Korea's Dongbu Asset Management, a subsidiary of Dongbu Group, is keen to expand its line of international investment products by working with global asset managers.
It is particularly interested in creating global portfolios with a focus on China equities and providing such investment opportunities to Korean investors, says chief executive Han Dong-jik.
Dongbu AM already has experience working with foreign investment advisors to tailor products for Korean investors. Since 2006 the company has worked with Hong Kong-based Hamon Investment Management, a unit of US group BNY Mellon, to run a China fund investing in Hong Kong-listed stocks. Dongbu AM now has $250 million of assets in Asian market investments, including its China fund. The firm has also partnered with Wells Fargo on an Asia-Pacific equity fund.
Since Han joined in 2007, Dongbu AM has expanded rapidly, with its assets under management growing nearly 300%, from $2 billion to $5.7 billion. This is despite the local funds market having been sluggish for the past year, with retail participation slow across the industry.
The firm has committed its investment process to one based on long-term fundamental research, which Han says has allowed it to grow from a small to a mid-size player in Korea.
His target is to transform Dongbu AM into a top-10, $10 billion-plus fund house in Korea -- by offering more international products, continuing to hire talented people and maintaining a focus on performance.
Han says such growth is possible because the asset-management pie is growing. The corporate pensions industry is just starting up and creates an opportunity for fund managers to become major players in Korean finance.
Dongbu AM is not the only Korean firm increasing its focus abroad, and particularly on China -- KDB, KITC and Tong Yang, for example, are launching funds with China exposure for South Korean investors. And institutional investors such as Korea Teachers Pension Fund are looking to raise their foreign asset allocation.
Dongbu AM is majority owned by Dongbu Securities, with five Korean commercial banks also holding stakes.