Asia continues to lag other regions for integrating ESG principles with investing; better data and stronger regulatory requirements will help institutional investors, market observers say.
Vanguard û which has regional offices in Melbourne, Sydney, Singapore and Tokyo û says it has set up the office in Korea in response to its growing institutional business there. The on-the-ground presence follows VanguardÆs announcement that it has successfully obtained a cross-border discretionary investment manager (DIM) licence, which opens up opportunities for the firm as an offshore fund management company.
Vanguard has appointed Kwang Lee as its Korean representative to head the new office in Korea. Lee joined Vanguard in 2007, continuing a successful career in the Korean funds management industry, most recently with Nonghyup Credit Agricole Asset Management where he was responsible for institutional sales and marketing. He reports directly to Vanguard Investments Singapore managing director Lee Yuit Chieng.
Meanwhile, BaringsÆ expansion into the Korean market includes the appointment of InJun Jung as head of sales, client services and business development for Korea. Jung reports to Gerry Ng, managing director for Asia ex-Japan. He joins Barings from Morgan Stanley Investment Management where he was head of their Korean operation. He has extensive experience raising assets from across the full range of distribution platforms in Korea including institutions, intermediary platforms, fund of funds, corporate pension schemes and variable universal life accounts.
Barings has a long history of managing money for clients in South Korea. Establishing a local presence there is ôa logical stepö, says Ng.
Korea has enjoyed strong growth since the 1960s as one of the original ôAsian tigersö and now is one of the largest economies in Asia, with the third-largest equity market in the region after Australia and Japan. Although financial assets make up a large part of household assets in Korea, only a fifth of these are currently invested in equities and mutual funds, which is lower than in most other countries and suggesting that there is plenty of growth potential in this area.
ôRetail investors have only started investing in mutual funds in a significant way since 2005, and the Korean market is at an early stage of development,ö Barings' Ng says. ôIf the current tax policy on offshore funds is repealed next year as the industry expects, we believe the mutual funds market has the potential to grow rapidly.ö
Global investors are advised to look selectively at Japanese equities as the country recovers from lockdown and continues to improve corporate governance.
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