Korea Post’s savings bureau is inviting foreign fund houses to bid for six equity mandates – two global, one US, one European, one Asia-Pacific ex-Japan and one Japanese – as it seeks to double its overseas exposure by 2020.
AsianInvestor understands that the initial size of each portfolio is expected to be around $40 million, a figure that could rise to $100 million over time.
Korea Post, which runs the postal and financial services of the country’s post offices, has a savings bureau and an insurance bureau, which manage $65 billion and $30 billion, respectively.
The latest issue of RFPs comes as the savings bureau has been steadily raising its exposure to alternatives and equities. The new allocations are largely coming at the expense of domestic fixed income and will mean a further $6 billion flowing offshore via direct investment and external managers. The savings bureau had a 1.62% allocation to foreign equities at end-2014, up from 0.01% at end-2010.
The submission deadline for the RFPs is 6pm Korea time on February 22, and the final selection will be made at the end of March. All strategies will have two-year terms and be denominated in dollars, apart from Europe equity (euro) and Japan equity (yen).
The chosen fund houses will set up managed accounts with either Korea Investment Management or Mirae Asset Global Investments, the two Seoul-based firms that advise Korea Post’s savings bureau on global equity portfolios. The chosen managers will be responsible for portfolio advisory, fund set-up, fund administration and currency hedging.
Applicant managers must have a three-year active equity track record and a fund size of at least $300 million as of end-2015. Each firm may apply for multiple mandates with separate proposals. Korea Post will not accept bids from managers for mandates for which they are already running the same type of portfolio.
One soft copy and one hard copy must be submitted to the following: for US and Japan equity mandates, Kim Gwiho at firstname.lastname@example.org and Kim Jungwook at email@example.com; for global, European and Asia-Pacific ex-Japan equity mandates, Kim Gwiho at firstname.lastname@example.org and Yeom Minsu at email@example.com.
All email applications must be submitted to both addresses, and all enquiries must be also sent to the above contacts.
Hard copies can be submitted by mail or in person to the following: Postal Savings Fund Management Team, Korea Post, 8-Dong, Sejong governmental complex, 19, Doum 5-ro, Sejong, Korea, 30114.