Kyobo Axa IM eyes growth in third-party mandates
Korean joint venture Kyobo Axa Investment Managers is setting out to win more third-party mandates in an accelerated growth drive, its newly appointed CEO tells AsianInvestor.
Last week the firm – a tie-up formed in September 2008 between Korean insurer Kyobo Life and Axa IM – revealed it had promoted Eun-Soo Chung to CEO and Arnaud Carcel to deputy CEO and COO.
Chung had worked as head of the investment business division of Kyobo Life Insurance, before which he was CIO of Kyobo Axa IM, while Carcel has held several senior roles at Axa IM.
Chung takes over from Cheng Liao, who led the JV for two-and-a-half years with a mandate to implement global standard investment and marketing processes and oversee an operations upgrade.
With that completed, the firm felt it was time to leverage on Chung’s experience and contacts in the domestic marketplace as it strives to become a stronger asset manager in Korea.
“So far this JV has been heavily dependent on the captive mandate from Kyobo Life, with the ratio of third-party business less than 20%,” says Chung. “My mandate here is to bring in third-party mandates and to strike a balance between captive and non-captive.
“Captive mandates are growing very slowly these days, so you need to win AUM in the third-party market. For such purposes, Axa and Kyobo agreed that they need a locally experienced CEO to leverage on local networks and experience. That is how I was given the CEO mandate.”
Kyobo Axa IM offers a combination of local and global products to both retail and institutional clients, although Chung stresses that his initial focus will be on the latter.
“I will be patient on the retail side because it’s slower to develop,” he explains. “You can develop AUM on the institutional side relatively faster. But we will get prepared by extending our distribution channels and lining up a fully blossomed product range.”
Kyobo Axa IM says it saw net new money of $1.3 billion in 2010 and now has about W18 trillion ($16 billion) in assets under management.
Chung has a target of increasing this by about 44% to W26 trillion by 2013. He is also seeking to improve the firm’s ratio of non-captive mandates to 40%, from 15%, over the same period.
In terms of products, Chung describes the firm as a universal provider heavily skewed to the fixed income side. Accordingly he is setting out to increase the firm’s equity products as it targets more third-party money, and will be adding equity and fixed-income managers.
Chung says the firm will look to leverage on Axa IM’s skills in quantitative research to launch more equity products in the marketplace.
“We will focus on quantitative skills in stock selection,” he adds. “In terms of stock index funds we are number one [in Korea, managing about W1.8 trillion] and we will leverage on this strength, too.”
Former CEO Liao returns to Axa Rosenberg Tokyo, while a role is still being found for former COO Okrae Cho.