Manulife Asset Management confirms it is targeting yield-starved institutional investors in Korea after obtaining a cross-border investment advisory licence in the country.
The firm, which had $17.4 billion in AUM sourced from Asia as at end-2011 by AsianInvestor numbers, has hired Peter Kim from Lapis Global as its new head of institutional sales for Korea.
He joined in July based in Hong Kong, although Manulife has no plans to set up a Korean office. Its retail distribution in the country is handled by affiliate companies.
Michael Dommermuth, president of Manulife Asset Management Asia, says the firm has had aspirations on Korea for some time, noting the institutional market there has over $1 trillion in assets, of which the addressable universe is about 15% and growing at 14% per annum.
He also stresses that the portion of institutional assets being outsourced to external managers is also forecast to grow 15-17% over the next four years.
“We like that part, and we like the fact that allocation to alternative assets is rising and they are doing that to contend with low rates in Korea in an attempt to bolster yields,” he says. “Korean pension funds tend to be a bit underfunded and there is impetus there to address that gap.”
Manulife is aiming to bring its skills in traditional and alternative assets to the market, noting in particular it is the world’s largest manager of timberland investments for institutional investors.
Further, Dommermuth points to the opportunities to manage Korean institutional QFII quotas covering Chinese onshore securities. The firm has a joint venture in China, Manulife TEDA. It received its own $200 million QFII quota in 2010 and a further $100 million top-up this July.
It notes in a release that it has won two institutional advisory mandates on renminbi bonds and A-shares for institutions in Asia in the past three months.
Kim reports to James Chen, Asia head of institutional sales and relationship management at Manulife. Previously Kim was director of Lapis Global in Hong Kong, having also been vice-president of Woori Global Markets Asia.
Manulife Asset Management is the global AM arm of Manulife Financial and has $218 billion in AUM globally as at June 30 this year.