Mirae Asset expands non-domestic business
Mirae Asset Global Investments, the international arm of South Korea’s Mirae Asset, is diversifying further beyond its domestic base in terms of both product manufacture and distribution.
Having hired a new Asia-Pacific chief marketing officer (CMO) last month, the emerging-markets specialist is seeking an institutional sales head for the region and is expanding its international investment teams in Hong Kong and elsewhere. The plan is to increase headcount from 71 to 80 in Hong Kong and from 36 to 41 in Sao Paolo, Brazil by the end of the year.
“We’ve been introducing global investment capability in terms of portfolio management, research and asset allocation in Hong Kong and we’re still filling certain positions,” says Martyn Gilbey, the new CMO. “In addition to managing certain global, regional and country-specific portfolios from Hong Kong, the global team here will also work closely with Mirae Asset’s other investment teams, which include India, Brazil and the US.”
Gilbey will also oversee the sales and marketing teams for the UK and Europe, the Middle East and Africa (Emea), following the departure of UK head of sales Andrew Lawley. Earlier this year, Kim Kenho took over as European head and the London base was revamped as a sales-only office, following the relocation of previous managing director Park Myung-Joo back to Korea. Of the eight portfolio managers in London, some have been redeployed to New York and Sao Paolo and others have left the company.
Brazil, India, Korea and the US are all domestic businesses, managing money for onshore investors, while London supports clients in the Emea region investing via the Sicav funds. Since Gilbey has had 15 years’ experience in sales and marketing at financial institutions in Europe, it made sense for him to take up those responsibilities. For the seven years before joining Mirae, he ran business development at London-based Insight Investment. He began his career at UK bank Barclays.
Mirae Asset's previous Asia-Pacific CMO was Bernard Lim, who left the firm in March for personal reasons.
The company is still in the early stages of developing its asset-management business outside Korea, says Gilbey, although it has a presence on the ground in Hong Kong, Ho Chi Minh City, London, Mumbai, New York and Sao Paolo. Having originally set up the international offices in 2003 to manage international assets for Korean investors, Mirae Asset seeded and launched its first Sicav funds in mid-2008 for international investors. For example, it launched its first Hong Kong retail fund in August of that year.
“The strategy to develop investment capabilities and secure distribution beyond our Korean business is clear,” says Gilbey. “We have committed resources to it, and the evidence is there in our launching Brazilian and Indian domestic businesses and giving international investors access to our investment platform via our Sicav range.”
Yet he stresses the continued importance of the domestic business in Korea, from both the distribution and product-manufacturing perspectives. “Our Korean equity funds are managed in Seoul, which is still considered a core investment competence by many of our clients in Korea, Hong Kong and more widely in Asia,” says Gilbey.
While the firm’s heritage is in the Korean retail investment market, it is starting to attract interest in its wider investment capabilities from institutional investors in markets as diverse as Denmark, Finland, Japan, the Philippines, Singapore and the US.
Of Mirae Asset’s $50.1 billion in AUM (as of June 30), $30.4 billion is invested in emerging-market equities. The firm runs money out of Brazil, Hong Kong, India, South Korea and the US and is also a domestic manager in those markets, appealing to the growing middle-class wealth in Brazil, China and India, says Gilbey.
In terms of retail distribution, Mirae Asset's strategy in terms of Sicav funds is to target pan-Asian retail investors (as well as seven European territories). It is doing so initially via intermediaries such as consumer and private banks in Hong Kong, Singapore and, to an extent, offshore in Taiwan. Beyond the Sicav territories, the manager is also looking at the US, where it is about to launch a range of Asia and Latin America mutual funds.
“But it takes time to get track records up and running, deciding which funds to launch for which markets and so on,” says Gilbey. “All the operational resources have been put in place, and within the next year most of the funds will have at least two-year track records, and some three-year. That will enable us to distribute the products more widely.”
Meanwhile, the company has a joint venture in China – set up in September last year – and in Vietnam (established in 2007) and is waiting for a fund-management licence for the former.
Mirae Asset also has an alternative investments business in Korea, so is it likely to launch any Ucits products to help boost distribution? “That’s a good question – I don’t know yet,” says Gilbey. “At the moment, Sicav seems to tick enough boxes for us to get UK distribution, but I’ll be in London in a few weeks' time to talk about product strategy for Europe.”
Meanwhile, although Mirae Asset is largely an equities house, it does have fixed-income capabilities in Brazil and Korea. For example, the firm sells multi-strategy portfolios in Brazil, where over two-thirds of domestic portfolios are comprised of fixed-income assets.