Goldman Sachs Asset Management has signed an agreement with South Korea's Tong Yang Securities to provide sub-advisory services to its wealthy clients.
Lloyd Reynolds, Singapore-based head of sub-advisory for Asia ex-Japan, says the idea is to go beyond simply providing global products to Tong Yang's network of high-net-worth clients. Investors and partners increasingly want advice and value-added services, he adds.
The agreement with Tong Yang covers two basic areas -- building a product set for Korean clients across equities, fixed income and alternatives, and then delivering GSAM's wealth-management expertise to Tong Yang, including product management, asset allocation and research.
Whether GSAM has any direct contact with the end investors depends on Tong Yang.
The two parties have worked together before -- Tong Yang Securities has distributed GSAM products to clients. Reynolds would not comment on any other relationships between Goldman Sachs and Tong Yang Group, noting that this agreement is simply between GSAM and the securities business.
Over the next few months, the relationship has to move from concept to implementation, as well as final decisions on the economics of the deal. Reynolds will be one of several GSAM staff working on this with Tong Yang, as well as Terence Lim, who recently joined GSAM in Korea as co-head of the domestic business.
For GSAM, the Tong Yang deal will be its only sub-advisory relationship in Korea, although it will be able to pursue third-party funds sales via other distributors. It is also keen to develop similar sub-advisory deals in other jurisdictions, including China, Malaysia, Singapore and Taiwan.