Korean pioneer brings eastern insight to west
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Andrew Lawley of Mirae Asset Global Investments, talks to Will Jackson about expansion and ambition.
Andrew Lawley is the head of UK distribution and global consultant relationships at Mirae Asset Global Investments (UK). Before joining Mirae, he was the head of consultant relationships within the UK institutional distribution team at Credit Suisse Asset Management.
Q: What is the history of Mirae Asset Global Investments?
A: We are part of Mirae Asset Financial Group, which includes a securities business and a domestic [South Korean] life insurance business. The group is owned by our chairman [Hyeon-Joo Park].
Mirae Asset Global Investments was launched in 1997 and pioneered the mutual fund industry in South Korea–we launched our first fund in 1998 and have grown rapidly since then, mainly through retail channels.
We launched offices in Hong Kong and Singapore in the early 2000s, and in London in 2007. Since then, we have launched offices in New York, São Paulo and Vietnam–we want a presence in all the major markets we invest in. We opened the Brazil and New York offices at the end of 2008. We are in the process of merging the London investment team covering eastern Europe and Russia with the New York team.
The firm has grown to about $60 billion [£38 billion] in assets under management by focusing on emerging markets investing–predominantly long-only. One of the most interesting aspects is that it is usually western banks who have tried to move east. We have done it the other way around, to bring our expertise and knowledge to a western audience.
Q: Mirae announced the opening of its Sicav range to British investors last month. Which funds does this include?
A: The line-up is four funds. Korea Equity, Asia Pacific Equity and China Sector Leader Equity were launched in July 2008, while Global Emerging Focus 30 Equity was launched at the end of last year. The umbrella fund has been authorised for sale to British retail investors since the end of January.
We are also registered in Sweden and the Netherlands, and in another month this will be extended to Austria, France, Germany and Switzerland.
[Global Emerging Focus 30 Equity] aims to hold about 30 stocks. We tend to run concentrated portfolios–it is very much a high conviction, high alpha-generating style.
It is almost run like a multi-manager fund–different teams around the world have input into the portfolio and then we have a global asset allocation team that sits on top of that. They pull the portfolio together.
Q: How big are the funds?
A: Asia Pacific Equity has $22m in assets, Korea Equity has $27m, China Sector Leader Equity has $24m and the emerging markets fund has about $10m, which is mostly seed money. We have won a couple of smaller clients in Europe, notably in Italy, and there have also been small retail flows from the UK and the rest of Europe.
Three of the funds have 18-month track records, which is short, but they are mirrors of funds we have been running for several years. This allowed us to get ratings from both Morningstar and Standard & Poor’s. (article continues below)
Q: Why have you decided to start distributing your funds in Britain?
A: The UK is a major part of our European strategy. When I joined Mirae [in May 2008] it was not a great time to be selling the emerging markets. We had to get the right people on board, then there was an education phase, and then it was a case of building the infrastructure. Getting the sterling share class in place also took longer than expected.
Q: Retail investors tend to think of the Bric nations [Brazil, Russia, India and China] when looking at emerging markets investing. How much demand is there in Britain for a Korean equity fund?
A: It is clearly a niche product but South Korea is an interesting market. People who have the time to dig a bit deeper will see that it has the potential to grow a lot further. The fund will probably appeal to the larger end of the discretionary market and money is starting to trickle in.
“We are now ready to be more proactive”
From a UK perspective, we expect to see interest from multi-managers, the wealth management industry and private client managers. We don’t have the manpower to go out and talk to IFAs, but we are looking to get onto the platforms. We have been talking to several platforms over the past 18 months and the hold-up has been getting the funds registered. We are now ready to be more proactive.
Q: What is Mirae’s investment style?
A: It is predominantly a bottom-up process. We look for long-term franchise value and that requires large teams of analysts. We have 160 investment professionals and it is these teams that generate the ideas. They visit all of the companies they invest in. Analysts have a matrix system which gives coverage of stocks from different angles.
Generally speaking, the company is independently-owned so it has a boutique-like feel. It is a large company but there is an entrepreneurial spirit running through it.
Q: With investors in several countries able to access the funds, could capacity become a problem?
A: That is not an issue at the moment–the funds are small and they also tend to invest in large cap stocks. Any concerns over capacity would be years down the line. We have the resources to manage a lot more money.
Q: Are you planning to open up more of the Mirae range to British investors?
A: There will be growth in terms of the product range, and we are constantly looking at expanding our Sicav. Mirae runs hundreds of funds. For example, we could use our office in Brazil, which is currently running money for domestic investors, and India is another major consideration [the firm opened an office there in 2006].
But the next addition is likely to be a Bric product, probably within the next few months. We have done the groundwork so adding new products will be a smoother process in future.
Q: What are your priorities for 2010?
A: We have been raising the profile of the company over the past 18 months, in a difficult market environment. Now we need to take it to the next level. We will be doing more events and we also hope to do some sort of advertising campaign. Now the funds are registered we will be getting them in front of investors and onto the platforms.
