Mirae Asset's Bold Move

Company to become first Korean investment firm to operate in U.S., Japan

Mirae Asset Management Co. will be the first Korean asset management firm to operate in the United States, with branch offices opening in Los Angeles and New York some time this year, the company said recently.
Company officials said the bold move is part of their plan to compete with fund management firms from the U.S. and Japan in their own backyards and to be a pioneer by exploring the financial markets of advanced countries. They also said the company plans to offer Korean investment funds in the U.S. and Luxemburg.
Mirae Asset Chairman Park Hyeon-joo said the management strategies of his company are nothing short of those in advanced countries in many business areas, pointing to such giant fund management firms as Fidelity and Templeton for comparison.
He said the company will work on attracting U.S. investors to its funds and invest them in emerging markets around the world.
Mirae Asset President Koo Jae-Sang said the company's plan to set up operations in Japan and the U.S. is part of its ambition to build a global network for the Insight Fund, which the company launched last month. The new fund has set a record by raking in over 4 trillion won in investments in a mere three weeks.
The fund is under the strict management of its subsidiary in London. Koo said the company will launch the Chicago Fund as an offshore fund for foreign investors in Luxemburg some time next year.
Park said these funds are for foreign investors in the countries in which they operate, not for Korean investors abroad, under Mirae Asset's daring move to strengthen its global operations. The Insight Fund can be said to have officially kicked off the company's global operations.
The fund will be managed with insightful strategies, as its name states. It will be focused on companies with solid outlooks and its portfolio will not contain 1,000 companies like some investment funds.
By the end of the year, Park said, the fund's investments will be spread among roughly 100 companies'shares.
He admitted that the company had trouble coming up with the right name for the fund. He and his assistants thought the name should reflect the investment philosophy of the company. Park said they finally settled on "Insight Fund"among the 50 names considered.
Commenting on the recent trends in global stock markets, Mirae Asset's top manager said China's stock exchanges would continue to grow, as would the economies of emerging-market countries. He said the stock exchanges around the world led by those in the U.S. have been going through a sound readjustment period weighed down by the sub-prime mortgage loan problems in the U.S., but they will regain their footing. In the long-term, he said, there is no reason to take funds out of the stock market despite the decline of share prices hit by a correction in the U.S. stock market and a perceived bubble in China's stock market.
He said the GDP of emerging countries including China made up 27 percent of world GDP, but the Morgan Stanley Capital International World Index came to only 11 percent. He said it means that the capital markets in emerging economies have a lot of room to grow. He said that discrepancy led him to create the Insight Fund.
He said the Insight Fund will have about 10 percent of its investment portfolio in Korean securities. He said, however, it would be risky to invest a substantial part of the fund in a small number of emerging market countries including China, which is one of the reasons the Insight Fund will be invested in a wide range of countries around the world.
As to worries that Mirae Asset will sweep the fund market in Korea and become the dominant player, he said there should be many more funds like Mirae Asset's with Korea's share of the world hedge fund market accounting for only 0.2 percent. Furthermore, Mirae Asset plans to launch asset management operations in the U.S. and will invest those funds in emerging market countries'stock markets. nw

Chairman Park Hyeon-joo of Mirae Asset Management Co.