Korea Investment Management seeks China JV partner

Korea Investment Management is ramping up efforts to internationalise its business. It has just opened a research office in Shanghai and is now searching for a local partner to establish a China joint-venture.

Kang Shinwoo, KIM’s chief investment officer in Seoul, says the firm wants to build investment expertise across the Asia region to sell to institutional investors in both Korea and internationally.

Last year it hired Park Myungjoo as general manager of its business strategy office, and he is spearheading KIM’s international marketing efforts. He is also overseeing the building in Seoul of the infrastructure, from IT to operations, to enable the firm to expand overseas.

Park, who was previously head of marketing for the United Kingdom at Mirae Asset, says he may transfer to Hong Kong in the next year or so.

KIM also hired Leung Ho-wa as its Greater China CIO in Hong Kong. Leung joined last year and has run money at UBS, Nomura and the former Citigroup Asset Management.

The $17 billion Korean fund house not only manages H-shares and Taiwan equities but also has a $120 million QFII quota and runs an A-share fund for local clients. It has had a Vietnam research office since 2006.

Kang says the crash in emerging markets in 2008-09 has given KIM an opportunity. Until then, rival Mirae was the only Korean fund house with an international presence. It sold China, India and other emerging-market products, with the bulk of its sales in 2006 and 2007.

Emerging markets were popular among Korean investors as a high-return investment destination, but those markets crashed in 2008 and many Korean investors are still suffering losses as a result.

Kang says KIM has developed a more stable, long-term oriented investment process for its domestic equities business that it can export to other Asian markets, and which should appeal to institutional clients.

He says consultants such as Mercer have affirmed the quality of KIM’s investment process. The company enjoyed net inflows to its equity funds in 2010 as the industry as a whole saw net outflows of around $23 billion.

The firm wants to use this success to jumpstart its international aspirations and try to catch up with the likes of Mirae, as well as keep pace with Samsung Investments, which is also rapidly growing its Asian businesses.

“Initially we will rely on our Korean equities expertise for our international marketing,” Kang says. “But we will then want to introduce regional funds, especially for Greater China.”