Samsung teams up with Man for alternatives push

Apr 7, 2010

Samsung Securities will distribute hedge funds and funds of hedge funds for Man Investments and may advise on using such products in its wrap accounts.

Samsung Securities has reached an agreement with Man Investments to distribute the hedge-fund group's products to Korean investors.

Man is looking at registering its products with Korea's Financial Supervisory Service (FSS), when regulations allow. (Today FRM, another global provider of funds of hedge funds, has an onshore presence.)

The terms of the deal have not been made public. It is part of a trend, with other Korean financial institutions said to be striking similar deals with other global providers of alternative-investment products, particularly funds of funds.

Offshore hedge funds are not approved for registration by the FSS. However, the regulators will accept hedge-fund products that don't use leverage. The idea is to market unleveraged single funds or funds of funds to qualified investors, including high-net-worth individuals, via private placements, says Lee Sang-dae, senior vice-president of marketing at Samsung Securities.

Moreover, regulators are expected to consider new legislation to liberalise the hedge-fund sector. (See the May edition of AsianInvestor magazine.)

Samsung will promote Man's products as a third-party independent distributor, but may also co-develop products with Man for Samsung's wrap-account business.

Affiliate Samsung Investment Trust Management has developed alternative-investment opportunities for domestic investors through structures, including funds of hedge funds. Its products have been sold via Samsung Securities, as well as through other Korean distributors. The deal with Man will therefore let Samsung Securities market global products alongside those created by Samsung Investments, although these will remain separate businesses.

Samsung elected to work with Man based on its performance record and an ongoing business relationship.

Samsung Securities' aim is to become a regional investment bank and institutional brokerage in Asia. It set up a Hong Kong-based corporation less than a year ago. This company's paid-in capital by its parent company is more than $100 million and it employs more than 70 staff.