Major asset managers growing through investment diversification

By Anna J. Park

Some of the leading asset managers in Korea marked substantial growth in their assets under management (AUM) in 2019, due to diversification strategies.

According to data from the Korea Financial Investment Association, out of the top 10 asset managers here, NH-Amundi Asset Management recorded the highest year-on-year growth last year, with its AUM growing 26 percent or 8.83 trillion won ($7.57 billion) to 43.27 trillion won as of Dec. 31.

KB Asset Management ranked second with a 16 percent growth in AUM, followed by Korea Investment Management (15 percent), Kiwoom (11 percent) and Kyobo AXA (11percent).

CEO Bae Young-hoon of NH-Amundi Asset Management, the seventh-largest asset manager in Korea, told The Korea Times that such a record was possible due to an increase in their diversified asset classes.

“In 2019, we saw balanced growth in all our asset classes: stocks, bonds, alternative assets, money market funds (MMF), etc. In order to log sustainable growth this year, we plan to add more alternative investments such as infrastructure and exchange-traded funds (ETF), while strengthening cooperation with Amundi ― the largest asset manager in Europe and our second-largest shareholder ― to expand the scope of our global investments,” Bae said.

Other major asset managers, including Shinhan BNP Paribas and Kiwoom, also have similar diversification strategies as a key source for their solid growth in 2019. They plan to continue to focus on alternative, overseas investments in 2020 as well.

“A substantial part of last year's AUM growth came from buoyant sales of overseas bond funds, which we developed as our strategic product for medium risk with medium returns. Another part came from an increase in target-date funds (TDF) sales, as we focused on the retail retirement market. Institutional investors' funds also constitute a major part of the growth,” Song Han-jin, head of the Corporate Management Division at Shinhan BNP Paribas Asset Management told The Korea Times.

“In 2020, we aim to continuously provide medium-risk, medium-return products for individual clients. We also plan to develop strategic products with a focus on overseas markets, employing BNP Paribas' product sourcing power. A strengthened emphasis will also be placed on expanding our alternative assets,” Song added.

Lee Chang-jin, head of the Strategy and Planning team at Kiwoom Asset Management also explained that diversifying and expanding asset classes were key to the company's stable growth.

“One of the most popular funds in 2019 was the Kiwoom Global Alternative Fund. Just several months after it began to be sold in May, the fund garnered about 400 billion won, and logged a 16 percent profit last year alone,” Lee said. The fund invests in global major hedge funds to stably realize diversified investment.

The top three asset managers in Korea ― Samsung, Mirae, and Hanwha ― solidified their leadership positions last year, way ahead of competitors.