Investing with an eye for the future
Park Hyeon-joo (51)
Now a landmark for the local financial industry, the clock represents the company’s philosophy and that of its mother entity Mirae Asset Financial Group - the top priority is the long term. In other words, “Don’t be bothered by short-term losses.”
It’s this philosophy that helped change Korea, where investment was once equated with short-term stock purchases or real estate, into a place that could see the lucrative bigger picture. To many, Mirae is still remembered as the first company to issue a mutual fund here.
This “clock” hangs at Mirae Asset Global Investments in Yeouido, Seoul.
But it is quickly recuperating this year, in tandem with the rapid recovery on the stock market.
According to the Korea Financial Investment Association, the money entrusted to mutual funds managed by Mirae Asset Global Investments rose to 57.29 trillion won ($49.18 billion) as of late September - 16.4 percent of total mutual fund investment in Korea. Samsung Investment Trust Management, which had taken the top position from Mirae late last year, is now again No. 2 with 45.4 trillion won. The group’s share is even bigger when one considers that Mirae Asset Global’s sibling company Mirae Asset MAPS Global Investments has 2.1 percent of the market itself.
“In terms of the asset management business, Mirae Asset Financial Group seems to be getting back on track,” said Chung Bo-seung, an analyst at Hanwha Securities. “We will see whether it will be able to regain its growth pace.”
Mirae Asset Tower in Shanghai.
The conglomerate had 11,001 employees as of July, including 6,582 insurance consultants with Mirae Asset Life Insurance.
Mirae’s success came quickly. Chairman Park Hyeon-joo founded Mirae Asset Investment Advisory on July 18, 1997. Called Korea’s Warren Buffett by some for his shrewd investment sense, Park started Mirae Asset Global Investments in 1998, getting it registered as Korea’s first asset management company. Later the same year, Mirae launched the first mutual fund in Korea, “Park Hyeon-joo Fund No. 1.” Mirae Asset Securities, the seller of the Mirae funds, was founded in 1999.
The first fund, worth 50 billion won, was, according to the company, sold out in three hours, and recorded returns of over 100 percent in one year. That led to a nationwide fund boom, with Mirae Asset as the biggest beneficiary when other asset managers were focused on brokering direct investments in stocks.
Mirae Asset, set up with initial capital of 10 billion won, has seen its total assets soar since then. As of July, it accounted for 36.4 percent of the equity funds issued in Korea at 33.4 trillion won. Runner-up Shinhan BNP Paribas Investment Trust Management was far behind at 9.4 percent.
As of the end of September, Mirae operated 448 funds, 19 with 1 trillion won or more. Many of its larger funds are focused on foreign markets.
The company is working hard to go global, with a presence in seven countries including Korea. In March 2007, it founded Mirae Asset Global Investments U.K. and added Mirae Asset Securities U.K. in October 2008. Its asset management and brokerage businesses opened units in the U.S. last year. It also has branches in Brazil, China, Hong Kong, India and Vietnam, with plans to enter Australia and Japan soon.
Poses with participants in an exchange program.
According to Kim Ji-young, an analyst at Hi Investment and Securities, banks and other brokerages have now caught up with Mirae Asset in terms of diversification of funds and markets. The ongoing financial crisis has also eroded Mirae’s credibility of by dampening the performances of its flagship funds such as the Insight Fund, which saw a return rate of around 60 percent since the beginning of the year, but cumulative returns of minus 26 percent since its inception in 2007. A total of 4.2 trillion won was invested in fund as of the end of last month.
Still, Mirae’s business model may mean a bright future for the company, Kim said. Mirae, in fact, happens to be the Korean word for future.
“Asset management is an advanced finance model, as it could create a leverage effect,” she said. “The government is also in a bid to make Korea a financial hub, trying to foster the asset management industry. So many people say the heyday for Mirae will come sooner rather than later when the fund market recovers, and I don’t think they are wrong.”
Mirae has said it believes the asset management industry, despite the economic crisis, is a growing industry. In particular, the company said the fast growth of the annuity market will present Korea’s asset management industry with a new chance to grow. Mirae is the leader of the annuity market with around 40 percent of the market at the end of last month.
Choi Hyun-man, vice chairman of Mirae Asset Financial Group, is a founding executive. He started his career in the brokerage industry at Dongwon Securities in 1989. After joining Park in creating Mirae, he served as the CEO of Mirae Asset Global Investments, Mirae Asset Venture Capital and Mirae Asset Securities.
Koo Jae-sang, CEO of Mirae Asset Global Investments, served as head of Mirae Asset Trust Investment between 2000 and 2002. He took up his current position in 2002.
Jeong Sang-kee, chief executive of Mirae Asset Maps Global Investments, has been serving at his current position since 2005.
Yoon Jin-hong is a 27-year-veteran in the industry. His first job was at Tong Yang Securities in 1982, after which he moved to Sejong Securities. It was June 2001 when he joined Mirae as vice president of Mirae Asset Maps Global Investments. He rose to the top spot at Maps three years later and then moved to Mirae Asset Life Insurance as CEO in 2005.
Kim Kyung-rohk, who became president of Mirae Asset Capital this year, joined Mirae Asset Global Investments in 2000, and there he rose to become the top executive of the bond and financial engineering management department in 2006.
Kang Chang-hee, managing director of the Mirae Asset Investment Education and Research Center, joined Daewoo Securities in 1977 and served as head of the brokerage’s research center. He also worked at some other financial firms including Goodmorning Investment Trust Management, where he was CEO from 2000 to 2004.
*“Faces inside Korea’s conglomerates,” a regular weekly series about key figures in the nation’s major companies, will also feature major figures within Korea’s large financial groups.
By Moon Gwang-lip [joe@joongang.co.kr]
with the Korea JoongAng Daily
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