Wanted: foreign managers for funds
Korea may open its door to foreign fund managers in a move to improve local asset management companies’ ability to manage mutual funds investing overseas.The Financial Supervisory Commission said yesterday in a release that it is considering easing qualification requirements for fund managers experienced in managing mutual funds outside of Korea.
As of October, 85 percent of the overseas mutual funds sold in Korea are managed by foreign asset management companies or are “copy funds” modeled after existing funds overseas.
Moreover, local companies suffer from being shorthanded. The number of funds that a fund manager has to handle has grown to 11 as of September from 9 at the end of last year.
Thus, 50 to 80 percent of asset management fees also go to foreign asset managers.
Indirect investment laws currently stipulate that fund managers who have two years or more experience in foreign financial institutions managing 10 trillion won ($10.9 billion) or more of assets can be recruited by local asset management companies.
“The FSC may ease the recruitment-related rule by reducing requirements for the amount of assets managed by the company at which potential applicants work,” said Jeon Su-han, an official at the Financial Supervisory Commission’s asset management supervision team.
In comparison, CJ Asset Management, which manages about 10 trillion won in assets, is ranked around 10th among domestic asset managers in terms of asset size. The leading Mirae Asset Investments manages about 50 trillion won.
The FSC said though the asset management market has grown rapidly, the number of asset or risk managers only increased a little, from 1,143 in 2006 to 1,224 in September 2007.
The FSC said 81 percent of the value of foreign funds sold in Korea are hedging against currency exchange risks as of September. Many investors, however, are not aware that such funds charge hedging commissions, it said.
By Limb Jae-un Staff Writer [jbiz91@joongang.co.kr]
with the Korea JoongAng Daily
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