Mirae brings emerging markets expertise west for European distribution
The race is on for European managers to have managers in emerging Asia. Mirae Asset Global Investment outlines why being there for 14 years provides an edge.
As Europe’s fund distributors rush east to sell products and install portfolio managers in emerging markets, Asia’s Mirae Asset Global Investment is going the other way, bringing its funds to Europe.
Its portfolio management experience in emerging markets, including its homeland South Korea, extends back to 1997.
It believes this experience, and locating managers locally in markets as broad as Hong Kong, India and Brazil, provides a significant advantage over newcomer rivals in analysing, investing in and profiting from emerging markets.
Academic research supports this. A study published in 2009 by Melvyn Teo, associate professor of finance at the Singapore Management University, found Asian managers based locally beat rivals outside the region by 3.7% a year.
He said this also applied beyond Asia, especially other developing markets “where public information is scarce and local information is more helpful”.
Elliot Berman (pictured), Mirae Asset’s EMEA sales head, says: “Our culture is an emerging markets culture. We firmly believe that through having people based locally we can add significant value.”
The group’s entire $51bn of assets under managed are invested in these markets, across a range of asset classes, chiefly equities, including in the MA Independence Equity and MA Discovery funds, the company’s flagships accounting for a combined $1.3bn.
Some 13 of its products are in the Mirae Asset Global Discovery fund, a $500m Luxembourg Sicav. Sub-funds focusing variously on single countries China, India, Brazil and Korea and regional and global strategies such as Asia Pacific ex Japan and Global Emerging Markets, among others, are registered in eight European countries.
Mirae Asset will add more of the products it already offers outside Europe to the Sicav range over time in response to investor demand and market opportunity, says Martyn Gilbey, Mirae Asset’s Hong Kong-based head of international distribution.
He says the macro themes in EMs remain strong. What differentiates managers active there is how well and how early they can spot themes and profit from them.
Getting such wisdom takes time, Mirae Asset says, but as developing markets become more efficient and popular, exercising the wisdom rapidly will be ever more important to gain an ‘edge’.
Gilbey says: “We are local, conviction-based, fundamental investors, so you need people operating in the regions you invest in.”
Mirae Asset’s China and Korea funds are fairly concentrated, with between 25 and 45 positions. The firm’s largest manager team is in South Korea, overseeing $5.9bn.
Mirae Asset also has domestic investment managers in India, Brazil, China and the US, and is adding Taiwan and building capabilities in Indonesian equities.
Its Hong Kong base manages $8bn in Asia Pacific and Chinese securities, while a manager team in New York covers emerging Europe.
Investors can expect to meet Mirae Asset’s managers twice a year, and supplementary contact with investment product specialists, who might not manage money, but work with those who do. In total, 121 of a total 589 of Mirae Asset’s staff are investment professionals.
For European distribution there are experts in London, including Berman and Betina Tomić, Mirae Asset’s senior sales manager for German-speaking Europe.