Korea Post Savings calls bids for global equities market mandate
04 August 2017
Category: News, Asia, Global, Korea
By Asia Asset Management
Korea Post Savings, a unit of South Korea’s state-owned Korea Post, is calling for bids from foreign asset managers to manage its global equities market mandate.
According to the request for proposal (RFP) posted on its website on July 27, Korea Post Savings plans to hire two managers to oversee the value strategy of the mandate, and two more for the dividend strategy.
The benchmarks used for the strategies will be MSCI AC World Value Index and the MSCI AC World High Dividend Index. The RFP does not say how much funding the four managers will receive.
This is Korea Post Savings’ first such tender to date in 2017.
The company has awarded similar mandates to about 15 foreign asset managers over the past few years as part of plans to diversify its overseas allocation, a spokeswoman tells Asia Asset Management (AAM).
This coincided with plans for parent company Korea Post to increase its weighting in foreign securities and alternative investments to boost its profitability, as outlined by its President Kim Kee-deok last year. Mr. Kim told The Korea Herald daily last August that the savings unit had raised its overseas exposure from 9.1% of total assets in 2012 to 15.3% in 2015.
For the latest tender, Korea Post Savings stipulates that each qualified manager must have a minimum three-year track record in related strategies as at June 2017, overseeing total AUM of over US$300 million.
The winning bidders must each set up a managed account with one of Korea Post Savings’ two overseas-equity investment advisors – Mirae Asset Global Investments (MAGI) and Korea Investment Management Co (KIM).
According to Andrew Shin, director and head of investment services, Korea, at Willis Towers Watson, Korea Post Savings tends to work with local asset managers such as MAGI and KIM to optimise its global RFPs and manager selection processes.
“This structure is a fit-for-purpose option for Korea Post Savings for the time being as they are dealing with many constraints and challenges such as high personnel turnover and limited back office capacity,” Mr. Shin tells AAM.
Applications for the new tender close August 16, and the selection process will be completed in late October, the company says.
According to its latest annual result, Korea Post Savings had 69.47 trillion won (US$61.62 billion) in total AUM at the end of 2016, up from 65.61 trillion won a year earlier.