Korean Institutions Rise
Global consultancy Mercer tackles business in South Korea.
In an effort to add global scale, institution consultancy, Mercer has expanded its services to Korean institutional investors. Such investors include fund managers, multinational pension plans and Employee Retirement Security Act (ERSA) vendors.
The firm highlights an opportunity to help Korean market participants utilize its services to manage the ‘new normal’ of global market volatility.
“We want to help Korean institutional investors access a range of assets globally to build more diverse and therefore more robust investment portfolios so that they are better able to deal with market volatility and achieve investment objectives,” said Kwang Lee, Mercer’s Korea head of Investment Management business.
Lee suggested that Korean clients need to “optimize their strategic asset allocations to strike the right balance of assets,” and not fall prey to the thoughts that asset allocation is akin to “travelling along a road or well-beaten path” which would make, “investing would be easy and relatively predictable.”
Earlier this year, Lee was appointed to finalize the necessary licensing arrangements to enable Mercer to offer Investment Management solutions to Korean investors. With the license now granted, his focus has turned to introducing local investors to Mercer’s capacity, highlighting the firm’s more than $44 trillion under advisory, global research capabilities, local presence, and experience.
The firm is tackling the country’s National Pension, sovereign wealth fund and Central Bank of Korea (BOK), and “other financial institutions such as insurance companies and local asset managers,” according to Lee.
“The retirement pension market in Korea is still in baby stage,” said Lee, citing his focus on domestic oriented products with potential. “The investment management business in Korea warrants a much more sales oriented role in collaboration with our global portfolio team, rather than assuming portfolio construction directly.”
Like many other institutional investors, Korean investors are keen to incorporate alternative investment vehicles into their asset allocation, perhaps more so than traditional assets, Lee said.
In 2018 Federated Hermes acquired a 60% interest in HFML from BT Pension Scheme.
The German Government pension fund has chosen the Euronext V.E ESG World 75 Index.
The fund is managed by the Dutch asset manager NN Investment Partners.
The Japanese pension fund requires asset managers to integrate ESG.
The 100 largest asset owners are responsible for over 35% of all global asset owner capital.