Mirae Asset Global Investments Co., Korea’s second-largest money manager, plans to boost the number of overseas employees by as much as 30 percent this year and acquire companies to strengthen coverage of emerging markets.
Foreign hires in 2011 will mostly be fund managers, analysts and marketing personnel, chief executive officer Koo Jae-sang said in an interview, declining to say where the employees would be based. The company that oversees about 49 trillion won ($43.7 billion) in assets had 244 overseas staff as of Dec. 31, the company said in an e-mailed document.
Koo is betting fund flows into developing nations will resume after withdrawals prompted by concern that inflation will lead to higher borrowing costs. Global-tracked emerging market funds had the biggest three-week run of outflows in three years through Feb. 9, according to EPFR Global. Last year, they lured more than $90 billion, an all-time high.
“Money will eventually flow back to where the growth is, and recent declines are a healthy correction, following solid gains,” Koo, 46, said at his Seoul office. “Developing markets will present opportunities in the latter half of this year as inflationary pressures start to ease and as investors shift some of their funds from bonds to equities.”
The MSCI Emerging Markets Index, which more than doubled in the past two years, has declined 3.9 percent this year, compared with a 5.2 percent increase in the MSCI World Index of developed-nation shares. Countries from China to Brazil and India increased borrowing costs as record food prices and oil above $85 a barrel boost inflation.
Emerging market stocks will rebound this year as tightening ends, Morgan Stanley analysts led by Jonathan Garner wrote in a report dated Feb. 10.
Mirae Asset’s expansion plan is aimed at tripling the contribution to assets under management from overseas clients to at least 3 trillion won by year-end from 1 trillion won as of Jan. 31, Koo said. Mirae Asset agreed last month to buy 60 percent of TLG Asset Management Co., a unit of Taiwan Life Insurance Co., for NT$303 million ($10 million).
“We need to flesh out our overseas networks this year by adding more staff,” Koo said. “The potential additional mergers and acquisitions are part of our efforts to increase our specialization in emerging-market investments,” he said, declining to give details.
The unlisted Korean money manager, an affiliate of Mirae Asset Securities Co., submitted an application last year to set up a mutual fund company in China with Huachen Trust Co. and another partner, Koo said. The parties are now waiting for approval by the China Securities Regulatory Commission, he said.
In Brazil, Mirae Asset plans to double its brokerage staff this year to about 100 to meet growing investor demand for equities, said Pablo Spyer, who runs the Brazilian unit, in an interview in Sao Paulo. Mirae wants Brazil to become its third-biggest market for equity trading after South Korea and the U.S., Spyer said, without providing a timeframe.
Mirae Asset’s overseas employees included 86 in India, 82 in Hong Kong, 41 in Brazil and 30 in the U.S. as of Dec. 31, the company document shows.
Samsung Securities Co. said on Feb. 8 it plans to hire as many as 20 people in Hong Kong this year as the brokerage unit of Korea’s largest family-run conglomerate seeks to boost the share of total net revenue derived from overseas units to 10 percent by 2013 from 5 percent.
Asian stocks may return as much as 30 percent in the next 12-18 months as an improving U.S. economy boosts global markets, Emil Wolter, Asian equities strategist at Royal Bank of Scotland Group Plc., said on Feb. 11.
Companies on MSCI’s index of 21 developing nations are valued at 11.3 times estimated earnings, against a multiple of 13.3 times for the MSCI World Index, according to data compiled by MSCI Inc. and Bloomberg.