Qualitative assessment seems to have played a bigger role than quantitative assessment in the choice of Mirae Asset Global Investments as lead manager of the state-supervised investment pool of 63 Korean pension funds, industry sources said.
Sources said the decisive factor that helped Mirae Asset become the preferred candidate for the role of lead manager was its technology evaluation. The South Korean asset management company recorded 81.01 points in that category, while its two rivals only scored in the 70s. The technical evaluation consists of a quantitative assessment (20 points) and qualitative assessment (70 points).
The first checks the financial stability, assets under management, human resources and investment performance of managers, while the second assesses overall factors related to their abilities to manage investment pool funds. Crucially, Mirae Asset was able to secure the highest scores in the qualitative category as it has strengthened the performance of its workforce through strict internal controls and has shown an outstanding performance in overseas and alternative investment, sources said.
The pension fund investment pool was designed to increase the stability and profitability of fund management while reducing the management costs of each fund. Samsung Asset Management managed the pool exclusively from its introduction in December 2001 until 2013, when Korea Investment Management joined as co-manager. As of November 30, they were managing 31.3 trillion won ($28.3 billion) of assets, with Korea Investment Management controlling around one-third of that amount.
Mirae Asset will take the place of Korea Investment Management, whose contract expires in April. The contract of the other lead manager, Samsung Asset Management, expires four month later.
A lead manager of the pension fund investment pool is responsible for organizing fund-of-funds structures with partners. The investment pool primarily targets South Korean bonds and money market funds.
Mirae Asset has been managing assets worth 21 trillion won as an external manager of the Ministry of Land, Infrastructure and Transport’s Housing and Urban Fund and Kangwon Land, a South Korean casino and resort company. But this is the first time it has been chosen to become the lead manager of the pension fund investment pool since it first made a bid in 2004. (Reporting by Capital Connect staff)