Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Despite authorities taking their foot off the environmental, social and governance pedal and recent volatility in equities and bonds, the benefits of Artificial Intelligence and improved investor transparency are just beginning.
More deals likely after Capital’s Korean move
Paul Hennessy
In what may be a sign of things to come in Australia, Capital Group has signed a distribution and product co-operation agreement with Samsung Asset Management in Korea. The US-based global manager has previously signalled its desire to aggressively expand its reach in Asia Pacific.
Under the agreement announced last week, Capital and Samsung will initially co-operate in four areas:
>Â Investment management processes: to enhance Samsung’s investment capability through understanding of Capital-style active management. Select Samsung managers and associates will participate in periodic study trips to facilitate learning of investment insights and processes
>Â Retirement solutions: to create actively managed, objective-oriented, long-term, cobranded retirement solutions for the Korean market; to establish asset allocation strategies for retirement pensions; and to develop relevant investment solutions.
>Â Product management: to select and use appropriate Capital Group products and services across multiple Samsung distribution channels, and
>Â Distribution channel support: to provide training programs with respect to asset management, business management and client management know-how.
According to Paul Hennessy, the managing director of Capital in Australia, the firm is having similar discussions with Australian institutions. He said after the Korean deal was announced last week: “We believe having a small number of close and deep working relationships, across multiple asset classes, is one path for the future for the Australian investment industry.”
Samsung is the largest asset manager in Korea, with about US$165 billion under management. It’s chief executive, Sung-hoon Koo, said in a statement: “As we look at trends – the growth of segregated mandates from institutions, asset allocation under a continued low interest rate environment, and the growth of alternative investment products – the Korean asset management industry can’t survive with products and services based solely on past market conditions. This strategic partnership will enable [Samsung] to enhance and upgrade its active equity investment capability and implement life-cycle asset allocation product strategies which have already been proven in developed markets.”
Capital, which has assets under management of about US$1.4 trillion globally, has been serving investors in the Asia region for more than 30 years. It has about US$16 billion under the Capital Group Asia umbrella from its offices in Sydney, Tokyo, Hong Kong, Singapore, Mumbai and Beijing.
