UBS, Mesirow Financial and AXA are on the shortlist for Korea Post’s global hedge fund investment mandates for which the state agency is to allocate about 150 billion to 200 billion won ($131 million to $174 million) later this year.
Korea Post’s insurance bureau had received proposals of multi-strategy hedge funds from global financial services firms in May.
It will select two or three hedge fund managers around the end of August upon completion of due diligence study on the three shortlisted investment companies, according to a Korea Post source on July 5.
“Our top selection priorities were track records of the rate of return and volatility management,” the Korea Post source told the Korean Investors. “We also took into consideration whether they can contribute to South Korea’s hedge fund market (growth).”
The management houses, willing to build a database on South Korean hedge funds and include them in their investment universe, received additional points in the selection process.
His remarks came after the Bell, a capital market news provider of MoneyToday, reported last week that Korea Post tentatively decided to allocate up to 200 billion won to the three hedge fund management firms – UBS, Chicago-based Mesirow Financial and France’s AXA.
Korea Post will deploy capital to selected global hedge fund houses through funds of funds run by Mirae Asset Global Investments Co. Ltd.
Mirae Asset was recently picked as Korea Post’s onshore fund of hedge fund manager, in addition to Korea Investment Management Co. Ltd. to which the state agency has entrusted around 200 billion won for hedge fund investment.
Including the planned allocation of 150 billion to 200 billion won to global hedge fund houses via Mirae Asset, Korea Post will have committed 350 billion to 400 billion won to hedge funds this year.
Meanwhile, Korea Post has shelved a plan of investing in South Korean hedge funds because of their lack of experience and track records.
By Chang Jae Yoo
<Edited by Yeonhee Kim>