Korea Post seeks multi-asset managers

The planned commitments come after its $200m allocation across two global multi-asset fund of fund managers last year.

Korea Post Insurance issued a request for proposals last Friday seeking four investment managers for a global tactical asset allocation strategy by 17 August. Its prospective commitment size has not been made public.

PDI previously reported that the fund committed $100 million apiece to Hamilton Lane and HarbourVest Partners in November 2017 as it sought global multi-asset fund of fund managers.

The fund is seeking managers for its global tactical asset allocation strategy (GTAA), although it excludes global macro hedge funds. It plans to hire up to two absolute return type fund managers and two benchmark type managers, respectively.

The mandate is to achieve excess returns by allocating assets actively, the statement says. Its targeted multi-asset investment scope includes alternative assets and liquid assets along with traditional assets such as equity and fixed income.

The fund is looking for both domestic and overseas fund managers with over $200 billion in assets under management (AUM) in total and $20 billion in a GTAA strategy with over seven years of investment history.

As Korea Investment Management, a Seoul-based investment management firm, is acting as Korea Post Insurance’s GTAA advisory manager, a separate fund of funds vehicle will be set up onshore by Korea Investment Management.

The Seoul-based investment firm will be responsible for the operation of the vehicle, portfolio risk monitoring, and currency hedging.

A spokesperson from Korea Post Insurance could not be reached for comment by publication time.

The multi-asset strategy is favoured by the world’s largest investment manager by assets, BlackRock, according to Belinda Boa, a Hong Kong-based managing director and head of active investments for the Asia Pacific and CIO of emerging markets and fundamental active equity at BlackRock, the New York-headquartered investment firm.

She told industry participants last Wednesday at the BlackRock Investment Institute 2018 Mid-year Global Investment Outlook held in Hong Kong that the firm should think about portfolio construction more holistically to meet required returns regardless of which asset class they are investing in.

“We say to our investors that we should still be risk-on as we see opportunities in risky assets but also need to be more resilient which is our preferred theme [in H2 2018],” Boa said.

Investors have seen an unusual equilibrium this year between strong economic growth and strong underlying fundamentals from corporates, which has triggered a meaningful gap between stock prices and valuations, according to her.

This means that investors’ sentiment has changed this year, demanding higher risk-adjusted returns across assets amid greater uncertainty from geopolitical risks and tighter financial conditions, she added.