Capital Group and Samsung Asset Management announced in October of 2015 that they were forming an active partnership in Korea. Through mutual cooperation, the two companies will develop investment strategies for institutional and retail investors in Korea.
Under the agreement, Capital Group will help the Samsung Management team to become familiar with Capital’s “active management style” and know how, within the areas of business management and client management.
What is Capital Group’s “active management style”? It is a collegiate style of management where individuals within the management team takes parts of the total portfolio. This style of management helps to protect the company from “stars”, who through their ultimate success moves to another company or the untimely death of an individual within the management team.
A Samsung Asset Management spokesman from it’s Seoul-based offices stated that the partnership with Capital could help lead the way for the company to become recognized as one of the top three of Asia’s home grown management companies by 2020.
Timothy Armour, CEO of Capital, looked at the broader picture of the partnership by stating that it was his hope that the co-design of investment solutions could offer Korean investors savings, retirement and insurance needs.
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In April of 2016 Capital Group and Samsung Asset Management announced the co-development of asset management products to the Korean market. This 2016 announcement is the first results of their collaboration together since they announced their partnership in October of 2015.
The firms launched six targeted retirement funds to the Korean market. The targeted, retirement dates years are 2020, 2025, 2030, 2035, 2040, 2045. According to this joint collaboration , these funds will be managed 30 years past the retirement date. This will ensure investors that they can maintain a single fund over their lifetime.
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Though at the time of the announcement in April, Samsung Asset Management showed only a specified $6.6 million in assets. However, with the recent regulatory change lifting the amount of retirement funds that could be invested in equities from 40% to 82%, management believes there is a strong possibility of growth in the future.
Moreover, the two companies feel that the eventual shift from growth-oriented equities to income-oriented equities that are suitable to Korea, will be their eventual path in the future.