Capital Group, Samsung Asset Management form strategic partnership in Korea

Capital Group and Seoul-based Samsung Asset Management on Wednesday announced a strategic partnership to cooperate on developing active investment strategies for institutional and retail investors in Korea.

Capital Group, with $1.4 trillion in assets under management, and Samsung Asset Management, Korea’s top manager with $166 billion in AUM, “will work together to co-develop retirement solutions and asset allocation products and enhance SAM’s active investment capability,” a news release said.

Under the agreement, Capital Group will help its Korean partner become familiar with “Capital-style active management,” and work to provide management know-how in areas such as business management and client management.

A Seoul-based spokesman for Samsung Asset Management said the partnership with Capital Group would be a cornerstone of the firm’s goal of becoming one of Asia’s top three home-grown asset management companies by 2020.

Sung-hoon Koo, SAM’s CEO, said in the release that the partnership will pave the way for his firm to “upgrade its active equity investment capability and implement life cycle asset allocation product strategies.”

The news release also quoted Tim Armour, chairman of the Capital Group, saying the “broader plan is to co-design investment solutions to fulfill the savings, retirement and insurance-linked needs of Korean investors.”

The Samsung spokesman, in a telephone interview, and Tom Joyce, Capital’s head of global media relations, in an e-mail, said details of the economics of the relationship — specifically how co-developed products would be distributed and revenues shared — had yet to be worked out. “It is too early to say what the pricing and structures will be,” noted Mr. Joyce, adding “the economics will be worked through.”

Separately, the news release said the partnership will include selecting and using “appropriate Capital Group products and services across multiple Samsung distribution channels.”

Mr. Joyce didn’t respond directly to a question about whether this was the first time Capital Group had entered into such a partnership. Instead, he cited Samsung’s interest in learning more about Capital’s system and “way of investing,” while noting Capital’s interest in learning “how Samsung markets and distributes products to Korean investors.”

According to data provider eVestment, Capital Group listed roughly $275 million in AUM managed on behalf of Korean investors.