For Asset Manager, a Future Beyond Korea

When Park Hyeon-joo, chairman of Mirae Asset Financial Group, introduced South Korea's first retail mutual fund in December 1998, the country was mired in the Asian financial crisis. Only a year had passed since the government had agreed to bring strict discipline to its financial sector and rein in profligate industrial conglomerates, in return for a multibillion-dollar bailout from the International Monetary Fund.

Mr. Park's risky bet paid off. Ten years after he started Mirae, and nine years after launching its first mutual fund, the company is Korea's biggest asset manager, with $50 billion under its direction. Growth at Mirae, which means future in Korean, has been aided by Mr. Park's efforts to convince Koreans to hold equities as long-term investments, a concept that hadn't been widespread. The country's fund market, which has swollen to more than $300 billion from less than $8 billion when official figures were first collected in 1999, also has attracted global asset managers, including Fidelity Investments, Goldman Sachs Group and UBS Investment Bank.

Under the Mirae Asset Financial Group umbrella are the flagship unit Mirae Asset Investments, Mirae Asset Securities, Mirae Asset Life Insurance and Mirae Asset Capital. Mirae Asset Securities posted a 26% increase in net profit to 115.7 billion won ($126.4 million) for the fiscal year ended March 31 on revenue of 604.5 billion won, up 40%. The group also operates offices in Hong Kong, Singapore, China and India. It is set to launch a joint-venture securities firm in Vietnam this year.

Mr. Park says he intends to triple Mirae assets under management to $150 billion in five years through overseas expansion, including a unit in London that is in the final stages of gaining its U.K. business license.

Mr. Park, 49 years old, has a bachelor's degree in business administration from Korea University and attended the Advanced Management Program at Harvard Business School in 2002. Jeongjin Lim spoke with Mr. Park at the Mirae Asset Financial Group headquarters in Seoul. The conversation was in Korean.

WSJ: What was your first job and what did you learn from it?

Mr. Park: At the time I graduated from college, Korea's financial scene lagged behind our manufacturing industry, which was fast growing and had reached a certain level of sophistication. Banks were almost alone in the financial sector in support of business, and business was still strongly tied to politics. I decided to get involved in the capital-markets business because I felt that Korea's financial system would in the long term become more like Japan's, which had expanded rapidly in support of its financial and capital markets.

When I was 27 years old, I started a small equity-investment-advisory company. But I quickly learned that Korea had no legal or regulatory guidelines for that kind of business, to guard against fraud. So, I decided instead to work for a licensed and structured organization for at least 10 years before returning to my own business. In those 10 years as a stockbroker, fund manager and branch manager of a securities company, I learned a lot about running, leading and managing an organization, which later helped me run my own company.

WSJ: In your business, is there a difference between Korea and the rest of the world?

Mr. Park: Though we were a front-runner in Korea, when I was preparing to do business in Hong Kong we had almost no track record abroad, and most of the advice we got was to concentrate on funds of funds. Now, with our funds' superior returns and assets under management making us one of the largest Asian equity funds, we are building brand recognition. Even people who had worked for global investment titans in Asia are coming to work for us.

But London isn't Asia. While we have localized operations in each foreign market we entered, we plan to localize our operation in London even more. We will provide the operations with a basic platform, product strategies and management guidelines, and leave the rest for them to work out. In that way, we can absorb what is best about the London financial market and, I think, do better than existing companies there.

WSJ: How can Mirae Asset Financial Group differentiate itself from global rivals that have a longer history in the wealth-management business?

Mr. Park: Mirae Asset has been competing with global asset managers in Korea and elsewhere in Asia. Global companies' one advantage is that they have well-established brands and well-equipped organizations with a long history of risk management. But it is also true that some of our rivals can be rigid and have difficulty thinking outside the box. I encourage my employees to be more creative. At the same time, we don't leave everything to the individual; that's where good communications play an important role.

Looking ahead five to 10 years, I believe that growth in Asia will move global economic trends in new directions. We are witnessing the creation of tremendous markets in China and India, with their three billion people coming into the capital-market system. Considering the similarities among Asian countries' cultures and systems, and our company's compelling track records in Asian investments, I am confident we can be competitive in Asian funds against companies from other regions. And while exposure to Asian assets by European and U.S. investors is still minimal, I believe the growth of Asia's economies will cause them to increase their investments here. We plan to offer them reliable Asia-Pacific investment funds.

WSJ: What's the most important knowledge you wish every new hire had?

Mr. Park: Honesty. This business is selling trust, not returns; it's not just about making money. People employed at Mirae shouldn't lie to our clients. The secret to hiring good people who will live up to those expectations is to find a group of qualified employees. If you find 10, it is likely you will be left with at least one who can.

WSJ: What principle of management do you wish you knew when you started?

Mr. Park: Running my own business, and before that my experiences as a branch manager for another company, taught me an important lesson, the value of people in any organization, though it took me almost 10 years. It is strange that it takes such a long time, for me and for most people, to realize such a simple truth. As a top manager whose vision is focused on strategy, what I do is simply to make marks on a blank sheet of paper, leaving others to fill out the picture. So, having the right people around you is really important.

WSJ: What makes a good fund manager?

Mr. Park: Contrary views. They should be able to find invisible as well as visible values. And a sense of balance, which means they should be capable of finding the fair value of a company regardless of current market condition. When looking at a company, I pay more attention to the relative competitiveness within the surrounding environment than to the statistical data itself.