Achieving strong momentum
05 September 2017
Mirae Asset Â鶹´«Ã½ (USA) is now operational in the securities lending, repo, foreign research distribution, corporate access and agency execution businesses.
Image: Shutterstock
How does it feel to be in business?
Peter Volino: Being back in business feels great. The response from our clients has been overwhelmingly positive. Currently, we have 110 repo counterparties and more than 100 securities lending counterparties in various stages of the approval process.
Once OCC membership is finalised, and through the use of its stock loan programme, considerable growth in our securities lending balances are expected.
Also, we just started executing orders off our agency desk. Very shortly, we will be launching prime brokerage and correspondent clearing. Our time-to-market has been what we had expected.
Thankfully, because we are owned by South Korea’s leading financial services firm, Mirae Asset Financial Group, we have had access to all resources required to undertake and successfully complete our business launch. For example, we launched with $260 million in total net capital. We also now have 60 employees.
In addition, Mirae Asset Â鶹´«Ã½ (USA) has partnered with FIS on the technology front and uses its Â鶹´«Ã½360 platform. Â鶹´«Ã½360 is the first of its kind, fully-integrated solution that automates and streamlines critical tasks, from the front, middle, and back office, into a single platform, and it includes portfolio accounting for our hedge fund clients.
This facilitates operational efficiency and reduces risk—two big competitive advantages for our clients and us. Lastly, we have chosen BNP Paribas to provide us with global custody services in the Americas, Europe and Asia. This relationship will allow us to meet the global settlement and asset servicing needs of our clients.
Can you tell us more about the Mirae Asset Financial Group and its strategic vision?
Richard Misiano: Mirae Asset Financial Group is South Korea’s leading financial services firm and operates in 16 country markets, including South Korea, Australia, Brazil, Canada, China, Colombia, Hong Kong, India, Indonesia, Japan, Mongolia, Singapore, Taiwan, the UK, the US and Vietnam.
As of 31 December 2016, the group’s asset management business had approximately $300 billion of assets under management. Its various broker-dealer subsidiaries and affiliates have approximately $5.8 billion in capital. So we have significant and increasing global market breadth and depth.
Strategically, Mirae Asset Â鶹´«Ã½ (USA) is an extension of the formidable asset management and brokerage franchise created by the parent. For example, the parent is now considering ways to enter the asset allocation business in the US with hedge funds and investment advisers. The plan is that these assets can be custodised at Mirae Asset Â鶹´«Ã½ (USA), which will enhance the information flow to, and comfort level of, non-US investors.
What are the possible benefits to Mirae Asset Â鶹´«Ã½ (USA) from the activities of the parent?
Robert Akeson: We see the benefits comprising the following. First, as earlier noted, we have begun operations with a significant permanent capital base. This reality combined with the fact that we do not roll-up to a bank holding company gives us tremendous added balance sheet ‘runway’ for our repo, securities lending, prime brokerage and correspondent clearing businesses. We will not be hobbled by Basel III and its ratios like other firms. Because of our globally recognised parent, our prime brokerage offering has the feel of a larger firm, but the nimbleness and attentiveness of a boutique.
Secondly, because of our parent, our clients will have access to a very distinctive foreign research product and related corporate access capabilities. We have a written content product covering a broad range of companies in South Korea, Vietnam, Indonesia and Brazil. We also have strategy pieces addressing East Asian market trends and beyond, written out of Seoul headquarters.
Finally, as the firm enters the asset allocation business, additional synergies will emerge with our prime brokerage and financing businesses and their clients.
As you gear up for the launching of your prime brokerage business, what can you tell us about it?
Volino: We are targeting emerging and small hedge fund managers and proprietary traders. These clients have been most adversely affected by Basel III and the US Dodd-Frank Act and the ensuing industry consolidation. We will also be working with introduced prime brokers who support smaller managers.
In addition, because of our balance sheet, we have been having conversations with larger funds that are seeking a significant and attentive counterparty for their secondary prime brokerage relationships.
Mirae Asset Â鶹´«Ã½ (USA) offers a fully integrated prime brokerage platform capable of providing tailored solutions around portfolio reporting and analytics, risk management, and trading.
The platform will focus largely on supplying intelligent data to support our client’s strategies. Taken as whole or in pieces, this platform will offer hedge fund clients operational efficiencies and risk mitigation tools.
In addition, we will provide hedge funds with a wide range of advisory services to assist them in launching, and operating their businesses, while better preparing to meet their operational due diligence needs. These services span areas including office space, enterprise technology, cyber security, compliance and human resources, and so on.
Recently, we hired industry veteran, Stephen Murphy, to lead our prime brokerage, correspondent clearing and agency execution businesses. Stephen has extensive sell and buy-side experience with Weiss Multi Strategy Advisors, Neuberger Berman and Merrill Lynch.
Peter Volino: Being back in business feels great. The response from our clients has been overwhelmingly positive. Currently, we have 110 repo counterparties and more than 100 securities lending counterparties in various stages of the approval process.
Once OCC membership is finalised, and through the use of its stock loan programme, considerable growth in our securities lending balances are expected.
Also, we just started executing orders off our agency desk. Very shortly, we will be launching prime brokerage and correspondent clearing. Our time-to-market has been what we had expected.
Thankfully, because we are owned by South Korea’s leading financial services firm, Mirae Asset Financial Group, we have had access to all resources required to undertake and successfully complete our business launch. For example, we launched with $260 million in total net capital. We also now have 60 employees.
In addition, Mirae Asset Â鶹´«Ã½ (USA) has partnered with FIS on the technology front and uses its Â鶹´«Ã½360 platform. Â鶹´«Ã½360 is the first of its kind, fully-integrated solution that automates and streamlines critical tasks, from the front, middle, and back office, into a single platform, and it includes portfolio accounting for our hedge fund clients.
This facilitates operational efficiency and reduces risk—two big competitive advantages for our clients and us. Lastly, we have chosen BNP Paribas to provide us with global custody services in the Americas, Europe and Asia. This relationship will allow us to meet the global settlement and asset servicing needs of our clients.
Can you tell us more about the Mirae Asset Financial Group and its strategic vision?
Richard Misiano: Mirae Asset Financial Group is South Korea’s leading financial services firm and operates in 16 country markets, including South Korea, Australia, Brazil, Canada, China, Colombia, Hong Kong, India, Indonesia, Japan, Mongolia, Singapore, Taiwan, the UK, the US and Vietnam.
As of 31 December 2016, the group’s asset management business had approximately $300 billion of assets under management. Its various broker-dealer subsidiaries and affiliates have approximately $5.8 billion in capital. So we have significant and increasing global market breadth and depth.
Strategically, Mirae Asset Â鶹´«Ã½ (USA) is an extension of the formidable asset management and brokerage franchise created by the parent. For example, the parent is now considering ways to enter the asset allocation business in the US with hedge funds and investment advisers. The plan is that these assets can be custodised at Mirae Asset Â鶹´«Ã½ (USA), which will enhance the information flow to, and comfort level of, non-US investors.
What are the possible benefits to Mirae Asset Â鶹´«Ã½ (USA) from the activities of the parent?
Robert Akeson: We see the benefits comprising the following. First, as earlier noted, we have begun operations with a significant permanent capital base. This reality combined with the fact that we do not roll-up to a bank holding company gives us tremendous added balance sheet ‘runway’ for our repo, securities lending, prime brokerage and correspondent clearing businesses. We will not be hobbled by Basel III and its ratios like other firms. Because of our globally recognised parent, our prime brokerage offering has the feel of a larger firm, but the nimbleness and attentiveness of a boutique.
Secondly, because of our parent, our clients will have access to a very distinctive foreign research product and related corporate access capabilities. We have a written content product covering a broad range of companies in South Korea, Vietnam, Indonesia and Brazil. We also have strategy pieces addressing East Asian market trends and beyond, written out of Seoul headquarters.
Finally, as the firm enters the asset allocation business, additional synergies will emerge with our prime brokerage and financing businesses and their clients.
As you gear up for the launching of your prime brokerage business, what can you tell us about it?
Volino: We are targeting emerging and small hedge fund managers and proprietary traders. These clients have been most adversely affected by Basel III and the US Dodd-Frank Act and the ensuing industry consolidation. We will also be working with introduced prime brokers who support smaller managers.
In addition, because of our balance sheet, we have been having conversations with larger funds that are seeking a significant and attentive counterparty for their secondary prime brokerage relationships.
Mirae Asset Â鶹´«Ã½ (USA) offers a fully integrated prime brokerage platform capable of providing tailored solutions around portfolio reporting and analytics, risk management, and trading.
The platform will focus largely on supplying intelligent data to support our client’s strategies. Taken as whole or in pieces, this platform will offer hedge fund clients operational efficiencies and risk mitigation tools.
In addition, we will provide hedge funds with a wide range of advisory services to assist them in launching, and operating their businesses, while better preparing to meet their operational due diligence needs. These services span areas including office space, enterprise technology, cyber security, compliance and human resources, and so on.
Recently, we hired industry veteran, Stephen Murphy, to lead our prime brokerage, correspondent clearing and agency execution businesses. Stephen has extensive sell and buy-side experience with Weiss Multi Strategy Advisors, Neuberger Berman and Merrill Lynch.
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