Samsung Electronics loses market share in mobile phones, TVs

[Herald Interview] Changing old habits in equity investment

Former Wall Street fund manager gives tips on how to be a smart investor

kh close

 

Published : 2014-03-31 20:55
Updated : 2014-03-31 20:58

John Lee left Korea more than three decades ago to study accounting in the U.S.

He had a successful career as a fund manager on Wall Street ― he was responsible for some $1.8 billion worth of assets at the time ― and also headed a team of experts focusing on investment in Korea.

Having enjoyed such success, Lee, now 56, is back in Korea for a new mission: to create an advanced investment culture in his home country.

“I wanted to come back to use my knowledge and experience to help the country’s financial market go up another level,” Lee said in a recent interview with The Korea Herald.
John Lee, CEO of Meritz Asset Management. (Yoon Byung-chan/The Korea Herald)

In less than a year since Lee took the helm of Meritz Asset Management, he has made some bold changes to the company.

One of the most noticeable changes, perhaps, is moving the office out of Yeouido, home to most of Korea’s largest banks and financial services companies, to Samcheong-dong in northern Seoul, where one can walk to dozens of trendy cafes, restaurants and boutique shops. The rationale was that creativity sprouts from the immediate environment.

“If you work in the same area, in the same way with others it’ll be so boring,” Lee said.

“You’ve got to think differently than others, especially in asset management.”

Under his guidance, Meritz has also cut the number of different types of equity funds from 10 to just one, in what he believes is a move to “better serve investors.”

Some firms here run each between 40-50 different types of equity funds, making it difficult for individual investors to choose one.

This is largely because many still believe the stock market is for short-term investment, Lee explained.

“This is completely wrong. You need to stay invested in funds for a long period of time.”

His presence has already made some positive impacts. Meritz’s fund gained some 3.79 percent in the first quarter of the year, while its peers saw a decline of an average of 3.97 percent during the same period.

Lee noted that the objective of Meritz’s fund was to achieve capital gains via long-term investing.

To pick the right stock, Lee’s team visits companies regularly, conducts investment meetings and studies top banks and even rivals.

Lee’s six-member team, in fact, has a strong track record of investing in Korea for more than 20 years.

The team was first built when Lee began managing the Korea Fund in 1991 at Scudder, Stevens and Clark, the U.S. leading asset management firm, which was later acquired by Deutsche Bank. Lee and most of his team members regrouped at Meritz as Lee believes it is critical to preserve the team’s unique investment culture and style.

“We’re looking for sustainable businesses and companies which are undervalued, and where investors keep their money for a long period of time,” he said.

Lee, who is a strong advocate of long-term investing, is also in favor of encouraging people to start investing in the stock market at an early age.

“If you are in your 20s or 30s, you need to use securities as building blocks for the core part of your portfolio, to prepare for the challenges of increased life expectancy,” he said.

His advice is simple. Save on small things ― a cup of coffee a day ― and set aside 10-20 percent of your earnings to invest in equities. “The important thing is not how much you earn but how much you save and invest,” he added.

By Oh Kyu-wook (596story@heraldcorp.com)

Photo News

티아라 효민 멋진 뒤태에 남심 흔들

섹시백 선발대회 몸매 뽐내는 참가자들

카자흐 女배구선수 초특급 미모, 전세계 ‘깜짝’