Go West young man.
And in this case, Korea’s Mirae Asset Financial Group has expanded West to Wall Street from its home base in South Korea. Mirae Asset Financial Group is South Korea’s leading non-bank financial services group. As of December 2018, the group’s asset management businesses had approximately $379 billion of total assets under management. Its various broker-dealer subsidiaries and affiliates had approximately $7.5 billion in equity capital.
According to Robert Akeson, Co-Head of Prime Brokerage, Correspondent Clearing & Agency Execution at Mirae Asset Securities (USA) Inc. (“Mirae USA”), who spoke with Traders Magazine, the Mirae family of companies operates in 14 country markets. These markets, in addition to South Korea and the United States, include: Australia, Brazil, Canada, China, Colombia, Hong Kong, India, Indonesia, Mongolia, Singapore, the U.K. and Vietnam.
According to Akeson, “in late 2016, the Mirae Asset Financial Group placed $250 million of permanent capital with Mirae USA, to launch its self-clearing Broker Dealer in the US”. Akeson continued: “with this capital, in 2017 we entered the correspondent clearing, prime brokerage, securities lending, repo, agency execution, and foreign research distribution businesses in the US. Currently, we work with nearly 200 counterparties, hedge funds and broker-dealers, and our customer financing balances are approximately $70 billion.”
What makes Mirae unique?
“Mirae is very focused on building synergies with its various affiliates as well as with our broker-dealer and hedge fund customers.” Akeson added: “Mirae’s goal is to build a leading global institutional services firm built around high-touch servicing, while leveraging the vast resources of the Mirae Family of affiliates”.
According to Keith Wright, Head of Securities Lending, “a good example of such synergies is our perspective on cannabis stocks, many of which are hard to borrow in the securities lending market. This perspective is a by-product of our relationship with Canadian affiliate, Horizons ETF, manager of the Horizons Marijuana Life Sciences Index ETF”. According to Wright, “the index is one of one of the largest in terms of USD value in the world.”
Since Mirae is in the asset allocation business, these resources include the ability to “potentially introduce investment capital to professional investment managers,” according to Akeson. He went on to say that “Mirae is now arranging a trip to Korea to introduce U.S.-based hedge fund managers to Korean institutional investors”.
Akeson notes that “since Mirae does not roll-up to a bank holding company, Basel III and other new regulations do not directly apply to Mirae. Thus we have more flexibility in how we can deploy our balance sheet and have significant capacity to offer highly competitive rates. With this flexibility we are well positioned to service various counterparties, broker-dealers and professional investors such as, emerging and smaller hedge fund managers”.
Another area Mirae has been quite successful in building out has been the agency execution and outsourced trading. “We provide anonymous executions, with no shopping of orders and no prop trading, which otherwise may give rise to conflicts. Also, clients have access to multiple broker routes and algos,” according to Stephen Bombardiere, Managing Director – Head of Agency Trading at Mirae USA. Bombardiere went on to say that “Mirae (USA) provides customized coverage to suit each client’s trading need and style and access to markets around the globe, including Shanghai/Hong Kong Connect.”
Mirae USA’s traders also provide access to ETF market makers for block trades in thinly traded issues. The desk offers both high- and low-touch trading options. The low-touch offering is based on a Rules Based Order Routing methodology as opposed to a more DMA-like capability.
“Each team members acts as an execution consultant while monitoring all low-touch activity,” Bombardiere said. “And all algos are available on a high-touch basis and are not proprietary.”
And what about its prime brokerage offering?
According to Akeson, “the firm has focused its technology efforts on establishing a leading-edge institutional platform to support clients’ diverse, complex and shifting needs. Our primary objective is to offer the most secure and stable technologies while maintaining flexibility for customers.”
“There are so many exciting technologies now that didn’t exist a few years ago that Mirae USA takes advantage of, thereby distancing itself from its competitors,” according to Brandon E. Angus, Chief Technology Officer. Angus went on to say: “the technology platform’s core emphasis is on providing clients with easy access to bespoke data. By offering clients real-time interfacing, multi-currency, dual entry, streamlined clearing and custody processing, efficient recordkeeping and reporting to Portfolio Accounting and Trading Solutions, Mirae’s platform sufficiently scales to support the most demanding full-service customers as well as those that may only require limited solutions.”
Mirae USA’s centerpiece technology platform is the MIRAE Prime Portal, which offers a centralized tool utilized by clients to access a robust set of information regarding their accounts. This global portal provides a real-time view into account holdings, activity, balances, P&L, financing & interest Accruals, as well as portfolio reporting suite and Customized Data.
So, who is Mirae targeting with its offering?
According to Akeson, “Mirae USA is attracting a broad base of broker dealers and start-ups, as well as small and emerging hedge fund managers. More recently, several large hedge funds have begun to use Mirae USA’s trading desks. Mirae USA started its business in the U.S. ‘de novo’ but is now supporting over 20 prime brokerage and clearing relationships it acquired during the last 18 months.” He went to say that “Mirae USA is committed to building a significant US-based franchise and is here for the long-haul”.