이 기사는 2020년 01월 29일 08:00 thebell 에 표출된 기사입니다.

Hyun Choi, Head of Korean Equities at Barings Korea, is often dubbed a “portfolio manager who produces steady returns.” His investment philosophy, focusing on value and security, is what made him one of the best-known domestic specialists in investing in dividend stocks.

A Seoul National University graduate who studied economics, the 50 year-old chose his career to be a financier at his early age, fascinated by the concept of securitization which was new to the Korean capital markets in 1990s. In 1995, Choi started his career at Saangyong Fire & Marine Insurance (now Heungkuk Fire & Marine Insurance), where he belonged to the company’s investment team for seven years or so.

Back then, however, the investment area for domestic insurance companies was limited. Also, the collapses of poorly-managed financial firms during the Asian financial crisis in the late 1990s motivated Choi to develop his career as a fund manager with one’s own philosophy.

In 2002, he moved to Hangaram Investment Management, one of the country’s first-generation investment advisors founded in 2000. The firm’s co-founder Park Kyung-min served as Chief Investment Officer (CIO) of SEI Asset Korea, which in 2013 was acquired by Barings Korea. While working as Head of Equities at Hangaram Investment Management, Choi was attracted by dividend equity funds and also developed his investment style that focuses on a bottom-up analysis of individual stocks.

Kang Myung-kyun, then CIO of Hangaram Investment Management, was one of those who had a large influence in shaping Choi’s investment philosophy. “When a top-down approach dominated in the domestic markets, Kang made detailed analyses based on each company’s financial statements,” Choi said. “I‘d never seen a person like him before who conducted bottom-up research in such a thorough way,” he recalled.

Five years later, Choi moved to Prudential Asset Management (now Hanwha Asset Management) where he worked as Head of Equity Investment Team. After joining the firm in 2007, he participated in running the Prudential Napoleon Equity Investment Trust (now Hanwha Korea Legend Fund), with which the firm employed a multiple-manager approach.

Choi was able to manage a fund in his own way when he was appointed to run a dividend equity fund for Prudential Life Insurance Company of Korea, which stepped up its focus on dividend income. At the time, such a fund practically did not exist in the domestic mutual fund market.

His experience as portfolio manager of the fund has played a vital role in developing his own unique approach to dividend stocks. Later, he also managed the Prudential Value Focus Fund (now Hanwha Korea Legend Fourth Industrial Revolution) as well as a small-and mid-cap fund on behalf of the National Pension Service, the country’s public pension scheme, forging his reputation as a specialist in dividend stocks and small-and mid-cap stocks.

Song Lee-jin – who worked with Choi at Prudential Asset Management and later served as Head of Equity at Hi Asset Management and CEO of LIG Capital Management – taught him the importance of taking into account a contrarian view on stock markets. “Song refused to just rely on analyst forecasts, which was the case for most [of the portfolio managers],” Choi said. “He taught me that it is important to doubt in favorable market conditions and vice versa.”

Choi moved to Barings Korea in 2013 to lead Seoul-based equity investment team, which he himself considered a turning point in his life. Here, he has further developed a team approach, which is his own way of making an investment decision.

Choi believes that a team approach can prevent mistakes that could be made in a situation where a portfolio manager makes a decision alone. He also thinks that, in order to realize the philosophy of value investing and long-term investing, portfolio managers and research analysts need to actively exchange their ideas rather than competing with each other.

His team is composed of five managers and nine analysts, all of whom play their role in the decision-making process. Choi also seeks to form a team with people of various backgrounds because he believes that such a combination could produce greater synergy. Most of his team members joined through a public recruitment process.

Choi’s investment style can be summarized as value investing based on a bottom-up research. But he also has his own differentiated view that allowed him to be recognized as one of the most talented portfolio managers in the country: He thinks that investing stocks can fluctuate in a range, above or below the fair-value level, in the mid-to-long term. That’s why he tends to be patient to take action until shares sit at a certain level of price point.

“Investment horizon can be as short as days or weeks, but the horizon for companies’ operation is much longer than that,” said Choi. “This difference must be considered when taking a position.”

Choi is lead manager of Baring Korea High Dividend Equity Fund, which is one of the firm’s flagship funds. Since launched in April of 2002, the fund posted a cumulative return of more than 433 percent, continuing to generate steady returns. Choi has a motto he keeps in mind: avoid being too greedy. He believes that he can keep the confidence of his clients by pursuing higher returns without excessive risk.

Choi has proved the effectiveness of his investment philosophy. In 2013, the weight of small- and mid-cap companies was large in the Baring Korea High Dividend Equity Fund. In 2015, he made a bold move to increase the weight of large caps in the IT, banking, oil and steel sectors based on the results of his bottom-up analysis, which led to a much higher return in the following year.

Choi is also putting efforts to improve the way of managing funds. “I learned from my experience that putting too much emphasis on avoiding risk could lead to missing the timing. Our team tries to communicate with each other actively to take action more timely once we conclude that risk is limited.”

“I want to be a portfolio manager who produces steady returns even when I get older,” said Choi. “I will continue to make efforts to improve skills of our team with unwavering principles.”

(By reporter Lee Min-ho)