Whenever John Lee has a chance to meet new people he emphasizes the same piece of advice: “Buy your children stocks, instead of paying high fees for private education.”
During our interview at his office in Bukchon, northern Seoul, the CEO of Meritz Asset Management asked me directly if I was investing in stocks.
For ordinary Korean workers, it is not easy to check the stock market frequently and pick good shares that will yield high returns. When news reports tell us the local stock market has remained sluggish for the past five years, it is even less tempting to put aside money for stock investment.
However, Lee says the opposite: Now is the best time to buy Korean stocks. If you buy them for your children, that will be even better for their future, he says.
“You should buy stocks when the market performs poorly. I’m not saying you should put in a lot of money. I’m saying you should pick the right one,” Lee said.
“Long-term stock investment will prepare you for post-retirement life. But most Korean parents spend huge amounts of money on private tutoring, which will only make their children uncompetitive and miserable,” he said.
He lamented the reality of Korean teenagers who usually stay until midnight to sit at a desk and study for exams.
Lee said the rat race kills children’s creativity and will eventually take a heavy toll on corporate Korea, where only those with innovative ideas will survive.
“Parents should set them free in a wild sea, instead of farming them. That way, there can be another Tesla, Apple and Google in Korea,” the 58-year-old said.
Recalling his childhood as the youngest among six siblings, his mother’s liberal attitude toward him helped Lee take bold risks later in life, he said.
“My mother always trusted me and encouraged me. She gave me lots of love.”
He suggested parents study with their children about prospective companies and jointly invest money in shares for the next 10-20 years.
“For example, parents can save money originally planned for hagwon and plan a short trip to Vietnam together, to find out more about the emerging market. How exciting this can be,” said Lee, who frequently mixed English words in his Korean language.
To stress the importance of buying stock for children, Lee has recently written a book called “Mom, buy me stock,” which will be published in late June.
Dropping out, moving up
Born and raised in Korea, Lee dropped out of Yonsei University and went to New York to study accounting in the 1980s, in his struggle not to become just an ordinary worker at a conglomerate in Korea.
After building a successful career as a fund manager on Wall Street in the 1990s, he served as managing director of Lazard Asset Management between 2005 and 2013.
Lee came back to Korea in 2014 as head of Meritz Asset Management, with an ambition to help cultivate a mature investment culture in his home country.
It did not take much time for Lee to impress the local financial industry.
Within a year since he took office in January, 2014, his company’s net profit jumped 840 percent to 6.6 billion won. A majority of the net profit came from equity investment, which snowballed to 4.6 trillion won from 60 billion won over the cited period, according to the company.
Lee was the lead manager of Korea Corporate Governance Fund, better known as Jang Ha-sung Fund among Koreans, through which Lazard Asset Management invested in undervalued Korean companies and sought to raise their values by improving their governance structures from 2006 to 2012.
Korean companies’ corporate governance has improved a lot compared to five years ago, Lee said, although there are some “isolated cases” in some family-run conglomerates.
“People go to jail if they get caught doing window dressing. Compared to five years ago, accounting has become really clean,” Lee said.
“The thing is, conglomerates without innovation will die out and their market caps will fall,” he noted.
Lee said his investment team at Meritz gauged corporate growth potential by evaluating their management.
“We look only management’s ability and morality. That’s 70 percent. The remaining 30 percent is other things like technology and patents.”
Meritz’ investment principle is “benchmark agnostic,” meaning the team makes stock investments regardless of the benchmark level.
“Out of the 1,800 Korean companies, we endlessly endeavor to search for good ones.”
Bold work environment changes
Since joining Meritz, Lee made bold changes in the company. Immediately after his inauguration, he moved the head office from financial district Yeouido to touristic Bukchon to encourage fund managers to think outside the box.
Lee removed all forms of reports for work communication and replaced them with emails to boost productivity.
“There is no hierarchy here. Staff send emails directly to me. It’s really silly if someone is stressed out because of a typo or a wrong format,” Lee said.
The company also allows flexible working hours. Working moms pick up their children from day care at a time convenient to them. If their children get sick, they can take sick leave. Male workers can apply for paternity leave, which is still regarded as unconventional at most other Korean firms.
“We don’t control people by time because it’s the most primitive method. Our staffs should be happy to make my clients happy,” Lee said.
By Kim Yoon-mi (
yoonmi@heraldcorp.com)
