[Interview] Andrea Muller, Executive Director for Principal Global Investors (PGI)

Positive Energy of a Woman that moves a 750 Trillion Won Global Asset Management Firm Work and Family, Achieving two objectives with the right balance Happy life thanks to dynamic work and diverse clients Korean clients picky but their needs are clear Positive outlook on Korean economy positive elements from both domestic and overseas environment [Cheonji-ilbo(H.E. Times)=Song, Tae-Bok] The more we spoke with Andrea Muller, the Executive Director at Principal Global Investors (PGI), the more we realized about her excellent leadership and her way of balancing life between work and family. Andrea Muller received juris doctorate from Georgetown Law Centerand worked as a lawyer and also at UBS Investment Bank and Fitch Ratings until 2010 when she joined a giant asset management firmthat manages KRW 750 trillionfor institutional and retail clients worldwide. She is frequently introduced by the press for well balancing her family and work, and certainly is a role model to working women. Andreas facial expressions actually sparkled and were very bright whenever she shared about her family and work. The children,both born in France during Andreas time as a lawyer, are both creative and globally aware thanks to their times spent in different parts of the world. Our newspaper met Andrea, who has visited Korea for client relationship purposes, to conduct an interview at the Grand Hyatt Seoul on September 7th. - Please introduce about yourself. I am an Executive Director at Principal Global Investors (PGI) and work as Global Head of Institutional Business, and also am one of the Operating Committee members at PGI. Prior to my current role, I was the Head of Asian operation in Singapore as CEO and have overseen business across Asia from Greater China to Singapore, Hong Kong and the Middle East at PGI. Ive also initiated business with China (China Construction BankPrincipal) as well as with Malaysia (CIMBPrincipal) successfully. Before joining Principal in 2010, I was a partner at Shearman&Sterling in Europe, and also worked as Managing Director at UBS Investment Bank both in France and in Singapore, and also worked at Fitch Ratings as Asia Pacific CEO. - What would be the purpose of this trip to Seoul. Ive been visiting Korea on a regular basis since 2000 for the purpose of client relationship. I am visiting Australia, Korea, Singapore, Thailand, Malaysia, Taiwan, Hong Kong and China on this 3-week trip. This extensive travel is only possible thanks to those people on the ground like Brian Shin who already has the Korean market all well covered as a good example. We are meeting Korean investors to listen what their concerns are, and what Principal could help provide solutions, meet their needs and ultimately solve their problems. - How is the working environment at Principal. Principal has a very unique culture. It is very open and collaborative, and this is the culture that I am truly proud of. It is also a very comfortable place for women to work, and Principal provides women with equal opportunity and reward, which I am impressed of. Women distinguish themselves here at Principal: for example Principal Financial Group (PFG) has 4 different divisions;the CEOs in those 2 divisions are women. Principal allows all employees to spend enough time with their families and loved ones, and to look after their well-beings. This is another part of Principal being successful in the industry. Principal actually won the best place to work in asset management in the past 4 years, which shows that it is indeed a great place to work for both men and women. - What would be the positive points of women from your experience. Having women participatein this society brings far more diverse ideas than those of men from my experience. Women certainly have a different approach to matters and thus have different perspectives and outlooks. These aspects definitely interact positively on the organization. After all, half of the worlds population is women and more than half of the consumers are women. Because many women manage household money, they also certainly have the required skillsets to manage assets well for clients in their professions. - Is thereany asset management program for women. PGI operates an annual program, "Women in Asset Management", and we recruit young women from universities in the United States for this 2 day program. This helps explain why women should consider financial services and asset management in specific, and why its a good career for women. I attended in this program and spoke of how women can be really good at Relationship Management and at Sales this program promotes open and frank discussions amongst women that helps young women to decide their career and future. - Patriarch has always been a culture here in Korea, and has made working women difficult to be successful. Ive been very fortunate in that aspect. I have a very supportive husband and family, and great colleagues at a company where I can work with comfort and confidence as a woman, which made my career today. My husband comes from a large family. One of the 8 children, he has 4 older sisters, and his mother worked. So that is a large part of how he has always understood and supported my career. However I always try my best as well to recognize the balance between family and work. Despite the busy schedule, I also take care of my health in order to stick with my balance. - Women in Korea are required to be superwomen today. It used to be like that but Korea is also gradually changing. Ive been in Asia for quite some time, and I do see positive developments for women across Asia.Ive been coming to Korea since 2000, and made many Korean friends. The women Ive met here in Korea are very talented, who are able to balance work and family well. - What would be the main characteristic of clients in Korea. Arent they picky in some sense? Every client has differences and similaritiesfrom one another in each of the countries. Meeting with a picky client is certainly not a problem; it actually is good because this helps us discern what they want from us.I closely listen to the concerns of the client, and provide diverse solutions appropriately, but I would not push to sell my ideas; instead I would be there to listen what the problem is.Principals philosophy is to form a close partnership with a long-term view. To establish so,Principal always approaches clients genuinely. Principal is very interested in the clients changing needs, and ultimately to provide the best solutions. - How do you expect global economy in the future. We expect to see continuous slow growth with low interest rates globally. Global market is so inter-connected as you know. The developed nationsare relatively slower in terms of growth than the emerging market. We are still seeing recovery from global financial crisis so seeing rates hike up to a level of 4 to 5% will be unlikely in the near future.So, in this slow growth, we are seeing investment demand shifting from domestic investments into overseas stocks, fixed income and real estate in countries like Korea. - How do you expect Korean economy and financial market. Korea is a very sophisticated market, and certainly has tremendous experience on credit and fixed income investments from the long past. Korean investors have strong knowledge on capabilities of assets, and this was thanks to financial education earlier that goes beyond to contribute in giving investors with deep knowledge in financial products across asset classes. Considering that China is opening up its door to overseas investors, this will certainly influence positively to neighboring countries like Korea. With all these reasons, Korean economy has a bright future ahead as an overall. Mother of two children and a wife in family, Andrea Muller shares that life is so busy and fun, and also dynamic work and different clients make workplace more energetic. Spending time with Andrea made us realize that challenging environment is actually a positive invitation of life, and moreover, Andreas blessed fortune is not only from external environment but also from her inner optimism and self-esteem. Bio Executive Director at Principal Global Investors (PGI) Global Head of Institutional Business at Principal Global Investors (PGI) Chief Executive of Asia (CEO)at Principal Global Investors (PGI) European Partner atShearman&Sterling Managing Director atUBS Investment Bank in France and Singapore Head of Fitch Ratings Asia Pacific (CEO) Juris Doctorate from Georgetown Law Center

[INTERVIEW] Bob Baur Principal(PGI) Chief Global Economist

An economic expert who forecasted Hope while the rest of the world was insecure after Brexit Big attention from the leading international press, combined with integrated analysis Accurate Forecast Europe, recovers quickly from the Greek experience Actual farming experience brings real understanding of market economy Principal Key Strength, 'Exceptional Real Estate Capability 'HospitalityHard WorkingCommunication' Visit to Korea to share market views with investors, but also to listen directly from investors Optimistic view on South Korean Economy "Despite a few threatening elements such as relationship with its neighbor in the North, South Korea will certainly do well [Cheonji-Il-Bo=Song, Tae-Bok] I was a farmer for a long time. My father and my grandfather farmed. I came to learn in depth of the global markets with an integrated understanding through external economic factors which influenced commodity prices. Asked how Bob Baur (Robert F. Baur, PhD) has obtained an integrated perspective in analyzing and anticipating economic trends and movements, who works as Chief Global Economist for a global asset manager Principal Global Investors (PGI) that manages over KRW 750 trillion, our Newspaper has learned a rather surprising answer live experience in person through farming from early days. Unlike other economic forecasters who expressed pessimism ever since the June 24th result of Brexit, Bob Baur anticipated quick rebound in Europe thanks to the lesson learned in the Greek crisis. Financial market was actually astounded when the UK and European economies all recovered by a month, but it wasnt the case to Bob Baur as he accurately expected as quoted at the Wall Street Journal the fall in bond yields since the Brexit vote will help the global economy by lowering borrowing costs for governments, companies and consumers. He further emphasized that People may call me delusional, but it is possible the Brexit vote may even help global growth because of the decline in interest rates. With great attention from the press worldwide for his accurate economic forecasts, Bob Baur has not visited Korea for more than 7 years. Our newspaper has met Bob Baur to conduct an exclusive interview on various issues such as forecast on Korean economy at the Grand Hyatt Seoul on August 24th. - Introduction about yourself. As a Chief Global Economist and a Managing Director at Principal Global Investors (PGI), I am also a Vice President at Principal Financial Group (PFG). I oversee the Economic Committee and am responsible for anticipating global economic trends and market movements by conducting macroeconomic and quantitative research. It will soon be my 22 years at Principal after 5 months. - Distinctive characteristics of Principal. Established in Iowa USA in 1879, Principal has always performed consistently across asset classes thanks to its outstanding economic analysis which has fortunately resulted in strong reliability from investors worldwide. With a unique mid-west welcoming culture and the emphasis on close communication, these have become the root of Principals distinctive culture no wonder all of the employees at Principal are hardworking and very kind. - What would be the objective of this visit to Seoul and the result so far. Primary objective is to support Brian Shin (Head of Korea Sales) by visiting clients together in order to provide as much economic views as possible, but also to help those investors by explaining how we see the market today, what we forecast in various areas of economies and what we could share our views in terms of asset allocation in a big picture. Secondly, another important purpose of this visit is to exchange views with one another, and to listen from the investors directly about their markets and views.I actually learned significantly by spending time together discussing with the investors face to face. I do spend quite amount of time globally on these purposes. We help investors with the solutions by providing valuable information and sharing views on various economic areas in the market, and thus, fundamentally guiding them to solve their concerns on investments. - Our newspaper is aware of your economic forecast through various international media. They were indeed significantly accurate and were based on integrated analysis. Is there any special know-how for such integrated perspective? I was originally a farmer in Iowa. My father, grandfather and even my great-great grandfather all farmed. I spent my time in the farm during those days when President Nixons Doctrine was in place the United States exported wheat to Soviet Union and soybeans to Japan. Ive experienced myself how global economic environment dictates directly on the prices of agriculture. We would talk about interest rates and currencies on the dinner table regularly, and how those external factors actually influenced our lives in the farm because of commodity prices and revenues as a whole. I naturally understood what and how the commodity prices were determined, and as a result, have become very curious to learn how the world evolved and worked, and ultimately have brought me here today. - It is interesting that youve learned about the importance of integrative perspective from farming. The Dollar was so strong in the early 80s and the opposite in the 70s. As a farmer, I have directly experienced and learned the real source of economics and markets we borrowed money from the banks and when interest rates spiked, we needed to understand what this meant to us and in a larger scale, the broad influences on the economy from external factors as well. As global economy has become more and more correlated with the price of commodities, I naturally got interested in other parts of the world. Because the world is so connected today, one needs to further knowledge and understanding than ever so on markets worldwide, and thus it is essential to broaden the view on global economy from an integrated perspective. - How do you forecast on Korean economy. I am not fully aware of Korean economy for now, however one thing for sure is that its economy does have a positive outlook. As an exporting country, it is essential to have positive relationships with those neighboring nations,and Korea is doing well to maintain such close ties in that perspective. Sure that there is always a foreign policy factors such as the geopolitical conflicts with North Korea as well as the THADD today in the Korean peninsula in relations to trying to take control over the entire South China Sea by China we still believe that such issues related to foreign relations will be resolved sooner than later. - Real Estate is a big interest to Korean investors in general, and were aware of Principals exceptional capabilities in this field. Please share your view on real estate investments. As far as the United States is concerned, there is the so-called bubble in gateway cities such as New York, San Francisco, Miami and LA. However, we still consider other cities to be attractive to investors such as Houston and Seattle. Principal has a large Real Estate department that focuses on the 4 Quadrants. It is a dedicated real estate specialist boutique that provides investors with plenty of attractive opportunities, and large Korean institutional investors have much exposure to the US Real Estate through Principals Real Estate capabilities. - If asked why Principal should manage on behalf of clients. First and foremost, Principal has a very strong long-term track record with expertise in various areas of asset class. We are also truly global and well connected worldwide our offices in the United States, London, Germany, Netherlands, Dubai, Australia, Japan, Hong Kong and Singapore as well as JV operations in Latin America, India, China and Malaysia - all cooperates to work closely for the good of clients. With local presence worldwide, Principal has a superior advantage with immediate access to valuable information on the ground, as US Real Estate being one of the best examples in identifying good property and providing clients with opportunities for great risk-adjusted returns. In essence, Principal is a very client-friendly organization that values the integrity and client servicing, and all employees genuinely work so diligently. - A comment for Cheonji-Il-Bo soon facing 7th anniversary. Cheonji-Il-Bo has grown remarkably well over the past 7 years. I am very impressed with your newspapers progress; I strongly believe you will develop further more rapidly. I wish Cheonji-Il-Bo the best, and equally look forward to seeing you again in the near future. Bio Robert F. Bauer, PhD Managing Director for Principal Global Investors (PGI) Chief Global Economist for PGI Vice Presidentfor Principal Financial Group(PFG) Ph.D. in Economics from Iowa State University

“Principal(PGI), Consistent Returns are based on Outstanding Analysis and Humanity”

Principal Global Investors: Brian Shin representing Korea at a Global Asset Management Firm Managing KRW 760 trillion for institutional and individual clients NPS and KTPF are two of the clients Value on human first philosophy leads employees in long-term commitment to its Firm Network of Specialized Investment Groups within PGI Investing those profits earned into Humanity by providing relief for refugees, supporting those in need during natural disasters, and also for future generations [Cheonji ilbo=Song, Tae-Bok] PGI(Principal Global Investors) is a global asset management firm with a credit rating of A that manages over USD 680 bil for institutional investors as well as various pension and retail customers across 76 nations worldwide. PGI is well recognized for its precise and high-quality analysis on global markets and economic insights. With this background, one could easily comprehend why those various information from PGI are often being used and quoted by media such as CNN, and even from the Wall Street. PGI manages variety of asset classes such as Real Estate, Global Fixed Incomeand Global Equity in the best interest of its clients. After meeting PGIs Brian Shin(Head of Korea) at the officeon the 16th, we quickly realized the biased thoughts that PGI would be one of those obsessed with money were merely a stereotype on the asset manager. ― Please introduce about yourself briefly. After graduating from University of Wisconsin-Madison (Undergraduate in Business Administration), Ive worked in several asset management firms, and now here in PGI since 3 years ago. I am traveling frequently back and forth from Hong Kong to Seoul. Note that weve got 400 staffs on the ground in Hong Kong amongst almost 10,000 employees globally. ― If you could also introduce about Principal as a firm. Mr. Larry Zipperman was a successful businessman in the field of Insurance in Iowa USA, and has established Principal in 1879 as a result of it. As a firm based in mid-west rather than a big city, PGI is widely known for country-style and yet humanity comes first philosophy deep in its roots. Nevertheless, the quality of economic analysis with outstanding performance for clients is second to none. The NPS, KTPF and Korea Post are just three of big names of how PGI has utilized its expertise to develop business in Korea. ― What are the key characteristics of PGI? Upon the foundation of valuing on human first, it is not surprising to find those employees in PGI who have spent more than 25 years in the firm, which is quite unusual in this rapidly evolving environment. With this, PGI is proud to earn the top spot among companies with 1,000 or more employees on an annual survey of the Best Places to Work in Money Management. (Pensions & Investments). Having worked in different companies myself, PGI is where I truly enjoy spending my time to work. Although other firms naturally speak highly of themselves, it is not in the culture of PGI to boast of its rich tradition rather, PGI is more interested and focused on the well-being of humanity and future generations. That is one of the few reasons why PGI has actively been participating to help others in need for help during environmental and natural disasters around the world. Clearly sharing, PGI has a long-standing commitment to corporate stewardship such as the Signatory for United Nations-backed Principles for Responsible Investment (PRI). ― Please Share with us the know-how on how to perform consistently. There is a network of specialized investment groups within PGI which all closely cooperate with each other by sharing valuable information and resources on economic trends. Precise analysis in the aftermath of Brexit is a classic example as many others predicted this eventpessimistically as the next Greek crisis; PGI on the other hand has rationally expected the market to react in a calm manner, and to rebound sooner or later, having the Greek crisis as a good lesson a few years ago already. ― A personal question, have you also enjoyed such performance yourself in PGI? As employees of PGI, we are all entitled to contribute significant portions of our bonuses in PGI funds, and I was fortunate to realize a profit of almost 20% within 3 years. ― Which area would you recommend to an institutional investor with KRW 10 bil to allocate? Priority would definitely be Real Estate. The reason for that is PGIs immediate access to valuable information on Global as well as US Real Estate relative to others. Many of those investors actually rely on PGI on investing into Real Estate. New York City as an example Norway, China and Korea are the three nations which aggressively look into the market today, which came as a surprise to myself to see Korea within the top 3 investors in the list. Second recommendation would have to be fixed income which provides good risk-adjusted returns in this low yielding environment. PGI has shared positive information on US Fixed Income, and those who were unenthusiastic of this asset class have regretted their decisions to pass this opportunity after missing the 7-8% of absolute returns this year so far. ― What is the minimum subscription amount for retail investors to invest into Principals Funds? It used to be around KRW 200 mil for individual investorsas a minimum subscription amount, but that entry barrier is lowering down. We are discussing with our business partners in the insurance sector to even abolish such guideline in order to provide the opportunity for those investors should they be interested in. ― We are aware that Bob Baur, the Chief Global Economist of PGI, will be visiting Korea this month for the first time. What would this imply to PGI and could you quickly share about him in detail? Bob, who was the global head of trading, is a Chief Global Economist for PGI he establishes and directs global economic policy and strategy, oversees macroeconomic and quantitative research, forecasts economic trends and anticipates market movements. Unlike other economists who are primarily concentrated in their own respective fields, Bob has tremendous deep knowledge across all global markets from one asset class to the other, and for that reason, his opinions and researches are often being quoted by Wall Street and other famous media such as CNN and CNBC. We have a few important client meetings in Seoul, and with Bobs visit, this certainly is a signal of commitment to communicate more closely with the Korean investors, which would also support to grow PGIs business in Korea going forward.

[Reporters’ Notebook] The Rough Speech of Samsung Electronics Vice Chairman Lee Jae-yong

▲ Samsung Electronics Vice Chairman Lee Jae-yong. [NewsCheonji = Reporter Som Lee] Why are you asking me that? As burst of laughter and the rough Speech came out of his mouth. On the morning of the May 27, Jae-Yong Lee, the Vice Chairman of Samsung Electronics was on his way to work at the Samsung Electronics Seocho Office. That was his response to the reporters questions about if there are any plans to merge with other companies. While his father, the chairman of Samsung, Kun-hee Lee has been bedridden for over a year, the current hot issue is Vice Chairman, Jae-yong Lees succession of management rights. This has especially been the case since news broke out about the merge between Cheil Industries and Samsung C&T. Due to this, the curiosity was amplified. There are even rumors of additional mergers between Samsung Electronics and Samsung SDS. This means the inquires about the additional mergers, posed to Vice Chairman Lee was a valid one grounded on recent relevant events. Every Wednesday, dozens of reporters wait in the lobby to ask questions to the teams of presidents that attend these weekly meetings. Meaning, there was nothing out of ordinary about meeting reporters at that time and responding to the inquires presented after the meeting. Nevertheless, his answer exhibited irresponsibility. The reporters throw numerous questions to the executive team. Depending on the issue, there may be sensitive questions asked. The presidents team also receive baffling questions, they avoid answering them by providing smiles or evading them by giving general answers. Vice Chairman Lee could have reacted in the same way. However, he chose to allow his facial expression to exhibit shock and also staunchly replied, Why are you asking me that? To whom then, should this question have been addressed? The question of one reporter is not the question of a single individual. It is a question which represents the readers and the citizens. The nature of a journalist is to be one who questions and the questions should have the ability to make people in power feel uncomfortable. This view of the press is held by Helen Thomas, a White House journalist for over 50 years, spanning 10 presidents, from John F. Kennedy to Barack Obama. Her quote reminds us of the basics of the mindset of journalists. They sometimes have to blurt out inappropriate questions on behalf of the readers and citizens, being reporters who ask questions to get to the bottom of things. Just as a reporter's question is essentially a question of the citizens, an answer a leader gives does not reflect that single individual. It represents the collective answer of the organization he/she heads, and it in turn becomes the image of the organization. At the moment, no one sees him as the vice chairman any longer. If not him, who will be responsible for the future of Samsung? Who on the earth can give an answer to this question? As the following chairman, we expect him to be a bit more responsible and well- mannered. I want to ask this question one more time, if not him, to whom should this question have been asked?