2021

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2021 Open

Samsung Life acquires minority stake in leading real estate asset manager Savills Investment Management

27 May 2021

 

  • Strategic alliance involving the acquisition of an initial 25% stake in UK-headquartered real estate asset manager Savills Investment Management (“Savills IM”), with potential to acquire up to a further 10%.
  • Strengthens Samsung Life’s position in real estate investment management in Europe and Asia.
  • Commitment to provide capital of US$1 billion to Savills IM investment strategies over 4 years to support the development of the business.
  • Part of a medium-term plan to increase the proportion of Samsung Life’s profits attributable to asset management to 30% by 2030.

Samsung Life Insurance, the largest insurance company in South Korea and a Fortune Global 500 company, has taken an important step towards strengthening its global network of asset management businesses, through the acquisition of a strategic minority equity stake in Savills IM, one of Europe’s leading real estate asset management platforms. Savills IM is headquartered in London with a local presence in 13 countries across Europe and Asia.  It has AUM of KRW32tn (US$28 billion) across a range of real estate equity and debt strategies with a 30-year track record. The transaction, which is conditional on various regulatory approvals and other customary closing conditions, is expected to complete in H2, 2021.

On 27 May 2021, Samsung Life’s Board of Directors approved the acquisition of a 25% stake in Savills IM, currently a wholly-owned subsidiary of the global real estate services provider Savills plc, for £63.75 million (approx. KRW102bn). Samsung Life will have the options to acquire up to an additional 10% stake in Savills IM, depending on the quantum and timing of the provision of capital to Savills IM’s investment products.

As part of this strategic partnership, Samsung Life has agreed to commit US$1 billion (approx. KRW1.1tn) of capital to Savills IM investment strategies by the fourth anniversary of completion. Real estate is a strategic asset class for Samsung Life and this partnership is expected to deliver diversification for its investment portfolio and enhance its longer-term investment yield. This long-term capital support will also help support Savills IM’s growth ambitions and the development of new investment strategies for investors. 

Alongside the transaction, Samsung Life will enter into a Shareholders’ Agreement with Savills IM to cover the working relationship between the parties. As part of this agreement, Samsung Life will have the right to appoint one director on Savills IM’s Board of Directors, customary minority protections as well as the establishment of a Commercial Partnership Committee.

Samsung Life has conducted companywide initiatives since last year under its long-term plan for 2030 under the mission statement of “Beyond insurance, a lifetime financial partner protecting customers' future” and “Change and challenge for customers, 2030”. In order to achieve its 2030 objective of diversifying away from the current domestic, insurance-focused profit structure towards a more balanced 40% domestic insurance, 30% asset management and 30% overseas insurance, Samsung Life plans to grow its asset management business significantly. The acquisition of a stake in Savills IM marks the first step towards achieving this long-term plan.  As the first strategic investment for Samsung Life in an overseas asset manager, Samsung Life undertook a significant and extensive due diligence process on Savills IM.

Samsung Life said, "Savills IM is a well-established real estate investment manager with outstanding investment expertise in both equity and debt strategies, across a broad range of sectors and geographies. It is led by a high-calibre management team with a clear growth strategy for the business. We are confident that our long-term alliance will accelerate this growth allowing Savills IM to capitalise on the growing investor demand for real estate investments. It will also support the continued expansion of Samsung Life’s footprint in the global investment community.”

 

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