South Korean life insurer Samsung Life has committed $1 bn (€820 mln) of capital to Savills IM’s investment platform over the next four years and taken a minority stake in the business as part of a new strategic investment alliance.
Under the agreement, Samsung Life will become a minority owner of Savills IM and provide $1 bn of equity to the platform’s investment products over the initial four years of the relationship. The transaction, which is conditional on various regulatory approvals and other customary closing conditions, is expected to complete in Q4, 2021.
Samsung Life is paying £63.75 mln for an initial minority stake of 25% in Savills IM and has options to increase its interest in Savills IM by up to a further 10% if it increases its equity commitments to at least $2 bn of capital.
Savills IM and Samsung Life said that they will enter a shareholders' agreement which covers the working relationship between the parties including the provision of customary minority protections to Samsung Life while maintaining the complete operational and investment autonomy with which Savills IM currently operates.
The investment strategies for Samsung Life include both investment in existing recently launched products and seed capital for new funds. The products target Asia Pacific and Europe and include debt and equity strategies.
As part of the alliance, Savills IM will form a close working relationship with Samsung SRA which will seek to bring additional Korean client capital to Savills IM's products alongside the capital commitment of Samsung Life's and Savills IM's other investment clients.
For the year to 31 December 2020, Savills IM reported profit before tax of £14.9 mln.
Commenting on the Transaction, Alex Jeffrey, CEO of Savills Investment Management said: ‘This transformational alliance will be unique in the industry, combining Savills IM's existing strengths as an investment manager with extensive local transaction and asset management capability in real estate debt and equity markets, with the strong capital support of Samsung Life. It will significantly enhance and accelerate our ability to provide attractive investment products for all our investment clients.’
Mark Ridley, CEO of Savills plc commented: ‘Samsung Life is a long-standing client of Savills both in Korea and internationally and this transaction will allow the strengths of both Savills Group and Samsung Life to drive further growth in the Savills Investment Management platform.’
Youngmuk Jeon, CEO of Samsung Life, commented: ‘We are confident that Savills IM is well positioned to help us expand our real estate investment network globally and that this strategic alliance, underpinned by our capital provision, will support and accelerate Savills IM's growth over the long term.’
Bumchul Lim, CEO of Samsung SRA Asset Management, added: ‘Samsung SRA is delighted to establish an alliance with Savills IM. It will strengthen our ability to provide attractive real estate investment opportunities at a time of heightened investor demand. With its 30-year track record, extensive network of 16 offices across 13 countries in Europe and Asia and broad product range, Savills IM is well positioned to address this market opportunity.’
