The headquarters of Igis Asset Management in Yeouido, Seoul. (Igis Asset Management)
The headquarters of Igis Asset Management in Yeouido, Seoul. (Igis Asset Management)

South Korea’s largest real-estate asset manager Igis Asset Management is up for sale, with Hanwha Life Insurance and Heungkuk Life Insurance shortlisted for the final round of bidding.

Both firms are seeking to strengthen their alternative investment arms as insurance earnings weaken.

One or two private equity firms were also shortlisted, industry reports said Thursday. Morgan Stanley and JPMorgan, acting as sell-side advisers, notified the bidders of the results recently.

The shortlisted bidders will undergo weeks of due diligence before submitting final offers, with a preferred buyer likely to be named within the year.

The current owners are said to favor a domestic buyer to avoid restructuring risks from overlaps with Igis’ extensive overseas operations.

About 66 percent of Igis is up for sale, including a 12.4 percent stake held by Son Hwa-ja, spouse of late founder Kim Dae-young, plus shares from strategic investors. Sellers are targeting a valuation of roughly 530 billion won ($380 million), based on an earlier full-company estimate of about 800 billion won.

Igis, founded in 2010, ranks among Korea’s top five asset managers with about 67 trillion won under management. It holds a commanding lead in real estate, with a 15 percent share of the domestic market and 27 trillion won in property funds. Overseas property assets under management — spanning Asia, Europe and the US — topped 10 trillion won as of August.

The firm has been delivering robust earnings, posting a net profit of 38 billion won in the first half, up 275 percent from a year earlier, while operating profit surged 240 percent to 48 billion won. Recently it completed a redevelopment of Yeouido’s Shinhan Financial Investment Tower, reopening it as the One Centinel Building with expanded retail space.

For insurers, the deal offers a way to diversify into alternatives as Korea’s shrinking population erodes demand for life policies.

Hanwha Life, led by Chief Global Officer Kim Dong-won has been actively expanding overseas, with recent investments in Indonesia’s Nobu Bank and US brokerage Velocity Clearing. Kim is said to be driving the Igis acquisition, which could create synergies with Hanwha Asset Management and broaden the group’s property portfolio.

Heungkuk Life is also pursuing Igis aggressively under the direction of its largest shareholder, Taekwang Group. The conglomerate pledged over 1 trillion won this year for mergers and acquisitions and is also bidding for beauty and health care company Aekyung Industrial.

Taekwang has been building on its property investment channels, launching Heungkuk REITs Management in March.


jwc@heraldcorp.com