Hillhouse Investment’s bid to acquire Igis Asset Management is facing growing uncertainty, as controversy over the sale process raises the prospect that the National Pension Service could withdraw capital from the firm — a move that would materially undermine the deal’s valuation.
Singapore-based alternative investment firm Hillhouse Investment was named the preferred bidder on Monday with an offer of 1.1 trillion won ($746 million) for Igis Asset Management, South Korea’s largest real estate investment manager. Rival bidders Heungkuk Life and Hanwha Life were outpaced, with Heungkuk Life submitting the second-highest bid at 1.05 trillion won.
The deal, however, has been overshadowed by allegations that the bidding process was unfairly conducted. Heungkuk Life filed a police complaint Thursday against Igis shareholders involved in the sale and lead adviser Morgan Stanley, claiming the process was structured to favor Hillhouse and that its bid price was shared without consent, triggering a bidding war.
More critically for the transaction, National Pension Service — one of Igis’ largest and most influential capital providers — has reportedly expressed strong dissatisfaction with how the sale was handled. Local media report that the NPS is considering withdrawing funds it has entrusted to Igis, arguing that sensitive information, including fund reports and performance-fee details, was provided to final bidders without prior approval.
Such a move would strike at the core of the transaction. A withdrawal by the NPS would sharply reduce Igis’ assets under management, forcing a reassessment of the firm’s valuation and potentially opening the door to price renegotiation or even a collapse of the deal, industry sources said.
Igis issued a statement Friday rejecting claims that the sale process was mishandled or that confidential information had been leaked.
“When selling management control of an asset manager, a due diligence process is essential for bidders to assess asset quality and the sustainability of fee income,” the firm said, adding that it imposed strict confidentiality obligations on all participants and implemented “multiple layers of safeguards” to prevent external disclosure.
The growing controversy could also complicate Hillhouse’s regulatory timeline. Any entity seeking to become a major shareholder of a financial investment company in Korea must obtain approval from the Financial Services Commission. Regulators said Igis has not yet submitted an application for approval of the change in its largest shareholder.
Hillhouse had initially aimed to file for regulatory review within the year, but industry watchers now expect delays to be unavoidable, particularly if the NPS proceeds with a capital pullback or intensifies scrutiny of the sale process.
silverstar@heraldcorp.com
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