Kyobo Life’s holding firm plan gains speed with Pavilion Asset acquisition

Kyobo Life Insurance Co. has completed the process to put a South Korea-based alternative asset investment company under its wing, a move that is expected to help the country’s third-largest life insurance firm diversify its business portfolio and expedite its plans to transform into a holding company.

Kyobo Life on Tuesday announced that it has fully paid for a 100% stake in Pavilion Asset Management Co. to become the new owner of the homegrown alternative asset management firm.

The Korean life insurer in December signed a share purchase agreement (SPA) with Pavilion Asset Management to buy its entire stake and got the nod for a change in the asset manager’s largest shareholder from the Financial Services Commission (FSC) last month.    

The acquisition of Pavilion Asset Management is expected to accelerate Kyobo Life’s plan to set up a holding firm to drive sustainable long-term growth with new growth engines and greater synergy among affiliates.

The life insurer is expected to speed up the diversification of its business portfolio beyond its mainstay insurance business with Pavilion Asset Management.

“The acquisition of Pavilion Asset Management is a preemptive move to stay competitive in the alternative asset investment market that is garnering great interest from financial companies at home and abroad,” Kyobo Life said in a news release on Tuesday.

“The company will expand its financial investment business and restructure its business structure to bring higher profit.”

Kyobo Life aims to set up a holding firm by the second half of next year.

It informed its financial investors in December last year of the plan to split the company into a holding company and other businesses through an equity spinoff.  

Pavilion Asset Management founded in 2009 is recognized for its expertise in alternative asset investment, especially with real estate development, private debt funds and financial advisory services. It is well known for having the best data center investment portfolio in Korea.

It will change its name to Kyobo AIM Asset Management to begin anew as a Kyobo affiliate and share its investment know-how with Kyobo sibling companies to develop new and diverse financial services.

Kang Young-wook, former chief executive officer of real estate management and consulting firm Kyobo Realco Inc., will lead the new alternative asset management company.

Write to Ho-Gi Lee at hglee@hankyung.com

Sookyung Seo edited this article.