Samsung Life buys 25% stake in Savills IM for $90 mn

Samsung Life Insurance Co. has agreed to buy a 25% stake in Savills Investment Management (Savills IM) for £63.75 million ($90 million) from UK-based real estate advisor Savills Plc, as the South Korean insurer is looking to ramp up its overseas asset management.

On May 27, Samsung Life's board of directors approved the stake purchase that will make it the second-largest shareholder of Savills IM, according to a company announcement. The remaining 75% will be held by the parent real estate firm.

On completion of the deal, Samsung Life will commit a total of $1 billion to Savills IM over the next four years, as part of an effort to diversify its overseas portfolio and enhance its medium- to long-term returns.

Samsung will be granted a call option to take an additional 10% stake in Savills IM by 2025, depending on the progress of its committed capital deployment to the British asset manager, Samsung said in a statement.

The two sides entered into negotiations last year and Samsung Life visited Savills IM's London headquarters last month to finalize the terms and conditions of the investment. 

With the stake purchase, Samsung Life will take a board seat and have business cooperation with Savills IM. 

"Considering Savills IM's deep investment experience across various real estate sectors and talented management, we decided that they are the right strategic partner for us to expand our global asset management," Samsung said in the statement.

"In order to strengthen and diversify our revenue sources, we will aggressively expand our global asset management business."

Samsung Life owns 100% of Samsung SRA Asset Management Co.

Savills IM manages about $30 billion in assets, with 16 offices in 13 countries in Europe and Asia. It ranks fifth among Europe's independent real estate investment firms by AUM.

Globally, pension funds and other asset owners have been making equity investments in asset managers, pursuing co-investments in high-yielding assets. In March this year, South Korea's National Pension Service acquired a stake in UK private equity firm BC Partners through a Blackstone fund and agreed to co-invest in deals sourced by the Lonon-based PEF.

Write to Ho-gi Lee at hglee@hankyung.com
Yeonhee Kim edited this article.