CJ, Samsung to launch $600 million e-commerce logistics fund

CJ Logistics and an affiliate of Samsung Life Insurance have joined forces to launch a real estate investment fund worth 740 billion won ($600 million) with the aim of purchasing fulfillment centers in and around Seoul. 

A real estate fund is a type of mutual fund that primarily focuses on investing in securities offered by public real estate companies.

The logistics arm of CJ Group and Samsung SRA Asset Management Co., a real estate asset management affiliate of Samsung Life Insurance, announced the plan on Sunday. 

The two conglomerates entered into a “Samsung SRS private real estate fund” contract agreement. 

Of the total, 250 billion won will be in a blind pool fund and the remaining 480 billion won will be available through loans. 

A blind pool fund is also known as blank check underwriting or a blank check offering. It refers to a direct participation program or limited partnership that lacks a stated investment goal for the funds that are raised from investors, allowing for speedy deployment of liquidity.

The joint fund will offer 100 billion won in common stock and 150 billion won in preferred stock. 

The Samsung Life affiliate and CJ Logistics will each provide 50 billion won in common shares. Samsung Life Insurance, Samsung Fire & Marine Insurance, and Samsung Securities Co. will contribute in this regard. 

Other institutional investors will take over the preferred stock. 

Through the latest collaboration, CJ Logistics is poised to expand its foothold in the capital area amid the rapidly growing e-commerce market. 

The logistics arm of the CJ Group will be able to expand the number of its fulfillment centers that encompass inventory management, packaging and distribution. It will also construct a more tightly knit logistics network in the target area. 

The financial subsidiaries of Samsung, for their parts, could benefit from having CJ Logistics as a lessee in terms of investing in real estate and managing financial products. 

“We will work with Samsung SRA, which has extensive real estate fund management experience, to secure e-commerce logistics footholds in a consistent manner,” a CJ Logistics insider told The Korea Economic Daily. 

The CJ employee said the company aspires to provide the highest quality service through the latest technology.

The blind pool is getting attention because all three Samsung financial subsidiaries are taking part. 

Samsung Life Life, Samsung Fire & Marine Insurance, and Samsung Securities Co. launched a joint brand last Tuesday named Samsung Financial Networks. 

Industry insiders interpret the meaning of the consolidated brand as the conglomerate’s efforts to create synergy in domestic and overseas investments through collaboration.

The Samsung financial subsidiaries have been bullish on overseas investments. 

Samsung Life Insurance acquired a 25% stake in London-based Savills Investment Management last month. The agreement was made about a year ago for £63.75 million ($90 million).

Earlier this month, Samsung Asset Management Co. acquired a 20% stake in Illinois-based Amplify Holding Company LLC, operator of Amply ETFs.

With the investment, Samsung became the second-largest shareholder of the US exchange-traded fund sponsor.

Write to Tae-Ho Lee at thlee@hankyung.com
Jee Abbey Lee edited this article.