South Korea’s largest life insurance provider Samsung Life will acquire an initial stake of 25% in Savills IM Holdings Ltd (Savills IM), a subsidiary of the real estate services provider Savills Plc, for 63.75 million pounds in cash.
This is part of a strategic investment alliance between Samsung Life, Savills IM, and real estate asset manager Samsung SRA, according to a statement.
As part of the alliance, Samsung Life will commit $1 billion to Savills IM’s investment strategies over the initial four years of the relationship.
The transaction, which is subject to various regulatory approvals and conditions, is expected to be complete in the fourth quarter of 2021. Samsung Life will have the option to increase its interest in Savills IM by another 10% over the initial term, depending on the quantum and timing of the provision of capital to Savills IM’s investment products.
Youngmuk Jeon, CEO of Samsung Life said the company is excited to invest in Samsung IM, one of Europe’s leading real estate asset management platforms.
“We are confident that Savills IM is well-positioned to help us expand our real estate investment network globally and that this strategic alliance, underpinned by our capital provision, will support and accelerate Savills IM’s growth over the long term,” he added.
Savills IM and Samsung Life would enter into a shareholders’ agreement, covering the working relationship between the companies. This includes providing customary minority protections to Samsung Life while maintaining the operational and investment autonomy of Savills IM.
The investment strategies for Samsung Life include both investments in existing recently launched products and seed capital for new funds. The products include debt and equity strategies targeting Asia Pacific and Europe.
As part of the alliance, Savills IM will form a close working relationship with Samsung SRA, seeking to bring additional Korean client capital to Savills IM’s products.
For the year ended December 31, 2020, Savills IM reported a profit before tax of 14.9 million pounds. On a proforma basis, including the full-year effect of the recently announced acquisition of the remaining A member interests in DRC Capital LLP, the company’s 2020 reported profit before tax would have been 19.3 million pounds.
The gross assets that are the subject of this transaction amounted to £101.4 million as of December 31 2020, excluding the consolidation of DRC Capital LLP. The proceeds from the sale will be used by Savills Plc for general corporate purposes.
Meanwhile, Samsung Life reported a net profit of 1.09 trillion won in the first quarter of the year, a 373.2% jump from the preceding year. Operating profit also saw a sharp 265.2% increase to 1.33 trillion won.
The company attributed the strong performance to the special dividends from Samsung Electronics Co, among other things.
