South Korean insurance company Samsung Life is to pay £63.75 million for a 25% stake in Savills Investment Management in what is being billed as a “strategic investment alliance” between the two companies.
Samsung Life, and its property asset management subsidiary Samsung SRA, will commit capital of US$1bn to Savills IM’s investment strategies over the initial four years of the relationship. The transaction between the two companies is expected to complete in Q4, 2021.
The deal also allows Samsung Life to increase its interest in Savills IM by a further 10% depending upon the scale and timing of investment in Savills IM’s products, the maximum being achievable if at least US$2bn of capital is committed.
The agreement between the two companies will provide minority protections to Samsung Life while maintaining Savills IM’s operational and investment autonomy, the firms said in a statement. Samsung Life said it will invest in existing recently launched products as well as providing seed capital for new funds which will target Asia Pacific and Europe and will include debt and equity strategies.
Deal to bring other Korean clients to Savills IM
Savills IM said it will form a close working relationship with Samsung SRA which will bring additional Korean client capital to Savills IM.
Savills IM reported profit before tax of £14.9m for the year to 31 December 2020. On a proforma basis, including the full-year effect of the recently announced acquisition of remaining A-member interests in DRC Capital, profit before tax in 2020 would have been £19.3 million.
“This transformational alliance will be unique in the industry, combining Savills IM’s existing strengths as an investment manager with extensive local transaction and asset management capability in real estate debt and equity markets, with the strong capital support of Samsung Life. It will significantly enhance and accelerate our ability to provide attractive investment products for all our investment clients,” said Savills Investment Management CEO Alex Jeffrey.