Competition heating up as Hanwha and Heungkuk named final contenders for Igis Asset Management acquisition

In a significant development for the Korean financial industry, South Korea's largest real-estate asset manager, Igis Asset Management, has been put up for sale. The sellers are targeting a valuation of roughly 530 billion won ($380 million) for the company.

Igis, which holds a commanding lead in real estate with a 15 percent share of the domestic market and 27 trillion won in property funds, is one of Korea's top five asset managers, managing approximately 67 trillion won.

Several prominent bidders have shown interest in acquiring Igis, aiming to strengthen their alternative investment arms. Hanwha Life Insurance, led by Chief Global Officer Kim Dong-won, is among the final round of bidders, pursuing the acquisition as it could create synergies with Hanwha Asset Management and broaden the group's property portfolio.

Heungkuk Life Insurance is also aggressively bidding for Igis, with its largest shareholder, Taekwang Group, pledging over 1 trillion won this year for mergers and acquisitions. The Taekwang Group is also bidding for beauty and health care company Aekyung Industrial.

Morgan Stanley and JPMorgan are acting as sell-side advisers for the sale of Igis Asset Management. The shortlisted bidders will undergo weeks of due diligence before submitting final offers. In addition to Hanwha Life and Heungkuk Life, the private equity firms Blackstone, Partners Group, and EQT have also been approved in the latest round of the sale process. One or two private equity firms were also shortlisted for the bidding process.

The current owners of Igis Asset Management favour a domestic buyer to avoid restructuring risks from overlaps with Igis' extensive overseas operations. As of August, Igis' overseas property assets under management exceeded 10 trillion won.

The redeveloped Yeouido's Shinhan Financial Investment Tower, now known as the One Centinel Building, has expanded its retail space. Meanwhile, Igis Asset Management posted a net profit of 38 billion won in the first half, up 275 percent from a year earlier, and an operating profit of 48 billion won, up 240 percent.

The acquisition of Igis Asset Management could provide a way for insurers to diversify into alternatives, as Korea's shrinking population erodes demand for life policies. The sale of Igis could potentially lead to significant changes in the Korean financial industry, with a preferred buyer expected to be named within the year.

Competition heating up as Hanwha and Heungkuk named final contenders for Igis Asset Management acquisition