Hillhouse makes $682 mn last-minute bid to compete with Hanwha, Heungkuk for IGIS Asset
Asia-based Hillhouse Investment Co. has emerged as a late-stage wildcard in the sale of IGIS Asset Management Co., South Korea’s largest real estate asset manager, possibly injecting foreign capital into what was expected to be a domestic contest and prompting governance concerns.According to investment banking industry sources on Tuesday, Hillhouse, Hanwha Life Insurance Co. and Heungkuk Life Insurance Co. have submitted final bids for management control of IGIS.Singapore-headquartered CapitaLand Investment was also among the four shortlisted bidders.Goldman Sachs and Morgan Stanley are running the sale, with the seller expected to select a preferred buyer before year-end and to close the transfer of ownership by the first half of next year, according to sources. Hillhouse is said to have proposed about 1 trillion won ($682 million), comparable to Hanwha Life’s offer, and dispatched senior executives, including board-level leadership, to a pre-bid presentation, sources said.Lei Zhang, founder and chairman of Hillhouse Investment, has also been in direct contact with the selling shareholders, underscoring its appetite for the asset, said a person familiar with the matter.With Son Hwa-ja, IGIS Asset’s top shareholder and late founder Kim Dai-young’s wife, intent on exiting her 12.4% stake, bankers say Hillhouse cannot be ruled out as the eventual winner should its terms satisfy the sellers’ conditions.HILLHOUSE: ASIA-FOCUSED ALTERNATIVE INVESTMENT FIRMFounded by Chairman Zhang in 2005 with initial seed capital from a Yale University endowment. Hillhouse operates home bases in Singapore, Hong Kong and Beijing with a primary focus on Asia and selective investments in North America and Europe. The firm is best known for its investments in Asia’s biggest startups like Tencent, Baidu, Grab, Magento, JD.com, Ctrip and global accommodation booking app Airbnb.With some $100 billion in assets under management, 450 professional investors and 10 operations across the globe, the alternative investment firm operates across buyouts, real assets and private credit.Among Korean startups it has backed are grocery shopping and delivery platform Kurly Inc., food delivery app Woowa Brothers Corp., game developer Krafton Inc. and battery maker SK On Co.Recently, Hillhouse explored a stake in medical-device maker Classys Inc.The bid for IGIS marks its first attempt to acquire a domestic real-estate manager outright. Its property franchise is housed under subsidiary Rava Partners, which last year acquired 50.04% of Japan’s listed property group Samty Co. and has been expanding in Singapore through joint industrial-asset acquisitions with Swiss alternative investment firm Partners Group Holding AG.Industry officials said Hillhouse views IGIS, a platform with pan-Asian reach and institutional relationships, as a potential anchor for a regional real-assets hub.CONCERNS OVER FOREIGN CONTROLYet the prospective sale to a foreign buyer has triggered pushback from some Korean institutions. IGIS has evolved as a trusted partner to local pension funds and mutual aid associations, relying on stable, long-term mandates.Investors worry that a shift of decision-making authority overseas could disrupt investment philosophy, dilute governance transparency and unsettle key personnel, according to industry watchers.Comparable frictions have surfaced abroad.In Australia, listed developer Lendlease Corp. has faced pressure from domestic pension funds after restructuring and strategy changes stoked governance concerns, prompting some limited partners (LPs) to demand manager changes.“The independence of the management company – its philosophy and the people behind it – is at the heart of our capital commitments,” said an executive at a major Korean pension fund. “If governance becomes unstable, any new business with the firm will have to be reassessed.” IGIS manages 65.8 trillion won in assets, including 27 trillion won in real-estate funds that give it a 14.5% market share.The firm posted 418.2 billion won in revenue and 82.5 billion won in operating profit last year, making it one of the most financially robust players in Korea’s property-investment landscape.Whether Hillhouse’s entrance accelerates the sale or complicates it now hinges on how sellers – and Korea’s powerful institutional LPs – weigh the benefits of fresh capital against the risks of a foreign-controlled governance structure, analysts said.
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