[Exclusive] Aegis Asset Management to Acquire Samcheonri Asset Management

[Asia Economy Reporter Minji Lee] Aegis Asset Management, the largest real estate asset management company in Korea, has launched a bid to acquire Samchully Asset Management.

According to the financial investment industry (IB) on the 16th, Aegis Asset Management, which manages assets worth 34 trillion KRW, is pursuing a plan to acquire Samchully Asset Management, which operates domestic and international energy-related investment businesses. A representative from Aegis Asset Management stated, "We are reviewing the acquisition as one of the business opportunities under the premise that there could be synergy with our business," adding, "However, since the deal (negotiations) is not yet finalized, it is difficult to comment on specific details."

The reason Aegis Asset Management is moving to acquire Samchully Asset Management is analyzed to be influenced by the intensified competition as many new management companies have entered the real estate management industry. Although Aegis has grown its business to become the third-largest real estate asset manager in Asia, with products based on domestic and international real estate assets gaining popularity among institutional investors, it is understood that the company recognizes the need for new growth engines for sustained expansion.

Since the outbreak of COVID-19, uncertainty surrounding real estate has increased, leading to growing demand for energy infrastructure within the asset management industry. Real estate asset values vary depending on the sale price in 4 to 5 years, but energy infrastructure generates cash flow over the long term, resulting in lower volatility in returns. Accordingly, Aegis Asset Management has also participated as a financial investor (FI) in Aegis PE, a private equity firm focusing on infrastructure, power generation, and renewable energy, to expand its investment scope into energy and infrastructure sectors.

A private equity firm CEO explained, "Samchully Asset Management has been on the market for some time," adding, "It appears that Aegis Asset Management, which has a strong real estate focus, is pursuing the acquisition to diversify its business model ahead of its public listing."

Samchully Asset Management is one of the few energy infrastructure specialized asset managers in Korea. It was established in 2009 as a 50-50 joint venture (JV) between Macquarie Fund Group and Samchully, with many professionals from Macquarie joining at the time, earning a reputation as an energy-specialized asset manager. Currently, it is led by CEO Jaekyun Lee, a former Macquarie professional. Recently, it was selected as a real asset investment manager by the National Pension Service and operates a 150 billion KRW renewable fund investing in renewable energy-related infrastructure.

The sale price is expected to be lower than the 110 billion KRW price of VI Asset Management (Ha Asset Management and Ha Investment Futures), which was previously sold to a Hong Kong-based private equity firm. At that time, Ha Asset Management's asset size was around 50 billion KRW, but as of the first quarter of this year, Samchully Asset Management's asset size is about 6.3 billion KRW, ranking 132nd among approximately 300 asset management companies. Samchully Asset Management recorded a profit of 730 million KRW in the fourth quarter of last year and posted an operating profit of 162 billion KRW in the first quarter of this year despite the impact of COVID-19.