The sale of South Korea’s top real estate asset management firm, IGIS Asset Management Co., has entered its final stage, with a shortlist of four bidders preparing to submit binding offers next week.
The deal could reshape the country’s property investment landscape, though questions over the seller’s 800 billion won ($554 million) valuation have caused debate in the market, analysts said.
According to investment banking sources on Thursday, Morgan Stanley and Goldman Sachs, the sale’s lead advisers, plan to hold the main bidding round on Nov. 11.
The four shortlisted bidders are Hanwha Life Insurance Co., Heungkuk Life Insurance Co., Asia-based Hillhouse Investment Co. and Singapore-headquartered CapitaLand Investment.
MBK Partners, which initially expressed interest, has dropped out, narrowing the field to four contenders, sources said.
TRANSFER OF NEAR FULL CONTROL LIKELY
The stake on offer amounts to close to 70%, including 12.4% owned by Son Hwa-ja, IGIS Asset’s top shareholder and late founder Kim Dai-young’s wife.
Additional shares held by IGIS Asset’s former Senior Managing Partner Cho Kab-Joo and Daishin Financial Group have reportedly been folded into the sale, potentially lifting the total stake up for sale to as much as 98%, effectively transferring full control of IGIS to a new owner.
Industry officials expect the transaction to close smoothly, given the sellers’ strong intent.
A preferred bidder could be selected by year-end, paving the way for ownership transfer by mid-2026 if negotiations proceed without friction, sources said.
LIFE INSURERS EYE STRATEGIC EXPANSION
Domestic insurers are emerging as aggressive suitors.
Heungkuk Life has raised about 840 billion won in liquidity by selling its Jongno headquarters and issuing subordinated bonds, while Hanwha Life is positioning the deal within a broader strategy to consolidate the group’s asset management operations.
Both groups’ owner-led decision-making structures could enable swift, decisive bidding in the final round, according to sources.
“If a major life insurer acquires IGIS, it would mark the effective end of Korea’s large independent property managers,” said an investment banker, noting that the sale would echo KORAMCO Asset Management’s absorption into the LF Group in 2019.
Foreign bidders are also seen as credible contenders.
Hillhouse Investment brings a track record in Asian commercial property, while CapitaLand’s strengths lie in logistics and hospitality asset development – experience that could complement IGIS’ domestic portfolio.
DEBATE OVER VALUATION
Still, the asking price has been put into question.
The sellers are valuing about 800 billion won for a 100% stake, based on a 2024 EBITDA of 89 billion won and a multiple of nine.
“Applying such a multiple to a fee-dependent real estate manager is a stretch,” said the head of a Seoul-based asset manager. “On a fee-related earnings basis, that valuation far exceeds listed REIT managers in Korea.”
Others argue the premium is justified.
“IGIS is the only domestic firm with a full-spectrum real estate platform, spanning REITs, overseas investment and development projects,” said another industry executive. “That diversification warrants a higher multiple.”
HIDDEN RISKS
Potential liabilities also complicate the picture.
About 30% of IGIS’ assets are tied to overseas property portfolios, some of which are expected to post losses due to higher interest rates and weaker global demand.
Analysts warn that such exposures could trigger price adjustments during due diligence.
The company’s rapid growth and project-heavy business model have also raised concerns over staff retention.
“If ownership changes, reorganization could be unavoidable, and that risk is weighing on key personnel,” said a person familiar with the firm.
