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Blackstone Asia Strategy Hits $7.88B as Samsung Commits $650M to Funds

Blackstone Asia Strategy Hits $7.88B as Samsung Commits $650M to Funds thumbnail

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Blackstone attracts big Korean investors eight years after reopening Seoul office in 2014.

Samsung Group continued to demonstrate its appetite for real asset investments this week with two of its financial services units announcing a combined $650 million commitment to funds managed by private equity titan Blackstone.

Samsung Life Insurance and Samsung Fire & Marine Insurance – which are wholly-owned financial affiliates of the Korean conglomerate – said Wednesday that they have signed an agreement with the world’s largest alternative asset manager to grow their global investments by investing in real estate, infrastructure and private equity funds managed by Blackstone.

The announcement came less than a week after Blackstone had reported to the SEC that its Blackstone Real Estate Partners Asia III strategy had now gained nearly $7.88 billion in commitments, on its way to a goal of $9 billion.

Samsung’s fund commitment marked the group’s second tie-up with a global fund manager within the past year and the largest single investment ever made by any of the five affiliates under Samsung Financial Networks – a newly formed alliance among the Korean conglomerate’s money management units.

Larger Global Exposure

“It is meaningful to be able to sign a contract with Blackstone as a company aligned with our strategy of expanding our global asset management business,” Samsung Life said in a statement.

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Blackstone’s Stephen Schwarzman welcomes Korean investors

The investments will be managed by the group’s investment management arms, Samsung Asset Management and Samsung SRA Asset Management.

In an effort to boost market share, Samsung formed its financial networks division last April as a partnership between the group’s Samsung Life and Samsung Fire & Marine insurance units, consumer credit division Samsung Card and asset managers Samsung Securities and Samsung Asset Management.

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The financial firms have been ramping up their overseas investments, led by Samsung Life investing £63.75 million (then $90.4 million) to acquire a 25 percent stake in Savills Investment Management in May last year. At the time the Korean insurer vowed to pump $1 billion in capital into the property asset manager’s investment strategies in a span of four years.

That all-cash deal also gave the Korean insurer an option to increase its interest by up to a further 10 percent within the first four years, with London-based Savills Plc retaining the remaining shareholding in its fund management subsidiary.

Another cross-border commitment was Samsung Asset Management’s April purchase of a 20 percent stake in US exchange-traded fund manager Amplify. Samsung Fire and Marine also accumulated a 19 percent stake in British reinsurer Canopius between 2019 and 2020.

Korea on the Rise

While Blackstone declined to comment on the fresh Korean capital, its SEC statement last week showed a sales commission payment to Seoul-based investment bank NH Investment & Securities.

The capital raising comes as the New York-based fund manager has been re-establishing its presence in the Asian nation this year.

The private equity titan welcomed another institutional Korean investor last month when the country’s National Pension Service, which manages more than $800 billion in assets on behalf of the the nation’s citizenry, committed an undisclosed sum to Blackstone Credit’s Sustainable Resources Platform.

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Blackstone announced in April that it had opened an office in Seoul’s Gwanghwamun business district with a local team led by ex-Citibank Korea boss Yung-Ku Ha as chairman of its South Korean operations, alongside former Angelo Gordon veteran Chris Kim, who now serves as managing director for real estate in the country. The Seoul bureau re-established Blackstone’s  office presence in the nation after an eight-year absence.

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The company’s South Korean property portfolio includes the 24-storey office tower Arc Place in Gangnam, Seoul, and a stake in the Taubman-developed Starfield Hanam mall, the country’s second-largest shopping centre.

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