By Park Hyong-ki
Shinhan Financial Group has forged a strategic partnership with KKR, a global private equity giant, to seek investment opportunities abroad, the financial holding company said.
The two signed a memorandum of understanding just before the Chuseok holiday, which was from Sept. 23 to 25, for a partnership under which Shinhan can take advantage of KKR's longstanding experience and networks in global finance, and mergers and acquisitions, it added.
Both sides have not yet drawn up a list of potential targets, given the early stage of their strategic partnership.
However, Shinhan Financial said it could, for instance, seek to invest in global capital markets or pursue acquisitions of alternative assets and real estate.
"The group could further acquire buildings with KKR, which possesses a well-established financial mechanism, as Shinhan's interest in real estate has been growing overseas," said a spokesman for the financial group.
This means Shinhan will be able to use KKR's capability in sourcing and financing deals. KKR could not be reached for comment.
In 2017, the group's global investment banking unit acquired debt securities of One Worldwide Plaza, a commercial building in Manhattan, New York, through Shinhan Alternative Investment Management and Shinhan Life.
The debt managed by Goldman Sachs and Deutsche Bank was part of a refinancing scheme by RXR Realty and SL Green Realty for the acquisition of the building from New York REIT.
Shinhan's strategic ties with KKR is in line with the group's efforts to expand its global investment operations as it seeks to generate 20 percent of its total net profit from overseas business by 2020, up from the current 13 percent.
Under this vision, the group has launched a global investment banking unit by integrating its key subsidiaries' resources in deal making and financing to help spur its overall nonbanking business.
Shinhan Financial is currently in negotiations to take over Orange Life, formerly ING Life Insurance, from MBK Partners, a local private equity giant.
The group agreed to pursue the acquisition of a 59.15 percent stake in Orange from MBK in September.
Shinhan denied news reports that it will seek to acquire the life insurer with KKR, which would buy some Orange shares that would be swapped for Shinhan Financial Group shares later.
"The partnership agreement does not extend to that. Also, a private equity investment in Shinhan does not fit the characteristics of KKR," the Shinhan spokesman said.
A private equity fund, generally, invests in or acquires equities or debt securities in assets, which it can resell after it improves their finances after an average period of five years.
KKR is renowned for its leverage buyout of RJR Nabisco, a tobacco and food conglomerate, in 1988, which was famously depicted in the book "Barbarians at the Gate."
The private equity's local deals include selling Oriental Brewery (OB) back to Anheuser-Busch InBev for $5.8 billion in 2014, the largest exit then made by a foreign investor. KKR acquired OB from InBev for $1.8 billion in 2009.
Shinhan Financial Group has forged a strategic partnership with KKR, a global private equity giant, to seek investment opportunities abroad, the financial holding company said.
The two signed a memorandum of understanding just before the Chuseok holiday, which was from Sept. 23 to 25, for a partnership under which Shinhan can take advantage of KKR's longstanding experience and networks in global finance, and mergers and acquisitions, it added.
Both sides have not yet drawn up a list of potential targets, given the early stage of their strategic partnership.
However, Shinhan Financial said it could, for instance, seek to invest in global capital markets or pursue acquisitions of alternative assets and real estate.
"The group could further acquire buildings with KKR, which possesses a well-established financial mechanism, as Shinhan's interest in real estate has been growing overseas," said a spokesman for the financial group.
This means Shinhan will be able to use KKR's capability in sourcing and financing deals. KKR could not be reached for comment.
In 2017, the group's global investment banking unit acquired debt securities of One Worldwide Plaza, a commercial building in Manhattan, New York, through Shinhan Alternative Investment Management and Shinhan Life.
The debt managed by Goldman Sachs and Deutsche Bank was part of a refinancing scheme by RXR Realty and SL Green Realty for the acquisition of the building from New York REIT.
Shinhan's strategic ties with KKR is in line with the group's efforts to expand its global investment operations as it seeks to generate 20 percent of its total net profit from overseas business by 2020, up from the current 13 percent.
Under this vision, the group has launched a global investment banking unit by integrating its key subsidiaries' resources in deal making and financing to help spur its overall nonbanking business.
Shinhan Financial is currently in negotiations to take over Orange Life, formerly ING Life Insurance, from MBK Partners, a local private equity giant.
The group agreed to pursue the acquisition of a 59.15 percent stake in Orange from MBK in September.
Shinhan denied news reports that it will seek to acquire the life insurer with KKR, which would buy some Orange shares that would be swapped for Shinhan Financial Group shares later.
"The partnership agreement does not extend to that. Also, a private equity investment in Shinhan does not fit the characteristics of KKR," the Shinhan spokesman said.
A private equity fund, generally, invests in or acquires equities or debt securities in assets, which it can resell after it improves their finances after an average period of five years.
KKR is renowned for its leverage buyout of RJR Nabisco, a tobacco and food conglomerate, in 1988, which was famously depicted in the book "Barbarians at the Gate."
The private equity's local deals include selling Oriental Brewery (OB) back to Anheuser-Busch InBev for $5.8 billion in 2014, the largest exit then made by a foreign investor. KKR acquired OB from InBev for $1.8 billion in 2009.
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