[Edaily Marketin KIM SUNG-SOO Reporter] Although the merger and acquisition (M&A) deal between global private equity fund (PEF) manager Hillhouse Investment (hereinafter “Hillhouse”) and Aegis Asset Management fell through, analysts say the transaction yielded unexpected benefits for Aegis Asset Management.

This assessment is based on the fact that the enterprise value proposed by Hillhouse—amounting to 1.1 trillion won—served as an opportunity for the market to reevaluate Aegis Asset Management’s valuation. This could also serve as an important benchmark for Aegis Asset Management when attracting strategic investments or engaging in future M&A discussions.

Revaluation of Enterprise Value Despite Failed M&A Deal

According to investment banking (IB) industry sources on the 10th, although Hillhouse’s acquisition of a controlling stake in Aegis Asset Management ultimately fell through, it is nonetheless significant for Aegis Asset Management in that its enterprise value was recognized by a global investor.

Last December, Hillhouse proposed an enterprise value of approximately 1.1 trillion won during the bidding process for Aegis Asset Management. Compared to the enterprise value of about 600 billion won assigned to Aegis Asset Management when Daishin Financial Group acquired an 8.2% stake in August 2023, this represents nearly a twofold increase in just over two years.

In particular, it is reported that Hillhouse internally deemed the 1.1 trillion won valuation to be sufficiently attractive. This assessment was influenced in part by the significant rise in the enterprise values of global real asset managers.

A consortium of global alternative investment managers—Starbuck Capital Group, Six Street, and SSW Partners (hereinafter referred to as the “Consortium”)—acquired ESR Group Limited (hereinafter referred to as “ESR”), one of Asia’s largest real asset managers, on December 5, 2024, for 55.2 billion Hong Kong dollars (approximately 10.6398 trillion won).

The Consortium acquired ESR by converting it into a private company through a share sale process on the Hong Kong Stock Exchange, with the prestigious U.S. multinational law firm Latham & Watkins providing advisory services for the transaction.

Headquartered in Hong Kong, ESR is a platform that develops and operates logistics centers, data centers, and distribution facilities across the Asia-Pacific (APAC) region, including South Korea, China, Japan, and Australia. In South Korea, it is actively engaged in logistics center development and REIT operations through ESR Kendall Square.

ESR’s predecessor was e-Shang, a Chinese logistics real estate developer. e-Shang merged with Singapore-based Redwood in 2016, giving rise to the current ESR Group.

“Still Undervalued” Even Considering the ESR Case

Industry analysts suggest that this experience was a key factor in Hillhouse’s high assessment of Aegis Asset Management’s growth potential.

Joe Gagnon, a Hillhouse partner who led this acquisition, previously headed the Asian real estate investment division at global private equity firm Warburg Pincus for about 15 years. He is known to have spearheaded the establishment of e-Shang, the predecessor to ESR, during his tenure at Warburg Pincus.

Joe Gagnon serves as a partner at Hillhouse and co-CEO of Lava Partners. Lava Partners is a company established in 2020 when Hillhouse spun off its real asset investment division. At Lava Partners, Joe Gagnon plays a pivotal role in building a real asset and real estate investment platform for the Asia-Pacific region.

Prior to joining Hillhouse, he spent approximately 15 years (2005–2020) as a Managing Director and Partner at Warburg Pincus, where he led the Asia real estate investment division. He subsequently served as Co-CEO from 2008 to 2012 and as Sole CEO from 2012 to 2020, spearheading investments in various real estate platforms.

Prior to that, he worked as a business development manager at GE Real Estate in Tokyo, where he gained investment experience in the South Korean commercial real estate market. Since then, he has continued to maintain his network in the South Korean market while identifying investment opportunities.

A financial investment industry insider stated, “Joe Gagnon witnessed the sale of ESR, the firm he founded, for 10 trillion won while at Hillhouse,” adding, “Given this, he likely judged that the 1.1 trillion won offer made to Aegis Asset Management was a bargain.”

The source continued, “Although Hillhouse’s M&A deal with Aegis Asset Management did not ultimately go through, the very fact that a global investor recognized Aegis Asset Management’s enterprise value at over 1 trillion won carries significant meaning for the market,” adding, “This could serve as an important benchmark for future strategic investment attraction or discussions on additional M&A deals.”