FB Roundup: Grosvenor Group, Samsung Group, Berkshire Hathaway

Grosvenor Group seeks ESG commercial property deals beyond London

Grosvenor Group, the London-headquartered international property businesses owned by the Duke of Westminster and family, looks to expand in the regions of the United Kingdom with its ESG–minded $415 million investment strategy.

The new strategy followed losses in asset values and revenue as Covid-19 pandemic restrictions impacted high street retail in 2020.

The group’s operating company, Grosvenor Britain & Ireland, launched a new investment team this month, which will manage a $1.3 billion UK property portfolio. The portfolio involves newly acquired and existing assets and projects outside of its Mayfair and Belgravia heartland.

The team will deploy an initial $415 million of equity into income-producing assets where it can boost the group’s environmental, social and commercial performance and build scale in new markets.

The portfolio includes the management of Liverpool ONE, a 17ha retail destination, and Grosvenor’s master developer business, Strategic Land, which has a pipeline of 18,000 houses. It will also include phases of the Bermondsey development as completed.

In June, Grosvenor completed its first acquisitions under the new strategy: 134 Edmund Street, an 8,000 sq m office building in Birmingham’s central business district, and The Hive, a 7,400 sq m office building in Manchester’s Northern Quarter.

According to the group’s 2020 financial report, the value of its property holdings dipped from $9.8 billion in 2019 to $9.2 billion last year as the impacts of Covid-19 on retail and the group’s disposal of some assets were felt. Revenue profit was down markedly at $35.1 million from $91.2 million in 2019.

Grosvenor Britain & Ireland, one of four regional operating companies around the world, is known for owning 121ha of London’s upmarket Mayfair and Belgravia districts.

Pastural, orchard and swamp land to the west of the City of London came into family ownership following the marriage of Sir Thomas Grosvenor, 3rd Baronet, to Mary Davies in 1677.

Their descendant Hugh Grosvenor (pictured), 30, the 7th Duke of Westminster, is the billionaire owner of Grosvenor Group. He became the duke in 2016 upon the sudden death of his father Gerald, 6th Duke of Westminster, at the age of 64.

Samsung’s ‘crown prince’ Lee Jae-yong released on parole

Samsung heir Lee Jae-yong has walked out of a South Korean prison on parole in a controversial decision made in the national interest, President Moon Jae-in’s office said.

The billionaire vice chairman and de facto leader was released last week after serving 18-months of a 30-month sentence for bribing Park Geun-hye, the jailed former president of South Korea.

Lee Jae-yong (pictured left), 53, was found guilty of bribery, embezzlement and concealment of criminal proceeds worth $7.8 million. However, the Justice Ministry responded to the growing clamour from politicians and business leaders to release the tycoon so he could regain control of Samsung. The chaebol is South Korea’s largest conglomerate, worth $300 billion.

Korean and US business interests considered Lee’s return essential in addressing the global shortage of semiconductors. Samsung Electronics has been the world’s largest semiconductor manufacturer since 2017. Samsung Biologics is scheduled to begin production of the Moderna vaccine in August or September. Only 16% of the country’s population was vaccinated against Covid-19 by 11 August.

South Korean law was changed earlier in 2021 to permit prisoners to be considered for parole after serving 60% of their sentence, which enabled Lee’s release.

“I’ve caused much concern for the people,” Lee told reporters outside the prison, south of Seoul.

“I deeply apologise. I am listening to the concerns, criticisms, worries and high expectations for me. I will work hard.”

Lee Jae-yong, worth $11.2 billion, according to Forbes, was the eldest child and only son of the late Lee Kun-hee (pictured right), the second-generation chairman of Samsung Group. The younger Lee inherited the bulk of his father’s shares and control over the conglomerate. The third-generation principal promised last year to end the line of family succession at Samsung by not eventually transferring control to his own young adult son and daughter.

Warren Buffett maintains Berkshire Hathaway buyback spree over deals

Warren Buffett, the billionaire US investor hailed as the “Oracle of Omaha” for his influential business acumen, remains cautious on his next acquisition despite his holding company rallying in its second quarter.

Buffett (pictured), who turns 91 this month, is the chairman, chief executive and controlling shareholder of the sprawling blue chip conglomerate Berkshire Hathaway, which he began buying into in 1962.

This month Berkshire revealed it used $6 billion to buy back its own shares during the second quarter of 2021, bringing the total to $12.6 billion this year. The company bought a record $24.7 billion of its own stock in 2020 and $5 billion worth in 2019. Berkshire’s B shares increased in value 2%, bringing their year-to-date gain to 23%.

Berkshire reported operating earnings of $6.69 billion in the second quarter, up 21% from $5.51 billion in the same period a year ago as the US economy recovers from the pandemic. Overall earnings were up 6.8% year-on-year to $28 billion in the second quarter.

Despite the buyback initiative, Berkshire sits on a stable and near record cash mountain of $144.1 billion, leading some observers to question when—and on what—Buffett will put his funds to work.

In his annual letter to shareholders in early 2019, the nonagenarian investor said Berkshire continued “to hope for an elephant-sized acquisition”, but prices were “sky-high for businesses possessing decent long-term prospects.”

Berkshire has acquired 65 companies with Buffett at the helm, but it has been more than four years since it last made a major acquisition.

Greg Abel, 59, the Canadian chairman and chief executive of Berkshire Hathaway Energy and vice-chairman of non-insurance operations of Berkshire Hathaway since 2018, was unofficially tipped as Buffett’s successor in May this year.