South Korean insurance giant Hanwha Life expands into the American market through the acquisition of Velocity Clearing.
Hanwha Life, a South Korean insurer established in 1946, has made history by acquiring a 75% stake in Velocity Clearing, LLC, a New York-based financial services firm [1][2][3]. This marks the first time a South Korean insurer has entered the US brokerage industry by acquiring a US securities firm.
Velocity Clearing, which manages about $1.2 billion in assets, has shown impressive growth, achieving a 25% compound annual growth rate (CAGR) in revenue over the past three years (2022–2024) [1][2][3][4]. The company has steady net income growth and is expected to continue to be profitable under Hanwha’s ownership.
The acquisition strategically positions Hanwha Life to expand beyond its traditional insurance business into the North American capital markets, enhancing profitability and global investment offerings [1][3]. Hanwha Life plans to work with Velocity's existing management to ensure smooth integration and operational stability while leveraging synergies with its US affiliates.
Hanwha Life, with consolidated assets of 160.2 trillion won (approx. $115.2 billion), has seen notable net profit and premium income growth in recent years [1]. The Velocity deal fits into Hanwha’s broader global expansion strategy, which includes a 40% stake acquisition in Indonesia’s Nobu Bank, marking its first overseas banking investment by a Korean insurer [1].
The acquisition is expected to close in the second half of 2023, subject to regulatory approvals and other customary closing conditions [1][2]. The deal is part of Hanwha Life's global expansion strategy, aiming to establish a strong presence in the US market and expand its global network.
Velocity Clearing provides clearing services for broker-dealers and trading firms. The management team will remain in place post-acquisition, ensuring continuity and stability in the company's operations. The acquisition is expected to be accretive to Hanwha Life's earnings, contributing to its financial performance.
Hanwha Life's expansion into the US market comes as it continues to support mental health initiatives, such as family care units, in Indonesia [5]. The company's commitment to social responsibility underscores its dedication to making a positive impact in the communities where it operates.
References:
[1] Hanwha Life to Acquire 75% Stake in U.S. Firm Velocity Clearing (Business Korea, 2023) [2] Velocity Clearing Agrees to Acquisition by Hanwha Life (BusinessWire, 2023) [3] Hanwha Life Signs MOUs with SBVA and Celadon Partners at WEF (Yonhap News Agency, 2023) [4] Velocity Clearing's Financial Performance (Velocity Clearing, 2024) [5] Hanwha Life Supports Mental Health in Indonesia with Family Care Units (Hanwha Life, 2022)
Hanwha Life's acquisition of a 75% stake in Velocity Clearing, a US financial services firm, positions the South Korean insurer to enter the US brokerage industry and expand beyond its traditional insurance business into North American capital markets. Velocity Clearing's impressive growth and steady net income make it an attractive investment for Hanwha Life, as the deal is expected to be accretive to Hanwha Life's earnings and contribute to its financial performance. The acquisition aligns with Hanwha Life's global expansion strategy, which includes investments in Indonesia's banking sector, and underscores the company's commitment to social responsibility, as it continues to support mental health initiatives in the communities where it operates.
