Primus buying distressed U.S. property

HONG KONG Tue Mar 2, 2010 5:58am EST

HONG KONG (Reuters) - After leading a consortium in the $2.2 billion agreement to buy AIG's (AIG.N) Taiwan life insurance unit, Primus Financial Holdings is now setting its sights on property owned by distressed sellers in the United States.

Primus is the $1.2 billion financial investment firm launched by Citigroup's (C.N) former top Asia investment banker, Robert Morse. Morse is co-chairman with former HSBC (HSBA.L) investment banking head, Huan Guocang, and co-CEO with former Fubon Financial (2881.TW) managing director Wing-Fai Ng.

The firm's first major deal was its agreement in October to buy Nan Shan Life in Taiwan, at the time AIG's largest asset disposal since being bailed out by the U.S. government.

At the Reuters Private Equity and Hedge Funds Summit, Morse would not speculate on the future of the stalled deal, saying only that Primus hoped to make Nan Shan a pan-Asia player in the region's life insurance market.

Morse did, however, speak about the firm's latest move to expand into four platforms: insurance, broker-dealer, banking, and asset management.

"Property funds investing was an offshoot of a lot of work that we have done in the asset management space," Morse said. "The opportunities in real estate in the U.S. are extraordinary."

Primus bought a 55 percent stake in a Salt Lake City property fund run by a friend from Morse's former Salomon Brothers days. The fund buys high quality properties from distressed sellers.

Morse, who first arrived in Asia in 1997, hopes to build the stake into a $500 million investment vehicle that will serve as one element of Primus' asset management arm.

The first property deal Primus struck was paying $9.5 million last year for an apartment complex in Ft. Worth, Texas, a unit he said was worth $30 million.

Primus will focus on real estate markets in the U.S. West and Southwest and invest mainly in multi-family residential properties and commercial office buildings.

"The opportunities in real estate in the U.S. are extraordinary," said Morse, 54, who is married with four children, three of whom attend the same U.S. college: Yale University.

Primus launched its business last April, raising $1 billion from a single Asian family. The firm recently added another $200 million from another Asian investor.

The Hong Kong based company is hiring, Morse said, and is currently staffed with around 15 employees, which includes analysts, support staff, and other professionals.

(Additional reporting by Ronnie Koo; Editing by Muralikumar Anantharaman)