Singapore-based Keppel Corporation is planning to consolidate its interest in business trust management, real estate investment trust (REIT), and fund management businesses under Keppel Capital.
The company will merge its asset management businesses under Keppel Capital Holdings, a wholly-owned subsidiary of Keppel Corporation, to grow the contributions from its investment division.
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This consolidation will include Keppel Infrastructure Fund Management (the trustee-manager of Keppel Infrastructure Trust), Keppel DC Reit Management (the manager of Keppel DC Reit), Keppel Reit Management (the manager of Keppel Reit), and fund manager Alpha Investment Partners.
The proposed merger is expected to boost Keppel Group’s capital recycling platform and make prudent and timely investments with an expanded capital base.
Additionally, the move will also enhance the performance of the subsidiaries and the funds, REITs and business trusts that they manage through centralising certain non-regulated support functions and create a larger platform that will enhance recruitment and retention of talent, and sharing of best practices.
The consolidation will also improve Keppel Group’s returns as well as increase the Group’s stable, recurring income from management fees.
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By GlobalDataKeppel Corporation said that it to merge its interests in the four subsidiaries under Keppel Capital and report the entities under a new consolidated reporting segment together with its investments unit.
Keppel Capital will be led by Christina Tan as CEO. He is currently the managing director of Alpha.
The merger is subject to board approval, shareholder and/or unitholder approval of the relevant Keppel Group entities, as well as the approval of the Monetary Authority of Singapore and other relevant regulatory approvals.
Keppel Corporation expects to close the proposed consolidation by the second half of 2016 following the receipt of all regulatory approvals.
Following the merger, Keppel Corporation will increase its scope to include regulated activities relating to investments and asset management.
Keppel Corporation CEO Loh Chin Hua said: "Creating and developing high quality real estate and infrastructure assets as well as stabilizing and monetizing them to generate strong cash flow and recurring income are integral parts of Keppel’s business model.
"Keppel’s asset management businesses currently manage S$26 billion of quality assets and contributed S$60 million of profits in 2015. The consolidation under Keppel Capital is part of our continuing plan to grow our assets under management and expand our capital platform for co-investing."
