It appoints two senior hires to drive growth in the country

 

CAPITALAND Investment : 9CI -0.71% (CLI) will commit up to A$1 billion (S$878 million) to grow its funds under management (FUM) in Australia, said the group on Thursday (Nov 21).

 

Currently, it has more than A$9 billion of assets under management (AUM) in the country across logistics, business parks, lodging and commercial assets.

 

Andrew Lim, group chief operating officer of CLI, said: &ldquo A stable, open and developed market, Australia is one of CLI&rsquo s focus markets where we see huge potential for both organic and inorganic growth.&rdquo

 

The group has also appointed two senior hires into newly created roles to drive growth in its Australia business.

 

Angelo Scasserra will be chief executive officer of CLI Australia, while Rahul Bharara will join as chief investment officer. They will join the company in the first half of 2025.

 

Their job scopes include driving the growth of CLI Australia&rsquo s real estate private equity and credit funds, as well as working with the unit&rsquo s managing director Paul Toussaint to manage CLI&rsquo s AUM in Australia.

 

Scasserra has more than 25 years of experience in real estate funds management, corporate finance and law. Prior to joining CLI, he was the head of real estate private capital at Barrenjoey Capital Partners &ndash an investment banking firm in Australia.

 

Bharara, meanwhile, was a partner of real estate private capital at Barrenjoey Capital Partners. He was also managing director and head of real estate coverage at Credit Suisse Australia.

 

Lim said: &ldquo Their contributions will fuel CLI&rsquo s efforts to expand our investment products, capabilities and network to drive value creation for our partners.&rdquo

 

This announcement comes a few months after CLI closed its Australian Credit Program, which is the group&rsquo s maiden credit fund at A$265 million, backed by Asian investors.

 

On Wednesday, the group announced that it will buy an initial 40 per cent stake in Singapore-headquartered real estate investment manager SC Capital Partners for S$280 million.

 

The deal is expected to close in the first quarter of 2025, and is projected to increase CLI&rsquo s FUM by S$11 billion to a combined FUM of S$113 billion.

 

Noting that the majority of the S$11 billion FUM is in Japan, the group said the acquisition will significantly boost CLI&rsquo s presence in the country and further enhance its diversification.

The deal is slated to close in the first quarter of 2025

 

CAPITALAND Investment : 9CI +0.71% (CLI) has agreed to buy an initial 40 per cent stake in Singapore-headquartered real estate investment manager, SC Capital Partners, for S$280 million.

 

The deal is slated to close in the first quarter of 2025.

 

This is expected to increase CLI&rsquo s funds under management (FUM) by S$11 billion to a combined FUM of S$113 billion, said the real asset manager on Wednesday (Nov 20).

 

Noting that the majority or 76 per cent of the S$11 billion FUM is in Japan, the group said its acquisition will significantly boost CLI&rsquo s presence in the country and further enhance its diversification.

 

Post the 40 per cent acquisition, the group&rsquo s FUM will be tripled from S$2.9 billion as at June 2024 to about S$11 billion.

 

Contributions from Japan to CLI&rsquo s current FUM is estimated to increase from 3 per cent currently, to 10 per cent of the combined FUM with SC Capital&rsquo s.

The addition of SC Capital&rsquo s Japan hotel real estate investment trust (Reit) manager to CLI&rsquo s portfolio will mark the group&rsquo s maiden entry into the Japan Reit market.

 

This is expected to grow the FUM of CLI&rsquo s listed funds from S$63 billion currently to S$69 billion. It is also estimated to increase the market capitalisation of CLI&rsquo s managed Reits and business trusts from over S$30 billion to S$35 billion.

 

CLI also said it intends to acquire the remaining 60 per cent interest in SC Capital in phases over the next five years, and invest at least S$524 million in SC Capital&rsquo s fund strategies to support the growth of its platform.

 

The initial 40 per cent-acquisition will therefore &ldquo provide an orderly and aligned pathway&rdquo for CLI&rsquo s full acquisition of SC Capital by 2030.

 

Till then, SC Capital will continue to operate independently, while CLI participates at the board level in investment strategies that require the use of strategic capital.

 

CLI group chief executive Lee Chee Koon said he considered SC Capital&rsquo s portfolio and geographic presence as complementary to those of the group.

 

He also highlighted the acquisition as one of CLI&rsquo s &ldquo strategic thrusts to scale up (the group&rsquo s) capabilities and build bench strength&rdquo across its focus markets.

 

&ldquo The addition of SC Capital&rsquo s capabilities will further solidify CLI&rsquo s foothold in the region. Together, our collective deal sourcing, investment and asset management network and capabilities across various thematic strategies will provide investors with wider access, and more differentiated and proprietary deal origination,&rdquo he said.

In 2024 to Nov 13, CLI bought back 126.2 million shares at an average price of S$2.72 per share. This comprised 31,235,000 shares bought back in January as part of the FY23 (ended Dec 31) share purchase mandate, and 94,971,200 shares bought back on the FY24 mandate to October.

 

For the FY24 mandate, CLI bought back 1.87 per cent of its issued shares (excluding treasury shares) as at the mandate approval date. This followed CLI buying back of 1.03 per cent of its shares on the FY23 mandate.

 

CLI said its share purchase mandate provides flexibility in managing share capital and improving return on equity (ROE). For the current FY, CLI can buy back as much as 5 per cent of the issued shares, excluding treasury shares and subsidiary holdings. Should CLI wish to increase the limit, it could seek approval at the FY24 annual general meeting or at an extraordinary general meeting.

 

CLI also pursues a strategic objective to recycle S$3 billion in assets annually to enhance ROE and create capacity for future growth.

 

This year, the S$3 billion target has already been met, with CLI highlighting in a Q3 FY24 business update that its FY24 gross divestments based on agreed property values till Nov 5 amounted to S$4.6 billion. This included CLI selling its stake in Ion Orchard to CapitaLand Integrated Commercial Trust for S$1.9 billion in September.

 

CLI&rsquo s prudent capital management in Q3 FY24 also saw its net debt to equity ratio inch down to 0.54 from 0.59 in Q2 FY24, as interest costs remained steady at 4.1 per cent with 64 per cent of its debt fixed.

 

CLI underwent a significant strategic transformation that took effect in September 2021 with a mission to grow its funds under management (FUM) and fee-related earnings by leveraging its leadership in Asia, comprehensive capabilities and development opportunities within the CapitaLand ecosystem.

 

FUM has grown to S$102 billion as at Nov 5, from S$91 billion at the end of 2021.

 

This includes announced acquisitions/divestments from listed and private funds not yet completed and committed but undeployed capital for private funds on a leveraged basis and forward purchase contracts.

 

For instance, on Nov 5, CLI announced that it had secured S$261 million from Mitsui OSK Lines for its South-east Asia and India private funds, boosting the CapitaLand SEA Logistics Fund to S$400 million and the CapitaLand India Growth Fund 2 to more thanr S$500 million in total equity raised.

 

Of the S$102 billion total FUM, S$63 billion is in listed funds while S$39 billion is in private funds. By asset class, the most invested thematic is new economy assets, which comprise 32 per cent of the FUM.

 

Geographically, CLI is also on a diversification drive to grow India and its focused markets of Australia, Japan and South Korea.

 

This is in addition to the South-east Asia and China markets, which respectively make up 43 per cent and 30 per cent of the FUM as at Nov 5.

 

CLI noted that with the onset of clearer interest rate trends boosting transaction momentum, it is seeking to fully realise the growth potential of its fund management business by expanding its listed funds platform and scaling up the private funds platform, targeting S$200 billion in FUM over the next five years.

 

The group also maintains a highly active presence in the local investor relation circuits and has scheduled its annual institutional investor day on Nov 22.

Yangzijiang Financial Holding leads the consideration tally for the non-STI primary-listed companies

 

SHARE buybacks can be used for employee compensation plans, such as share option schemes or employee share purchase plans, as well as for long-term capital management.

 

As at Nov 13, nearly 80 primary-listed companies have repurchased their shares on-market this year, amounting to S$1.03 billion in buyback consideration.

 

These share buybacks by way of market acquisitions were &ldquo on-market&rdquo , meaning the company bought the shares from any willing seller at the prevailing market value.

 

In addition, secondary-listed companies and two real estate investment trusts also conducted buybacks over the year, and primary-listed companies also engaged in off-market acquisitions through equal access schemes.

 

For instance, secondary-listed Jardine Matheson Holdings : J36 +2.53% repurchased shares 47 times between Jan 9 and May 28, and Digital Core Reit repurchased more than 25 million units at a discount to net asset value.

 

Vertically integrated agri-food operator Japfa : UD2 0% acquired 6.86 per cent of its shares at S$0.355 per share on Oct 7, in an equal access offer announced in August. In the announcement, Japfa noted that its shares were trading below the group&rsquo s net asset value, while maintaining the equal access offer reflected the company&rsquo s confidence in its long-term growth potential.

 

The offer also provided shareholders with an opportunity to realise a portion of their investments in the shares at a premium over recent market prices, without incurring transaction costs.

 

For the primary-listed company on-market buyback transactions, the S$1.03 billion in consideration value in 2024 year to Nov 13 compares to around S$740 million filed by nearly 70 primary-listed companies in 2023.

 

Most of the buyback consideration this year was filed in the first half of 2024. During this period, the Straits Times Index (STI) generated a 3 per cent price gain, compared with the 12 per cent price gain in the second half to Nov 13.

 

A total of 11 STI stocks accounted for more than 80 per cent of the S$1.03 billion consideration, with CapitaLand Investment : 9CI -0.36% (CLI) leading the buyback consideration tally.

 

For the non-STI primary-listed companies, Yangzijiang Financial Holding : YF8 -1.23% (YZJF) led the consideration tally.