AUMs race heats up with CLI transaction raising its FUM to $113 bil

By The Edge Singapore

/ The Edge Singapore |

November 20, 2024 8:54 AM SGT

From left Chiaranussati, chairman and founder, SC Capital Partners Group with Lee Chee Koon, group CEO, CLI / Photo: CLI

On Nov 20 CapitaLand Investment Limited (CLI), announced it has entered into an agreement to acquire a 40% stake in SC Capital Partners Group (SCCP) for $280 million, and the remaining stake in SCCP in phases over the next five years, subject to the fulfilment of conditions. This provides an orderly and aligned pathway for CLI’s full ownership of SCCP by 2030, CLI says in a press release. As part of the partnership, CLI will also invest a minimum of $524 million in strategic capital in SCCP’s fund strategies to support the growth of the platform.

SCCP is an Asia Pacific real estate investment manager headquartered in Singapore with a presence across eight locations in the region, and has total funds under management (FUM) of $11 billion.

When CLI’s acquisition of the 40% stake in SCCP is completed, it will increase CLI’s FUM by $11 billion, strengthening its foothold as one of Asia Pacific’s largest real asset managers with a combined FUM of $113 billion.

CLI and SCCP’s combined listed and private funds management platform will expand CLI’s network and capabilities across key Asia Pacific markets and sectors including hospitality, living, and renewables.

According to CLI, 76% of the $11 billion FUM from SCCP is in Japan. The acquisition will significantly boost CLI’s presence in Japan, tripling its FUM in Japan from $2.9 billion to approximately $11 billion. Contribution from Japan will increase from the current 3% of CLI’s FUM to 10% of the combined $113 billion FUM of CLI and SCCP.

CLI will cement its position as one of Asia Pacific’s largest managers of real estate investment trusts (REITs) by market capitalisation with the addition of the manager of SCCP’s Japan Hotel REIT (JHR). The FUM of CLI’s listed funds will grow from S63 billion to $69 billion while the market capitalisation of its managed REITs and business trusts will increase from over $30 billion to $35 billion.

The J-REIT market is the largest in Asia-Pacific. With a market capitalisation of $3 billion, JHR is the second largest hospitality REIT and 13th largest J-REIT.

CLI will boost its private funds management capabilities and offer investors a wider range of fund products. SCCP’s flagship opportunistic private funds series - Real Estate Capital Asia Partners (RECAP) are complementary to CLI’s fund management growth strategy. SCCP’s other funds include core-plus and specialised strategies. SCCP’s more than 60 global institutional investors, most of which are new to CLI, will expand the combined team’s pool to approximately 120 global institutional investors.

CLI will fund its initial investment of the 40% stake through cash, with the deal expected to close in the first quarter of 2025, subject to regulatory approvals. SCCP will continue to operate independently until CLI completes its acquisition of the remaining 60% stake in SCCP. CLI will participate at the board level in investment strategies that require the use of strategic capital.

This acquisition is one of the strategic thrusts to scale up our capabilities and build bench strength across our focus markets, accelerating CLI’s growth as a global real asset manager to create greater value for our stakeholders. CLI and SCCP have complementary portfolios and geographic presence across the Asia Pacific region. The addition of SCCP’s capabilities will further solidify CLI’s foothold in the region,” says Lee Chee Koon, group CEO, CLI.

“We are excited to be joining forces with CLI to capitalise on the growth opportunities and dislocation we see in the real estate investment management markets in Asia Pacific. Our strategic partnership with CLI will enable SC Capital Partners to gain access to additional resources, enabling us to accelerate capital deployment and achieve scale, which is becoming increasingly important," says Suchad Chiaranussati, Chairman and Founder, SC Capital Partners.

As at Sept 30, CLI had AUM of $134 billion and FUM of $102 billion.

SCCP is best known as the white knight brought in to rescue Eagle Hospitality Trust (EHT). However, an extraordinary resolution to appoint an SC Capital unit as the manager of EHT during an Extraordinary General Meeting held on Dec 30, 2020 was not carried as the resolutions were inter-dependent, and one of them required 75% of votes from EHT's stapled security holders. EHT was subsequently liquidated.

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