CAPITALAND Investment (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’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 that its acquisition will significantly boost CLI’s presence in the country and further enhance its diversification.
Post the 40 per cent acquisition, the group’s FUM in Japan will be trebled from S$2.9 billion as at June 2024 to about S$11 billion.
Contributions from Japan to CLI ’s current FUM is estimated to increase from 3 per cent currently, to 10 per cent of the combined FUM with SC Capital’s.
The addition of SC Capital’s Japan hotel real estate investment trust (Reit) manager to CLI’s portfolio will mark the group’s maiden entry into the Japan Reit market.
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This is expected to grow the FUM of CLI’s listed funds from S$63 billion currently to S$69 billion. It is also estimated to increase the market capitalisation of CLI’s managed Reits and business trusts from over S$30 billion to S$35 billion.
CLI also said that 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’s fund strategies to support the growth of its platform.
The initial 40 per cent-acquisition will therefore “provide an orderly and aligned pathway” for CLI’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 noted that he considered SC Capital’s portfolio and geographic presence as complementary to those of the group.
He also highlighted the acquisition as one of CLI’s “strategic thrusts to scale up (the group’s) capabilities and build bench strength” across its focus markets.
“The addition of SC Capital’s capabilities will further solidify CLI’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,” he explained.
Shares of CLI ended Tuesday S$0.02 or 0.7 per cent higher at S$2.81.
