CapitaLand Investment Limited (CLI) has made a significant move to expand its presence in Australia by acquiring the property and corporate credit investment management business of Wingate Group Holdings for A$200 million ($173 million) plus an earn-out.
Upon completion of this acquisition, CLI’s total funds under management (FUM) in Australia will increase by 30% to A$8.3 billion. This accounts for approximately 7% of CLI’s total FUM of $115 billion. The company has set an ambitious target to reach $200 billion in FUM by 2028.
The acquisition is a major step towards fulfilling this target and marks a return to Australia for CLI, a decade after it divested its key assets in the country to focus on faster-growing markets like China and other overseas markets.
CLI’s investor day last month had hinted at a potential acquisition of Wingate, and the confirmation of the deal on Dec 16 has been met with media attention in Australia. Wingate is renowned as one of Australia’s leading private credit investment managers, with a successful track record of over 350 transactions worth A$20 billion.
This acquisition also strengthens the existing relationship between CLI and Wingate, as in September, they had announced the close of the A$265 million Australia Credit Program (ACP), a joint venture between the two companies.
CLI has highlighted Wingate’s extensive deal origination networks and strong relationships with institutional and private high-net-worth investors as key reasons for the acquisition. It will also provide CLI with a wider reach in the Australian market.
According to Paul Tham, CLI’s group chief financial officer, besides Australia, there is a potential for growth in private credit opportunities in other Asia Pacific markets such as South Korea, India, and Japan. Therefore, CLI is focusing on geographical diversification, with Australia being one of its priority markets.
CLI has also highlighted the growth potential of the Australian private capital market, which has seen a 33% increase in assets under management in the last 18 months, reaching A$139 billion. Additionally, there is a forecasted A$146 billion gap in commercial mortgage funding by 2028.
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Wingate’s expertise will help CLI diversify its portfolio, which currently comprises of logistics, business parks, offices, and lodging assets spread across nine cities in Australia. As of Sept 30, CLI manages 34 logistics properties, business parks, and four Grade A office buildings in the country. It also owns over 13,500 lodging units across more than 150 properties through its wholly-owned lodging business unit, The Ascott.