Singapore’s CapitaLand Investment is purchasing a 40% stake in pan-Asia real estate fund SC Capital Partners for S$280 million ($214 million) to bolster its investment management capabilities.
The real estate asset manager, part of Temasek-owned conglomerate CapitaLand Group, will acquire the remaining stake in the Singapore-based general partner in phases, according to an announcement on Wednesday.
CapitaLand will buy two additional 30% stakes in SC Capital on the third and fifth anniversary of the transaction, with an expected full ownership by 2030. Its founder and chairman Suchad Chiaranussati will retain his position and autonomy over the business in the meantime, while CapitaLand will join SC Capital at the board level for investment strategies that require the use of strategic capital.
The deal, which is funded through cash, is expected to close in the first quarter of 2025 upon receiving regulatory approvals.
“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,” said Chee Koon Lee, Group Chief Executive Officer at CLI.
Founded in 2004, SC Capital manages several fund families for opportunistic and core-plus real estate in the Asia-Pacific region as well as a yen-dominated strategy for hospitality assets in Japan. SC Capital most recently launched its sixth opportunistic fund, Real Estate Capital Asia Partners VI, with a $1-billion target in late 2022, filings showed.
CapitaLand will also invest at least S$524 million ($400 million) in SC Capital’s fund strategies to help grow its platform, which has S$11 billion in funds under management. It will also expand into the J-REIT market where SC Capital is the majority owner of Japan Hotel REIT Advisors, the asset manager of Japan Hotel REIT Investment Corp and a specialist in hotel asset management in the country.
“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,” said Chiaranussati.
Temasek-linked buy-side entities have been picking up stakes in general partners across different asset classes and strategies in recent times, signalling increasing consolidation in the private fund industry.
Seviora Group announced that it is buying minority stakes in private credit manager ADM Capital in July.
Singapore-listed Keppel last year bought a 50% stake in European real estate investor Aermont Capital with plans to obtain full ownership in the future. The group did a similar deal with infrastructure-focused private credit fund Pierfront Capital and absorbed the fund, now known as Keppel Credit, into the group.