GIC invests $84.4m in Philippine hospital business

The Singapore sovereign wealth fund will acquire a 14% stake in Neptune Stroika Holdings.

The Government of Singapore Investment Corporation (GIC) has agreed to invest in the hospital unit of Philippine-based Metro Pacific Investments Corporation (MPIC).

GIC, through its affiliates, will invest $84.4 billion to acquire a 14.4 percent stake in Neptune Stroika Holdings (NSHI), MPIC’s wholly-owned subsidiary which will be the holding company for all of its hospital investments.

GIC will also take on PHP 6.5 billion (€110 million, $149 million) of an exchangeable bond which can be exchanged into a 25.5 percent stake in NSHI in the future. Proceeds from the bond will be used by MPIC for continuing investments in roads, power and water. The agreement is subject to certain conditions but is expected to complete in the middle of the year.

The MPIC Hospital Group under NSHI consists of eight premier hospitals with a total capacity of 2,200 beds, and a recently acquired mall-based diagnostic centre mega-clinic.

The investment comes after a relatively busy start of the year for GIC. Earlier this month, GIC entered into a PHP 3.4 billion exchangeable loan agreement with Century Canning Corporation which is the parent company of soon to be listed Century Pacific Food.

In March, GIC invested $63 million into Intelligent Energy, an international power technology company, while in January, GIC teamed up with Macquarie Capital to acquire a majority interest in Australian student accommodation group Iglu. In the same month, Related Companies, an entity owned by GIC and the Abu Dhabi Investment Authority (ADIA), also acquired 1.1 million square feet of office space from Time Warner in a $1.3 billion transaction.

Last July, GIC reported an annualised 20-year real rate of return of 4 percent to 31 March 2013, up from 3.9 percent the previous year. In US dollar terms, GIC’s portfolio had annualised nominal rates of return of 2.6 percent over five years, 8.8 percent over 10 years and 6.5 percent over 20 years, the report said.

The 10-year results beat the performance of US endowment funds, which on average returned 6.2 percent in US dollar terms over the 10-year period ended June 2012, GIC said at the time.

Established in 1981, GIC manages Singapore’s foreign reserves and invests across a wide range of asset classes, including private equity, public equities, fixed income and real estate. In private equity, GIC invests through funds as well as directly in companies, partnering with fund managers and management teams. GIC employs more than 1,200 people across offices in Singapore, Beijing, London, Mumbai, New York, San Francisco, Sao Paulo, Seoul, Shanghai, and Tokyo.