Keppel Asia Infrastructure Fund passes half-way mark towards $1bn target

The vehicle, which the AIIB is backing with up to $150m, will invest across the infrastructure space primarily in emerging Asian markets.

Keppel Capital Holdings, the asset management arm of Singapore-based conglomerate Keppel Corporation, has secured a $100 million commitment and a co-investment sleeve of up to $50 million from the Asian Infrastructure Investment Bank, raising $570 million for its Asia infrastructure fund and co-investment vehicles.

The Keppel Asia Infrastructure Fund, which has a target of $1 billion, will invest across a number of infrastructure sub-sectors, including power, renewable energy, telecoms, transportation and logistics, and social infrastructure, in the Asia-Pacific region, the firm said.

“The fund intends to provide growth capital to operating companies and selectively greenfield projects and apply a value-add strategy to these investments by leveraging Keppel’s business network and infrastructure expertise,” a spokesman for Keppel Capital Holdings told Infrastructure Investor.

“The fund, together with its co-investment vehicles, has acquired a 30 percent interest in the Gimi floating liquefied natural gas facility which is currently undergoing conversion at Keppel Offshore & Marine,” he added, referring to Keppel Corporation’s specialised shipbuilding company.

For the AIIB, the investment “aims to crowd in private capital for infrastructure in AIIB’s members via the fund, which invests in a broad range of infrastructure sectors with a focus on emerging markets in Asia”, the bank said in a separate statement.

AIIB is the first multilateral investor to partner with Keppel Capital Holdings to invest in the fund, as well as the sole investor for the co-investment sleeve.

“With the co-investment sleeve, AIIB has the option to make a minority investment in a company alongside the fund investment made by the fund manager in this company,” AIIB senior investment officer Thomas Walenta told Infrastructure Investor.

The target geographies of the fund include Bangladesh, Brunei, Cambodia, China, India, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand and Vietnam, Infrastructure Investor has learned.

“The fund will further diversify AIIB’s equity portfolio through exposure to sectors that AIIB has yet to explore but which are well aligned with the AIIB’s sector strategies. Also, the fund’s target geographies in the Asia-Pacific region will further diversify the geographic coverage of AIIB’s equity portfolio,” Walenta said.   

The fund was launched by Keppel Capital in April 2019 and is managed by Keppel Capital Alternative Asset, a private fund manager under Keppel Capital, which focuses on infrastructure, senior living and education. It reached first close in January on $360 million from investors including a sovereign wealth fund and an endowment fund, Keppel Capital said in a statement at the time, without disclosing the names of those investors.

Keppel Capital, whose assets under management stood at around S$33 billion ($23.2 billion; €21.4 billion) as of end 2019, is the parent company of another private fund manager, Alpha Investment Partners, which invests in real estate and data centres.

However, aside from its asset management arm, Singapore-listed Keppel Corporation also invests in infrastructure through several of its other companies, which include Keppel Infrastructure, a developer and operator of power plants across China, the Philippines and South America; and Keppel Telecommunications & Transportation, a logistics and data centre business, which provides services to the Asia-Pacific region and Europe. It’s also a majority partner in the joint venture Keppel Data Centres and a sponsor of Keppel DC REIT, the first data centre real estate investment trust listed in Asia and on the Singapore Exchange.