Keppel Capital takes 50% interest in Pierfront Capital
Singapore-based Keppel Corporation has agreed to buy a 50% interest in Pierfront Capital, an alternative credit investment fund manager controlled by Temasek Holdings.
KC Management One, a subsidiary of Keppel Capital, will pay $6.78 million for the holding, plus a further $1 million on completion of the deal, according to a filing. The selling entity is Pierfront Capital Mezzanine Fund. Temasek currently owns 90.91% of this entity, while Sumitomo Mitsui Banking Corporation has 9.09%. Temasek is also the controlling shareholder of Keppel Corporation.
Pierfront will serve as the investment manager for private credit funds raised in conjunction with Keppel Capital. The first of these will be known as the Keppel-Pierfront Private Credit Fund.
"The strategic acquisition of a stake in Pierfront Capital allows Keppel Capital to manage mezzanine loans for private debt, while extending our fund management capabilities beyond the equity layer of the capital stack,” said Christina Tan, CEO of Keppel Capital, adding that private mezzanine debt for real estate and infrastructure projects is a growing asset class.
Keppel Corporation has interests spanning offshore and marine services, property, infrastructure, and solutions for sustainable urbanization. Keppel Capital, its asset management arm, had S$29 billion ($21 billion) in assets under management as of year-end 2018. Its investments cover real estate, infrastructure and data center properties across 30 cities.
There are two main private fund segments: Alpha Investment Partners, which focuses on real estate and data centers; and Keppel Capital Alternative Asset, which targets senior living, education and infrastructure. Recent initiatives include an investment fund focused on education assets established in conjunction with Singapore-based preschool operator MindChamps.
Pierfront primarily provides junior debt, mezzanine and structured equity to support infrastructure and real estate projects. It has previously backed the likes of Singapore shipping services company KNOT Offshore Partners, mine operator Merdeka Copper Gold, and clean energy player Greenko Ventures.
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