Keppel Capital Holdings, a unit of Singapore-listed Keppel Corporation, has agreed to acquire an initial 50% stake in the European real estate fund manager Aermont Capital, for a consideration of up to 356.9 million euros ($388 million), in a move to expand its footprint beyond the Asia Pacific.
Keppel expects the acquisition to be completed in the first half of 2024, subject to regulatory and other approvals.
After a transition period, it expects to acquire the remaining 50% stake in Aermont in the first half of 2028 for 575 million euros ($630 million), according to a stock exchange filing by Keppel Corp.
“The acquisition will add an initial S$24 billion to Keppel’s current funds under management (FUM) of about S$53 billion, marking significant progress towards the group’s FUM target of S$100 billion in 2026,” according to the stock exchange filing.
The acquisition, which can be funded through a combination of cash and treasury shares raised through Keppel’s earlier share buyback programme, implies an enterprise value-to-EBITDA (EV/EBITDA) multiple of 13 times, according to a company statement.
Aermont, which had S$24 billion in funds under management as of June, will serve as Keppel’s European real estate platform, extending its global reach and strengthening its value proposition to global limited partners with minimal overlaps. The European firm has over 50 blue-chip limited partners, including public pension funds, sovereign wealth funds and endowments and foundations.
Aermont’s investments include assets and businesses in the office, student accommodation, workforce housing, luxury hospitality and production studio infrastructure sectors. It has generated an average realised 25% gross internal rate of return and 2.8x gross multiple on invested capital through its five pan-European opportunistic funds to date.
Following the acquisition, Keppel will work with Aermont to jointly develop new fund products and initiatives, leveraging Keppel’s expertise in alternative assets such as private credit funds and data centres.
“The acquisition of an initial 50% stake in Aermont, with a pathway to an eventual 100% ownership and full integration, marks a major strategic step forward in Keppel’s ambition to be a global asset manager and operator… with strong recurring fees and a premium network of global LPs,” said Loh Chin Hua, CEO of Keppel Corporation.
Keppel, which is backed by Singapore state investor Temasek, in October announced that it had acquired the remaining stake it does not already own in Pierfront Capital from Clifford Capital after buying the initial 50% stake in 2019.
Keppel Corp’s Singapore-listed shares closed at S$6.43 on Wednesday, prior to the announcement, up by 1.4% from the previous close.