CapitaLand Investment Limited (CLI) is making major moves in the Australian market with its recent acquisition of the property and corporate credit investment management business of Wingate Group Holdings for A$200 million ($173 million) and an earn-out contingency.
This acquisition will contribute to CLI’s total funds under management (FUM) in Australia, which is currently at A$2.5 billion. This will increase CLI’s FUM in Australia by 30%, bringing it to a total of $8.3 billion, which is approximately 7% of its total FUM of $115 billion. CLI has set a target to reach $200 billion in FUM by 2028.
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This acquisition is part of CLI’s commitment to invest up to A$1 billion to grow its FUM in Australia, a focus that has resurfaced a decade after the previous board and management divested their Australian assets to focus on the then rapidly-growing Chinese and other overseas markets.
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The announcement of the acquisition, made on December 16, was in line with previous reports by the Australian media last month. Wingate is one of the leading and largest private credit investment managers in Australia, with a proven track record of completing more than 350 transactions worth over A$20 billion.
CLI is already familiar with Wingate, having announced the close of its A$265 million Australia Credit Program (ACP) in September, which was a joint venture with Wingate. According to CLI, Wingate’s partnership will help expand CLI’s proprietary deal origination networks, provide access to institutional and private high-net-worth investors, and increase geographical exposure to Australia.
CLI’s group CFO, Paul Tham, believes that besides Australia, there are also opportunities for scalable private credit investments in other Asia Pacific markets, particularly South Korea, India and Japan. He adds that as CLI accelerates its efforts for geographical diversification, Australia is a key market with significant growth potential.
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According to CLI, the Australian private capital market has grown by 33% in the past 18 months, with assets under management reaching A$139 billion. There is a projected A$146 billion commercial mortgage funding gap expected by 2028.
With the addition of Wingate, CLI’s portfolio diversifies further, with investments in logistics, business parks, office and lodging assets across nine cities in Australia. As of September, CLI manages 34 logistics properties and business parks, as well as four Grade A office buildings in Australia. It also has over 13,500 lodging units across more than 150 properties under its wholly-owned lodging business unit, The Ascott.