Capitaland Investment Establishes Rmb5 Billion Onshore Master Fund China Major Domestic Insurer
, raises stake in RafflesCity China
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CapitaLand Investment Limited (CLI) has recently launched its first master fund in China – CLI RMB Master Fund, with an initial investment of RMB5 billion ($921 million). This move is in line with the company’s asset-light strategy to grow its funds under management (FUM). A major domestic insurance company has been secured by CLI to take up a majority stake in the master fund.
The CLI RMB Master Fund will invest in a range of sub-funds that aim to acquire high-quality assets with growth potential and generate stable income. These sub-funds will focus on business parks, retail properties, rental housing, and serviced residences across Tier one and top Tier two cities. Future sub-funds may also consider investing in other sectors such as data centres, logistics parks, and offices.
CLI China’s Chief Executive Officer, Puah Tze Shyang, mentions that the company has over three decades of experience operating in China. He emphasises its ability to structure and launch various RMB funds that cater to the needs of domestic investors.
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“The launch of our first master fund in China demonstrates CLI’s expertise in offering a diversified suite of RMB funds designed for domestic investors. This trend of insurance companies increasing their capital allocation towards real estate in China has provided opportunities for us to invest in a resilient portfolio of stabilised assets with core returns. Furthermore, with a significant domestic insurance company as a co-investor in our master fund, we are well-positioned to attract other insurance firms to invest in our sub-funds and grow our domestic investor base,” says Puah.
He added that CLI has successfully raised RMB54 billion across seven RMB funds since 2021, which is a testament to the company’s domestic-for-domestic fund strategy to expand its FUM and increase its recurring fee income. In April, CLI announced its plans to list its first real estate investment trust (REIT) in China – CapitaLand Commercial C-REIT (CLCR). This move will enable CLI to access domestic capital and further enhance its recurring fee income. Two of CLI’s properties – CapitaMall Yuhuating owned by CapitaLand China Trust and CapitaMall Sky+ owned by CLI and CapitaLand Development, will be the seed assets for CLCR.
In conclusion, CLI’s establishment of a master fund in China showcases its ability to capitalise on the growing trend of insurance companies investing in real estate. This move will help the company expand its FUM and strengthen its recurring fee income. Meanwhile, the upcoming listing of CLCR will provide CLI with additional access to domestic capital and further enhance its recurring fee income.