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Keppel Capital surpasses half of target commitments for new US$500m fund

KEPPEL Corp's asset-management arm has crossed the halfway mark in target commitments for a US$500 million regional real estate investment fund, the mainboard-listed conglomerate announced on Tuesday evening.

Keppel Capital's closed-end Keppel Education Asset Fund, which aims to build up a portfolio of private education-related real estate in the Asia-Pacific, has made its first property investment - a 70-per-cent stake in a school run by Malvern College Chengdu in China.

Other assets in the deal pipeline include properties in Australia, China, Singapore, South Korea and Vietnam, with the goal of US$1.2 billion in assets under management when the fund is fully leveraged and invested, said Keppel in a statement.

Potential assets will include stable, brownfield and greenfield assets in sub-sectors such as kindergarten to 12th grade, higher education, and on-campus housing.

Said Keppel Capital chief executive Christina Tan: "Through the Keppel Education Asset Fund, we will work with established operators to capitalise on the opportunities in the private-education sector in the Asia-Pacific and support their expansion plans as they scale up in the region.

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"Education assets offer investors attractive risk-adjusted returns, with potential downside risks protected by established tenants and long leases.

"The reception to the fund despite the pandemic reflects investors' confidence in and demand for this defensive asset class, as well as Keppel's capabilities."

The Keppel Education Asset Fund is managed by Keppel Capital Alternative Asset, which focuses on new alternative asset classes such as infrastructure, senior living and education.

Keppel added that the latest transactions are not expected to have a material impact on the group's earnings and net tangible asset per share for the year to Dec 31.

Keppel shares closed down by S$0.07, or 1.67 per cent, to S$4.12, before the news.

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