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The A$200 million ($173 million) acquisition of Wingate Group Holdings’ property and corporate credit investment management business is a strategic move by CapitaLand Investment Limited (CLI) to strengthen its presence in Australia. This deal will add A$2.5 billion in funds under management to CLI’s portfolio in Australia, bringing the total FUM in this market to $8.3 billion, which is around 7% of its total FUM of $115 billion. CLI has set a goal to reach $200 billion in FUM by 2028 and this acquisition will contribute towards achieving it.
Previously, CLI divested its key assets in Australia a decade ago to focus on faster-growing markets like China and other overseas markets. However, this recent focus on Australia shows CLI’s commitment to investing up to A$1 billion to grow its FUM in this market. The acquisition of Wingate has been confirmed after reports by the Australian media last month. Wingate is known as one of the leading and largest private credit investment managers in Australia, with a proven track record of completing over 350 transactions worth more than A$20 billion.
CLI and Wingate have a prior partnership which led to the creation of the A$265 million Australia Credit Program (ACP) in September. With this acquisition, CLI will be able to tap into Wingate’s extensive deal origination networks and expand its access to institutional and private high-net-worth investors. CLI will also gain more exposure to the Australian market.
CLI’s Group CFO, Paul Tham, believes that besides Australia, there are other lucrative private credit opportunities in the Asia Pacific region, particularly in markets such as South Korea, India, and Japan. Hence, CLI is accelerating its geographical diversification efforts and focusing on Australia as one of its key markets for growth.
According to CLI, the Australian private capital market has grown by 33% in the past 18 months, with AUM reaching A$139 billion. It is estimated that there will be a commercial mortgage funding gap of A$146 billion by 2028. The acquisition of Wingate will help CLI diversify its portfolio, which includes logistics, business parks, office, and lodging assets across nine cities in Australia.
Presently, CLI manages 34 logistics properties and business parks, and four Grade A office buildings in Australia. It also owns The Ascott, a lodging business unit with more than 13,500 lodging units across 150 properties. The acquisition of Wingate will further enhance CLI’s position in the Australian market and increase its growth potential. Additionally, CLI will also have access to Wingate’s expertise in the private credit market, which will help it capitalize on the growing opportunities in this sector.