Singapore-based global asset manager Keppel has entered into an agreement to acquire European real estate manager Aermont Capital Group for approximately $1 billion.
Under terms of the deal, the transaction will occur in two steps, according to a Nov. 29 release from Keppel. Initially, Keppel will acquire a 50% stake in Aermont for up to S$517 million ($387 million) in a transaction expected to close in the first half of 2024, subject to regulatory and other approvals.
The second step — in which Keppel will acquire the remaining 50% stake in Aermont — is expected to occur in the first half of 2028. The estimated maximum consideration for this second transaction would be about €575 million or S$834 million based on an exchange rate of €1 to S$1.45, a Keppel spokesperson said.
As a result of the first transaction, Keppel's funds under management will climb to more than S$77 billion from S$53 billion.
A spokesperson for Keppel noted that funds under management is "essentially the portion of AUM that the company is earning fees from."
After the acquisition of the initial 50% stake, Keppel said in the release it "will focus on maintaining and supporting the success of Aermont's real estate platform while working with Aermont's team to jointly develop new fund products and initiatives, leveraging Keppel's expertise in alternative assets such as private credit funds and data centers."
The consideration for each stake is expected to be funded through a combination of cash and shares in Keppel, Aermont said in its own release on Nov. 29.
"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, availing us of a highly attractive European platform with strong recurring fees and a premium network of global LPs," said Keppel CEO Loh Chin Hua in the Keppel release.
A spokesperson for Aermont said that Aermont's partners will retain their responsibilities "ensuring full continuity on behalf of LPs."
The Keppel spokesperson said "in the immediate term, the plan is for Aermont's management team to continue focusing on running Aermont's day-to-day operations. Separately, there are plans for cross-secondments of employees between Keppel and Aermont, with the intention to provide a broader platform to advance the careers of our employees."
Keppel has a total portfolio with more than S$65 billion of assets under management.