Alternatives news roundup: Investors ploughing into India private debt
ASIA (REGION)
After a year in which hotel investment came to a virtual standstill as Covid-19 crushed international travel and tourism, 70% of investors in a recent survey now say they are keen to deploy capital in Asia Pacific hospitality assets in 2021.
Global property consultancy JLL, which conducted the study, forecasts $7 billion in hotel transactions in the region this year, which would represent a 20% increase from last year’s $5.8 billion, with the bulk of that 2020 total having taken place during the first quarter before the pandemic took hold.
Japan is seen as the most desirable hotel investment market in the region, with 52% of respondents holding a favourable view, followed by Southeast Asia with 46%, Australia with 31% and China with 22%. JLL polled about 100 clients in late January.
Source: Mingtiandi
AUSTRALIA
Allowing individuals to buy property through their super would put significant upward pressure on house prices and exacerbate housing affordability concerns for low-income earners, according to the Association of Superannuation Funds of Australia.
A new ASFA analysis found that using superannuation for housing deposits would most likely be used by higher-income earners who can afford a home already. Further, it noted it would lead to increased purchasing power that would be near fully capitalised into higher house prices, exacerbating the upswing of the current house price-credit cycle.
As a result, ASFA recommended that the government commission a comprehensive and independent review of housing affordability, similar in nature to the Retirement Income Review, to establish a fact base and drive sensible, consistent policy across federal, state and local governments.
Source: Nestegg
KKR appointed Tom Lee into a new role as a managing director and head of Australia and New Zealand real estate, effective from May 3.
Lee, who will be based in Sydney, will oversee the US private equity company's property platform across the two countries, as well as helping expand its real estate strategies across the Asia region. He will also join the KKR Asia Real Estate Investment Committee.
A spokeswoman said Lee will work closely with Tom Pattar, head of Asia Pacific real estate, as well as Scott Bookmyer, head of Australia and senior members in the Australia team. She declined to say how many people would report to Lee.
Lee was most recently chief executive of LOGOS, a logistics real estate investment manager with operations across Asia Pacific. Prior to that, he worked in senior positions at BlackRock, MGPA and Lendlease in Asia, Europe, US and Australia. KKR has deployed more than A$2 billion ($1.5 billion) of equity in Asia Pacific across approximately 20 real estate transactions since 2011
Source: KKR (press release)
CHINA
Jardine Matheson Holdings, one of Hong Kong's original colonial trading houses, and Chinese private equity firm Hillhouse Capital, known for its investments in technology companies like Tencent Holdings and Uber Technologies, agreed to join forces to find new deals in greater China and Southeast Asia.
HONG KONG
Hong Kong-based insurance company AIA announced it will pull out of all coal investments by 2028. The life insurer will divest and/or run off our entire directly managed equity and fixed income exposure to coal mining and coal-fired power businesses by the end of 2021 for equity and 2028 for fixed income, and will not permit any new investments within businesses involved directly in either mining coal or generating electricity from coal.
AIA has $326 billion of funds under management and is estimated to hold up to $6 billion in coal and coal-fired power assets, according to the Institute for Energy Economics and Financial Analysis.
Last year, the life insurer had divested directly managed equity exposure in coal mining and coalfired power companies generating more than 30% of their revenue from either or both of these activities.
Source: AIA; The Guardian
INDIA
Global investors such as the Canada Pension Plan Investment Board (CPPIB), Ontario Teachers’ Pension Plan, Baring Private Equity Asia, and Värde Partners are flocking to Indian private debt because they expect huge demand for credit in the country after the onslaught of the Covid-19 pandemic and limited lending by Indian banks and non-banking financial companies.
These asset owners and general partners have committed over $1 billion in Indian private credit, revealed industry estimates.
Source: Business Standard (paywall)
Kotak Investment Advisors and Allianz Investment Management SE (Allianz), the investment management arm of German insurer Allianz, announced on March 15 a partnership to invest in Indian private credit market.
In February 2021, Allianz made its maiden credit investment of $150 million in KIAL’s 11th real estate debt fund, which achieved a closure of $380 million. KIAL’s Real Estate Fund primarily focuses on financing early- and late-stage real estate projects across geographies in India. Allianz’ total private credit investments in India so far are worth around $650 million and it is looking to steadily increase that total in 2021.
Source: Kotak Investment Advisors (via press release)
INDONESIA
The Indonesia Investment Authority (INA) is exploring debut infrastructure investments worth $2.6 billion, a deputy minister said on Wednesday (March 10).
“We have the first 24 (toll road) concessions that we are currently discussing with INA for coordination opportunity with a total equity value of around Rph37 trillion ($2.57 billion),” said Kartika Wirjoatmodjo, deputy minister of state-owned enterprises.
The new sovereign wealth fund, seeded with $5 billion by the Indonesia state and targetting a further $16 billion from foreign institutions initially, was set up to spur infrastructure investment in the Southeast Asian nation. Its first chief executive and board members were announced in February 2021.
Source: Reuters
KOREA
The South Korean government approved a bill to revise the ‘Enforcement Decree of the Financial Investment Services and Capital Markets Act’ to strengthen investor protection in the private equity fund market.
The revision bill is scheduled to go into effect immediately after promulgation in mid-March. It is a follow-up to the measures to improve the regulatory framework on private equity funds announced by the FSC (Financial Services Commission) and FSS (Financial Supervisory Service) in April 2020.
The measures included requirements for private equity funds to undergo regular audits, adopt new valuation guidelines, conduct regular liquidity stress tests, and cap leverage at 400 percent of assets.
Source: Regulation Asia
SINGAPORE
Sovereign wealth fund GIC is doubling down on its investment in US retail real estate by teaming up with RPT Realty, Zimmer Partners and Monarch Alternative Capital to form a net lease retail real estate platform targeting $1.2 billion of strategic assets.
GIC, Zimmer, Monarch and RPT committed to fund $470 million in the platform, called RGMZ, over the next three years, including the initial investment portfolio that is to be seeded by RPT. The platform will create a scalable, stable-growth investment platform, RPT said in a statement.
Source: RPT Realty, Straits Times
Singapore’s state-owned investment firm Temasek announced it has entered into a US$500 million partnership with London-based LeapFrog Investments.
The partnership will form a multifund investment vehicle by Temasek to anchor LeapFrog’s future funds. Temasek will also take a minority stake in LeapFrog and provide growth capital to expand the latter’s team and investment capabilities across Asia and Africa.
Founded in 2007, LeapFrog backs businesses across the two regions and has raised over US$2 billion from global institutional investors. The investment firm said its companies now reach 212 million people across 35 countries.
Source: Tech In Asia
INTERNATIONAL (EX-ASIA)
Private equity buyout firm KKR is seeking to raise $12 billion for its flagship global fund that will invest in infrastructure assets such as oil and gas pipelines and renewable energy projects, according to people familiar with the matter.
The fundraising comes as President Joe Biden has been pushing US lawmakers to back a plan for trillions of dollars in new spending on projects to restore America’s crumbling infrastructure.
KKR began raising the fund, KKR Global Infrastructure Investors IV, late last year alongside its other flagship funds, including the North America private equity fund, which is aiming to attract more than $15 billion. But the firm's latest global infrastructure fund would be significantly bigger than KKR Global Infrastructure Investors III, which amassed $7.4 billion from investors in 2018.
Source: Reuters
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