Singapore-based Keppel Capital Holdings, through its wholly-owned subsidiary, Keppel Capital Alternative Asset has announced it has raised more than half of its target commitments for its $500 million Keppel Education Asset Fund, a closed-end private equity fund that will focus on the fast-growing private education sector in Asia Pacific.

The fund is managed by Keppel Capital Alternative Asset and the investors in the fund and its parallel vehicle include a sovereign wealth fund, an endowment fund and a family office.

The fund intends to partner established school operators to invest in private education-related real estate in the Asia Pacific region. It aims to build a balanced portfolio of stable, as well as brownfield and greenfield assets in different education subsectors, including the early learning and K12 segments, higher education and tertiary institutions, as well as on-campus accommodation. When fully leveraged and invested, the Fund is expected to have assets under management of approximately $1.2 billion.

Christina Tan (pictured), chief executive of Keppel Capital, said: “The private education industry is a resilient and fast-growing sector in Asia Pacific, supported by macrotrends including rapid urbanisation, an expanding middle class and rising affluence, increasing focus on education as well as supportive government policies. Through the Keppel Education Asset Fund, we will work with established operators to capitalise on the opportunities in the private education sector in Asia Pacific and support their expansion plans as they scale up in the region.

“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.”

As its first real estate investment, the fund has acquired a 70% stake in a bilingual K12 school property operated by Malvern College Chengdu (pictured), located in Chengdu in China. Other education-related assets in the fund’s deal pipeline include properties in Australia, China, Singapore, South Korea and Vietnam.

Jacqueline So, co-founder and chief executive of Malvern College (Asia), said: “We are delighted to partner with Keppel, which has a strong track record in Asia Pacific and in-depth expertise in real estate development, investment, as well as fund and asset management. The partnership will support our overseas expansion plans and we can focus on strengthening our operations to provide superior education and services to our students.”

Date published: 29 September 2020

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