CDL to set up dedicated fund management entity, targets S$10 billion AUM by 2029
Singapore-listed developer City Developments Ltd (CDL) announced a new strategy called GET+ on Monday, including setting up a dedicated fund management entity. The group aims to double assets under management to S$10 billion by 2029 and outlined plans to divest S$6 billion of assets and deploy S$5 b
Singapore-listed property developer City Developments Ltd (CDL) announced on Monday that it will set up a dedicated fund management entity with an investment committee and leadership team responsible for growing assets under management (AUM), fee income, profit and loss, and investor outcomes. The move is part of a new strategy called GET+, which aims to double AUM to S$10 billion (US$7.8 billion) by 2029.
As of 30 June, CDL had around S$5 billion in AUM, including S$3.5 billion managed through CDL Hospitality Trusts, S$1.2 billion under IReit Global and S$300 million in private funds on an attributable basis, according to The Business Times. "Fund management will become a more significant part of CDL's capital model, comprising new and existing listed REIT platforms and an expanded private capital platform via funds, partnerships and joint ventures," the group said in the press release.
The renewed push comes after CDL's earlier goal, announced in 2018, of increasing fund-management AUM to US$5 billion by 2023 failed to materialise amid a prolonged period of high interest rates and difficult fundraising conditions. "We were one foot in, one foot out," group CEO Sherman Kwek said at a briefing on Monday, as quoted by BT.
As part of the GET+ roadmap, CDL also plans to divest S$6 billion of assets and deploy S$5 billion in new investments. Other measurable targets include maintaining an annual dividend payout ratio of at least 35 per cent of reported net profit and lowering net gearing to about 55 per cent by 2029. The roadmap comes out of a strategic review to maximise shareholder return that CDL announced in February, about a year after the public dispute between Sherman and his father and CDL executive chairman Leng Beng.
CDL shares fell on Monday after the roadmap was unveiled, with some analysts suggesting that investors were awaiting more details on how the new strategy will be carried out and noting that some topics, including boardroom tensions, were not addressed, as cited by The Straits Times. Other analysts took a more positive view, saying investors should welcome CDL's clearer roadmap for unlocking value and its concrete targets, which make execution measurable.
The Kweks control about 49 per cent of CDL's shares, per Bloomberg. Forbes earlier this month ranked the family second among Singapore's richest people, estimating their combined fortune at US$16.1 billion.
