Singapore's CapitaLand Investment is set to acquire Melbourne-based fund manager Wingate Group for A$200 million (approximately $127.4 million), marking a significant move to bolster its private credit business within Australia. This strategic acquisition follows the company's recent partnership with Wingate to launch the Australia Credit Program, inaugurated earlier this September.
The partnership commenced with CapitaLand seeding the A$265 million credit fund, which has since drawn interest from Asian investors, allowing both companies to work together on originating and underwriting real estate deals. Farrel Meltzer, Wingate's founder and CEO, has led the company for over 20 years and will continue to play a key role post-acquisition as a non-executive director and senior advisor to CapitaLand.
Paul Tham, CapitaLand's CFO, expressed his enthusiasm about the acquisition, stating, "Wingate’s private credit capabilities complement CLI’s own private funds platform, and will enable us to collaborate to create greater value for our capital partners in Australia and beyond.”
With over A$2.5 billion under management and having executed over 350 transactions totaling over A$20 billion, Wingate will significantly increase CapitaLand's funds under management (FUM) to approximately S$115 billion (around $85.3 million). More impressively, Wingate's portfolio will boost CapitaLand's Australian assets by more than 30%, now totaling approximately S$8.3 billion, contributing to 7% of CapitaLand’s total FUM.
The terms of the acquisition entail not only the immediate compensation but also performance-based earn-outs contingent on the achievement of specific targets over the next three years. The transaction is expected to close soon, pending the necessary regulatory approvals.
Nick Jacobson has been appointed as Wingate’s new managing director, transitioning from his previous position as managing director of Wingate Property. This change, along with the solid foundation laid by Meltzer, positions Wingate to leverage CapitaLand's extensive proprietary deal origination networks and its capacity to gain access to more institutional and high-net-worth investors.
"Wingate is a private credit pioneer in Australia focused on fostering long-term partnerships, carefully managing risks, and delivering sustainable returns," said Jacobson. He underlined how the collaboration with CapitaLand opens the door to globally competitive investment opportunities for clients.
The Australian private capital market is on the rise, showcasing impressive growth of 33% over the past 18 months, leading to assets under management reaching A$139 billion. Such expansion highlights the promising market environment CapitaLand is stepping closer to with its strategic acquisition of Wingate.
Tham also pointed out, "We see scalable private credit opportunities in other Asia Pacific markets, most prominently South Korea, India, and Japan,” showcasing CapitaLand's ambition to tap new markets beyond Australia.
To facilitate these aspirations, CapitaLand has committed up to A$1 billion (about S$878 million) dedicated to amplifying its FUM within Australia. Consequently, this approach aims to accelerate the company's growth toward its substantial goal of S$200 billion by 2028.
The firm recognizes the urgent demand for commercial mortgage funding, which is predominantly driven by forecasts of a forthcoming A$146 billion funding gap by 2028. This moves underlines CapitaLand’s commitment to not just maintaining but optimizing its assets to meet rising investment opportunities.
CapitaLand Investment has been fortifying its presence across Australia, managing 34 logistics properties, four Grade A office buildings, and more than 13,500 lodging units across approximately 150 properties under its subsidiary, The Ascott Ltd. Angelo Scasserra and Rahul Bharara, both set to join as key executives, will steer the company’s ambitions forward as they transition from their roles at Sydney-based Barrenjoey.
According to Meltzer, "This partnership will bring fresh international perspectives, create seamless cultural and operational synergy, and even more so, will add to our high standards of co-investor management.” The vision encapsulates the efforts both companies are making to provide superior investment avenues coupled with heightened operational standards.
With the Australian private credit market poised for growth and strong foundations laid with this recent acquisition, CapitaLand's future looks set for expansive opportunities. The synergy with Wingate is anticipated to transform the investment panorama within the area, catering to the needs of international institutional investors seeking stable real estate ventures.
