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Keppel sets AUM target of $200 bil by 2030, seeks to move away from businesses with 'lumpy earnings'

Felicia Tan
Felicia Tan • 3 min read
Keppel sets AUM target of $200 bil by 2030, seeks to move away from businesses with 'lumpy earnings'
With Keppel now close to its asset monetisation target of $5 billion, Loh also noted that the group aims to eventually activate all $17.5 billion of its monetisable assets. Photo: Keppel
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Keppel Corporation CEO Loh Chin Hua has revealed that the group aims to work towards an asset under management (AUM) target of $200 billion by end-2030 from its current $50 billion in assets. The announcement was made in the group’s annual report released in the early hours of March 30.

The $200 billion target was first mentioned during Keppel’s results statement for FY2022 ended Dec 31, 2022, when the group said that it will work towards its longer-term target after growing its AUM to $50 billion by the end of FY2022.

With Keppel now close to its asset monetisation target of $5 billion, Loh also noted that the group aims to eventually activate all $17.5 billion of its monetisable assets. The group had identified $17.5 billion worth of monetisable assets based on carrying value in June 2020. These did not include its operating platforms such as Keppel Offshore & Marine (Keppel O&M).

Loh also revealed that the group will be launching the Keppel Asia Infrastructure Fund II with a target size of US$2.5 billion ($3.33 billion), after the successful launch of its first fund in 2022. The first fund has been fully deployed with six quality assets, says the CEO.

Reflecting on last year’s performance, Loh called 2022 a “transformational and productive year” for the group, adding that it has made “very good progress” in executing Vision 2030. In 2022, the group saw the successful divestment of Keppel Logistics and Keppel O&M as well as the resolution of its legacy rigs and associated receivables.

In 2023 and beyond, the CEO revealed that the group is looking at moving away from businesses with “lumpy earnings” which are often valued at discounts to book value, towards "those with recurring income that attract high multiples".

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“To be clear, logistics, O&M and residential development are good businesses, but they may not be the best fit with Keppel’s Vision 2030, which sees us focusing on growing recurring income and building scalable businesses that fully leverage our asset-light model,” says Loh.

“Going forward, we will focus on fast-tracking Keppel’s transformation from a conglomerate of diverse parts into an integrated business – one that harnesses the group’s strengths to invest for the good of current and future generations, while addressing the pressing challenges of climate change,” he adds.

In China, Loh expects to see home sales and asset monetisation gain traction in 2023 as market conditions improve in the country.

See also: Seatrium’s non-executive independent director resigns

In its urban space solutions segment, the CEO says he sees opportunities to offer real estate-as-a-service. Sustainable urban renewal (SUR) and senior living are two other key market segments the group can focus on within the segment.

For the group’s connectivity segment, the CEO sees increasing digitalisation including artificial intelligence and cloud computing as generating further demand for its solutions.

As at 12.37pm, shares in Keppel are trading 4 cents higher or 0.72% up at $5.60.

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