Azalea Asset Management, an indirectly wholly-owned asset management subsidiary of Temasek Holdings, is poised to list the Astrea VI Private Equity bond fund – its third such fund here.

Typically, investing in private equity is the exclusive domain of institutional and high net worth individuals. This PE bond fund, Astrea VI, offers retail investors a way to invest in such asset class.

The Astrea VI PE bonds of this fund are backed by cash flows from a diversified portfolio of 35 PE funds managed by 28 reputable general partners.

The total offering size of Astrea VI is expected to be around US$643 million. It will consist of three classes. First, $375 million Class A-1 bonds split between a public offer of $250 million and placement tranche of $125 million. 

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The second class is expected to be a tranche of US$228 million Class A-2 bonds and last but not least, US$130 million Class B bonds. All the bonds are expected to have attained investment grade, or ‘BBB-‘ or higher.

Book building is commencing and the coupon rate will be determined, depending on demand. The draft prospectus has been lodged earlier today.

These funds invest in 802 companies across various industries and the total portfolio net value of the funds, as of Nov 30 2020, was nearly US$1.46 billion.

The investments are allocated into five key areas: IT, 28.2$; healthcare, 19.8%; consumer discretionary, 13.2%; industrials, 12.4% and financials, 7.7%.

To date, Azalea has launched 3 Astrea PE bond series. The first, Astrea III, was launched in 2016 but for institutional and accredited investors only. In 2018, Astrea IV was launched, and the first time it is made available for retail investors. The following year, Astrea V was launched and now, Astrea VI.