Keppel Raises $1.5B for Data Centre and Education Funds, Urban Renewal Strategy

Singapore’s Keppel Ltd has announced capital commitments totalling S$2 billion ($1.5 billion) for its latest data centre and education asset funds and an existing strategy focused on sustainable urban renewal.

The funding haul includes a $580 million first closing on capital raised for Keppel’s third data centre vehicle, the Temasek-backed asset manager said Monday in a release. Keppel Data Centre Fund III will draw on Keppel’s expertise in developing and operating digital infrastructure to invest in a hyperscale-focused Asia Pacific data centre portfolio, the group said.

Keppel also reached a $307 million first closing of its second education asset fund and secured S$760 million in further commitments for its sustainable urban renewal strategy. The three vehicles represent S$4.9 billion in funds under management, bringing Keppel closer to its interim FUM target of S$100 billion by 2026, with ambitions to reach S$200 billion by 2030, said Christina Tan, group chief investment officer and CEO of fund management.

“The securing of about S$2 billion in capital across Keppel’s flagship funds reflects the resilient demand for high-quality alternative real assets anchored to macrotrends such as climate change and energy transition, urbanisation as well as rapid digitalisation and the AI wave,” Tan said.

Hyperscale Opportunities

KDCF III is the follow-up to Keppel Data Centre Fund II, which achieved a $1.1 billion final closing in 2022 with backing from investors including China’s Asian Infrastructure Investment Bank. KDCF II has committed more than 90 percent of its total funds, most recently with last year’s acquisition of a hyperscale data centre project in western Tokyo from the facility’s developer, real estate giant Mitsui Fudosan.

KDCF III is expected to benefit from synergies across Keppel’s operating divisions, such as the sourcing of renewable energy and advanced cooling infrastructure, while tapping the group’s client relationships with hyperscalers to access off-market opportunities.

Keppel Education Asset Fund II continues the group’s series focused on value-add investments in education-related facilities in APAC markets. KEAF II builds on the work of the maiden fund, which closed on over S$450 million in capital in 2022 and has made acquisitions including a suburban Singapore office park and a pair of school campuses in Sydney.

The sustainable urban renewal strategy, meanwhile, has raised S$4.3 billion to date and targets APAC value-add investments with the goal of decarbonising the built environment. The strategy is pursuing a pipeline of opportunities across real estate segments including commercial, living, life sciences, hospitality and logistics in Singapore, South Korea, Japan, Australia and first-tier cities in China.

FUM Surge

Keppel didn’t disclose its limited partners in the latest fundraising, saying only that the backers included various global institutional investors for KDCF III, a returning sovereign wealth fund for KEAF II and one of Europe’s largest pension funds for the sustainable urban renewal strategy.

Keppel’s funds under management jumped 60 percent in 2024 to S$88 billion as the group reported full-year profit growth of 5 percent to S$1.06 billion. The period saw the group extend its reach in Europe with the $1 billion acquisition of fund manager Aermont Capital and achieve a $300 million first closing of its third private credit fund.

“Notwithstanding the current volatile international environment, Keppel is well-positioned to offer both critical solutions that the world needs, and defensive investment products that can help to steady investors’ portfolios,” Tan said. “We are committed to delivering strong returns to our limited partners leveraging Keppel’s deep operating capabilities in sustainability and connectivity solutions.”