Keppel Raises $700M for Education, Data Centre Funds After NZ Student Housing Deal

Singapore’s Keppel Ltd has raised fresh cash for two of its alternative asset investment strategies with the SGX-listed firm saying late Thursday that it has gained commitments of $700 million across the pair of funds.

After inking the first deal for its Keppel Education Asset Fund II (KEAF II) , the Temasek Holdings-controlled companyhas secured $500 million for that strategy from one of Europe’s largest pension funds, Keppel said in an announcement. It has also raised another $200 million for Keppel Data Centre Fund III (KDCF III), Keppel said, with no additional details provided regarding the sources of the cash.

“Keppel’s private funds continue to attract robust investor interest, underscoring the strength of our platform and the appeal of strategies aligned with transformative megatrends,” Keppel chief executive of fund management and chief Investment officer Christina Tan said.

The new commitments to the two ventures translate into a fresh S$2.3 billion ($1.79 billion) in funds under management for the strategies, the company said, while tying the new backing for the vehicles to broader changes in the economy.

Betting on Kiwi Education

“Education assets are increasingly valued for their defensive qualities and ability to generate stable returns, making them especially attractive in times of economic uncertainty. At the same time, data centres are a cornerstone of the digital economy, supported by the rapid expansion of cloud computing, artificial intelligence and digital infrastructure,” Tan said in explaining the appeal of the two funds.

Thursday’s announcement followed Keppel’s April news of a first close on its regional education vehicle, attributing the commitments to limited partners spanning sovereign wealth funds, insurers, pension managers and endowment institutions. With the latest tranche, Keppel has now raised more than $800 million in capital for the strategy, which it translates into more than S$2.6 billion in funds under management.

The Keppel Education Asset Fund series focuses on investments in education-related assets and facilities, supporting early learning, K-12, higher education, tertiary education and student accommodation, with a focus on the Asia Pacific region, the company said. 

For its first investment, Keppel said KEAF II has entered into a partnership with New Zealand’s Precinct Properties Group, the company said, with that deal giving it an 80 percent stake in a purpose-built student accommodation project being developed in Auckland. 

Precinct Properties had announced to the New Zealand stock exchange on 29 May, “its commitment to develop a Purpose-Built Student Accommodation (PBSA) facility for the University of Auckland at the Carlaw Park Student Village in Auckland, and the conditional formation of a new strategic real estate investment partnership with a Singapore-based institutional investor.”

The Kiwi developer said it expects the facility to have a value of NZ$290 million ($173 million) upon its completion in 2028. The 960-unit project is expected to be the largest purpose-built student housing facility in the country and is being developed with a long-term lease in place to the University of Auckland.

Other assets in KEAF II’s $3 billion investment pipeline primarily include properties in Australia, Japan, Singapore and South Korea, the company said.

Data Centre Boost

Including this latest tranche, Keppel has now raises nearly $800 million for its third data centre fund, which it says represents more than S$2.6 billion in funds under management for the strategy, including S$400 million raised for the strategy late last year. 

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. The second installment in the strategy invested in projects including acquiring a hyperscale data centre project in western Tokyo last year from Japan’s Mitsui Fudosan.

Keppel, which changed its name from Keppel Corporation at the beginning of last year in an effort to transform itself from a diversified conglomerate into a manager of third party capital, says it has now raised S$6.3 billion in total funds under management so far this year across its data centre, education and sustainable urban renewal strategies, among other private funds. 

The company defines funds under management as the gross asset value of investments and uninvested capital commitments on a leveraged basis.