Temasek Expands Private Credit Commitments With US REIT Investment

Singapore’s Temasek Holdings continues to up its bets on private credit strategies with the state investment firm making a major capital commitment to US commercial real estate lender 3650 REIT, according to a statement on Tuesday.

3650 REIT, a US commercial real estate lender and loan servicing firm providing fixed-income advisory support to global institutions, said it has secured nearly $430 million in capital commitments from Temasek, the California State Teachers’ Retirement System (CalSTRS), and an unnamed top-ranked independent wealth management and investment advisory firm.

Temasek’s 3650 REIT investment further expands its footprint in private credit strategies as commercial real estate owners continue to scramble for cash in the current interest rate environment. Last month, SeaTown Holdings International, an alternative investment manager under Temasek’s Seviora Holdings asset management platform reached a final close for its second private credit fund targeting Asia Pacific with over $1.3 billion in capital commitments.

“We believe these new capital commitments from major institutions are the result of their confidence in 3650’s expertise and the platform we’ve built over the past several years,” Jonathan Roth, co-founder and managing partner of 3650 REIT, said. “As an investment manager focused specifically on commercial real estate credit, we remain steadfast and cautious with our investment thesis, which has led to strong and consistent performance.”

The capital is set to be deployed across 3650’s credit strategies, with the new commitments further diversifying 3650’s investor base and growing its roster of backers from some of the world’s largest institutions.

Leading Investment Destination

Temasek’s commitment to 3650 REIT aligns with the state investor’s growing preference for US deals, with the Americas region accounting for 17 percent of its global portfolio as of March.

Pierce Scranton, deputy head of North America and managing director of international relations at Temasek, said in an article published on Temasek’s website on Monday that the institution plans to invest a further $30 billion in the United States over the next five years. Scranton said the US will continue to be the leading destination for Temasek’s investment dollars after the country was the largest recipient of Temasek capital over the last seven years.

Temasek, along with California state pension fund CalSTRS, joins a growing list of global institutions including South Korea’s Public Officials Benefit Association (POBA) which have backed 3650 REIT’s strategies.

In October last year, POBA committed $100 million to 3650 REIT’s Bridge and Event-Driven real estate credit fund focused on shorter-term loans for borrowers pursuing ground-up construction, acquisitions, repositionings, recapitalizations or the restructuring of partnerships.

The commitments to 3650 REIT come as private debt fundraising in Asia Pacific reached $1 billion in the second quarter, up from $600 million raised in the first quarter, according to Preqin. Asia Pacific accounted for just 7 percent of the $1.7 trillion global private debt market as of last September.

Steward of Institutional Capital

Thanks in part to its institutional backing, 3650 REIT now boasts a loan servicing portfolio of over $17.7 billion in commercial real estate loans and securities across the capital stack.

The latest round of capital commitments coincide with the expansion of 3650’s capital formation team, with the REIT announcing in the same release that it has appointed Jared Carney as senior advisor and chief strategist, with Patrick Repko having joined the company as a director in May.

Carney, who is founder and CEO of global holding and strategic advisory firm Lightdale, will focus on optimizing 3650’s capital formation function and diversifying its global investor base, according to the statement.

Repko joined 3650 from Vista Equity Partners where he served as vice president and helped manage capital campaigns across the firm’s equity and credit platform. He is said to be working closely with Carney and 3650’s capital formation team to manage 3650’s fundraising initiatives and grow its international profile.