Temasek launches new private equity co-investment vehicle

Singapore’s sovereign wealth fund Temasek has launched a new co-investment vehicle with diversified holdings in 36 private equity funds christened Astrea II. Temasek is the single-largest stakeholder in Astrea II, which has six other investors, with 38 per cent stake, as per a company statement.

The vehicle is part of the company’s efforts to develop co-investment platforms where multiple portfolios of assets can be made available to a large base of investors, including retail investors.

Although Temasek banks on a direct investment strategy it has a small portion of its total corpus which goes into other PE funds. Temasek reported a total portfolio value of S$215 billion as of March 31, 2013, of which a tenth is in third-party managed funds.

Temasek, one of the two sovereign wealth funds of Singapore (besides GIC), had earlier sponsored Astrea I in 2006 with a diversified and balanced portfolio of select Temasek interests in other private equity funds. This was intended as the first of a series of private equity co-investment platforms.

“Temasek continues to be an active investor in high quality private equity or PE funds globally. These investments have created value for us in the form of direct returns, as well as opportunities for us to make further direct investments alongside the PE fund managers,” says Dilhan Pillay Sandrasegara, Head of Enterprise Development Group in Temasek.

He added that Astrea I provided an opportunity to start exploring how to broaden co-investor base, starting with long-term institutional investors. With the world recovering from the troughs of the global financial crisis, Temasek assessed that it was timely for the next Astrea co-investment product, Sandrasegara said.

Like Astrea I, Astrea II comprises a portfolio of private equity funds, balanced across vintages, geographies and sectors.

Ardian, a global private investment company and leading secondary fund manager, is one of the six co-investors in Astrea II. Ardian provided an independent valuation of the Astrea II portfolio to be set for all investors, and has been appointed General Partner or GP and manager of Astrea II.

Lee Theng Kiat, president of Temasek, said that Temasek intends to eventually bring long-term minded retail investors, especially retail investors in Singapore, to co-invest alongside it. However, given the risk return preferences it is first starting with offering Temasek Bonds to retail investors, when there is a suitable opportunity to do so, and phase in higher risk return investment opportunities at a later stage.

Temasek is one of the most active sovereign wealth funds in India. Most recently it invested Rs 240 crore in Star Agriwarehousing and Collateral Management Limited, an agri-solutions company. Last year, Temasek invested in HealthCare Global Enterprises.

(Edited by Joby Puthuparampil Johnson)

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