Singapore’s CapitaLand nails $200m Wingate deal
Singapore’s CapitaLand has confirmed its intended acquisition of property and corporate credit group Wingate for $200 million as the Asian real estate manager expands into private credit.
As part of the deal, Farrel Meltzer, Wingate’s founder and chief executive, will stand down while saying on the board and Nick Jacobson, an executive who has been in charge of the firm’s property business, will become Wingate’s managing director.
Private credit has become one of the strongest growing areas in the debt markets, as non-bank lenders plug the lending gap left by the retreat of big banks. Australian private credit funds are on track to manage $200 billion in capital, with much of that allocated to real estate, including residential development.
“We really wanted to be in credit and in Australia,” Paul Tham, CapitaLand’s chief financial officer told The Australian Financial Review. “One [reason] is obviously [as higher rates have] been a little bit stickier than other markets where we’ve seen a little bit more rate cuts. But also, compared to other markets like Singapore or Korea or Japan, in Australia we think there is much more room for private credit to work alongside the banks.”
Wingate’s Mr Jacobson said that the relationship with CapitaLand grew from going in alongside them in debt deals in 2022. The acquisition will allow the business to grow in Australia, as CapitaLand looks to pick up over $1 billion more in debt in the country.
“We’ve been largely capitalised by more private money, high net worth [in particular],” Mr Jacobson told the Financial Review. “It’s obvious that there is a need for substantial institutional capital to accelerate the growth of the company.”
Under the deal with CapitaLand, Mr Meltzer will stay on as a non-executive director of Wingate and become an advisor to the Singaporean giant. He will also chair a new investment group managing Wingate assets that have been excluded from the deal.
“He’s moving on to grow the incubator businesses that he established before,” Mr Jacobson said.
The purchase of Wingate, which has $2.5 billion under management, will take CapitaLand’s funds under management to $S115 billion ($134 billion). The transaction is still subject to regulatory approval, CapitaLand said. The move was first reported by The Australian Financial Review’s Street Talk in November.
In addition to the $200 million, the deal also has a $100 million earn-out over a three-year period applicable only to the shareholders of Wingate investment management business that CapitaLand purchased. Some assets are excluded from the deal.
“Wingate’s principal investment and related strategies, including portfolio companies, ORDE Financial, Fifo Capital and Talaria Asset Management, and the Specialised Finance Fund, will be excluded from the transaction,” the company said.
“These assets are to be spun out into Fancourt Capital Group (FCG), a new dedicated investment firm, which will continue to be owned by the current Wingate shareholder group. FCG will be chaired by Farrel Meltzer and led by Yoni Cukierman, current managing director of Wingate’s principal investment strategy, as FCG’s CEO.”
The deal follows Regal Partner’s $235 million acquisition of Melbourne lender Merricks Capital in June, which gave the investment manager exposure to private credit. Australia’s growing private credit market has caught the interest of offshore institutions as well, including US giant Apollo Global Management, which took a half stake in non-bank lender MaxCap three years ago.
Mr Jacobson said Wingate was keeping a close eye on ongoing challenges in the building development industry and in commercial property. “Everybody in the industry realises that it’s suffering from inflation pressures, particularly at the construction level, and there are cash flow challenges for builders,” he said.
“We are very careful about who we take on and conservative in underwriting. Over the 350 or plus loans we’ve done, there’s only a handful in that entire history of 20 years that have had challenges.”
