Keppel Ltd Generated a 61% Total Return in 2023: Can the Asset Manager Continue to Impress?

The Smart Investor01-17

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0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nKeppel Ltd Generated a 61% Total Return in 2023: Can the Asset Manager Continue to Impress?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-01-17 07:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/keppel-ltd-generated-a-61-total-return-in-2023-can-the-asset-manager-continue-to-impress/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>[\n\n\n\nShare\n\n\nFacebook\n\nTwitter\n\nLinkedIn\n\nEmail\n\nWhatsApp\n\n\n\n\n\nThe bellwether Straits Times Index pulled off a lacklustre performance last year, ending 0.3% below its 2022 close.\nHowever, there were a...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/keppel-ltd-generated-a-61-total-return-in-2023-can-the-asset-manager-continue-to-impress/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SG9999014492.USD","symbol_name":"NIKKO AM 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has been growing its business steadily over the past year, leading investors to wonder – can the group pull off a similar performance for 2024?\nLet us find out.\nSolid sets of financial metrics\nKeppel reported a robust set of financial results for the first nine months of 2023 (9M 2023) as well as progress for its asset monetisation target.\nRevenue for 9M 2023 grew 5% year on year to S$5.3 billion, driven by top-line growth for its Infrastructure and Connectivity divisions but offset by a weaker performance for the Real Estate division.\nNet profit for this period was significantly higher year on year, even after excluding discontinued operations.\nThe asset manager has also delivered close to S$2.70 per share in cash dividends and distribution-in-specie of shares in both Seatrium Ltd (SGX: S51) and Keppel REIT (SGX: K71U).\nOver at the fund management and investments segment, Keppel grew its funds under management (FUM) from S$25 billion in 2016 to S$53 billion by the first half of 2023.\nAs a result, asset management fees more than doubled from S$128 million in 2016 to S$267 million in 2022.\nNext, on asset monetisation, Keppel had a target of between S$3 billion and S$5 billion by 2023. \nOn this note, the asset manager has exceeded its goal, recording  S$5.3 billion of asset divestments.\nBy the end of 2026, Keppel plans to increase its asset monetisation to between S$10 billion and S$12 billion before hitting S$17.5 billion by 2030.\nThese numbers above are an indication to management’s resolve in achieving multiple financial, FUM, and asset management targets and the group has made steady progress on these objectives thus far.\nAccelerated growth under Vision 2030\nVision 2030 was announced in May 2020. \nThe current year will be the fourth year of this long-term programme..\nThe goals of this plan remain the same – going asset-light and achieving a return on equity of 15%.\nIn May last year, Keppel boldly announced a major reorganisation to accelerate growth under Vision 2030 and chart the next phase of its multi-year transformation.\nThe group will be split into three distinct platforms that act as a simplified structure to help spur faster growth.\nUnder this new structure, there will be a fund management platform focused on raising capital and forging relationships with investors.\nNext, the investment platform will oversee capital deployment decisions to create value for investors.\nFinally, Keppel’s operating platform will specialise in providing sustainable solutions and help the group drive innovation.\nWith these three pillars, Keppel hopes to ignite a virtuous cycle to achieve its eventual S$200 assets under management (AUM) target.\nRecent initiatives\nManagement has been busy building the business since announcing the organisational changes more than seven months ago.\nBack in October, Keppel successfully closed S$300 million for its Sustainable Urban Renewal programme.\nThe company is targeting around S$728 million in AUM when fully leveraged and invested.\nIn that same month, the group also achieved the first closing of US$575 million for its flagship evergreen infrastructure fund, Keppel Core Infrastructure Fund, with an initial target size set at US$2.5 billion.\nJust last month, Keppel announced the acquisition of European asset manager Aermont Capital, immediately adding S$24 billion of FUM to Keppel’s current FUM and lifting it to S$77 billion.\nThe asset manager also established partnerships for its operating platform to explore sustainability solutions.\nLast month, Keppel collaborated with GenZero by signing a memorandum of understanding (MOU) to explore projects that drive early retirement of coal-fired power plants.\nThese initiatives involve the switch to energy alternatives and the production of sustainable fuels.\nAnother MOU was signed in the same month with Masdar from Abu Dhabi to jointly collaborate on opportunities for decarbonisation and sustainability solutions in ASEAN and the Middle East.\nEarlier this month, Keppel signed an MOU with industry leaders such as Chevron Singapore, Surbana Jurong, and Osaka Gas Singapore to collaborate on lower carbon opportunities to support Singapore’s net-zero emissions aspirations by 2050.\nGet Smart: On track for a good performance\nKeppel has advanced on its multiple initiatives since announcing its major reorganisation last May.\nThe asset manager looks on track for a good performance with these collaborations and acquisitions.\nHowever, investors should note that some of these initiatives are in their infancy and will require a gestation period before they can contribute positively to Keppel’s bottom line.\nThat said, it is encouraging that Keppel is heading in the right direction and it will be a matter of time before this progress shows up in its share price.\nThe best gift a responsible parent can give their child is a secure, comfortable financial future. And we found that dividend investing is one of the easiest and effortless methods to do it. Our latest FREE report reveals how you can do it, plus the 3 SGX stocks you can buy today to start future-proofing your child’s financial future. Click HERE to grab a copy of the guide.\nDisclosure: Royston Yang does not own shares in any of the companies mentioned.\n\n\n\nYahoo\n]","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2404623847"}