Surbana Jurong and Mitsubishi Corporation join hands to set up a fund management company
Surbana Jurong Capital and Mitsubishi Corporation have signed an agreement to set up a fund management company (FMC). The FMC will be a 50:50 joint venture between the two companies and will be jointly managed by both partners.
The FMC will set up an Investment Fund (Fund) to invest in urban development projects in emerging Asia, primarily in Myanmar, Vietnam, the Philippines, Indonesia, India and Sri Lanka. Such projects may include transit-oriented developments (TOD) such as aviation or rail-related developments, affordable housing as well as other urban-related infrastructure.
Each partner will contribute up to US$250 million to seed the Fund, and the FMC will also raise and manage funds from other accredited or institutional third-party investors.
According to the Asian Development Bank's (ADB) estimates, developing Asia will need to invest at least US$1.7 trillion per year in infrastructure until 2030 to maintain its growth momentum. However, there remains a huge gap between the demand for such infrastructure and the region's access to financing.
The FMC will seek out commercially-viable urban infrastructure projects which are in an advanced feasibility stage or in the early phases of construction, and provide equity investment to support such projects. Qualifying projects will need to meet sustainable environmental, social and corporate governance metrics. Institutional investors seeking to participate in the sustainable growth of the region can, therefore, do so through the Fund.
The FMC will leverage both partners' unique strengths to deliver optimum long-term risk-adjusted returns for the Fund. Surbana Jurong, as one of the largest Asia-based urban and infrastructure consultancies, has direct exposure to project opportunities in the region. It has over 70 years of successful project deliveries and technical teams in over 40 countries to provide insights on the risks of such projects.
Mitsubishi Corporation, a global integrated business enterprise with diverse business operations, has experience in investments and financial products, and has been investing in real-estate projects in the ASEAN countries since 2013 totalling JPY250 billion.
Wong Heang Fine, Group Chief Executive Officer, Surbana Jurong, says, "Emerging countries in Asia continue to see rapid economic and population growth, which drives the demand for urban infrastructure projects including transit-oriented developments and affordable housing. For project owners looking for funding, and investors looking for long-term sustainable returns, Surbana Jurong and Mitsubishi Corporation's new FMC will provide that capital bridge."