Surbana Jurong and Mitsubishi Corporation enter joint venture to set up fund management company
US$500M Fund to Invest in Urban Development and Infrastructure Projects in Emerging Asia
Singapore, 14 September 2018 – Surbana Jurong Capital, the newly established financial services arm of Surbana Jurong, and Mitsubishi Corporation today 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, 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.
The partners will each 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 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 ASEAN countries since 2013 totalling JPY250 billion.
Mr Wong Heang Fine, Group Chief Executive Officer of Surbana Jurong, said, “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. Our JV will tap both partners’ know-how across financing and investing, as well as technical and risk analysis to deliver sustainable returns. This JV is also timely, as Singapore positions itself as the regional infrastructure hub.”
Surbana Jurong Capital
Surbana Jurong Capital, as the financial services arm of Surbana Jurong, will source, invest, plan, develop and manage infrastructure and real estate projects, generating long-term sustainable returns for its stakeholders. It will draw on its ability to plan and manage the risks of development stage projects, seeking to bring together existing market liquidity with appropriate opportunities, providing risk-adjusted returns for investors.
Mr Wong commented, “Surbana Jurong Capital will augment Surbana Jurong Group’s complete value-chain of solutions. Through Surbana Jurong Capital, we are now able to provide equity investment and long-term financing solutions to our global clientele, further enhancing the value-add we bring to our partners.”
About Surbana Jurong
Surbana Jurong is one of the largest Asia-based urban and infrastructure consulting firms. Leveraging technology and creativity, Surbana Jurong provides best-in-class consultancy solutions across the entire value chain of the urbanisation, industrialisation and infrastructure domains.
Headquartered in Singapore, the Surbana Jurong Group has a global workforce of over 14,000 employees in more than 120 offices across over 40 countries in Asia, Australia, UK, the Middle East, Africa and the Americas, and an annual turnover of around S$1.5 billion.
Surbana Jurong has a track record of close to 70 years, and has built more than a million homes in Singapore, crafted master plans for more than 30 countries and developed over 100 industrial parks globally.
Surbana Jurong’s motto ‘Building Cities, Shaping Lives’ reflects its belief that development is more than just steel and concrete. Surbana Jurong creates spaces and designs infrastructure where people live, work and play, shaping cities into homes with sustainable jobs where communities and businesses can flourish.
About Mitsubishi Corporation
Mitsubishi Corporation is a global integrated business enterprise that develops and operates business across virtually every industry including industrial finance, energy, metals, machinery, chemicals, foods, and environmental business.
Mitsubishi Corporation’s current activities are expanding far beyond its traditional trading operations as its diverse business ranges from natural resources development to investment in retail business, infrastructure, financial products and manufacturing of industrial goods.
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