CLI relies on “patient capital”, making insurance funds, sovereign wealth funds and pension funds its capital partners in its private funds. However, the larger part of its funds under management as at FY2023 is from its publicly-traded REITs. Retail investors and hedge funds comprise “impatient capital”.
It appears that real estate companies have put too much faith in interest rate cuts this year. No surprise then that they have been among the worst performers since the start of the month while the local banks have been resilient.
CapitaLand Investment (CLI) is at its lowest level since its restructuring in 2021. The decline is largely driven by sentiment as Federal Reserve chair Jerome Powell had “signalled” on April 16 that the Fed may have to wait longer before cutting interest rates as a consequence of recent elevated gauges of inflation.
