Keppel Corp BN4 has announced the next phase of its Vision 2030 plans to drive its further transformation from a conglomerate into a global alternative asset manager with deep operating capabilities.
Moving forward, the company’s group structure will be simplified to form a horizontally integrated model comprising three platforms — fund management, investment and operating platforms — all part of one integrated business focused on investing in and creating solutions for a sustainable world, Keppel says in a filing.
“This latest restructuring reflects a fundamental shift in how we organise ourselves to operate in a nimbler manner and harness technology to grow at speed and scale,” says Keppel CEO Loh Chin Hua.
To drive its growth, Keppel plans to significantly scale its assets under management (AUM) to $200 billion by 2030. It had also set an interim target of $100 billion in AUM by end-2026, double the $50 billion AUM it had at end-2022.
Additionally, the company will continue its asset monetisation programme which includes unlocking value from its sizable landbank. Beyond the current $3 billion to $5 billion asset monetisation target — which Keppel achieved ahead of schedule — the company will work towards a cumulative $10 billion to $12 billion asset monetisation target by the end-2026
Proceeds from the asset monetisation programme will be invested in new growth engines leveraging Keppel’s asset-light model, aside from being used to reward shareholders.
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With the simplification of its structure as well as integration of business units into one operating platform, Keppel can realise significant synergies, including through centralising and optimising its support functions. This would enable cost-efficient and scalable AUM growth empowered by technology and automation. These initiatives are expected to translate into annual savings of $60 million to $70 million by 2026.
The reorganisation will be progressively implemented over the next 12 to 18 months. In line with the pivot from a conglomerate to a global asset manager and operator, Keppel’s new horizontally integrated operating model will be reflected in how the company reports on its financial performance.
This will commence from the 1HFY2023 financial results, with additional disclosures to help the market better understand and value the company.
Shares in Keppel closed 5 cents higher or 0.81% up on May 2 at $6.22.
