Temasek spins off PE holdings into Astrea II

Astrea II is the second co-investment platform launched by Temasek, the investment arm of Singapore government

Temasek Holdings, the investment arm of Singapore government, has launched a new co-investment vehicle, Astrea II. The $215-billion fund will hive off part of its holdings into this new vehicle to enable participation by wider set of investors.

The new vehicle will have holdings in 36 private equity funds across geographies, sectors and vintages. With Temasek as the single largest investor at 38 per cent, Astrea II will be managed by ARDIAN, a global private investment company and leading secondary fund manager. ARDIAN is one of the six co-investors in Astrea II. The former provided an independent valuation of Astrea II portfolio to be set for all investors, and had been appointed general partner and manager of Astrea II, Temasek said. However, it did not give details of the size of the vehicle or its portfolio.

ARDIAN, formerly AXA Private Equity, had last week announced the successful closing of a ^500-million fund comprising investors from Europe, North America and Asia. European insurance companies and pension funds make for the majority of the fund's investor base and almost 80 per cent of the commitments come from existing investors.

Astrea II is the second co-investment platform launched by the sovereign wealth fund. Its diversified portfolios of assets would be then sold to other investors. Temasek had earlier sponsored Astrea I in 2006 with a portfolio of selected Temasek interests in private equity (PE) funds. Temasek securitised its investments in 46 PE funds through Astrea I. The holdings were first sold to Astrea I, which then sold around $810 million in equity and debt to institutions and high networth investors, according to local media reports.

Dilhan Pillay Sandrasegara, head of enterprise development group at Temasek, said, " Launching Astrea I in 2006 gave us an opportunity to start exploring how to broaden our co-investor base, starting with long-term institutional investors. With the world recovering from global financial crisis, we assessed it was timely for the next Astrea co-investment product. We are now very pleased to have six high quality and like-minded long-term institutional co-investors with us in Astrea II portfolio."

Sandrasegara, elaborating on Temasek's continued interest to invest in PE funds, said, "We have stepped up our engagement with them, especially over the last couple of years, to explore new opportunities and models for PE investments. Our strategy for investing in these funds is, and will continue to be, an important complement to Temasek's direct investing activities."

Temasek plans to issue retail bond issues soon. Lee Theng Kiat, president of Temasek, said, "One of Temasek's aspirations is to have long-term minded retail investors, specially retail investors in Singapore, to co-invest alongside us. We hope to start by offering Temasek Bonds to retail investors, and phase in higher risk return investment opportunities at a later stage."

Lee added platforms such as Astrea I and II help the fund test market interest and fine tune our thinking and product positioning for eventual participation by retail investors.

"When we are ready to launch suitable products for the retail market, we hope that retail investors in Singapore will welcome such opportunities to co-invest with us," he said.