25 January 2016

Keppel Corp to consolidate asset management businesses

After the Full Year 2015 financial result is out since last week saying there is a layoff of 6,000 Offshore & Marine (O&M) workers in a bid to slash costs and optimise its current operations. Today, they reported to propose consolidating of their asset management businesses (Keppel Infrastructure Trust, Keppel DC Reit, Keppel Reit and Alpha Investment Partners) under one subsidiary called Keppel Capital Holdings Pte Ltd, a wholly-owned subsidiary of Keppel Corporation.

The proposed consolidation will benefit the Keppel Group by strengthening the Group’s capital recycling platform and ability to make prudent and timely investments with an expanded capital base and without relying solely on its balance sheet. It will also improve the performance of the Subsidiaries and the funds, REITs and business trusts that they manage through centralising certain non-regulated support functions and creating a larger platform which will enhance recruitment and retention of talent and sharing of best practices.

This proposed consolidation is also implying they are restructuring their workforce to tide over the oil price dip crisis and to centralise their workflow and productivity to improve on unitholder and investor returns. Shared services allowed greater management focus on core business and to retention of top talent. This move come in at the right time to bring back the trust of the investors on their Infrastructure and Investment sectors. As O&M sector will not be doing well in the next few years, their move to strengthen on other sectors to balance out their business strategy and portfolio.

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