Temasek transfers Equistone, PAI to co-investment vehicle

More details have emerged on the Singaporean SWF's latest initiative as it gears up to eventually attract retail co-investors.

LP stakes from European private equity firms Equistone and PAI Partners are among those that Temasek has transferred to Astrea II, a co-investment vehicle holding 36 private equity fund interests.

Earlier this month, Temasek transferred 100 percent of its interests in Equistone Partners Europe Fund II and Fund III as well as PAI Europe IV and PAI Europe V, according to a UK regulatory notice. Equistone Partners Europe II is a 2002-vintage fund that raised €888 million while Fund III is a 2007-vintage that raised €1.8 billion; PAI’s Fund IV is a 2005-vintage fund that raised €2.7 billion, while Fund V raised €3.36 billion, according to PEI data.

Astrea II follows on from Astrea I, launched in 2006 as “the first in a series of private equity co-investment platforms”, according to a Temasek statement.

In addition to Temasek, which retains a 38 percent stake in Astrea II, there are six co-investors, including secondaries specialist Ardian, which has been appointed general partner and manager of Astrea II. It noted Ardian provided an independent valuation of the Astrea II portfolio for all the investors.

Astrea II’s other investors were not disclosed; however it appears there has already been secondaries activity among the fund’s co-investor base: Hong Kong-based Altai Fund Investments sold its position in Astrea II to Texas-based Azalea Asset Management on 8 April, according to regulatory notices.

The launch of Astrea II is part of the sovereign wealth fund’s initiatives to broaden its co-investment base, with the aim to eventually market products to retail investors, according to the statement.

“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,” Dilhan Pillay Sandrasegara, head of Temasek’s enterprise development group, said in a statement. “With the world recovering from the troughs of the global financial crisis, we assessed that it was timely for the next Astrea co-investment product, and are now very pleased to have six high quality and like-minded long term institutional co-investors with us in the Astrea II portfolio.”

Lee Theng Kiat, Temasek’s president, added one of the institutional investor’s “long held aspirtations is to have long-term minded retail investors, especially retail investors in Singapore, co-invest alongside us”. Platforms like Astrea I and II are part of a phased approach to co-investing that help Temasek “test market interest and fine tune our thinking and product position for eventual participation by retail investors”.

Temasek reported a total portfolio value of S$215 billion as at 31 March 2013, and said it remains primarily a direct equity investor with about 10 percent of its portfolio in third-party managed funds.


With extra reporting from James Regan