OUE injects $254.2m in Nuvest Real Return Fund

The fund’s seed capital came from GIC.

OUE Limited revealed on Friday that it is set to invest $254.2m (US$200.0m ) in Nuvest Real Return Fund, a Cayman Islands-domiciled exempted mutual fund.

According to OCBC, the Fund was launched in 2012 with seed capital from GIC and seeks to achieve stable annual returns above inflation through diversification across a range of investment classes and active management styles. 

"Management sees this investment as part of its treasury operations and believes this will allow optimal returns on funds held in the current low interest rate environment through leveraging the expertise of the Fund. As at end 2Q14, we note that the group has significant net cash and equivalents of $449.3m. Overall, we are neutral on this move and prefer management to return excess capital not earmarked for allocation into the group’s core businesses over the medium to long term. That said, taking into account the investment size and terms, this investment appears fairly liquid,” stated OCBC.

Here’s more from OCBC:

OUE will be subscribing for Tranche X participating shares, which is made available only to key cornerstone investors. 

The fee structure include a 1% management fee of NAV and a 10% performance fee equal to the appreciation in NAV during each performance period, subject to a high water mark and adjusted by the hurdle rate. 

The shares are redeemable on the first business day of every calendar month, with a minimum notice of 45 days, and OUE is also entitled to a “most-favored nation” treatment with regards to any rights or benefits that may be enjoyed by any future shareholders in the fund (save for those included solely as a requirement of law in the shareholder’s jurisdiction).