Keppel Infrastructure Trust’s manager proposes new fee structures

The manager wishes to be paid a base fee of 10% per annum of KIT’s distributable income.

Keppel Infrastructure Trust’s (KIT) manager, Keppel Infrastructure Fund Management Pte Ltd (KIFM), has proposed amendments to its old Management Fee and Performance Fee structures.

Under the proposal, KIFM will be paid a base fee of 10% per annum of KIT’s distributable income and a performance fee of 25% per annum of the increase in DPU (if any) as compared to the preceding financial year, multiplied by the weighted average number of Units in
Issue.

KIFM said this type of fee structure is “widely adopted by Singapore REITs listed in the last five years and the fee quanta, as percentage of AUM, Market Capitalisation and Revenue, are within the market range charged by selected business trusts.”

In the previous structure which has been in place since 2010, the KIT manager is being paid a $2 million management fee with adjustments to provide for inflation, and a 4.5% performance fee pegged to the Trust’s Income.

KIFM said the revised fee structures will bolster their ability to “optimise and create greater value from the Trust’s portfolio.”

“It reflects the increased level of resources to manage and operate KIT’s diverse portfolio, which has grown since its inception, from $760 million comprising three assets in Singapore as at 31 December 2010, to a well-diversified global portfolio of approximately $4.6 billion comprising nine assets across five countries as at end-February 2022. At the time of listing, the Trustee-Manager had only seven employees,” the manager explained in a bourse filing.