A series of investment products based on diversified portfolios of private equity funds. Started in 2006, there are eight in the series to date, with Astrea 8 being the latest addition to the Astrea Platform.
Azalea became a signatory to the United Nations Principles for Responsible Investment (“UNPRI”), the world's leading proponent of responsible investment, affirming Azalea’s commitment to sustainability
With the launch of Astrea IV, Azalea introduced the first listed PE bonds for retail investors in Singapore. This platform democratized PE investments, allowing participation with a minimum of S$2,000
Azalea issued Astrea III, marking the debut of listed PE bonds. This launch offered investors investment grade bonds providing regular distributions and exposure to PE
The year 2023 was one of portent. Deal value fell by 37%. Exit value slid even more, by 44%. Fund-raising dropped across private capital, as 38% fewer buyout funds closed. Interestingly, dollar commitments in buyouts surged as a number of high-performing funds came to market. But it was truly a year of haves and have-nots. Just 20 funds accounted for more than half of all buyout capital raised. Yet what’s driving these declines couldn’t be more dissimilar to what was happening in 2008–09, and making sense of it requires a different lens altogether.
As difficult as it was, the aftermath of the GFC followed a predictable pattern: To cope with the crisis, central bankers slashed interest rates to spur activity, the economy slowly stabilized, and private equity was able to claw its way back from what many predicted would be its unraveling. The resulting period of growth in the years that followed created a private equity industry that is vastly larger and more complex than anyone in 2008 could have reasonably expected.
Yet today that size and complexity magnify the challenges the industry faces. Business conditions are more perplexing than predictable. Interest rates have risen faster than at any time since the 1980s, and it remains unclear when the US Federal Reserve will reverse course or where rates will eventually settle. Concerns about what we dubbed last year “the most anticipated recession in history that hasn’t happened yet” continue to linger. Yet to the surprise of most analysts, the economy is chugging along nicely. Record-low unemployment, reasonable growth, and surging public markets in the US suggest the possibility that we might just escape these months of turmoil with nothing worse than a soft landing.
These crossed signals have left private equity hamstrung. The sheer velocity of the interest rate shock was something few in the industry had ever experienced, and the impact on value has driven a wedge between buyers and sellers.
Astrea Investor Day 2024 offers a platform for Astrea bond investors to delve into the nuances of private equity ("PE") bonds and the performance of Astrea bonds. The event featured a series of presentations that highlighted Azalea’s milestones and market updates, as well as a fireside chat with Christopher Tan, CEO of Providend, on strategies for retirement investing in the current economic environment.
The webinar kicked off with an overview by Azalea's Chief Investment Officer, Chue En Yaw, who highlighted the role that Azalea plays in the private markets space. Azalea, which was established by Temasek in 2015, has US$9 billion in assets under management and has completed five transactions on the Astrea Platform. The Altrium Platform, which is a series of private equity fund of funds and a direct co-investment fund, has seen significant growth in assets under management since the first fund launch in 2019.
En Yaw shared that economic growth remained resilient in 2023 despite challenges like bank collapses and inflationary pressures. He pointed out the easing of inflation and moderation in interest rates going into 2024, potentially improving the investment climate for PE, which has continued to outperform public markets over the long-term. Elaborating on the PE exit environment, he noted that despite market challenges, PE continues to exhibit resilience with multiple exit channels including trade sales, secondary buyouts, and IPOs. He highlighted the Astrea portfolios’ distributions from successful exits over the past year, including the notable IPO of Birkenstock, the trade sale of VMware, and the secondary buyout of Macrobond.
Lim Jun Jie, Director in the Investor Solutions & Marketing team, provided a quick refresher on the Astrea bonds, before diving into a detailed analysis of Astrea bonds' performance, underscoring our structured approach to risk mitigation and consistent cash flow generation.
The full redemption of Astrea IV bonds was highlighted as a testament to the program's success, with over US$1.2 billion in cash distributions, representing ~108% of the initial portfolio NAV
Astrea V also showed strong performance with over US$1.4 billion in cash distributions and significant fair value gains
Astrea VI has generated strong cash distributions totalling US$900 millionrepresenting ~63% of the initial portfolio NAV since its issuance in 2021
Astrea 7, despite broader market declines, has recovered to produce healthy cash distributions of over US$500 million, ~27% of the initial portfolio NAV, since its launch in 2022
The multiple rating upgrades received by Astrea bonds over the years reflect the strong credit quality of the bonds, despite market disruptions and the inflationary environment.
Fireside Chat with Christopher Tan
Azalea’s Managing Director of Investor Solutions & Marketing, Tang Hsiao Ching, hosted a fireside chat with Christopher Tan, CEO of Providend, who offered insights into retirement planning and investment strategies. He highlighted the importance of building a diversified retirement portfolio, tailored to withstand various market conditions. Read the summary of the fireside chat here.
Watch the full replay of the webinar here:
Disclaimer: Please note that all information shared in this session is intended for your information only and is not an offer, invitation, or recommendation to purchase, hold or sell any securities. If you would like to receive any investment advice or recommendation, please do speak with a qualified financial advisor.
