Keppel Infrastructure Trust proposes fee changes to boost growth plans

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Keppel Infrastructure Trust (KIT) has proposed Monday changes to its management and performance fee structures to align the manager’s interests with unitholders and to support the trust’s growth plans. 

Under the proposed changes, Keppel Infrastructure Fund Management (KIFM) would be paid a base fee of 10 percent per annum of KIT’s distributable income and a performance fee of 25 percent per annum of any increase in distribution per unit (DPU) multiplied by the number of units, the trust said in a filing to SGX.

That would replace the fee structure in place since 2010, which was S$2 million in management fees, with inflation adjustments, and a 4.5 percent performance fee pegged to KIT’s income, the filing said. 

KIT said the proposed fee structure has been widely adopted by Singapore-listed REIT’s in the past five years; the changes will be subject to unitholder approval at an extraordinary general meeting (EGM) set for 19 April, KIT said. 

“The proposed fee structure will enhance KIFM’s ability to drive growth through new acquisitions and investments,” KIT said. “Beyond the traditional asset classes that provide long-term utility-like contracted cash flows, KIFM has also identified key asset classes that will benefit from the growth of the low-carbon and decarbonisation economy, support the digital economy as well as socio-economic infrastructure that furthers economic growth and enhances social wellbeing.”

Jopy Chiang, CEO of KIFM, added that the manager was expanding its talent pool in investment origination, deal execution and portfolio management, with plans to establish offices in key overseas markets to scale up faster.

The independent financial adviser (IFA) is of the opinion that the fee structure changes are on normal commercial terms and are not prejudicial to minority unitholders’ interests, the filing said. The independent directors have recommended unitholders vote in favor of the changes, the filing said.

Read Keppel Infrastructure Trust’s filing on the changes.

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