who is azalea? - astrea€¦ · • 2016 - astrea iii • 2018 - astrea iv • 2019 - astrea v •...

Who is Azalea?

About Us

Wholly-owned subsidiary of Temasek

Investor, developer and manager

Successfully launched• 2016 - Astrea III• 2018 - Astrea IV• 2019 - Astrea V

• 2019 - Altrium I

Led by a team of professionals with extensive industry and experience in the private equity field

Independent board and management team

Develop and InnovateSustainable investment products

to suit the needs of investors

Our Goals

Broaden Investor AccessCreating investment opportunities

Educate InvestorsInvestor education programmes and updates

Astrea PE Bonds

$1,142m $1,098m

$1,324m

Private Equity (PE) Fund Investments

(US$)

Astrea PE Bonds

$1,142m $1,098m

$1,324m

Private Equity (PE) Fund Investments

(US$)

July 2016 June 2018 June 2019

Astrea III Bonds

$510m

Astrea IV Bonds

$501m

Astrea V Bonds

$600m

Equity EquityEquity

What is Private Equity?

Different PE

strategies

Buyout funds

invest in

established

businesses

General examples of private equity owned companies

Growth Equity

funds invest in

high growth

Managed by a

professional manager

(General Partner)

Invest in a portfolio of

private companies –

diversification

Multiple investors

providing capital funding

(Limited Partners)

Grow the business by

enhancing productivity and

efficiency of investee

companies

With an increased

value, companies are

sold after 3 to 7 years

What Role Does It Play In The Market?

What is a Private Equity Fund?

What are the Barriers to Entry?

Institutional Investors

Pension Funds / Sovereign Wealth Funds

High Net Worth Individuals

High amount of

minimum investment

capital required

Long holding period

requires invested

capital to be locked

up for a long time

(~10 years)

J-curve effect

exposes investors to

initial negative cash

flows

Who Invests in Private Equity?

Net cash outflows at the

start as manager calls capital

to make investments

Net cash inflows later on as

managers generate returns from

investments

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

1 2 3 4 5 6 7 8 9 10 11 12 13

Cash outflows Cash inflows Cumulative net cash position

Year

% of Capital Commitment

Mature phase

What is a J-Curve?

Risk of Loss

• Historically, portfolios of mature funds have demonstrated lower risk of loss –

– only ~1.4% of such funds experienced a loss

• Of the loss-making funds, the worst performing fund experienced a ~15% loss

• With a conservative LTV, the risk of loss to bondholders is low

Source: Preqin, May 2019. Data as of the latest available performance per fund, obtained from https://www.preqin.com/user/PE/product_menu_pa_advanced.aspx, last accessed on 8 May 2019. Each

strategy is comprised of the following Preqin fund classifications; PE Fund (Preqin Classification: Buyout, Distressed Debt, Growth, Mezzanine, Venture (All), Real Estate). Primary FoF (Preqin

Classification: Fund of Funds). Secondary FoF (Preqin Classification: Secondaries) obtained from Preqin Performance Analyst.

Bonds issued at

conservative

~45%

Loan-to-Value

Ratio

Capital Structure

Portfolio needs

to lose 55% of

value before

Bondholders are

impacted

Astrea PE Bonds are issued at conservative LTVs

Astrea

Portfolio

Portfolio

Bonds

Equity

Portfolios of mature funds

Portfolios of mature funds

Worst

performing

portfolio lost

~15% of its

value

Prospectus Gatefold

Product Highlights Sheet (PHS)

Prospectus

Innovative bond to provide exposure to private equity

Backed by cash flows from private equity fund investments

Listed on SGX to address illiquidity

Shorter holding period compared to traditional private equity

What are Astrea PE Bonds?

Astrea PE Bonds Mitigate Barriers to Investing in PE Funds

High Investment

Capital

J-Curve Effect

More bite-sized investment

lots available

Capital tied up for shorter durations

Diversified portfolio of

seasoned funds mitigates initial

cash outflow

PE Bonds

Long HoldingPeriod

Barriers to Investing

in PE Funds

Transaction Structure

Diversified portfolio

Issuer

PE Fund 1 PE Fund 2 PE Fund 3 PE Fund 4 PE Fund 5 PE Fund 38

………………………………………

Flow through Priority of Payments

38PE Funds

862 Investee Companies

5.4 yearsWeighted Average

Fund Age

………………………………………

Transaction Structure

Payments for:Clause 1: Taxes and expensesClause 3: ManagerClause 4: Credit Facility

Interest for:Clause 5: Class A-1 Bonds and Class A-2 BondsClause 6: Class B Bonds

Payments for Reserves Accounts:Clause 8: Reserve Amount

Payments to:Clause 13: Sponsor

Pay Bond-holders

Priority of Payments

Reserves AccountsRegular cash build-up to repay principal of Class A Bonds

Sponsor SharingTo enable a faster build-up of reserves

Maximum Loan-to-Value RatioDebt limit at 50%, crossing this limit triggers lowering of Total Net Debt

Credit FacilityAllows Issuer to draw down from bank to pay key expenses, interest

payments of Bonds and capital calls in the event of shortfall

Structural Safeguards

1st INTEREST PAYMENT & DISTRIBUTION REPORT

20 DEC 2019

LAUNCH DATE12 JUN 2019

CLOSING DATE18 JUN 2019

LISTING DATE21 JUN 2019

Stock Code: 5A1B | Astrea V3.85%B290620

www.astrea.com.sg/a5

Jun ‘19 Jul ‘19 Aug ‘19 Sep ‘19 Oct ‘19 Nov ‘19 Dec ‘19

1.01

1.02

1.03

1.04

1.05

1.06

1.07

Jan ‘20

Bond Summary

BondsBonds

Outstanding

Total

Reserves

Interest Rate

(p.a.)

Scheduled Call

Date

Ratings(1)

(Fitch / S&P)

Class A-1 S$315

$47

3.85% 20 June 2024 Asf / A+ (sf)

Class A-2 $230 4.50% 20 June 2024 Asf / Not rated

Class B $140 N/A 5.75% N/ABBBsf / Not

rated

(All amounts are in US$m unless otherwise stated)

Note: (1) Ratings as of 20 December 2019.

Key Highlights

Semi-annual interest

paid to bondholders

on 20 Dec 2019Class A-1 – 3.85% p.a.

Class A-2 – 4.50% p.a.

Class B – 5.75% p.a.

Portfolio value

$1,366m

$46.7m reserved

for Class A as

scheduled

Maximum

Loan-to-Value Ratio

of 50% not

exceeded

Portfolio NAV by Fund Region

58.7%19.3%

22.0%

56.1%

21.6%

22.3%

Amounts reflect values as of 31 Mar 2019 Amounts reflect values as of 6 Dec 2019


Portfolio NAV by Fund Strategy(All amounts are in US$m unless otherwise stated)

Buyout

Growth Equity79.7%

Buyout Funds

The majority of the portfolio comprised

buyout funds

81.0%

19.0%

79.7%

20.3%

31 Mar 2019

Fund Strategy (% of NAV)

As of 6 Dec 2019 As of 6 Dec 2019

6 Dec 2019

Top3PE Fund Managers (GPs) %of NAV

KKR 8.7%

Warburg Pincus 6.5%

TPG 6.1%

Top3Fund Investments %of NAV

Silver Lake Partners IV, L.P. 5.6%

KKR North America Fund XI L.P. 4.4%

General Atlantic, L.P. 4.3%

Portfolio NAV by Vintage Year

0

50

100

150

200

250

300

350

400

2011

8

2012

7

2013

6

2014

5

2015

4

2016

3

Portfolio NAV by Vintage Year as of 31 Mar 2019 Portfolio NAV by Vintage Year as of 6 Dec 2019

US$m

7.4%

17.9%

22.3%

25.2%

17.0%

10.2%

7.2%

15.6%

20.8%

26.3%

18.0%

12.1%

Vintage Year

Fund Age (years)

Portfolio Activity(All amounts are in US$m unless otherwise stated)

1,324 1,366

Distributions Capital Calls

1,484

Private Equity Portfolio Appreciation

Portfolio NAV Cumulative Net Distributions

Private Equity Portfolio Cash Flow Activity

31 Mar 2019

Portfolio NAV

6 Dec 2019

Portfolio NAV

+ Cumulative Net

Distributions

6 Dec 2019

Ending Portfolio

NAV

Net Distributions = 118

31 Mar 2019

Starting

Portfolio NAV

118

Fair Value

Gains

Priority of Payments for First Distribution Date(All amounts are in US$m unless otherwise stated)

i Net Distributions + $118m

1

ii Beginning Cash

Balance and net

receivables

+ $ 69m

iii Residual balance from

Settlement Accounts 2

+ $ 7m

iv Retained Amount for

the next period

-$ 10m

$184m

Priority of Payments for Third Distribution Date(All amounts are in US$m unless otherwise stated)

Notes:

1. Other inflows includes interest income and prior period distributions from PE Funds received in current period after deducting certain operating expenses.

2. US$15m was set aside from the gross proceeds of the Bonds in the Issuer’s Settlement Accounts for payment of fees and expenses incurred in connection with the issue

and offering of the Bonds. The residual balance after transaction and related fees and expenses was US$7m.

LTV Test

Performed

Available

Cash Flow for

Priority of Payments

$184m

Payments for:Clause 1: Taxes and expensesClause 3: ManagerClause 4: Credit Facility

$3m

Interest for:Clause 5: Class A-1 Bonds and Class A-2 BondsClause 6: Class B Bonds

$14m

Payments for Reserves Accounts:Clause 8: Reserve Amount

$47m

Payments to:Clause 13: Sponsor

$120m

Pay Bond-holders

0.5% bonus payment upon

redemption of Class A-1 Bonds

triggered when Sponsor

receives US$407m

Loan to Value (“LTV”) Computation(All amounts are in US$m unless otherwise stated)

US$m

1,3661,366

558

Total

Portfolio

NAV

Total Net

Debt

Note:

1. Class A-1 principal calculated based on blended USD:SGD forward FX rate of 1.33825.

LTV = 40.8%

50%

Maximum LTV Ratio

The Maximum LTV Ratio of 50% was not exceeded. Hence,

no payment to the Reserves Accounts was required.

Calculated as of

Distribution Reference Date

6 December 2019

A Total Portfolio NAV $1,366

B

Total Principal Amount

of Bonds1 $ 605

Credit Facility Loans

Outstanding$ 0

CPayments to Reserves

Accounts$ 47

B – C Total Net Debt $ 558

(B – C) / A LTV Ratio 40.8%

Bond Summary

BondsBonds

Outstanding

Total

Reserves

Interest Rate

(p.a.)

Scheduled Call

Date

Ratings(2)

(Fitch / S&P)

Class A-1 S$242

$118(1)

4.35% 14 June 2023 A+sf / A (sf)

Class A-2 $210 5.50% 14 June 2023 Asf / Not rated

Class B $110 N/A 6.75% N/ABBBsf / Not

rated


Note: 1. This includes inflows from both the current and prior Distribution Periods. The Reserves Amounts includes SGD balances which were translated into USD as of 2 December 2019. Reserve

Amounts from the prior period were placed into fixed deposits and investments in accordance with the Eligible Deposits/ Investments criteria. Likewise, the US$40m from the current period will be invested in accordance with the Eligible Deposits/Investments criteria.

2. Ratings as of 14 December 2019.

Key Highlights

Semi-annual interest

paid to bondholders

on 14 Dec 2019Class A-1 – 4.35% p.a.

Class A-2 – 5.50% p.a.

Class B – 6.75% p.a.

Portfolio value

$884m

$40m reserved for

Class A as

scheduled

Maximum

Loan-to-Value Ratio

of 50% not

exceeded

Portfolio NAV by Fund Region

61.4%21.1%

17.5%

60.8%

20.8%

18.4%

Amounts reflect values as of 30 May 2019 Amounts reflect values as of 2 Dec 2019


Portfolio NAV by Fund Strategy(All amounts are in US$m unless otherwise stated)

Buyout

Growth Equity

Private Debt88.5%

Buyout Funds

The majority of the portfolio comprised

buyout funds

88.4%

10.1%

88.5%

10.0%

30 May 2019

Fund Strategy (% of NAV)

1.5% 1.5%

As of 2 Dec 2019 As of 2 Dec 2019

2 Dec 2019

Top3PE Fund Managers (GPs) %of NAV

Silver Lake Partners 10.6%

Blackstone Capital Partners 9.2%

PAG Asia 8.2%

Top3Fund Investments %of NAV

Silver Lake Partners IV, L.P. 9.4%

Blackstone Capital Partners VI, L.P. 8.6%

PAG Asia I LP 8.2%

Portfolio NAV by Vintage Year

Portfolio NAV by Vintage Year as of 2 Dec 2019

0

50

100

150

200

250

300

≤2006

≥13

2007

12

2008

11

2009

10

2010

9

2011

8

2012

7

2013

6

2014

5

US$m

Vintage Year

Fund Age

5.1% 5.4%

3.6%

0.0%

22.8%

26.2%

14.8%

1.2%

20.9%

Portfolio NAV by Vintage Year as of 30 May 2019

3.6%

6.2%

4.0%

0.0%1.1%

21.1% 21.6%

25.9%

16.5%

Portfolio Activity(All amounts are in US$m unless otherwise stated)

1,098 1,047 956

884

134 243 353

1,237

Private Equity Portfolio Appreciation

Portfolio NAV Cumulative Net Distribution

Private Equity Portfolio Cash Flow Activity

31 Mar 2018

Portfolio NAV

2 December 2019

Portfolio NAV

+ Cumulative Net

Distributions

Net Distributions = 110

1,1991,181

30 Nov 2018

Portfolio NAV

+ Cumulative Net

Distributions

30 May 2019

Portfolio NAV

+ Cumulative Net

Distributions

30 May 2019

Starting

Portfolio NAV

Distributions Capital Calls Fair Value Gains 2 Dec 2019

Ending

Portfolio NAV


i Net Distributions + $110m

1

ii Beginning Cash

Balance and other

inflows

+ $ 7 m

iii Retained Amount for

the next period

- $ 5m

$112m


Available

Cash Flow for

Priority of

Payments

$112m

Payments for:

Taxes and expenses (Clause 1)

Manager (Clause 3)

Liquidity Facility (Clause 4)

Interest for:

Class A-1 Bonds and Class A-2 Bonds (Clause 5)

Class B Bonds (Clause 6)

Payments for:

Capital Calls and Capital Call Facility (Clause 11)

Payments to:

Sponsor (Clause 14)

Payments for Reserves Accounts:

Reserve Amount (Clause 8)

$2m

$13m

$1m

$56m

$40m

Notes:

1. Other inflows includes interest income from fixed deposits placed using balances from the Operating Accounts

2. As of Third Distribution Date, Sponsor has received US$201m.

LTV Test

Performed

0.5% bonus payment upon

redemption of Class A-1 Bonds

triggered when Sponsor

receives US$313m2.

Loan to Value (“LTV”) Computation(All amounts are in US$m unless otherwise stated)

Calculated as of

Distribution Reference Date

2 December 2019

A Total Portfolio NAV $884

B

Total Principal Amount

of Bonds1 $504

Liquidity Facility Loans

Outstanding$ 0

Capital Call Facility

Loans Outstanding$ 0

CReserves Accounts

Balance$ 78

DPayments to Reserves

Accounts$ 40

B – C – D Total Net Debt $386

(B – C – D)

/ ALTV Ratio 43.7%

Total

Portfolio

NAV

Total Net

Debt

US$m

386

884

The Maximum LTV Ratio of 50% was not exceeded. Hence,

no payment to the Reserves Accounts was required.

LTV = 43.7%

50%

Maximum LTV Ratio

Note:

1. Class A-1 principal calculated based on blended USD:SGD forward FX rate of 1.31677.

Thank Youwww.astrea.com.sg

[email protected]

http://www.astrea.com.sg/

mailto:[email protected]

who is azalea? - astrea€¦ · • 2016 - astrea iii • 2018 - astrea iv • 2019 - astrea v •...

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