Q: Can you share more on the progress in Keppel’s transformation to be a global asset manager and operator? Has the transformation been completed?
Keppel has undergone a fundamental transformation. Up to a few years ago, Keppel was known mainly as an offshore rig builder, a property developer, or an infrastructure EPC1 contractor, with independently run verticals. Today, Keppel is a horizontally integrated company. Our platforms and divisions are working together, and reinforcing one another to deliver higher value, both to Keppel’s shareholders and to our Limited Partners (LPs). We are also working with world-class partners and collaborators to offer better solutions across our value chains, and establishing Keppel as a strategic ecosystem player.
The quality of our earnings has improved significantly. Recurring income of $766 million in 2024 made up 72% of our net profit from continuing operations2, up from 21% in FY 2021. As part of our asset-light strategy, we have announced the monetisation of close to $7 billion in assets since October 2020.
Importantly, we have demonstrated our ability to do more with less. In the past four years, our total assets declined by about 14% to $27.7 billion as at end-2024, while our Funds Under Management3 (FUM) grew about 2.4x, from $37 billion in 2020 to $88 billion. Over the same period, our asset management fees4 rose at a compounded annual growth rate of about 25% to $436 million in 2024. As an asset manager, we have diversified our investment strategies to include energy, environmental infrastructure, data centres and private credit. We have also expanded from mainly Asia Pacific to Europe with Aermont Capital as our platform.
Our segments have also undergone significant transformation. Today, Infrastructure has become the largest profit contributor with earnings surging 4.9x from $137 million in FY 20215 to $673 million in FY 2024, underpinned by robust recurring income. We have also shifted from being largely an EPC player with lumpy earnings to providing technology, and operating and maintenance services.
Our Connectivity business has grown from a subscale data centre and logistics player to a premier digital infrastructure provider, with earnings rising 2.5x from $74 million in FY 20186, before the privatisation of Keppel T&T and M1, to $184 million in FY 2024. We have also expanded our data centre portfolio significantly, and ventured into new growth areas such as subsea cable systems. M1, following its privatisation, has also evolved from a traditional telco into a digital-first network operator, synergising with Keppel and establishing its enterprise business as a new growth engine.
While we have achieved strong results, the transformation journey continues. We will continue to grow our asset management business, with the aim of reaching $100 billion in FUM before the end of 2026, and $200 billion by 2030. We will also work hard at pivoting our Real Estate Segment to be more asset-light, and driving the monetisation of our legacy offshore and marine (O&M) assets.
Reflecting our transformation, Keppel is no longer ascribed a conglomerate discount by most analysts covering us. As we strive to achieve our goals with laser-focus, we hope the market will ascribe an appropriate growth multiple to the New Keppel.
