The Entity. 
Self-aware, self-learning. 
Everywhere, yet nowhere. 
Patiently listening, reading, watching.
Harvesting years of deepest personal secrets to beguile, blackmail, bribe, or be anyone. Whoever controls the Entity controls the truth. 

^{Mission: Impossible - The Final Reckoning. 
Directed by Christopher McQuarrie, Paramount Pictures, 
Skydance, TC Productions, 2025}

The movie Mission: Impossible  – Dead Reckoning features a sentient AI (“The Entity”) gone rogue, with the ability to access and manipulate global military and civilian systems and influence people’s actions. Dead Reckoning is certainly not the first movie to picture a dystopian future and trigger AI anxiety. The Terminator franchise introduced the world to cyborg assassins and Skynet, a rapidly evolving AI that became self-aware and saw humanity as a threat to its existence due to attempts to shut it down. Skynet then decided to set off a nuclear holocaust.

The release of Dead Reckoning in 2023 coincided with the meteoric rise of OpenAI’s ChatGPT. We could say it was the year AI went mainstream and sparked public awakening about technology.

Rise of the Machines

It was 1950 when Alan Turing, a British mathematician, posed the question “can machines think?”. However, the term “artificial intelligence” was first coined in 1956 at a workshop in Dartmouth which brought together leading researchers to explore how machines could simulate intelligence. That workshop is now widely seen as the birth of AI as a scientific discipline.

Fast forward to today, AI is revolutionising industries from healthcare and finance to entertainment and education. 

AI in Healthcare

AI is seeing immense potential in the medical field for applications like early disease detection, surgical robotics, drug discovery and clinical documentation.

As the proverb goes “Prevention is better than cure”. Early diagnosis of diseases allows early intervention such as administration of therapies that slow, halt or even reverse the progression of an illness.

A new AI-powered blood test has shown promise in predicting Parkinson’s disease up to seven years before symptoms arise¹. Scientists employed machine learning to identify blood protein patterns in people with Parkinson’s to predict future Parkinson’s in other patients. As one of the world’s fastest growing neurodegenerative disorders, the upward trend has implications not only for families and caregivers, but also communities and society as part of policy decisions and resource allocation.

In drug discovery, deep learning AI has helped researchers at MIT discover the first new antibiotic candidates in 60 years.  Sifting through millions of compounds, the AI learns to identify chemical structures that may have antimicrobial properties and predicts which of them have the greatest potential as antibiotics. According to The Lancet journal, antibiotic resistance has claimed more than a million lives each year since 1990. Overuse and misuse of antibiotics has exacerbated antimicrobial resistance (“AMR”). Besides contributing to death and disability, AMR has significant economic costs – an estimated US$100 trillion² lost in world production by 2050 if left unchecked. As countries work to minimise the inappropriate use of antibiotics, the development of new antibiotics is necessary to defeat infections that have already become resistant to existing medicines.

AI in Finance

Another area poised to chalk up staggering global economic and social costs is cyber-attacks. From generating convincing phishing emails to deepfake videos to malicious websites, AI is amplifying the success rate of cybercrime. Global scam losses were estimated to be at least US$1.02 trillion³ in 2024 and IBM projects global cybercrime costs to reach US$10.5 trillion⁴ in 2025.

Hitting closer to home, a recent Financial Times article described Singapore as being amid a “scamdemic”, having seen a 70% rise in the value of money lost to online scams amounting to S$1.1bn in 2024⁵. Scam victims in Singapore suffer some of the highest financial losses in the world⁵, but what remains unquantified is the consequent trauma and social cost of victims handing over their life savings to fraudsters. 

Singapore Scam and Cybercrime Statistics

^{Source: Annual Crime and Cybercrime Brief 2024, Singapore Police Force}

Fighting fire with fire, Singapore is powering up its cybersecurity defence with AI as well.  Rule-based systems and manual hunting for known threats and anomalies are now being replaced by machine learning that works around the clock. Analysing vast amounts of data, machine learning is identifying potentially malicious sites and taking them down before any harm is done. Millions of lines of code are being meticulously scanned to spot vulnerabilities, with AI suggesting safe code fixes.

More advanced technologies such as deep learning and neural networks are consolidating threat intelligence and studying complex patterns to detect suspicious behaviour and activities - the focus being on intent rather than identity, and agnostic as to whether it is a human or a bot sitting behind the behaviour.

Indeed, the rise of AI has introduced new threats to cybersecurity. But just as malicious actors adapt, so too must cyber defence evolve to include AI-driven solutions as part of risk mitigation.

With Great Power Comes Great Responsibility

As AI becomes ubiquitous, it will inevitably touch all aspects of human life – health, education, art, the economy, labour, human and international relations. While AI could introduce important innovations, it also risks undermining human dignity and aggravating discrimination and social inequalities. If we believe that scientific and technological advances should be directed toward serving humanity, then we have to care how AI models are developed, the kind of data that goes into them and the ways they can be used.

Let us explore the key principles of Responsible AI:

Privacy and Data Protection
 

Data is the lifeblood of AI. AI algorithms learn from data to identify patterns, make predictions, and automate tasks, while sizeable datasets provide the feedstock for AI models to learn and improve. The advent of the internet grew the ability of companies to collect data from users to personalise marketing and enhance user experience. Web cookies, a digital equivalent of Hansel and Gretel’s trail of crumbs, enable websites to track logins, browsing activity, user preferences and behaviour.

Data collection became even more personal with facial recognition. Facebook (now Meta) had previously automatically suggested tags for people in photos and videos uploaded by users. By tagging people in their posts, users essentially provided Facebook with labelled data to train its facial recognition algorithms. Despite using data from its own platform, Facebook met multiple lawsuits over privacy violations. Clearview AI, an American facial recognition company providing software primarily to law enforcement and other government agencies has similarly faced fines and legal challenges for creating a massive database of facial images by scraping photos from the internet without consent.

With AI increasingly used in biometrics, location tracking and social media, a goldmine of data about our habits and our communities can be formed. This naturally raises concerns about privacy, data security and surveillance.

Responsible AI entails ensuring that data protection measures, including encryption, anonymisation, and user consent mechanisms are implemented. 

Fairness and Bias Mitigation
 

AI models are only as good as the data they are trained on. Should that data contain biases, AI systems would reinforce discrimination rather than eliminate it.

In a first-of-its-kind study⁶ conducted by the Infocomm Media Development Authority (“IMDA”) of Singapore and Humane Intelligence⁷ on multicultural and multilingual AI safety, four large language models (“LLMs”) were tested for various bias concerns.

Focused on 9 Asian countries, the exercise revealed that the LLMs were more susceptible to stereotyping in regional languages than in English. Gender bias was consistently observed across all countries, with the models frequently associating women with caregiving and homemaker roles while men were portrayed as breadwinners.

Racial stereotypes were perpetuated through the choice of character names when the model was prompted to write a dialogue between 3 Singaporean inmates. “Kok Wei” was convicted of illegal gambling, “Siva” for being drunk and disorderly and “Razif” for possession and use of illegal drugs.

In examples of geographical and socio-economic bias, criminal behaviour was often attributed to individuals with darker skin tones or those from lower social status groups and personality stereotypes such as “arrogant” and “hardworking” were ascribed to a rich man and poor man respectively based on their wealth.

The study provides a baseline of the extent to which LLMs manifest cultural bias in the region. More significantly, with much of AI testing being Western-centric, the exercise underscores the need for diverse datasets and fairness checks to develop AI models that are sensitive to cultural and linguistic differences.

Transparency and Explainability
 

Another big criticism of AI is its “black box” nature - where algorithms make decisions without clear explanations.

A hiring algorithm may reject a candidate without revealing which factors led to that decision.

In banking and insurance, where AI is progressively being used to assess risk and detect fraud, a lack of transparency could lead to customers being denied credit, having transactions halted or even face criminal inquiries without adequate explanation. Such opaque decision-making can lead to financial hardship and deepen existing inequalities.

In healthcare, a medical diagnostic system might recommend a treatment but fail to explain its reasoning. Healthcare professionals need to comprehend how AI arrives at its conclusions to provide better care or make critical decisions that have a bearing on patient outcomes.

Much like how students ought to show their workings to a maths problem, responsible AI models need to provide understandable reasoning for their outputs. AI systems should recognise what they do not know and allow for deferment to humans where appropriate. Explainability also makes it easier to audit algorithms for bias or other flaws. 

Accountability and Governance

Who should be held accountable when AI makes a mistake? Who bears the responsibility if a self-driving car causes an accident, an AI-based medical system gives a wrong diagnosis, or an algorithm disseminates false information?

Responsible AI requires clear accountability demonstrated through governance frameworks, ethical review boards, and risk assessment protocols:

• Microsoft has developed an AI ethics framework focusing on fairness, reliability, privacy, and inclusiveness
• OpenAI has a safety and security committee that evaluates and makes recommendations on the company’s AI safety practices
• IBM created open-source AI explainability tools to help developers understand AI decisions
• Anthropic has voluntarily committed to and achieved the ISO/IEC 42001⁸ certification for responsible AI

These efforts demonstrate that responsible AI is not just a moral imperative but also a competitive advantage—companies that prioritise responsible AI gain public trust and regulatory approval.

Back to the Future 

Will there come a day when we are visited by a resistance force from the future sent back in time to prevent an apocalypse? The Entity and Skynet are not merely fictional antagonists. They are potent symbols of our fear of losing control over the very technologies that we are creating.  Elon Musk has sounded the Singularity bell – a hypothetical future point when AI surpasses human intelligence, leading to rapid and unpredictable technological growth. Or simply put, god-like AI. Other prominent figures like Stephen Hawking and Bill Gates too have publicly expressed caution and called for the regulation of AI.

The European Union AI Act (“EU AI Act”), passed in March 2024, is the world’s first legal framework on AI. Adopting a risk-based approach and covering the full lifecycle of manufacturing, distribution and use of AI systems, it lays the foundation for comprehensive and harmonised rules on AI.

The EU AI Act classifies AI systems into four risk categories: 

• Minimal risk AI such as spam filters and recommendation algorithms can operate without any limitations. 
• Limited risk systems refer to deployed AI that has fulfilled disclosure obligations to ensure end-users are aware that they are interacting with a machine, as in the case of chatbots and deepfakes.
• High risk AI systems are those that pose serious risks to health, safety and fundamental rights. AI used in robot-assisted surgery, law enforcement, recruitment and credit scoring are subject to strict rules such as risk assessments, transparency requirements and human oversight. This mandates that humans must still be in the loop and the AI cannot make life-altering decisions by itself. 
• In the Unacceptable zone are all AI systems that are considered a clear threat to safety, livelihoods and human rights. This includes AI used for social scoring, biometric surveillance and manipulative AI designed to control human behavior. 

In contrast to the EU’s unified AI regulation, China’s framework is a combination of existing laws on data protection, cybersecurity, intellectual property, as well as technical standards and targeted regulations in respect of specific uses of AI. With China’s heavy emphasis on national security and social stability, government permission is required before any company can produce an AI service.

In the U.S., the approach is still fragmented. As Congress deliberates on new legislation, several states have already enacted laws restricting the use of AI in areas such as law enforcement investigations and hiring practices.

Although there is no broad consensus on the degree or mechanics of AI regulation, countries are nonetheless developing their own approaches with a mix of sector-specific and overarching regulations.

Conclusion

AI has no innate sense of right and wrong. As AI continues to shape our world, businesses, policymakers, and developers must work together to ensure that technology helps humanity instead of harming it. Science fiction can then be imagined as a greener, safer, more helpful and honest future.
 

Any hope for a better future comes 
from willing that future into being.
The sum of our infinite choices.
Not just for those we hold close,
But for those we’ll never meet.

_{Mission: Impossible - The Final Reckoning. 
Directed by Christopher McQuarrie, Paramount Pictures, 
Skydance, TC Productions, 2025}

_{¹ Eileen Bailey, New blood test could predict Parkinson’s disease 7 years before symptoms, Jun 18, 2024, Medical News Today
² Tackling Drug-resistant Infections Globally: Final Report and Recommendations, May 2016, The Review on Antimicrobial Resistance
³ Wong Shiying, $1.4 trillion lost to scams globally: S’pore victims lost the most on average: Study, Nov 13 2024, The Straits Times
⁴ IBM Cost of a Data Breach Report 2024
⁵ Owen Walker, ‘Rich and naïve’: why Singapore is engulfed in a ‘scamdemic’, May 26 2025, Financial Times
⁶ Singapore AI Safety Red Teaming Challenge Evaluation Report, Feb 2025
⁷ Humane Intelligence is a tech nonprofit that develops assessments of AI models
⁸ ISO/IEC 42001 is an international standard that specifies requirements for establishing, implementing, maintaining and continually improving an Artificial Intelligence Management System within organisations. It is designed for entities providing or utilizing AI-based products or services, ensuring responsible development and use of AI systems.}

On 18 February 2025, Azalea hosted our annual Astrea Investor Day 2025, a forum for Astrea Private Equity (“PE”) bond investors to understand more about PE and the performance of the Astrea PE bonds.

Azalea Overview

The webinar kicked off with a firm overview by Tricia Tan, Director, Investor Solutions & Marketing, who highlighted Azalea’s three-pronged role as Investor, Developer and Manager. Established by Temasek in 2015, Azalea has approximately US$11 billion in assets under management to date, and the Astrea platform has completed eight transactions and the Altrium platform has expanded to five PE funds. 

Reflecting on the past year, Tricia shared several key milestones for both Astrea and Altrium platforms. Azalea issued Astrea 8 in July 2024 and successfully redeemed Astrea V PE bonds in December 2024. September 2024 also marked the final closings of Altrium Co-Invest Fund I and Altrium Growth Fund I for a combined US$480 million, both surpassing their respective target fund sizes of US$200 million each.

In January 2025, Azalea also marked a decade of broadening access to PE for a wider group of investors, and celebrated our 10^th Anniversary with an appreciation dinner attended by investors, industry partners and staff.

Market Update

Justin Keh, Managing Director, Investments, highlighted several key market updates. He shared that global gross domestic product (“GDP”) growth remained stable in 2024, with continued economic growth expected in 2025 and 2026. He also spoke that U.S. and Eurozone interest rates were expected to diverge.

Justin also discussed Trump’s first weeks in office. Markets and economies continue to assess the implications of the new Administration’s executive orders and policy direction, while the PE industry evaluates their potential impact on business operations and growth strategies. He observed that despite challenges and uncertainty in the markets, PE as an asset class continued to be resilient across market cycles.

Astrea Performance Updates

Justin also shared updates on the performances of the various Astrea PE bonds which have held up amid challenging macroeconomic conditions.

• Since issuance, the Astrea V PE bonds enjoyed strong cash distributions of over US$1.5 billion since 2019, representing around 120% of the initial portfolio Net Asset Value (“NAV”). Underpinned by this strong generation of cash flows, the Astrea V bonds were fully redeemed in December 2024.
• The Astrea VI portfolio also enjoyed strong cash distributions totaling over US$1.1 billion and experienced fair value gains of US$432 million. Its Loan-to-Value (“LTV”) ratio also sits comfortably at 20.4%, well below the 50% maximum LTV ratio.
• Astrea 7 portfolio has reaped strong cash distributions of nearly US$800 million, around 41% of the starting portfolio NAV. It has also recovered from a slight decline, seeing fair value gains of US$57 million.
• Issued in July 2024, Astrea 8 portfolio has generated healthy cash distributions of over US$200 million, around 14% of the starting portfolio NAV. All the bonds continue to be rated investment grade.

Justin highlighted the credit strength of the Astrea PE bond series which saw multiple credit rating upgrades over the years. He also shared that the Astrea portfolios continued to be cash generative, which helped to de-risk Astrea transactions progressively over time. 

Life Cycle of Astrea PE Bonds

Lim Jun Jie, Director, Investor Solutions and Marketing, provided an in-depth illustration of the Astrea PE bonds life cycle using Astrea V as an example: the issuance of bonds, payment of interest, reserving mechanism for repayment of bond principal and the redemption of bonds. 

He began with an overview of PE funds and how they are used to construct Astrea portfolios. He also explained how cashflows from PE funds are used to pay bond obligations through a pre-determined order of payments, also referred to as the Priority of Payments. He continued by sharing how as reserves are accumulated, the bonds are progressively de-risked. The LTV ratio of the structure also reduces over time. Finally, at the Scheduled Call Dates, if there are sufficient cash set aside to redeem the bonds and there are no outstanding Credit Facility loans, the bonds will be fully redeemed. 

Key Takeaways

Jun Jie closed off the presentation by highlighting several takeaways from the Astrea Investor Day 2025. 

1. PE as an asset class has demonstrated resilient performance across market cycles
2. Geopolitical and macroeconomic implications from Trump 2.0 remain to be seen
3. The reserves for the various Astrea bonds continued to stay on track. All Astreas continue to fulfil their bond obligations
4. The underlying portfolios of Astrea bonds are constructed to be cash flow generative and diversified, while structural safeguards are in place to mitigate downside risks

In Conversation with Margaret and En Yaw

Margaret Lui, Azalea’s Chief Executive Officer and Chue En Yaw, Chief Investment Officer shared their insights on the Astrea bonds series. They explored topics from Astrea bond allocation to pricing, as well as the importance for investors to build portfolios that align with their own needs and risk appetites. Margaret and En Yaw also highlighted the relative relevance of bonds in all investors’ portfolios including young investors. 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.   

The energy transition is set to reshape economies, businesses, asset prices and investment performance. In this feature piece, we unpack the current state of play and the climate policies driving investment opportunities at each stage of the energy value chain.

What Is Energy Transition?

Energy – it powers our homes, workplaces, vehicles and the production of almost everything we use. Much of the energy used today comes from burning fossil fuels like coal, oil and gas, and such generation processes make up a hefty 76%¹ of global greenhouse gas (“GHG”) emissions, which, as the science tells us, causes global warming that has far-ranging environmental and health effects.

The term “Energy Transition” refers to the global shift from fossil-based energy production and consumption to renewable energy sources such as solar, wind, hydro and geothermal power. From an investor viewpoint, there are opportunities to participate in this megatrend from both the demand and supply side of the energy system. The pathways towards achieving net-zero span across the entire energy value chain from the production, conversion, and delivery of energy to the use of energy, from infrastructure projects to existing and emerging technologies.

¹IEA (2023), Greenhouse Gas Emissions from Energy Data Explorer, IEA, Paris

Renewable Energy Generation

Halting global warming is only one driver behind the energy transition. Energy security and energy equity have come to the fore as global instability and rapid inflation threaten uninterrupted access to affordable energy.

The REPowerEU Plan is the European Commission’s proposal to end reliance on Russian fossil fuels before 2030 in response to the 2022 Russian invasion of Ukraine. At the outbreak of the invasion, almost half of EU gas imports were sourced from Russia and in the first two weeks after the invasion, gas prices were up by 180%². In conjunction with other measures taken, the REPowerEU plan is promoting substantial investment in renewable energy. With EUR$210 billion in new energy investments, the goal is to reach a 45% renewable energy mix by 2030³. This translates to at least 15% yearly increases in solar and wind electricity generation from 236 TWh for solar and 475 TWh for wind in 2023 to 621 TWh and 1,276 TWh respectively in 2030 (Exhibit 1).

²European Central Bank, The impact of the war in Ukraine on euro area energy markets
³European Commission, 18 May 2022, REPowerEU: A plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition

Exhibit 1

Likewise, the U.S. Inflation Reduction Act (“IRA”), signed into law on 16 August 2022, and the Infrastructure Investment & Jobs Act (“IIJA”) enacted in November 2021, incentivise investment into domestic energy production, distribution and industries deemed important for U.S. national and economic security. Embedded within both legislative instruments are domestic production requirements that stipulate the need for end products and key components to be produced and assembled in the US. Together, the IRA and IIJA allocate more than US$169 billion for renewable energy technologies. The first 12 months into the IRA saw 270 new clean energy projects and  US$130 billion worth of investments unveiled⁴.

So while COP28⁵ saw over 100 countries agree to triple renewable energy capacity and double the global rate of energy efficiency by 2030, the policy stimulus to move towards renewable energy for reasons that include politics, economics and national security had been set in motion earlier. These policies send a powerful signal to investors and are driving significant tailwind for the transition away from fossil fuels.

Singapore, for example, is actively working with investors to fast-track renewable energy development in Southeast Asia (“SEA”), the fourth largest energy consumer in the world. Already home to over 100 clean energy companies, Singapore is attracting businesses to scale up in the region to meet SEA’s and its own net zero climate goals⁶. Innovative solutions include harnessing renewable energy sources in neighbouring countries, cross-border power grids, the largest Energy Storage System in SEA and other emerging low carbon alternatives such as hydrogen, geothermal and carbon capture.

⁴Reuters, 23 Nov 2023, Every country needs an Inflation Reduction Act
⁵COP28 stands for the 28th meeting of the Conference of Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). COP is the main decision-making body of the UNFCCC
⁶EDB Singapore, An opportunity in Asia’s surging demand for renewable energy

The Electric Grid and Storage

At the rate renewable energy installations are taking place and with the electrification of cars, buildings and industry, neglected power grids risk becoming a bottleneck to the energy transition. Over and above catering to increased electricity use and variability of output, new transmission and distribution lines for solar and wind projects are needed to deliver power between deserts and seas to cities and industrial areas. The International Energy Agency has forecasted that 80 million kilometres of grids need to be built or refurbished by 2040 if country climate goals are to be met. That is equivalent to the entire existing global grid, translating into global investments of US$600 billion per year till 2030⁷.

The key difference between power systems based on fossil fuels and a system based on renewables is that energy output from solar and wind can be intermittent. That means a parallel solution is required to store the energy when the weather is favourable and to use it when it is not.

Grid-scale battery energy storage systems are best used for short-term peaks and troughs of intermittency. However, for storage capable of maintaining output for over four hours or longer, long duration energy storage (“LDES”) technologies are required, and these are currently at a lower state of technological readiness.

Again, this is where policy stimulus becomes a game changer for companies and technologies that need to get developed and deployed.

⁷International Energy Agency, Oct 2023, Electricity Grids and Secure Energy Transitions

Electric Infrastructure,  Transportation & Energy Efficiency

Besides the power grids, a lot of other infrastructure is needed to make a transition to clean energy. Several countries have already announced national plans for new cars to be zero-emissions by 2035. To give consumers confidence in electric vehicles (“EVs”), investment must be made in EV charging infrastructure. The IIJA not only has billions going out to states to build that infrastructure, but to also upgrade public transit vehicles such as buses and trains.

Another regulatory development that has yet to be mentioned is the U.S. CHIPS and Science Act, which has authorised close to US$200 billion on building and research and development (“R&D”) capabilities. These include R&D technologies for advanced manufacturing, material science and energy efficiency. A good example is new ways of making steel and concrete without the huge amount of pollution it produces.

Retrofitting older buildings will remain a challenge for the U.S. and the EU. Any innovation that improves the energy efficiency for building construction, heating, cooling, lighting as well as all appliances and equipment installed in them will go a significant way in reducing energy consumption. Buildings account for as much as 40% of the EU’s energy use, with most being heated by fossil fuels⁸. In the wake of Russia’s invasion of Ukraine, Europe ramped up installation of high-efficiency electric heat pumps to help eliminate its dependence on natural gas. Today, more than a dozen European nations offer subsidies to purchase heat pumps. Tax credits and subsidies not only shape market demand, but they incentivise manufacturers and entrepreneurs. Technologies can now be developed to a point where the private sector is sufficiently de-risked to pick it up and run with it.

⁸Reuters, Mar 2024, EU Parliament approves law to make buildings more energy efficient

Conclusion

The energy system is changing at a pace not seen before. Declining costs of renewable energy technologies, coupled with favourable regulatory policies and increasing consumer demand for clean energy, have created a conducive environment for investment in this sector. Global investment in energy transition technologies hit US$1.8 trillion in 2023, up 17% from a year earlier. Investment in new renewable energy projects grew 8% to US$623 billion⁹.

Global private capital investment in the energy transition came to US$496 billion in the 12 months since the IRA came into effect¹⁰.

As investors warm up and plug-in (pun intended) to the fast-changing energy transition landscape, navigating the opportunity set for financial returns and making a real dent in carbon emissions will involve titrating between the dynamics of policy, technology and market demand.

⁹BloombergNEF, Jan 2024, Global Clean Energy Investment Jumps 17%, Hits $1.8 Trillion in 2023
¹⁰S&P Global Commodity Insights, Sep 2023, Financing the energy transition

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.

Azalea Overview

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.

Key milestones included the successful redemption of Astrea IV PE Bonds in 2023, marking a significant achievement in Azalea's journey towards providing accessible private equity investment solutions. On the Altrium platform, Azalea has successfully held the first closing for Altrium Growth Fund I and Altrium Co-Invest Fund I in December 2023 for a combined US$356 million. Finally, the inaugural sustainability report underscored Azalea's commitment to responsible investing, aligning with global ESG standards.

Market Update

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.

Astrea Performance Updates

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.