ESR Group Limited Annual Report 2023 9 BUILDING ON SECULAR TRENDS • Sustained Growth in New Economy Real Assets Leverage investor demand for New Economy real assets and alternatives, namely in logistics and data centres, as well as new emerging areas of growth such as life sciences, infrastructure and renewables, driven by favourable structural secular trends underpinned by the ongoing digital evolution aging demographics and the energy transition. • Consolidation in Asset Management Relationships As global investors continue to navigate challenging private markets stymied by tighter financing options and higher capital costs, they look to increasingly consolidate their relationships towards a handful of large-scale managers and are allocating more capital to a smaller roster of platforms for efficacy. • Increasing Financialisation of Real Assets in APAC The support of new REIT legislations in APAC countries such as China, South Korea and India, along with the growing need for professional management and institutional real assets are driving the acceleration of the financialisation of real assets in the APAC. • ESG-driven for Long-term Value Creation With the increasing importance of ESG issues and the call to global action on climate change, more and more asset managers are steering capital towards sustainable investment activities and products and are incorporating ESG into their overall corporate strategy. Pursue Sustainable Revenue Growth and Cost Management Strategies • Recycle capital to re-invest into new and existing fund products to drive recurring fee income growth as AUM scales. • Continue to pursue disciplined cost management strategies to achieve stronger earnings and cashflow. • Increased earnings and cashflow would support higher distributions or liquidity for share buybacks. Growth in Fund Management EBITDA • Increase and scale New Economy AUM and development pipeline, as well as establish more perpetual vehicles to underpin continued Fund Management EBITDA growth. 4 5 STRATEGIC REPORTS CORPORATE GOVERNANCE FINANCIAL STATEMENTS
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