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With its excellent track record,Alpha Investment Partners islooking to launch two new fundsin 2007.Vanguard, TokyoProperty fund managementAlpha Investment PartnersDelivering good returns to investors and shareholdersAlpha Investment Partners (Alpha) continues to delivergood returns to its investors and shareholders. All the fundsunder Alpha‘s management continue to exceed returnsexpected by investors. This strong performance is a resultof active management to achieve higher income from itsportfolio of properties and gains from divestments, as well asappreciation in property value. With a strong focus on assetmanagement, Alpha aims to maximise income and achievevalue enhancement for its funds.In 2006, Alpha made 18 acquisitions, bringing the total valueof assets under management (AUM) to $2 billion as at end-2006, up from about $980 million as at end-2005. AUM isexpected to be more than $4 billion when all the funds arefully leveraged and fully invested. The pace of acquisitions isexpected to continue into 2007 given the positive outlook forreal estate markets in Asia.Asia No.1 Property Fund, which is an opportunistic fund jointlymanaged with Henderson Global Investors, has achievedgood returns on its investments. As at end-2006, the fund’sreturn was well in excess of its target internal rate of return(IRR), partly due to substantial capital gains realised from thesale of two investments. The investments made by the fundhave generated good income and capital value growth. Alphawill undertake to divest some of these investments at theopportune time.Alpha Core Plus Real Estate Fund concluded its final closingin March 2006 with total equity of about $720 million,exceeding its target of $412 million. Alpha has successfullyinvested about 65% of the fund’s equity in 18 propertiesacross Japan, Singapore, Hong Kong and South Korea as atend-2006. Alpha is targeting to invest the remaining equityby end-2007 so as to capitalise on the improving real estatemarkets in Asia. Of equal importance, Alpha will strive tomanage the acquired assets well to achieve the expectedyields from investments.Alpha has also secured its first Shariah compliant mandatefrom a Middle Eastern investor to manage an existingportfolio in Asia. The portfolio of Shariah compliant propertieshas also performed well during the year, enjoying highoccupancy and strong rental growth, and offering a goodreturn to the investor. The strong performance of the Shariahcompliant portfolio has also benefited Alpha as its assetmanagement fee is pegged to the performance of the portfolio.Alpha has divested one of the properties in the portfolio inaccordance with the agreed portfolio repositioning strategy.As part of this strategy, Alpha will help to secure newinvestments that will be accretive to the portfolio return.Backed by seed investment from a corporate sponsor andco-investment capital from the senior management ofAlpha, the company started a small real estate securitiesfund in early 2004 to invest in listed real estate investmenttrusts (REITs) and property stocks globally. This fund wasOperations and market reviewSingaporeKeppel Land LimitedReport to Shareholders 2006113