Underlying recurring fees remain resilient despite normalising transaction income. While 9M26 FRR increased 15% y/y, growth moderated to an estimated c.6% y/y in 3Q26, reflecting lower event-driven fees and softer private fund management contributions after a strong 1H26 performance. Encouragingly, recurring listed fund management fees accelerated to approximately 22% y/y in 3Q26, supported by portfolio expansion and a larger fee-generating asset base. Commercial management fees also strengthened, increasing approximately 12% y/y in 3Q26. We believe these trends reinforce CLI's improving recurring earnings profile, although the normalisation of transaction-related fees could temper near-term headline growth.

Value unlocking remains the key catalyst, with investors awaiting more tangible execution. CLI has made incremental progress in monetising its balance-sheet investments, with non-fund investment exposure declining by SGD0.4bn to SGD3.5bn since end-FY25, this was mainly coming from the divestment of CapitaMall LuOne and Arlington Park. Nevertheless, it is a positive step towards the group’s broader ambition of a SGD7–9bn value-unlocking goa, which encompasses legacy funds, balance-sheet investments and non-strategic holdings. Further catalysts will hinge on successful execution of these initiatives which could improve capital efficiency, accelerate the transition towards recurring fee-based earnings and create capacity for additional shareholder returns. Maintain BUY, TP SGD 3.40.