ARA Asset Management

[Muser]

Why buy
- asset light, low leverage, fee-based income, multiple income streams
- owners & mgmt with good track record (john lim, li ka shing group, straits trading)
- good track record in growing revenes & profits
- consistently high ROE
- significant share holding by CEO and strategic owners (straits trading, li ka shing group)
- sidecar investment (ability to gain access to real estate investments which others may not be able to, due to track record & relationships)
- selling at >40% discount to EPV (my calculation may be wrong)

What can go wrong?
- my bias. I like the company
- increase in debt
- change from asset-light model to asset-heavy model (like higher ownership/stake in assets managed)

Catalyst to sell
- when valuation gap closes (my EPV estimate is ~$3)

This $3 is based on a simple valuation method inspired by this wonderful book http://goo.gl/7ntp7t ....and conservative assumptions..simple workout.