ARA Asset Management

[freedom]

I think you are confusing shareholders' return with managers' return. When times are good nobody cares about the latter as long as committed capital is low.

You highlighted ARA should watch their SG&A which I agree. I am just reiterating the outstanding basic concern based on the latest results, or that's not a concern anymore?

I am fully aware of the difference between shareholders' return and managers' return. The reality is that the managers does not care how much the company earns, they just demand how much they should be paid. Globally, investment banking becomes a tough business as the capital and regulatory requirement is high, but the return is low, so investment banks want to cut the pay to investment bankers. What happens? Quite some investment bankers left, to either hedge funds/private equity firms or to join other firms which pay more.
Just look at how many investment bankers jump ship since Barclays decides to cut its investment banking business.

I did highlight that's a problem, but it could be very difficult to solve. Good managers choose to leave when getting paid less as you knew well that clients often follow the managers rather than the companies.

[gutman]

I must first admit that I am vested with ARA. I have been a shareholder, for a while, a long while actually.

I bought the stock after its IPO days, and really started accumulating more during the GFC when it dropped to a price of near $0.40. I continue to buy as the company continue to show growth in both top lines and bottom lines, year after year.

Needless to say, I am glad to have hitched this ride, as I was well rewarded through ARA's capital appreciation, bonus issues and dividend payouts over these few years

Today, ARA has become one of my major holdings. I would continue to stay invested with ARA, as long as John Lim continues to steer the company. The reason is I continue to believe in this man, who took his own money to start this company 11 years ago.

One thing I learned in these years of investing, is to find the right businessman to follow. After all, it is the management that comes out with the financial numbers, which we as investors spent so much time scrutinizing.

Today, despite being a successful man and one of the 40 richest man in Singapore, John remains a humble man, who believes in the old traditional values of returning to society. Son of a former vice principal of Taonan school, he set up a philanthropy fund named after his late father.

He remains approachable. Just see the way he interacts with people during the AGMs and even after that. He has openly mentioned whether you own one lot or many lots, you can call on the company anytime, for information and the company will entertain you.

I should know, because I have approached him for help on some contacts, which he willingly gave.

There were many talks about Cheung Kong selling its stake in this company. The fact is, Cheung Kong is lending support by way of its name and its small shareholding in this company. Even before Cheung Kong sold down their stake, the stake they held in ARA was really nothing compared to the whole Cheung Kong empire. I believe it is Cheung Kong's believe in the vision and integrity of John Lim, so much so that they are willing to help him by doing some business together.

I believe with John Lim as the CEO, ARA has all the ingredients of becoming an even more successful company than who it is today.

Straits Trading adds wings to the company. I believe it is a matter of time before the company takes off.

I continue to like this man and the company. They say, never to fall in love with a stock. I admit, I may have made that mistake. However, I have not found a reason to sell, at least not yet.

[greengiraffe]

Gd that you found someone so trust worthy...

I must first admit that I am vested with ARA. I have been a shareholder, for a while, a long while actually.

I bought the stock after its IPO days, and really started accumulating more during the GFC when it dropped to a price of near $0.40. I continue to buy as the company continue to show growth in both top lines and bottom lines, year after year.

Needless to say, I am glad to have hitched this ride, as I was well rewarded through ARA's capital appreciation, bonus issues and dividend payouts over these few years

Today, ARA has become one of my major holdings. I would continue to stay invested with ARA, as long as John Lim continues to steer the company. The reason is I continue to believe in this man, who took his own money to start this company 11 years ago.

One thing I learned in these years of investing, is to find the right businessman to follow. After all, it is the management that comes out with the financial numbers, which we as investors spent so much time scrutinizing.

Today, despite being a successful man and one of the 40 richest man in Singapore, John remains a humble man, who believes in the old traditional values of returning to society. Son of a former vice principal of Taonan school, he set up a philanthropy fund named after his late father.

He remains approachable. Just see the way he interacts with people during the AGMs and even after that. He has openly mentioned whether you own one lot or many lots, you can call on the company anytime, for information and the company will entertain you.

I should know, because I have approached him for help on some contacts, which he willingly gave.

There were many talks about Cheung Kong selling its stake in this company. The fact is, Cheung Kong is lending support by way of its name and its small shareholding in this company. Even before Cheung Kong sold down their stake, the stake they held in ARA was really nothing compared to the whole Cheung Kong empire. I believe it is Cheung Kong's believe in the vision and integrity of John Lim, so much so that they are willing to help him by doing some business together.

I believe with John Lim as the CEO, ARA has all the ingredients of becoming an even more successful company than who it is today.

Straits Trading adds wings to the company. I believe it is a matter of time before the company takes off.

I continue to like this man and the company. They say, never to fall in love with a stock. I admit, I may have made that mistake. However, I have not found a reason to sell, at least not yet.

[greengiraffe]

Li Ka-shing eyes property market
THE AUSTRALIAN AUGUST 07, 2014 12:00AM

Greg Brown

Property Reporter
Sydney
THE richest man in Asia, Hong Kong-based business magnate Li Ka-shing, is intent on gaining a foothold in the Australian property market.

Mr Li’s Singapore-listed company ARA Asset Management is running the ruler over local sites as it looks to deploy capital into Southeast Asia and Australia, through its Summit Development Fund.

ARA Private Funds chief executive Ng Beng Tiong told The Australian that the group was looking largely at Sydney and Melbourne.

He indicated that ARA could develop a wide range of properties, saying that the group was looking at sites for office, retail, residential and industrial projects.

“We are ready and in fact, have been looking at deals,” Mr Ng said.

He would not be drawn on how many sites the group aimed to buy over the next few years.

“(There is) no predetermined number. (It) depends on individual merits,” he said.

Mr Ng declined to say whether ARA was bidding for Leighton Properties, which is being sold by Leighton Holdings. But he said the group would be “happy” to work with local developers.

[pianist]

wow such a fresh news from oz, it is dated 7 aug 2014..thanks for the freshness

[whatamidoing]

Since you come from investment banking or know about investment banking, among of the fees earned, how much percentage is paid to the investment bankers? How much is left to the bank itself? If I am not wrong, more than 50% is paid as SG&A.

From that angle, I feel investment managers from ARA are not that overpaid compared to investment bankers.

the banks usually take less than 1% of the total deal value, depending on the size and the complexity of the deal and how many other banks are roped in. so for a mega deal like F&N-TCC, let's assume the total EV was 10bn, fees would be been around 100mn or less, split among MS, DBS and UOB (the three advisors on the deal).

however it is naive to assume 50% gets paid all to the bankers. you might not know this but the technology platforms, admin, compliance all take up $. not to mention rent and legal expenses. for example, MS spends >5bn annually on tech.

[specuvestor]

I think you are confusing shareholders' return with managers' return. When times are good nobody cares about the latter as long as committed capital is low.

You highlighted ARA should watch their SG&A which I agree. I am just reiterating the outstanding basic concern based on the latest results, or that's not a concern anymore?

I am fully aware of the difference between shareholders' return and managers' return. The reality is that the managers does not care how much the company earns, they just demand how much they should be paid. Globally, investment banking becomes a tough business as the capital and regulatory requirement is high, but the return is low, so investment banks want to cut the pay to investment bankers. What happens? Quite some investment bankers left, to either hedge funds/private equity firms or to join other firms which pay more.
Just look at how many investment bankers jump ship since Barclays decides to cut its investment banking business.

I did highlight that's a problem, but it could be very difficult to solve. Good managers choose to leave when getting paid less as you knew well that clients often follow the managers rather than the companies.

For sure the managers don't care how much the company earns per se, just as ANY employee. The verdict is still out as to whether those who left actually did better on their own to justify that they are "good". I don't think many who threatened to leave London actually did so, because of cut in fees or increase in tax. I also don't think nowadays clients follow the managers per se, best case is the clients give them a 3-years window to perform, which is becoming a norm in the industry. Clients starting to realise star traders or IB from Goldman Sachs may not be as spectacular once they lose the connection and infrastructure of Goldman.

We gripe about high pay of politicians and CEOs. We also need to think whether the value that they add justify their remuneration vs the shareholders' return. For sure shareholders care how much the company earns.

John Lim converted his equity into "fund". His interest as a manager remains. But his equity interest has changed. He certainly knows the difference between shareholders' return and manager's return.

[EnSabahNur]

http://www.scmp.com/business/companies/a...-land-bias

Li Ka-shing to sell Shanghai property assets worth HK$6 billion
Cheung Kong firms to sell Shanghai holdings worth up to HK$6b, bringing mainland and HK divestments in the past year to about HK$25b

Li Ka-shing is set to sell Shanghai property assets worth almost HK$6 billion, bringing the value of disposals made by him on the mainland and in Hong Kong since August last year to about HK$25 billion.

The deals, through Li's (pictured) Hutchison Whampoa and real estate investment trusts he partly owns, are part of a concerted strategy of cutting exposure to real estate and raising funds to deploy elsewhere.

"This is a pretty consistent trend across the group - to me, it's not a coincidence," Danie Schutte, CLSA's deputy head of Asia research, told the South China Morning Post.

"They [Li-led companies] have not purchased any land in Hong Kong or [mainland] China for three years.

"Victor Li talked about it and said they are cashed up and ready to buy, [but] they clearly think prices will come down."

Victor Li Tzar-kuoi is the deputy chairman of Cheung Kong (Holdings) and Li's son.

Schutte said Cheung Kong typically maintained a five to six-year land bank in Hong Kong, but today its land reserves would only last about three to four years.


ARA Asset Management is selling International Capital Plaza in Shanghai. Photo: SCMP Pictures

The company's land bank in the mainland had dropped from 200 million sq ft to 160 million sq ft, he added.

Cheung Kong is the main property arm of the Li group of companies.

Hutchison Harbour Ring, which owns office towers in Shanghai, said in a stock exchange announcement that its parent Hutchison Whampoa was seeking to sell its 71.36 per cent stake in the firm to Shenzhen-listed Oceanwide Holdings for between HK$3.5 billion and HK$3.8 billion.

Meanwhile, ARA Asset Management, a manager of real estate investment trusts part owned by Li, is selling its International Capital Plaza in Shanghai for 1.54 billion yuan (HK$1.94 billion), according to a report in the Beijing Times.

Hutchison Harbour Ring shares jumped 35 per cent yesterday despite the fact that, at the midpoint, the selling price comprised a 12 per cent discount to the firm's pre-announcement equity capitalisation of HK$5.8 billion.

The discrepancy was explained in the announcement, alongside the offer of a special dividend of 20 HK cents per share.

The offer values Hutchison Harbour Ring at 55 HK cents to 59.8 HK cents per share, implying a valuation of 79.8 HK cents at the top.

The stock closed yesterday at 88 HK cents.

Hong Kong developers are well known to time property markets and the disposals suggest to analysts that the Hong Kong and mainland property markets are at a peak, particularly with regards to land prices.

"For the moment, [Cheung Kong has] a land bank and projects to sell. While property prices are still rising, the outlook in three or four years, when various projects are completed, prices may no longer be rising," said Alan Jin, who covers Cheung Kong for Mizuho Securities Asia.

Among recent transactions, Cheung Kong last year sold Kingswood Ginza, a retail shopping mall in Hong Kong, to Fortune Real Estate Investment Trust for a profit of HK$2.7 billion.

In January 2012, the company sold a 70 per cent stake in Sheraton Shenyang Lido Hotel on the mainland, reaping a profit of HK$1 billion.

Through Cheung Kong, the property-based conglomerate he controls, Li owns a 7.84 per cent stake in ARA Asset Management.

The largest shareholder is Singapore-based Straits Trad- ing Co, which owns 20.1 per cent of the company.

[pianist]

doesn't sounds bright for property related investors

[Boon]

John Lim Sees Real Returns With Li Ka-shing

This story appears in the August 18, 2014 issue of Forbes Asia

http://www.forbes.com/sites/forbesasia/2...-ka-shing/

(vested)