ARA Asset Management

[Salty]

Thank you Bro Nick for this valuable information.

[donmihaihai]

A favorite company can do no wrong?
Fund management company expenses as a percentage of aum/revenues goes down as aum/revenues increase. Depend on how calculation being down, ARA expenses,especially admin increase faster or in line with AUM/ recenues. Why is it so?

[Contrarian]

Bro Contrarian,

Where do you get the 2016 double AUM plans?
Aggressive!

http://www.nextinsight.net/index.php/com...-successes

There was a video in this posting, I am not sure if it is still there.

One thing the managers in his REIT are very capital savvy. Suntec REIT issued ~1.5% interest convertible bond recently convertible at > 20% premium, due in a few years time

The REITs dont have big brother backing, so they guard their risks very very well!!!

[gutman]

Bro Contrarian,

Where do you get the 2016 double AUM plans?
Aggressive!

http://www.nextinsight.net/index.php/com...-successes

There was a video in this posting, I am not sure if it is still there.

One thing the managers in his REIT are very capital savvy. Suntec REIT issued ~1.5% interest convertible bond recently convertible at > 20% premium, due in a few years time

The REITs dont have big brother backing, so they guard their risks very very well!!!

http://www.youtube.com/watch?feature=pla..._x2PNQv26U

[Musicwhiz]

The Straits Times
www.straitstimes.com
Published on Mar 13, 2013
ARA plans to double assets over five years
Reit manager wants to focus on expanding private property funds

ARA Asset Management, a manager of real estate trusts partly owned by billionaire Li Ka Shing, wants to double assets under management over five years as its private funds buy more properties.

ARA, which manages about $22.1 billion of assets through real estate investment trusts (Reits) and funds, plans to expand through acquisitions and by enhancing existing properties, chief executive John Lim said in an interview on Monday.

Its real estate funds, which make up less than a third of assets managed by the Singapore-based firm, are expected to increase to half in five years, he said.

With six Reits listed in Singapore, Hong Kong and Malaysia, ARA now wants to focus on expanding its private property funds after attracting the largest US pension investors.

The stock yesterday ended 2.5 per cent higher at $1.85.

"Capital markets will continue to grow but I think there's more potential for us on the private markets side," Mr Lim said.

"If we continue to prove to the market that we can increase the assets under management, then the share price will continue to grow."

Its funds, which have invested in properties from an empty mall in China to a Singapore convention centre, will focus on the retail and office sectors, Mr Ng Beng Tiong, chief executive of ARA's funds unit, said in the same interview.

California Public Employees' Retirement System, or Calpers, the largest US pension fund, and Teacher Retirement System of Texas have invested in the funds, Mr Lim said.

Japanese and Korean funds are potential sources of capital, he said.

"You're looking at a market full of liquidity," Mr Lim said. "Money is ready, it's about how well you're going to manage it."

Last October, ARA cancelled an initial public offering (IPO) of Dynasty Reit, backed by commercial real estate in China, amid sluggish demand for new equity.

The IPO, which had sought to raise as much as 5.4 billion yuan (S$1 billion), is still being considered, Mr Lim said.

The assets for Dynasty Reit are held by ARA's property funds, he noted, adding that the biggest concern is China's taxes.

Mr Lim owns 33 per cent of ARA while Mr Li's Cheung Kong Holdings holds 13.9 per cent, according to data compiled by Bloomberg.

The Hong Kong developer had offered ARA's Reits the first right to buy some of its properties.

ARA is also focusing on expanding its existing trusts including Cache Logistics Trust and Fortune Reit.

These plans may include buying other Reits, Mr Mark Chu, its director of business development, said in the interview.

BLOOMBERG

[gutman]

The Straits Times
www.straitstimes.com
Published on Mar 13, 2013
ARA plans to double assets over five years
Reit manager wants to focus on expanding private property funds

ARA Asset Management, a manager of real estate trusts partly owned by billionaire Li Ka Shing, wants to double assets under management over five years as its private funds buy more properties.

ARA, which manages about $22.1 billion of assets through real estate investment trusts (Reits) and funds, plans to expand through acquisitions and by enhancing existing properties, chief executive John Lim said in an interview on Monday.

Its real estate funds, which make up less than a third of assets managed by the Singapore-based firm, are expected to increase to half in five years, he said.

With six Reits listed in Singapore, Hong Kong and Malaysia, ARA now wants to focus on expanding its private property funds after attracting the largest US pension investors.

The stock yesterday ended 2.5 per cent higher at $1.85.

"Capital markets will continue to grow but I think there's more potential for us on the private markets side," Mr Lim said.

"If we continue to prove to the market that we can increase the assets under management, then the share price will continue to grow."

Its funds, which have invested in properties from an empty mall in China to a Singapore convention centre, will focus on the retail and office sectors, Mr Ng Beng Tiong, chief executive of ARA's funds unit, said in the same interview.

California Public Employees' Retirement System, or Calpers, the largest US pension fund, and Teacher Retirement System of Texas have invested in the funds, Mr Lim said.

Japanese and Korean funds are potential sources of capital, he said.

"You're looking at a market full of liquidity," Mr Lim said. "Money is ready, it's about how well you're going to manage it."

Last October, ARA cancelled an initial public offering (IPO) of Dynasty Reit, backed by commercial real estate in China, amid sluggish demand for new equity.

The IPO, which had sought to raise as much as 5.4 billion yuan (S$1 billion), is still being considered, Mr Lim said.

The assets for Dynasty Reit are held by ARA's property funds, he noted, adding that the biggest concern is China's taxes.

Mr Lim owns 33 per cent of ARA while Mr Li's Cheung Kong Holdings holds 13.9 per cent, according to data compiled by Bloomberg.

The Hong Kong developer had offered ARA's Reits the first right to buy some of its properties.

ARA is also focusing on expanding its existing trusts including Cache Logistics Trust and Fortune Reit.

These plans may include buying other Reits, Mr Mark Chu, its director of business development, said in the interview.

BLOOMBERG

The Straits Time and Business Times both carry summarised reports on ARA today. The full article, which has a little more juice, can be found at Bloomberg
http://www.bloomberg.com/news/2013-03-11...-asia.html

[Contrarian]

1. Private funds performance fee much higher than REITS 0.5 to 1%. Hopefully Dynasty REIT can relaunch this year, the payment is $60 - $80M

2. Strange, ex bonus should have corrected 10%. Instead, it only dropped 3.5%. So the bonus issue is a REAL bonus for now, 6.5% gain vs pre-bonus on Friday

The Straits Times
www.straitstimes.com
Published on Mar 13, 2013
ARA plans to double assets over five years
Reit manager wants to focus on expanding private property funds

[felixleong]

ARA seems to always reward shareholders with bonus issues, nice~

[Nick]

1. Private funds performance fee much higher than REITS 0.5 to 1%. Hopefully Dynasty REIT can relaunch this year, the payment is $60 - $80M

2. Strange, ex bonus should have corrected 10%. Instead, it only dropped 3.5%. So the bonus issue is a REAL bonus for now, 6.5% gain vs pre-bonus on Friday

The Straits Times
www.straitstimes.com
Published on Mar 13, 2013
ARA plans to double assets over five years
Reit manager wants to focus on expanding private property funds

Personally I don't want them to relaunch Dynasty REIT at the current structure - ARA must use the cash received from performance fees to buy $100 million worth units in the REIT, the units in the REIT cannot receive dividends for 5 years and ARA cannot receive management fees in cash for 2 years. Perhaps when the assets are more stabilized in 2014 - they could relaunch it and cut the income support aspect of the REIT so that ARA won't be badly tied up. With that being said, I think John Lim know whats best so he will probably relaunch it at the best time. The capex is inevitable if they truly wish to be a REIT manager cum sponsor.

(Vested)

[Boon]

1. Private funds performance fee much higher than REITS 0.5 to 1%. Hopefully Dynasty REIT can relaunch this year, the payment is $60 - $80M

2. Strange, ex bonus should have corrected 10%. Instead, it only dropped 3.5%. So the bonus issue is a REAL bonus for now, 6.5% gain vs pre-bonus on Friday

The Straits Times
www.straitstimes.com
Published on Mar 13, 2013
ARA plans to double assets over five years
Reit manager wants to focus on expanding private property funds

Personally I don't want them to relaunch Dynasty REIT at the current structure - ARA must use the cash received from performance fees to buy $100 million worth units in the REIT, the units in the REIT cannot receive dividends for 5 years and ARA cannot receive management fees in cash for 2 years. Perhaps when the assets are more stabilized in 2014 - they could relaunch it and cut the income support aspect of the REIT so that ARA won't be badly tied up. With that being said, I think John Lim know whats best so he will probably relaunch it at the best time. The capex is inevitable if they truly wish to be a REIT manager cum sponsor.

(Vested)

Hi Nick,

In addition to the annual management fee, fund manager of most private real estate funds are entitled to a performance-based fee referred to as “carried interest.” This fee is usually a fixed percentage of the performance and typically accrues only after the fund’s net returns clear a predefined hurdle rate of return over its fund life. The normal standard for measuring performance is the internal rate of return (“IRR”).

As an example, assume that a private fund has a carried interest charge of 30% and a pre-established 10% hurdle rate. A total return of 25% (net of management fee) by the fund at the end (after fully exited or successful divestment of all assets) would entitle the manager to collect 30% (performance incentive fee) on 15% of the profits or, in other words, those returns that were in excess of its 10% hurdle rate. This would result in an equivalent annual net return to investors of 20.5 % and a performance fee of 4.5 % to the fund manager.

I don’t think ARA would be able to increase the proceeds from Dynasty Reits IPO by postpone it to a later date. By delaying it, and without being able to value add, the return of the fund measured by IRR would be reduced which means performance fees would also be reduced accordingly – though base management fee would still be paid.

ADF (I) private fund is an “opportunistic” fund as opposed to “core” and “value-add” funds. With the ways the fund and its exit strategy (via IPO) are being structured, it would not be a surprise to me at all, if the performance fee entitled by ARA is as high as SGD 100 million - and were “structured” to be paid with SGD 100 million worth of Dynasty shares. ARA would not have to come up with any money up front (including the income support) - it would just be a matter of “paper shuffling”

Re-launching of the IPO while the market is hot would be a better option IMO.

(Vested)