ARA Asset Management

[freedom]

If private equity or fund management is the focus, there are plenty of US fund managers listed. They have much larger asset under management and much longer track record. And cheaper in terms of PE. e.g. BX, KKR, etc.

To me, the REIT management part is the most valuable part of the company. It is worth 20x PE. It takes very little capital to make a good and stable profit year after year, possible for the next 20 - 50 years.

Paying PE 20x for 'assets' that walk in and out of the company's door every day?

what do you mean by walking in and out? The REIT management is sticky. If ARA did not do badly, no one can unseat it as the REIT manager.

[opmi]

If private equity or fund management is the focus, there are plenty of US fund managers listed. They have much larger asset under management and much longer track record. And cheaper in terms of PE. e.g. BX, KKR, etc.

To me, the REIT management part is the most valuable part of the company. It is worth 20x PE. It takes very little capital to make a good and stable profit year after year, possible for the next 20 - 50 years.

Paying PE 20x for 'assets' that walk in and out of the company's door every day?

what do you mean by walking in and out? The REIT management is sticky. If ARA did not do badly, no one can unseat it as the REIT manager.

It is from an old ad cliché “the most valuable assets walk in and out of the door every day.” - referring to advertising agencies creative talents.

I think it is relevant to ARA too. It is no wonder they paid 50% profit to a handful of employees and 50% to shareholders (heard/read from someone).

[freedom]

what do you mean by walking in and out? The REIT management is sticky. If ARA did not do badly, no one can unseat it as the REIT manager.

It is from an old ad cliché “the most valuable assets walk in and out of the door every day.” - referring to advertising agencies creative talents.

I think it is relevant to ARA too. It is no wonder they paid 50% profit to a handful of employees and 50% to shareholders (heard/read from someone).

Thanks for the explanation.

If we are talking about the REIT management model, it does not exactly wok like that.

It's difficult to copy ARA's Suntec REIT. Nowadays, you can't list a REIT without owning much of it. That's the beauty of ARA. It requires so little capital, its return is phenomenal. Though it can't scale, it is a great business.

For fund management, it takes a lot to retain talents.

[felixleong]

the so called talents are very well paid, I wonder if shareholders should deserve more

[Nick]

Prosperity REIT proposed to acquire 9 Chong Yip Street in Kwun Tong for HK$1,010 million
2013-12-15

http://www.prosperityreit.com/en-US/Pres.../detail/30 [Article]

More AUM and performance fees for ARA.

[Contrarian]

> the so called talents are very well paid, I wonder if shareholders should deserve more

John Lim is doing a lot of good work. He actually does not need the salary... He is working to create an Asian BlackRock that lasts beyond him

[opmi]

Prosperity REIT proposed to acquire 9 Chong Yip Street in Kwun Tong for HK$1,010 million
2013-12-15

http://www.prosperityreit.com/en-US/Pres.../detail/30 [Article]

More AUM and performance fees for ARA.

Kwun tong got grade A property? I don't know what is considered grade A in HK?
Kwun tong has a lot of old industrial buildings. And gov allow them to refurbish and rezone without paying land premium. Can rent out but cannot sell.

I guess this building may be a refurbished one.

ARA funds got nothing to sell meh? Keep buying third party and use up debt capacity.

[opmi]

> the so called talents are very well paid, I wonder if shareholders should deserve more

John Lim is doing a lot of good work. He actually does not need the salary... He is working to create an Asian BlackRock that lasts beyond him

Salary as a manager is different from dividends from being shareholders. If u are working for company, should be paid a fair price.

I thot is Asian Blackstone? Blackrock is public equities fund mgt house, right?

[gutman]

Prosperity REIT proposed to acquire 9 Chong Yip Street in Kwun Tong for HK$1,010 million
2013-12-15

http://www.prosperityreit.com/en-US/Pres.../detail/30 [Article]

More AUM and performance fees for ARA.

That looks like a S$1.63 mil acquisition fee going into the pocket of ARA.

[Contrarian]

> Salary as a manager is different from dividends from being shareholders. If u are working for company, should be paid a fair price.

ARA has increased dividend payout almost every year. Now payout ratio is about 60%... no mean feat...