Warburg Pincus raises stake in Asia real assets fund manager
Warburg Pincus has agreed to increase its ownership of ARA Asset Management – an Asia Pacific real assets fund manager that was privatized in 2016 – as China’s AVIC Trust exited the business.
Through a series of transactions expected to conclude before May of next year, the private equity firm will control a 48.7% stake, up from 30.7% at the time of privatization, with AVIC going from 20.5% to zero. Straits Trading, Cheung Kong Property and JL Investment Group – an entity wholly owned by ARA co-founder John Lim – have also increased their holdings. They will own a combined 51.3%. The size of the transaction was not disclosed.
The existing investors and AVIC delisted ARA from the Singapore Exchange in 2016 at a valuation of about S$1.8 billion ($1.3 billion). Since then, the company has increased in scale. Gross assets under management were S$88 billion as of December 2019, up from approximately S$35 billion in 2016.
Established in 2002, the company built up a portfolio of real estate investment trusts (REITs) in Singapore, Hong Kong, Malaysia and Korea, investing in the office, retail, logistics, industrial, hospitality and residential segments. In recent years, it has broadened in geographic scope, accumulating stakes in real estate platforms in Japan, Australia, Europe, and the US.
At the same time, ARA has expanded its REITs and private real estate funds offering to include more products across infrastructure, logistics, real estate credit, and real estate financial technology. It recently acquired Logos, one of Asia’s largest logistics real estate platforms.
“The substantial increase in our shareholding in ARA demonstrates our strong confidence in its scalable business model and John’s visionary leadership. We look forward to leveraging our strong capital base to help the business become the largest real estate fund management platform in Asia Pacific and one of the largest globally,” said Jeffrey Perlman, head of Southeast Asia at Warburg Pincus, in a statement.
The private equity firm has previous experience in this area, having grown ESR from a Chinese warehouse operator into one of the largest real estate logistics platforms in Asia. The business went public in Hong Kong last October. Warburg Pincus has also backed hotel and infrastructure platforms in Vietnam.
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