ARA Asset Management, which launched its infrastructure arm earlier this year, is set to hit the road to raise a $1-billion infrastructure fund, its first private vehicle in the space, a top executive with the firm said.
“Preliminary market sounding was well received and consultants are in place to prepare the launch, which should happen in a few months’ time. Typically, fundraising takes between 12 and 24 months from launch to final close, but we hope to land at the lower end of that range, given the huge demand for infrastructure investments,” Ng Beng Tiong, CEO, ARA Private Funds & Assistant Group CEO, ARA Group, said in an interaction.
The Singapore-headquartered real estate investment manager had forayed into infrastructure investing recently in line with its aggressive global expansion strategy. Earlier this year, it had brought on board former diplomat and investment veteran Grant Dooley to oversee this new business line.
Its initial products in the infrastructure space will be in the core to value-add space, and limited to Asia and Europe, Ng added.
ARA, which had brought on board private equity major Warburg Pincus and China’s AVIC Trust, as its shareholders, when it went private last year, plans to leverage both partners for its China play, which currently accounts for a fifth of its S$78 billion assets under management (AUM).
“We will work with AVIC Trust to raise money onshore and current market conditions are conducive to creating a debt platform. Warburg is one of the most active private equity players in Asia, especially in real estate. They avail to us their resources and introduce us to their portfolio companies. This is exciting because we can cooperate on deals and create products not only with Warburg but also their portfolio companies, both in and outside China,” Ng said.
On the cards is also a potential partnership with Warburg in Southeast Asia.
On the firm’s China plan, Ng said: “For a start, we are creating RMB equity funds to invest in domestic real estate. At the same time, due to deleveraging policies, property cooling measures and tightening of real estate credit, we see mezzanine financing opportunities. We are therefore also looking at creating RMB or offshore currency debt funds to invest in China real estate,” Ng said.
He further added that ARA Asset Management was looking at “investing in specialised asset classes in China, such as logistics and retail”, to cater to the “growing trend of sophisticated investors wanting specific exposure to certain asset classes”.
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