ARA Asset Management, the Singapore-based fund management business behind some of Asia’s best established REITs, has raised more capital for its second private opportunity real estate investment fund.
During the first quarter the firm raised $100 million ahead of a second closing for its ARA Asia Dragon Fund II, bringing the total amount of equity raised for the vehicle to $400 million. ARA’s ultimate capital raising target is $1 billion, similar to the $1.13 billion raised for its debut effort, ARA Asia Dragon Fund in 2008. A final closing is expected before the end of the year.
The first closing was completed late last year. At that stage $300 million had been raised including $200 million from the Teacher Retirement System of Texas which had included ARA Asset Management on a list of ‘premier’ managers with which to partner.
Investors to have backed ARA for its first Dragon fund include California Public Employees’ Retirement System, California State Teachers’ Retirement System, the New Jersey Division of Investment, New York Fire Department Pension Fund and the New York City Police Pension Fund, according to data from PERE Connect.
The fund was invested in properties across the office, retail and residential sectors of mainland China, Hong Kong, Singapore and Malaysia and was on track to deliver a target return of 20 percent IRR, before fees, and a 1.92x equity multiple, according to PERE sources at the time of the fund’s first closing.
In its latest annual report, published in February, the firm said it had completed the fund’s investment period and, for that vehicle, it had shifted its focus to asset management and divestment.
The report also revealed that ARA had generated a net profit of S$68.2 million (€40.7 million; $54.39 million), an increase of 7 percent on the year before. The firm, which makes most of its money from management fees generated via its long-established REIT series, posted a revenue of S$122.76 million, up 9 percent on the previous year. Its total assets under management were up too, by 19 percent to S$20.2 billion.
Probitas Partners and Gilford Securities are aiding ARA in its efforts to raise capital.
ARA would not comment on its capital raising.