Warburg Pincus-backed ARA Asset Management has set up its first ever direct fund management platform in Europe, according to a company announcement earlier this month.
The Singapore-based real estate fund manager has joined with London-based Dunedin Property Asset Management to set up ARA Dunedin Ltd, with the goal of managing and investing in real estate assets in the United Kingdom.
The joint venture, which has yet to reveal any investments incorporated as a limited liability partnership with the UK’s Companies House, the government agency responsible for registering new enterprises, on July 1st.
The new venture comes just over a year after the asset manager initially established ARA Europe under former Standard Chartered global head of real estate Mark Ebbinghaus, with the former banker charged with driving the group’s business expansion initiatives on the continent.
With the company expanding its footprint in the region, Ebbinghaus has been named chairman of ARA Dunedin, with Roun Barry, managing director of Dunedin Property Asset Management, given the role of chief executive officer.
“ARA is pleased to work with Dunedin in the first of such partnerships for both parties,” said Ebbinghaus. “With Dunedin’s strong local asset management expertise and deep knowledge of the UK real estate market, the partnership presents tremendous credentials and opportunities to create successful new investment and fund products for our capital partners.”
Finding a Value-Add Friend in London
The joint venture, which is majority-owned by ARA, aims to tap into diversified sources of capital from ARA’s traditional markets as well as investment from the UK and Europe, with a mandate to establish funds and other real estate asset ownership vehicles.
ARA said in its announcement that the JV will employ a multi-sector, multi-strategy investment approach covering the office, industrial and logistics sectors in the UK.
Dunedin’s Barry said that the tie-up with ARA would combine his firm’s local knowledge with the Singapore-based property specialist’s fund management and fundraising expertise.
Like ARA, the asset manager — which was incorporated in 2001 as a spin-off of Edinburgh-baed Dunedin Property — favours a value-add real estate investment strategy. According to ARA’s statement, its new partner has owned, improved and sold over £7 billion of property, targeting mis-priced multi-sector assets that require intensive management.
In recent years the company’s highest profile project has been its joint venture with US fund manager Angelo Gordon to redevelop the Great Charles Street Estate portfolio in Birmingham, England, after purchasing the project in the country’s second largest city from Aviva for £20 million in early 2015.
Joint Ventures Expand Reach for SG Player
The London agreement is the latest in a series of joint ventures for ARA, which earlier this year worked with a mainland investor to set up its first renminbi denominated property fund.
Just over a month ago, the group announced the purchase of a Chengdu retail property from a Tishman Speyer-managed fund, through a joint venture fund it had established with AVIC Trust, one of ARA’s largest shareholders.
That joint venture involved the Singaporean firm working with AVIC Trust to set up ARA Qihang Equity Investment, which raised RMB 400 million ($58 million) to purchase a 50 percent stake in the Atrium mall in the Sichuan provincial capital. That aquisition was done in league with an equal-sized fund managed by CICC Capital, the private equity arm of China’s largest investment bank, which acquired the other 50 percent of the asset.
Traditionally acting as a fund manager making investments on behalf of REITs, private funds or separate accounts under its management, ARA has $80.1 billion in assets under management, and counts Li Ka-shing’s CK Hutchison Holdings, US private equity giant Warburg Pincus, and China’s AVIC Trust among its shareholders.