ARA Asset Management

History

2021: ESR Cayman bought ARA Asset Management for $5.2 billion

In early August 2021, a new company appeared in the three largest real estate owners in the world - Hong Kong ESR Cayman. She buys the share capital of real estate fund manager ARA Asset Management for $5.2 billion. After the acquisition, assets managed by the combined company will amount to $129 billion, which will bring ESR Cayman to the top 3 of this industry.

The main value of ARA, which is still subject to adjustment, will be paid in the form of new shares of ESR Cayman and loans of sellers in the amount of $4.7 billion, and the remaining amount ($519 million) will be provided in cash. Analysts believe that the amount provided by ESR Cayman is overestimated, and "this will not appeal to investors" of the company. However, "the deal also has its merits given that ARA founder John Lim has very broad ties."

ESR Cayman acquired ARA Asset Management for $5.2 billion

According to ESR Cayman, the Ontario Omers Pension Fund is the largest shareholder in ESR Cayman, owning a 14.9% stake. After the completion of the transaction, the share of Omers will fall to 10.2%. The largest shareholder will be companies affiliated with the American private investment company Warburg Pincus, whose share will be 13.2%. It was Warburg Pincus who led the buyout of the ARA fund. ARA founder John Lim will own a 4.5% stake in the combined company.

The proposed ESR Cayman deal can be considered as a way for ARA to enter the exchange. Earlier in 2021, it was reported that the fund was considering the possibility of double listing Hong Kong in and, Singapore which could raise more than $1 billion. In May 2021, ARA already raised $500 million as part of a financing round conducted by the corporation. Sumitomo Mitsui Banking However, the group's director of corporate development and investor relations at ARA Asset Management said the former "plan IPO is no longer relevant" due to ESR's takeover of Cayman.^[1]

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