ARA targets investor-led global infra fund by Q3

ARA Infrastructure, the recently established arm of Singapore-based real estate fund manager ARA Asset Management, has been speaking with investors to launch its maiden fund by the third quarter this year, chief executive Grant Dooley told Infrastructure Investor.

“We have been speaking to our investors, shareholders and the industry on refining the investment strategy,” Dooley said. “It’s going to be investor-led.”

He added that the investment strategy for the new fund will need to meet three conditions – investor appetite, opportunity set and investment capability of the team. He declined to disclose further details about the new vehicle, but he is certain the strategy will include investments in Asian infrastructure.

Speaking of opportunity set, Dooley said he would prefer core infrastructure opportunities in investment-grade countries. Asia, he noted, is presenting more attractive risk-return profiles, while Europe remains the key source of OECD dealflow.

When it comes to investor appetite, he noted that Asian investors prefer global and OECD assets, while non-Asian investors are increasingly relocating their money to Asia, where “the investment opportunities are more sound, compared with a decade ago”.

Dooley joined ARA this month from Hastings, where he led the Australian fund manager’s operations in Asia for nearly six years. In his new role, he is working on establishing a team in Singapore and formulating the firm’s investment strategy with a view to start fundraising in September.

He is looking to add two investment professionals to the three-member team currently in place, which includes himself and Kanishk Bhatia, another Hastings executive who joined ARA in March to oversee the new business’s Asia investments.

The infrastructure team is supported by ARA’s network and resources of finance, research, legal and investor relations professionals, but it is a standalone unit from ARA’s real estate fund management business with independent decision-making power.

ARA, which was taken private by the US’s Warburg Pincus and China’s AVIC Trust in April 2017, has had its sights on infrastructure for a while. Last August, the firm’s group chief executive John Lim told sister publication PERE in an interview that the firm was looking to launch a $1 billion infrastructure fund.

On Friday, Lim told Infrastructure Investor that in addition to the “tremendous opportunities” presented from emerging Asia and Europe, given the infrastructure expertise and support provided by its partners – Hong Kong’s Cheung Kong Infrastructure, Warburg Pincus and AVIC Trust –  ARA’s move into the infrastructure space is “a natural process”.