ARA goes global, more than doubles AUM to S$80b

Singapore

ARA Asset Management, co-founded by group chief executive John Lim, has gone from strength to strength in its quest to globalise.

As at end-2018, its assets under management (AUM) at S$80.1 billion had more than doubled from S$35.6 billion at the point of privatisation in April 2017. The growth was fuelled by mergers and acquisitions and by organic expansion.

Mr Lim said: "Our objective was to go global... We took 15 years to build to S$36 billion in AUM, and two years to more than double it."

His larger ambition is to cross the S$100 billion mark, at which point the group may reconsider a public listing.

His net worth was estimated by Forbes at around US$780 million at the end of last year, making him the 38th wealthiest Singaporean in Forbes' top 50 list.

Twenty per cent of ARA is owned by his family under JL Family Office, set up in 2011 as a holding company investing in operating businesses.

His son Andy Lim is executive director of the family office, and is exploring investments in healthcare assets to diversify the family's sources of wealth.

He recounted in Tuesday's edition of At the Helm in this newspaper's Wealth section (page 12): "Since ARA privatised, we've grown at a good pace. We're starting to think about what we can do beyond ARA... what we should do next to complement this growth."

The Wealth section of The Business Times sports a new look, and carries the theme of next-generation wealth challenges (see Page 11).

ARA has set up a number of country desks to exploit the opportunities in places such as Japan, the US and Europe. Its milestones this year include the listing of the ARA US Hospitality Trust and the acquisition of Seoul Square in Seoul by ARA Korea.

It is also gearing up to explore investments in infrastructure in Asia, in essential services with significant barriers of entry and strong, reliable cash flows. It has assembled a team, understood to be working on a number of initiatives, including raising US$1 billion for a pan-Asian fund.

ARA also has a private funds arm; investors include US pension funds and Asian institutions. The ARA Private Funds has been active; its acquisitions this year include 51 Bras Basah Road (Manulife Singapore) and 133 Mary Street in Brisbane.

Mr Lim said the biggest challenges in ARA's globalisation drive has been resources and the integration of cultures and people. The group employs more than 1,200 people globally.

"I can understand why certain organisations fail when they start to globalise. The good thing about ARA is we're doing the same thing. We diversified globally, but our business model is the same.

"Now it's (a matter of) devoting time and resources. It will take us a while. We make sure compliance - the risk management we're very proud of - is intact. When you stretch the group, sometimes compliance lags and risk management gets distorted. We want to make sure corporate governance is intact."

He believes a return to a "normalised" interest rate will be good for all. "We've had 10 years of very low rates; that creates a lot of inflation and bubbles. A lot of assets are inflated because of liquidity, not fundamentals. How can an office in Hong Kong trade at 1 to 2 per cent (yield), Singapore at 3 per cent? We should be trading at 5 per cent. Borrowing cost is so low; it's not normal."

The prevailing market expectation, however, is for central banks to cut rates due to concerns over slowing economic growth.

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