ARA partners SMBC after raising US$500m equity funds

ARA Asset Management has raised US$500 million in a round of equity financing, with Sumitomo Mitsui Banking Corporation (SMBC) as the lead investor.

 SMBC is now its new strategic shareholder, the asset fund manager announced on Monday.

According to ARA, with the new support from SMBC, the company aims to strengthen its core asset management business and boost its expansion plans into new sectors such as logistics, data centres, infrastructure and private credit, and in key markets globally.

"ARA Group stands to benefit from long-term market trends in the APAC (Asia-Pacific) region, such as the surge in demand for new economy real assets. We are very excited about the prospect of working with our new shareholders and hope to expand swiftly on our new partnership with SMBC," said ARA chairman Justin Chiu.

The company expects to leverage the growing real estate investment trust (Reit) and alternative asset markets in the Asia-Pacific to support its expansion.

ARA predicts that listed Reits are poised to "proliferate rapidly" in new markets such as India, China and South Korea, and believes that it is "exceedingly well positioned" to capture this emerging opportunity.

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It also noted Preqin's 2020 report on global alternative assets, which predicted that Asia's asset under management will grow at a compound annual growth rate of 25.2 per cent over the next five years, to back ARA's continued push into logistics, data centres, infrastructure and real estate credit.

"The growth in alternative assets in Asia-Pacific has also hit an inflection point, far outpacing the growth in the US and Europe," ARA added.

Said SMBC: "We look forward to working with ARA in support of its asset-light business model and expansion plans, which align very well with SMBC Group's own growth strategies in Asia."

SMBC is a Japanese multinational banking and financial services institution with US$2.25 trillion in assets as at Dec 31, 2020, and a presence in 40 countries.