ARA ASSET has very high ROE; Eratat Lifestyle valued at 28 c: "Eric Chow: ARA Asset Managment is listed in Singapore but is a Pan-Asia property specialist. Half the assets are in private funds, with multiyear lockups, and listed REITS.
The largest investor in the unlisted funds is the California Publc Employees' Retirement System, which wants long-term assets, so Asian property is a natural part of the portfolio.
ARA has $23.5 billion under management, up from $9.5 billion at the IPO in 2007.
We like the visibility. They can easily calculate the fee revenue from REITS, and the private funds with a multiyear lockup are very stable.
It is not a capital-intensive business model. The ROE has stayed very high -- over 30% -- and globally their earnings have been growing very nicely.
In 1H, recurring revenue was up 18% and recurring net profit was up 17%. It's now trading at 15 times forward earnings, with a 3.3% dividend yield.
-- As quoted in the Oct 28 edition of The Edge Singapore "
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