Warburg Pincus-backed ARA Asset Management Ltd, one of the largest Asian real estate fund managers, has agreed to establish a joint venture with Venn Partners, a specialist investment manager in European real estate private debt, to capitalize on the real estate credit market in the region.
The deal, which is done through the Singapore-based company’s UK subsidiary, ARA UK Asset Management, is expected to complete by the first quarter of 2020, subject to regulatory approvals, the company said in a statement.
The proposed JV, ARA Venn, will create and manage funds and other ownership vehicles to invest in real estate credit strategies in Europe.
The establishment of the debt investment platform comes at the back of a UK focused JV which ARA had signed with local property asset manager Dunedin Property Asset Management in July. The JV, ARA Dunedin, which was also done through its UK subsidiary, was ARA’s first investment vehicle to invest in and manage real estate assets in the UK.
Through the latest JV, ARA will be hoping it can leverage Venn’s specialty in European real estate private debt, which has built up a track record in areas including residential mortgages, commercial real estate, private rented sector guarantee scheme and credit advisory.
Founded in 2009, with offices in the UK and Spain and an affiliate office in the Netherlands, Venn serves the investment needs of a diversified range of government entities, leading global institutions and private investors.
The foray into Europe is part of ARA’s global expansion strategy, which has also seen it increase its presence in Australia through various investments in the last few years.
Meanwhile, the company has continued to be actively sealing deals and building up its portfolio of assets in its home continent. Last week, ARA announced that it is teaming up with Straits Real Estate and ICBC International Holdings to acquire Sanlin InCity, a retail mall in Shanghai, China.
As at 30 June 2019, ARA Asset Management manages 21 public and private real estate investment trusts and over 70 private real estate funds, including the assets under management by ARA Group and its associates. Its latest gross assets under management is $83 billion.
In the first half of this year, ARA said it had closed over $460 million worth of real estate transactions through its private fund division, ARA Private Funds.