Its rights issue raised over $150m, for starters.
ARA Asset Management (ARA) is well-positioned to capture opportunities in 2016, according to a report by RHB.
The lack of newsflow and activity following the company’s recent rights issue have led to a weak share price performance for ARA. RHB notes that this is unwarranted as 2016 is likely to be another banner year for the company.
Firstly, the company’s recent cash call ended with $152.1m on ARA’s lap. With this war chest, the company is more than able to finance growth opportunities. Currently, the group is already on the prowl in key markets of China and Australia, and is particularly interested in breaking new ground in Korea and Japan.
ARA has also invested almost $200m as seed capital in its various funds, with an unrealized gain of US$21.7m, suggesting a return in the low to mid teens.
Moreover, the company’s earnings in 2016 will see a boost from the exit of Asia Dragon Fund 1 (ADF), which is in the final stages of winding down. ARA’s FY16 income will further be bolstered by the launch of ADF3. RHB notes that ARA expects to raise close to US1b for ADF3 over 2016 to 2017.
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