ARA Asset Mgt: Standard Chartered Initiates Coverage with O/p call and $1.84 TP.
House note that Mgt fees provides a strong base of recurring earnings with added non-recurring kickers such as acquisition and performance fees, and ARA has grown AUM at $1.6b p.a. over last 6 yrs and believe grp can sustain level of growth both organically and inorganically (through new REITs and funds) over 2011E to 2015E.
Add that ARA has enjoyed high returns without extending its balance sheet significantly and believe investment landscape has changed and ARA may now have to take 10% strategic stakes in new REITs and funds, from 0-2%, previously as investors demand a better alignment of interests. Valuations are undemanding even after house price in equity fund-raising. TP offers 20% potential upside.
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