A London-based unit of Singapore’s ARA Asset Management plans to acquire InfraRed Capital Partners’ European real estate investment management business for an undisclosed amount.

Once completed, the purchase of InfraRed Real Estate, which has $1.4 billion in equity under management, will enable ARA Dunedin to expand its European footprint, the companies said Sunday in a press release.

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The transaction comes after Canadian insurer Sun Life acquired a majority stake in London-based InfraRed in 2020, with the UK private equity firm having since begun restructuring its real assets strategy.

“Following a strategic review, we concluded that our European real estate business would be best served for the future under a new ownership,” said InfraRed CEO Werner von Guionneau. “This transaction will create a win-win situation for all stakeholders by ensuring continuity and stability for the team, leveraging ARA’s competencies and footprint.”

Value-Add Arm Splits Off

With a 25-year investment record across eight funds, value-add specialist InfraRed Real Estate will continue to be led by the same management team, which will invest in a minority stake in ARA Dunedin.

InfraRed CEO Werner von Guionneau

InfraRed CEO Werner von Guionneau

InfraRed Real Estate represents a relatively small slice of InfraRed’s $12 billion in equity under management. PERE reported in April that InfraRed would be restructured to focus solely on infrastructure after an internal reorganisation by parent Sun Life. In May, InfraRed transferred its Asian real estate management business to Sun Life’s BentallGreenOak division.

“InfraRed will focus on its infrastructure proposition to provide long-term predictable income streams for our investors across assets in core and energy infrastructure,” von Guionneau confirmed in Sunday’s announcement.

The acquisition by ARA Dunedin is subject to customary closing conditions and is expected to be completed in October, the parties said.

Growing Together

ARA Asset Management and London-based Dunedin Property Asset Management joined forces in 2019 to create ARA Dunedin with the goal of managing and investing in real estate assets in the UK.

ARA Dunedin was set up just over a year after the establishment of ARA Europe under former Standard Chartered global head of real estate Mark Ebbinghaus, who was later named chairman of ARA Dunedin while remaining CEO of ARA Europe.

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“The addition of InfraRed’s real estate team gives us the opportunity to offer our growing client base another option to invest into European real estate through a leading and well-established European value-add fund manager via ARA Dunedin, as part of the ARA Group,” Ebbinghaus said.

The arrangement with InfraRed Real Estate gives ARA Dunedin a pathway to introduce value-add and core-plus logistics assets to its office-focused portfolio, which includes the three-building mixed-use Nova Estate in London’s West End, the 3 Minster Court commercial building in the City of London, and Bourne Business Park southwest of London.