MANILA, Philippines - Ayala Corp. and its property unit Ayala Land Inc. (ALI) announced yesterday the completion of an exchange of ownership interests in Arch Capital with The Rohatyn Group (TRG), an emerging markets-focused private firm with around $3 billion in assets under management.
The ownership swap results in TRG acquiring the combined 50-percent interest of the Ayala firms in Arch Capital and Arch Capital Asian Partners G.P.
Ayala Corp., a cornerstone investor in TRG since its founding in 2003, will, in turn, further increase its investment as a result of the share exchange to become one of TRG’s largest outside shareholders.
Arch Capital and Arch Capital Asian Partners G.P are the investment manager and the general partner, respectively, of Arch Capital Asian Partners L.P, an Asian real estate fund with investments in China, Macau, Singapore, Thailand and India.
“We believe this is a natural progression for Arch Capital which has been a fruitful and exciting investment for us. At this stage in its next growth cycle, we feel it would be better served and managed within a globally dedicated alternative asset management firm. Given Ayala’s successful experience as an investor in TRG for a significant period of time, we believe TRG would be an ideal partner in ensuring Arch’s continued success. It would also allow us to consolidate our investments in this particular industry grouping,” Ayala Corp. chief executive officer Jaime Augusto Zobel de Ayala said.
Meanwhile, Richard Yue, co-founder and chief executive officer of Arch Capital, retains his 50-percent stake in Arch Capital and Arch Capital Asian Partners.
Yue said the entry of TRG represents a vote of confidence for the business that they have built at Arch Capital. “We have gained a new shareholder with a world-class asset management platform and an impressive array of investment products,” he said.
“At the same time, Ayala remains committed to the growth of our business as evidenced through its capital commitment to our follow-on fund and its willingness to continue providing business input and support for Arch Capital,” Yue added.
Ayala Corp. and ALI, together with Yue, an Asian real estate investment veteran of over 20 years, co-founded the investment management firm in 2006.
The transaction is part of TRG’s strategy to grow its private investing business in Asia.
For his part, TRG chief executive officer Nicolas Rohatyn said: “This transaction gives us a meaningful stake in a proven real estate investing business in the fastest growing region in the world. In Richard (Yue) we have a partner who is devoted to the business, shares our values, and complements our capabilities. Ayala Corp.’s decision to increase its interest in our firm is a reflection of their unwavering support of TRG’s growth strategy. Moreover, ALI’s commitment to provide ongoing real estate development expertise will continue to differentiate Arch Capital from its competitors.”
Founded in 2003, TRG is a leading emerging markets asset management firm with offices in New York, Singapore, Hong Kong, London, Buenos Aires, Lima, Montevideo and Johannesburg.