ARA Asset Management says it has acquired a 15% interest in boutique Australian real-estate fund manager, APN Property Group, for A$4.6 million ($5.6 million) via a share placement.

APN is a specialist real estate fund manager listed on the Australian Securities Exchange (ASX) with total assets under management of A$2.6 billion as at 31 March 2010. APN currently manages real estate securities funds, private equity real estate funds, a listed real estate investment trust (REIT) and unlisted property funds investing primarily in Australian real estate.

ARA Asset Management says the transaction marks ARA’s first foray into Australia, a key market with one of the largest managed funds sectors in the world, including the largest REIT sector outside the United States.

As a strategic shareholder, ARA will collaborate with APN on real estate fund opportunities in Australia, which may include the provision of seed capital, capital raising and/or joint management of such funds.

In addition, ARA will also be rationalising its real estate public securities fund management business via the sale of its entire interest in ARA Strategic Capital I, the manager of the ARA Asian Asset Income Fund, to APN.

Going forward, ARA SC will be able to leverage on APN’s proven track record in this space and distribution network to grow its funds under management.