Ares Management has agreed to merge with Kayne Anderson Capital Advisors to form a new investment firm with $113bn in assets under management.
Under the terms of the deal, Ares will provide $2.55bn in consideration, most of which will be in the form of Ares Operating Group Units.
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The merged business will be known as Ares Kayne Management. It will invest across five investment groups including tradable credit, direct lending, energy, private equity and real estate.
The combined entity will comprise approximately 450 investment professionals in over 20 global offices serving over 2,700 direct investors.
Following the merger, Kayne Anderson chairman and founder Richard Kayne and Ares chairman and CEO Tony Ressler will become co-chairman of Ares Kayne Management, while Kayne Anderson CEO Bob Sinnott will become chairman of the newly-formed energy group.
Ares Kayne is expected to provide enhanced investing expertise, complementary distribution channels as well as high-quality and diverse revenue streams to its stakeholders.
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By GlobalDataSubjected to customary regulatory approvals, the transaction is scheduled to complete on 1 January 2016.
Following the merger, two firms will continue to manage and operate their funds under their existing brand names.
Ares chairman and CEO Tony Ressler said: "We expect the combination will make us better investors by greatly enhancing our expertise in these compelling sectors and will create new opportunities as we leverage each other’s complementary investor bases to expand our distribution.
"In addition, Kayne Anderson adds long-lived capital and significantly increases our fee-related earnings, which we expect will make this merger meaningfully accretive to Ares’ unit holders."
