Ares Management Corporation is to aquire global real assets fund manager GCP International in a transaction valued at US$3.7bn (€3.37bn).
GCP International, which has investments in logistics, digital infrastructure and self-storage in Asia, the Americas and Europe, is being sold by GLP Capital Partners (GCP), the asset management arm of Singapore-headquartered logistics real estate developer and operator GLP.
The acquisition excludes GCP’s operations in Greater China, but GCP International’s US$44bn in assets under management will nearly double that of Ares Real Estate to approximately US$96bn.
New York-headquartered Ares said the deal would “firmly establish Ares Real Estate as one of the largest global vertically integrated platforms”.
GCP International manages 23 institutional funds, with more than 320m sqft of industrial space and has vertically integrated platforms with presence in developed geographies, including Japan, Europe and the US, and emerging markets, such as Brazil and Vietnam.
The firm has been expanding into global data centre markets with several hyperscale development projects, representing over 1GW of IT capacity, in London, Tokyo, Osaka and São Paulo.
The transaction will follow a separation of GCP International from GLP Capital Partners’ remaining business, which will continue to be independent and headquartered in Singapore with a focus on investing in Greater China.
Ming Mei, co-founder and CEO of GCP and GLP, will serve as CEO of GLP and GCP’s remaining business, along with its leadership team in China and a select number of other global executives. He will also continue to support GCP International’s and Ares’ growth and success as an Ares partner and senior adviser.
Michael Steele, president of GCP International and GCP International’s leadership teams responsible for managing and operating the funds in Japan, Europe, the US, Brazil and Vietnam will join Ares as part of the transaction.
The deal includes approximately US$1.8bn in cash and US$1.9bn in Ares class-A common shares.
It is structured to include long-term performance incentives designed to align GCP International leadership with the interests of fund clients and Ares stockholders.
“We have long admired the global real estate experience of GCP and its capabilities in facilitating the economy of the future, which includes investing in and managing industrial, data-centre and self-storage assets,” said Michael Arougheti, CEO and president of Ares. “As a combined business, we believe that Ares’ and GCP International’s experienced management teams, highly collaborative cultures and investment track records will create a powerhouse in global real assets investing.”
In a joint statement, Bill Benjamin and Julie Solomon, co-heads of Ares Real Estate, said: “We have great respect for the business that the GCP International leadership team has built, and we believe that there are attractive strategic synergies between our firms.
“Combining our platforms will further enhance our strong position in the industry and bolster Ares as a global market leader in real estate with vertically integrated capabilities. We are excited for the opportunities that we can pursue together with our expanded product suite, like-minded cultures and our ability to invest in assets that facilitate the new economy.”
Mei said: “We have strong conviction that combining GCP International’s and Ares’ investment and operating capabilities, expansive networks and collaborative cultures will create one of the world’s leading real assets investment management businesses.
“We are excited for the new opportunities the transaction will create for our current clients, and we look forward to continuing to partner with teams across GCP International and Ares to drive success for the combined business.”
Mei added: “We are excited by the growth that our Greater China business can achieve at a time when opportunities in the region are in abundance.”
Steele said: “We are thrilled to join Ares, a pioneer and market leader in alternative investing. Our commitment to long-term business building and our ability to identify and focus on new economy sectors with large addressable markets and strong secular tailwinds have enabled us to distinguish ourselves in the market and grow rapidly.
“In Ares, we have found a partner that shares our philosophy and entrepreneurial culture. We look forward to integrating with the Ares team, and continuing to build upon our successful, long-term track records and scale our combined platform for the benefit of all stakeholders.”
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