Ares Management Corporation is expanding its real estate business with the takeover of Black Creek, a US real estate investment manager with $11.6bn (€9.49bn) of assets under management (AUM).
The 100% acquisition will take the global real estate AUM of the $207bn Los Angeles-based alternative investment manager to $29bn.
The transaction follows a series of efforts by Ares to expand, including an attempt to take over AMP Capital’s private markets arm and the successful acquisition of secondary-market specialist Landmark Partners.
Black Creek manages $11.6bn in core and core-plus real estate assets through two non-traded real estate investment trusts (REITs) and several institutional funds – including an open-ended vehicle focused on US industrial property.
The company, founded in 1993, invests across several property types, has more than 100 investment professionals in eight offices across the US.
Ares said the core and core-plus focus of the company, and its 25-year presence in the US industrial markets, would complement its existing capabilities in value-add and opportunistic strategies and real estate debt.
Last month, Ares announced it had raised $1.7bn for its latest US opportunistic real estate fund
The acquisition will also strengthen Ares’ retail distribution capability and increase its perpetual, non-traded REIT capital by $5.1bn with the addition of two non-traded REITs.
“We are very pleased to enter into this strategic transaction with Black Creek, which further scales our real estate business, expands us into core/core-plus strategies and provides us with a leading non-traded REIT retail distribution platform,” said Michael Arougheti, CEO and president of Ares.
“We believe that this highly complementary combination will add meaningful revenue synergies for our real estate business as we offer new products to our existing investor base.”
Raj Dhanda, CEO of Black Creek Group, said: “As a leading firm with extensive global relationships and a collaborative culture, Ares was the ideal partner for Black Creek Group, and this agreement will allow the combined Ares Real Estate Group to expand our capabilities, reach and growth potential.”
Upon closing, key members of the Black Creek leadership team will remain in place and become part of the Ares Real Estate Group, led by Bill Benjamin.
The transaction consideration will include an upfront amount comprised of cash, Ares operating group units and a potential performance-based earnout payable in a combination of cash and Ares equity.