Ares Management LP (NYSE: ARES) and Kayne Anderson Capital Advisors LP have entered into a definitive merger agreement to create Ares Kayne Management LP, a diversified alternative asset manager with a combined $113 billion of assets under management as of March 31.
Under the terms of the agreement, Ares will provide $2.55 billion in consideration, the majority of which will be in the form of Ares operating group units. The transaction is expected to close on or around Jan. 1, 2016, subject to customary regulatory approvals, Kayne Anderson investor consents, and other closing conditions.
Ares Kayne combines Ares Management, a global alternative asset manager with $87 billion in assets under management, with Kayne Anderson, a US energy and energy infrastructure investor with $26 billion in assets under management, to form a diversified global asset manager that will invest across five complementary investment groups: Tradable Credit, Direct Lending, Energy, Private Equity, and Real Estate.
The combined firm will have approximately 450 investment professionals in over 20 global offices serving more than 2,700 direct investors, and will be a manager of publicly traded yield-oriented vehicles with more than 400,000 retail account holders in eight public companies.
Upon closing, Kayne Anderson Chairman and Founder Richard Kayne and Ares Chairman and CEO Tony Ressler will serve together as co-chairmen of Ares Kayne Management.
Kayne Anderson President and CEO Robert Sinnott will become chairman of the newly formed Energy Group at Ares Kayne, which will include all of Kayne’s energy investment activities including energy private equity, private energy income and energy infrastructure marketable securities. Substantially all of Kayne Anderson’s non-energy investment professionals will join Ares’ existing investment groups in Private Equity, Real Estate, and Direct Lending. The two companies will continue to manage their existing funds and operate under their existing brand names.
In addition to Kayne, Sinnott, and Kevin McCarthy of Kayne Anderson will join Ares Kayne’s board of directors, and Sinnott, McCarthy, and Al Rabil will join Ares Kayne’s Management Committee. Ressler, Michael Arougheti, and Michael McFerran will continue their respective roles as CEO, president, and CFO.
Moelis & Co. and BofA Merrill Lynch served as financial advisors to Ares, and Wells Fargo Securities LLC served as a financing advisor. Proskauer Rose LLP served as Ares’ legal counsel. JP Morgan Securities LLC served as financial advisor to Kayne Anderson. Paul Hastings LLP served as Kayne Anderson’s legal counsel.