Ares Management and its subsidiary, Ares Holdings, entered into a definitive agreement to acquire AMP’s PrivateMarketsCo Infrastructure Debt platform, an infrastructure debt investment platform with approximately $8 billion in assets under management as of Sept. 30. The transaction consideration is A$428 million ($309 million) and will be funded using cash on hand and Ares’ $1.1 billion revolving credit facility.
The PrivateMarketsCo infrastructure debt team is led by its global head, Patrick Trears, and has 17 dedicated investment professionals located across London, Sydney, Singapore and New York. The team has invested approximately $9 billion of capital across nearly 60 transactions globally, with a focus on the digital, utilities, transportation and renewable energy sectors.
This transaction adds complementary investment capabilities to Ares’ current activities in the infrastructure asset class. The PrivateMarketsCo infrastructure debt team is anticipated to expand Ares’ existing infrastructure strategy, which has historically focused on value-add equity and capital across the power and climate infrastructure sectors.
“We are pleased to announce this acquisition of a highly complementary infrastructure debt platform. We believe that this strategic combination will further propel our infrastructure investment capabilities and expand our global footprint,” Michael Arougheti, CEO and president of Ares, said. “The team shares a similar credit mindset with Ares, and our infrastructure leadership has enjoyed a great relationship with Patrick and other senior leaders for over a decade. Together, we believe we are well-positioned to leverage the full scale of the Ares platform and relationships to provide optimal capital solutions for our investment partners and generate attractive risk-adjusted returns for our investors.”
“We have great respect for Ares as a global leader in the alternative investment industry and are excited to join the team,” Trears said. “We believe that this strategic combination will help accelerate our business and drive significant benefits for our investors and deal counterparties.”
Upon closing of the transaction, the infrastructure debt team will be led by Trears and will be reported as part of a new segment for Ares called the Ares real assets group. This segment will also include real estate, which led by Bill Benjamin, and infrastructure equity, which is led by Keith Derman and Andrew Pike. The Ares real assets group would represent approximately $48 billion of assets under management as adjusted for the transaction as of Sept. 30.
The transaction is expected to be immediately accretive to Ares’ after-tax realized income per share of class A common stock. It is expected to close in Q1/22 and is subject to customary closing conditions, including satisfaction of applicable regulatory requirements.
Morgan Stanley acted as financial advisor to Ares and Kirkland & Ellis and DLA Piper served as legal counsel. Broadhaven Capital Partners acted as financial advisor to PrivateMarketsCo and Nixon Peabody served as legal counsel.
