(Bloomberg) -- Ares Management Corp. agreed to acquire GLP Capital Partners Ltd.’s operations outside of China for up to $5.2 billion, in one of the biggest recent combinations in the alternative asset management industry.
Ares will initially pay about $3.7 billion for GCP’s fund management business in Japan, the US, Europe, Brazil and Vietnam, according to a statement from GLP on Tuesday, which confirmed an earlier Bloomberg News report. Of that amount, Ares will pay about $1.8 billion in cash and about $1.9 billion in Class A common shares, the US-based firm said in a separate statement.
The deal also includes an additional earn-out provision of up to $1.5 billion if certain performance goals are met, GLP said. The upfront cash proceeds would help it reduce liabilities and strengthen the group’s balance sheet, it added.
The acquisition will help Ares Real Estate nearly double its assets under management to about $96 billion across North America, Europe, Asia and Latin America. Ares said it has secured bridge financing from Morgan Stanley Senior Funding Inc. and Citigroup Global Markets Inc. for the deal.
Alternative asset managers have been pursuing mergers to gain scale and expand into new sectors and geographies, turning into one-stop shops offering a range of investment strategies.
GCP has traditionally invested in areas such as real estate tied to logistics, digital infrastructure and renewable energy. The firm grew out of Singapore-based GLP Pte, a developer and operator of warehouses that has benefited from the boom in e-commerce. GLP set up a fund management arm to invest third-party money in the sector, and it became a separate entity — GLP Capital Partners — after a series of transactions in 2022.
Michael Steele, president of GCP International, will join Ares as part of the transaction, along with the leadership teams responsible for managing and operating the funds in Japan, Europe, the US, Brazil and Vietnam.
Ming Mei, co-founder and CEO of GLP and GCP, will continue to run GCP’s remaining businesses, which will remain headquartered in Singapore and focus on investing in Greater China. Mei will also become an Ares partner and senior adviser. GLP said that following the deal, GCP will have $81 billion in assets under management.
GLP’s dollar perpetual bond climbed more than three cents on the dollar on Tuesday, the biggest jump in three weeks, according to data compiled by Bloomberg. The note climbed to 70 cents, the highest since 2022, the data show.
The transaction is expected to close in the first half of 2025, pending regulatory approvals and other conditions.
Eastdil Secured LLC, Barclays Plc, Goldman Sachs Group Inc. and Wells Fargo & Co. are financial advisers to Ares, with Latham & Watkins acting as legal counsel. Citigroup Inc., Morgan Stanley, Greenhill & Co., UOB Group and Deutsche Bank AG are working with GCP and Kirkland & Ellis LLP is serving as legal counsel.
(Adds legal advisers in final paragraph.)
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