Firm plans to expand its real estate business with the acquisition
Ares Management Corporation is poised to take over Black Creek, a US real estate investment manager with $11.6 billion of assets under management (AUM).
Black Creek Group has agreed to sell 100% of its US real estate investment advisory and distribution business to Ares. If the acquisition goes ahead, it will broaden the existing capabilities and product offerings of the Ares Real Estate Group and expand the Ares real estate platform.
Founded in 1993, Black Creek manages approximately $11.6 billion in core and core-plus real estate assets through two non-traded REITS and various institutional fund vehicles. The company invests across several property types – including industrial, multifamily, office, and retail – and has more than 100 investment professionals in eight offices throughout the US.
Ares said that it expects the transaction to bolster Ares’ retail distribution capability and boost its perpetual, non-traded REIT capital by $5.1bn with the addition of two non-traded REITs. Black Creek’s strong presence in the industrial sector will also allow Ares to expand its foothold in the sector and drive operating, sourcing, and informational advantages for its fund investors.
“We are very pleased to enter into this strategic transaction with Black Creek, which further scales our real estate business, expands us into core and 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.”
“This acquisition presents an attractive opportunity to further enhance our team’s capabilities and grow our leading global real estate equity and debt business to approximately $29 billion in assets under management with offices spanning across the US and Europe,” said Bill Benjamin, partner and head of the Ares Real Estate Group.
Upon closing, key members of the Black Creek executive team will continue to lead the company and become part of the Ares Real Estate Group, led by Bill Benjamin.
According to Black Creek, the transaction consideration will include an upfront amount comprised of a combination of cash and Ares Operating Group Units in addition to a potential performance-based earnout payable in a combination of cash and Ares equity. The deal is anticipated to close early in the third quarter of 2021.
“We are excited to join the Ares team, and we believe this is a highly complementary combination of people, investment products and resources,” said Black Creek Group CEO Raj Dhanda. “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. We are excited for our leadership teams to work together and capitalize on what we believe will be a promising future.”