Alternatives manager Ares Management continues to build up its real estate platform with the second announced planned acquisition in less than two weeks.
Ares plans to acquire global alternative asset management firm GCP International for $3.7 billion in a deal that will nearly double real estate assets under management. The acquisition includes roughly $1.8 billion in cash, with the rest in stock.
GCP International manages $44 billion in real assets and private equity. Once the deal closes, Ares Real Estate will have roughly $96 billion in assets across North America, Europe, Asia, and Latin America. The acquisition is expected to bring Ares' total global AUM to about $492 billion.
GLP Capital Partners’ Greater China operations are not included in the transaction. The transaction separates GCP International, which will stay independent, based in Singapore.
Ming Mei, CEO of GCP and GLP, will lead GLP, and become an Ares partner and senior advisor. GCP International President Michael Steele and leadership teams from Japan, Europe, the U.S., Brazil, and Vietnam, will join Ares.
Ares’ president and CEO Michael Arougheti said in a statement that the combined business “will create a powerhouse in global real assets investing.”
Ares Real Estate’s co-heads Bill Benjamin and Julie Solomon added in the release that “there are attractive strategic synergies between” the two firms, adding: “Combining our platforms will further enhance our strong position in the industry and bolster Ares as a global market leader in real estate with vertically integrated capabilities.”
Ares and GCP are betting that e-commerce will drive long-term investor demand in the $2 trillion industrial real estate sector. Demand for data centers is also rising, with spending projected to exceed $1 trillion in the next three years from growth in cloud migration, data security, and AI.
Fitch Ratings highlighted GLP's strength in high-growth sectors across Asia.
"Fitch believes the transaction will enhance Ares' scale and further build out its product breadth across Asia in high-conviction sectors supported by secular tailwinds," according to the ratings agency.
Oppenheimer analyst Chris Kotowski told Reuters that alternative asset managers are particularly focused “on positioning themselves in front of the multi-trillion-dollar opportunity of building out the world's digital infrastructure.”
Ares has been building its real estate platform by expanding in key geographies and sectors that are positioned to benefit from attractive long-term structural tailwinds. Ares has maintained high conviction in the industrial real estate sector, establishing a total portfolio of $28.1 billion and over 230 million square feet across the U.S. and Europe as of June 30.
This announcement from Ares comes hot off the heels of the firm revealing its plans to buy Walton Street Capital Mexico, a real estate asset manager with $2.1 billion in AUM focused on the industrial sector.
Ares expects the transaction to close in the first half of 2025.
