Ares eyes Kayne Anderson acquisition

The US alternative investment firm is reportedly in talks to acquire Kayne Anderson Capital Advisors, another Los Angeles-headquartered private investment firm.

Ares Management is reportedly negotiating the acquisition of Kayne Anderson Capital Advisors, a private equity firm that, like Ares, is headquartered in Los Angeles and handles a variety of private investment strategies, according to Bloomberg and other publications.

Sources told Bloomberg that the two firms are negotiating over terms and haven’t finalized a deal yet, but that the acquisition would be financed via stock and cash.

Ares has $87 billion in assets under management across its private equity, direct lending, tradable credit and real estate platforms. Kayne Anderson primarily deals in energy investments, via closed-end funds and energy private equity. It also runs growth private equity, real estate private equity, mid-market credit and municipal strategies. The firm has $29 billion in assets under management.

Spokesmen for the two firms declined comment.

Ares’ president Mike Arougheti (pictured), told PDI in December and has said in other recent public appearances that the firm has held discussions about several potential acquisitions and opportunities for growth and strategy expansion. He has also said that the idea behind its public listing in May last year was to raise the firm’s profile and build its brand in order to get more firepower for acquisitions and team lift-outs.

The firm has already been active in deals like these in recent months. The firm agreed to acquire the $700 million commercial finance portfolio from First Capital Holdings to build out its own new commercial finance platform, in April. The firm began building that effort by bringing on an asset-based lending team from Keltic Financial a year ago.

Kayne Anderson would also not be Ares’ first energy-focused play in recent history. The firm closed on its acquisition of Energy Investors Funds, a $4 billion manager of energy infrastructure assets, in January.