Ares Management Corporation, a Los Angeles-headquartered alternative investment manager, has formed a strategic agreement with Tokyo-based Sumitomo Mitsui Banking Corporation, according to statements from both firms.
As part of the deal, Ares Management has sold a 4.9 percent equity stake to SMBC, with SMBC making a $384 million equity investment in the publicly traded shares of Ares’s Class A common stock.
Ares plans to use the capital proceeds for internal growth initiatives, for the launch of new investment products in the Japanese market, and to invest in opportunities offered by the current market dislocation.
This is the second major strategic announcement by Ares this year following its planned Asia expansion via a majority stake acquisition in SSG Capital Management, a Hong Kong-headquartered pan-Asian private credit and special situations manager. This transaction is to be finalised in the second or third quarter of 2020 and is subject to customary closing conditions, including regulatory approvals. It was confirmed to Private Debt Investor that there has been no further update on the timing of the SSG deal closing.
Ares had $149 billion of assets under management as of 31 December 2019, of which available capital was as much as $35 billion, according to its 2019 annual letter released on 26 March.
As well as private debt, Ares invests in real estate and private equity. Among its latest funds in market, Ares Corporate Opportunities Fund VI obtained a $50 million commitment from Kansas Public Employees Retirement System, according to PDI data. Its predecessor vehicle, Ares Corporate Opportunities Fund V, closed on $7.85 billion in April 2016.
Another example of a tie-up between a Japanese and non-Japanese investor came when Tikehau Capital and T&D Insurance Group, a Tokyo-based insurance company, entered into a strategic partnership on 2 September 2019 to grow the sales and distribution capacity of European private debt products across the Japanese institutional market. This agreement saw T&D acquire a stake for an undisclosed amount in Tikehau.