Ares Management to Acquire Black Creek Group
Black Creek’s 25-year experience in the industrial sector should further drive operating, sourcing and informational advantages for its Ares Real Estate Group’s fund investors.
A subsidiary of Ares Management Corp. has entered into a definitive agreement to acquire Black Creek Group’s US real estate investment advisory and distribution business.
As of March 31, 2021, Black Creek had approximately $11.6 billion of assets under management in core and core-plus real estate strategies across two non-traded REITs and various institutional fund vehicles. Black Creek, which has more than 100 investment professionals operating across eight offices throughout the US, has experience in major property types, including industrial, multifamily, office and retail.
Black Creek, which was founded in 1993, has a senior management team with an average of 25 years of experience in sourcing, acquiring, operating and developing properties in the US. After closing, key members of the Black Creek leadership team will become part of the Ares Real Estate Group, led by Bill Benjamin.
Ares expects that the transaction will broaden its existing capabilities and product offerings. Additionally, it should provide vehicles that complement Ares’ existing real estate debt and US and European value-add and opportunistic funds.
Specifically, Black Creek’s 25-year experience in the industrial sector should further drive operating, sourcing and informational advantages for its Ares Real Estate Group’s fund investors. Ares believes industrial is positioned to benefit from heightened institutional interest-driven in part by secular tailwinds and the accelerated growth of e-commerce. The firm also believes the Black Creek acquisition will transform its retail distribution capability.
The addition of Black Creek’s two separate non-traded REITs should increase Ares perpetual, non-traded REIT capital by $5.1 billion. Black Creek has a broker dealer team that distributes and markets to more than 70 relationships with over 100,000 financial advisors. Ares sees the potential to accelerate the retail distribution of its various alternative asset products to broker-dealers through Black Creek’s distribution platform.
“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 Benjamin, partner and head of the Ares Real Estate Group, in a prepared statement.
Ares is also focused on the distressed space. Last month, it completed its largest US real estate equity fundraise to date with the final closing of its Ares U.S. Real Estate Opportunity Fund III, which targets distressed, repositioning, and selective development opportunities. The fund was oversubscribed with approximately $1.7 billion of commitments compared to its $1.5 billion target.
“Looking ahead, the unprecedented change in space utilization has potentially widened the opportunity set for both attractive undercapitalized assets and assets within sectors experiencing accelerated demand,” said David Roth, head of US Real Estate Private Equity, said in a prepared statement. “We believe that we are well-positioned with our flexible mandate and experienced team to continue to build upon the great progress that the Fund has already achieved.”