Ares Management Corporation (“Ares”) announced that its subsidiary, Ares Holdings L.P., has entered into a definitive agreement to acquire a controlling interest in SSG Capital Holdings Limited and its operating subsidiaries (collectively, “SSG”), a leading Asian alternative asset management firm.
Headquartered in Hong Kong with offices across Asia, SSG manages private credit and special situations funds totaling approximately $6.2 billion in assets under management, as of September 30, 2019. Supported by a global, institutional investor base, SSG is regarded as one of the top investment firms in Asia with numerous industry distinctions and accolades for its lending and distressed activities. SSG is led by a highly experienced management team that has delivered attractive investment performance across various market cycles, transaction types and Asian countries, including India, Indonesia, China and Thailand.
“We believe SSG is the ideal partner for Ares to further expand into the strategically important Asian region,” said Michael Arougheti, Chief Executive Officer and President of Ares. “SSG is an experienced alternative investment manager with a long-tenured team with deep investment experience, well-established track record, comprehensive regional sourcing networks and global institutional investor relationships. We look forward to having Edwin Wong, Shyam Maheshwari, Andreas Vourloumis, Peter Cairns and their colleagues join our firm and we envision significant benefits for our respective investors and employees following this combination.”
“We are excited to partner with Ares and to capitalize on the significant investment opportunities we collectively see for the Asian region in the years to come,” said Edwin Wong, Chief Executive Officer of SSG Capital. “Through the combination of our expertise in the region and the resources of the entire Ares platform, we believe we can better serve our growing investor base as many of our clients seek to increase their allocations to Asian alternative investment strategies.”
“This transaction significantly builds upon our established Asian presence and will serve as a foundation for our future expansion,” said Eric Vimont, Partner of Ares. “The region is the largest and fastest growing global market that we believe is characterized by structural market inefficiencies that are driving the capital needs for the underserved middle market. We look forward to leveraging the SSG team’s experience and infrastructure to enhance our current activities, launch new strategies and continue to deliver attractive long-term returns.”
The transaction is expected to be minimally accretive in year one and a more meaningful driver of growth to after-tax realized income per Class A share in the second year and beyond. The transaction consideration will be primarily comprised of Ares Class A common shares subject to a multi-year lock-up along with a cash component. In certain circumstances, Ares may acquire full ownership of SSG pursuant to a contractual arrangement that may be initiated by Ares or the equity holders of SSG. The transaction is expected to close in the second or third quarter of 2020 and is subject to customary closing conditions, including regulatory approvals.