Under the terms of the agreement, Ares will provide US$2.55 billion in consideration, the majority of which will be in the form of Ares Operating Group Units.
The transaction is expected to close on or around January 1, 2016, subject to customary regulatory approvals and closing conditions.
Ares Kayne Management will be a highly diversified alternative asset manager with a combined US$113 billion of assets under management, as of March 31, 2015.
Kayne Anderson President and CEO Robert Sinnott will be Chairman of the newly-formed Energy Group at Ares Kayne. However, the two companies will continue to manage their existing funds and operate under their existing brand names.
Tony Ressler, Ares Chairman and CEO, has commented on the merger:
"We have long known and admired Kayne Anderson as an industry leader in energy, energy infrastructure, real estate and other asset classes, and this merger will make us a differentiated investment manager with five market-leading businesses. We expect the combination will make us better investors by greatly enhancing our expertise in these compelling sectors and will create new opportunities as we leverage each other's complementary investor bases to expand our distribution.
In addition, Kayne Anderson adds long-lived capital and significantly increases our fee-related earnings, which we expect will make this merger meaningfully accretive to Ares' unit holders."
Ares Kayne combines Ares Management, with US$87 billion is assets under management, with Kayne Anderson, with US$26 billion in assets under management to create a global asset manager which will invest across five complementary investment groups: Tradable credit, Direct Lending, Energy, Private Equity, and Real Estate.