Ares Management, L.P. announced last week that one of its subsidiaries has signed a definitive agreement to acquire Energy Investors Funds (EIF), a leading asset manager in the energy infrastructure industry with approximately $4 billion of assets under management across EIF’s four commingled funds and related co-investment vehicles.
The acquisition is being financed primarily with cash, including a portion of the proceeds raised from the previously announced offering of senior notes by an indirect subsidiary of Ares, and with equity interests in Ares. The transaction is expected to close by the end of 2014, subject to regulatory approval and other customary closing conditions.
Michael Arougheti, President of Ares Management, said:
“The energy sector is an area of increasing importance across our business given the large, growing and contractual nature of the asset class and the differentiated risk-adjusted returns that can be generated by experienced managers. EIF represents exactly what we look for in pursuing accretive, strategically valuable acquisitions. The team brings an established track record of excellence in an investment strategy that merits greater exposure for our collective fund investors, a strong cultural fit and a deep expertise that we believe will benefit Ares’ existing strategies.”
Bennett Rosenthal, Senior Partner of Ares Management and Co-Head of the Ares Private Equity Group, said:
“We are thrilled to have EIF, a team that members of the Ares Direct Lending Group have known and respected for years, join the Ares Private Equity Group. Since our inception, our private equity investment activities have meaningfully benefited from the scale and collaboration of the broader Ares platform, and we expect that the EIF team at Ares will also capitalize on our sourcing, market intelligence and relationship network advantages to enhance what is already superb investment performance.”
EIF’s investment team of energy private equity professionals will join the Ares Private Equity Group and maintain full day-to-day responsibility over EIF’s current and future private equity funds and related investments. Following the closing of the transaction, the Ares Private Equity Group will manage approximately $14 billion of AUM across U.S./Europe corporate private equity, China corporate private equity and U.S. energy infrastructure private equity. Ares Management will have more than $7 billion of AUM in energy-related investments across various private equity, direct lending and tradable credit strategies.
Herbert Magid, a Managing Partner of EIF and a member of its Board, Executive and Investment Committees, said:
“Joining Ares is an exciting new chapter for our team, which has been generating strong returns for our fund investors and creating a thriving work environment for our employees for more than 25 years. With the opportunity to work closely with our new colleagues across Ares, we believe we will be a more significant player at a time when there is a growing need for capital and sophisticated sponsorship in our markets.”
Proskauer Rose LLP acted as legal advisor and Latham & Watkins LLP acted as regulatory advisor to Ares, and Morgan, Lewis & Bockius LLP acted as legal advisor to EIF.