By James Searle, Greg Dargue, Cameron Hansell, Ben Motamed (Durham University); Aviral Jain, Leon Gaster, Adalia Melvin, Haci Eren Sidar (University of Nottingham)
Photo: Arum Visuals (Unsplash)
Overview of the deal
Acquirer: Ares Management Corporation
Target: GLP Capital Partners International, Inc.
Implied Equity Value: $3.7 billion
Total Transaction Size: $5.2 billion
Closed date: 01/01/2025 - 30/06/2025 (expected)
Target advisors: Citigroup, Morgan Stanley, Greenhill, United Overseas Bank, Deutsche Bank (Financial); Kirkland & Ellis (Legal)
Acquirer advisors: Barclays, Eastdil, Goldman Sachs, Wells Fargo (Financial); Latham & Watkins (Legal)
On October 8th, 2024, Ares Management, a leading global investment manager, announced its proposed acquisition of GLP Capital Partners International, excluding its Greater China operations. This strategic move will solidify Ares’ real estate platform as one of the largest vertically integrated platforms, nearly doubling its AUM to approximately $96 billion across North America, Europe, Asia, and Latin America.
GLP Capital Partners International’s extensive portfolio includes 23 funds, 320 million square feet of industrial properties, and $44 billion in AUM as of June 30, 2024. The acquisition will look to take advantage of their portfolio’s strength in new economy sectors that are benefiting from secular trends such as their hyperscale data centre developments, which are experiencing growth driven by rising data demands.
The deal is backed by bridge financing from Morgan Stanley and Citigroup, with an expected close in the first half of 2025, pending regulatory approvals.
“As a combined business, we believe that Ares’ and GCP International’s experienced management teams, highly collaborative cultures and investment track records will create a powerhouse in global real assets investing” - Michael Arougheti, CEO and President of Ares
Company Details (Acquirer - Ares Management)
Ares Management Corporation is a leading global alternative investment manager managing $464 billion in assets across credit, private equity, real estate, and infrastructure. Ares, with over 35 locations worldwide, uses its large network to deliver specialised investment solutions to institutional and individual clients all over the world. Approximately $335 billion of their AUM is in credit, demonstrating Ares’ strong focus on this asset class. The firm’s diverse portfolio and global presence allow it to navigate a wide range of investment opportunities, delivering consistent returns through its expertise in various asset classes.
Founded in 1997, headquartered in Los Angeles, California
CEO: Michael Arougheti
Number of employees: ~3,100
Market Cap: $55.1bn (as of 10/12/2024)
EV: $67.9bn
LTM Revenue: $3.7bn
LTM EBITDA: $1.1bn
LTM EV/Revenue: 18.5x
LTM EV/EBITDA: 59.6x
Recent Transactions: $2.1bn acquisition of Walton Street Capital Mexico (Sep 2024)
Company Details (Target - GLP Capital Partners)
GLP Capital Partners is a global alternative asset manager with $122 billion in assets under management (AUM) as of 2024, including $111 billion in real assets and $11 billion in private equity. The firm manages 66 funds investing across major world economies, focusing on high-growth sectors such as logistics, data centres, and renewable energy. GCP International, which represents GLP’s operations outside of China, became an independent entity in 2022, leveraging over a decade of expertise to deliver strong returns. It is one of the largest managers of real estate and infrastructure funds globally with $44 billion of AUM.
Founded in 2009, headquartered in Santa Monica, Los Angeles
CEO: Ming Z. Mei
Number of employees: ~550
Assets Under Management: $122bn
Net Debt / Core Underlying EBITDA: 9x
Projections and Assumptions
Short-Term Consequences
The acquisition will establish the world’s third-largest global real estate platform, significantly enhancing diversification. Geographic coverage will expand to include Asia, alongside strengthening mandates in Europe and the Americas. Strategic investment capabilities in real assets will grow, with the asset focus on these sectors increasing by 8 percentage points to 23%. The combined entity will oversee $492 billion in assets under management.
This transaction opens doors to high-growth areas such as data centres, industrial facilities, and infrastructure, providing opportunities for robust portfolio expansion. Notably, Ares gains access to data centre capabilities across North America, Europe, and Asia, positioning it strongly in a sector critical to the digital economy. Additionally, the company can now introduce the Core/Core+ product in Europe, a strategy that has proven highly effective for competitors like Blackstone, further enhancing its competitive edge in the region.
Ares expects the transaction to be moderately accretive in 2026 on a fee-related earnings basis, excluding transaction costs. Shares in Ares closed down 4.5% after the announcement, although the stock has since recovered, rising 14.8% in the following two months.
Post-acquisition, GCP International will join Ares, while GLP refocuses on its Greater China operations. The CEO, Mr. Mei sees abundant opportunities in the region. There will be a significant, short-term cash influx, aiding debt reduction or investments. Key executives from GLP will join Ares, necessitating leadership restructuring to combat temporary expertise gaps.
Overall this acquisition strengthens Ares’ global footprint, diversifies its offerings, and solidifies its position as a leader in the real estate investment space.
Long-Term Upsides
Ares Management’s $3.7 billion acquisition of GCP International is a transformative move, nearly doubling its real estate AUM to $96 billion and solidifying its leadership in industrial and digital infrastructure investments. GCP’s portfolio, including hyperscale data centres in London, Tokyo, Osaka, and São Paulo, strategically positions Ares to capitalise on the rapid growth of the data centre industry, which is projected to see $1 trillion in capital expenditures over the next three years.
The data centre sector is undergoing a fundamental transformation driven by AI. AI training workloads, requiring high-performance computing and energy-intensive facilities, have reshaped the industry’s geographic and operational dynamics. Unlike traditional data centres located near metropolitan hubs to reduce latency, AI-focused facilities can thrive in less densely populated regions with lower land and energy costs. This paradigm shift expands opportunities for scalable, high-margin investments, and GCP International’s projects align perfectly with this trend.
In addition to the financial benefits, Ares has placed a clear focus on ESG considerations, which are becoming increasingly important to institutional investors. GCP’s assets incorporate advanced cooling technologies and renewable energy sources, minimising environmental impact while maintaining operational efficiency. By prioritising ESG principles, Ares is not only reducing potential regulatory risks but also aligning itself with the growing investor demand for sustainability in infrastructure investments.
The industrial real estate market, valued at $2 trillion, remains robust, offering stability to Ares’ expanded portfolio. Furthermore, the deal includes an earnout provision of up to $1.5 billion tied to performance milestones, underscoring confidence in achieving revenue growth and operational efficiency. While Ares expects modest accretion in the first year, meaningful revenue and earnings growth are projected in subsequent years as synergies are realised.
By consolidating asset management and streamlining back-office functions, Ares can achieve operational efficiencies and reinvest savings into strategic initiatives. This acquisition places Ares at the forefront of the digital economy, ensuring high-margin returns and sustained growth aligned with global macroeconomic trends.
Risks and Uncertainties
Several uncertainties surround Ares Management’s acquisition of GLP Capital Partners' ex-China business. While the team making up GCP International will transition to Ares, the future roles of the teams managing GLP’s China operations remain unclear. This ambiguity could impact how post-acquisition integration unfolds between the two entities.
Ming Mei, GLP’s co-founder and CEO, will continue to lead its China business while also becoming a partner at Ares to facilitate a smooth transition. This dual role, however, raises questions about potential strategy conflicts between GLP and Ares. GLP, which retains ownership of its remaining business, plans to continue global investments under Ares' management, focusing on markets like Brazil and Japan. How leadership responsibilities will be divided between Ming and other executives, and whether competing priorities may arise, remains a key issue to monitor.
GLP will also retain $5 billion in investments outside China, but details of this portfolio are unclear. It is unknown whether assets like GLP’s Hong Kong logistics fund fall within this retained portfolio. With the acquisition expected to close in the first half of 2025, these unresolved matters, including leadership structure, portfolio details, and strategic alignment, warrant close attention as they could significantly influence the success of the deal.