Japan’s Sumitomo Mitsui Financial Group (SMBC Group) is buying a 4.9% stake in US-based alternatives asset manager Ares Management Corp for US$384 million as part of a strategic partnership where they will collaborate in distribution, investments and capital markets.
These are “highly accretive growth areas”, the companies say in a joint statement on March 30. SMBC Group is buying the stake from Ares’s cofounders and other employees.
Under the deal, SMBC Group will invest in the asset manager’s businesses, particularly those focused on the private credit markets, while Ares will market its investment products to the former’s clients in the Japanese market.
They will also coordinate on certain capital market financing activities in the US and Asian leveraged finance markets.
“This is to help accelerate the growth of our businesses and to enhance our clients’ global product needs in the attractively growing global alternative asset management industry,” SMBC Group President and Group Chief Executive Officer Jun Ohta and Deputy President Masahiko Oshima say in the statement.
The partnership will “empower both our firms to further leverage our individual franchise strengths”, adds Michael Arougheti, chief executive officer and president of Ares.
“It will also enable us to accelerate the growth of many new strategic business initiatives on a global scale,” according to Mr. Arougheti, who is one of the firm’s cofounders.
The other cofounders are Antony Ressler, David Kaplan, John Kissick and Bennet Rosenthal.
As of end-2019, SMBC Group had 212.4 trillion yen ($1.96 trillion) of total assets and Ares Management had $149 billion of assets under management.
