Ares Management has acquired the investment platform of Wrightwood Capital, a debt capital provider to the US commercial real estate sector, in a bid to address a growing need for financing solutions in middle-market commercial real estate. Terms of the deal were not disclosed.
The acquisition will expand “our reach into commercial real estate lending—an area we see having attractive long-term growth opportunities,” said Tony Ressler, senior partner and chairman of the executive committee at Ares, in a statement.
Under the deal, the Ares Private Debt Group will pick up more than 40 Wrightwood investment professionals to focus on middle-market lending in commercial real estate. They will be part of the Ares Commercial Real Estate (ACRE) investment team, which will be based in Chicago and have offices in Dallas, Los Angeles, New York, Washington, DC and Newport Beach, California. The transaction also will add $1.2 billion in assets under management to the Ares Private Debt Group, with ACRE now managing all of Wrightwood’s commercial real estate assets and sponsored funds.
Leading the team will be John Bartling, a senior partner of ACRE and global head of real estate at Ares, and former Wrightwood chief executive Bruce Cohen, who has been named a senior partner of ACRE. With ACRE, Bartling and Cohen will be implementing a business plan that is modeled after Ares Capital, which has a dedicated US team servicing middle-market companies, said Michael Arougheti, a senior partner at Ares and global head of the Ares Private Debt Group.
“The addition of the Wrightwood investment platform enhances ACRE's ability to address a significant and growing need for financing solutions in middle-market commercial real estate,” said Mr. Bartling. “We have seen this story unfold in middle-market corporate credit and the ability for Ares to continuously take meaningful market share from traditional lenders, which are under pressure to withdraw and/or are unable to adapt.”