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Kayne Anderson RE parent in Ares merger talks

Discussions between the two California-based firms, Ares Management and Kayne Anderson Capital Advisors, are said to be ‘ongoing’, with any deal likely to have implications for Kayne Anderson Real Estate Advisors (KAREA).

Ares Management and Kayne Anderson Capital Advisors are reportedly in talks over a merger which would have corporate implications for Kayne Anderson Real Estate Advisors (KAREA), the latter’s real estate investment management arm based in Florida.

Reports today suggested the two California-based alternatives firms were “discussing the potential combination”, though no deal had been finalized. Bloomberg quoted a source who did not wish to be named insisting the reason for anonymity was that talks were ongoing.

Should a deal materialize it would mean the combination of Ares – which is listed on the New York Stock Exchange and has $87 billion of assets under management – with Kayne Anderson Capital Advisors with its $29 billion of assets.

Spokespeople for the two organizations had not confirmed at press time that talks were being held or whether an agreement was close.

Kayne Anderson manages investments in energy, private equity, growth private equity, real estate, middle market credit, distressed or defaulted municipal securities, and alternative marketable securities. 

Its real estate division is run by Al Rabil and employs 42 people. The firm, which is the subject of this month’s Blueprint interview in PERE magazine was founded in 2007 and manages $2.6 billion of niche real estate. It invests in asset classes such as off-campus student accommodation and medical offices.

For its part, Ares Real Estate Group has expanded significantly in recent years having added AREA Property Partners in 2013 on top of the Ares Commercial Real Estate Corporation, a REIT that was created in 2012. The takeover of AREA added 50 investment professionals.

News of talks with Kayne Anderson comes in the same week as Ares president Mike Arougheti spoke at a New York conference at which he said one reason the firm went public was to pursue strategic acquisitions.