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Ares Management closes acquisition of energy investors funds

Ares Management has completed its acquisition of Energy Investors Funds (EIF), an asset manager with approximately USD4 billion of assets under management across four commingled funds and related co-investment vehicles. 

The transaction closed on 1 January, 2015, and is expected to be accretive to Ares.

“The EIF transaction provides Ares an entry into the large and growing energy infrastructure industry and attractive investment opportunities where we can leverage our existing core competencies to bring differentiated investment results,” says Michael Arougheti, Co-Founder and President of Ares. “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 is attractive for our collective fund investors and a deep expertise that we believe will benefit and further diversify Ares’ existing strategies.”

Ares’ new energy infrastructure equity investment team focuses on generating long-term, stable cash-flowing investments in the power generation, transmission and midstream energy sector. Along with EIF’s team of approximately 40 professionals, the transaction brings Ares a strong long-term investment track record and significant fee-paying assets under management of approximately USD4 billion in an asset class that is well insulated from the volatility in the oil and gas industry.

“We are delighted to welcome EIF – a reputable team with tremendous experience in the energy infrastructure sector, having invested in more than 100 diversified investments with a combined asset value of over USD15 billion, and one that we believe will be an excellent cultural fit with our collaborative investment teams at Ares,” says Bennett Rosenthal, Co-Founder and Senior Partner of Ares and Co-Head of the Ares Private Equity Group. “We expect that the EIF team will greatly benefit from Ares’ sourcing, market intelligence and relationship network advantages to enhance its already excellent investment performance. We believe that Ares investors will be attracted to the long term, contractual nature of the investments and potential risk-adjusted returns within the infrastructure sector, enabling us to grow our assets under management in the future.”

As a result of this transaction, the Ares Private Equity Group has approximately USD14 billion of assets under management, pro forma for the EIF transaction as of 30 September, 2014, across US/Europe corporate private equity, China corporate private equity and US energy infrastructure private equity.

“We are pleased to join the Ares platform and capitalise on the significant and growing investment opportunities as the nation replaces its ageing energy infrastructure and builds new power and midstream assets to meet capacity needs over the coming decade,” says Herbert Magid, a Managing Partner at EIF and now a Senior Partner in the Private Equity Group at Ares. “The benefits of the Ares platform are already apparent to us and we believe these advantages will enhance our performance and growth prospects.”

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.

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