Ares Management Corp. and AMP Ltd. have agreed to pursue a A$2.25 billion ($1.8 billion) joint venture for AMP's private markets business.
Los Angeles-based Ares will pay A$1.35 billion for 60% of the business, and Sydney-based AMP will retain the remainder worth A$900 million, a news release said.
"We expect it would strengthen the business and significantly accelerate our strategy to grow private markets, while derisking our international expansion plans, and bringing forward the value in AMP Capital for our shareholders," said AMP Chairwoman Debra Hazelton and AMP CEO Francesco De Ferrari in the news release.
AMP's private markets joint venture business includes infrastructure equity, infrastructure debt and real estate. The joint venture is expected to raise A$500 million of debt to reduce each firm's equity investment in the venture.
"We are excited to further expand our real estate and infrastructure investment capabilities through our partnership with AMP," said Michael Arougheti, Ares CEO and president, in the same news release.
Under the expected transaction, the implied value of AMP's private markets business is up to A$3.15 billion, the news release said. Ares had $197 billion in assets under management, including $18.3 billion in infrastructure and real estate AUM as of Dec.31.
If Ares and AMP end up entering into a joint venture, Ares' shareholders would benefit from the strategic global expansion of its infrastructure and real estate strategies, which amount to as much as $60 billion in total AUM.
AMP and Ares will enter into a 30-day period of exclusivity, to work toward a binding transaction.