As part of the deal, Ares will buy the 60% stake BrightSphere owns as well as the 40% interest held by the Landmark management team. Ares has also agreed to acquire BrightSphere's co-investments in Landmark funds, which were valued at roughly $34 million as of Dec. 31.
Founded in 1989 and acquired by BrightSphere in August of 2016, Landmark is an alternatives investment manager with $18.7 billion in assets under management through its private equity, real estate, and infrastructure secondaries funds. It has 150 employees in six offices globally.
Landmark will retain its brand and all of the firm’s 16 partners will join Ares
A news release issued by Ares said that the acquisition will expand the firm’s investment offerings in the secondaries market, a sentiment that Ares President and CEO Michael Arougheti echoed in a conference call Ares hosted Wednesday.
"Landmark is a unique and valuable platform that will instantly bring us scale and capabilities in an attractive and growing global market," Mr. Arougheti said on the call. "Over the last several years the secondaries market has evolved to become more institutionalized, increasing from a limited number of bespoke transactions over a decade ago to more than $88 billion in GP and LP secondary market transactions per year."
Mr. Arougheti added that he believes that "we are still in the early days of the development of (the secondaries) market," and that "there's a long and visible runway for significant growth."
Francisco Borges, chairman and managing partner of Landmark Partners, said in the release: "Ares' global platform and significant resources will enhance our combined investment capabilities and my partners and I look forward to driving continued strong performance, transaction structuring innovation and business growth for many years to come."
The transaction, pending customary regulatory approvals and closing conditions, is anticipated to close in the second quarter.
RBC Capital Markets and Credit Suisse Securities (USA) served as financial advisers to Ares, while Kirkland & Ellis served as legal counsel. Morgan Stanley & Co. acted as financial adviser to BrightSphere. Goldman Sachs & Co. acted as financial adviser to Landmark Partners. Ropes & Gray provided legal counsel to Landmark and BrightSphere.