GLP Capital Partners sells ex-China assets to Ares for up to US$5.2 billion

FUND manager GLP Capital Partners (GCP) has agreed to sell its operations outside China to US-based alternative investment group Ares Management, in a deal worth up to US$5.2 billion.

Under the deal, Ares will make an initial payment of US$3.7 billion for GCP’s international fund management business, which covers Japan, the US, Europe, Brazil and Vietnam.

This upfront payment comprises US$1.8 billion in cash and about US$1.9 billion in Ares Class A common shares.

The transaction also includes an earn-out provision of up to US$1.5 billion, contingent on meeting specific performance milestones, bringing the total potential value of the deal to US$5.2 billion.

GCP was established in 2011 when GLP, a logistics operator in Asia, launched its fund management platform.

Following the transaction, GLP will retain ownership of GCP, which will continue to manage US$81 billion in assets.

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The upfront cash proceeds will provide “meaningful liquidity” to GLP, which plans to reduce its liabilities and strengthen its balance sheet and key financial metrics, GLP said on Tuesday (Oct 8).

The transaction represents less than 10 per cent of GLP’s core underlying Ebitda (earnings before interest, taxes, depreciation and amortisation).

On a pro forma basis, net leverage is expected to improve from 27 per cent to 24 per cent as of Jun 30, 2024, GLP said.

Ming Mei, chief executive of GLP and GCP who will remain in both roles, said: “We are excited that the transaction will also allow us to strategically optimise each region’s business development plan.”

In a separate statement on the same day, Ares described the acquisition as a move to expand its real estate capabilities. The deal nearly doubles its real estate assets under management to some US$96 billion across North America, Europe, Asia and Latin America.

The company’s president and chief executive, Michael Arougheti, said: “We have long admired the global real estate experience of GCP and its capabilities in facilitating the economy of the future, which includes investing in and managing industrial, data centre and self-storage assets.”

The transaction is expected to close in the first half of 2025, subject to customary regulatory approvals and other closing conditions.