Ares Management said Wednesday that Alleghany Corp. has invested $250 million in Ares for a 6.25% equity stake. Alleghany has also committed to invest up to $1 billion of capital in various existing and new Ares investment strategies. Ares plans to use the $250 million as sponsor capital in its investment vehicles. J.P. Morgan Securities and Bank of America Merrill Lynch provided financial advice to Ares. Morgan Stanley advised Alleghany.
LOS ANGELES and NEW YORK, July 31, 2013 /PRNewswire/ — Ares Management LLC and Alleghany Corporation (NYSE-Y) announced today a new strategic partnership. Alleghany invested $250 million for a 6.25% equity ownership interest in Ares, which is privately held, and also committed to invest up to $1 billion of capital in various existing and new Ares investment strategies.
Through its relationship with Ares, Alleghany seeks both to participate in Ares’ strong business prospects and to enhance the returns of its committed capital through Ares’ alternative asset expertise. The $250 million investment will be used by Ares as sponsor capital in its investment vehicles, which aim to deliver compelling risk-adjusted returns for investors through differentiated investment strategies.
“We believe this strategic transaction with Alleghany, a highly regarded, well-run company with expertise in specialty insurance, asset management and opportunistic equity investing, will greatly benefit our entire platform,” said Tony Ressler, Senior Partner and Chairman of the Executive Committee of Ares Management. “We are thrilled to have Alleghany join the Abu Dhabi Investment Authority as a strategic investor to meet the diverse needs of our blue chip investor base across more than 100 vehicles. In working closely with Alleghany’s leadership team, we recognized how similar our corporate cultures are, which further confirmed the enormous potential of this relationship.”
“Ares has over 15 years of experience making successful credit-focused investments across asset classes,” commented Weston Hicks, President and Chief Executive Officer of Alleghany Corporation. “The Ares senior management team has built an impressive business and we believe the firm has excellent long-term prospects. We are excited about the opportunity to work closely with Ares to enhance Alleghany’s fixed income investment returns, while helping Ares expand its presence in the insurance industry. In addition, we believe our two organizations will be well-positioned to serve the converging reinsurance and capital markets.”
In connection with this transaction, J.P. Morgan Securities and Bank of America Merrill Lynch provided financial advisory services and Proskauer Rose LLP provided legal representation for Ares Management. Morgan Stanley provided financial advisory services, and Willkie Farr & Gallagher LLP provided legal representation for Alleghany.
About Ares Management LLC
Ares Management LLC is a global alternative asset manager and SEC registered investment adviser with approximately $66 billion of committed capital under management and approximately 700 employees as of July 1, 2013. Ares is headquartered in Los Angeles with professionals located across the United States, Europe and Asia and invests across the capital structure – from senior debt to common equity. Ares’ investment activities are managed by dedicated teams in its Capital Markets, Private Debt, Private Equity and Real Estate investment platforms. Ares Management was built upon the fundamental principle that each platform benefits from being part of the greater whole. This multi-asset class synergy provides its professionals with insights into industry trends, access to significant deal flow and the ability to assess relative value.
For additional information, visit www.aresmgmt.com.
About Alleghany Corporation
Alleghany Corporation (NYSE-Y) creates value through owning and managing operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. Alleghany’s property and casualty subsidiaries include: Transatlantic Holdings, Inc., a leading global reinsurer; RSUI Group, Inc., a national underwriter of property and liability specialty insurance coverages; Capitol Transamerica Corporation, an underwriter of small commercial property, casualty and surety insurance coverages; and Pacific Compensation Corporation, an underwriter of workers’ compensation insurance primarily in California.
For additional information, visit www.alleghany.com.