Ares Management, an L.A.-based alternative asset manager, has acquired the investment platform of Wrightwood Capital, a provider of debt capital to the U.S. commercial real estate sector. The terms of the transaction were not disclosed, but as part of the deal, more than 40 Wrightwood employees have joined the Ares Private Debt Group to focus on middle-market lending in the commercial real estate sector.
Ares Management LLC announced today that it has acquired the investment platform of Wrightwood Capital, a highly respected provider of debt capital to the U.S. commercial real estate sector. Terms of the transaction were not disclosed.
“This transaction represents a unique opportunity to further build out the Ares Private Debt Group by adding specific industry expertise from a talented group of professionals and expanding our reach into commercial real estate lending–an area we see having attractive long-term growth opportunities,” said Tony Ressler, Senior Partner and Chairman of the Executive Committee of Ares Management. “This asset class will be supported by our experienced pool of investment professionals in corporate credit, extensive infrastructure and superior risk management tools.”
As a result of this transaction, more than 40 Wrightwood professionals have joined the Ares Private Debt Group to focus on middle-market lending in the commercial real estate sector. They will be part of the Ares Commercial Real Estate, or “ACRE”, investment team, which will be headquartered in Chicago with other offices in Dallas, Los Angeles, New York, Newport Beach, and Washington, D.C. ACRE will be led by John Bartling, a Senior Partner of ACRE and the Global Head of Real Estate at Ares Management, and by former Wrightwood CEO Bruce Cohen, who has been appointed as a Senior Partner of ACRE.
“The Ares Commercial Real Estate business plan that John and Bruce are implementing is patterned after what we have accomplished at Ares Capital Corporation–where we have a dedicated team located across the U.S. that is delivering flexible capital solutions to middle-market companies,” said Michael Arougheti, Senior Partner of Ares Management and Global Head of the Ares Private Debt Group. “I believe ACRE will ultimately replicate the kind of success we continue to have at ARCC–where clients have come to expect creative structuring solutions for their borrowing needs.”
All of Wrightwood’s commercial real estate assets and sponsored funds will be managed by the ACRE team, and benefit from the significant resources and investment expertise of Ares Management. In addition, Ares Management retained Wrightwood’s designation as a general and special servicer by Standard & Poor’s.
“We believe this transaction benefits all of our stakeholders and validates the commitment they made to the Wrightwood team and platform,” said Mr. Cohen. “This is also an excellent opportunity to grow the platform we created with the support of a world class asset manager in order to better serve our long-standing client base.”
“The addition of the Wrightwood investment platform enhances ACRE’s ability to address a significant and growing need for financing solutions in middle-market commercial real estate,” said Mr. Bartling. “We have seen this story unfold in middle-market corporate credit and the ability for ARCC to continuously take meaningful market share from traditional lenders who are under pressure to withdraw and/or are unable to adapt. By adopting ARCC’s flexible approach to private debt, we believe ACRE is well-positioned to achieve meaningful growth for years to come with a compelling offering to owners and operators of commercial real estate.”
About Ares Management LLC
Ares Management LLC is a global alternative asset manager and SEC registered investment adviser with approximately $42 billion of committed capital under management and more than 440 employees after this transaction. Ares is headquartered in Los Angeles with professionals located across the United States, Europe and Asia and has the ability to invest in all levels of a company’s capital structure — from senior debt to common equity. Ares’ investment activities are managed by dedicated teams in its Private Equity, Private Debt and Capital Markets 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.
The Ares Private Debt Group provides integrated private debt and non-control equity financing solutions to the middle market. In addition to ACRE, the Ares Private Debt Group has two other dedicated investment teams: Ares Capital Management LLC (a wholly-owned subsidiary of Ares Management and an SEC registered investment advisor), which manages Ares Capital Corporation ARCC +7.22% in the U.S., and Ares Capital Europe Limited (ACE) in Europe.
About Wrightwood Capital
Wrightwood has made more than $3.9 billion in loans and investments since 2004, comprised of more than 285 senior and subordinate capital transactions in the middle market across all major property types throughout the U.S. In addition to balance sheet lending, Wrightwood and its predecessors were the sponsors of eight funds as well as the manager of separate accounts totaling more than $870 million in equity commitments primarily from institutional investors.