Ares Said to Buy Northstar Funds for Asia Private Equity Growth

Ares Management Corp. has acquired control of three funds formerly managed by Northstar Group, an Indonesian private equity firm, expanding Ares' presence in the Asian private equity market. Approximately 20 Northstar staff, primarily investment professionals, will transition to Ares as part of the deal; however, Northstar's co-founders will not be joining. The acquisition follows extensive discussions and due diligence, despite Northstar's investments in the failed startup eFishery.

Analysis

Ares Management Corp. is strategically expanding its footprint in the Asian private equity market by acquiring control of three funds previously managed by Indonesian firm Northstar Group. This transaction, which followed months of detailed discussions and due diligence, will see approximately 20 Northstar investment professionals transition to Ares, enhancing its local operational capabilities and market intelligence. Notably, Northstar's co-founders, Patrick Walujo and Glenn Sugita, will not be joining Ares. The acquisition proceeds despite Northstar's prior investment in eFishery, a startup that reportedly failed, suggesting Ares perceives overriding value in the fund assets and team or has structured the deal to mitigate associated risks. The overall sentiment surrounding this development is moderately positive, with a specific sentiment score of 0.7 for Ares (ARES), indicating market approval for this expansionary M&A activity within emerging private markets.

Key Decisions for Investors

• Investors should view this acquisition as a positive strategic move for Ares Management (ARES) to deepen its presence and asset base in the Asian private equity landscape, a key growth region.
• Monitor Ares' integration of the Northstar funds and personnel, and its subsequent performance in managing these assets, particularly given the context of Northstar's past unsuccessful investment in eFishery.
• Consider the potential accretion to Ares' fee-related earnings and assets under management stemming from these newly acquired funds as a factor in evaluating the company's growth trajectory.