Alleghany has invested USD250m for a 6.25 per cent equity ownership interest in Ares Management, which is privately held, and also committed to invest up to USD1bn 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 USD250m 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," says Tony Ressler (pictured), 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 recognised 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," says 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 organisations will be well-positioned to serve the converging reinsurance and capital markets."
JP Morgan Securities and Bank of America Merrill Lynch provided financial advisory services and Proskauer Rose provided legal representation for Ares Management. Morgan Stanley provided financial advisory services, and Willkie Farr & Gallagher provided legal representation for Alleghany.