Ares Management Corporation to acquire seven CLO contracts through managing interest in Crestline Denali Capital
A subsidiary of Ares Management Corporation (Ares) is to acquire a managing interest in a restructured Crestline Denali Capital (Crestline Denali) that will result in the addition of seven collateralised loan obligation funds (CLOs) totalling USD2.6 billion of assets under management to the Ares portfolio.
Crestline Denali, a Chicago area-based firm specialising in the management of non-investment grade bank loans, will retain its equity interest in its CLOs.
Ares’ CLOs are managed by its Credit Group, which had USD106 billion in assets under management as of 30 September, 2019. Ares believes that the all-cash transaction will further strengthen its leading global CLO franchise and increase its CLO assets under management by USD2.6 billion without the assumption of any debt or headcount. The purchase price was not disclosed.
“We believe the opportunity to become the manager of these CLOs is a compelling investment opportunity for us given our deep credit expertise and extensive CLO management capabilities,” says Kipp deVeer, Partner and Head of the Ares Credit Group. “We have known the Crestline Denali team for many years and we share a similar approach and philosophy towards credit investing, which we believe has been critical in their successful management of their investors’ capital.”
“This transaction will allow the capabilities, scale and experience of Ares to benefit all investors,” says John Cochran, the Chief Operating Officer of Crestline Investors, Inc. and representative for Crestline Denali. “As continued investors in these CLOs, we look forward to our future, collective success.”
The transaction is expected to close in the first quarter of 2020 and is subject to customary closing conditions.
Berkshire Global Advisors served as financial advisor and Winston & Strawn LLP served as legal counsel to Crestline Denali. Latham & Watkins LLP served as legal counsel to Ares.