Ares weighs acquisition of buyout firm Leonard Green
Ares Management has held discussions over a potential acquisition of buyout firm Leonard Green & Partners in a deal that would significantly expand its private equity platform and accelerate consolidation across the private markets industry, according to a report by the Financial Times.
The report cites unnamed people familiar with the matter as saying that the two Los Angeles-based firms have recently explored a possible transaction, although negotiations remain preliminary and may not lead to an agreement.
If completed, the acquisition would transform Ares’ private equity business. While the alternative asset manager oversees approximately $644bn in assets under management, only around $25bn is invested through its private equity strategies. Leonard Green manages roughly $85bn, meaning a combination would more than quadruple Ares’ buyout assets.
The move would strengthen Ares’ position in traditional private equity, an area where it has historically maintained a smaller presence than diversified rivals including Blackstone, Apollo and KKR. Ares has built its reputation primarily in private credit before expanding into areas such as real estate and secondaries through acquisitions and organic growth.
Leonard Green is regarded as one of the industry’s most established buyout firms, specialising in investments in businesses with resilient cash flows, including distributors, consumer brands, restaurants, fitness operators, healthcare services and automotive-related companies. The firm has earned a reputation for generating strong returns with a relatively small investment team, including its recent exit from a building products distribution company sold to Home Depot in an $18bn transaction.
The potential acquisition would also give Ares greater scale at a time when the private equity industry continues to face slower fundraising and a backlog of ageing portfolio companies awaiting exits. Despite these challenges, leading managers have continued to attract capital and are expanding their offerings across private equity, private credit, infrastructure and real assets.
