NEW YORK and LOS ANGELES, Oct. 19,
2020 /PRNewswire/ -- Pretium and a group of its
investors and funds managed by the Real Estate Equity and
Alternative Credit strategies of Ares Management Corporation (NYSE:
ARES) today announced a strategic partnership to acquire Front Yard
Residential Corporation (NYSE: RESI) ("Front Yard"), a leading
provider of high-quality and affordable single-family rental
("SFR") housing, in an all-cash transaction that values Front Yard
at $2.4 billion.
The transaction demonstrates investors' increasing demand for
SFR assets and the unique investment opportunities available to
operators such as Pretium that possess the requisite scale to drive
margins. Pretium led the transaction and will manage the venture
following closing.
Front Yard will benefit from the scale, expertise, data
analytics, and operational and capital markets capabilities of
Pretium and its wholly owned property and asset management platform
Progress Residential. Upon completion of the transaction, Pretium
will become the second-largest owner and operator of SFR properties
in the United States with a
portfolio of more than 55,000 cash-flowing single-family rentals
throughout the country.
"This transaction further establishes Pretium as both a pioneer
and a leader in the SFR space since 2012, having completed the
industry's largest strategic recapitalization in 2019 and now
leading the industry's first public-to-private transaction," stated
Don Mullen, Chairman and CEO at
Pretium. "We firmly believe that scale is paramount to
outperformance and continuing to create meaningful liquidity for
SFR investors is necessary to ensure robust valuations and the
continued flow of institutional capital into the SFR asset
class."
"The acquisition of Front Yard and its team represents a unique
and strategic opportunity to leverage our differentiating scale and
best-in-class operating platform to drive margins and deliver
attractive returns to investors," added Dana Hamilton, Head of Real Estate at Pretium.
"We look forward to working with the Front Yard team to make our
resident-focused management approach available to a greater number
and more diverse set of households, as well as to new markets where
affordability challenges are growing."
"We look forward to partnering with Pretium on this compelling
opportunity to invest in an attractive and well-diversified
portfolio of single-family rental assets," said David Roth, Partner and Head of U.S. Real Estate
Equity in the Ares Real Estate Group. "SFR has become a core real
estate asset class that fits well within our investment strategy,
and we believe Pretium's experience as one of the earliest
innovators in the sector makes them an ideal partner for us."
"This transaction is a perfect example of how we collaborate and
partner across our platform to offer flexible capital solutions of
scale while making differentiated investments on behalf of our
investors," said Joel Holsinger,
Partner and Co-Head of Alternative Credit at Ares Management. "We
are excited to partner with our real estate colleagues and Pretium
to benefit all of our stakeholders."
The transaction is expected to close in the first quarter of
2021, subject to the satisfaction of customary closing
conditions.
Advisors
RBC Capital Markets, LLC is serving as financial advisor to
Pretium. BofA Securities is serving as financial advisor to Ares.
Sidley Austin is serving as M&A
legal counsel, Fried Frank as partnership legal counsel, and
Hunton Andrews Kurth as special tax
and financing counsel to Pretium. Latham & Watkins is serving
as legal counsel to Ares.
About Pretium
Pretium is a specialized alternative investment management firm
focused on residential real estate, mortgage finance, and corporate
credit. Pretium was founded in 2012 to capitalize on secular
investment and lending opportunities arising as a result of
structural changes, disruptions, and inefficiencies within the
economy, the residential housing sector, and mortgage finance
markets. Pretium has built an integrated analytical and operational
ecosystem within the U.S. residential housing, mortgage, and
corporate credit markets, and believes that its insight and
experience within these markets create a strategic advantage over
other investment managers. Pretium's platform has more than
$16 billion of assets under
management as of October 1, 2020 and
employs approximately 1,500 employees across 26 offices. Please
visit www.pretium.com for additional information.
About Progress Residential
Progress Residential is a market leader in intelligent
single-family rental management services, with people, technology,
scale, and data-driven solutions that streamline operations,
optimize asset performance, and provide an exceptional renting and
living experience for our residents. Progress Residential's
approximately 1,000 employees currently manage over 40,000 homes
across 15 core markets. Progress Residential also offers
third-party property management service for investors with
mid-to-large single-family rental home portfolios and Built for
Rent communities through its PR3 Management business. For more
information, please visit www.rentprogress.com.
About Ares Management Corporation
Ares Management Corporation (NYSE: ARES) is a leading global
alternative investment manager operating integrated businesses
across Credit, Private Equity and Real Estate. Ares Management's
investment groups collaborate to deliver innovative investment
solutions and consistent and attractive investment returns for fund
investors throughout market cycles. Ares Management's global
platform had approximately $165
billion of assets under management as of June 30, 2020 with approximately 1,400 employees
operating across North America,
Europe and Asia Pacific, pro forma for the acquisition of
SSG Capital Holdings Limited which closed on July 1, 2020. For more information, please visit:
www.aresmgmt.com.
About Ares Real Estate Group
The Ares Real Estate Group manages comprehensive public and
private, equity and debt strategies with approximately $14 billion of assets under management and
approximately 80 investment professionals, as of June 30, 2020. The real estate team maintains a
time-tested and consistent investment approach across equity and
debt strategies focusing on major property types that have value
creation opportunities, located in liquid markets with diversified
economies.
About Ares Alternative Credit
Ares' Alternative Credit strategy focuses on direct lending and
investing in assets that generate contractual cash flows and fills
gaps in the capital markets between credit, private equity and real
estate. Ares Alternative Credit targets investments across the
capital structure in specialty finance, lender finance, loan
portfolios, equipment leasing, structured products, net lease, cash
flow streams (royalties, licensing, management fees), fund
secondaries and other asset-focused investments. Co-Headed by
Keith Ashton and Joel Holsinger, Ares Alternative Credit
leverages a broadly skilled and cohesive team of approximately 40
investment professionals as of June 30,
2020.
Media:
Pretium
Prosek Partners
Mike Geller, 646-818-9018
mgeller@prosek.com
Josh Clarkson, 646-818-9259
jclarkson@prosek.com
Ares Management Corporation
Mendel Communications
Bill Mendel, 212-397-1030
bill@mendelcommunications.com
Investors:
Pretium
Genie Pusey, 917-942-7395
gpusey@pretium.com
Ares Management Corporation
Carl Drake, 800-340-6597
cdrake@aresmgmt.com
Priscila Roney, 212-808-1185
proney@aresmgmt.com
Brittany Cash, 212-301-0347
bcash@aresmgmt.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/pretium-and-ares-management-announce-2-4-billion-take-private-transaction-with-front-yard-residential-301154705.html
SOURCE Pretium Partners, LLC; Ares Management Corporation