In a strategic move that signals the growing influence of Middle Eastern capital in private equity, Ares Management Corp. has announced a partnership with Mubadala Investment Co. and the Abu Dhabi Investment Council (ADIC) to form a new GP stakes business. The collaboration, revealed in late November 2025, represents a significant expansion of Ares' alternative investment platform and marks another chapter in the deepening relationship between the Los Angeles-based asset manager and Abu Dhabi's sovereign wealth apparatus.

The new venture will focus on acquiring minority stakes in mid-size asset managers with up to $30 billion in assets under management, targeting firms across private equity, real estate, credit, infrastructure, and secondaries. This strategic alliance builds upon the success of a previous $1 billion credit secondaries joint venture between Ares and Mubadala launched in March 2023, demonstrating the partners' commitment to expanding their collaborative investment approach across multiple alternative asset classes. According to SecondaryLink, the partnership specifically targets minority positions in these mid-size managers, positioning the venture to capitalize on the substantial growth opportunities within the alternative asset management space.

The Strategic Architecture of the GP Stakes Platform

The new GP stakes business will operate within Ares' existing private equity secondaries unit, creating synergies with the firm's established infrastructure and expertise. What sets this venture apart from traditional GP stakes investing is Ares' unique sourcing advantage through its extensive direct lending relationships. The firm maintains connections with over 1,000 general partners through its lending business, providing an unprecedented pipeline for identifying and evaluating potential investment targets.

The involvement of Mubadala's special-situations unit adds significant firepower to the venture. As one of the world's most sophisticated sovereign wealth funds, Mubadala brings deep expertise in complex investment structures and patient capital that is essential for successful GP stakes investing. ADIC's participation further strengthens the Abu Dhabi connection, representing a convergence of two of the emirate's most influential investment entities under a unified strategy with Ares.

"The target firms will have up to $30 billion in assets under management, with focus areas including private equity, real estate, credit, infrastructure, and secondaries managers."

To support the platform's launch, Ares has made strategic personnel additions, including the hire of Sean Gallary from Jefferies. Gallary's addition reflects the firm's commitment to building a best-in-class team capable of executing complex minority stake transactions in the competitive GP stakes market. His background at Jefferies brings valuable investment banking and capital markets expertise that will be crucial for structuring deals and managing relationships with target managers.

Leveraging Ares' Direct Lending Network as a Deal Engine

The competitive advantage of the Ares-Mubadala-ADIC venture lies in its proprietary deal sourcing mechanism. Unlike many GP stakes investors who rely on intermediaries or cold outreach to identify opportunities, Ares can tap into its relationships with over 1,000 general partners cultivated through its position as a leading direct lender. This network provides unparalleled visibility into the financial health, growth trajectories, and capital needs of potential targets.

Ares Management, recognized as the biggest firm in private credit by fundraising according to the PDI 100, has built these relationships over years of providing financing solutions to private equity sponsors. This positions the firm uniquely to identify managers who might benefit from strategic capital infusions, whether for growth initiatives, founder liquidity, or balance sheet optimization.

The direct lending connection also provides crucial due diligence advantages. Having lent to many of these managers or their portfolio companies, Ares possesses intimate knowledge of their operational capabilities, risk management practices, and market positioning. This information asymmetry can significantly reduce due diligence timelines and improve investment decision-making quality compared to competitors operating without such embedded relationships.

Furthermore, the lending relationships create natural conversation starters for GP stakes discussions. Managers who have successfully worked with Ares on debt transactions may be more receptive to exploring equity partnerships, particularly when the capital comes with the backing of sophisticated sovereign wealth funds known for being patient, strategic partners rather than purely financial investors.

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Building on a Proven Partnership Model

The GP stakes venture represents an evolution of the successful collaboration between Ares and Mubadala that began with their credit secondaries partnership. The March 2023 launch of their $1 billion joint venture formalized Ares' debt secondaries business and demonstrated the partners' ability to execute complex alternative investment strategies together.

The credit secondaries partnership served as a proof of concept for the cultural and operational compatibility between Ares and Mubadala. Both organizations share a long-term investment horizon and sophisticated understanding of alternative assets, making them natural collaborators for complex strategies like GP stakes investing. The success of their initial venture likely provided the confidence necessary to expand their partnership scope and bring ADIC into the fold.

The addition of ADIC to this latest venture signals the growing institutionalization of Abu Dhabi's alternative investment strategy. By coordinating investment approaches across multiple sovereign entities, Abu Dhabi is maximizing its collective influence and deal flow access in the global private markets. This coordinated approach allows for larger check sizes, broader sector coverage, and enhanced due diligence capabilities.

The timing of this expansion also reflects broader market dynamics. The GP stakes market has matured significantly since 2020, with increased competition driving the need for differentiated sourcing strategies. By leveraging Ares' lending platform and combining it with Abu Dhabi's patient capital, the partnership is positioning itself to compete effectively against established players like Dyal Capital, Blackstone Strategic Capital, and Blue Owl Capital.

Market Positioning in the Evolving GP Stakes Landscape

The GP stakes market has undergone significant evolution over the past five years, transitioning from a niche strategy to a mainstream alternative investment approach. Large institutional investors increasingly view minority stakes in high-quality asset managers as attractive sources of diversified fee income and exposure to alternative asset growth trends. The Ares-Mubadala-ADIC venture enters this market with several structural advantages that differentiate it from existing players.

The focus on mid-size managers with up to $30 billion in AUM represents a strategic sweet spot in the market. These firms are typically large enough to have established track records and institutional infrastructure but small enough to benefit meaningfully from strategic capital and operational support. They often face specific challenges around succession planning, growth capital needs, or founder liquidity that GP stakes partnerships can address effectively.

The multi-asset class approach across private equity, real estate, credit, infrastructure, and secondaries provides significant diversification benefits and reflects the partners' broad expertise across alternative investments. This comprehensive scope allows the venture to capitalize on secular growth trends across multiple alternative asset categories rather than being concentrated in a single strategy.

"The business will focus on taking minority positions in other asset managers, with target firms being mid-size managers across multiple alternative asset classes."

However, the venture faces intensifying competition from both established GP stakes specialists and new entrants attracted by the strategy's growth potential. Success will depend heavily on execution capabilities, relationship development, and the ability to provide value beyond capital to portfolio managers. The unique sourcing advantage through Ares' lending platform may prove crucial in identifying opportunities ahead of competitors and building stronger relationships with target managers.

Operational Framework and Investment Approach

The operational structure of the GP stakes business within Ares' private equity secondaries unit creates important synergies with existing capabilities. The secondaries team's expertise in alternative asset valuation, due diligence processes, and complex transaction structuring provides a strong foundation for GP stakes investing. Both strategies require deep understanding of alternative asset managers' business models, performance drivers, and risk factors.

The involvement of Mubadala's special-situations unit adds a sophisticated layer of transaction expertise and flexible capital structures. Special-situations investing often involves complex deal terms, creative structuring solutions, and patient capital deployment – all characteristics that align well with successful GP stakes investing. This capability may allow the venture to pursue more complex opportunities that require innovative transaction structures or unique capital solutions.

ADIC's participation brings additional strategic value through its extensive network of global investment relationships and sovereign wealth fund connections. This network effect can create valuable business development opportunities for portfolio managers, potentially enhancing their ability to raise capital from institutional investors globally. The sovereign wealth fund imprimatur also provides credibility and long-term capital stability that many managers find attractive.

The hiring of Sean Gallary from Jefferies represents a strategic addition that bridges investment banking expertise with alternative asset management knowledge. His background in capital markets and transaction execution will be valuable for structuring minority stake deals, managing complex negotiations, and maintaining relationships with target managers throughout the investment lifecycle.

Strategic Implications for Alternative Asset Management

The formation of this GP stakes partnership reflects broader trends reshaping the alternative asset management industry. Institutional investors are increasingly seeking exposure to the asset management business model itself, recognizing the attractive characteristics of diversified fee streams, scalable infrastructure, and growing alternative asset allocations among global investors.

For mid-size asset managers, the availability of patient, strategic capital from sophisticated partners like Ares, Mubadala, and ADIC provides new options for growth financing and founder liquidity. Unlike traditional private equity buyers who typically seek control positions, GP stakes investors offer capital solutions that allow management teams to retain operational control while accessing resources for expansion and development.

The partnership also highlights the growing influence of sovereign wealth funds in global private markets. The collaboration between Mubadala and ADIC demonstrates Abu Dhabi's coordinated approach to alternative investment deployment, maximizing the emirate's collective influence and market presence. This trend toward sovereign wealth fund collaboration may encourage similar partnerships among other government investment entities globally.

From Ares' perspective, the GP stakes business represents a natural extension of its alternative asset platform and relationship network. By monetizing its extensive general partner relationships through minority stake investments, Ares creates a new revenue stream while deepening strategic relationships with key market participants. This approach exemplifies the trend toward platform-based alternative asset management, where firms seek to maximize value creation across multiple interconnected strategies.

Future Outlook and Market Development

The launch of the Ares-Mubadala-ADIC GP stakes business comes at a critical juncture for the alternative asset management industry. With institutional investor allocations to alternatives continuing to grow globally, demand for high-quality asset managers with proven track records and scalable platforms remains strong. The venture's focus on mid-size managers positions it well to capitalize on this demand while providing strategic capital to firms seeking to expand their capabilities and market presence.

The success of the partnership will likely depend on several key factors, including deal sourcing effectiveness, value creation capabilities, and market timing. The unique advantage of accessing Ares' lending network for deal origination provides a differentiated starting point, but sustainable competitive advantage will require consistent execution and value delivery to portfolio managers over time.

Market observers will be watching closely for the venture's first announced investments, which will provide insights into the partnership's investment criteria, deal structuring approach, and strategic positioning. Early deals will also demonstrate how effectively the partners can leverage their combined resources and expertise to create value for target managers and their investors.

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The broader implications for the GP stakes market include potential increased competition for mid-size manager targets and continued innovation in deal structures and value creation approaches. As more institutional investors seek exposure to alternative asset management businesses, the market for high-quality GP stakes opportunities will likely become increasingly competitive, emphasizing the importance of differentiated sourcing and relationship advantages like those the Ares partnership appears to possess.

Sources & References

Bloomberg - Primary announcement of Ares, Mubadala, and ADIC partnership
SecondaryLink - GP stakes business strategy details
Secondaries Investor - Background on Ares-Mubadala credit secondaries partnership
Pensions & Investments - Sovereign wealth fund market analysis

This article was written with AI assistance and curated by the Quest Placement editorial team. While we strive for accuracy, please verify important details independently before making decisions.

Quest Placement Editorial Team