Oct 8 (Reuters) - Alternative asset manager Ares

Management Corp ( ARES ) said on Tuesday it will buy smaller

rival GLP Capital Partners' international business, excluding

China operations, in a deal valued at $3.7 billion.

The deal would help Ares to expand into the infrastructure

sector, an area where Wall Street is making significant bets,

expecting the artificial intelligence boom to drive substantial

returns due to increasing demand for data center and power.

The companies said they expect data center demand from both

hyperscale and enterprise customers to accelerate, with capital

expenditures projected to surpass $1 trillion over the next

three years.

The deal for GCP International includes a $1.8 billion cash

consideration and the remainder will be paid through Ares class

A common shares. It also allows for an additional payout of $1.5

billion, if certain performance targets are met.

GCP International, a global alternative asset management

firm, had $44 billion in assets under management (AUM), as of

June 30. Meanwhile, Ares held over $447 billion in AUM at

quarter-end.

The broader industrial real estate sector, valued at about

$2 trillion, continues to demonstrate strong and resilient

fundamentals through various market cycles.

Alternative asset managers, who invest beyond traditional

stocks, bonds, and cash, are poised for further gains as central

banks around the world cut interest rates, revitalizing the real

estate market.

GCP International managed 23 funds and over 320 million

square feet of industrial properties, as of June 30.

Ares said it expects the deal to close in the first half of

2025, following which GCP International's leadership teams

responsible for managing and operating the funds in the United

States, Japan, Europe, Brazil and Vietnam, will join it.

Eastdil Secured, Barclays, Goldman Sachs and Wells Fargo

Securities, LLC served as financial advisers to Ares on the

deal. Citigroup, Morgan Stanley, Greenhill, UOB Group and

Deutsche Bank advised GCP International.

(Reporting by Manya Saini in Bengaluru; Editing by Shinjini

Ganguli)