Shares of Ares Management (NYSE:ARES) are down about 10% as of 11 a.m. EST Thursday after the company announced the pricing of a secondary offering at $20 per share.
The alternative investment manager filed for a secondary offering in which one investor, the Abu Dhabi Investment Authority, would sell 7.5 million shares, with a greenshoe option, or a provision for additional shares, to sell up to 1.125 million more shares within 30 days.
The company announced that the secondary priced at $20 per share before the market opened on Thursday.
The Abu Dhabi Investment Authority is cashing out at an interesting time. Ares Capital Corporation (NASDAQ:ARCC), one of the company's largest managed funds, recently acquired a competitor, making it by far the largest publicly traded business development company (BDC). That merger should be a boon for Ares Management, given that the BDC generated about 19% of the company's management fees before its recent growth spurt.
Prices are driven by supply and demand, and share prices are not an exception to this rule. With millions of shares sold in a secondary, and up to 1.125 million more available to underwriters at $20 per share, it isn't surprising to see shares trade just below the $20 per-share mark in active trading on Thursday.