LOS ANGELES—Ares Management LP, parent company of Ares Real Estate Group, reportedly is in talks to acquire Kayne Anderson Capital Advisors, also based in Los Angeles and itself a major real estate player in the private equity space. Bloomberg Business reported that the deal, which hasn't been finalized, would be paid for in stock and cash.

Ares, which went public in 2014, has $87 billion of assets under management; Kayne Anderson has $29 billion in AUM. After launching the REIT Ares Commercial Real Estate Corp. in 2012, AREG followed up with its acquisition of AREA Property Partners in 2013, adding 50 investment professionals to its commercial real estate team.

For its part, Kayne Anderson Real Estate Advisors invests opportunistically in niche sectors such as student housing. The parent company completed fundraising last month for its fourth real estate fund, capping it at $1 billion, according to Bloomberg.

At an industry conference in New York City, Ares president Mike Arougheti said Wednesday that one reason the firm went public was to pursue strategic acquisitions, Bloomberg reported. “The bar for us to make acquisitions is very, very high,” Bloomberg reported Arougheti as saying. “Typically when we've made acquisitions, it's coming in an area where we already have core competencies. It's something that we understand but it's easier for us to buy the capability than to build it organically in order to accelerate into that market opportunity.”

Arougheti has previously said that the founders of private equity firms launched in the 1980s and 1990s are now aging and therefore thinking about how their companies can continue, thereby providing opportunities for consolidation, Bloomberg reported. Kayne Anderson chairman Richard Kayne, who cofounded the firm in 1984, is 70, and reportedly would take a senior role in the merged firm. GlobeSt.com will report more on a possible deal as information becomes available