Months after rumors of the deal first surfaced, private equity and debt giant Ares Management announced Thursday that it has agreed to acquire fellow Century City finance firm Kayne Anderson Capital Advisors for $2.6 billion, mostly in stock.

The firms will merge, with the combined company to be named Ares Kayne Management, an entity with a combined $113 billion in assets under management as of March 31. That would make it one of the five biggest asset managers in Los Angeles, just behind downtown L.A. bond shop TCW Group Inc.

The two companies are neighbors, located just blocks apart on Avenue of the Stars in Century City, but have starkly different portfolios. Ares core business is focused on private equity, direct lending and tradable credit, while Kayne has a specialty in energy investments.

“We have long known and admired Kayne Anderson as an industry leader in energy, energy infrastructure, real estate and other asset classes, and this merger will make us a differentiated investment manager with five market-leading businesses,” Ares Chief Executive Tony Ressler said in a press release announcing the merger.

“Merging with Ares, whom we have admired for years, adds more competitively advantaged strategies for our clients, in addition to fortifying the firm’s long-term management capabilities,” Kayne Anderson Chairman Richard Kayne said in the press release.

Following the merger, Ressler will be chief executive of Ares Kayne. Ressler and Kayne will be co-chairmen of the firm.

Ressler and Kayne both appeared on the Business Journal’s most recent list of Wealthiest Angelenos. Ressler ranked 35th, with an estimated net worth of $1.6 billion, while Kayne, who founded Kayne Anderson along with early investor and late business magnate John Anderson, ranked 49th at $1.2 billion.

Based on Business Journal estimates and public filings, Ares’ acquisition of Kayne Anderson values Kayne’s stake in the firm at between $1.1 and $1.6 billion.

A spokesman for Ares declined to comment. A Kayne spokesman did not immediately respond to a request for comment.