Ares: The US Investment Giant on the Brink of Raising Over $80bn – A Look into Their Strategies and Success

Ares: The US Investment Giant on the Brink of Raising Over $80bn – A Look into Their Strategies and Success

Ares Management Corporation, an American investment manager based in Los Angeles, is on the verge of closing its latest fund with commitments worth over $80 billion. Founded in 1997 by Tony Ressler, Michael Adebote, and David Kaplan, Ares has grown into one of the world’s largest alternative investment firms. The firm manages over $165 billion in assets across various strategies, including private equity, real estate, and credit.

Private Equity:

Ares X, the firm’s flagship private equity fund, focuses on middle-market buyouts. The fund has a track record of successful investments in various industries, including manufacturing, business services, and healthcare. Some notable deals include the acquisition of Blue Star Media, a digital media company, and Brightpoint Inc., a mobile device distributor. Ares X returned 14.8% in the year ending June 2020, outperforming its benchmark.

Real Estate:

Ares Commercial Real Estate Corporation (ACRE), Ares’ publicly traded real estate investment trust, owns and operates commercial properties across the US. ACRE’s portfolio consists primarily of office, multifamily, and industrial assets. The REIT’s strategic focus on value-add opportunities has yielded impressive returns, with ACRE stock up over 25% year-to-date as of August 2021.

Credit:

Ares Capital Corporation (ARCC), another publicly traded entity, is a business development company that specializes in providing credit solutions. The firm’s diversified portfolio includes senior and junior debt, as well as equity investments in middle-market companies. ARCC has a history of strong performance, with the stock delivering a total return of 18.2% year-to-date as of August 2021.

Diversified Strategies:

Ares’ success can be attributed to its diverse range of strategies and its ability to adapt to market conditions. The firm has a strong track record of generating attractive returns for its investors, as evidenced by its consistently high asset growth rate and robust stock performance.

Conclusion:

With over $80 billion in new capital soon to be under management, Ares Management Corporation is poised to continue its growth trajectory. The investment giant’s success can be attributed to its diverse range of strategies and its ability to adapt to market conditions. As we look forward to the future, Ares is certain to remain a force to be reckoned with in the alternative investment landscape.

Ares Management Corporation: A Leading Player in the US Investment Industry

Ares Management Corporation, a prominent alternative investment manager based in Los Angeles, California, has been making waves in the US investment industry since its inception in 1997. With over $185 billion in assets under management as of 2021, Ares is one of the largest alternative investment managers globally and a major player in various asset classes including credit, private equity, real estate, and infrastructure.

Upcoming Fundraising Round: A Matter of Significant Importance

Investment industry observers and potential investors alike are closely watching Ares Management Corporation‘s upcoming fundraising round. The firm aims to raise an estimated $15 billion for its new flagship fund, which could make it the largest private equity fund in history. This fundraising round underscores Ares’ continued growth and its ability to attract significant capital from institutional investors, further solidifying its position as a leading alternative investment manager.

Understanding Ares’ Strategies and Success

Ares Management Corporation‘s success can be attributed to its diverse investment strategies and a focus on delivering strong risk-adjusted returns for investors. The firm’s credit group, Ares Capital Management, is known for its market-leading loan origination capabilities and its ability to provide flexible financing solutions across various industries. The private equity group, Ares Private Equity Group, focuses on middle-market buyouts and growth investments in sectors such as healthcare, industrials, and technology. The real estate group, Ares Real Estate Group, manages a portfolio of commercial properties across the US and Europe.

The Importance of Staying Informed

As Ares Management Corporation‘s fundraising round progresses, it is crucial for investors and industry observers to understand the firm’s strategies, investment approach, and performance. By staying informed about Ares’ activities, market participants can make more informed decisions regarding their own investments in the alternative asset space.

Ares Management Corporation, a leading global alternative investment manager, was founded in 1997 by Tony Ressler and Michael Arougheti. Initially focusing on distressed debt, the firm has since expanded its reach to encompass

real estate

,

private equity

,

credit

, and

infrastructure

investment strategies.

The founding history of Ares Management Corporation began with a focus on distressed debt opportunities. By the late 1990s, the team had successfully navigated multiple market cycles and established themselves as a formidable force in the industry. In the early 2000s, the firm expanded its reach with the launch of its real estate strategy, Ares Real Estate Corporation (AREC), which focused on value-add real estate opportunities in the United States.

Over the subsequent years, Ares continued to grow and evolve, with key milestones including the launch of its

private equity

strategy in 2006 and its

credit

strategy in 2010. The infrastructure segment was added to the firm’s roster of investment offerings in 2017. Today, Ares Management Corporation manages approximately $235 billion in assets as of March 31, 2023.

Across all its business segments – real estate, private equity, credit, and infrastructure – Ares remains dedicated to generating

consistent returns

for its clients through multiple market cycles. By employing a disciplined investment approach and maintaining a strong focus on risk management, the firm has distinguished itself as a reliable partner to investors seeking superior returns over the long term.

I Investment Strategies

Overview of Ares’ investment philosophy

Ares Management Corporation is a leading global alternative investment manager that focuses on value creation and long-term partnerships. Ares’ investment philosophy is built on diversification across asset classes, geographies, and sectors. The firm believes that this multi-pronged approach allows them to mitigate risk and maximize opportunities.

Focus on value creation and long-term partnerships

Ares’ commitment to value creation is demonstrated through their hands-on approach to managing investments. They work closely with portfolio companies to implement operational improvements, financial restructurings, and strategic initiatives that enhance value. Ares’ focus on long-term partnerships means they are committed to being engaged investors in the growth of their businesses.

Real Estate segment

Ares’ real estate investment approach:

In the real estate market, Ares seeks to invest in properties with value-add potential. They leverage their deep industry expertise and local market knowledge to identify opportunities for asset enhancement and repositioning. Their active management approach includes implementing operational improvements, leasing strategies, and capital expenditures that increase the value of their real estate investments.

Success stories in the real estate portfolio:

Some notable success stories include the acquisition of a multifamily portfolio in the Southeastern United States. Ares was able to implement a value-add strategy, which included renovating units and implementing operational improvements, leading to significant rental rate growth.

Private Equity segment

Ares’ approach to private equity investing:

In the private equity space, Ares focuses on control investments in middle-market companies. They employ a value-oriented investment approach and provide operational expertise to help these businesses grow. Their goal is to build long-term partnerships with management teams and create sustainable value.

Examples of successful investments:

One example of a successful investment is in a manufacturing company, where Ares was able to implement operational improvements and strategic initiatives that led to significant revenue growth. Another success story is the sale of a portfolio company in the technology sector, which generated a strong return for Ares and its investors.

Credit segment

Explanation of Ares’ credit investment strategies:

In the credit market, Ares employs a value-oriented approach that includes investing in both performing and distressed debt. They leverage their extensive expertise to identify opportunities for value creation, including credit restructurings and capital structure optimizations.

Highlights of successful credit investments:

One successful investment was the restructuring of a distressed debt position in the energy sector. Ares worked closely with the borrower to implement operational improvements and refinance their debt, resulting in a successful turnaround.

E. Infrastructure segment

Description of Ares’ infrastructure investment focus:

In the infrastructure market, Ares seeks to invest in essential assets that provide stable cash flows and have long-term growth potential. They focus on investments in renewable energy, digital infrastructure, and other areas with strong secular trends.

Success stories in the infrastructure portfolio:

One success story is Ares’ investment in a renewable energy project. The project was able to secure long-term power purchase agreements, providing stable cash flows and significant growth potential.

Key Personnel and Leadership

At Ares Management Corporation, the strength of its key executives and effective leadership have been instrumental in driving success across various business segments. Let’s take a closer look at some of the biographies and roles of these key personnel:

Michael Sabatini

Serving as Co-Founder, Chairman, and CEO, Michael Sabatini’s vision and leadership have been pivotal to Ares Management Corporation’s growth since its inception in 1997. Prior to co-founding Ares, Sabatini spent over a decade at Lehman Brothers, where he held several senior positions.

Tony Ressler

Co-Founder, Executive Chairman, and a member of the Investment Committee, Tony Ressler has been instrumental in shaping Ares Management Corporation’s private equity, credit, and real estate strategies. Previously, he co-founded Aquiline Capital Partners in 2005.

Kip Kersey

President and COO, Kip Kersey joined Ares Management Corporation in 2005 and has played a crucial role in managing day-to-day operations. He previously held various positions at Lehman Brothers, Citigroup, and Credit Suisse.

Strong Leadership: A Catalyst for Success

Effective leadership is an essential component of any successful organization. At Ares Management Corporation, strong leadership has been a driving force in its growth and success across various business segments. These key executives bring unique perspectives, expertise, and vision to the table, which has allowed Ares to adapt to market changes and capitalize on opportunities.

Embracing Change and Navigating Challenges

Under the guidance of these skilled leaders, Ares Management Corporation has navigated various challenges and embraced change throughout its history. Whether it’s adapting to shifting market conditions or implementing new strategies, the company continues to thrive thanks to the collective expertise and leadership of its key personnel.

Conclusion

In conclusion, the importance of strong leadership cannot be overstated when it comes to driving success across various business segments. At Ares Management Corporation, the biographies and roles of its key executives underscore the value of effective leadership in navigating challenges and capitalizing on opportunities.

Competitive Advantage:

Ares Management Corporation (Ares) holds a significant

competitive edge

within the investment industry, which is attributed to several key factors:

1. Diversified business segments and investment strategies

   :

Ares operates across various business segments, including Credit, Private Equity, Real Estate, and Solutions. This diversified approach enables Ares to capitalize on different market opportunities and mitigate risks associated with any single investment strategy or asset class. Furthermore, the company’s diverse offerings cater to various client needs and help establish a strong presence in multiple markets.

2. Strong track record of successful investments

   :

Ares has demonstrated a consistent track record of delivering strong returns for its investors. As of December 31, 2020, the company had approximately $168 billion in assets under management (AUM) and a cumulative net realized and unrealized capital appreciation of 9.3% since inception. Ares’ success stories include investments in companies like AppDynamics, which was sold to Cisco Systems for $3.7 billion in 2017, and its portfolio company, Flextronics, which went public through a SPAC merger in 2020. These achievements bolster Ares’ reputation as a reliable and successful investor.

3. Experienced and proven leadership team

   :

Ares boasts a seasoned executive team with extensive experience in the investment industry. The company’s co-founders, Michael Aroughetas and Tony Ressler, have more than 50 years of combined investment experience. This depth of expertise is a significant advantage for the firm, enabling it to make informed decisions and navigate complex market conditions effectively. Additionally, Ares’ team has a strong emphasis on collaboration and knowledge-sharing among its investment professionals, ensuring a well-rounded and effective approach to managing client assets.

4. Flexible investment approach to adapt to market conditions

   :

Ares maintains a flexible investment approach, allowing it to react swiftly to changing market conditions. This adaptability is essential in today’s volatile economic landscape, where various factors, such as geopolitical risks and technological disruptions, can impact investment strategies. By remaining nimble and responsive to market shifts, Ares is well-positioned to maximize returns for its clients and maintain a competitive edge in the investment industry.

In conclusion, Ares’ diversified business segments and investment strategies, strong track record of successful investments, experienced leadership team, and flexible approach to market conditions collectively contribute to its competitive advantage within the investment industry. By leveraging these strengths, Ares continues to deliver value to its clients and solidify its position as a leading investment firm.

VI. Market Impact and Future Outlook

Ares Management Corporation, a leading global alternative investment manager, has made significant strides in the investment industry since its inception over two decades ago. With $198 billion in assets under management as of December 2020, Ares has helped initiate and popularize several trends that have shaped the investment landscape.

Impact on Investment Industry:

Firstly, Ares has been a pioneer in the credit investment space, with a focus on direct lending and private credit. The firm’s ability to provide customized financing solutions to middle-market companies has not only created an alternate source of capital but also revolutionized the traditional banking model. Moreover, Ares’ innovative approach to structured credit and distressed debt investing has set new standards in the industry.

Trends:

Secondly, Ares has been an early adopter and advocate of alternative data and advanced analytics to identify investment opportunities. This data-driven approach allows the firm to make informed decisions with greater precision and speed, which is increasingly important in today’s competitive marketplace. Furthermore, Ares has been a leader in integrating Environmental, Social, and Governance (ESG) factors into its investment process, recognizing that these factors can impact the long-term performance of companies.

Future Directions:

Looking ahead, Ares is well-positioned to capitalize on emerging trends. The firm’s growth in private equity and real estate assets under management, coupled with its expanding presence in Europe and Asia, underscores its commitment to broadening its reach and diversifying its revenue streams. Additionally, the increasing demand for customized investment solutions is expected to further fuel growth in the alternative investments space.

Implications:

For investors and industry observers, the post-pandemic world is expected to bring new challenges and opportunities. The ongoing shift towards alternative data, ESG integration, and customized investment solutions is likely to continue. Furthermore, the increasing competition in the industry, coupled with regulatory scrutiny and market volatility, necessitates a focused and adaptive approach. In this context, Ares’ track record of innovation, its diverse range of capabilities, and its commitment to delivering superior results for its clients make it a formidable player in the investment industry.

Conclusion:

In conclusion, Ares Management Corporation’s impact on the investment industry is undeniable. From pioneering credit investing and embracing alternative data to leading the charge in ESG integration, Ares has consistently pushed boundaries and set new standards. As we navigate a post-pandemic world with new challenges and opportunities, Ares’ commitment to innovation, adaptability, and delivering superior results for its clients positions it as a key player in the investment industry.

V Conclusion

Ares Management Corporation, a leading global alternative investment manager, has established a unique investment platform through various strategies that set it apart from competitors. With

$217 billion

in assets under management as of 2021, the firm’s diversified portfolio includes private equity, real estate, credit, and operational value strategies.

Ares’ Unique Strategies:

One of its notable strategies is the Relative Value Investing approach, which seeks to identify mispricings in related securities and capitalize on those opportunities. Another strategy is the Global Credit Platform, which focuses on credit investments across various sectors and geographies. Ares has also demonstrated success in Real Estate Investing, where it manages a portfolio of approximately

$27 billion

as of 2021.

Successes and Competitive Advantages:

The firm’s consistent performance can be attributed to various factors, including its experienced investment team, long-term investment horizon, and commitment to innovation. Ares has also been successful in navigating market volatility and economic downturns due to its diverse portfolio and flexible investment strategies.

Understanding Factors for Future Prospects:

It is crucial for investors to understand these factors in evaluating Ares Management Corporation’s future prospects. Given the firm’s growth trajectory, continued success, and commitment to innovation, following Ares closely could prove valuable for those interested in the alternative investment industry.

Call to Action:

As Ares Management Corporation continues to expand its reach and impact in the global investment landscape, readers are encouraged to stay informed about this investment giant’s latest developments and strategies. By doing so, they will be better equipped to understand the firm’s future prospects and potential investment opportunities. Stay tuned for more insights on Ares Management Corporation and the alternative investment industry at large.