ARES - Ares Management: Capital And Asset Growth Leading Secular Margin Expansion

2023-03-20 04:01:22 ET

Summary

• In YTD growth, Ares Management (+9.80%) leads both the broad market (SPY: +2.41%) and the private equity market (PSP: -1.04%).
• By its own admission, the firm seeks to cultivate 'ecosystems' to drive investing advantages, aiming to simultaneously source, evaluate, and execute asset activities, from cap-structure solutions to market arbitrage.
• In the past decade, Ares has experienced a 12% CAGR in alternative AUM- much of it driven by infrastructure and private debt/equity products- and projects a 15% CAGR to 2026.
• More broadly, Ares' total AUM in the past five years has grown from $106bn to $352bn, a 27% CAGR, with pronounced growth in direct credit facilities and further scaling large-scale funds.
• Ares' ability to attract capital regardless of macro headwinds, their increased exposure to alternative investments, and continued growth across direct lending leads me to rate the company a 'buy'.

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