Welcome back to the Deep Dive. Today, we are
strapping ourselves in and jumping into the high
-octane world of global alternative investment
management. It's a complex world. It really is.
And we're not going to just read you the dry
corporate filings. Instead, we've taken a whole
stack of sources and really, we've tried to distill
the strategic essence of one of the market's
biggest and most influential players. Aries Management
Corporation. Right. And you have to understand
this isn't just some financial footnote. No,
not at all. This is a massive worldwide capital
platform that is actively right now shaping private
credit markets. It's determining the trajectory
of private equity landscapes and moving billions
and I mean billions in global real estate. That's
exactly right. And the source material you shared
gives us this incredibly detailed look at Aries
evolution. And frankly, it's immense scale. So
our mission today is to go beyond just reciting
the financials. We need to extract the strategic
DNA. The why behind their rapid growth since
1997, how they ingeniously structured themselves
for resilience, and most critically, how their
four massive business units interact to make
them an absolute force, especially in that private
debt market. OK, let's unpack this immediately
with scale, because the magnitude here is, well,
it's the starting point for everything else they
do. It is. Ares Management, headquartered in
Los Angeles, publicly traded on the NYSE as AACE.
It's a fully entrenched S &P. S &P 500 component.
And that designation alone, being in the S &P
500, it signals they're a permanent fixture in
global finance. It's a huge stamp of approval.
It is. And we were talking about financial mass
that's equivalent to a mid -sized nation. That's
not an exaggeration. As of November 2025, their
global platform is reporting approximately $596
billion of assets under management, AUM. Just
let that number sink in. Almost $600 billion.
Right. Think of $600 billion being actively deployed,
managed and rotated across all these diverse
global markets. That scale, it isn't just a big
number. It grants them the ability to be an anchor
investor in almost any large complex transaction
anywhere in the world. And you can't handle that
kind of volume with a small team. I mean, the
operational infrastructure required has to be
colossal. Oh, absolutely. They're operating with
approximately 4 ,200 employees and they're spread
out across North America, Europe, Asia Pacific
and the Middle East. So it's a truly multinational
capital deployment machine. It is. And the financials
really back that up. This vast operation is highly
productive. If you look at their most recent
snapshot from 2024, they generated revenue of
$3 .885 billion. Wow. And the operating income
was nearly a billion dollars at $946 million,
leading to a net income of $441 million. So this
deep foundation of consistent profitability.
That's what's funding their aggressive expansion.
Exactly. It funds the expansion and their strategic
moves into these increasingly specialized and
illiquid asset classes, which I think we really
need to analyze in depth. Okay, so that immediately
sets the stage. They're massive, they're profitable,
and they're global. Now, let's look at how this
machine was actually built. Let's do it. Let's
rewind to the beginning. So, Section 1 is all
about the founding and the core structure. Ayers
was established in 1997. And this wasn't a startup
built by one or two investment bankers. No, not
at all. It was built by what you could almost
call a super group. A super group. I like that.
A team of five co -founders, Antony Ressler,
Michael Arrigetti. David Kaplan. John H. Kissick
and Bennett Rosenthal. The fact that there were
five founders, especially in the high stakes
world of private capital, is really significant.
How so? Well, it signals a built in diversification
of expertise from day one. They weren't just
betting on a single strength like, say, distressed
credit or classic private equity. Right. We had
a broader base. They created a structure that
allowed them to tackle credit, private equity
and real estate all at the same time. That ability
to speak the language of all three major alternative
asset classes. It just gave them a unique competitive
edge really early on. They avoided that traditional
silo structure. And that strong collaborative
founding group. It seems like that created the
kind of stable governance you need for long term
growth. It did. They grew as a private firm initially,
but they very quickly attracted some serious
institutional firepower. OK. And here's where
the first really strategic maneuver comes in.
In May of 2007, the Abu Dhabi Investment Authority,
or ADIA. One of the world's most powerful sovereign
wealth funds. Exactly. They acquired a minority
interest. Okay, but hang on. The Abu Dhabi Investment
Authority took a minority stake but explicitly
waived governance or voting rights. Now, why
would a sophisticated institutional investor
like ADIA pass on that critical control? This
is fascinating. It really is. What's the thinking
there? ADIA is betting on the management team.
Pure and simple. By acquiring a minority interest
without demanding board seats or voting control,
Adia successfully raised a massive amount of
capital, a huge vote of confidence, without ceding
any control over their strategic decision making.
So they got the funding power. Without any of
the external complications of, you know, outside
governance, it kept the founder's vision completely
intact. That unified, unencumbered governance
structure. That seems to have set them up perfectly
for their eventual public life. It did. And that
transition came with their initial public offering,
their IPO, which was completed in May of 2014.
And that marked the shift from a purely private,
partnership -driven asset manager to a listed
company on the New York Stock Exchange. The IPO
was a watershed moment. It didn't just provide
liquidity for the existing partners, which is
important, but critically, it gave the firm publicly
traded stock. Right, which is what we call acquisition
currency. Acquisition currency, exactly. And
this currency is what allowed them to execute
the aggressive multi -billion dollar acquisitions
that really define their growth story. Deals
that would have been far, far harder to execute
as a purely private entity. But even before that
IPO, the team was strategically building out
some key operational components. And that really
defined both their early focus and their geographic
reach. Let's talk about Ayers Capital Corporation,
founded in 2004. ARCC. ARCC. For a lot of listeners,
this is probably one of the most visible parts
of the whole Ayers ecosystem. It's absolutely
crucial. ARCC is crucial because it underpins
Aerie's huge footprint in U .S. middle market
lending. Functionally, a BDC, or a business development
company, is, well, it's essentially a public
high -yield vehicle that's designed to fund American
middle market companies. Okay, so let's simplify
some of that technical language. The official
description is a publicly traded, closed -end,
non -diversified specialty finance company regulated
as a BDC under the Investment Company Act of
1940. What does that mouthful actually mean for
you, the listener, in practical terms? Okay,
so what it means is that BDCs are mandated by
that 1940 Act to distribute a very, very high
percentage of their taxable income to shareholders.
Ah, and that's where the high yield for investors
typically comes from. That's it. ARCC's specific
mandate is providing financing for middle market
acquisitions, recapitalizations and leveraged
buyouts, primarily in the U .S. They fill a critical
financing gap. They act as this sophisticated
non -bank lender for businesses that have, you
know, outgrown small business status but aren't
quite large enough to easily tap the public high
yield bond markets. So they're basically providing
that crucial private financing backbone for the
U .S. engine room. A perfect way to put it. And
this is all managed through Ares Capital Management
LLC, the SEC -registered investment advisor to
the BDC, which ensures compliance and clear operational
lines. Precisely. The structure is built for
capital management and risk control within that
established U .S. regulatory framework. But this
early engine was geographically limited. To the
U .S. Right. And Ares knew that true dominance
required a global perspective. Which brought
the strategic focus across the Atlantic in 2006
with the founding of Ares Management Limited.
This was their formal expansion into Europe.
Areas Management Limited focused specifically
on European capital markets operations. And it's
critical to note they immediately saw authorization
under the Financial Conduct Authority, the FCA,
in the UK. So this isn't just about opening an
office in London. No, no. It's about establishing
a fully regulated, fully compliant presence in
one of the world's major financial centers. So
by 2006, they had the foundation in place, U
.S. private debt mastery, and a regulated Europe.
outpost. This laid the essential groundwork for
the explosive growth that followed. Right. Once
that initial governance and foundational structure
was set, areas needed to scale up and fast. And
that brings us to section two, a strategic playbook
built on using acquisitions to instantly buy
market expertise, geographic reach, and just
massive asset accumulation. Yeah. And the first
indicator of their market power actually came
before the biggest acquisitions. In April of
2016, they successfully closed their fifth global
private equity fund. And this is a big one. A
huge one. They raised a staggering $7 .85 billion.
That figure alone speaks volumes. It shows overwhelm.
investor confidence in Aerie's ability to deploy
capital profitably, and it legitimized their
shift from being just a debt -focused firm to
a genuine multi -asset alternative manager. And
they used that massive momentum to launch their
first industry -shaking move, the American Capital
acquisition. The plan was announced in May 2016
to buy the asset management company American
Capital for U .S. $3 .4 billion. It closed in
January 2017. This was a defining, absolutely
pivotal moment for Aries and I'd argue for the
private credit market in general. Why so significant?
Because American capital was a major player in
the BDC and private credit space, just like Aries.
So this acquisition, it wasn't just about adding
assets. It was about industry consolidation.
It was about eliminating a major competitor.
So for $3 .4 billion. For $3 .4 billion, Aries
instantly achieved a massive scale increase in
their credit and private equity portfolios. They
acquired a huge portfolio of existing investments
and, crucially, they locked up all these new
client relationships. It fundamentally reshaped
the landscape of the private debt market. It
confirmed Aries as the undisputed leader in U
.S. middle market financing. So that deal was
all about consolidation and scale mastery in
North America. But their next move was purely
geographic. It was a thrust to the east with
the SSG capital acquisition. The Asia -Pacific
strategy. And again, look at the playbook. Rather
than spending a decade slowly building a presence
in Hong Kong or Singapore. Which would be the
traditional way. Right. Instead, in January 2020,
Ares acquired a controlling stake in the established
Hong Kong -based alternative investment firm
SSG Capital Management. This was formalized in
July 2020, and the unit was renamed Ares SSG.
So why was acquiring SSG the smart move rather
than just building organically? Speed and expertise.
I mean, Asian markets are uniquely complex. You
need specialized knowledge of local regulatory
environments, of distressed debt mechanisms,
of regional business cultures. You can't just
parachute people in. You can't. So by purchasing
a controlling interest in an already operational,
already successful firm like SSG, Ares instantly
gained a deep pipeline and local expertise across
the entire Asia -Pacific region. This just accelerated
their global strategy dramatically. It gave them
immediate capability in credit, private equity,
and special situations. all across APAC, which
really rounded out their global reach. Okay,
so rounding out their expansion strategy, they
looked inward at specialized asset classes. In
July 2021, Aries completed the acquisition of
Black Creek Group's U .S. real estate investment
advisory and distribution business. And this
shows a highly targeted effort to bolster their
real estate group's capacity, which we're going
to detail in a moment. While Aries already had
a real estate arm, Black Creek brought two specific
things to the table. One, advisory expertise,
and two, specialized distribution capabilities.
Distribution meaning? Meaning it strengthened
their ability not only to find and finance real
estate assets, but also to package and sell those
investment products to a wider range of investors
in the U .S. It deepened their vertical integration.
And, importantly, it laid the groundwork for
that massive, complex, global real estate deal
that followed just a few years later. So we're
seeing a really clear pattern here. Consolidating
power and credit with American Capital, achieving
global reach with SSG, and then deepening asset
class specialization with Black Creek. That is
a very sophisticated playbook for growth. Absolutely.
So now we get to the core of the business, Section
3, the investment engine. And it's absolutely
essential to remember, as we've said, that Ares
is among the largest players in the private debt
market. All their activities flow through four
distinct yet complementary business units. And
that complementarity is their secret weapon.
It really is. That ability to pivot. That's the
key competitive edge. The four groups are designed
to operate as a full -stack capital solution.
It allows ARIS to shift capital, to manage risk,
and to exploit opportunities based on global
market conditions. So if one unit slows down,
the others are positioned to capture the value
somewhere else. Okay, so let's start with the
largest component, the ARIS credit group. Let's
do it. The credit group is the foundation. It
was immense, even back in May 2016, reporting
$60 .0 billion in assets under management. It
dwarfed the other groups at the time and really
confirmed the firm's origin in private debt mastery.
The credit group is the engine room. Its core
focus is managing both liquid and illiquid credit,
and it operates squarely in that high -yield,
non -investment -grade credit sector. This is
the world where capital is most needed and, frankly,
where ARIS generates its highest returns. It's
high risk, high reward. What's fascinating is
the sheer diversity of instruments they manage
within that single sector. It's not just one
thing. No, they are comprehensive. The categories
are vast. Corporate loans, high -yield bonds,
institutional credit, credit opportunities. Which
means capitalizing on temporary market distress.
Exactly. Then there are special situations, which
are more complex, deeply troubled companies,
asset -backed lending, and of course, direct
lending. And they do this across both the U .S.
and Europe. Basically, if a company needs non
-traditional structured financing, ARIS has an
offering. And the execution model in the U .S.
is largely defined by the structures we mentioned
earlier, right? Correct. The U .S. corporate
lending is primarily run through ARIS Capital
Corporation, the BDC, and a separate commercial
finance business. And that commercial... finance
business is specialized. Very specialized. It
provides asset based loans. So lending against
the value of inventory or equipment and cash
flow loans, which is lending based on projected
future earnings. This dual approach means they
can finance almost any type of middle market
company in North America, whether it's stable
or, you know, in a high growth phase. So how
does that self -origination model differ when
you look at Europe? In Europe, the focus shifts.
It's more about self -originated investments
in illiquid middle market credits. They don't
rely as heavily on the institutional market for
deal flow. They are actively out there sourcing,
structuring and negotiating debt packages directly
with the companies themselves. And what's the
advantage of that? That hands -on approach minimizes
competition, and it allows Aries to control the
terms and the structure of the debt right from
inception. These are managed through commingled
funds, separately managed accounts for their
massive clients, and joint venture lending programs,
which spreads the risk and increases their deployment
capacity. So this makes the credit group a globally
adaptive proprietary machine. It's designed to
find value wherever traditional banks have retreated.
Precisely. They are built to exploit those crucial
pricing inefficiencies and the regulatory differences
between the U .S. and European debt markets.
Okay, so let's move to the second pillar, the
EIRS private equity group. In 2016, this had
$23 .3 billion in AUM. The synergy here with
the credit group seems to be what sets EIRS apart.
It is. The strategy is targeted and complementary.
The private equity group makes opportunistic
majority or shared control investments, and they
focus principally on, you guessed it, undercapitalized
middle market companies. There's that recurring
theme again. The middle market. It is. This allows
them to be the full -stack capital provider.
So if a deal is too risky for their credit funds
to provide the debt, they can instantly pivot
and offer an equity stake. Or vice versa. It
gives them a competitive bid advantage over those
single focus firms that only do one or the other.
Exactly. That is the competitive differentiator.
They can sit down with a struggling or a growing
middle market company and offer a completely
tailored solution. Cheap debt, expensive debt,
preferred equity or a full equity buyout. They're
seeking companies that need a capital injection
and a strategic restructuring. This allows them
to capture value where the traditional private
equity mega LBO houses just aren't interested.
And within PE, they've carved out a really fascinating
specialization in U .S. power and infrastructure
assets. This is a huge strategic move toward
recession proofing their portfolio. They manage
investments in vital sectors like power generation,
transmission and midstream assets. So we're talking
pipelines, processing facilities. Exactly. These
are essential services. They're often protected
by regulation or long -term contracts, which
provide highly stable, almost annuity -like cash
flows. And institutional investors, they love
that stability, especially when markets get volatile.
And how do they structure these PE investments?
What are the vehicles? They utilize four corporate
private equity commingled funds, mainly targeting
North America but with a presence in Europe as
well. For the infrastructure play, they manage
four commingled funds and six related co -investment
vehicles. And the co -investment vehicles are
key. They are key because these vehicles allow
their largest institutional clients, pension
funds, sovereign wealth funds to participate
directly alongside Ares in specific high conviction
infrastructure deals. And that dramatically deepens
those critical client relationships. OK, next
up is the Ayers Real Estate Group. It had $10
.2 billion in AUM back in 2016, and it's grown
substantially since then, especially after the
targeted acquisitions we talked about. The real
estate group provides critical diversification.
It moves away from purely corporate balance sheets
and into physical tangible assets. Their strategy
is broad. They manage both public and private
equity and debt investments in real estate across
both North America and Europe. So just like with
corporate financing, they can play both sides
of the ledger in the property markets. Exactly.
They can provide the senior debt for a massive
project, or they can take an equity ownership
stake in the underlying office tower or apartment
complex itself. Precisely. That dual capacity
allows them to be flexible regardless of where
the greatest value is being generated in the
current cycle. Is it in the low risk debt portion
or the high upside equity portion? They manage
several investment vehicles here and they reflect
that diversity. So tell us about those vehicles,
especially how they ensure liquidity for investors.
Well, they operate their own publicly traded
REIT, Ayers Commercial Real Estate Corporation.
The existence of a public REIT provides investors
with a liquid way to access commercial real estate
debt and equity. It balances out the illiquidity
of their private funds. Makes sense. Then they
also manage U .S. and European real estate private
equity commingled funds for more opportunistic
investments and highly customized real estate
equity and debt separately managed accounts for
their most sophisticated tailor -made clients.
The Black Creek Acquisition was specifically
designed to enhance their capabilities in distributing
these products to a wider audience. It was preparing
them for future global scale. Okay, finally,
we revisit Air's SSG, the specialized Asia -Pacific
arm that was formed from that 2020 SSG capital
management acquisition. Air's SSG is the essential
fourth pillar. It functions as the specialized,
localized extension of the other three groups,
credit, private equity, and real estate, but
it's tailored specifically for those Asia -Pacific
markets. Its mandate focuses explicitly on credit,
private equity, and highly complex special situations
investments across that region. So if a distressed
debt opportunity comes up in Singapore or a growth
equity play emerges in Korea, this is the team
that executes it. They're using their local knowledge
and expertise. Absolutely. It completes the global
strategic map. You have the massive U .S. credit
and P .E. machine. You have the regulated European
platform. And now you have the specialized Asia
-Pacific arm. This triple continent reach governed
by four complementary pillars, it positions Aries
to deploy capital 24 hours a day, capitalizing
on market shifts regardless of geography or asset
class. That robust structure and capital flexibility,
it really allowed Aries to pursue increasingly
massive and diverse deals in 2024. And these
moves, they aren't just incremental adjustments.
They are strategic leaps that demonstrate their
evolving appetite for new asset classes and just
sheer size. 2024 was a banner. year. It really
showed Ares leveraging their global scale and
their willingness to end for markets where others
might fear to tread. So first up, in June of
2024, Ares Management, in cooperation with Searchlight
Capital, invested $500 million in a preferred
equity transaction in RSK Group. And this is
a perfect example of how the private equity group
applies its strategic focus. RSK Group is a UK
-based environmental engineering and technical
services group. Right. This sector is incredibly
resilient because it's driven by non -discretionary
spending. Things like environmental compliance,
infrastructure maintenance, essential engineering.
These investments benefit from these powerful
long -term regulatory tailwinds related to sustainability.
And the type of investment preferred equity is
highly strategic, isn't it, for both Aries and
for the company? It is. Preferred equity sits
senior to common equity. It often offers a guaranteed
dividend or return, but it still retains the
upside potential of equity. So it allowed Aries
to gain exposure to the growth of this essential
services company, locking in returns while also
enabling RSK Group to raise a huge amount of
capital for expansion without immediately diluting
the control of its existing common shareholders.
And the total investment? even increased a bit
to $520 million. It did, which really underscores
Aries' deep commitment to this essential infrastructure
and environmental services space as a stable,
long -term asset class. Okay, next came a transaction
that immediately solidified their position in
global real estate and logistics. In October
2024, Aries acquired the international business
of GLP Capital Partners, or GCP, excluding its
Greater China business. This was a colossal play.
It specifically targeted the high growth logistics
real estate sector, which has just been booming
since the global supply chain shifts of the pandemic.
The huge deal. And the transaction demonstrates
their tremendous firepower. The deal was valued
at approximately $3 .7 billion in cash and another
$1 .9 billion in Ares Class A common stock. The
scale is immense. But the use of their own stock
as currency is just as important as the cash
component, right? Utilizing $1 .9 billion of
your own Class A stock shows that Ares has immense
confidence in the valuation of its own shares.
It's an efficient way to close a deal of this
magnitude without completely draining the balance
sheet of cash. So what do they get for that?
Critically, acquiring GCP's international business
instantly provided heirs with a massive, high
-quality portfolio of logistics and real estate
assets outside of China. And remember that 2021
Black Creek... acquisition yes the one to beef
up distribution exactly that move beefed up their
real estate distribution capabilities making
them competent enough to integrate this far larger
global logistics platform from glp three years
later this is Truly strategic, long -term planning
coming to fruition. It instantly upgrades their
real estate group from a regional player to a
global logistics powerhouse. It's a game changer,
a complete game changer in terms of AUM and global
influence in the institutional real estate market.
And finally, we arrive at the deal that truly
captured the public imagination. December 2024.
Ayers acquired 10 % of the Miami Dolphins of
the National Football League. This raises a really
important high level question for institutional
investors, which is why does a 10 percent stake
in a single sports team warrant so much attention?
It's a great question. The significance here,
it really transcends the dollar value. This was
one of the very first deals allowing outside
investors, specifically private equity firms
like Ayers, to buy into an NFL franchise. And
that market entry was only possible because the
league owners voted to allow these new types
of institutional investors back in August 2024.
They essentially opened up a hyper exclusive
club. And Ayers acted incredibly fast to secure
that first mover advantage. Professional sports
ownership, especially in major leagues like the
NFL, has historically been restricted to a very,
very small circle of family groups or ultra high
net worth individuals. Right. The August vote
opened the door to institutional capital and
Aries jumped right through it immediately. This
is a landmark transaction because professional
sports ownership represents an asset class defined
by extreme scarcity, massive brand equity and
constantly appreciating media rights contracts.
So for Aries, this isn't about running the team
or picking. the quarterback. It's about pioneering
a brand new, highly desirable asset class for
their global institutional clients. It validates
the NFL's decision to modernize the capital structure
of its franchises, and it demonstrates Arias'
ability to execute complex, precedent -setting
deals in these highly visible sectors. It signals
to the entire investment world that professional
sports teams, which were once seen as vanity
projects, are now legitimate, institutional -grade
assets. This deal is perhaps the clearest sign
of Arias' relentless hunt for the next frontier
of alternative investment. So let's bring it
all back together. We've charted the course of
Aries Management Corporation. We started with
five founders back in 1997, building regulatory
platforms in the U .S. with AirACC and in Europe,
and then executing this really strategic blueprint
of acquisition. A very clear blueprint. Consolidating
credit with American Capital, achieving global
reach with SSG, and then deepening real estate
expertise with Black Creek and now GLP. The core
takeaway here is that the growth of Aries is
not random. It's a deliberate strategy of massive
diversification across four highly focused, often
complementary segments, credit, private equity,
real estate, and SSG, all coupled with aggressive
geographic expansion. They are the market's capital
architect. They're willing to provide these sophisticated
capital solutions in places where traditional
banks or public markets want or simply can't
go. And they're consistently focusing on that
illiquid private debt and middle market company
space. That's their sweet spot. This strategic
vision. leads us directly to the core question
for you, the learner, that builds on everything
we've discussed. Given Ares' significant presence
in illiquid credit and its role as a BDC financing
middle market companies, how does the ability
to instantly shift capital across four distinct
global segments allow them to proactively manage
risk and capitalize on varying economic cycles
and regulatory environments worldwide? That structural
flexibility is their competitive moat. I mean,
that's what it all comes down to. The four pillar
structure isn't just an organizational chart.
It's a dynamic risk mitigation strategy. So how
does that play out in practice? Well, if U .S.
private equity deal valuations get too rich,
they can pivot resources to opportunistic European
direct lending. If the Asian credit market presents
special situations driven by regulatory changes,
areas SSG is immediately positioned to execute
on that. It allows them to arbitrage. opportunities
across asset classes and geographies, ensuring
stable high returns even when specific markets
are facing severe headwinds. This ability to
rotate capital is why they remain such a dominant
force. Fascinating. And finally, let's end with
a provocative thought that builds on the recent
activity we've seen. The investment in the Miami
Dolphins confirmed that these hyper -exclusive,
scarce asset classes are the next frontier for
alternative managers. They certainly are. So,
considering the success of the NFL deal, what
other unexpected industry currently closed off
by tradition or restrictive ownership rules might
Aries, or its peers, aim to penetrate next? Think
of asset classes with high barriers to entry,
massive brand recognition, and appreciating intrinsic
value. Following that playbook of the NFL deal,
it's really a question of where the next trillion
dollars of institutional capital will find its
new home. Something to mull over as you think
about the future of global investing. Thank you
for joining us. We hope you feel thoroughly well
informed of the global strategy of Aries Management
Corporation.