WEBVTT 00:00:00.000 --> 00:00:02.759 Welcome back to the Deep Dive. Today, we are 00:00:02.759 --> 00:00:06.320 strapping ourselves in and jumping into the high 00:00:06.320 --> 00:00:08.500 -octane world of global alternative investment 00:00:08.500 --> 00:00:11.220 management. It's a complex world. It really is. 00:00:11.320 --> 00:00:13.199 And we're not going to just read you the dry 00:00:13.199 --> 00:00:15.619 corporate filings. Instead, we've taken a whole 00:00:15.619 --> 00:00:18.679 stack of sources and really, we've tried to distill 00:00:18.679 --> 00:00:21.120 the strategic essence of one of the market's 00:00:21.120 --> 00:00:23.929 biggest and most influential players. Aries Management 00:00:23.929 --> 00:00:25.929 Corporation. Right. And you have to understand 00:00:25.929 --> 00:00:28.149 this isn't just some financial footnote. No, 00:00:28.230 --> 00:00:31.429 not at all. This is a massive worldwide capital 00:00:31.429 --> 00:00:35.710 platform that is actively right now shaping private 00:00:35.710 --> 00:00:38.009 credit markets. It's determining the trajectory 00:00:38.009 --> 00:00:40.469 of private equity landscapes and moving billions 00:00:40.469 --> 00:00:43.359 and I mean billions in global real estate. That's 00:00:43.359 --> 00:00:45.600 exactly right. And the source material you shared 00:00:45.600 --> 00:00:48.500 gives us this incredibly detailed look at Aries 00:00:48.500 --> 00:00:51.960 evolution. And frankly, it's immense scale. So 00:00:51.960 --> 00:00:54.159 our mission today is to go beyond just reciting 00:00:54.159 --> 00:00:56.799 the financials. We need to extract the strategic 00:00:56.799 --> 00:01:00.140 DNA. The why behind their rapid growth since 00:01:00.140 --> 00:01:03.299 1997, how they ingeniously structured themselves 00:01:03.299 --> 00:01:06.560 for resilience, and most critically, how their 00:01:06.560 --> 00:01:09.459 four massive business units interact to make 00:01:09.459 --> 00:01:11.819 them an absolute force, especially in that private 00:01:11.819 --> 00:01:14.159 debt market. OK, let's unpack this immediately 00:01:14.159 --> 00:01:16.939 with scale, because the magnitude here is, well, 00:01:17.060 --> 00:01:18.680 it's the starting point for everything else they 00:01:18.680 --> 00:01:21.159 do. It is. Ares Management, headquartered in 00:01:21.159 --> 00:01:24.819 Los Angeles, publicly traded on the NYSE as AACE. 00:01:25.180 --> 00:01:27.920 It's a fully entrenched S &P. S &P 500 component. 00:01:28.140 --> 00:01:30.120 And that designation alone, being in the S &P 00:01:30.120 --> 00:01:32.480 500, it signals they're a permanent fixture in 00:01:32.480 --> 00:01:34.620 global finance. It's a huge stamp of approval. 00:01:34.799 --> 00:01:36.640 It is. And we were talking about financial mass 00:01:36.640 --> 00:01:39.060 that's equivalent to a mid -sized nation. That's 00:01:39.060 --> 00:01:42.040 not an exaggeration. As of November 2025, their 00:01:42.040 --> 00:01:45.379 global platform is reporting approximately $596 00:01:45.379 --> 00:01:48.599 billion of assets under management, AUM. Just 00:01:48.599 --> 00:01:50.799 let that number sink in. Almost $600 billion. 00:01:51.739 --> 00:01:55.260 Right. Think of $600 billion being actively deployed, 00:01:55.500 --> 00:01:57.859 managed and rotated across all these diverse 00:01:57.859 --> 00:02:01.200 global markets. That scale, it isn't just a big 00:02:01.200 --> 00:02:04.140 number. It grants them the ability to be an anchor 00:02:04.140 --> 00:02:06.840 investor in almost any large complex transaction 00:02:06.840 --> 00:02:09.139 anywhere in the world. And you can't handle that 00:02:09.139 --> 00:02:11.039 kind of volume with a small team. I mean, the 00:02:11.039 --> 00:02:13.259 operational infrastructure required has to be 00:02:13.259 --> 00:02:15.180 colossal. Oh, absolutely. They're operating with 00:02:15.180 --> 00:02:18.259 approximately 4 ,200 employees and they're spread 00:02:18.259 --> 00:02:20.900 out across North America, Europe, Asia Pacific 00:02:20.900 --> 00:02:23.379 and the Middle East. So it's a truly multinational 00:02:23.379 --> 00:02:26.319 capital deployment machine. It is. And the financials 00:02:26.319 --> 00:02:28.939 really back that up. This vast operation is highly 00:02:28.939 --> 00:02:31.219 productive. If you look at their most recent 00:02:31.219 --> 00:02:34.460 snapshot from 2024, they generated revenue of 00:02:34.460 --> 00:02:38.180 $3 .885 billion. Wow. And the operating income 00:02:38.180 --> 00:02:41.400 was nearly a billion dollars at $946 million, 00:02:41.699 --> 00:02:45.900 leading to a net income of $441 million. So this 00:02:45.900 --> 00:02:47.879 deep foundation of consistent profitability. 00:02:48.870 --> 00:02:50.830 That's what's funding their aggressive expansion. 00:02:51.110 --> 00:02:53.349 Exactly. It funds the expansion and their strategic 00:02:53.349 --> 00:02:56.469 moves into these increasingly specialized and 00:02:56.469 --> 00:02:58.370 illiquid asset classes, which I think we really 00:02:58.370 --> 00:03:00.750 need to analyze in depth. Okay, so that immediately 00:03:00.750 --> 00:03:03.569 sets the stage. They're massive, they're profitable, 00:03:03.729 --> 00:03:06.650 and they're global. Now, let's look at how this 00:03:06.650 --> 00:03:09.629 machine was actually built. Let's do it. Let's 00:03:09.629 --> 00:03:12.210 rewind to the beginning. So, Section 1 is all 00:03:12.210 --> 00:03:15.389 about the founding and the core structure. Ayers 00:03:15.389 --> 00:03:20.669 was established in 1997. And this wasn't a startup 00:03:20.669 --> 00:03:23.069 built by one or two investment bankers. No, not 00:03:23.069 --> 00:03:24.889 at all. It was built by what you could almost 00:03:24.889 --> 00:03:26.969 call a super group. A super group. I like that. 00:03:27.030 --> 00:03:29.949 A team of five co -founders, Antony Ressler, 00:03:30.069 --> 00:03:33.110 Michael Arrigetti. David Kaplan. John H. Kissick 00:03:33.110 --> 00:03:35.370 and Bennett Rosenthal. The fact that there were 00:03:35.370 --> 00:03:37.870 five founders, especially in the high stakes 00:03:37.870 --> 00:03:40.830 world of private capital, is really significant. 00:03:41.169 --> 00:03:44.370 How so? Well, it signals a built in diversification 00:03:44.370 --> 00:03:46.909 of expertise from day one. They weren't just 00:03:46.909 --> 00:03:49.009 betting on a single strength like, say, distressed 00:03:49.009 --> 00:03:51.169 credit or classic private equity. Right. We had 00:03:51.169 --> 00:03:53.469 a broader base. They created a structure that 00:03:53.469 --> 00:03:56.069 allowed them to tackle credit, private equity 00:03:56.069 --> 00:03:59.189 and real estate all at the same time. That ability 00:03:59.189 --> 00:04:01.990 to speak the language of all three major alternative 00:04:01.990 --> 00:04:05.289 asset classes. It just gave them a unique competitive 00:04:05.289 --> 00:04:08.330 edge really early on. They avoided that traditional 00:04:08.330 --> 00:04:10.490 silo structure. And that strong collaborative 00:04:10.490 --> 00:04:13.069 founding group. It seems like that created the 00:04:13.069 --> 00:04:15.150 kind of stable governance you need for long term 00:04:15.150 --> 00:04:18.029 growth. It did. They grew as a private firm initially, 00:04:18.110 --> 00:04:20.910 but they very quickly attracted some serious 00:04:20.910 --> 00:04:23.629 institutional firepower. OK. And here's where 00:04:23.629 --> 00:04:25.870 the first really strategic maneuver comes in. 00:04:26.160 --> 00:04:29.600 In May of 2007, the Abu Dhabi Investment Authority, 00:04:29.759 --> 00:04:32.720 or ADIA. One of the world's most powerful sovereign 00:04:32.720 --> 00:04:34.939 wealth funds. Exactly. They acquired a minority 00:04:34.939 --> 00:04:37.819 interest. Okay, but hang on. The Abu Dhabi Investment 00:04:37.819 --> 00:04:40.379 Authority took a minority stake but explicitly 00:04:40.379 --> 00:04:44.180 waived governance or voting rights. Now, why 00:04:44.180 --> 00:04:46.379 would a sophisticated institutional investor 00:04:46.379 --> 00:04:50.279 like ADIA pass on that critical control? This 00:04:50.279 --> 00:04:52.540 is fascinating. It really is. What's the thinking 00:04:52.540 --> 00:04:55.240 there? ADIA is betting on the management team. 00:04:55.759 --> 00:04:58.660 Pure and simple. By acquiring a minority interest 00:04:58.660 --> 00:05:01.100 without demanding board seats or voting control, 00:05:01.439 --> 00:05:04.220 Adia successfully raised a massive amount of 00:05:04.220 --> 00:05:07.019 capital, a huge vote of confidence, without ceding 00:05:07.019 --> 00:05:09.560 any control over their strategic decision making. 00:05:09.800 --> 00:05:11.819 So they got the funding power. Without any of 00:05:11.819 --> 00:05:14.259 the external complications of, you know, outside 00:05:14.259 --> 00:05:17.060 governance, it kept the founder's vision completely 00:05:17.060 --> 00:05:20.600 intact. That unified, unencumbered governance 00:05:20.600 --> 00:05:23.829 structure. That seems to have set them up perfectly 00:05:23.829 --> 00:05:26.610 for their eventual public life. It did. And that 00:05:26.610 --> 00:05:28.790 transition came with their initial public offering, 00:05:28.910 --> 00:05:31.889 their IPO, which was completed in May of 2014. 00:05:32.769 --> 00:05:35.569 And that marked the shift from a purely private, 00:05:35.769 --> 00:05:38.610 partnership -driven asset manager to a listed 00:05:38.610 --> 00:05:41.149 company on the New York Stock Exchange. The IPO 00:05:41.149 --> 00:05:42.990 was a watershed moment. It didn't just provide 00:05:42.990 --> 00:05:44.850 liquidity for the existing partners, which is 00:05:44.850 --> 00:05:47.889 important, but critically, it gave the firm publicly 00:05:47.889 --> 00:05:50.250 traded stock. Right, which is what we call acquisition 00:05:50.250 --> 00:05:53.259 currency. Acquisition currency, exactly. And 00:05:53.259 --> 00:05:55.480 this currency is what allowed them to execute 00:05:55.480 --> 00:05:58.399 the aggressive multi -billion dollar acquisitions 00:05:58.399 --> 00:06:01.319 that really define their growth story. Deals 00:06:01.319 --> 00:06:03.339 that would have been far, far harder to execute 00:06:03.339 --> 00:06:06.060 as a purely private entity. But even before that 00:06:06.060 --> 00:06:08.339 IPO, the team was strategically building out 00:06:08.339 --> 00:06:11.399 some key operational components. And that really 00:06:11.399 --> 00:06:13.620 defined both their early focus and their geographic 00:06:13.620 --> 00:06:16.879 reach. Let's talk about Ayers Capital Corporation, 00:06:17.180 --> 00:06:20.939 founded in 2004. ARCC. ARCC. For a lot of listeners, 00:06:21.079 --> 00:06:22.759 this is probably one of the most visible parts 00:06:22.759 --> 00:06:25.269 of the whole Ayers ecosystem. It's absolutely 00:06:25.269 --> 00:06:28.189 crucial. ARCC is crucial because it underpins 00:06:28.189 --> 00:06:30.410 Aerie's huge footprint in U .S. middle market 00:06:30.410 --> 00:06:33.670 lending. Functionally, a BDC, or a business development 00:06:33.670 --> 00:06:36.430 company, is, well, it's essentially a public 00:06:36.430 --> 00:06:38.850 high -yield vehicle that's designed to fund American 00:06:38.850 --> 00:06:40.930 middle market companies. Okay, so let's simplify 00:06:40.930 --> 00:06:42.769 some of that technical language. The official 00:06:42.769 --> 00:06:45.230 description is a publicly traded, closed -end, 00:06:45.350 --> 00:06:48.470 non -diversified specialty finance company regulated 00:06:48.470 --> 00:06:51.170 as a BDC under the Investment Company Act of 00:06:51.170 --> 00:06:54.740 1940. What does that mouthful actually mean for 00:06:54.740 --> 00:06:57.720 you, the listener, in practical terms? Okay, 00:06:57.759 --> 00:07:01.160 so what it means is that BDCs are mandated by 00:07:01.160 --> 00:07:04.959 that 1940 Act to distribute a very, very high 00:07:04.959 --> 00:07:07.839 percentage of their taxable income to shareholders. 00:07:08.339 --> 00:07:10.459 Ah, and that's where the high yield for investors 00:07:10.459 --> 00:07:13.639 typically comes from. That's it. ARCC's specific 00:07:13.639 --> 00:07:16.600 mandate is providing financing for middle market 00:07:16.600 --> 00:07:19.300 acquisitions, recapitalizations and leveraged 00:07:19.300 --> 00:07:22.480 buyouts, primarily in the U .S. They fill a critical 00:07:22.480 --> 00:07:24.939 financing gap. They act as this sophisticated 00:07:24.939 --> 00:07:28.240 non -bank lender for businesses that have, you 00:07:28.240 --> 00:07:30.319 know, outgrown small business status but aren't 00:07:30.319 --> 00:07:33.319 quite large enough to easily tap the public high 00:07:33.319 --> 00:07:35.519 yield bond markets. So they're basically providing 00:07:35.519 --> 00:07:37.860 that crucial private financing backbone for the 00:07:37.860 --> 00:07:40.149 U .S. engine room. A perfect way to put it. And 00:07:40.149 --> 00:07:42.149 this is all managed through Ares Capital Management 00:07:42.149 --> 00:07:45.689 LLC, the SEC -registered investment advisor to 00:07:45.689 --> 00:07:49.009 the BDC, which ensures compliance and clear operational 00:07:49.009 --> 00:07:51.230 lines. Precisely. The structure is built for 00:07:51.230 --> 00:07:53.370 capital management and risk control within that 00:07:53.370 --> 00:07:56.129 established U .S. regulatory framework. But this 00:07:56.129 --> 00:07:58.529 early engine was geographically limited. To the 00:07:58.529 --> 00:08:00.889 U .S. Right. And Ares knew that true dominance 00:08:00.889 --> 00:08:03.149 required a global perspective. Which brought 00:08:03.149 --> 00:08:05.670 the strategic focus across the Atlantic in 2006 00:08:05.670 --> 00:08:08.089 with the founding of Ares Management Limited. 00:08:08.509 --> 00:08:10.629 This was their formal expansion into Europe. 00:08:10.889 --> 00:08:13.009 Areas Management Limited focused specifically 00:08:13.009 --> 00:08:16.550 on European capital markets operations. And it's 00:08:16.550 --> 00:08:18.589 critical to note they immediately saw authorization 00:08:18.589 --> 00:08:21.230 under the Financial Conduct Authority, the FCA, 00:08:21.410 --> 00:08:23.649 in the UK. So this isn't just about opening an 00:08:23.649 --> 00:08:25.949 office in London. No, no. It's about establishing 00:08:25.949 --> 00:08:29.389 a fully regulated, fully compliant presence in 00:08:29.389 --> 00:08:32.090 one of the world's major financial centers. So 00:08:32.090 --> 00:08:34.830 by 2006, they had the foundation in place, U 00:08:34.830 --> 00:08:37.730 .S. private debt mastery, and a regulated Europe. 00:08:37.840 --> 00:08:40.700 outpost. This laid the essential groundwork for 00:08:40.700 --> 00:08:43.039 the explosive growth that followed. Right. Once 00:08:43.039 --> 00:08:45.019 that initial governance and foundational structure 00:08:45.019 --> 00:08:48.980 was set, areas needed to scale up and fast. And 00:08:48.980 --> 00:08:51.700 that brings us to section two, a strategic playbook 00:08:51.700 --> 00:08:54.200 built on using acquisitions to instantly buy 00:08:54.200 --> 00:08:57.000 market expertise, geographic reach, and just 00:08:57.000 --> 00:08:59.659 massive asset accumulation. Yeah. And the first 00:08:59.659 --> 00:09:01.600 indicator of their market power actually came 00:09:01.600 --> 00:09:04.039 before the biggest acquisitions. In April of 00:09:04.039 --> 00:09:07.259 2016, they successfully closed their fifth global 00:09:07.259 --> 00:09:09.879 private equity fund. And this is a big one. A 00:09:09.879 --> 00:09:13.740 huge one. They raised a staggering $7 .85 billion. 00:09:14.519 --> 00:09:18.200 That figure alone speaks volumes. It shows overwhelm. 00:09:18.220 --> 00:09:20.740 investor confidence in Aerie's ability to deploy 00:09:20.740 --> 00:09:23.460 capital profitably, and it legitimized their 00:09:23.460 --> 00:09:25.679 shift from being just a debt -focused firm to 00:09:25.679 --> 00:09:28.960 a genuine multi -asset alternative manager. And 00:09:28.960 --> 00:09:31.200 they used that massive momentum to launch their 00:09:31.200 --> 00:09:33.940 first industry -shaking move, the American Capital 00:09:33.940 --> 00:09:37.059 acquisition. The plan was announced in May 2016 00:09:37.059 --> 00:09:39.179 to buy the asset management company American 00:09:39.179 --> 00:09:42.929 Capital for U .S. $3 .4 billion. It closed in 00:09:42.929 --> 00:09:46.029 January 2017. This was a defining, absolutely 00:09:46.029 --> 00:09:48.490 pivotal moment for Aries and I'd argue for the 00:09:48.490 --> 00:09:50.529 private credit market in general. Why so significant? 00:09:50.730 --> 00:09:52.929 Because American capital was a major player in 00:09:52.929 --> 00:09:55.149 the BDC and private credit space, just like Aries. 00:09:55.210 --> 00:09:57.289 So this acquisition, it wasn't just about adding 00:09:57.289 --> 00:09:58.830 assets. It was about industry consolidation. 00:09:58.909 --> 00:10:01.490 It was about eliminating a major competitor. 00:10:01.629 --> 00:10:05.649 So for $3 .4 billion. For $3 .4 billion, Aries 00:10:05.649 --> 00:10:08.029 instantly achieved a massive scale increase in 00:10:08.029 --> 00:10:10.750 their credit and private equity portfolios. They 00:10:10.750 --> 00:10:13.269 acquired a huge portfolio of existing investments 00:10:13.269 --> 00:10:16.029 and, crucially, they locked up all these new 00:10:16.029 --> 00:10:19.029 client relationships. It fundamentally reshaped 00:10:19.029 --> 00:10:21.289 the landscape of the private debt market. It 00:10:21.289 --> 00:10:24.090 confirmed Aries as the undisputed leader in U 00:10:24.090 --> 00:10:26.490 .S. middle market financing. So that deal was 00:10:26.490 --> 00:10:28.929 all about consolidation and scale mastery in 00:10:28.929 --> 00:10:31.669 North America. But their next move was purely 00:10:31.669 --> 00:10:34.620 geographic. It was a thrust to the east with 00:10:34.620 --> 00:10:37.299 the SSG capital acquisition. The Asia -Pacific 00:10:37.299 --> 00:10:39.519 strategy. And again, look at the playbook. Rather 00:10:39.519 --> 00:10:41.840 than spending a decade slowly building a presence 00:10:41.840 --> 00:10:43.899 in Hong Kong or Singapore. Which would be the 00:10:43.899 --> 00:10:46.620 traditional way. Right. Instead, in January 2020, 00:10:47.039 --> 00:10:49.419 Ares acquired a controlling stake in the established 00:10:49.419 --> 00:10:51.860 Hong Kong -based alternative investment firm 00:10:51.860 --> 00:10:54.759 SSG Capital Management. This was formalized in 00:10:54.759 --> 00:10:57.700 July 2020, and the unit was renamed Ares SSG. 00:10:58.320 --> 00:11:01.299 So why was acquiring SSG the smart move rather 00:11:01.299 --> 00:11:04.279 than just building organically? Speed and expertise. 00:11:04.600 --> 00:11:07.730 I mean, Asian markets are uniquely complex. You 00:11:07.730 --> 00:11:09.710 need specialized knowledge of local regulatory 00:11:09.710 --> 00:11:11.970 environments, of distressed debt mechanisms, 00:11:12.190 --> 00:11:14.970 of regional business cultures. You can't just 00:11:14.970 --> 00:11:17.769 parachute people in. You can't. So by purchasing 00:11:17.769 --> 00:11:20.370 a controlling interest in an already operational, 00:11:20.710 --> 00:11:24.269 already successful firm like SSG, Ares instantly 00:11:24.269 --> 00:11:27.409 gained a deep pipeline and local expertise across 00:11:27.409 --> 00:11:31.009 the entire Asia -Pacific region. This just accelerated 00:11:31.009 --> 00:11:33.509 their global strategy dramatically. It gave them 00:11:33.509 --> 00:11:35.950 immediate capability in credit, private equity, 00:11:36.110 --> 00:11:39.110 and special situations. all across APAC, which 00:11:39.110 --> 00:11:41.190 really rounded out their global reach. Okay, 00:11:41.250 --> 00:11:43.529 so rounding out their expansion strategy, they 00:11:43.529 --> 00:11:46.330 looked inward at specialized asset classes. In 00:11:46.330 --> 00:11:49.129 July 2021, Aries completed the acquisition of 00:11:49.129 --> 00:11:50.950 Black Creek Group's U .S. real estate investment 00:11:50.950 --> 00:11:53.370 advisory and distribution business. And this 00:11:53.370 --> 00:11:56.129 shows a highly targeted effort to bolster their 00:11:56.129 --> 00:11:57.830 real estate group's capacity, which we're going 00:11:57.830 --> 00:12:00.450 to detail in a moment. While Aries already had 00:12:00.450 --> 00:12:02.929 a real estate arm, Black Creek brought two specific 00:12:02.929 --> 00:12:05.929 things to the table. One, advisory expertise, 00:12:06.049 --> 00:12:09.169 and two, specialized distribution capabilities. 00:12:09.389 --> 00:12:11.470 Distribution meaning? Meaning it strengthened 00:12:11.470 --> 00:12:14.049 their ability not only to find and finance real 00:12:14.049 --> 00:12:17.370 estate assets, but also to package and sell those 00:12:17.370 --> 00:12:19.529 investment products to a wider range of investors 00:12:19.529 --> 00:12:22.830 in the U .S. It deepened their vertical integration. 00:12:23.849 --> 00:12:26.330 And, importantly, it laid the groundwork for 00:12:26.330 --> 00:12:29.669 that massive, complex, global real estate deal 00:12:29.669 --> 00:12:31.690 that followed just a few years later. So we're 00:12:31.690 --> 00:12:34.490 seeing a really clear pattern here. Consolidating 00:12:34.490 --> 00:12:36.909 power and credit with American Capital, achieving 00:12:36.909 --> 00:12:40.429 global reach with SSG, and then deepening asset 00:12:40.429 --> 00:12:43.090 class specialization with Black Creek. That is 00:12:43.090 --> 00:12:45.570 a very sophisticated playbook for growth. Absolutely. 00:12:45.830 --> 00:12:47.649 So now we get to the core of the business, Section 00:12:47.649 --> 00:12:50.240 3, the investment engine. And it's absolutely 00:12:50.240 --> 00:12:52.559 essential to remember, as we've said, that Ares 00:12:52.559 --> 00:12:54.799 is among the largest players in the private debt 00:12:54.799 --> 00:12:57.519 market. All their activities flow through four 00:12:57.519 --> 00:13:00.799 distinct yet complementary business units. And 00:13:00.799 --> 00:13:02.759 that complementarity is their secret weapon. 00:13:02.799 --> 00:13:05.360 It really is. That ability to pivot. That's the 00:13:05.360 --> 00:13:07.799 key competitive edge. The four groups are designed 00:13:07.799 --> 00:13:10.039 to operate as a full -stack capital solution. 00:13:10.360 --> 00:13:13.240 It allows ARIS to shift capital, to manage risk, 00:13:13.360 --> 00:13:15.919 and to exploit opportunities based on global 00:13:15.919 --> 00:13:18.360 market conditions. So if one unit slows down, 00:13:18.580 --> 00:13:20.480 the others are positioned to capture the value 00:13:20.480 --> 00:13:22.320 somewhere else. Okay, so let's start with the 00:13:22.320 --> 00:13:24.600 largest component, the ARIS credit group. Let's 00:13:24.600 --> 00:13:27.019 do it. The credit group is the foundation. It 00:13:27.019 --> 00:13:30.940 was immense, even back in May 2016, reporting 00:13:30.940 --> 00:13:35.220 $60 .0 billion in assets under management. It 00:13:35.220 --> 00:13:37.279 dwarfed the other groups at the time and really 00:13:37.279 --> 00:13:40.220 confirmed the firm's origin in private debt mastery. 00:13:40.759 --> 00:13:43.500 The credit group is the engine room. Its core 00:13:43.500 --> 00:13:46.220 focus is managing both liquid and illiquid credit, 00:13:46.379 --> 00:13:48.899 and it operates squarely in that high -yield, 00:13:48.919 --> 00:13:52.139 non -investment -grade credit sector. This is 00:13:52.139 --> 00:13:54.379 the world where capital is most needed and, frankly, 00:13:54.519 --> 00:13:57.100 where ARIS generates its highest returns. It's 00:13:57.100 --> 00:13:59.419 high risk, high reward. What's fascinating is 00:13:59.419 --> 00:14:01.399 the sheer diversity of instruments they manage 00:14:01.399 --> 00:14:03.600 within that single sector. It's not just one 00:14:03.600 --> 00:14:06.289 thing. No, they are comprehensive. The categories 00:14:06.289 --> 00:14:08.669 are vast. Corporate loans, high -yield bonds, 00:14:08.889 --> 00:14:11.450 institutional credit, credit opportunities. Which 00:14:11.450 --> 00:14:13.730 means capitalizing on temporary market distress. 00:14:14.110 --> 00:14:17.320 Exactly. Then there are special situations, which 00:14:17.320 --> 00:14:19.980 are more complex, deeply troubled companies, 00:14:20.320 --> 00:14:22.759 asset -backed lending, and of course, direct 00:14:22.759 --> 00:14:25.559 lending. And they do this across both the U .S. 00:14:25.559 --> 00:14:28.220 and Europe. Basically, if a company needs non 00:14:28.220 --> 00:14:30.879 -traditional structured financing, ARIS has an 00:14:30.879 --> 00:14:33.059 offering. And the execution model in the U .S. 00:14:33.059 --> 00:14:34.899 is largely defined by the structures we mentioned 00:14:34.899 --> 00:14:36.879 earlier, right? Correct. The U .S. corporate 00:14:36.879 --> 00:14:39.299 lending is primarily run through ARIS Capital 00:14:39.299 --> 00:14:42.080 Corporation, the BDC, and a separate commercial 00:14:42.080 --> 00:14:44.799 finance business. And that commercial... finance 00:14:44.799 --> 00:14:47.580 business is specialized. Very specialized. It 00:14:47.580 --> 00:14:51.100 provides asset based loans. So lending against 00:14:51.100 --> 00:14:53.980 the value of inventory or equipment and cash 00:14:53.980 --> 00:14:56.480 flow loans, which is lending based on projected 00:14:56.480 --> 00:14:59.259 future earnings. This dual approach means they 00:14:59.259 --> 00:15:01.340 can finance almost any type of middle market 00:15:01.340 --> 00:15:03.600 company in North America, whether it's stable 00:15:03.600 --> 00:15:06.059 or, you know, in a high growth phase. So how 00:15:06.059 --> 00:15:08.120 does that self -origination model differ when 00:15:08.120 --> 00:15:10.460 you look at Europe? In Europe, the focus shifts. 00:15:10.620 --> 00:15:12.639 It's more about self -originated investments 00:15:12.639 --> 00:15:15.700 in illiquid middle market credits. They don't 00:15:15.700 --> 00:15:17.899 rely as heavily on the institutional market for 00:15:17.899 --> 00:15:20.659 deal flow. They are actively out there sourcing, 00:15:20.759 --> 00:15:23.240 structuring and negotiating debt packages directly 00:15:23.240 --> 00:15:25.059 with the companies themselves. And what's the 00:15:25.059 --> 00:15:28.039 advantage of that? That hands -on approach minimizes 00:15:28.039 --> 00:15:30.860 competition, and it allows Aries to control the 00:15:30.860 --> 00:15:33.039 terms and the structure of the debt right from 00:15:33.039 --> 00:15:35.440 inception. These are managed through commingled 00:15:35.440 --> 00:15:37.860 funds, separately managed accounts for their 00:15:37.860 --> 00:15:40.899 massive clients, and joint venture lending programs, 00:15:41.120 --> 00:15:43.679 which spreads the risk and increases their deployment 00:15:43.679 --> 00:15:47.029 capacity. So this makes the credit group a globally 00:15:47.029 --> 00:15:50.029 adaptive proprietary machine. It's designed to 00:15:50.029 --> 00:15:52.809 find value wherever traditional banks have retreated. 00:15:53.009 --> 00:15:55.230 Precisely. They are built to exploit those crucial 00:15:55.230 --> 00:15:59.190 pricing inefficiencies and the regulatory differences 00:15:59.190 --> 00:16:01.230 between the U .S. and European debt markets. 00:16:01.509 --> 00:16:03.230 Okay, so let's move to the second pillar, the 00:16:03.230 --> 00:16:06.129 EIRS private equity group. In 2016, this had 00:16:06.129 --> 00:16:10.250 $23 .3 billion in AUM. The synergy here with 00:16:10.250 --> 00:16:12.470 the credit group seems to be what sets EIRS apart. 00:16:12.970 --> 00:16:16.110 It is. The strategy is targeted and complementary. 00:16:16.850 --> 00:16:19.570 The private equity group makes opportunistic 00:16:19.570 --> 00:16:22.590 majority or shared control investments, and they 00:16:22.590 --> 00:16:26.690 focus principally on, you guessed it, undercapitalized 00:16:26.690 --> 00:16:29.309 middle market companies. There's that recurring 00:16:29.309 --> 00:16:33.529 theme again. The middle market. It is. This allows 00:16:33.529 --> 00:16:35.289 them to be the full -stack capital provider. 00:16:35.809 --> 00:16:38.610 So if a deal is too risky for their credit funds 00:16:38.610 --> 00:16:41.009 to provide the debt, they can instantly pivot 00:16:41.009 --> 00:16:43.909 and offer an equity stake. Or vice versa. It 00:16:43.909 --> 00:16:46.330 gives them a competitive bid advantage over those 00:16:46.330 --> 00:16:48.610 single focus firms that only do one or the other. 00:16:48.690 --> 00:16:50.990 Exactly. That is the competitive differentiator. 00:16:51.090 --> 00:16:53.470 They can sit down with a struggling or a growing 00:16:53.470 --> 00:16:55.769 middle market company and offer a completely 00:16:55.769 --> 00:16:58.730 tailored solution. Cheap debt, expensive debt, 00:16:58.950 --> 00:17:01.889 preferred equity or a full equity buyout. They're 00:17:01.889 --> 00:17:03.629 seeking companies that need a capital injection 00:17:03.629 --> 00:17:06.569 and a strategic restructuring. This allows them 00:17:06.569 --> 00:17:08.630 to capture value where the traditional private 00:17:08.630 --> 00:17:11.390 equity mega LBO houses just aren't interested. 00:17:11.980 --> 00:17:14.299 And within PE, they've carved out a really fascinating 00:17:14.299 --> 00:17:16.500 specialization in U .S. power and infrastructure 00:17:16.500 --> 00:17:19.440 assets. This is a huge strategic move toward 00:17:19.440 --> 00:17:22.160 recession proofing their portfolio. They manage 00:17:22.160 --> 00:17:24.480 investments in vital sectors like power generation, 00:17:24.799 --> 00:17:28.009 transmission and midstream assets. So we're talking 00:17:28.009 --> 00:17:30.789 pipelines, processing facilities. Exactly. These 00:17:30.789 --> 00:17:32.829 are essential services. They're often protected 00:17:32.829 --> 00:17:35.609 by regulation or long -term contracts, which 00:17:35.609 --> 00:17:38.710 provide highly stable, almost annuity -like cash 00:17:38.710 --> 00:17:42.190 flows. And institutional investors, they love 00:17:42.190 --> 00:17:44.609 that stability, especially when markets get volatile. 00:17:44.890 --> 00:17:47.470 And how do they structure these PE investments? 00:17:47.849 --> 00:17:50.559 What are the vehicles? They utilize four corporate 00:17:50.559 --> 00:17:53.819 private equity commingled funds, mainly targeting 00:17:53.819 --> 00:17:56.000 North America but with a presence in Europe as 00:17:56.000 --> 00:17:58.539 well. For the infrastructure play, they manage 00:17:58.539 --> 00:18:01.819 four commingled funds and six related co -investment 00:18:01.819 --> 00:18:03.539 vehicles. And the co -investment vehicles are 00:18:03.539 --> 00:18:06.470 key. They are key because these vehicles allow 00:18:06.470 --> 00:18:08.930 their largest institutional clients, pension 00:18:08.930 --> 00:18:11.369 funds, sovereign wealth funds to participate 00:18:11.369 --> 00:18:14.630 directly alongside Ares in specific high conviction 00:18:14.630 --> 00:18:17.609 infrastructure deals. And that dramatically deepens 00:18:17.609 --> 00:18:20.529 those critical client relationships. OK, next 00:18:20.529 --> 00:18:23.529 up is the Ayers Real Estate Group. It had $10 00:18:23.529 --> 00:18:27.630 .2 billion in AUM back in 2016, and it's grown 00:18:27.630 --> 00:18:29.890 substantially since then, especially after the 00:18:29.890 --> 00:18:31.970 targeted acquisitions we talked about. The real 00:18:31.970 --> 00:18:34.269 estate group provides critical diversification. 00:18:34.609 --> 00:18:37.289 It moves away from purely corporate balance sheets 00:18:37.289 --> 00:18:40.750 and into physical tangible assets. Their strategy 00:18:40.750 --> 00:18:43.829 is broad. They manage both public and private 00:18:43.829 --> 00:18:46.349 equity and debt investments in real estate across 00:18:46.349 --> 00:18:49.539 both North America and Europe. So just like with 00:18:49.539 --> 00:18:51.539 corporate financing, they can play both sides 00:18:51.539 --> 00:18:53.859 of the ledger in the property markets. Exactly. 00:18:54.079 --> 00:18:56.099 They can provide the senior debt for a massive 00:18:56.099 --> 00:18:58.579 project, or they can take an equity ownership 00:18:58.579 --> 00:19:00.799 stake in the underlying office tower or apartment 00:19:00.799 --> 00:19:03.420 complex itself. Precisely. That dual capacity 00:19:03.420 --> 00:19:05.839 allows them to be flexible regardless of where 00:19:05.839 --> 00:19:07.859 the greatest value is being generated in the 00:19:07.859 --> 00:19:10.559 current cycle. Is it in the low risk debt portion 00:19:10.559 --> 00:19:13.480 or the high upside equity portion? They manage 00:19:13.480 --> 00:19:15.619 several investment vehicles here and they reflect 00:19:15.619 --> 00:19:17.940 that diversity. So tell us about those vehicles, 00:19:18.099 --> 00:19:20.200 especially how they ensure liquidity for investors. 00:19:20.779 --> 00:19:22.799 Well, they operate their own publicly traded 00:19:22.799 --> 00:19:25.119 REIT, Ayers Commercial Real Estate Corporation. 00:19:25.579 --> 00:19:28.279 The existence of a public REIT provides investors 00:19:28.279 --> 00:19:30.680 with a liquid way to access commercial real estate 00:19:30.680 --> 00:19:33.819 debt and equity. It balances out the illiquidity 00:19:33.819 --> 00:19:36.119 of their private funds. Makes sense. Then they 00:19:36.119 --> 00:19:38.619 also manage U .S. and European real estate private 00:19:38.619 --> 00:19:40.960 equity commingled funds for more opportunistic 00:19:40.960 --> 00:19:43.700 investments and highly customized real estate 00:19:43.700 --> 00:19:45.960 equity and debt separately managed accounts for 00:19:45.960 --> 00:19:48.019 their most sophisticated tailor -made clients. 00:19:48.400 --> 00:19:50.710 The Black Creek Acquisition was specifically 00:19:50.710 --> 00:19:53.230 designed to enhance their capabilities in distributing 00:19:53.230 --> 00:19:55.970 these products to a wider audience. It was preparing 00:19:55.970 --> 00:19:58.470 them for future global scale. Okay, finally, 00:19:58.569 --> 00:20:02.329 we revisit Air's SSG, the specialized Asia -Pacific 00:20:02.329 --> 00:20:05.089 arm that was formed from that 2020 SSG capital 00:20:05.089 --> 00:20:07.950 management acquisition. Air's SSG is the essential 00:20:07.950 --> 00:20:10.490 fourth pillar. It functions as the specialized, 00:20:10.569 --> 00:20:13.009 localized extension of the other three groups, 00:20:13.230 --> 00:20:16.009 credit, private equity, and real estate, but 00:20:16.009 --> 00:20:18.569 it's tailored specifically for those Asia -Pacific 00:20:18.569 --> 00:20:22.349 markets. Its mandate focuses explicitly on credit, 00:20:22.549 --> 00:20:25.049 private equity, and highly complex special situations 00:20:25.049 --> 00:20:27.630 investments across that region. So if a distressed 00:20:27.630 --> 00:20:29.930 debt opportunity comes up in Singapore or a growth 00:20:29.930 --> 00:20:32.509 equity play emerges in Korea, this is the team 00:20:32.509 --> 00:20:35.029 that executes it. They're using their local knowledge 00:20:35.029 --> 00:20:37.829 and expertise. Absolutely. It completes the global 00:20:37.829 --> 00:20:40.470 strategic map. You have the massive U .S. credit 00:20:40.470 --> 00:20:42.650 and P .E. machine. You have the regulated European 00:20:42.650 --> 00:20:45.750 platform. And now you have the specialized Asia 00:20:45.750 --> 00:20:48.930 -Pacific arm. This triple continent reach governed 00:20:48.930 --> 00:20:52.109 by four complementary pillars, it positions Aries 00:20:52.109 --> 00:20:55.289 to deploy capital 24 hours a day, capitalizing 00:20:55.289 --> 00:20:57.710 on market shifts regardless of geography or asset 00:20:57.710 --> 00:21:00.769 class. That robust structure and capital flexibility, 00:21:01.069 --> 00:21:03.329 it really allowed Aries to pursue increasingly 00:21:03.329 --> 00:21:06.569 massive and diverse deals in 2024. And these 00:21:06.569 --> 00:21:08.069 moves, they aren't just incremental adjustments. 00:21:08.509 --> 00:21:11.210 They are strategic leaps that demonstrate their 00:21:11.210 --> 00:21:13.869 evolving appetite for new asset classes and just 00:21:13.869 --> 00:21:17.119 sheer size. 2024 was a banner. year. It really 00:21:17.119 --> 00:21:19.519 showed Ares leveraging their global scale and 00:21:19.519 --> 00:21:21.660 their willingness to end for markets where others 00:21:21.660 --> 00:21:24.519 might fear to tread. So first up, in June of 00:21:24.519 --> 00:21:27.299 2024, Ares Management, in cooperation with Searchlight 00:21:27.299 --> 00:21:29.720 Capital, invested $500 million in a preferred 00:21:29.720 --> 00:21:32.339 equity transaction in RSK Group. And this is 00:21:32.339 --> 00:21:34.559 a perfect example of how the private equity group 00:21:34.559 --> 00:21:38.779 applies its strategic focus. RSK Group is a UK 00:21:38.779 --> 00:21:41.460 -based environmental engineering and technical 00:21:41.460 --> 00:21:44.319 services group. Right. This sector is incredibly 00:21:44.319 --> 00:21:47.119 resilient because it's driven by non -discretionary 00:21:47.119 --> 00:21:49.299 spending. Things like environmental compliance, 00:21:49.680 --> 00:21:52.039 infrastructure maintenance, essential engineering. 00:21:52.279 --> 00:21:54.819 These investments benefit from these powerful 00:21:54.819 --> 00:21:58.240 long -term regulatory tailwinds related to sustainability. 00:21:59.099 --> 00:22:01.440 And the type of investment preferred equity is 00:22:01.440 --> 00:22:03.799 highly strategic, isn't it, for both Aries and 00:22:03.799 --> 00:22:05.759 for the company? It is. Preferred equity sits 00:22:05.759 --> 00:22:08.619 senior to common equity. It often offers a guaranteed 00:22:08.619 --> 00:22:11.200 dividend or return, but it still retains the 00:22:11.200 --> 00:22:14.019 upside potential of equity. So it allowed Aries 00:22:14.019 --> 00:22:16.380 to gain exposure to the growth of this essential 00:22:16.380 --> 00:22:19.619 services company, locking in returns while also 00:22:19.619 --> 00:22:22.240 enabling RSK Group to raise a huge amount of 00:22:22.240 --> 00:22:24.799 capital for expansion without immediately diluting 00:22:24.799 --> 00:22:26.819 the control of its existing common shareholders. 00:22:27.259 --> 00:22:29.339 And the total investment? even increased a bit 00:22:29.339 --> 00:22:32.640 to $520 million. It did, which really underscores 00:22:32.640 --> 00:22:35.339 Aries' deep commitment to this essential infrastructure 00:22:35.339 --> 00:22:37.720 and environmental services space as a stable, 00:22:37.799 --> 00:22:40.779 long -term asset class. Okay, next came a transaction 00:22:40.779 --> 00:22:42.859 that immediately solidified their position in 00:22:42.859 --> 00:22:45.539 global real estate and logistics. In October 00:22:45.539 --> 00:22:48.500 2024, Aries acquired the international business 00:22:48.500 --> 00:22:52.960 of GLP Capital Partners, or GCP, excluding its 00:22:52.960 --> 00:22:56.039 Greater China business. This was a colossal play. 00:22:56.200 --> 00:22:58.720 It specifically targeted the high growth logistics 00:22:58.720 --> 00:23:01.579 real estate sector, which has just been booming 00:23:01.579 --> 00:23:04.319 since the global supply chain shifts of the pandemic. 00:23:04.480 --> 00:23:06.619 The huge deal. And the transaction demonstrates 00:23:06.619 --> 00:23:09.859 their tremendous firepower. The deal was valued 00:23:09.859 --> 00:23:13.480 at approximately $3 .7 billion in cash and another 00:23:13.480 --> 00:23:18.440 $1 .9 billion in Ares Class A common stock. The 00:23:18.440 --> 00:23:20.900 scale is immense. But the use of their own stock 00:23:20.900 --> 00:23:23.059 as currency is just as important as the cash 00:23:23.059 --> 00:23:26.000 component, right? Utilizing $1 .9 billion of 00:23:26.000 --> 00:23:28.140 your own Class A stock shows that Ares has immense 00:23:28.140 --> 00:23:30.099 confidence in the valuation of its own shares. 00:23:30.480 --> 00:23:32.660 It's an efficient way to close a deal of this 00:23:32.660 --> 00:23:34.759 magnitude without completely draining the balance 00:23:34.759 --> 00:23:36.480 sheet of cash. So what do they get for that? 00:23:36.640 --> 00:23:39.460 Critically, acquiring GCP's international business 00:23:39.460 --> 00:23:42.799 instantly provided heirs with a massive, high 00:23:42.799 --> 00:23:45.039 -quality portfolio of logistics and real estate 00:23:45.039 --> 00:23:48.099 assets outside of China. And remember that 2021 00:23:48.099 --> 00:23:50.880 Black Creek... acquisition yes the one to beef 00:23:50.880 --> 00:23:54.099 up distribution exactly that move beefed up their 00:23:54.099 --> 00:23:56.500 real estate distribution capabilities making 00:23:56.500 --> 00:23:59.380 them competent enough to integrate this far larger 00:23:59.380 --> 00:24:02.359 global logistics platform from glp three years 00:24:02.359 --> 00:24:06.450 later this is Truly strategic, long -term planning 00:24:06.450 --> 00:24:09.309 coming to fruition. It instantly upgrades their 00:24:09.309 --> 00:24:11.829 real estate group from a regional player to a 00:24:11.829 --> 00:24:14.250 global logistics powerhouse. It's a game changer, 00:24:14.369 --> 00:24:16.950 a complete game changer in terms of AUM and global 00:24:16.950 --> 00:24:19.089 influence in the institutional real estate market. 00:24:19.230 --> 00:24:21.190 And finally, we arrive at the deal that truly 00:24:21.190 --> 00:24:24.730 captured the public imagination. December 2024. 00:24:25.410 --> 00:24:28.029 Ayers acquired 10 % of the Miami Dolphins of 00:24:28.029 --> 00:24:30.970 the National Football League. This raises a really 00:24:30.970 --> 00:24:33.250 important high level question for institutional 00:24:33.250 --> 00:24:36.250 investors, which is why does a 10 percent stake 00:24:36.250 --> 00:24:38.690 in a single sports team warrant so much attention? 00:24:38.970 --> 00:24:40.930 It's a great question. The significance here, 00:24:40.970 --> 00:24:43.930 it really transcends the dollar value. This was 00:24:43.930 --> 00:24:46.450 one of the very first deals allowing outside 00:24:46.450 --> 00:24:48.650 investors, specifically private equity firms 00:24:48.650 --> 00:24:52.250 like Ayers, to buy into an NFL franchise. And 00:24:52.250 --> 00:24:55.349 that market entry was only possible because the 00:24:55.349 --> 00:24:57.730 league owners voted to allow these new types 00:24:57.730 --> 00:25:01.109 of institutional investors back in August 2024. 00:25:01.650 --> 00:25:03.809 They essentially opened up a hyper exclusive 00:25:03.809 --> 00:25:07.430 club. And Ayers acted incredibly fast to secure 00:25:07.430 --> 00:25:09.869 that first mover advantage. Professional sports 00:25:09.869 --> 00:25:12.049 ownership, especially in major leagues like the 00:25:12.049 --> 00:25:15.349 NFL, has historically been restricted to a very, 00:25:15.390 --> 00:25:17.849 very small circle of family groups or ultra high 00:25:17.849 --> 00:25:20.289 net worth individuals. Right. The August vote 00:25:20.289 --> 00:25:22.269 opened the door to institutional capital and 00:25:22.269 --> 00:25:25.130 Aries jumped right through it immediately. This 00:25:25.130 --> 00:25:27.210 is a landmark transaction because professional 00:25:27.210 --> 00:25:29.930 sports ownership represents an asset class defined 00:25:29.930 --> 00:25:32.670 by extreme scarcity, massive brand equity and 00:25:32.670 --> 00:25:34.970 constantly appreciating media rights contracts. 00:25:35.329 --> 00:25:38.190 So for Aries, this isn't about running the team 00:25:38.190 --> 00:25:40.369 or picking. the quarterback. It's about pioneering 00:25:40.369 --> 00:25:43.450 a brand new, highly desirable asset class for 00:25:43.450 --> 00:25:46.200 their global institutional clients. It validates 00:25:46.200 --> 00:25:48.460 the NFL's decision to modernize the capital structure 00:25:48.460 --> 00:25:51.359 of its franchises, and it demonstrates Arias' 00:25:51.380 --> 00:25:54.059 ability to execute complex, precedent -setting 00:25:54.059 --> 00:25:57.119 deals in these highly visible sectors. It signals 00:25:57.119 --> 00:25:59.380 to the entire investment world that professional 00:25:59.380 --> 00:26:01.759 sports teams, which were once seen as vanity 00:26:01.759 --> 00:26:04.740 projects, are now legitimate, institutional -grade 00:26:04.740 --> 00:26:07.859 assets. This deal is perhaps the clearest sign 00:26:07.859 --> 00:26:10.519 of Arias' relentless hunt for the next frontier 00:26:10.519 --> 00:26:12.940 of alternative investment. So let's bring it 00:26:12.940 --> 00:26:14.740 all back together. We've charted the course of 00:26:14.740 --> 00:26:16.819 Aries Management Corporation. We started with 00:26:16.819 --> 00:26:19.859 five founders back in 1997, building regulatory 00:26:19.859 --> 00:26:22.420 platforms in the U .S. with AirACC and in Europe, 00:26:22.519 --> 00:26:25.180 and then executing this really strategic blueprint 00:26:25.180 --> 00:26:28.440 of acquisition. A very clear blueprint. Consolidating 00:26:28.440 --> 00:26:30.519 credit with American Capital, achieving global 00:26:30.519 --> 00:26:32.940 reach with SSG, and then deepening real estate 00:26:32.940 --> 00:26:36.240 expertise with Black Creek and now GLP. The core 00:26:36.240 --> 00:26:38.240 takeaway here is that the growth of Aries is 00:26:38.240 --> 00:26:41.339 not random. It's a deliberate strategy of massive 00:26:41.519 --> 00:26:44.579 diversification across four highly focused, often 00:26:44.579 --> 00:26:47.579 complementary segments, credit, private equity, 00:26:47.720 --> 00:26:50.839 real estate, and SSG, all coupled with aggressive 00:26:50.839 --> 00:26:54.380 geographic expansion. They are the market's capital 00:26:54.380 --> 00:26:57.019 architect. They're willing to provide these sophisticated 00:26:57.019 --> 00:26:59.420 capital solutions in places where traditional 00:26:59.420 --> 00:27:02.579 banks or public markets want or simply can't 00:27:02.579 --> 00:27:05.119 go. And they're consistently focusing on that 00:27:05.119 --> 00:27:07.759 illiquid private debt and middle market company 00:27:07.759 --> 00:27:10.519 space. That's their sweet spot. This strategic 00:27:10.519 --> 00:27:13.119 vision. leads us directly to the core question 00:27:13.119 --> 00:27:15.119 for you, the learner, that builds on everything 00:27:15.119 --> 00:27:18.440 we've discussed. Given Ares' significant presence 00:27:18.440 --> 00:27:20.940 in illiquid credit and its role as a BDC financing 00:27:20.940 --> 00:27:23.359 middle market companies, how does the ability 00:27:23.359 --> 00:27:26.359 to instantly shift capital across four distinct 00:27:26.359 --> 00:27:29.740 global segments allow them to proactively manage 00:27:29.740 --> 00:27:32.660 risk and capitalize on varying economic cycles 00:27:32.660 --> 00:27:35.500 and regulatory environments worldwide? That structural 00:27:35.500 --> 00:27:37.839 flexibility is their competitive moat. I mean, 00:27:37.859 --> 00:27:39.720 that's what it all comes down to. The four pillar 00:27:39.720 --> 00:27:41.579 structure isn't just an organizational chart. 00:27:41.720 --> 00:27:44.660 It's a dynamic risk mitigation strategy. So how 00:27:44.660 --> 00:27:47.220 does that play out in practice? Well, if U .S. 00:27:47.240 --> 00:27:49.680 private equity deal valuations get too rich, 00:27:49.920 --> 00:27:52.660 they can pivot resources to opportunistic European 00:27:52.660 --> 00:27:55.880 direct lending. If the Asian credit market presents 00:27:55.880 --> 00:27:58.599 special situations driven by regulatory changes, 00:27:59.140 --> 00:28:01.940 areas SSG is immediately positioned to execute 00:28:01.940 --> 00:28:04.750 on that. It allows them to arbitrage. opportunities 00:28:04.750 --> 00:28:07.529 across asset classes and geographies, ensuring 00:28:07.529 --> 00:28:10.910 stable high returns even when specific markets 00:28:10.910 --> 00:28:13.990 are facing severe headwinds. This ability to 00:28:13.990 --> 00:28:16.190 rotate capital is why they remain such a dominant 00:28:16.190 --> 00:28:19.410 force. Fascinating. And finally, let's end with 00:28:19.410 --> 00:28:21.130 a provocative thought that builds on the recent 00:28:21.130 --> 00:28:23.839 activity we've seen. The investment in the Miami 00:28:23.839 --> 00:28:26.160 Dolphins confirmed that these hyper -exclusive, 00:28:26.200 --> 00:28:29.339 scarce asset classes are the next frontier for 00:28:29.339 --> 00:28:31.559 alternative managers. They certainly are. So, 00:28:31.579 --> 00:28:33.799 considering the success of the NFL deal, what 00:28:33.799 --> 00:28:36.140 other unexpected industry currently closed off 00:28:36.140 --> 00:28:38.940 by tradition or restrictive ownership rules might 00:28:38.940 --> 00:28:42.660 Aries, or its peers, aim to penetrate next? Think 00:28:42.660 --> 00:28:44.839 of asset classes with high barriers to entry, 00:28:45.059 --> 00:28:48.259 massive brand recognition, and appreciating intrinsic 00:28:48.259 --> 00:28:51.819 value. Following that playbook of the NFL deal, 00:28:52.039 --> 00:28:54.400 it's really a question of where the next trillion 00:28:54.400 --> 00:28:56.839 dollars of institutional capital will find its 00:28:56.839 --> 00:28:59.259 new home. Something to mull over as you think 00:28:59.259 --> 00:29:01.880 about the future of global investing. Thank you 00:29:01.880 --> 00:29:03.980 for joining us. We hope you feel thoroughly well 00:29:03.980 --> 00:29:06.400 informed of the global strategy of Aries Management 00:29:06.400 --> 00:29:06.799 Corporation.