Skip to Content
Stock Strategist

Ares' Focus on Credit Should Pay Off

We think that as alternative asset flows consolidate around a few select global managers, Ares will benefit.

Mentioned: , , ,

 Ares Management (ARES) specializes in credit, and its exposure to that market is one of the largest in the industry at 80% of its assets under management. We consider credit AUM and Ares' model to be less volatile than private equity; performance fees tend to be more stable, as they are tied to interest and dividend payments rather than private equity exits.

We'd define the credit opportunity for Ares in two ways. First, banks are divesting themselves of risky and complex credit instruments to buyers like Ares because of tougher regulatory rules. Ares, as a result of its deep expertise and extensive relationships, is better positioned than most investors to acquire these difficult-to-value instruments at a reasonable price from forced sellers, generating excess returns for its investors. We see the total opportunity here as sizable; potentially more than a trillion dollars' worth of assets could be divested over the next decade.

Stephen Ellis does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.