Broad Products Suite.
What We Do
We are experienced credit evaluators who take a value-oriented approach, using fundamental bottom-up research to identify investments that offer attractive relative value in comparison to their fundamental credit risk profile.
Our portfolio managers average approximately 23 years of relevant experience investing in liquid credit, in many cases since the inception of either the leveraged loan or high yield asset class. As a long-term, patient direct lender, we leverage our flexibility, structuring expertise and self-origination capabilities to invest across capital structures and meet the full spectrum of our clients’ financing needs. Members of our direct lending and alternative credit investment committees average approximately 26 years of relevant middle-market lending, leveraged finance, and asset-focused investing experience.
Our investment solutions help traditional fixed income investors access the syndicated loan and high yield bond markets and capitalize on opportunities across traded corporate credit. We additionally provide access to directly originated fixed and floating rate credit assets and the ability to capitalize on illiquidity premiums across the credit spectrum. Our strategies include syndicated loans, high yield bonds, multi-asset credit, alternative credit investments and U.S. and European direct lending.
Our Global Reach
Ares Credit Group
Asset manager specializing in liquid and illiquid credit strategies investing primarily in North America and Europe.
Los Angeles, New York, Chicago, Atlanta, Dallas, San Francisco, Washington, D.C., London, Paris, Frankfurt, Stockholm, Amsterdam, Madrid, Luxembourg
Primary Areas of Focus
Non-investment grade corporate credit and alternative credit investments across the North America and Europe.
Types of Investments
Syndicated loans, high yield bonds, multi-asset credit, alternative credit, direct lending: corporate direct lending (non-syndicated senior debt, mezzanine debt and non-control equity to middle market companies), project finance (high yield senior and mezzanine debt to finance power generation projects) and commercial finance (asset-based and cash flow loans to small and middle-market companies, asset-backed facilities to specialty finance companies).
This strategy delivers a diversified portfolio of liquid, traded non-investment grade secured loans to corporate issuers including an allocation to syndicated middle market loans. Loans are one of the few floating rate fixed income alternatives and can be especially suitable for investors with a view of rising short term rates. Our funds include both North American and European issuers. We include a sleeve of high yield bonds (up to 25%) as an accent and typically benchmark our loan strategy against the Credit Suisse Leveraged Loan Index.
This strategy seeks to deliver a diversified portfolio of liquid, traded non-investment grade corporate bonds. This incorporates secured, unsecured and subordinated debt instruments of issuers in both North America and Europe. We benchmark our high yield strategy against the ICE BofA US High Yield Master II Constrained Index.
Our Multi-Asset Credit strategies combine both syndicated loans and high yield bonds, as well as other asset categories including structured credit, special situations, and related credit instruments, into a single portfolio. These portfolios are designed to offer investors a flexible solution to global credit investing by allowing Ares to tactically allocate between multiple asset classes in various market conditions in order to capture the best relative value. This strategy invests globally, can be highly customized, and is designed to “go anywhere” within the liquid non-investment grade credit universe.
Alternative Credit is Ares' home for investment opportunities that fall outside of traditional, well-defined markets such as corporate debt, real estate and private equity. Ares believes gaps exist between traditional, well-defined markets. Ares believes these gaps exist and persist for many reasons, including: regulation, bank disintermediation, tax and accounting rules, rating agency criteria, market structure, capital inefficiencies, and transaction complexity and size. Within these gaps there are markets and sectors that are often overlooked or misunderstood, resulting in investment opportunities that can offer attractive yield premiums, current income, downside protection and low correlation to traditional markets.
Alternative Credit has a broad range of substrategies designed to be client-focused and solutions-based with three main formats: pure play, customized and flagship funds. Each format benefits from Ares' focus on asset security, covenants, cash flow velocity and other features designed to capture value and minimize risk to principal. Alternative Credit targets a level of downside protection, low correlation to traditional markets, diversification, attractive levels of current income and attractive risk-adjusted return opportunities.
In the wake of banking industry consolidation over the past 20 years and institutionalization of the leveraged lending market, Ares has capitalized on the opportunity to provide financing solutions to middle market companies. With a team of approximately 190 investment professionals in offices across the U.S. and Europe, we self-originate our investment opportunities in senior secured loans, private high yield, mezzanine and select minority equity investments. We can provide creative structures, hold large and control positions and offer sponsors and management teams enhanced certainty of execution, which we believe gives us a competitive advantage in the market. We provide investors access to our self-originating direct lending platform through several vehicles, including commingled funds, separately managed accounts and a publicly traded vehicle.
We are one of the largest self-originating direct lenders to the U.S. middle market. Our direct lending business in the U.S. is conducted through Ares Capital Corporation (NASDAQ: ARCC), a leading specialty finance company, and certain private funds and accounts. ARCC is the largest business development company in the United States by both market capitalization and total assets. We also manage a commercial finance business that provides asset-backed and cash flow loans to small and middle-market companies, as well as asset-based facilities to specialty finance companies.
Our European direct lending platform is one of the most significant participants in the European middle-market, focusing on self-originated investments in illiquid middle-market credits. We manage multiple commingled funds and separately managed accounts.