Special Opportunities

Overview

We employ a flexible capital strategy to target non-control positions across a broad spectrum of stressed, distressed and opportunistic situations. We seek to deploy our flexible capital across a broad range of both private market and public market transaction types. This flexible approach expands our universe of potential investment opportunities beyond that of traditional rescue and distressed capital providers and enables construction of a differentiated portfolio of investments. We seek to invest in businesses undergoing stress or transformational change.

 

 

 

Overview

Private Markets


In the private markets, we seek to leverage the substantial resources of Ares Management's private equity and direct lending franchises by partnering with companies and management teams to provide flexible capital solutions.

This process of providing companies with private capital solutions that offer leadership, flexibility and distressed expertise in the form of incremental liquidity and/or covenant relief can empower a business going through distress or transformational change by improving cash flows, reducing leverage and returning the business to corporate health.

We expect to flex more significantly into public market stressed and distressed debt investments in circumstances where we see what we believe to be attractive value relative to what can be achieved in the private market.

Targeted Investments

Targeted Investments

We seek to deploy capital across a broad range of non-control private market and public market transaction types with respect to companies undergoing stress or transformational change.

We search for companies that are being challenged by one or more of the following:

  • The business model or management team is undergoing a significant transition;
  • The industry is broadly out-of-favor in the capital markets and/or is going through secular or cyclical change; or
  • The balance sheet has become overly cumbersome, complex and/or unsustainable.

Targeted Investment Types

Private Markets
Rescue Direct Lending

Rescue Direct Lending

  • Provide companies with highly structured capital solutions with a strict focus on (i) asset and/or cash flow coverage and (ii) downside protection
  • Examples include:
  • 1st/2nd lien secured debt, non-recourse SPV debt financing, common/preferred equity

Opportunistic Financing

Opportunistic Financing 

  • Provide companies with bespoke capital solutions at the operating asset level and/or holding company level to unlock debt capacity and support growth initiatives
  • Examples include:
  • Secured/unsecured debt, preferred/common equity

Comprehensive Recapitalization Solutions

Comprehensive Recapitalization Solutions 

  • Provide companies with “end-to-end” capital solutions across the capital structure which in turn gives management flexibility, liquidity and runway to execute strategic initiatives and realize growth 
  • Examples include:
  • Secured/unsecured debt, preferred/common equity, and warrants

public to private

Public to Private Transactions 

  • Convert public debt investments into non-control private equity investments, usually for companies recovering from cyclical tailwinds, operational restructurings and/or inappropriate capital structures 
  • Examples include:
  • Fulcrum debt securities

Public Markets
Stressed/Distressed Debt

Stressed/Distressed Debt 

  • Invest in publicly traded secured and/or unsecured debt in companies undergoing transformational change, liquidity duress, and/or macroeconomic headwinds
  • Intention is to either hold securities to maturity and/or receive reorganized equity
  • Typically seek to influence processes and provide thought leadership
Post-Reorg Equities

Post-Reorg Equities 

  • Invest in publicly traded, post-bankruptcy equities
  • Usually includes companies that are recovering from cyclical headwinds, operational restructurings and/or inappropriate capital structures

 

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Value Proposition

For Management Teams

We seek to partner with management teams as they evaluate growth and capital structure initiatives. Both public and private market opportunities require collaborative approaches to fill the “void of sponsorship,” especially in highly complex and distressed situations. Our team conducts thorough, private equity-style diligence to gain a deep understanding of each specialized situation, the needs of the management team and dynamics of the investment's ecosystem. We employ a flexible capital approach which enables us to provide companies with highly flexible, structured capital to support growth and capital structure initiatives.

In situations where a restructuring process is necessary, we seek to work effectively with other constituents to reach a quick resolution and minimize the impact on the company's business. We seek to “right-size” each company's balance sheet to enable the company to grow and compete without the constraints of an over-leveraged capital structure. We have the ability to leverage the knowledge and resources of the broader Ares Management platform to support the company throughout the restructuring process. We do not seek day-to-day control of businesses in which we invest.

For Investors

We employ a flexible capital strategy to target non-control positions across a broad spectrum of stressed, distressed and opportunistic situations. We seek to deploy our flexible capital across a broad range of both private market and public market transaction types. We utilize a proprietary relative value framework to optimize team capacity utilization, portfolio construction and risk management objectives. Our team conducts thorough, private equity-style diligence utilizing an objective, consistent and repeatable investment process.