Ares Management looks to build Middle East presence
Alternative asset manager says UAE institutions are among the top five investors in its funds
Ares Management Corporation, a New York-listed financier with $144.3 billion (Dh529.9bn) of assets under management, is bullish about plans to grow its business in the Middle East, despite a slowing global economy.
Kipp deVeer, the chief executive of Ares Capital Corporation and head of Ares Management Corporation's Credit Group, said investors in the region have shown a strong and growing interest in alternative investment products, and are increasing their allocations in alternatives to achieve their long-term investment goals.
“We expect this trend to continue especially as investors around the world are searching for higher-yielding investments in the current low-rate, low-return environment,” Mr deVeer told The National in Abu Dhabi. Ares Capital Corporation is managed by Ares Capital Management, a subsidiary of Ares Management Corporation.
Ares Management Corporation is an alternative asset management firm specialising in private credit, private equity and real estate investments.
The company says it has long-standing relationships with institutional investors in the GCC and considers the UAE, Saudi Arabia and Kuwait as important markets to boost its business.
Mr DeVeer did not divulge details on the total number of clients from the region but said the number is growing. The company has an office in Dubai with four employees.
“Client base from the region is growing every year. It is in the 25-plus type of distinctive investor relationships here and probably a bunch more than that. The UAE has ranked as a top-five country among direct institutional investors in Ares’s funds for the last 12 years."
Mr DeVeer said he is excited about Saudi Arabia and the role played by the Public Investment Fund (PIF) in the country’s transformation through its investments.
“When you are in PIF, it’s sort of interesting for me to think about how that is a place to be able to transform the country," he said. “They've obviously taken a tremendous amount of resources that they have entrusted PIF to invest all over ... so we are hopeful that through partnership with them, we will not only bring them good performance and good investment returns but hopefully over time we would be able to offer them something more strategic.”
Ares Management Corporation's assets under management are invested in more than 200 funds in credit, private equity and real estate.
Ares Capital Corporation made a $175m net profit during the three months to September 30, bringing its total profit for the first nine months to $589m. According to its website, the company currently has a market capitalisation of $8bn. More than 75 per cent of the company's assets as at September 30 were in senior secured loans, according to a presentation accompanying its third-quarter results.
Ares Management has more than 20 offices across the US, Europe, Asia and Australia. The company said it has achieved a 15 per cent increase in fee-related earnings over the past five years.
“The most favourable tailwind that we have as an alternative firm continues to be increased acceptance but also a need for alternatives. A lot of what we are offering is excess return relative to what you can get in more traditional markets.”
On the expansion plans of the company, he said the company recently opened offices in Amsterdam and Madrid and is looking to expand in Asia.
“Right now, the next focus area where we do anything is Asia. Most of the financial stuff in Asia runs out of Hong Kong and Singapore, probably a combination of these two. We do have marketing folks in Hong Kong but I would like to have more investment folks there. We have a few dedicated investment professionals in China today, we would like that Asian investment presence to be larger,” he said.
Updated: December 10, 2019 01:32 PM