Ares Management Eyes Buyout to Strengthen Private Equity Business

Core Viewpoint - Ares Management Corp. is considering a potential acquisition to enhance its private equity business and improve competitiveness against industry leaders like Blackstone, KKR, and Apollo Global Management [2][11]. Group 1: Rationale Behind Acquisition - Ares Management has sufficient financial capacity for both organic growth and acquisitions, especially as U.S. retirement plans increase access to private markets [3]. - A broader and diversified private equity franchise is becoming crucial as defined contribution plans open to alternative investments [3]. - Although no specific acquisition targets were mentioned, Ares Management could feasibly acquire a private equity firm managing $100 billion or more, which would not be disproportionate to its market value [4]. Group 2: Current Private Equity Position - Private equity constitutes approximately $25 billion of Ares Management's assets under management (AUM) as of September 30, 2025, representing just over 4% of total AUM, a decrease from over 13% at the time of the company's public listing in 2014 [6][11]. - The company's private equity arm is relatively small compared to competitors like Blackstone, KKR, and Apollo, indicating room for growth [5]. Group 3: Recent Acquisitions and Industry Trends - Ares Management has been active in reshaping its business through acquisitions, including the purchase of GLP Capital Partners' international arm for up to $5.2 billion in March 2025, which enhanced its real estate and digital infrastructure capabilities [7]. - Competitors are also expanding through strategic collaborations and acquisitions, such as Blackstone's partnership with Phoenix Financial and KKR's expanded collaboration with Capital Group [8][9]. Group 4: Market Performance - Over the past three months, Ares Management's shares have increased by 3.3%, contrasting with a 6.7% decline in the industry [10].