Tradable Credit Group
Our Tradable Credit Group is a leading participant in the tradable, non-investment
grade corporate credit markets, with approximately $30 billion of assets under
management as of December 31, 2015. The group manages various types of investment
funds, ranging from commingled and separately managed accounts for institutional
investors to publicly traded vehicles and sub-advised funds for retail investors.
A key to our performance is our robust research team of approximately 40 analysts
that support our nearly 20 highly respected portfolio managers and traders.
Based in Los Angeles, London, and New York, our analysts have on average over
ten years of experience and are organized by industry rather than asset class,
which we believe enables them to effectively assess relative value across the
capital structure within their areas of expertise, from traditional corporate
credit to alternative credit. While each of the group’s 80 funds is tailored
to specific investment objectives, mandates can be broadly categorized between
long-only credit and alternative credit investment strategies.
Tradable Credit Group long-only credit: Our long-only investment funds primarily
seek to outperform the corresponding performing bank loan or high-yield market
indices. This strategy encompasses senior bank loans (principally first lien
and secured debt), second lien loans, high yield bonds and unsecured loans.
Primary areas of focus for our Tradable Credit Group’s long-only credit
teams include:
Leveraged Loans: Our leveraged loans strategy focuses on relative value and
principal preservation within the non-investment grade credit markets. We focus
on evaluating individual credit opportunities related primarily to non-investment
grade senior secured loans. We primarily target first lien secured debt, with
a secondary focus on second lien loans, mezzanine loans, high yield bonds and
unsecured loans.
High Yield Bonds: Our high yield bonds strategy employs a value-driven philosophy,
utilizing fundamental research to identify non-investment grade corporate issuers.
We primarily target high yield bonds, with a secondary focus on corporate loans,
mezzanine loans, debtor in possession loans and unsecured loans.
Tradable Credit Group alternative credit: Our alternative credit investment
funds primarily seek to deliver compelling absolute risk-adjusted returns relative
to publicly traded stocks, hedge funds, distressed funds, bank loans, high yield
bonds or other investment types. This strategy encompasses dynamic credit and
credit opportunities funds, both of which allocate capital across senior secured
debt, unsecured debt, stressed/distressed debt and structured assets, subject
to our investment professionals’ views of relative value at different
points of an economic cycle. Our special situations funds capitalize on current
and anticipated stressed and distressed credit opportunities focusing on debtor-in-possession
loans, exit and rescue financings, post-reorganization equities, self-originated
investments in specialty finance companies, directly negotiated purchases of
non-performing or non-core assets divested by financial institutions, collateralized
loan obligation vehicles and global structured assets.
Primary areas of focus for our Tradable Credit Group’s alternative credit
teams include:
Credit Opportunities: Our credit opportunities strategy has an event-oriented
credit mandate that seeks to generate attractive risk-adjusted returns across
market cycles by capitalizing on market inefficiencies and relative value opportunities
in the non-investment grade corporate credit market. We principally invest or
take short positions in U.S. and European debt securities across the capital
structure, including opportunistic liquid credit, special situations and structured
products. Our “all weather” strategy seeks to dynamically manage
duration, which is critical to realizing attractive performance during various
interest rate environments.
Global Special Situations: Our global special situations strategy capitalizes
on dislocated assets by flexibly deploying capital across multiple asset classes.
We employ our deep credit expertise, proprietary research and robust sourcing
model to capitalize on current market trends. This opportunistic approach allows
us to invest across a broad spectrum of investments, including corporate debt,
rescue capital, specialty finance, post-reorganization securities and non-performing
portfolios, corporate and consumer asset-backed products and across the capital
structure of collateralized loan obligation vehicles.
Direct Lending Group
Our Direct Lending Group is one of the largest self-originating direct lenders
to the U.S. and European markets, with approximately $33 billion of assets under
management across approximately 45 funds or investment vehicles as of December
31, 2015. Our Direct Lending Group has a multi-channel origination strategy
designed to address a broad set of investment opportunities in the middle market.
We focus on being the lead or sole lender to our portfolio companies, which
we believe allows us to exert greater influence over deal terms, capital structure,
documentation, fees and pricing, while at the same time securing our position
as a preferred source of financing for our transaction partners. The group maintains
a flexible investment strategy, with the capability to invest in revolving credit
facilities, first and second lien senior loans, mezzanine debt and non-control
equity co-investments in middle market companies, power generation projects
and early stage and emerging growth companies backed by venture capital firms.
We manage various types of funds within our U.S. and European Direct Lending
teams that include commingled funds, separately managed accounts for large institutional
investors seeking tailored investment solutions and joint venture lending programs.
Primary areas of focus for our U.S. Direct Lending teams include:
Ares Capital Corporation: ARCC is a leading specialty finance company that
provides one-stop debt and equity financing solutions to U.S. middle market
companies, venture capital backed businesses and power generation projects.
European Direct Lending: Our European team is comprised of approximately 35
investment professionals in five offices. Our team covers approximately 160
financial sponsors and is one of the most significant participants in the European
middle-market. We provide a wide range of financing opportunities to middle-market
companies that typically range from €10 to €75 million in EBITDA.
Private Equity Group
Our Private Equity Group has achieved compelling investment returns for a loyal
and growing group of high profile limited partners and as of December 31, 2015
had approximately $21 billion of assets under management. Our Private Equity
Group broadly categorizes its investment activities into three strategies: North
American/European flexible capital, U.S. power and energy assets and China growth
capital. Our private equity professionals have a demonstrated ability to deploy
flexible capital, which allows them to stay both active and disciplined in various
market environments. The group’s activities are managed by three dedicated
investment teams in North America, Europe and China
Real Estate Group
With our experienced team, along with our expansive network of relationships,
our Real Estate Group capitalizes on opportunities across both real estate equity
and debt investing. Our equity investments focus on implementing hands-on value
creation initiatives to mismanaged and capital-starved assets, as well as new
development, ultimately selling stabilized assets back into the market. Our
debt strategies leverage the Real Estate Group’s diverse sources of capital
to directly originate and manage commercial mortgage investments on properties
that range from stabilized to requiring hands-on value creation. The Real Estate
Group has achieved significant scale in a short period of time through various
acquisitions and successful fundraising efforts. Today, the group provides investors
access to its capabilities through several vehicles: U.S. and European real
estate private equity commingled funds, real estate equity and debt separately
managed accounts and a publicly traded commercial mortgage REIT, ACRE. The group’s
activities are managed by dedicated equity and debt teams in the U.S. and Europe.