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Company > Ares Management Corp: Business Model, SWOT Analysis, and Competitors 2023

Ares Management Corp: Business Model, SWOT Analysis, and Competitors 2023

Published: Jan 25, 2023

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    In this blog article, we will explore the business model of Ares Management Corp, a prominent global alternative investment manager. Ares Management Corp focuses on providing its clients with a diverse range of investment strategies across credit, private equity, real estate, and alternative asset classes. We will delve into the company's strengths, weaknesses, opportunities, and threats through a comprehensive SWOT analysis. Additionally, we will examine its key competitors in the market and analyze the potential landscape for Ares Management Corp in 2023.

    What You Will Learn:

    • Who owns Ares Management Corp and the importance of ownership in a company's structure and decision-making processes.
    • The mission statement of Ares Management Corp and how it guides the company's overall goals and strategies.
    • How Ares Management Corp generates revenue and the different avenues through which they make money.
    • An explanation of Ares Management Corp's business model canvas, providing insights into their key activities, resources, and value proposition.
    • The competitors of Ares Management Corp and an understanding of the competitive landscape in their industry.
    • A comprehensive SWOT analysis of Ares Management Corp, highlighting their strengths, weaknesses, opportunities, and threats in the market.

    Who owns Ares Management Corp?

    Ownership Structure of Ares Management Corp

    Ares Management Corp is a publicly traded company, listed on the New York Stock Exchange under the ticker symbol "ARES." As such, the ownership of the company is divided among its shareholders, who hold shares of the company's common stock.

    Institutional Investors

    A significant portion of Ares Management Corp's ownership is held by institutional investors. These include various investment management firms, pension funds, mutual funds, and other financial institutions. These institutional investors are attracted to Ares Management Corp's expertise in alternative asset management and the potential for strong returns.

    Co-Founders and Senior Management

    The co-founders and senior management team of Ares Management Corp also hold a substantial stake in the company. The co-founders, Antony Ressler, Michael Arougheti, David Kaplan, and John Kissick, have been instrumental in building the company and continue to be actively involved in its operations. Their ownership stake aligns their interests with those of other shareholders and reinforces their commitment to the company's success.

    Public Shareholders

    Public shareholders, including individual investors, also own a portion of Ares Management Corp. These shareholders can purchase shares of the company through brokerage accounts and participate in the company's growth and financial performance.

    Employee Ownership

    Ares Management Corp recognizes the importance of aligning the interests of its employees with those of its shareholders. The company has implemented various employee ownership programs, such as stock options and restricted stock units, to incentivize and reward its employees. This approach fosters a sense of ownership and motivates employees to contribute to the long-term success of the company.

    Overall Ownership Distribution

    The exact breakdown of ownership percentages among these various groups can fluctuate over time due to market activities, such as buying and selling of shares. However, as of [current date], institutional investors, co-founders, senior management, public shareholders, and employee ownership collectively represent the ownership of Ares Management Corp.

    It is important to note that the ownership structure of Ares Management Corp can change over time due to various factors, including stock market activities and corporate transactions. Investors and interested parties can refer to the company's latest filings with the Securities and Exchange Commission (SEC) for the most up-to-date information on ownership distribution.

    What is the mission statement of Ares Management Corp?

    The Mission Statement of Ares Management Corp

    Ares Management Corp is a leading global alternative investment manager with a strong commitment to its mission. The company's mission statement reflects its core values and guiding principles, shaping its approach to investment management and client service.

    The mission statement of Ares Management Corp can be summarized as follows:

    "To generate attractive investment returns for our investors while maintaining a focus on risk management and delivering exceptional client service."

    This mission statement highlights the primary objectives and priorities of Ares Management Corp. Let's take a closer look at each element of their mission:

    1. Generating Attractive Investment Returns

    Ares Management Corp aims to deliver superior investment returns to its investors. They employ a disciplined and rigorous investment approach, leveraging their extensive industry expertise and global network to identify and capitalize on compelling investment opportunities. By focusing on generating attractive returns, Ares seeks to enhance the long-term financial well-being of its investors.

    2. Maintaining a Focus on Risk Management

    Recognizing the importance of risk management, Ares Management Corp prioritizes a comprehensive and proactive approach to risk assessment and mitigation. They diligently analyze and manage potential risks associated with their investments, aiming to protect investor capital and optimize risk-adjusted returns. This commitment to risk management ensures that Ares remains well-positioned to navigate various market conditions and safeguard investor interests.

    3. Delivering Exceptional Client Service

    Ares Management Corp places a strong emphasis on providing exceptional client service. They strive to build lasting relationships with their investors by aligning their interests, maintaining transparency, and delivering on their promises. Ares believes that strong client relationships are built on trust, open communication, and responsiveness, which ultimately contribute to successful long-term partnerships.

    In summary, Ares Management Corp's mission statement encapsulates their dedication to generating attractive investment returns, maintaining a focus on risk management, and delivering exceptional client service. By adhering to these principles, Ares aims to solidify its position as a trusted and reliable alternative investment manager, committed to the success of its investors.

    How does Ares Management Corp make money?

    Investment Management Fees

    One of the primary ways Ares Management Corp makes money is through investment management fees. As a global alternative investment manager, Ares charges fees for the management of various investment funds and accounts. These fees are typically calculated as a percentage of the assets under management (AUM) and are charged on an annual basis. This revenue stream is a key driver of the company's financial performance, as it is directly tied to the growth and success of the funds and accounts managed by Ares.

    Performance-based Fees

    In addition to investment management fees, Ares also generates revenue through performance-based fees. These fees are contingent upon the investment performance of the funds and accounts managed by the company. Typically, if the investment performance exceeds certain predefined thresholds or benchmarks, Ares is entitled to receive a share of the profits generated. Performance-based fees provide an incentive for Ares to deliver superior investment results, aligning the interests of the company with those of its clients.

    Capital Markets and Advisory Services

    Ares Management Corp also generates revenue through its capital markets and advisory services. The company offers a range of financial advisory services to corporate clients, including mergers and acquisitions, debt and equity capital raising, and strategic financial planning. Ares earns fees for providing these services, which can vary based on the complexity and size of the transaction or engagement. This segment of the business allows Ares to leverage its expertise and network in the financial industry to generate additional revenue.

    Real Estate and Private Equity Investments

    Furthermore, Ares Management Corp generates income through its own investments in real estate and private equity. The company has a track record of successful investments in these asset classes, and the returns generated from these investments contribute to Ares' overall profitability. By leveraging its expertise in identifying and managing attractive investment opportunities, Ares is able to generate returns for its own portfolio, further solidifying its reputation as a leading alternative investment manager.

    Other Income Sources

    Ares Management Corp also benefits from various other income sources, including interest income, dividend income, and transaction fees. These sources of revenue are derived from the company's investment activities, such as lending, structured credit, and other investment strategies. While these income sources may not be as significant as the aforementioned ones, they still contribute to Ares' overall financial performance and add diversification to its revenue streams.

    In conclusion, Ares Management Corp generates revenue primarily through investment management fees and performance-based fees. Additionally, the company earns income from its capital markets and advisory services, real estate and private equity investments, as well as other ancillary income sources. This multi-faceted revenue model allows Ares to generate consistent cash flows and drive long-term growth, positioning it as a leader in the alternative investment management industry.

    Ares Management Corp Business Model Canvas Explained

    Introduction

    The Business Model Canvas is a strategic management tool that helps organizations visualize, analyze, and refine their business models. In this section, we will dive into the Ares Management Corp's Business Model Canvas and explore the various components that make up their business model.

    Key Partnerships

    Ares Management Corp has established strong partnerships with various entities to enhance its business model. They collaborate with institutional investors, including pension funds, sovereign wealth funds, and insurance companies, to source capital for their investment strategies. Additionally, they maintain relationships with portfolio companies, industry experts, and other financial institutions to leverage their expertise and expand their network.

    Key Activities

    Ares Management Corp engages in several key activities that drive its business model. These activities include investment research and analysis, deal origination, due diligence, asset management, and portfolio monitoring. The company's investment professionals actively seek attractive investment opportunities, conduct thorough research, and execute strategic transactions to generate value for their investors.

    Value Proposition

    The value proposition of Ares Management Corp revolves around their ability to deliver attractive risk-adjusted returns to their investors. They achieve this by leveraging their extensive industry knowledge, disciplined investment process, and long-standing relationships in the market. Ares Management Corp aims to generate consistent cash flows and capital appreciation through their investment strategies, providing their investors with a compelling value proposition.

    Customer Segments

    Ares Management Corp primarily caters to institutional investors seeking exposure to alternative asset classes. These investors include pension funds, endowments, foundations, insurance companies, and high-net-worth individuals. By focusing on institutional investors, Ares Management Corp can tap into large pools of capital and build long-term partnerships with these entities.

    Customer Relationships

    Ares Management Corp emphasizes building and maintaining strong customer relationships. They prioritize open and transparent communication with their investors, providing regular updates on investment performance, market insights, and portfolio strategies. By fostering trust and delivering value, Ares Management Corp aims to establish long-term relationships with their customers.

    Revenue Streams

    The primary revenue stream for Ares Management Corp is generated through management fees and performance-based fees. They charge management fees based on the assets under management (AUM), typically calculated as a percentage of the total AUM. In addition, performance-based fees are earned when the investment performance exceeds certain predetermined benchmarks. These revenue streams provide a stable and scalable source of income for the company.

    Key Resources

    Ares Management Corp's key resources include their talented team of investment professionals, industry expertise, proprietary research, and access to capital. The company heavily relies on its skilled workforce to source, analyze, and manage investment opportunities. Furthermore, their extensive network and deep industry knowledge enable them to identify attractive investment opportunities and create value for their investors.

    Key Partnerships

    Ares Management Corp has established strong partnerships with various entities to enhance its business model. They collaborate with institutional investors, including pension funds, sovereign wealth funds, and insurance companies, to source capital for their investment strategies. Additionally, they maintain relationships with portfolio companies, industry experts, and other financial institutions to leverage their expertise and expand their network.

    Cost Structure

    Ares Management Corp incurs various costs to support its business model. These costs include employee salaries and benefits, technology infrastructure, marketing and business development expenses, regulatory compliance costs, and general overhead expenses. As a financial services company, Ares Management Corp also invests in robust risk management systems and compliance frameworks to ensure regulatory compliance and mitigate operational risks.

    Conclusion

    Ares Management Corp's Business Model Canvas provides a comprehensive overview of how the company operates and delivers value to its stakeholders. By focusing on key partnerships, key activities, value proposition, customer segments, customer relationships, revenue streams, key resources, cost structure, and key partnerships, Ares Management Corp has built a robust business model that enables them to thrive in the alternative asset management industry.

    Which companies are the competitors of Ares Management Corp?

    Introduction

    Ares Management Corp. is a leading global alternative investment management firm that specializes in credit, private equity, and real estate investments. With a diverse portfolio and a strong track record, Ares has established itself as a prominent player in the investment industry. However, like any other company, Ares faces competition from other firms operating in the same space. In this section, we will explore some of the main competitors of Ares Management Corp.

    Blackstone Group

    One of the most prominent competitors of Ares Management Corp. is the Blackstone Group. Blackstone is a multinational private equity, alternative asset management, and financial services firm. With a vast array of investment strategies and a strong global presence, Blackstone competes with Ares in various areas such as credit investments, real estate acquisitions, and private equity deals. Both firms have a similar focus on alternative investments, making Blackstone a notable competitor for Ares Management Corp.

    Apollo Global Management

    Another major competitor of Ares Management Corp. is Apollo Global Management. Apollo is a leading alternative investment manager known for its expertise in credit, private equity, and real estate investments. Like Ares, Apollo has a diversified portfolio and a global presence. The two firms often compete for lucrative investment opportunities, and their similar investment strategies and target sectors make Apollo a direct rival to Ares Management Corp.

    KKR & Co. Inc.

    KKR & Co. Inc. is a global investment firm that operates in the private equity, credit, and infrastructure spaces. With a long history and a strong reputation, KKR competes with Ares Management Corp. in various aspects of their business. Both firms have a focus on credit investments and private equity deals, making KKR a significant competitor for Ares. Additionally, KKR's expertise in infrastructure investments further adds to the competition between these two industry leaders.

    Brookfield Asset Management

    Brookfield Asset Management is a global alternative asset manager that specializes in real estate, renewable power, infrastructure, and private equity. With a substantial portfolio and a diversified investment approach, Brookfield competes with Ares Management Corp. in several areas. Both firms have a strong presence in real estate investments, and their expertise in alternative assets positions them as competitors in the market.

    Conclusion

    As a leading alternative investment management firm, Ares Management Corp. faces competition from various industry players. The Blackstone Group, Apollo Global Management, KKR & Co. Inc., and Brookfield Asset Management are just a few notable competitors in the space. Despite the competition, Ares Management Corp. continues to thrive and deliver value to its investors through its unique investment strategies and expertise in credit, private equity, and real estate investments.

    Ares Management Corp SWOT Analysis

    Strengths

    1. Diverse Investment Platform: Ares Management Corp has built a strong reputation in the market due to its diverse investment platform. With expertise in private equity, credit, and real estate, the company is able to offer a wide range of investment opportunities to its clients. This diversification helps Ares to mitigate risks and generate stable returns across different market cycles.

    2. Strong Track Record: Ares Management Corp has a proven track record of delivering consistent and superior investment performance. The company has achieved attractive risk-adjusted returns for its investors, which has helped to build trust and attract new clients. Ares' ability to navigate through market uncertainties and identify lucrative investment opportunities is a key strength that sets it apart from its competitors.

    3. Experienced and Talented Team: Ares Management Corp boasts a team of experienced and talented professionals who have deep industry knowledge and extensive investment expertise. The company's investment professionals have a strong network of relationships and access to unique deal flow, enabling them to identify and execute on attractive investment opportunities. This expertise and network give Ares a competitive advantage in the market.

    Weaknesses

    1. Reliance on Market Conditions: Ares Management Corp's performance is highly dependent on market conditions. The company's investment returns can be influenced by factors such as interest rates, economic growth, and market volatility. During periods of economic downturn or market instability, Ares may face challenges in generating desired returns for its investors. This reliance on market conditions is a weakness that exposes the company to potential risks.

    2. Limited Global Presence: While Ares Management Corp has a strong presence in the United States, its global footprint is relatively limited compared to some of its competitors. This limited global presence may hinder the company's ability to access attractive investment opportunities in international markets. Ares may need to expand its global reach to diversify its investment portfolio and capture growth opportunities in emerging markets.

    Opportunities

    1. Growing Demand for Alternative Investments: The increasing demand for alternative investments presents a significant opportunity for Ares Management Corp. Investors are seeking diversification away from traditional asset classes and are looking for higher returns in a low-interest-rate environment. Ares, with its expertise in private equity, credit, and real estate, is well-positioned to capitalize on this trend and attract new clients.

    2. Expansion into New Geographies: Ares Management Corp has the opportunity to expand its presence into new geographies, especially in emerging markets with growing economies. By establishing a stronger global footprint, the company can tap into untapped investment opportunities and diversify its portfolio. This expansion can also help Ares to reduce its reliance on the US market and mitigate potential risks associated with regional market fluctuations.

    Threats

    1. Intense Competition: Ares Management Corp operates in a highly competitive industry. The company faces competition from other asset managers, private equity firms, and investment banks. This intense competition can lead to pricing pressures, higher acquisition costs, and limited access to attractive investment opportunities. Ares must continually differentiate itself by delivering superior investment performance and providing value-added services to stay ahead of its competitors.

    2. Regulatory Challenges: The financial services industry is subject to extensive regulations and compliance requirements. Ares Management Corp must navigate through a complex regulatory landscape, which can pose challenges and increase operational costs. Changes in regulations or the introduction of new regulatory requirements can impact the company's ability to operate efficiently and may limit its investment strategies.

    Overall, Ares Management Corp possesses several strengths, including its diverse investment platform, strong track record, and experienced team. However, it also faces weaknesses such as reliance on market conditions and limited global presence. The company has opportunities to capitalize on the growing demand for alternative investments and expand into new geographies. Nevertheless, it must navigate through threats such as intense competition and regulatory challenges to maintain its competitive position in the market.

    Key Takeaways

    • Ares Management Corp is a publicly traded company, meaning it is owned by its shareholders who hold shares of the company's stock.
    • The mission statement of Ares Management Corp is to provide superior investment performance and risk management for its clients while fostering a culture of teamwork, integrity, and excellence.
    • Ares Management Corp generates revenue primarily through management fees charged to its clients for managing their investment portfolios. It also earns performance-based fees based on the investment performance of the funds it manages.
    • The business model canvas of Ares Management Corp includes key activities such as investment management, fundraising, risk management, and client relationship management. It focuses on delivering value to clients through expertise in alternative investments.
    • Some of the competitors of Ares Management Corp include Blackstone Group, KKR & Co., Apollo Global Management, and Carlyle Group. These companies also operate in the alternative investment management industry and compete for clients and investment opportunities.
    • Ares Management Corp's SWOT analysis reveals strengths such as a diverse range of investment strategies, a strong track record, and a global presence. However, it also faces weaknesses such as dependence on key personnel and potential regulatory risks. Opportunities include the growing demand for alternative investments, while threats include market volatility and competition from other investment firms.

    Conclusion

    In conclusion, Ares Management Corp is a prominent player in the investment management industry. As for ownership, the company is publicly traded, meaning it is owned by its shareholders. Ares Management Corp's mission statement revolves around providing investors with superior risk-adjusted returns and long-term capital appreciation.

    The company primarily generates revenue through various sources, including management fees, performance fees, and investment income. By offering a diverse range of investment strategies, Ares Management Corp attracts a wide range of clients and investment partners, contributing to its financial success.

    Ares Management Corp's business model canvas provides a comprehensive overview of the company's key activities, resources, and value proposition. It highlights the company's focus on delivering excellent investment performance, building strong relationships with clients, and continuously innovating its investment strategies.

    In terms of competition, Ares Management Corp faces competition from other investment management firms such as Blackstone Group, KKR & Co, and Apollo Global Management. These companies operate in a similar space and strive to attract and retain investors by offering unique investment products and superior returns.

    Lastly, conducting a SWOT analysis of Ares Management Corp reveals its strengths, weaknesses, opportunities, and threats. The company's strengths lie in its strong brand reputation, diversified investment offerings, and experienced management team. However, it also faces challenges such as the potential impact of market volatility and regulatory changes.

    Overall, Ares Management Corp has established itself as a leading investment management firm, driven by its mission to deliver value to its clients and stakeholders. With a robust business model and a focus on innovation and performance, the company is well-positioned to navigate the competitive landscape and seize opportunities in the market.

    FAQs

    How can I find a SWOT analysis on a company?

    There are several ways to find a SWOT analysis on a company:

    1. Company website: Start by visiting the official website of the company you are interested in. Some companies may have a section dedicated to providing information about their strengths, weaknesses, opportunities, and threats. Look for annual reports, investor presentations, or corporate strategy documents that may include a SWOT analysis.

    2. Business news websites: Financial news websites like Bloomberg, CNBC, or Forbes often provide SWOT analyses on various companies. Use the search function on these websites and enter the name of the company you are researching, followed by "SWOT analysis" to find relevant articles.

    3. Market research reports: Many market research firms and business intelligence companies provide detailed reports on various industries and companies, including SWOT analyses. Some popular sources include MarketResearch.com, IBISWorld, or Statista. These reports are often available for purchase or through subscription services.

    4. Business databases: Academic and business databases such as ProQuest, EBSCO, or Business Source Complete contain a wealth of information, including SWOT analyses. You can access these databases through your school or local library, or sometimes through a paid subscription.

    5. Online search engines: Conduct a simple online search using the company name and "SWOT analysis" as keywords. This will yield results from various sources, including business websites, blogs, or industry-specific publications that may have published SWOT analyses on the company.

    Remember to critically evaluate the sources you find, as SWOT analyses can vary in quality and reliability depending on the source.

    What makes Ares management different?

    Ares Management differentiates itself in several ways:

    1. Breadth and depth of expertise: Ares has a diverse team of investment professionals with deep expertise across various asset classes, including corporate credit, private equity, real estate, and infrastructure. This broad range of capabilities allows Ares to offer comprehensive investment solutions to its clients.

    2. Global reach: Ares has a global presence with offices across North America, Europe, Asia, and Australia. This global footprint enables the firm to identify and capitalize on investment opportunities worldwide, providing its clients with access to a wider range of investment options.

    3. Flexible investment approach: Ares employs a flexible investment approach that combines deep industry knowledge with a disciplined risk management framework. This approach allows the firm to adapt to changing market conditions and tailor its investment strategies to meet the specific needs and objectives of its clients.

    4. Partner-oriented culture: Ares emphasizes a collaborative and partnership-driven culture, both internally with its team members and externally with its clients. The firm aims to build long-term relationships with its clients and align its interests with theirs, fostering a client-centric approach to investing.

    5. Integrated platform: Ares operates an integrated investment platform that leverages the expertise of its various asset class teams. This integrated approach enables the firm to leverage synergies across different investment strategies, enhancing its ability to identify and capture value across market cycles.

    Overall, Ares Management differentiates itself through its breadth of expertise, global reach, flexible investment approach, partner-oriented culture, and integrated platform. These factors contribute to its ability to deliver value and generate attractive risk-adjusted returns for its clients.

    What is the SWOT model of management?

    The SWOT model of management is a strategic planning tool used to evaluate and analyze the strengths, weaknesses, opportunities, and threats of an organization. It helps managers identify internal and external factors that can impact their business and develop strategies to leverage strengths, overcome weaknesses, capitalize on opportunities, and mitigate threats.

    Here's a breakdown of each component of the SWOT model:

    1. Strengths: These are the internal attributes and resources that give the organization a competitive advantage over others. Strengths can include a strong brand reputation, skilled workforce, advanced technology, efficient processes, or financial stability.

    2. Weaknesses: These are internal factors that limit the organization's performance or put it at a disadvantage compared to competitors. Weaknesses can include outdated technology, poor customer service, limited market share, high employee turnover, or lack of innovation.

    3. Opportunities: These are external factors that could potentially benefit the organization and create new avenues for growth. Opportunities can arise from market trends, technological advancements, changing consumer preferences, emerging markets, or competitor weaknesses.

    4. Threats: These are external factors that may hinder the organization's growth or pose risks to its success. Threats can include intense competition, economic downturns, changing regulations, disruptive technologies, or shifting consumer behavior.

    By conducting a SWOT analysis, managers can gain a comprehensive understanding of their organization's current position in the market and develop strategies to maximize strengths, address weaknesses, seize opportunities, and mitigate threats. It helps in making informed decisions, setting realistic goals, and aligning resources effectively to achieve desired outcomes.

    What type of company is Ares management?

    Ares Management is an alternative investment management company. It specializes in managing and providing investment solutions across various asset classes, including private equity, credit, real estate, and private debt. It serves institutional investors, including pensions, sovereign wealth funds, and insurance companies, as well as individual investors.

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