Ares :: Private Equity :: Value Proposition

Private Equity

Value Proposition

For Management Teams:
We work with our portfolio company management teams to employ a four-stage value creation process, typically over a five to seven-year investment horizon. By properly capitalizing a company at the time of our investment, management can refocus its efforts toward achieving EBITDA growth and maximizing free cash flow. The chart below illustrates the prototypical actions and objectives of this process, which generally are customized for any given particular situation.

ACOF’s Four Stages of Value Creation
Stage 1	Stage 2	Stage 3	Stage 4
Capitalize Balance Sheet for Growth	Focus on Operational Excellence	Execute on Growth Strategy	Position Company for Next Life Cycle Phase
Action Plan
Inject Equity Capital Facilitate Balance Sheet Restructuring if Required Reduce Near-Term Debt Maturities and Increase Liquidity	Implement Best Practices Together with Management, Develop Long-Term Strategic Plan in Order to Maximize Value of Business Model	Opportunistically Pursue Acquisitions Inject Additional Equity to Meet Growth Objectives	Integrate Acquisitions and Realize Synergies Develop Investment Thesis for Next Owner or IPO Investors Actively Explore Strategic Alternatives
Measurable Objective
Maximize Liquidity to Pursue Growth	Expand EBITDA Margins	Grow Top Line Revenues	Maximize Free Cash Flow

For Investors:
The combination of our flexible capital approach with the broad resources of Ares Management widens our universe of potential investment opportunities and allows us to remain highly selective in deploying capital in all market environments. Many of these situations originate from proprietary channels and require our Private Equity Group’s proven ability to generate creative and complex structuring solutions.