Ares Management, L.P.’s (“Ares”) Real Estate Equity strategy is to focus on cash flowing quality assets and de-risked developments with an opportunity to create value through repositioning, lease-up, re-tenanting, redevelopment, and/or complex recapitalizations. Our strategy targets primary property types in major markets where we seek to deliver superior returns through a combination of asset selectivity and disciplined portfolio management.
Our Real Estate Group’s Equity platform implements real estate investment strategies that span the risk spectrum, with a footprint on three continents. The U.S. strategies are managed by approximately 30 investment professionals in offices across the U.S as of March 31, 2016. This segment has approximately $4.5 billion of assets under management (“AUM”) as of March 31, 2016. Our Real Estate Group’s U.S. Equity platform has a portfolio of 72 investments as of March 31, 2016.
Our European Real Estate segment began in 1995. The investment team includes over 20 investment professionals with personnel based out of London and Paris and we have coverage for Frankfurt, Madrid, Stockholm, and Luxembourg as of March 31, 2016. Our European Real Estate team has AUM of approximately $3.1 billion as of March 31, 2016, primarily within dedicated European funds and managed accounts.
Across the U.S. and Europe, we believe our teams have the experience to identify property types with favorable risk adjusted returns in a given cycle, underwrite and execute these types of deals and then sell the improved assets into the liquid core market.
Our investment professionals are product and property type generalists who are able to invest in a range of commercial real estate assets – principally targeting properties (i) in strong markets, (ii) with solid competitive positioning, and (iii) controlled by experienced sponsorship teams executing value-add business plans. We primarily target major property types including industrial, multifamily, office, retail, lodging and senior-living properties and selectively consider hospitality, mixed-use, self-storage, single-tenant/owner-occupied, specialty use and student housing.
As a long-term and value-oriented investor, we analyze each investment with a primary focus on minimizing downside risk, protecting invested principal and generating an appropriate risk-adjusted return.
Our investment strategy relies on intensive due diligence, structuring experience, disciplined underwriting and active portfolio management. We actively monitor our investments to ensure operational control and to provide more value to our borrowers and their sponsors.
While we are primarily a direct lender to owners of commercial real estate, we also selectively consider third-party-led senior and subordinated debt financings, review portfolio purchases and opportunistically consider the purchase of distressed and discounted debt positions.
* Not every investment meets each of the below criteria.
Asset values of $15-250 million
Attractive basis with above-average supply/demand dynamics
Solid credit fundamentals
Strong market position with competitive economic advantage
Experienced, properly-incentivized sponsorship team with demonstrated track record
Appropriately structured and documented investment
Return opportunity that compensates for perceived risk