Ares Management Corporation’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 compelling, risk adjusted returns through a combination of asset selectivity and disciplined portfolio management.
Our Real Estate Group’s U.S. Equity platform implements real estate investment strategies that span the risk spectrum, with a footprint in five cities. The U.S. strategies are managed by approximately 25 investment professionals in offices across the U.S as of December 31, 2019. This group has approximately $3.8 billion of assets under management (“AUM”) as of December 31, 2019. Our Real Estate Group’s U.S. Equity platform has a portfolio of 55 investments as of December 31, 2019.
Our European Real Estate segment began in 1995. The investment team includes approximately 30 investment professionals with personnel based out of London, Paris and Luxembourg, with coverage of Frankfurt, Madrid and Stockholm as of December 31, 2019. Our European Real Estate team has AUM of approximately $4.6 billion as of December 31, 2019, primarily within dedicated European funds and managed accounts.(1)
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.
(1) AUM amounts are as of December 31, 2019 and are preliminary and unaudited. AUM in Europe includes approximately $33.5 million of Indian assets overseen through a joint venture arrangement between Ares and the SUN Group.
Asset values of $10-250 million
Attractive basis with above-average supply/demand dynamics
Solid credit fundamentals
Strong market position with competitive economic advantage
Experienced, incentivized sponsorship team with demonstrated track record
Appropriately structured and documented investment
Return opportunity that compensates for perceived risk
* Not every investment meets each of the below criteria.