Ares Management Corp. or Ares, the private credit and private equity alternative asset management leading global firm is undervalued, according to Wolfteam Ltd.'s projections and estimates.
Ares' intrinsic worth is 82 billion USD, compared with Ares' current market capitalization of 59.59 billion USD, in Wolfteam Ltd.'s view.
Private credit is in a boom phase driven in part by lending to expanding technology companies, packaging loans into Collateralized Debt Obligations and other credit derivative securities. Most of Ares' 484 billion USDs of assets under management are in private credit and Ares benefits handsomely from the private credit boom. Private credit booms due to the reach of yield of pension funds looking to fulfill pension fund promises to retirees, insurance companies trying to cover future insurance events and increase profits and endowment reaching for extra income. On top of that many individual investors are looking for additional credit yield above US treasuries in their portfolios. And Ares Management Corp benefits hugely from strong investor inflows into its private credit funds. Only in 2024 Ares raised as much as 93 billion USDs of new funds.
Ares recently reported fourth quarter and full year 2024 results:
'GAAP net income attributable to Ares Management Corporation was $177.3 million for the quarter ended December 31, 2024. On a basic and diluted basis, net income attributable to Ares Management Corporation per share of Class A and non-voting common stock was $0.72 for the quarter ended December 31, 2024.
After-tax realized income was $434.7 million for the quarter ended December 31, 2024. After-tax realized income per share of Class A common stock was $1.23 for the quarter ended December 31, 2024. Fee related earnings were $396.2 million for the quarter ended December 31, 2024.'
“During 2024, we set many financial records, including our best year ever in gross fundraising and capital deployed. We raised $93 billion of new funds in 2024 and ended the year with $484 billion of AUM,” said Michael Arougheti, Chief Executive Officer of Ares. “We continued to expand our investment platform, diversify our distribution channels across institutional, wealth and insurance and generate compelling investment performance for our investors. As we head into 2025, we are optimistic that we are entering into a more active transaction environment which should create more investment opportunities for our platform.”
“With a record $95 billion of assets under management not yet paying fees, we are well positioned to invest opportunistically across a broad range of our strategies for investors and to drive continued strong growth in our key financial metrics over the next several years,” said Jarrod Phillips, Chief Financial Officer of Ares. “We are making excellent progress on GCP International and we now expect the transaction will close in the first quarter. We believe the GCP International business we are acquiring is well positioned and we expect progress on a number of new fundraising initiatives this year.”
In short, Ares is on a high growth trajectory in a booming market for private credit. And its stock market capitalization is yet to unlock tens of billions of USDs of value.
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