Ares Management Corp at Barclays Global Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ben Budish - Barclays - Analyst : And maybe just to start, can you give us a brief update of what you're seeing in the private credit landscape, how is credit quality looking? What are you seeing in terms of deployment activity going into the back half of the year? What's your kind of view there?

Question: Ben Budish - Barclays - Analyst : Got it. And I was going to ask you about the upcoming election. How might that impact your deployment activity fundraising, but maybe also as we're kind of getting longer in the process, have you seen any sort of policy proposals that could potentially impact private market -- private credit in particular, it feels like it's always like the regulatory bogeyman that comes up. Like will it will regulation come, but what are your thoughts there?

Question: Ben Budish - Barclays - Analyst : Maybe think about fundraising more broadly, what are you seeing from LPs in terms of their appetite for private credit versus other asset classes? And then given the assets you originate or floating rate, how do you think about a series of rate cuts? How could that impact their demand over the next year or two?

Question: Ben Budish - Barclays - Analyst : Interesting. But what about demand for some of your new asset classes that aren't your traditional direct middle market lending. So how do LP you think about infrastructure, real estate debt, other types of asset-backed assets?

Question: Ben Budish - Barclays - Analyst : Maybe one last question on the fundraising side. You recently closed the US direct lending fund with $34 billion of capital. How do you think about the scalability of funds. Clearly there are opportunities. You mentioned the $5 billion in project funding were there in meaningful upside to fund size, but given the size of some of these more mature strategies, how do you think about, you know, over time that the place of drawdown funds versus more perpetual strategies.

Question: Ben Budish - Barclays - Analyst : And maybe on the deployment side, in Q2, we saw some improvement in your kind of gross to net deployment ratio, I think it was still a little bit below where it's been historically. What are you seeing in the back half of the year? What do we need to get back to a more normal level, is it just a further opening up of capital markets or if credit spreads are narrowing, but how should we think through those factors? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 1:45PM, ARES.N - Ares Management Corp at Barclays Global Financial Services Conference

Question: Ben Budish - Barclays - Analyst : But maybe one last question on deployment. Just from an investment perspective, where are you seeing the most interesting opportunities to put capital to work and what about the longer-term themes, kind of the different geographies, kind of all the good thing one, but how are you thinking about the landscape of opportunities.

Question: Ben Budish - Barclays - Analyst : Well, maybe in terms of bank, how do you see the current state of competition between the traditional banking system and your private credit managers like yourself evolving into how things look so far this year, what could it look like in 2025? And presumably as areas get bigger and bigger, you become a more formidable competitor. So how does that look from your end?

Question: Ben Budish - Barclays - Analyst : In terms of bank partnerships, especially last year, coming out of the regional banking crisis, there were a number of publicly announced partnerships from you and some of your peers. How does the pipeline look and kind of going forward, do we kind of get this like initial rush of partnerships in response to what was happening then? Or is there sort of still a long tail of partnership opportunities.

Question: Ben Budish - Barclays - Analyst : And I'm not speaking of old credit. I mean, one of the themes you talked about in your Investor Day was sort of the reconsolidation of the ABS market, which used to be concentrated at firms like GE Capital prior to the financial crisis and since really kind of dispersed. So how do you see this evolving over time? How those areas kind of TAM changing, how big of a piece this business of your business? Can this be over the next five to 10 years.

Question: Ben Budish - Barclays - Analyst : Maybe tying this into your insurance business. What does it all mean, you've been quite clear that you're not pursuing investment grade approach taken by some of your peers. Your insurance capital is still kind of small relative to your total AUM. How do you think about the importance of insurance capital over the next five to 10 years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 1:45PM, ARES.N - Ares Management Corp at Barclays Global Financial Services Conference

Question: Ben Budish - Barclays - Analyst : If I could talk for a moment about something you mentioned earlier about the sort of LP opportunity outside the traditional alternatives bucket and your peers that have been more vocal about that are have a very specific investment grade fixed income approach, as I think investors may be perceived that was less of an opportunity for areas which doesn't kind of take that from that similar approach. So how has that been evolving? How do you see those kind of -- how the can you talk about those conversations on what's the appetite for you've kind of unrated private credit within that fixed income bucket share?

Question: Ben Budish - Barclays - Analyst : Maybe just move over to the retail side of the business now. So maybe can you talk a little bit about your current distribution kind of footprint? I think the last call, you talked about a third of your flows coming from outside the US and maybe touch on how that market differs from the US and then maybe kind of just give us kind of the latest in terms of wirehouse platforms, what you kind of breadth looks like.

Question: Ben Budish - Barclays - Analyst : And then maybe in terms of just the economics of the business. On the last earnings call, there was a lot more discussion around distribution fees, which seem to be kind of following your overall growth and inflows. But what are you seeing in terms of the relative economics between areas and your partners? Is there any pressure from distributors to increase their share? Or is this sort of a worry from investors that's maybe a bit unfounded? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 1:45PM, ARES.N - Ares Management Corp at Barclays Global Financial Services Conference

Question: Ben Budish - Barclays - Analyst : Maybe pivoting over to capital allocation M&A. So you've done a few acquisitions over the last few years. I was recently reported in the press you are in talks to acquire GLP capital partners on to I imagine you can't comment on that particular deal. Maybe just talk about how M&A fits into the overall toolkit in terms of growth drivers. What might you be looking for in terms of potential targets, how do you think about stock versus cash versus things?

Question: Ben Budish - Barclays - Analyst : Maybe just squeeze in real quick one last financial question. You've indicated that your margin expansion is largely predicated on deployments on given the way you are in fees. But just other than that, what are the other considerations where you sort of investing in OpEx, whereas there are kind of natural scale in the business?

Question: Ben Budish - Barclays - Analyst : Unfortunately, we're out of time shared what a pleasure to have you. Thank you so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 1:45PM, ARES.N - Ares Management Corp at Barclays Global Financial Services Conference