Ares Management Corp at TD Cowen Inaugural Financial Services Summit Transcript

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

Question: William Katz - TD Cowen - Analyst : All right. It's been an interesting day for sure, but maybe we'll start with a couple of big picture questions. And then maybe diving a little bit deeper at some of the different segments, if you will. Sort of big picture down, obviously, you had your Investor Day just a few weeks ago now. Are you seeing any material shifts in the investor allocations? I was wondering if you could maybe think that through answer that through the prism of what you're seeing in your retail platform, which has been accelerating very nicely, your insurance platform, both your sort of speed as well as third party and then maybe even on the institutional side and how these allocations of migraine between US and what you're seeing or offshore?

Question: William Katz - TD Cowen - Analyst : Great. Thanks. So as I think about your story, we actually laid out a note yesterday saying that the alternative managers are sort of migrating revolving to what we call Generation four, which just to trying to manage these platforms, your platform in particular, many of your peers had the same thing like multi-vector growth by distribution channel, by geography, by product at Quantum, right? So as you think about your KPIs that you laid out at the Investor Day, including the goal of getting our $750 billion of assets, which is 75% higher than where you sit today and much of that coming across these multi-vector opportunity sets, how are you and the team and my team sort of charting a course to sort of drive that growth, but also retain that performance led culture that you've been spending a lot of time educating folks like myself on.

Question: William Katz - TD Cowen - Analyst : Great. If we could dive in now to some of the different businesses, so many different ways to take the conversation, unfortunately, about 30 minutes. So again, just sort of referencing back to the Investor Day, one of the more powerful set of slides that I look through was just the ability to sort of sustain strong deployment and maintain relatively wide spreads across your direct lending platform and really regardless of the bank competition being in and out or where M&A activity or just sort of capital market activity was million one year. So maybe a bit of a two-part question. I'm going to add a second part, just given everything going on last week or so. The first part is if you could sort of talk about why you're able to sustain such superior metrics, if you will. And then secondarily, there's been an intense focus over the last week or so around the health of the direct lending backdrop and whether or not there's of a sudden the credit cycle building. I was wondering if you might be able to address, maybe the big picture as well as what should we be thinking about tactically around just sort of the health of direct lending by market?

Question: William Katz - TD Cowen - Analyst : Great. For what it's worth to your other peers have sort of suggested exactly the same thing. So it does seem like that in appropriate article at the end of the day. One more question on credit, so I want to cover a couple of topics, well. So again, if you come back to what you just said, but what you just said, you're very bullish on the opportunity in alternative credit, right? It does seem like a huge opportunity, it's much larger than a direct lending where I think you laid out $40 trillion credit opportunity, direct lending being the largest of that, I think at $18 trillion, something of that ilk, much larger than direct lending. Why is Ares so well positioned? And where do you sort of see the best opportunities, whether it be in the US or beyond just given your scope, particularly Europe and maybe even Asia where I think you have a bit of an advanced position.

Question: William Katz - TD Cowen - Analyst : Great. Look forward to hearing more about that as we go forward. The shift gears a little bit, not managing time whilst I apologize, I have a gazillion questions for you. On retail democratization, that seems to be a big area of focus. You shared a statistic at your Investor Day that 52% of semi-liquid vehicle flows went to the numbers two to six there inferences for about the first position as well as seven to infinity. I think that's up like 17% just a couple of years ago. Right? So you've seen that consolidation. So maybe a two-part question. How do you sort of see the evolution of the industry from here? Is it getting a little too late for some also rents? And then how should we toggle to your long term growth of $100 billion by 2028, which you build a fourfold increase in where you sit today?

Question: William Katz - TD Cowen - Analyst : Great. Okay. So it's a good question just came in over the shares. I mean, let me ask it. So how do you sort of see the nutritional asset managers coming into the space given that they have the pre-existing relationships with the RAAs. And maybe I'll back up the question a bit more. And obviously, you've had a major announcement between one of your peers KKR and Capital Group as they sort of think through the co-branded and the hybrid opportunity set. So maybe how do you sort of see that race for shelf space from here and how that trickles on the outside looking in? Or is there other things they can do to sort of try and compete up against a platform like Ares?

Question: William Katz - TD Cowen - Analyst : Right. Makes sense. Okay. We only have a few minutes. I want to cover is maybe a couple of the topics you fast-forward that you go. May be talk a little bit about on margins. Let's just switch around a little bit, and we've cut a little bit insurance to the conversation. How should we think about the incremental margins for growth here? You've laid out a nice pathway for margin expansion. You talked about ceasing of some of the initiatives if you will. And I think you showed a slide that said you can get a 50%-plus margins. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2024 / 7:40PM, ARES.N - Ares Management Corp at TD Cowen Inaugural Financial Services Summit But how do we think about maybe the intermediate stop along the way and then when you look at the industry, there are some scaled players that have margins that are starting to approach 60%, and even 70% of FRE. How should we think about that trajectory for Ares as particular as you climb toward that $750 billion of AUM?

Question: William Katz - TD Cowen - Analyst : Okay. And then maybe one final question, then we're bucket up right against time. And I have a lot more questions and not enough time to get it all done. So I apologize for making you talk longer actually allowed, and I appreciate the fulsome answers. Yeah, I think one of the key themes that came off the comp of your own Investor Day was just the opportunity set in terms of M&A, and you've done a very good job both you mentioned Black Creek ready and also you were very forward thinking with the landmark transaction. As you look ahead, where do you sort of see the greatest opportunity? And then how should we be thinking about the bid-ask spread? It does seem like a few of your peers who have been participating in our conference so far. Want to do more things, but also the best seems to be relatively wide. So how should we be thinking about both? What's out there and then the financial constraints around that?

Question: William Katz - TD Cowen - Analyst : Great. I've run over by a minute or so, but it's also toward the end of the day. So I thought it would be, okay. Thank you very much, Jarrod and the IR team as he has joined as well. So I thank you all for just participating in the conference, few patients with our questions. And the trend is dialogue and conversation. Look forward to continuing that with you as we look ahead. So thank you again for joining, and that's the end of the session. Thank you all.