This strategy delivers a diversified portfolio of liquid, traded non-investment grade secured loans to corporate issuers. Loans are one of the few floating rate fixed income alternatives and can be especially suitable for investors seeking to manage duration. Our funds include both North American and European issuers. We typically benchmark our loan strategy against the Credit Suisse Leveraged Loan Index.

This strategy seeks to deliver a diversified portfolio of liquid, traded non-investment grade corporate bonds. This incorporates secured, unsecured and subordinated debt instruments of issuers in both North America and Europe. We benchmark our high yield strategy against the ICE BofA US High Yield Master II Constrained Index.

Our Multi-Asset Credit strategies combine both syndicated loans and high yield bonds, as well as other asset categories including structured credit, special situations, and related credit instruments, into a single portfolio. These portfolios are designed to offer investors a flexible solution to global credit investing by allowing Ares to tactically allocate between multiple asset classes in various market conditions in order to capture the best relative value. This strategy invests globally, can be highly customized, and is designed to “go anywhere” within the liquid non-investment grade credit universe.

Alternative Credit is Ares' home for investment opportunities that fall outside of traditional, well-defined markets such as corporate debt, real estate and private equity. Ares believes gaps exist between traditional, well-defined markets. Ares believes these gaps exist and persist for many reasons, including: regulation, bank disintermediation, tax and accounting rules, rating agency criteria, market structure, capital inefficiencies, and transaction complexity and size. Within these gaps there are markets and sectors that are often overlooked or misunderstood, resulting in investment opportunities that can offer attractive yield premiums, current income, downside protection and low correlation to traditional markets.

Alternative Credit has a broad range of substrategies designed to be client-focused and solutions-based with three main formats: pure play, customized and flagship funds. Each format benefits from Ares' focus on asset security, covenants, cash flow velocity and other features designed to capture value and minimize risk to principal. Alternative Credit targets a level of downside protection, low correlation to traditional markets, diversification, attractive levels of current income and attractive risk-adjusted return opportunities.

In the wake of banking industry consolidation over the past 20 years and institutionalization of the leveraged lending market, Ares has capitalized on the opportunity to provide financing solutions to middle market companies. With a team of approximately 275 investment professionals in offices across the U.S. and Europe, we self-originate our investment opportunities in senior secured loans, private high yield, mezzanine and select minority equity investments. We can provide creative structures, hold large and control positions and offer sponsors and management teams enhanced certainty of execution, which we believe gives us a competitive advantage in the market. We provide investors access to our self-originating direct lending platform through several vehicles, including commingled funds, separately managed accounts and a publicly traded vehicle.

We are one of the largest self-originating direct lenders to the U.S. middle market. Our direct lending business in the U.S. is conducted through Ares Capital Corporation (NASDAQ: ARCC), a leading specialty finance company, and certain private funds and accounts. ARCC is the largest business development company in the United States by market capitalization⁽¹⁾. We also manage a commercial finance business that provides asset-backed and cash flow loans to small and middle-market companies, as well as asset-based facilities to specialty finance companies.

Our European direct lending platform is one of the most significant participants in the European middle-market, focusing on self-originated investments in illiquid middle-market credits. We manage multiple commingled funds and separately managed accounts.

Our APAC Private Credit strategy targets high quality privately sourced loans in high quality businesses across the region. Our team primarily targets investments in sponsor backed and asset backed transactions, as well as non-sponsor corporate lending, leveraging our deep set of relationships and coverage to enable direct origination. The APAC Private Credit team currently manages a portfolio of debt obligations, unitranche securities and other credit instruments which generate fixed income returns with a significant cash coupon component.

Our Asian special situations strategy focuses on primary and secondary special situation across the Asia Pacific region. Our team primarily targets restructuring-related situations, deep value acquisitions and last-mile financing.