Ares CEO: Expansion in Private Equity Likely as Firm Evaluates Growth Opportunities
Ares Considers Growth and Acquisition Strategies in Private Equity
(Corrects to this week in paragraph 3)
By Isla Binnie and Arasu Kannagi Basil
Ares' Position in Private Credit and Equity
NEW YORK, July 31 (Reuters) - Ares CEO Michael Arougheti said on Friday it should probably be bigger in private equity, after a report that the group, a leader in private credit, had held talks to buy a smaller firm.
Potential for Acquisitions
Arougheti told the Financial Times in December that Ares could look to acquire a large private equity group, in part because the buyout business would be one beneficiary of a drive to include more private assets in mainstream retirement plans.
Recent Reports and Market Activity
The FT reported this week that Ares, which manages $671 billion, had held talks to acquire Leonard Green & Partners, which manages $85 billion. Ares declined to comment on the report at the time.
Strategic Considerations for Expansion
Asked about the FT report on an analyst call, Arougheti said any deal would need to have cultural and strategic benefits, and make the business better in areas including revenue.
"The question that we have posed ... is as Ares continues to scale the way that it is, should we be bigger in private equity? And I think the answer is probably, if we check all those three boxes," Arougheti added.
Financial and Industrial Logic
"There's a lot to argue in favor of it, but ... the price has to be right," said Arougheti. "I think the industrial logic would make a lot of sense for the right ... situation," he said.
(Reporting by Isla Binnie in New York and Arasu Kannagi Basil in Bengaluru; Editing by Alexander Smith)
