Ares Management: A High-Yield Growth Story With Elevated Risks

Morgan Housel

Award-winning financial writer and partner at The Collaborative Fund, exploring the psychology of money.

This article examines Ares Management Corporation, a leading global alternative investment manager, focusing on its financial performance, dividend growth, and the risks associated with its high-yield strategy. It delves into the company's market position, historical growth, and future outlook, providing a comprehensive overview for potential investors.

Navigating Growth and Risk in Alternative Investments

Ares Management: A Global Alternative Investment Powerhouse

Ares Management Corporation, a distinguished alternative investment manager based in the United States, has solidified its position as an industry giant. Established in 1997, the firm has expanded significantly, now commanding a market capitalization of $33 billion and employing nearly 4,000 professionals globally. Its journey reflects a strategic ascent in the competitive landscape of alternative asset management.

Consistent Dividend Growth Amidst Market Dynamics

Ares Management has consistently rewarded its shareholders, showcasing an impressive track record of dividend increases for seven consecutive years. This sustained performance is underscored by a remarkable five-year dividend growth rate of 22.9%, illustrating the company's commitment to returning value to its investors. This consistent growth highlights the firm's robust operational capabilities and financial health.

Projected Revenue Growth and Market Influence

The company has outlined ambitious revenue projections, anticipating an increase from $4.2 billion in fiscal year 2021 to $5.6 billion by fiscal year 2025. This forecast represents a compound annual growth rate of 7.5%, signifying a period of expected vigorous expansion. Ares Management's success has been significantly bolstered by the surge in post-pandemic market liquidity and a burgeoning interest in private capital, positioning it favorably within the evolving financial landscape.

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