(Bloomberg) -- Michael Arougheti, chief executive officer of Ares Management Corp., said his firm's conversion to a C-corp last year from a public partnership has boosted liquidity in the stock.
Arougheti also said Blackstone Group LP's announcement in April that it will become a C-corp will lure more investors to alternative asset managers. As a corporation, the firms can be included in indexes and their stock is available to a much wider pool of investors.
“I think it's great for Blackstone, I think it's great for the alternative asset managers,” Arougheti said Tuesday on Bloomberg Television from the Milken Institute Global Conference in Beverly Hills, California. “I'd like to think we provided some leadership in going first.”
Lifted by the conversions, alternative asset managers have outperformed the S&P 500 Index over the past twelve months with dividends reinvested: Ares returned 16 percent; KKR, which switched last year, gained 19 percent; and Blackstone is up 38 percent. The S&P gained 13 percent in the span.
Ares, which managed about $131 billion as of Dec. 31, has been a pioneer in private credit, a hot business that is now garnering more attention from Wall Street. The firm was the top U.S. collateralized loan obligation manager during the first quarter of 2019, according to data compiled by Bloomberg News.
Ares is pushing deeper into Europe and Asia and expanding strategies like investing in structured credit and asset-backed securities that it expects could be as big as direct lending. The firm has also started a strategy dubbed "climate infrastructure" that will make investments focused on combating climate change.
--With assistance from Erik Schatzker.
To contact the reporter on this story: Alexandra Stratton in New York at astratton4@bloomberg.net
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Vincent Bielski, Alan Mirabella
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