Ares Management targets high yields and capital growth from private markets
Ares Wealth Management Solutions Head of Australia and New Zealand explains why private equity returns are outpacing public share markets.
Investing in private markets is increasingly popular and Livewire recently sat down with Teiki Benveniste to unpack what's behind their rise and some different ways to get exposure to a complex space.
Based in Sydney, Benveniste is the Managing Director for Australia and New Zealand for Ares Wealth Management Solutions, which offers multiple fund products to qualified wholesale investors in both private credit and private debt.
"At Ares, we manage over US$500 billion of alternative assets across multiple verticals, private credit, private equity, secondaries, infrastructure and real estate," says Benveniste.
Ares now offers numerous funds to wholesale investors in Australia. They usually have a minimum investment of $100,000 including for its credit and secondaries strategies.
Scale and firepower advantage
Benveniste believes one of the California-headquartered group's biggest advantage is scale as its giant reach and size means it has fewer competitors searching for secondary private equity and private credit investment opportunities.
"We're strong believers that in private markets, scale is your friend," he says. "Over the last five or ten years, I think the access to or the democratisation of access for private wealth investors to private markets, it's really improved.
"You have seen the rise of semi-liquid funds that allow private wealth investors to invest and access those markets in probably a more efficient way than the closed ended capital structures, generally giving them a better experience in our mind."
Private equity and private credit
In the private equity space, Ares has around US$24 billion in assets under management. While its private credit group is now one of the world's largest direct private lenders across the US, Europe and Asia Pacific, with US$349 billion of assets under management (as at 31 December 2024).
"We are able to offer access to the full breadth of the Ares platform across all the private credit instruments that we self originate, such as US and European direct lending alternative credit, which is asset backed direct lending credit opportunities," says Benveniste.
"And really in one swoop you get access to that broad platform and the benefits that we've talked about of higher yield and lower volatility compared to comparable liquid markets."
The private investments boss added that Ares funds offered to private wealth investors primarily get private equity exposure for investors by buying into secondary offerings of interests in private equity funds from sellers who want to exit the funds for different reasons.
Typically, these secondary offerings are bought from a fund that is four to five years into a shelf life of 10 to 15 years and often this also means Ares can snap up the interests at a discount to net asset value.
"And then on the risk side, both those asset classes are exhibiting attractive lower volatility profiles than more liquid instruments. So of course, you're giving up liquidity because these are not liquid instruments, but you also are reducing potentially volatility in your portfolios when you add that to a diversified portfolio." says Benveniste.
Learn more
For further insights from the team at Ares Wealth Management Solutions, please visit their website.
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Tom covered markets as a Markets Reporter & Commentator at the Australian Financial Review for nearly five years. Prior to that he was the Managing Editor of The Motley Fool Australia leading a team of around 20 investment writers during a five-year period of massive online growth. Before that Tom worked in equities management at the Bank of New York Mellon in London and as a holder of professional investment qualification the Investment Management Certificate is eligible for membership of the CFA Society of the UK.
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Tom covered markets as a Markets Reporter & Commentator at the Australian Financial Review for nearly five years. Prior to that he was the Managing Editor of The Motley Fool Australia leading a team of around 20 investment writers during a...
Tom covered markets as a Markets Reporter & Commentator at the Australian Financial Review for nearly five years. Prior to that he was the Managing Editor of The Motley Fool Australia leading a team of around 20 investment writers during a...
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