Ares Management Is Said To Mull An IPO

  • Source: No bank hired to work on project
  • Peers have enjoyed gains in stock market
  • Ares invests more in debt than equity

It would also come at a time when Ares’ peer group, which also includes The Blackstone Group LP, Kohlberg Kravis Roberts & Co. and Apollo Global Management LLC, has seen strong gains in the stock market. Since the start of the year, shares of alternative asset managers have outperformed the wider financial sector on expectations that buoyant capital markets will make it easier for them to sell assets and pay rich dividends to shareholders.

The Financial Times on May 2 cited bankers as saying that Ares could launch an IPO in the next few months and that Bank of America Merrill Lynch and JPMorgan Chase & Co. were among the leading contenders to underwrite the offering. The person familiar with the matter, who requested anonymity because the matter is confidential, said that no bank had yet been hired to work on the IPO.

Executives at Ares, Bank of America Merrill Lynch and JPMorgan declined to comment.

Financial publication Pension and Investments cited one of the firm’s founders, Tony Ressler, on Feb. 18 as saying on the question of an IPO: “It’s not something we are actively considering or have enormous interest in today. We watch. We are never the first. But, we are aware of it as an opportunity.”

Los Angeles-based Ares was founded by Ressler and John Kissick, both of whom worked as bond traders in the 1980s at Drexel Burnham Lambert and in 1990 co-founded investment manager Apollo with Leon Black, Marc Rowan and Joshua Harris.

At Apollo, Ressler and Harris led the firm’s capital markets business and in 1997 spun out into a new firm called Ares, which became independent in 2002. Even though it retained and expanded its strong franchise in credit, Apollo became a major player in large private equity deals.

Unlike Apollo, Ares has always been primarily a debt investment firm. As of the end of December, Ares had just $9 billion in private equity assets and more than $48 billion in corporate bonds, loans, structured credit products and other securities. In 2007, an Abu Dhabi sovereign wealth fund bought a stake in Ares.

Ares also has an affiliated business development company, Ares Capital Corp., that is already publicly traded on the Nasdaq stock exchange.

Greg Roumeliotis is a correspondent for Reuters in New York. Additional reporting by Olivia Oran.