Ares Management Completes Acquisition of BlueCove
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Should l Buy ARES?
Source: Benzinga
Ares Management's stock has hit a 20-day low, reflecting broader market trends as the Nasdaq-100 and S&P 500 decline.
The company has finalized its acquisition of BlueCove, a London-based systematic fixed-income manager, enhancing its market position in systematic credit investments. This acquisition increases Ares Credit Group's total assets under management to $397 billion, showcasing its significant influence in the global credit market.
This strategic move is expected to bolster Ares's capabilities in investment management, particularly through the integration of BlueCove's proprietary technology and expertise, which could lead to improved investor returns.
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Analyst Views on ARES
Wall Street analysts forecast ARES stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARES is 196.55 USD with a low forecast of 175.00 USD and a high forecast of 222.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
9 Buy
2 Hold
0 Sell
Strong Buy
Current: 121.870
Low
175.00
Averages
196.55
High
222.00
Current: 121.870
Low
175.00
Averages
196.55
High
222.00
About ARES
Ares Management Corporation is an alternative investment manager offering clients complementary primary and secondary investment solutions across various asset classes. Its segments include Credit Group, Private Equity Group, Real Assets Group, Secondaries Group, and Other. The Credit Group segment manages credit strategies across the liquid and illiquid spectrum, including liquid credit, alternative credit, direct lending and APAC credit. The Private Equity Group segment categorizes its investment strategies as corporate private equity, special opportunities and APAC private equity. The Real Assets Group segment manages comprehensive equity and debt strategies across real estate and infrastructure investments. The Secondaries Group segment invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate, infrastructure and credit. It has operations across North America, South America, Europe, Asia Pacific and the Middle East.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Deutsche Bank Upgrades Ares Management to Buy Following Q4 Results
- Earnings Performance: Ares Management's fourth-quarter results fell short of expectations, leading to an 8.4% drop in shares post-announcement, despite strong fundraising and investment activities supporting higher assets under management.
- Optimistic Fundraising Outlook: Management anticipates robust fundraising in 2026, expecting total fundraising this year to meet or exceed record levels set in 2025, which will support future revenue growth.
- Fee-Related Earnings Growth: Management reaffirmed the outlook for fee-related earnings (FRE) margin expansion, guiding towards the high end of its annual expansion target range, bolstered by synergies from GCP integration and improved operational efficiencies.
- Improving Investment Environment: Ares' investment pipeline has reached record levels, indicating strong future management fee growth, particularly as its $101 billion in assets under management that are not yet fee-bearing will soon become fee-generating.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
Multiple Acquisition Deals and Bankruptcy Developments
- Potential BDx Sale: I Squared Capital is considering options for its Asian data center business BDx, with a potential sale price of up to $2 billion, which could reshape its investment portfolio in the Asian market.
- Four Roses Brand Deal: Kirin Holdings has agreed to sell the Four Roses bourbon brand to E. & J. Gallo Winery for approximately $775 million (around 120 billion yen), enhancing Gallo's position in the premium spirits market.
- Genius Sports Acquisition: Genius Sports has agreed to acquire digital sports and gambling media company Legend for $1.2 billion, with $900 million in cash and $100 million in stock, financed through an $850 million loan, despite a 27% drop in stock price following the announcement.
- Bankruptcy Filing Preparation: Catalyst Brands is preparing to file for bankruptcy for the entity operating Eddie Bauer locations, which may impact the overall operations and brand value of Authentic Brands Group.
See More
Asset Managers Face AI-Driven Shock Amid Software Selloff
- Market Capitalization Loss: The software sector's selloff has wiped out nearly $1 trillion in market capitalization, leading the Dow Jones US Asset Managers Index to decline nearly 5% this week, reflecting investor concerns over loan and leverage exposure.
- Declining Private Equity Deal Volumes: Morgan Stanley noted that technology services deal volumes account for nearly 21% of overall private equity activity, with TPG, Carlyle, and KKR slightly above this level, indicating weakened market confidence in software-related investments.
- Rising Loan Risks: Software borrowers are shouldering an average debt-to-EBITDA ratio of 7.4 times, significantly higher than the 5.9 times average across a $1 trillion loan pool studied by KBRA, highlighting the private credit market's heavy reliance on the software sector and its associated risks.
- Portfolio Review: Companies like Ares and KKR are reviewing their portfolios to assess the impact of AI on their software investments, demonstrating a cautious approach among asset managers in the face of market volatility.
See More
The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
See More
The Impact of Software Concerns on BDC Stocks: Reasons Some May Be Good Investment Opportunities
- Private Credit Sector: The private credit sector is facing challenges, likened to "cockroaches" emerging from the software industry.
- Opportunities in Business Development Companies: This situation may present investment opportunities in business development companies that hold the debt of affected firms.
See More
Deutsche Bank Upgrades Ares Management to Buy Following Q4 Results
- Earnings Performance: Ares Management's fourth-quarter results fell short of expectations, leading to an 8.4% drop in shares post-announcement, despite strong fundraising and investment activities supporting higher assets under management.
- Optimistic Fundraising Outlook: Management anticipates robust fundraising in 2026, expecting total fundraising this year to meet or exceed record levels set in 2025, which will support future revenue growth.
- Fee-Related Earnings Growth: Management reaffirmed the outlook for fee-related earnings (FRE) margin expansion, guiding towards the high end of its annual expansion target range, bolstered by synergies from GCP integration and improved operational efficiencies.
- Improving Investment Environment: Ares' investment pipeline has reached record levels, indicating strong future management fee growth, particularly as its $101 billion in assets under management that are not yet fee-bearing will soon become fee-generating.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
Multiple Acquisition Deals and Bankruptcy Developments
- Potential BDx Sale: I Squared Capital is considering options for its Asian data center business BDx, with a potential sale price of up to $2 billion, which could reshape its investment portfolio in the Asian market.
- Four Roses Brand Deal: Kirin Holdings has agreed to sell the Four Roses bourbon brand to E. & J. Gallo Winery for approximately $775 million (around 120 billion yen), enhancing Gallo's position in the premium spirits market.
- Genius Sports Acquisition: Genius Sports has agreed to acquire digital sports and gambling media company Legend for $1.2 billion, with $900 million in cash and $100 million in stock, financed through an $850 million loan, despite a 27% drop in stock price following the announcement.
- Bankruptcy Filing Preparation: Catalyst Brands is preparing to file for bankruptcy for the entity operating Eddie Bauer locations, which may impact the overall operations and brand value of Authentic Brands Group.
See More
Asset Managers Face AI-Driven Shock Amid Software Selloff
- Market Capitalization Loss: The software sector's selloff has wiped out nearly $1 trillion in market capitalization, leading the Dow Jones US Asset Managers Index to decline nearly 5% this week, reflecting investor concerns over loan and leverage exposure.
- Declining Private Equity Deal Volumes: Morgan Stanley noted that technology services deal volumes account for nearly 21% of overall private equity activity, with TPG, Carlyle, and KKR slightly above this level, indicating weakened market confidence in software-related investments.
- Rising Loan Risks: Software borrowers are shouldering an average debt-to-EBITDA ratio of 7.4 times, significantly higher than the 5.9 times average across a $1 trillion loan pool studied by KBRA, highlighting the private credit market's heavy reliance on the software sector and its associated risks.
- Portfolio Review: Companies like Ares and KKR are reviewing their portfolios to assess the impact of AI on their software investments, demonstrating a cautious approach among asset managers in the face of market volatility.
See More
The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
See More
The Impact of Software Concerns on BDC Stocks: Reasons Some May Be Good Investment Opportunities
- Private Credit Sector: The private credit sector is facing challenges, likened to "cockroaches" emerging from the software industry.
- Opportunities in Business Development Companies: This situation may present investment opportunities in business development companies that hold the debt of affected firms.
See More
