Billions Wasted as Private Equity Firms Suffer Losses from New 'Continuation Vehicle' Strategy
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
Updated: Nov 26 20250mins
Continuation Vehicles in Focus: The private equity strategy of continuation vehicles (CVs) is under scrutiny following a significant failure involving United Site Services (USS), with major firms like Ares Management and Blackstone facing a potential $1.4 billion loss.
Investment Maneuver: Platinum Equity established a CV in 2021 to transition USS into a new fund, valuing the company at $4 billion and allowing investors to cash out $2.6 billion without a direct sale.
Challenges Faced by USS: USS encountered difficulties due to rising interest rates affecting the construction sector, which is a key customer, and struggled with integrating previous acquisitions, leading to financial strain.
Risks of Continuation Vehicles: The USS situation underscores the risks associated with CVs, which can result in concentrated, illiquid investments for new investors, despite being a popular exit strategy in private equity.
ARES.N
$0.0000%Past 6 months
Line
|
Candle
1D
5D
1M
3M
6M
YTD
1Y
5Y
No Data
Powered By
Intellectia
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 189.58 USD with a low forecast of 156.00 USD and a high forecast of 215.00 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.
12 Analyst Rating
10 Buy
2 Hold
0 Sell
Strong Buy
Current: 176.870
Low
156.00
Averages
189.58
High
215.00
Current: 176.870
Low
156.00
Averages
189.58
High
215.00
Barclays
Overweight
maintain
$187 -> $218
2025-12-12
New
Reason
Barclays
Price Target
$187 -> $218
2025-12-12
New
maintain
Overweight
Reason
Barclays raised the firm's price target on Ares Management to $218 from $187 and keeps an Overweight rating on the shares. The firm adjusted targets in the brokers, asset managers and exchanges group as part of its 2026. Market conditions "look constructive" going into 2026, particularly for the alternative asset managers and wealth brokers, the analyst tells investors in a research note. Barclays sees a more mixed outlook for the exchanges and traditional asset managers.
UBS
Neutral
initiated
$201
2025-12-11
New
Reason
UBS
Price Target
$201
2025-12-11
New
initiated
Neutral
Reason
UBS assumed coverage of Ares Management with a Neutral rating and $201 price target, noting strong sector fundamentals across 20 U.S. asset managers and brokers despite more mixed views on valuations and consensus expectations.The outlook favors undervalued growth, disciplined capital allocation, and firms positioned for margin expansion, while secular tailwinds support wealth brokers and independent investment banks whose robust earnings growth appears partly priced in, the analyst tells investors in a research note.
BofA
NULL -> Buy
maintain
$200 -> $214
2025-12-10
New
Reason
BofA
Price Target
$200 -> $214
2025-12-10
New
maintain
NULL -> Buy
Reason
BofA raised the firm's price target on Ares Management to $214 from $200 and keeps a Buy rating on the shares. Looking ahead to 2026, the firm now favors the alternative asset managers to online brokers due to what it sees as a better valuation and positioning setup combined with a stronger macro backdrop, the analyst tells investors in a note on the brokers, asset managers and exchanges group.
Oppenheimer
Chris Kotowski
Outperform
maintain
$180 -> $190
2025-11-04
Reason
Oppenheimer
Chris Kotowski
Price Target
$180 -> $190
2025-11-04
maintain
Outperform
Reason
Oppenheimer analyst Chris Kotowski raised the firm's price target on Ares Management to $190 from $180 and keeps an Outperform rating on the shares. On the morning of Ares' earnings, the stock was up 5.5% in a flattish market. It is a small sign of the absolute credibility that this company has on all things related to private credit, the firm says. On the call, CEO Arougheti pointed to the obvious facts that neither the banks nor the Alts that have reported earnings showed any signs of broad-based credit issues and on this occasion, people finally seemed to listen. Oppenheimer continues to think the group's selloff is a buying opportunity.
See All Ratings
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
Preview
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.
Sigh Up to Get Intellectia Insights
What is the significance of Ares consolidating logistics platforms under Marq Logistics?
How does Ares Management's acquisition of GLP Capital Partners enhance its operations?
Will Ares Management's inclusion in the S&P 500 boost its stock performance?
Can Aledade's new credit facility accelerate the transition to value-based care?