Ares Capital Management - Culture, Status, Word on the Street
Hello everyone,
Does anyone have anything to share about these guys?
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Only clarification I'd make is that the BDC and CLOs are merely vehicles. The investment professionals are not spending the majority of their time running analysis on how much to dividend to the public BDC investors / pooling together loans and passing them along to various investors.
http://aresmgmt.com/Public/About/History.aspx maybe helps tell the story a little more clearly (in terms of funds committed by strategy over time).
The Apollo debt arm from which the firm was formed stands today as the Capital Markets group (like any hedge fund there are several funds managed out of this group; some comprise lower-risk syndicated leveraged loans [and use financial leverage to boost returns], while others invest more in HY bonds [less financial leverage] and distressed securities [almost no financial leverage]). Investment professionals here are classfied like they are at any other hedge fund (just Analysts/Sr. Analysts and PMs) and are responsible for identifying the right investments across these three groups (loans, bonds, distressed) and monitoring them. More time is obviously spent on diligence, etc. on the riskier end of that scale (bonds/distressed) because BB-rated loans aren't going to be worth 0 tomorrow. Lifestyle - generally market hours (so you get in between 7-8 AM as everyone's in LA). Can be stressful during those hours but you're out by 5-6.
The BDC is just one of the vehicles of the Private Debt group. Investment professionals are spending time looking at CIMs, doing diligence, putting together term sheets, going to investment committee and then finally investing. Deal timelines are typically ~14 weeks. Sr. guys (classified more like banking/PE as MDs, etc.) are sourcing investment opportunities through relationships w/ PE firms while jr. guys (classified more like banking/PE as well with Associates, Sr. Associates, VPs, etc.) are managing the diligence processes. Lifestyle - chill/good hours. Little busy when you're going to investment committee or if you have a couple of things going on, but keep in mind this group has the highest amount of investment professionals to funds managed ratio (this is positive/negative in that it benefits lifestyle/hurts the prestige factor of a jr. level position).
PE is what it is, although as I think I mentioned there's not a whole lot of vanilla PE. Group is pretty indifferent between majority/minority investments (vs. the more standard majority-only deals you see with PE firms of similar size) and will play the majority angle pretty selectively in what I'd classify as more growth-y plays. There's an equal emphasis put on rescue lending / distressed for control, which I think also distinguishes the group. Lifestyle - not good. Banking-type hours in that you're eating dinner in the office nightly and are always on call. There's less old-Apollo here vs. Capital Markets but it obv. has its own prestige factor because it's PE.
What the groups share:
You're not talking to counterparts in the other groups every day, but folks will use each other for help when needed. As a result of the second point, though, there's a good degree of mobility between the groups to the extent you want to try something new.
If you're looking for a combo of career advancement, comp. and experience, I'd rate the firms you listed as follows:
Oaktree Distressed (good for all three, but the risk/return spectrum on distressed stuff is tightening; there's just not a lot of distressed paper out there... really the only bad thing you can say about the firm)
Farallon (good for all three, but credit/distressed business is smaller/has not performed as well as Oaktree/Ares/top hedge funds - if that sort of thing matters to you; highest pay/prestige factor of anything you mentioned)
3.a. Ares Private Equity (good for all three, but vanilla PE in general is on the decline and as mentioned w/ Oaktree you have to pay more to get your hands on the distressed for control stuff these days; as mentioned lifestyle is like banking) 3.b. Ares Capital Markets (comp. slightly below the others and likely not considered as prestigious as Oaktree/Farallon [to be frank this is like comparing Ivy League schools], but has performed well and has a lifestyle benefit over 3.a.) 3.c. Sankaty (v. solid place w/ a smaller distressed focus but a slightly more cerebral/distinguished approach [note how MDs and up are listed on the team page vs. 2., 3.a. and 3.b.]; slightly better comp. than Ares Capital Markets but similar $/hr.) 3.d. Oaktree Corp. Debt (Oaktree as a firm is a great combo of everything, but you're getting similar pay to 3.b. and passing along distressed/special situation stuff to the A-team)
4.a. Ares Private Debt (sheer # of people is why I'd rate this here) 4.b. Kayne Anderson (rep. is decent; OK pay... it's just that there's a difference between where people from the first three groups end up and where people from Kayne end up - to the extent they leave) 4.c. GoldenTree (rep. is more mutual fund than hedge fund; OK pay)