Overview
Alternative Credit is a strategy focused on investments in large, diversified portfolios of credit assets such as portfolios of loans, leases, financial receivables, fees or royalties. This is sometimes also called asset-based credit.
Alternative Credit targets investments that benefit from asset security, covenants, cash flow velocity and other features designed to capture value and minimize risk to principal. Because of these features, the strategy offers the potential for attractive levels of current income, low correlation to traditional markets, portfolio diversification and downside protection that many investors today are seeking.
Investors typically access the strategy through flagship funds and managed accounts. Alternative Credit provides investors opportunities to invest across the breadth of Alternative Credit markets, spanning both liquid securities and directly-originated, private transactions.
Previous Editions
Targeted Opportunity Set
Consumer
- Auto Loans
- Consumer Loans
- Healthcare Receivables
- Student Loans
- Timeshares
Corporate & Whole Business
- Asset Manager Fees
- CLOs
- Equipment Leasing
- Fund Finance
- GP/Manager Finance
- Secondaries Lending
- Small Business Loans
- Structured Equity
- Tax Receivable Agreements
- Trade receivables
- Whole Business Securitizations
Transportation & Infrastructure
- Aviation Assets
- Cell Towers
- Data Centers
- Fiber Assets
- PACE
- Shipping Containers
- Solar Loans
Real Assets
- CMBS
- Fix-and-Flip Finance
- Ground Leases
- Mortgage Servicing Rights
- REIT Finance
- Residential Mortgages
- Single Family Rentals
- Whole Loans
Other
- Agriculture Loans
- Capital Relief Transactions
- Drug Royalties
- Legal Assets
- Media and Sports Assets
- Music Royalties
- NPL/RPL Portfolios
- Servicer Fees
- Triple Net Leases
*For illustrative purposes only.
We employ true bottom-up analysis to evaluate the risk and value of each investment. Each opportunity is subjected to a rigorous investment process, drawing upon the breadth of the team’s experience and enhanced by proprietary data, analytical tools and systems. We approach each sector with specialized, dedicated resources and often collaborate with other investment professionals at Ares to enhance our view of risk and value.
Our Approach
We approach each sector with specialized, dedicated resources in collaboration with other investment professionals at Ares
With a seasoned team comprised of approximately 75 dedicated investment professionals, as of December 31, 2024, we believe we are one of the most active market participants. We believe our scale and flexibility contribute to Ares’ ability to originate opportunities and capture value in Alternative Credit.
Charitable Tie-In
We believe Ares and the Alternative Credit team have developed a novel approach to charitable giving and impact. Ares and the team have committed to donating between 5% and 10% of the carried interest earned on Alternative Credit's flagship funds, targeting global health and education charities.
Aligning the team's efforts to deliver investment performance to investors with charitable impact has created a path for every individual on the team to make a difference. The better we perform for our investors, the bigger the impact on the lives we seek to help. We call it “doing good by being good.”
As of September 30, 2024, Alternative Credit's flagship funds comprise over $17 billion in LP commitments that today drive this philanthropic effort. Based on performance to date, these funds have already accrued over $30 million in pledged charitable contributions.
In 2024, Ares and Alternative Credit made its inaugural grants to charities, totaling approximately $550,000. Grantees included PATH, Khan Academy, Pratham and Rocket Learning. In 2025, Ares and Alternative Credit expect to generate approximately $5 million for additional grants to health and education charities.
For more information about the charitable feature of the funds, we invite you to watch the following video.
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