Lecture Notes on Real Assets at Ares

Introduction

• Speaker: Julie Solomon, Partner & Co-head of Ares Real Estate Group
• Co-speaker: Keith Derman, Co-head of Infrastructure Opportunities
• Focus: Update on real assets at Ares
• Ares Real Assets: $64 billion AUM in U.S., Europe, Asia
• Roles: Owners, operators, lenders to real assets globally

Growth and Strategy

• Growth: 32% increase in past 5 years
  • Drivers: Organic growth, strategic acquisitions
  • Acquisitions:
    • Black Creek Group (2021): Industrial capabilities
    • ANP Capital (2022): Infrastructure market
• Reputation: Scale, marketplace reputation, track record
• Platform Benefits:
  • Relevance in markets
  • Opportunities in capital structure
  • Strategies for institutional and retail clients

Real Estate Focus

• AUM: Approximately $50 billion
• Growth: Organic, asset performance, fundraising
• Acquisition Impact: Black Creek acquisition
  • Growth in U.S. and Europe
• Private Real Estate Debt: Tripled in U.S. and Europe
• Success Factors:
  • Resilient portfolios (multifamily, industrial)
  • Investment in people and infrastructure

Portfolio Composition

• Investment Focus: 84% in industrial, multifamily, student housing, etc.
• Operational Capabilities:
  • JV partner relationships
  • Larger data sets for better underwriting
• Sector Expertise: Protect downside, participate in upside

Market Opportunity

• Size: $20 trillion global market
• Current Market: Signs of recovery, more liquidity
• Key Focus Areas:
  • High-quality assets in supply-constrained markets
  • Direct real estate lending
  • Structuring expertise
  • Generational asset opportunities

Future Growth

• Strategies:
  • Maintain performance
  • Scale current strategies
  • Pursue new, complementary strategies
  • Expand client relationships
• Market Outlook: Uncertain, but potential for recovery

Infrastructure Opportunities

• Speaker: Keith Derman, Co-head of Infrastructure
• AUM: $15 billion
• Team: 50 dedicated professionals
• Strategies:
  • Diversified infrastructure credit solutions
  • Equity strategy in energy transition
• Investment Style: Value-add, flexible capital

Infrastructure Focus

• Credit Business:
  • Coverage: Energy, renewables, transportation, digital
  • Investment: $12 billion historically
• Capital Needs: Trillions needed, overlapping trends
• Equity Business Focus: Climate infrastructure, green digital
  • High growth, permanent trends, resilience

Recent Infrastructure Funds

• Funds:
  • Ares Climate Infrastructure Partners 1
  • IDF 5
• Performance: High returns, asset quality
• Future Expansion: Geographic (Europe, Asia, LATAM)
• Product Expansion: Core and core plus markets

Conclusion

• Overall Focus: Growth and expansion in both real estate and infrastructure
• Emphasis: Maintaining performance, expanding capabilities, leveraging expertise