Ares names two co-presidents because it goals to almost double in measurement | USAEMALL.com

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Ares Management has promoted two senior partners to co-president as chief executive Michael Arougheti pushes to broaden the private investment firm’s top ranks and nearly double the size of the business in the next four years.

The company promoted Kipp deVeer and Blair Jacobson to the new roles, with the two men set to step back from their day-to-day management of the its large credit investment operations.

Arougheti told the Financial Times that the promotions were a crucial part of Ares’s ability to meet ambitious growth targets, which will take it far beyond its core private credit unit. Last May he laid out a goal of managing $750bn by the end of 2028, up more than 75 per cent from its size at the time.

To achieve those goals, Ares and Arougheti have turned to acquisitions, including a deal worth as much as $5.2bn to buy the international arm of real estate investment manager GLP Capital Partner. That deal put it squarely into competition with diversified private investment companies such as Blackstone, KKR and Brookfield.

“We’re about to take on another meaningful acquisition and integration and [the promotions are] driven by wanting to go from strength to strength,” he said. “Kipp and Blair are two of our most successful business builders.”

Arougheti, Ares’s second chief executive since the $484bn asset manager was founded in 1997, insisted he was “not going anywhere”. Instead, he said the firm wanted to “create lanes of opportunity for people, often earlier than others do in our business”.

He added: “A lot of people who get succession wrong wait a little too long to do it and you lose a little bit of that energy deeper down in the organisation.”

Some of the most important institutions on Wall Street are reckoning with complicated succession races, including JPMorgan Chase and BlackRock. Last month, Apollo extended chief executive Marc Rowan’s contract as part of a larger shake-up that laid the groundwork for its long-term leadership plans.

DeVeer joined Ares in 2004 and has served as chief executive of its flagship, publicly traded credit investment vehicle, Ares Capital Corporation, which manages roughly $26bn of mostly private loans. Jacobson, a former partner in Citigroup’s proprietary investment division, joined Los Angeles-based Ares in 2012 and runs its European credit business.

The firm has been at the centre of the explosion in so-called private credit, becoming a big lender to businesses across the globe as traditional banks retrenched in the wake of the financial crisis. Its shares have returned more than 500 per cent over the past five years, far outpacing the S&P 500.

Increasingly, large asset managers are pushing beyond direct lending, where they lend to corporate clients, and are investing in loans backed by a panoply of assets such as music royalties, credit card receivables or the lease payments collected by data centres. Ares and its rivals see it as an area where they can invest on behalf of deep-pocketed insurers.

“There is a pretty significant intersection between credit . . . and insurance,” Arougheti said. “Putting more senior resources and attention on driving organisation design and performance there will be a big benefit.”