Ares Management Corp Chief Executive Michael Arougheti said on a conference call Friday that growing the firm's private equity platform could make sense under the right conditions. The comments came after reports that Ares had been in talks to acquire a smaller company in the same segment.
Arougheti told analysts that any potential transaction would have to pass multiple tests before moving forward. He said the deal would need to be a cultural fit and strategically complementary to Ares’ existing operations. He also emphasized that the target should add tangible capabilities and create new revenue opportunities for the firm.
"There would be a lot of boxes to check," Arougheti said, adding that "the price has to be right." He further noted that "the industrial logic would make a lot of sense for the right situation."
Those comments underline a cautious approach to expansion: while the chief executive acknowledged that enlargement of the private equity business could be logical, he framed that potential only within a context of strict criteria that must be met. The remarks were made in the wake of reports that Ares had been engaging in acquisition discussions with a smaller firm operating in the private markets.
Arougheti's statements reiterate the need for alignment across several dimensions before Ares would pursue an acquisition: cultural alignment between organizations, strategic compatibility with existing capabilities, and demonstrable additions to revenue and operational skill sets. Price discipline was highlighted as a central consideration by the CEO.
While the comments do not confirm any transaction, they do offer a view into the decision-making framework Ares would apply to potential deals. The company is led by management with a background in private credit, and the CEO framed expansion of private equity as something that could make sense for the firm if all stated conditions were satisfied.
The public remarks follow media reports of talks to acquire another firm in the space. Beyond restating the factors that would drive Ares’ decision, Arougheti did not provide further specifics about targets, timing, or valuation in the conference call comments.
Summary of remarks: Ares’ CEO said expansion into private equity could be sensible, but only if cultural fit, strategic compatibility, revenue and capability gains, and acceptable price are all present. These comments followed reports of acquisition discussions with a smaller firm in the private markets.