Avoiding Ares Management Corporation And Ares Capital As Private Credit Headwinds Persist
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Dan Plettner696 FollowersFollow5ShareSavePlay(15min)CommentsSummaryHigh costs and risks of owning ARCC or any Private Credit vehicle should be tempered against the best-yielding 1940 Act-protected CEF Preferreds at any time; compare HFRO.PR.A.ARES is valued like a growth stock at 18x forward earnings and 8.7x book, but its pricing and private credit leadership growth are now hard.ARCC's high incentive fees (20%) make cost scrutiny increasingly relevant amid peer discounts.It is important to know the pros and cons of Private Credit vehicles versus fee free alternatives. J Studios/DigitalVision via Getty Images Ares Management Corporation (ARES) and Ares Capital (ARCC) were not immune to the Private Credit carnage last week. ARES is among the worst performing Private Credit advisor equities year-to-date. Yet ARCC’sThis article was written byDan Plettner696 FollowersFollowDan Plettner focuses his qualitative investigative research methods on Closed-End Funds and other underfollowed securities. Dan Plettner was born in 1975 and has been investing since his teen years. After completing his undergraduate degree Magna Cum Laude from Miami University (Oxford, Ohio), he won the “NSD award” as a retail Financial Advisor at Morgan Stanley Dean Witter. Dan relocated to Morgan Stanley’s International Headquarters in Manhattan where he served as a Closed-End Fund Product Specialist until 2000 and then attained his MBA from New York University.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.