April 18, 2017

99 Problems But the Price Ain’t One: Unsustainable Capital Structure at Ares Management’s 99 Cents Only Stores

As Ares Management looks to deploy capital from its newly-raised Ares Corporate Opportunities Fund V (ACOF V), the firm’s troubled $6 billion buyout of struggling luxury retailer Neiman Marcus has drawn headlines amidst a potentially conflicted exit. But the firm’s lesser-known acquisition of discount retailer 99 Cents Only Stores has also been plagued with heavy […]

March 23, 2017

Are Some Limited Partners Being Cut Out Of Ares’ Clayton Williams Deal – One Of Its Best Energy Investments?

Ares Corporate Opportunities Fund IV (ACOF IV) stands to triple its money from its recently announced sale of oil and gas producer Clayton Williams Energy Inc. (NYSE:CWEI), according to the Wall Street Journal. Meanwhile, two of Ares’ underperforming funds that invest heavily in the oil and gas sector – Energy Investors Fund IV (EIF IV) and […]

February 27, 2017

Private Equity’s Irish Adventure: Has Tax Avoidance Put Limited Partners Outside Their Comfort Zone?

Oaktree Capital Management’s funding of Mars Capital Ireland, an “orphaned” Section 110 SPV, provides an example of the headline risk that tax avoidance may expose limited partners to. The full report is available here. Key Points In the wake of the financial crisis, the Irish government took steps to rescue its largest banks, including the […]

February 23, 2017

What’s behind American Capital Equity III’s sky high returns?

A new report by UNITE HERE, “What’s behind American Capital Equity III’s sky high returns?”, looks at American Capital Equity III’s performance and asks whether American Capital Equity III acquired its initial portfolio companies at artificially low prices.

February 8, 2017

Ares Real Estate Group’s missing leadership: Has Lee Neibart quietly exited group?

Report available here. Key points: Lee Neibart joined Ares Real Estate Group in July 2013 upon Ares’ acquisition of AREA Property Partners. Since then, he has played key roles as Senior Partner and Chairman of Global Real Estate for Ares. However, as of March 2016 Neibart disappeared from Ares’ organizational and leadership charts, and has […]

January 25, 2017

Ares Management’s Private Equity and Real Estate Funds Underperform

2016 was the year that alternative asset manager Ares Management passed the $100 billion threshold in assets under management. Through a combination of fundraising and acquisitions, the firm has seen its AUM grow from $12 billion in 2006 to $97 billion by the end of the third quarter of 2016. But have Ares’ limited partners […]

December 14, 2016

Ares Special Situations Funds’ Performance Plummeted Amidst Overconcentration in Oil and Gas

In this report we focus on the two most recent Ares Special Situations Funds, which may prove to be more concentrated in specific sectors than claimed by Ares Management. Key Points Special Situations Fund III performance declined from a TVPI multiple of 1.35 and Net IRR since inception of 16.08% in the first quarter of […]

December 9, 2016

Deluxe Meltdown: From Bad to Worse at Ares Management’s Neiman Marcus

As Ares Management looks to deploy capital from its newly-raised Ares Corporate Opportunities Fund V (ACOF V), the firm’s exit plan from its $6 billion buyout of the struggling retailer remains unclear. Ares Corporate Opportunities Funds III and IV purchased Neiman Marcus with the Canadian Pension Plan Investment Board in September 2013 in what was […]

December 8, 2016

Ares Silent on Energy Funds’ Sluggish Fundraising and Underperformance

In July 2016 UNITE HERE noted that Ares Management’s Energy Investors Funds (EIF) were underperforming and, amidst the failed merger with energy-focused manager, Kayne Anderson, fundraising for Ares EIF V was slower than four comparable energy funds raised over a similar period. During the 2nd quarter of 2016, Ares EIF’s performance declined even further and […]

November 16, 2016

Will Oaktree run afoul of HUD requirements on distressed Baltimore mortgages?

Read the full report here Key Points: Oaktree Capital Management has purchased over 5,000 total loans through the Department of Housing’s Distressed Asset Sale Program, with 612 loans in Baltimore City and Baltimore County, MD. UNITE HERE organizers visited 320 homes whose loans were purchased by Oaktree and found 145 (45%) homes that appeared to be vacant. […]