Good morning, and welcome to Ares Management Corporation's Investor Day. Before the presentation begins, we need to inform you of important matters and legal disclaimers about today's presentation. Today's presentation contains forward-looking results and are subject to risks and uncertainties, and actual results may differ materially. Note that Ares does not undertake any duty to update. Please see the risk factors in Ares Management Corporation's 10-K and SEC filings for details of these risks that could impact results. Viewers should not view the past performance of Ares Management Corporation as indicative of future results. Non-GAAP reconciliations are available in the full presentation, which can be found on the company's Investor Resources page of its website. Today's presentation does not constitute an offer to sell or a solicitation of an offer to purchase an interest in any Ares fund. We will now start today's presentation with a short video. [Presentation] Good morning, and welcome to Ares's 2021 Investor Day. It's so great to have everyone here with a live audience, and many of you more joining virtually for our first Investor Day. We want to thank everybody for their presence today, and more importantly, their support over the many years for our company. As you'll no doubt hear today, we've grown meaningfully since our IPO, outperforming our benchmark indices, but we believe the best is yet to come. Why are we here today besides showing you a snazzy new video? Well, first, there's three primary goals that we want to talk about. What makes us different? What separates us from other investment opportunities? Why are we growing at 2x the rate of the alternative industry? Co-founders Tony Ressler and Mike Arougheti will talk about our guiding principles, our collaborative culture, and our strong and broad platform that enables us to deliver strong and consistent investment performance for our fund investors, but also strong growth and consistent growth for our public investors. Second, you're going to hear a lot about growth opportunities today. We operate leading businesses in $1 trillion+ end markets, but we believe the scaling opportunity is still very early. You're going to hear how we use a consistent playbook for both organic and inorganic growth opportunities, where we leverage the platform to build and innovate businesses. Third, we're going to highlight how we're striving to lead by example, live by our core values, create value, but also have a positive impact on our stakeholders and our communities. This is part of the DNA of the firm. How are we going to share this with you today? We have a packed agenda today. As you can see, 13 speakers, three and a half hours of prepared remarks, promise it'll go quickly. We break it down into four sections. First section, Tony and Mike will lead off with a business and strategic discussion. Jarrod Phillips, our CFO, will talk about our differentiated business model, provide some financial guidance on where we see ourselves in 2025, updating with AUM, FRE guidance, dividend guidance, a lot of the questions that you all ask us. Also provide some new performance income that may help you value the stock better. Ryan Berry is going to provide and discuss why the alternative industry is growing, how we're going to continue to penetrate new and existing investors' wallet share in the alternative industry as investors continue to consolidate their GP relationships with broad-scale players like Ares. In the second section, we're going to talk about our core business overview. Here, leaders Kipp deVeer, Matt Cwiertnia, Scott Graves, and David Roth are going to talk about our core businesses in credit, private equity, and real estate. Here we're going to focus on our differentiation, our strong performance, and our ability to continue to scale these businesses going forward. We will have a short break after the midway point, which is after the private equity section for those here in the audience. In our third section, we're going to talk about our emerging businesses. Here, Frank Borges and Mike Arougheti are going to talk about Secondary Solutions. Frank will discuss how we're still early and scratching the surface in the secondaries market. Mike will talk about what we're planning for in terms of our Ares SSG and our insurance solutions initiative from a five-year forecast perspective. In our fourth section, Impact at Ares, Mike will lead a discussion with our Heads of ESG, D&I, and Philanthropy, and why it's core to what we do at Ares and how we're striving to lead by example. At the end, we're going to have time for a Q&A panel, if you could please hold your questions until then, that would be greatly appreciated. I'm excited to start the program. Hope it's very productive for you. We're going to start with the Ares story. No one is better at doing that and telling that story than Tony Ressler, our Executive Chairman. Tony? Thank you, Carl. Appreciate that introduction. We certainly appreciate everyone being here. I know I'm excited to be here. Actually, I'm excited to be anywhere right now after the last 18 months. Probably most of you as well. Well, I think for the sake of argument, my job is to set the stage if you will, and I think the objective, if you will, is to lay the foundation for what we have done over the past 20 years. Which, obviously, at least from my perspective, is just not that easy. We've had a group of principles, a group of guiding principles at our firm, and there's just no doubt that these principles, I can't say that we had all of them at the first day we started the firm, but I assure you, we certainly, shall we say, adopted them very quickly and you can appreciate why as we go through them. The first principle that we built this firm on was and continues to be that assets will always follow quality performance. We firmly believe that consistent and attractive performance through business and market cycles is what our clients are looking for. If we deliver growth, assets and growth will follow, no question, and has for the past 20 years. Along with quality performance is undoubtedly transparency with our investors. It truly builds, if you will, a trust and particularly when things are not going out perfectly. It creates a sense of partnership and through cycles, truly you appreciate that sense of partnership with your investor base. Thirdly, we often say and many firms often say, culture is in fact critical. For us, culture is just about everything. We're committed to hiring great people and as importantly, trying to keep them. As a result, we do have amongst the highest retention rates in our industry, and it's something we're enormously proud of. Fourth, again, this is a term that I've used over and over again, we've always believed that pools of capital and investment professionals with focus have huge benefits from other pools of capital. Benefits, if you will, from relationships they might have, from access to diligence, from industry knowledge, from sharing investors, marketing, et c. We've always referred to this, shall we say, forced collaboration in our early years. We call this the power of the platform. How each pool of capital can truly help the others to be the best they can be. It's fair to say I've said this so often that those at the firm that have been here the past 20 years are terribly sick of hearing me say it, but I keep saying it because it's something we've grown up with. In addition, I would say the fifth principle at our firm is certainly our commitment to direct origination. It's core to our philosophy of boots on the ground in local markets, creating assets for clients that they simply cannot source or manufacture on their own. Whether it's in our credit groups or corporate PE or Special Opportunities, real estate equity, real estate debt, our new Secondaries business, all of these products are, if you will, predominantly self-originated and somewhat unique to our investors' portfolio. I would say our sixth and final principle really was always since our inception was to raise, if you will, flexible capital, which permits us to invest well in all types of markets, and as importantly, to be able to pivot when appropriate to the best relative value. This has enabled us to deploy capital successfully in truly all types of market cycles. I'd say this principle of really committing yourself to flexible capital is what helped us enormously as we, shall we say, traversed the 2008-2009 period, being able to go very senior at certain times of the market, and frankly, to go very junior in the 2010, 2011, 2012 range. Again, that flexibility of capital is something our firm has actually, I think, built somewhat of a high-quality reputation about. When you take, if you will, our six guiding or core principles that we feel we've grown up with. I would say the next slide is really just highlighting some of the milestones over the past 20 years, which I guess my job is to try to make them sound even more exciting than they might initially. We'll try our best. Ares clearly started as a credit manager in 1997. We are proud of that, and again, built on, if you will, that ability to play anywhere in a company's capital structure. From 2002- 2004, we truly leveraged this ability, this expertise in flexible capital to form our Private Equity Group, and then launched our direct lending platform with the addition of really four superb investment professionals and leaders, Mike, Kipp, Smithy, and Mitch. I think you'll hear from all of the above quite shortly. Four senior professionals who built our U.S. direct lending business over the past 20 years. I guess 17 years since they joined us in 2004. After a decade of growth in both credit and private equity, we added our real estate group in 2013, and then shortly thereafter, completed our public offering in May of 2014. A public company now seven years. Whoa. Time flies, I'd say. In 2017, we promoted Mike Arougheti as our CEO and elevated Kipp, Smithy, and Mitch as our Co-Heads of what is and was a truly rapidly growing credit business, which has been made a whole lot better over the past four years. I would suggest these were some of the best management changes and promotions a company can make. Another important step was when Ares became a C-corp, which many of you, I think, are quite familiar with. This really not just led to improved valuations for Ares, but for the entire alternative asset management sector. It really created an ability for more and more investors to participate as public shareholders. These changes helped our business grow more dramatically, as evidenced from the fact that our assets under management grew from something around $106 billion at the end of 2017 to something close or just over $260 billion as of July 1st of 2021. I guess as importantly, helped the stock price, which has delivered a total return of over 250% during this period. I must say, for a long while, I've argued that that extraordinary growth and the really improved operational performance across the firm were in fact a truly incredible coincidence, rather than some would say, the result of Mike Arougheti replacing me as our CEO. I would say even my wife doesn't accept that story any longer, and nor should any of you. While we are proud, of course, of what we have accomplished in the past 20 years, we believe we are just getting started. We have never been better positioned for growth than we are today. In the last two years, we've acquired four exciting growth engines for our firm that complement our existing businesses beautifully. In Asia, with SSG growing in the direct lending and special situations and private equity arenas. With Insurance and Aspida, with our secondaries business, with the incredible acquisition of Landmark, as we'll hear about shortly. Lastly, our growing retail distribution and core plus real estate activities with the recently closed acquisition of Black Creek. All of which we believe positions us beautifully for the next several years. I think this is one of those global map slides maybe not for you, but for me, it makes me take a moment, take a long pause, and just be somewhat amazed at what we have become. The fact that we have 31 offices across the globe, 2,000 employees, all built over the past 20 years, truly positions us as a Global International Asset Management Firm, which one needs to be to compete in today's world. We truly have that global footprint, and we think positions us, as I say, for the next 10 or 20 years, as beautifully as one can be. Again, in terms of a global footprint, you also have to have high-quality people, and as I said, you have to keep the obsession of keeping your best people, which we have been successful in doing over the past 20 years and fully expect to for the next 20 years. Our organization today, as I said earlier, has over 2,000 people. We have five great investment groups, if you will, all of which are growing and positioned to be successful for a long time to come. In closing, I couldn't be more proud of the company we have built. I couldn't be more excited about the growth ahead. Over the past 10 years, we believe at least, we have come from being a really good asset manager to becoming a really great company. Now to tell you a little bit more about our company, I would suggest is the most talented CEO in the business, and I promise you, I would say that even if Mike wasn't my friend. Mike Arougheti, come on up. Wow, you're going to make me blush in front of all these people, Tony. I'm not used to being out. Thank you. It's really gracious. I, like Tony, would probably be happy to be anywhere, but I'm happy to be here, with a great sense of pride to introduce you to the depth of our team, the quality of our company, and all of the opportunity that lies ahead. Tony did such a good job looking back, and I think it was Maya Angelou who said that you can't really talk about where you're going if you don't know where you've been. So much of how we think about growth as a company is really anchored in who we are as people, as partners, and how we've really built this culture of collaboration that drives our growth forward. When we talk about Ares internally, we refer to ourselves as a growth company in a growth industry. You'll see today our industry is rapidly growing and we're taking disproportionate share. One of the reasons that we're doing that is because of this growth mindset that we bring to all of our businesses, our investing activities, our capital raising activities, our impact. Everyone that works at this firm is encouraged to think about growth. How do I innovate? How do I do things differently? How do I think about a new way of attacking a market? It's that DNA, that part of our culture that we think is so unique. It works so well because Tony said, all we talk about is collaboration. How do we break down internal silos? How do we harness the power of the platform to drive results for our investors? Hopefully you'll see today a consistency of approach across all of our activities, and you'll see that collaboration shine through. Jarrod's going to spend a fair amount of time talking about our financial model and the consistency of our financial returns. We are uniquely positioned in this industry because of the nature of the assets that we manage to deliver strong growth without having to sacrifice consistency or predictability of return. I think last but not least, any time that we're making an investment at Ares, we're always thinking, how am I aligned with my management team? How am I aligned with my partners? When you look at the partnership at Ares, we own 50% of this company. We are right there shoulder to shoulder with all of you. We have over $2 billion of capital invested in our underlying fund product, fully aligned with our private LPs as well. Over the course of today, we're going to be talking a lot about all of our businesses. What you're going to see is we are in very large addressable markets with a significant amount of growth ahead. The business is really just firing on all cylinders. What you'll see here is we have built a business that has a repeatable business model. It seems simple. We raise capital. We put that money to work. We generate extraordinary returns for our investors. They reward us, as Tony said, with more capital, because assets follow performance, and then we do it all over again. Behind that simplicity, though, is obviously 2,000 people across the globe that are working hard every day to deliver these types of results. To put all of this in perspective, in terms of our fundraising engine that Ryan will talk about, we've been able to grow our assets under management close to 20% per year for the last five years. We've invested in people, office footprint, broadening our product set, and that leads to consistent and more diversified deployment across all of our businesses. You'll see that deployment has kept pace with that fundraising, growing at 23% over the last five years as well. As that money gets put into the ground and we harvest it, we're driving 20% growth in our fee-related earnings and realized income. Our investors are coming back and they're consuming more product with us in existing strategies and broadening their relationship with us. You'll see a 20% increase in the number of institutional relationships that we have on the firm as well. When you put all of that together, the beauty is we're not just delivering for our private LPs, but we're delivering for our public shareholders as well, and we've delivered a 36% annualized rate of return over the last five years. We have been fortunate, I'm not going to lie, to be growing this business against the backdrop of a multi-decade secular growth trend in the alternative asset space. A lot of people are experiencing the accelerated growth now as a new phenomenon, but this is nothing new to us. Over the last 20 years, we've seen banks retrench from the middle market, clearing the way for the growth of a global private credit leader. We've seen the high yield and leverage loan market restructure and move towards larger borrowers, larger issuers, paving the way for our leverage finance and private credit businesses to grow. We're seeing the public markets grow, become more concentrated. We're seeing the length of time for companies to get to the IPO market lengthen, and companies are spending more time in the private markets. We've had a 30-year secular decline in interest rates. The backdrop against which we've been building this business has been quite extraordinary. As we sit here today, a lot of these in-place trends are accelerating. As you'll see throughout the course of the day, while we've enjoyed great growth historically, we think that the setup for future growth is probably better. How has that growth translated into our response and the positioning of our company? Obviously, we've been able to grow AUM, but importantly, we've been able to diversify the number of strategies and the AUM within those strategies over time. If you were to look at the AUM at IPO, we had about $77 billion of assets under management in 144 strategies, leveraging our historical success, as Tony mentioned, in our liquid credit and direct lending business, with growth emerging in our private equity and real estate businesses. Fast-forward to today, seven years later, that $77 billion has grown to $262 billion. We've diversified into close to 20 strategies across the globe. The number of funds that we manage is up to about 360. This allows us to go into those local markets, as Tony said, directly originating product with more impact and more relevance to those markets. The broader our product set, the more we can do for our clients. On the other side of that, the more that we can bring into those markets, the broader the investment solutions that we can deliver to our investors, and that is that virtuous cycle as well. With this growth mindset, how do we think about growth? How do we support growth from a business build standpoint and infrastructure standpoint? We believe that we have a repeatable formula in place to build. Now, when we talk about investing at Ares, we often talk about pattern recognition. 20 years in the investment business, you learn a lot. You see things occurring over and over again. You adjust your framework. We do the same as we build businesses. Business building is pattern recognition as well. We know where to look for opportunity. We know how to exploit it. We know how to build around those opportunities. We know how to scale it. Every time we're looking to grow, whether it's organic or inorganic, it starts with this very simple formula. Identify a large addressable market where there's a capital inefficiency or a need for capital that we can fill, and that need for capital can get filled where we can bring creativity or scale or flexibility, to Tony's earlier comment, to drive growth and take share. The beauty is there's no shortage of large addressable markets for us to play in. If you look at the businesses that we have today, you'll see on this slide, each of our businesses, though we're market leaders, we are operating in incredibly large total addressable markets. I believe we have one of the leading credit businesses in the market. That $10.6 trillion end market against our $168 billion of AUM. How great is it to be in a market where you can be a market leader with a 2% market share? Competition is fragmented. The competitive advantages that we're able to accumulate allow us to continue to take share, and we can take share without having to take incremental risk. I'm not going to go through this list, but the story is the same in each of these markets. Even in certain of the markets that are maybe more mature or where we have larger market shares, like Secondary Solutions that Frank will talk about, are about to go through transformational growth themselves and open up more opportunity for us. In these markets, and this is key, we are operating in a backdrop of growth in alternatives. If you look over the last five or six years, the alternative asset market has been growing at roughly 8%, 1.5x Global asset growth. Alternatives are outpacing the growth in traditionals, and that trend, irrefutable, will continue. Ares has been growing 20%, 2.5x the alternative market, as we go through the course of the day, hopefully you'll understand why. If you look going forward between 2020 and 2025, the numbers don't change much. Traditional assets are expected to grow about 4%, alts 9%, and as we'll walk through today, we have high conviction that we'll continue our growth rate in excess of 20%. What do we do once we establish a view on a large total addressable market? This is where we bring the power of the platform that Tony talked about. We joke about it. I don't actually think that anybody at this firm is sick of us talking about it because this is what we live every day. This is how we drive results and how we deliver returns to our investors and how we all share success. It does start with building competitive advantages in three simple ways, as I think about it. One is through origination. Two is through the evaluation of deals and the information edge that we can bring by harnessing everything that resides on our platform. Three is by building scaled portfolios and unlocking the value in those portfolios. Maybe we'll just drill down on each of those quickly to understand how they all work together and deliver outperformance. Originations is not just about growth and deployment. Originations is also about performance. When we're in these local markets, self-originating, as Tony said, and sourcing unique assets for our clients, it enables us to be incredibly selective in what we choose to do. If you were to look across all of our private markets businesses and all the thousands of deals that we look at, we typically close less than 5% of the transactions that come through the firm. That level of selectivity is ultimately what leads to the performance that you're about to see. That means that we're saying no 95% of the time. Now, we're learning when we say no. We're seeing those businesses. We're recognizing those patterns, but we're in an enviable position to say no 95% of the time and still build durable client relationships and a durable investment business. Those originations obviously then funnel into the building of large portfolios across markets, geographies, asset classes, different parts of the capital structure, liquid markets, illiquid markets. Because of our collaborative culture, because of the lack of friction between the businesses, because of the lack of siloing in our company, we're able to harness all of the information on that platform to drive better investment decisions in each of our businesses and make better portfolio management decisions as we grow. Today, we have over 3,000 companies that we touch through our investment books across Ares. Every day, we're looking into those portfolios for some information that will make us better investors. Then lastly is this idea of scale and flexibility that Tony referenced. We have learned over time that by crafting flexible pools of capital, we can attack these markets more actively, and we can be more nimble as these markets develop. We've also learned that we need to match that flexibility with scale. As these markets are growing and consolidating, scale has become a huge advantage. You don't have to take my word for it because the proof is in the pudding. When you look at our returns, you'll see on this slide, across the credit businesses that we run, we have decades-long track records. U.S. Direct Lending, Ares Capital, our publicly traded BDC, has delivered a 13% total rate of return for 17 years. Tony likes to say that if you deliver somebody a 9% dividend for 17 years, you're going to make a lot of friends. I think that's true. Similar type of performance in European Direct Lending, alternative credit, and standout performance that we're very proud of from our partners at Ares SSG in our Asia Direct Lending and distressed businesses with gross IRRs of 30% and 22%. This performance is not just isolated in our credit book. Obviously, our private equity and real estate businesses are delivering best-in-class performance. We're seeing decades-long performance in our Secondary Solutions business. I want to point out, and we'll talk about this a little bit later, the early returns on our Special Opportunities business at 68% gross and 52% net, demonstrating the ability to scale new businesses with the same type of performance experience that we've grown accustomed to. Three, identify large markets, deliver the power of the platform into those markets, and then what? Grow those businesses through innovation and business building. I want to talk about how we do that. Once we get a team of talented people or capabilities onto this platform, whether they come organically or inorganically, the playbook is the same. They get integrated into the cultural fabric of the firm, actively collaborated with. We deliver the power of the platform in terms of all of that scale, all of that information, all of that flexibility. We capture that revenue synergy. Once we have that foundation established, we pick our heads up and we say, "Where do we go next? How do we deliver an adjacent strategy? How do we expand the product suite? How do we extend distribution to new channels? How do we think about ways to leverage this team into new markets, new geographies?" If you look at the history of the firm, you'll see that almost in every case, we'll take a flagship fund or a core team and rapidly expand it into adjacent markets as we grow. As I mentioned, this playbook is the same whether we're buying a company or we're building a team. The entry point is the only thing that's different. If you look across the history of the firm, there are so many examples of how this playbook has been well executed. Our European Direct Lending business, that was a de novo team build that we started in 2007. Now, almost 15 years later, we have close to a $50 billion business market leader in that market, and we did it by investing in people, processes, and capital. Now, with that market leadership position, you'll start to see us broaden the product set and continue to grow that business. Similar story with our ASOF family. Hired a team of 20 people, built capability, scaled a fund, delivering excellent performance. Now we get to pick our heads up and say, "Where do we take that business now? Move into new geographies," etc. Similar playbook when we make acquisitions. You'll see here a lot of our historical acquisitions have blossomed into large global franchises for us. Indicus was really the seed of our now large and growing alternative credit platform. AREA Property Partners, the seed for what is now a close to $40 billion global real estate business, and so on and so forth. What's so exciting, as Tony mentioned, given some of our recent activity, is the huge amount of white space that we see to execute this playbook on the backs of the acquisitions of SSG, Aspida, Landmark, and Black Creek. While we continue to grow our core businesses, we feel that we've opened up a whole swath of opportunity and white space for us to deliver this playbook into these acquired businesses. If that's our roadmap, one could say that maybe this is our subway map, and it's hard to read, so hopefully you guys can see it. All of these tributaries and branches are really this depiction of what happens here from a growth perspective. You could see our direct lending business starting with ARCC, moving into SMAs, moving into senior loan funds, moving into Europe, moving into junior loan funds, and then growing into industry-specific verticals, and so on and so forth. When you grow this way, off of core strength, it's high conviction growth. It's lower risk, it's lower volatility. We can grow it more efficiently, and we can grow it with confidence. While these markets are mature in some respects, we are finding ways to leverage our core capabilities into these large-end markets to grow. You'll see 35% growth in alt credit, 45% growth in direct lending, 40% growth in real estate, so on and so forth. The next four slides I am not going to walk through just in the interest of time, but I would encourage folks, if you do have time, to take a look at these. We've put together case studies of some of these de novo and inorganic experiences in a little bit more detail so that you all could get a sense, maybe a little bit more tangibly, about how these businesses are growing and where that playbook is getting executed. Where does that leave us now? We have a deep stable of established strategic products across all of our businesses in credit, private equity, real estate, and secondaries. They are all growing with good performance. We have a whole suite of what I would call emerging strategies and products, things like our SSG senior loan product, our climate infrastructure fund, our secured income product coming out of our alternative credit business, our Pathfinder series, and so on and so forth. What I'm most excited about is what we would call future growth or emerging fund products. These are the products that we're building for 2025 and beyond. These are the products that you don't see today running through our P&L or maybe running through our performance but are being actively executed against that playbook and opening up yet more avenues for growth over the next 10 years. Ryan is going to walk through the distribution investments. Needless to say, while we're investing in the front-end origination and investment capability to support this growth and expansion, we're also investing in our distribution as well, building and opening up new channels of distribution globally in the institutional market, in the retail market, and in the insurance channel to make room and make way for the distribution of all of these new products. Again, when you look at the results of how we've been able to do this, hopefully you'll have as much confidence as we do in our ability to continue to take on this product set and deliver it into the market. Where does this take us? Where do we think this business can go? As we sit here today, $262 billion of AUM growth coming off of our largest fundraising year, consistent deployment. The product set has diversified. We have high confidence that if we do nothing but what's in front of us now, that that 262 can double to $500 billion+ by 2025. That's just going to come through the simple execution of the playbook that we just talked about. Scale our existing funds, launch adjacent and ancillary products, open up new distribution channels for those products, expand geographically, and so on and so forth. This $500 billion does not include any inorganic growth, and as hopefully we're demonstrating, we have a long track record and experience of success bringing new capabilities and new products onto the platform through acquisition. To the extent that we did that, obviously these numbers can grow from here. I'm going to end this section where I started, which is I could not be more proud of the team that we've built and the performance that we've delivered. It's days like this where you're probably the most excited to be able to share the depth of the team, the depth of the capability with all of you. It's an exciting time here. We're firing on all cylinders, as I said, putting up record numbers across the board, and having a lot of fun doing it. I'm going to now call up Jarrod Phillips, my Partner and CFO, who's going to talk a little bit about the financial metrics underpinning some of this growth opportunity and walk you through what the future looks like from a numbers perspective. Jarrod? Thanks, Mike. It's great to be here. Hello to all of our friends virtually. Great to see all of you here in this room. I'm excited to walk you through our business model today and the pillars of our financial success. We've got a diversified recurring revenue stream that's really evidenced by the diversified, less volatile types of investments that we invest in. That is invested in by long-dated, long-duration, or sticky capital that results in a management fee-centric business that we believe is more stable and predictable. As we increase our management fees, that gives us economies of scale and margin expansion, driving FRE growth. Lastly, our stable balance sheet light model, which we believe is core to our philosophy, differentiates us and makes us more flexible. The two drivers of FRE that we'll talk about here are annual fundraising and drawdown deployment. As we raise funds, that's going to drive our AUM, which we then deploy to increase our fee-related earnings. As you see, since 2015, these numbers are all two times higher and are at records across the board. That is how we build our dividend. Our long-dated AUM drives the management fees. That, with scale, increases the fee-related earnings, which provides high-quality earnings to support our dividend, and then the dividend can grow. When we talk about that long duration, that sticky management fee base, we mean it. 95% of our management fees are insulated from redemption, with 90% of those coming from permanent capital, perpetual capital, closed-end funds, and CLOs. Less than 5% of our assets are in liquid and credit strategies that are more short-term and open-ended. That has led to stable growth. As we talk about those sticky management fees, it allows us to have that stable, predictable growth that you see here. As time's gone by, we've diversified more and more. Now, this is going to continue as we see our acquisitions of Landmark and Black Creek built into here. One of the things that I'm really proud of and want to highlight is that we've had this growth in AUM and management fees without seeing fee pressure. Meaning we haven't cut our fees in order to support this growth. Our fees have stayed at that 1%-1.1% throughout. As you see, when we talk about the stability of the management fees that we build off of, management fees are a large portion of this revenue, often over 85%. There was a lot of blue on that other slide that was credit, and I didn't want to take away from the diversity that is naturally within credit. Our credit focus is something that we think differentiates us from all of our peers. We think being invested in credit helps us be less volatile based on the nature of the assets that aren't as subject to market fluctuations and cyclicality due to their standing in the capital structure. They're more insulated from those items. Our scale, as Mike talked about, allows us to see more deals, to be better partners to the sponsors, and to be more selective with what we invest in. Our ability to go across many types of credit also makes us more efficient at deploying that capital, but it's a benefit to our LPs too, as we can provide more solutions for them to invest in. As you saw earlier, it's a $10.6 trillion addressable market at which we're less than 2%. There's plenty of room to grow. The thing that I found really interesting is for every $1 of private equity you need, you need $1-$1.50 of credit. That gives credit even more room to grow in the future. We've talked a lot about how in times of volatility and times of stress, that we're able to be more offensive and less defensive. We can focus on growing and deploying as opposed to being distressed sellers of assets. As opposed to defending our portfolio. This supports that. As you see, during the global financial crisis, we grew 28%. During the pandemic to date, we've grown 20%. That's more support for the stability of our model. That model also gives us great visibility to the future. As Tony mentioned, it took us about four years to go from $100 billion- $200 billion. Well, we believe in the next four years, we'll go to $500 billion of AUM. We'll do that with our diversified and growing investor base, with our strong tailwinds that we have in fundraising and organic growth. A demonstrated track record across 20 different strategies that allows us to often have successor funds larger than predecessor funds. Cross-selling across our platform, which will improve with our acquisitions of Black Creek and Landmark. Deepening our wallet share. 75% of our growth has come from existing investors. When we think about FRE and we think about AUM, one of our most important metrics is shadow AUM. This is what drives a lot of the predictability that we talk about. Right now, we have about $43 billion of shadow AUM. That's AUM that's not yet paying fees but will pay fees upon deployment. The fees associated with that AUM is a little over $400 million. This is fees that are about 30% of our last 12 months management fees that we know we have the ability to earn on deployment. Historically, about 90% of that balance is deployed over 18 months, to give you an idea of how that ultimately gets deployed. That deployment has grown at three times since 2015 and has become more and more diversified. Another area where our acquisitions of Landmark and Black Creek will help. That'll increase this diversification and increase this deployment. A scale note that I'll add here is you see that our deployment has grown three times. Our shadow AUM, which has scaled with AUM throughout the process. That number has grown almost three times as well, but we've only grown about two times investment professionals and global offices. We're building the structure, but we're building it with scale. That scale is something I want to highlight here, because by 2025, we believe we'll be at a 45% FRE margin. We've had annual increases of 200 basis points on average. We believe that that will continue as we deploy that shadow AUM and as we scale our business. We're also targeting within here, and we'll talk about it in another slide, 20% growth in FRE and dividends. That doesn't mean that we've stopped investing in growth initiatives. Mike highlighted a lot of our growth initiatives. Tony did too. We have Aspida growing the secondaries business, growing our presence in Asia, hiring investment professionals that will allow us to invest in new strategies and geographies. That is where expenses will front-run the ultimate revenue or FRE that we earn. A great case study of this and something that we're really proud of is our European direct lending platform. To give you some numerical examples. In 2015, that was a $9 billion AUM business. Today it's a $43 billion AUM business, so about five times larger. In 2015, we had 34 employees. Today, investment professionals. Today we have 72 investment professionals, so only about a two times growth in investment professionals. It gives you an idea of once we begin to build a business, how we can scale that business organically. As we talk about FRE and dividends, as I noted, we believe that by 2025, we'll have increases annually of 20% in FRE and dividends. As our FRE grows, we've pegged that to our dividend, so our dividend grows. Our model allows us to have that stable, predictable growth, that we know the metrics that inform us in making this assumption. Speaking a little bit about our shareholder value creation, we've spent a lot of time here just on FRE. We haven't yet talked about performance fees, but FRE, as a reminder, provides the shareholders with that stable dividend that can recur, while as our performance fees, we retain those in our model. That allows us to invest in organic and inorganic growth. That makes us less reliant on the capital markets. We've got some exciting things that I want to talk to you about that we're really going to show you for the first time here in performance fees. Just like we talked about shadow AUM for FRE, incentive eligible and incentive generating AUM are the important metrics that we think about in terms of AUM and our performance fees. Incentive eligible is at $151 billion, with $63 billion of that incentive generating. Right now, we have $64 billion of incentive-eligible AUM that is not yet deployed. About 90% of that, if it was deployed immediately, would be in funds that are currently above their hurdle rates. We have an excellent view on what we ultimately think we'll be able to realize in terms of net performance fees. Today, that $63 billion of incentive generating has resulted in $616 million of net accrued performance fees on our balance sheet. Let's say, historically, as we think about this portfolio, based on the types of funds that we've managed, that gets paid out about 41% the following year. Something that's not priced in there yet, and something that we believe is unique to us and one of the first times we'll be seeing it in our industry, are these European waterfall style funds. The traditional private equity style funds are American style generally, meaning that when there's a sale, that's when you have the realization of carry. Starting in 2017, we began to build a critical mass of these European waterfall style funds. As you see here, we've grown that over five times in that less than four-year period. That amount now stands at $61 billion of incentive eligible with $26 billion of incentive generating. Because they're European waterfall, that means that the payments don't occur largely until the investors have received back their cost and their preferred return. There'll be some small payments that may come in for tax purposes early on in the life, but largely these are back-end weighted funds. Once those payments start, they largely go to the GP. As we think about this balance as a whole, we have about $1.5 billion of realized net performance income for the funds that exist today coming from these European waterfall style. That amounts to about pre-tax $5 per share. This, when it starts, will become stable and predictable. You can see here when we expect those amounts to come in, and that is, again, I'll remind you, just the amounts for funds that exist today. We're continuing to launch these funds, we're continuing to grow these funds, and as I've noted before, often in our commingled funds, successor funds are larger than the predecessor. Once we start to earn these fees, we believe this will be a stable, recurring revenue source within our performance fees. Something that we haven't seen yet in our industry, and something that I think, frankly, is very exciting to have that stability and growth built in on the performance side as well as on the FRE side. We haven't forgot about American style. It's only about 50% of our funds that will end up being in the European style. 50% will still be the American style, and they're using the same technique of saying the funds that exist today, and if we hit our performance hurdles, we expect another $1.5 billion or pre-tax about $5 a share. That's less predictable. That's your standard American style. It's hard to predict exactly when those amounts will come in. We believe somewhere between 2022 and a little bit beyond 2028, those amounts will come in as well. Having that stable, predictable base of FRE and the stable, predictable base of the performance fees, plus the traditional performance fees, I think is extremely exciting and something that we haven't seen yet in our industry. Our balance sheet light model, as I mentioned earlier, is core to our philosophy. We're very happy with our credit rating. We're extremely pleased to have the low net debt that we have. Our FRE interest coverage is where we believe appropriate. We have $1.5 billion of available capital that makes us extremely flexible. With the recent retirement of our preferred stock and our new junior sub notes, we now have an average debt maturity of over 14 years. We're extremely pleased with the flexibility of our current structure. Just a little bit of support for our balance sheet light model. You can see that compared to our peers, our AUM and our management fees as a percentage of our balance sheet investment is much above the peer average. We believe this creates fewer conflicts of interest as we're investing. We believe that this creates lower volatility on our balance sheet from market fluctuation, and ultimately drives a higher return on capital for our investors. Some of the key takeaways from today that I want to highlight. 95% of our management fees are insulated from redemptions, giving us stability and predictability when we're talking about them. We're targeting a 45% FRE margin, continued expansion of our margin until 2025. We believe there's no upper limit to that margin. As we continue to expand and grow, 45% is just our target for 2025. We believe we have the ability to continue to expand that margin based on our business model. We're targeting annual growth of 20%+ in both FRE and dividends until 2025. We estimate that we have about $3 billion of inherent performance fees, of which $1.5 billion will come in those European waterfall funds that will be more stable and predictable than your typical performance fees. We're targeting $500 billion of AUM by 2025. That's all based on strong fundraising and deployment and the excellent tailwinds we have to grow both organically and inorganically. Our Chief Marketing and Strategy Officer, Ryan Berry, is going to tell you a lot more about that right now. I'd like to introduce him. Ryan. Good morning. My name is Ryan Berry. I've had the great opportunity to be at Ares for 16 years, almost exactly to the day. For the past five or so years, I've been in my current seat working with a wonderful and growing group of talented professionals in our business development and client strategy teams. If I could get across just three big themes today, they would be as follows. One, we've established a powerful network of client service teams that are working in partnerships to develop solutions. Two, the ongoing growth and diversification of our AUM highlights the merits of our approach. Three, even with the success that we've been enjoying, we believe there's a tremendous opportunity to broaden and deepen our investor relationships. We really believe we're just scratching the surface of what we can do as we help the platform grow. It all starts with people. Today, we are at 260 dedicated professionals in capital formation. We are large, we are global, and we are collaborative. This collaboration, this partnership across these different teams is critical in developing solutions for the growing number of our different clients. We have 30 strategy professionals, which really started as an in-house M&A team, but we've expanded their mandate to really support a number of business building initiatives. We have 50 relationship managers. That term really means something to us. That really represents a mindset of how they work with our external clients and build on that trust. They're not just trying to push one or two funds that we have, or they're being incentivized to go kind of push on clients. They go across our entire offering and really trying to develop solutions that work for their portfolio needs. We are very excited to welcome 90 wealth solution professionals from Black Creek, one of the largest and top-performing teams in the space. They've been primarily having all their success in real estate, and we're very much looking forward to what we can be doing together across our offering. Last, but certainly not least, we have 90 IR product management professionals who sit predominantly within our investment groups. Their leaders are part of the business leadership teams, and they are charged with developing our product, really quarterback the entire fundraising experience, and owning the client relationships specific to that fund family. I note dedicated because client solutions and the developing of the relationships is really a firm-wide focus, and we're very fortunate to have our business leaders across our investment and business operations groups who are right there with us. It's a big advantage, and it's something our investors really appreciate. We look at how we've progressed. Our AUM has more than tripled in under seven years. We have gone from $82 billion at the end of our IPO year in 2014 to $262 billion today. We certainly believe this puts us in a rare group of asset managers, we think the other important distinction is that the majority of this growth has come from organic inflows, our ability to fundraise. Going and raising larger, subsequent vintage funds in the same families, certainly we're having a lot of success, as Mike mentioned, of really launching new strategies and supporting other types of funds. As we dig deeper on these organic flows, we're very pleased to see that we've had recent record fundraising results. 2020, our record calendar year of inflows, we just experienced a record quarter by a large margin. We're very pleased because not only we think this is impressive on dollar terms, but also as a percentage of where we started from. If we look over the last 12 months, we have organically onboarded $56 billion of inflows, and that represents about 1/3 of where we started from just a year ago at $165 billion, which we also included SSG in that number, which closed on July 1st. The growth has come across all of our key client types, across all of our business segments. As we look at our AUM by client, we have direct relationships, we have our public vehicles, we have the intermediate channel, which is primarily CLOs. We're very pleased as we look up and down this page to see double-digit growth across each of our clients. Pensions and sovereigns have been some of our longest standing, largest clients historically. Those segments are still growing at near 20% compound annual growth rates. Still so much to do with those investors. In insurance and high net worth, where we've put some real focus in the past years, insurance has grown at a 31% CAGR, and high net worth has grown at a 50% CAGR. We are very pleased to see that our solutions are really being in demand by a range of clients from around the world. As we look at our growth by strategy, we have certainly benefited from our leadership in private credit, which really started with the U.S. Direct Lending business, then went over to European Direct Lending, which just had its record fundraise for the entire firm. It then went into alternative credit, into real estate debt, so we are certainly doing well in those areas. As we think about the compelling investment opportunities that each of these teams are doing in our debt and equity strategies, as we look across and think about our prospects, we believe there is strong growth to come in each of these business segments. The growth has primarily been fueled by deepening our relationships. As we look at the direct AUM, 62% today is coming from investors who are now with us in two or more of our groups. That's up from 37% in 2015. As we think about the number of our large partnerships, in 2015, we had $11 billion+ type relationships through our direct channel. Today, we're up to 49 of those partners. Just looking at our LTM direct inflows, the existing investors have played such a critical role in our ability to go raise larger subsequent funds and launch new fund families. Over 80% of our direct inflows has come with an existing investor. A third has been from an existing investor who's come into a re-up. That's a big focus, certainly for our IR teams to really deliver on that client experience to get the investor to be excited to come into the subsequent fund. To have these investors represent half of the capital as they've looked to come into maybe existing fund family we have, but they weren't in there before, or come into a first-time fund or a different type of mandate. It's a very, very powerful relationship network that we have, and we're very appreciative of their support. Of course, the other means is onboarding new investors and entering new geographies. Today, we're especially excited to say of our nearly 1,800 direct LPs, that over half are new investors to the firm over the past 18 months. When you link it up just with the prior message of how important these existing investors are, the fact that we now have 929 investors who are new to the firm, we have so much to do with this group to be able to kind of expand and really build out the relationship. We've been pleased. We've been experiencing balanced growth across the three major regions that we are in, the Americas, Europe, Middle East and Africa, and Asia Pacific, balanced growth within each. We've also been very excited to see that we've been able to secure new investors in different countries. Today, we have direct investor relationships with over 50 countries around the world. There's a number of aspects of our business model that we believe is really differentiated as we look at other asset managers. This distinction that we make between a relationship manager and a product manager, the extensive fund vetting process that we do, and perhaps I, and I alone, think we do some very creative team-building initiatives. Carl allowed me to focus on one area, that's our strategy team, which we've invested heavily in the past few years. This is the team that really started out as a centralized M&A team. We wanted to make sure that each of our business leaders across the firm were having this centralized resource to help them maximize the opportunities within their asset class. This team continues to be very focused, we're very pleased to have secured these three very exciting platform acquisitions in the form of SSG in Asia, Landmark in secondaries, and Black Creek in real estate. That said, the mandate of our strategy teams has certainly expanded beyond M&A. We have done a lot of work with the Aspida team, really standing up that insurance initiative that we're very excited about. We've done strategic partnerships with SMBC, Fidante, and other groups. A big area of focus right now is our strategic partnerships initiative with some of our larger clients who are really looking to develop these customized mandates with us that go across strategies. It's an area that we're putting a lot of time and energy behind, and we think there's a lot of benefits to come with those large pools of capital. We're incredibly excited as we look back. We're incredibly excited as we look ahead. All of the same themes that we have been benefiting from, and you've heard about the tailwinds that are taking place in alternatives, are all still there. If anything, the one big change is what was looking as potential benefits to some who may have been skeptical, they now over time are really starting to believe these are in fact actual benefits. It is much easier for our Credit Group to now answer questions around, well, how can the direct lending asset class navigate cycles today than it was 2004 when they launched that strategy? The Private Equity Group launched a very innovative distressed special opportunities fund that really combined public distressed with private distressed, and now over the past couple of years, people are really seeing the benefits of putting that into the same fund family. We have all of those kind of positive drivers that's really helping everybody in alternatives. When you combine it with certain key distinctions of the Ares business model, we think this is really supporting our accelerated growth. We have strong investment performance across cycles. We have robust origination across markets and geographies. That is certainly helpful for our team members to go and secure the meetings and really be able to start the discussions with a growing group of clients. When you can come in and say, well, now we have this increasing number of strategies and we have increasing number of access points into these strategies, whether it's a leveraged sleeve or an unleveraged sleeve or an insurance-rated feeder, and we're really trying to tailor the vehicles to get into the same strategies, you're really creating a whole range of solutions to really kind of tailor to the different clients' needs. Lastly, and it'll be a big focus today with our team members with Mike, we're really focused on the entire organization being this positive agent for good across our communities. This is of increasing importance to a number of our investors, and we really want them to be proud of who they are partnering with and going back to the stakeholders and talking about Ares beyond just our investment performance, but what we are doing as an organization. Mike touched upon it. I won't necessarily go too much more depth, but the theme of this slide is alternatives are taking share and are expected to continue to take share. If we look and exclude hedge funds, they've been growing at a 10% CAGR. It's projected to grow at a 12% CAGR. We've been able to grow historically at 21%, so twice the alternatives space. It is certainly our expectation to continue to grow in excess of the alternatives industry, given all of the advantages, all of the investment we're putting across our functions. Mike talked about having 2,000 employees today. We believe that there is a focus for many of our investors to try and consolidate their relationships and really look to kind of find more customized solutions. We believe we're very well-positioned. One of the big focuses in asset management is really trying to focus on partnerships in the high net worth and retail channel. This has been a client segment that has been under-allocated to this space. They have the same interest to try and enhance their portfolios. They have not had the access. To bring over a market-leading team in the form of Black Creek, which is a top two team amongst our alternative peers in terms of size and what they were able to fundraise last year, and they've been doing it primarily in real estate, we could be not more pleased to partner with this talented group that provides us 90 professionals across the U.S. with valuable relationships into these financial advisors. At the same time, we're certainly bringing something to this combination because we have experienced strong growth in the high-net-worth channel. We have hundreds of thousands of investors who've gotten to know Ares well and been pleased with our performance through our public vehicles. We have a small wealth team that has made a big impact to the firm, who's got us in with each of the key private banks and developed those relationships in our closed-end funds. We are working kind of around the clock of bringing this combination together, and we're very pleased to how it's going so far and what we have on the horizon. I won't go through each of these, but I think this is just meant to highlight how we feel we're just scratching the opportunity. Historically, as we've ramped our efforts, we've really been focused on the largest pools of capital. Of course, now we're trying to get to any investor in the world who's focused on alternatives, but this is where we started with. Even with that focus, there are still 40 of the top 100 global asset managers, or asset owners I should say, who do not have an Ares relationship. We are very focused, and we are expanding our solution set to really try and find that entry point with as many of these 40 groups as we can. With that said, with the 60 groups we do have relationships, nearly half are only in one Ares group. There's a lot of work, as we've been talking about, how can we continue to expand the relationship and introduce them to our other strategies. The other comment that I will make is we've made a significant investment in areas that we believe there's going to be outsized growth. We've been very active in the Asia Pacific, bringing on a world-class team with Ares SSG, a real credit market leader in the space. We've done these very strategic partnerships that we're very excited about. We feel we've really put the playbook in place to kind of really be a leader in Asia, both on the investment side as well with our relationships. We mentioned Black Creek and what we think that does. Aspida will be talked about later. We're very excited about that. We'll hear from Frank later today. We really feel that secondaries are at an inflection point with so much capital coming in to alternatives and the solutions that team has been providing for a long period of time. In closing, I'll just say we really feel we've put a special organization in place that is appropriately focused on creating solutions. We feel with our record fundraising results and tripling the size of our business since our IPO, we're showing a lot of success as an organization being so focused. With that said, there is still a tremendous opportunity to broaden and deepen our relationships. We couldn't be more excited of how well we are positioned today. Of course, it won't be a surprise to my group, I proposed a whole section to how wonderful our people are and how well connected we've been in the work from home environment. Thanks, Carl, for giving me this one bullet, but team know that you are thought about here. It's a real pleasure to now move into the investment groups. I think you'll see with the strong performance and these deep teams that all complement each other just how easy and enjoyable they make our jobs as their capital formation partners. With that, I'll hand it over to our Global Head of Credit, Kipp deVeer. Thank you very much. Good morning. I too am delighted to be here presenting to all of you, but it feels particularly rewarding, I guess, 17 years into my career at Ares. Welcome. I'll say it also feels a little unusual to be standing up here alone because we run the largest group and the largest investment team at the firm. We've got about 300 people managing what we're pretty convinced are leading businesses across credit. While we've got some representatives in the audience, I sure wish some of my 50 partners in the business could be up here to talk about all their accomplishments. Much of what we do these days at the senior level is about attracting and retaining great talent, and as we often say, making sure that we have the right people in the right seats, and we're convinced that we do. It's a real competitive advantage. The team's been together a long time. Most of us at the top of the house have been together for 20+ years investing and building businesses together. Now we've got four distinct businesses, $168 billion of AUM. It's liquid credit, European Direct Lending, U.S. Direct Lending, and alternative credit. I'll go into each of the businesses in more detail, but today we're invested in almost 3,000 companies. We have 200 funds to offer our investors, and we think the business is going to continue to grow. Look, each of the businesses has been admired. We've had accolades from the industry, which is nice. Flattery always works for us, but we are committed to continuing to build out what we think are absolutely leading platforms in very large addressable markets. Mike and Tony went into this. One of the things that our investors and analysts, I think, ask me most often, and I think others at the firm, are, "You guys have this great business. It's huge. You've been building it out for 15, 20 years. Where do you go from here? Is there room to run?" We obviously hit on some of this earlier in the presentation, I think, during Mike's section. The credit group today is playing in addressable markets that represent assets of north of $10 trillion. Right? While the business looks very large, it's demonstrated great growth over the last five years, and we think it's well-positioned to demonstrate great growth over the next 5- 10 years. It's for all the same reasons continuing, and frankly, getting more impactful that we've been able to generate this growth. It's been global bank retrenchment. It's been the growth of private equity. It's been the increased and growing acceptance of private capital solutions across all of the investing that we're doing. I think most importantly, it's been increasing investor interest. Right? A lot of our investors are frustrated by what they see elsewhere in terms of what they can invest in the fixed income markets. On the bottom, we've laid out a couple of points that have been critical as we market our funds to clients. Rates are low. Public markets are exceedingly volatile. Long-duration assets in the face of potential inflation and rising rates present concerns for investors. What do we bring? We bring assets that have generated returns 2x- 5x what you'll see in more traditional markets, and we've done it with leading performance and low loss rates. Obviously, there's issuer demand. Rates are low, transaction and M&A volume is high, and we're seeing great drivers from both the private equity channels and the corporates that we increasingly are going to on a direct basis. What have we done when we've thought about that investor demand? Well, obviously we've tried to go out and cater to what our investors are looking to do, right? Five, six years ago, we had a much more narrow product set. We had the BDC, which started 17 years ago and is now the largest publicly traded BDC out there. We were building up our European direct lending strategy. We had a commercial finance platform, but we increasingly found investors wanting to invest with us, but not necessarily having the product set for our investors to come in. Over time, probably the last five or six years, we've really, to Ryan's presentation, too, been thinking about deepening our distribution. We've been building commingled funds. We've been taking separate accounts in, and we're seeing a greater overlap of investors across all of these products, right? We think we're much more investable, much more accessible than we've ever been, and that's been a real focus of mine, and I know Mike and Mitch's and the rest of my partners as we built the series out. One of the things that was important to our business was five or six years ago, we were running a much more siloed set of products and investment teams, and we've really brought it all together in a material way in the last five or six years. We used to have the sub-strategies standing on their own. We've now put it together under one leadership team. We've really been building that collaboration that we think is such a competitive advantage for us in terms of idea generation, in terms of the due diligence that we're able to do, in terms of sourcing, markets and trading information, right? When you look at some of the points on the right, they're powerful when you can really use them together. We cover 900 private equity firms around the world, right? We play in corporate and asset-backed markets. We play in liquid markets. We source illiquid transactions. When we can put that all together and have the leadership team and credit, those 50 partners really working together, we really think that the scale and the breadth of that investing effort gives us huge competitive differentiation. We've seen it from our investors. We've seen more and more subscription from both existing and new investors in multiple funds, in multiple products in the last five years than we saw in the 10 years prior by huge multiples. I'm just going to table for a second and try to give you some basics on each of our business units for those who don't know us as well, and then I'll tell you a bit about where we think the group's going and where our investing and growth objectives are for the future. I start with liquid credit. I think Tony made this point earlier. Ares has always been a credit firm, right? Unlike some of the other alternatives players, where you may end up at Investor Days as well, this is a firm that was built over 20 years ago as a credit firm and continues to lead with its credit business. The first thing that we did is something that we continue to do well, which is invest in the liquid credit markets. We obviously do that through CLOs, through bank loan funds, commingled funds, and high yield, et c. Today, that business is about $36 billion of capital. They cover 1,000 companies. They cover 60 industries. For us, it really is the repository of all market and kind of industry information in the firm and continues just to be a great base for everything else that we've built alongside liquid credit over the years. The great news is they have top quartile investment performance through multiple market cycles, and that's allowed us to continue to grow. You'll see how we've managed against the default indices in the liquid credit markets. Significantly better loss ratios than you'll see in any index. We have benchmark outperformance in both businesses. As others have said today, what happens when you have good investment performance? Investors tend to give you more money. Investors stick with you, too. This business continues to be really a ballast for us, one where we think there's great growth going forward. Again, in a huge market, feels like a very large business, but frankly, relative to the addressable markets, lots of running room, I think, here in liquid credit. A lot of recent momentum as well. Near and dear to my heart, where I started back at the firm in 2004, was helping to build out what we think is today the leading, not going to say a leading, we think it is the leading direct lending business in the market. We've invested $120 billion of capital over the last 17 years between the U.S. and Europe, to near 0% loss rates. I think it's difficult to go out and find another organization that could show you a track record that's that well established and cycle tested. This is a business, again, that has been growing rapidly, and I think will continue growing rapidly for the foreseeable future. It's north of 150 direct origination and sourcing people in, I'd have to count them, but probably 15 offices today between the U.S. and Europe. We think there's more great things to come for the direct lending platform. The performance has been quite strong and it's been consistent across our funds. Our BDC Ares Capital Corporation, as Mike mentioned, has a 17-year track record, having generated a 13% return. Others don't have that to hang a shingle on, but as we built out all these other products, we've demonstrated funds that have consistently generated premium yields, and at a minimum, low single-digit returns for investors in leveraged strategies, 15%-20% returns, which obviously compare unbelievably well with lots of other options that you could find out there in the alternatives universe. I'll just pause here. We get the second question most often, or perhaps the 1A question most often. Isn't the direct lending business incredibly competitive? Right? Isn't it getting harder? We actually don't think it is. We actually think it's getting easier because of the competitive advantages that we've built and the scale that we have in the market, and frankly, the team that I referenced earlier. Typically what happens, particularly during downturns, and it's happened throughout this COVID period, is the large players get larger, they consolidate market share, and this is a market where clearly the winners are winning. Luckily, we're one of the winners. As you'll see in some of the call-out boxes below, the top five lenders, ourselves included, have a 2x growth rate versus the next 50. We have a 30% market share increase since 2017 in terms of the top five. The scale advantages, particularly in the downturn, have really presented themselves and created great momentum for us. The call-out boxes on the top, I guess our compliance people wouldn't let us put other firms' logos on here, so we just tried to lay out count. When we think about our global footprint in terms of team size, number of offices, etc, we really are in a position today that is unusual, right? Fortunate in a lot of ways. I'm not going to dwell on this too much because we touched on it earlier, but this slide will show you the evolution of our product strategy. This is more focused on bringing what we think we do well to as many investors as we can possibly bring it to that are interested in what we do. For a long time, even as recently as 2015, I said it before, we found investors saying, "We love the team. We love the asset class. We're increasingly scoping how to be in direct lending, how to be in alternative credit. We can only write a $25 million check. We can't have a $1 billion separate account like pension fund or sovereign XYZ. To Ryan's point, we've figured out ways to deepen the distribution, but it was on us to broaden the product set so that we could do that. Again, here it's been successful. The Senior Direct Lending strategy, the Junior Direct Lending strategy, certainly Ares Capital Europe, which just raised a monster fund this year, have shown the ability to bring larger and larger flagship funds with growing size each time we come back to market. Importantly, and I'll get to this a little bit later, they've shown the ability to deploy, right? Because you can't raise more capital if you're sitting on too much dry powder, right? Our investors are not paying us to be in cash. The key to these large origination teams is being able to support fundraising and continued deployment of the dry powder, which we're more than able to do today. The last place I'll spend some time just giving business overview is on what I'd say our smallest, and third business, latest to the party perhaps, but I actually think maybe our most exciting today. I'll get into a little bit about the investing and what this group does. Alternative credit for us is a non-corporate asset-oriented investing business. We're investing in pools of assets that generate contractual cash flows, and the great news for us, as one of the leaders in direct lending, we think it has a lot of complements to both what the direct lending assets look like, but also the evolution of the market. What's really driving this business has been the lack of a resumption of the securitization market that the global financial crisis really destroyed. A lot of the assets that alternative credit is targeting these days are things that for many, many years, prior to the GFC, lived on bank trading desks. Well, guess what? They don't anymore. The banks' businesses have changed. All the people that used to do that at the banks have left, and they're all showing up at places like Ares. We've taken a very aggressive recruiting approach here. We've raised capital, and we think we've done it, again, to a point Mike made earlier, to a purpose of building a very long-term business in what we think is a $4 trillion addressable market. They have made a lot of investments to date, but I'd say we're really just getting organized now and have an incredible platform for growth. $14.5 billion of AUM. I'm going to just flip forward here, from $3.1 billion a couple of years ago. We've seen great growth, but we think there's a lot more to come. I do want to give you a sense, because we've spent a tremendous amount of time with our investors doing missionary work on the assets and explaining this business to people, but it's a very flexible model, right? It makes, again, investments in assets that range from loans to leases, receivables, consumer finance assets, shipping, transportation, aircraft, any of the above, right? These are assets that, again, generate cash flows but aren't necessarily companies. The format of investing is incredibly flexible too. We can lend, we can be in the liquid markets, we can buy asset portfolios, and we frankly do it a little bit differently depending on how we're seeing the markets. I think one of the most interesting points that we've seen as this has developed is a huge advantage for us is being large. We're out ahead of people. We have a real first-mover advantage. The tougher deals to get done in these markets are actually the $200+ million deals. The smaller ones aren't so difficult. Because we're so far out in front of this in terms of team, assets, and frankly, investor education, we think we've got a lot of running room in the alternative credit business, and we're very excited about where we go from here. I was encouraged by Jarrod and Carl and others to at least stop talking about investing for a few minutes and think about the financial results. The good news is our group's delivered some great financial results. I made this point earlier, the key to it is deployment. We see lots of our competition collecting assets, not deploying them well, sitting on dry powder, which is not what our investors want. Obviously, for shareholders, not in turn generating management fees for the company. I think across all of our businesses, we've got a great track record that continues today of taking on investor capital, deploying it well with strong returns, but also being smart and sitting around on sufficient dry powder so that when markets dislocate the way that they had over the last 12 months, we're sitting there with dry powder to go out and drive new investing activities at the time where it's most interesting. As we've continued to hire, we've continued to actually show more productivity of our people. We've seen 100% growth in AUM per investment professional over the last six years. We've driven margins in the business up every year for the last five years. We balance that with our investors' constant desire to say, "We're giving you more capital. Are you investing in the team? Are you bringing more people in that can drive these unique, directly originated assets that we're coming to you seeking? The good news is, we've been able to do both, right? We've been onboarding loads of talent. We've been raising loads of capital. All the while, we've been driving improving financial results across the group. I don't want to harp on it. There have been some real talks earlier before I came up about growth. We think our business can continue to grow at the current rate or better for the foreseeable future. We really don't feel that we have any limits in any of the businesses. The call-out points on the bottom really summarize it. There is, as everybody knows, a rabid desire for income across the world with rates as low as they are. With strong credit performance, we've been able to generate premium yields in alternative credit markets broadly that we know everybody's going to continue to look for in the foreseeable future. To the middle and right boxes, institutions are looking for it. They've changed the way that they allocate. Whether it's insurance, pension, sovereign, they're all moving their fixed income allocations to be more oriented to private illiquid credit. Private equity, some of that is coming into our markets from institutions. We know that there's long investor demand there. The last point where I do think we're making quite a lot of progress as a firm, and I do think that the Black Creek acquisition will be helpful, particularly for us in the credit business, is the fact that we are not deep in the retail channels today, despite our large BDC, which obviously has a tremendous amount of retail interest. We have the ability to bring all of this product, all of these exciting risk-reward situations across the credit business to retail investors that we simply have not touched yet. That is an unbelievable growth area for us, and one that we plan to leverage very diligently over the next couple of years. That'll finish my presentation. I think next up are my partners and friends, Scott Graves and Matt Cwiertnia from the private equity team. Nice job, man. Question. Good morning. My name is Scott Graves. This is my partner, Matt Cwiertnia, and we are here to talk to you about the private equity business. In the private equity business, our main focus is to run a great culture across a collaborative team focused on net returns. As a by-product of those first two things, our business naturally grows. We're a $31 billion business across three very complementary products with one team servicing those three products. We have our Corporate Opportunities business, which Matt's going to walk you through. That's a for-control traditional private equity and for control and influence distress business. We have a Special Opportunities business, which is run very similarly to our for-control private equity businesses, but focuses on debt and non-control equity. We have our Infrastructure and Power business, self-explanatory. Our business is organized across four industry specializations and three disciplines. Our Infrastructure and Power business, our Special Opportunities business, and we have a portfolio management business that helps us improve companies, diligence companies, and really add value to management teams, corporate sponsors, and public boards. We believe that in the private equity business, we have tremendous advantages. We have sourcing advantages across the platform. You've heard a lot about that today. We are very excited about that. We have tremendous underwriting advantages. There's over 3,100 portfolio companies here at Ares that we can work with different management teams, corporate boards, advisors, and the overall folks involved with all of those investments to make better investment decisions, source broader and more interesting investment opportunities, and obviously get market insights. Across 3,100 portfolio companies, you get real market information on how companies are doing on a daily, weekly, and monthly basis to draw real investment thesis conclusions prior to public information being available. Industries, industry sub-sectors, where is the wind at your face? Where is the wind coming from behind where potentially you can achieve better opportunities? Our pillars of differentiation, which we leverage the power of the platform. I've just gone through that. Very clear, very deep in our culture. We operate as one integrated team across those three products. We're investing in both traditional private equity and distressed markets, we can really deploy capital on a more all-weather basis. That enables us to grow our business more consistently and provide a better, broader set of solutions to companies. Over the last 20 years, we think we've proven ourselves as somebody who companies and management teams want to work with. We try and be that partner of choice. I think one of the main reasons why companies choose us is because we are a catalyst for good. Embedded in our culture, we really try and make companies better every day with our capital. Our capital is one thing, but being a good partner, providing good advice, and helping companies to and through difficult times as well as extending opportunities is core to who we are. Lastly, our business is built to scale. We can grow with the resources we have, and we are very excited about what's coming in our future. We're lucky that we work in a very attractive private equity market. This is a $5 trillion global market. This is a market where growth is outpacing the public markets by 4x since 2000. We're also poised for significant growth in the future with 80% of limited partners planning to increase their allocations to this asset class. The private markets, as Kipp referenced, are growing 13% a year over the past 20 years, and we think that growth will likely remain robust in this asset class as investors hunt for yield and look for alternatives. This is the range of products and types of investing we do in the private equity group. It's broad. It's broad by intention. We want to be flexible. We want to find that capital solution that sponsors companies and management teams ideally want to optimize where they want to go. That's been one of our real strengths. We have a lot of experience structuring creative and complex transactions. When you have a complexity in your company or in your capital structure or in whatever strategic corporate challenge you may be facing, that creates inefficiencies. Inefficiencies create great risk-reward if you can understand them appropriately, and we really have a deep expertise there. Finally, at the bottom of the page, we're very pleased that we've gotten numerous accolades referencing our achievements in the business. However, again, what we're most excited about is what's to come. I'll hand it over to Matt. Great. Thanks, Scott. For us, our formula within private equity for generating that attractive performance really comes down to three enablers that really generate for us five core competitive advantages from our standpoint. The enablers are what we've learned over a long period of time that in service businesses, what differentiates great service businesses, in our opinion, is a combination of what we call people, process, and culture. For us, what that means is starting with people. It always starts with people. I think Ryan referenced this earlier. We find those team-oriented players, those people with a growth mindset, to talk about something that Jarrod talked about at the beginning. When we find those people, putting them on our team, we think we have 100+ of those colleagues in private equity. When I also say people, I also talk about all the people at Ares, the 700 investment professionals around the world who are waking up every day looking for deals. When you build the firm with collaboration, that culture of collaboration, the Private Equity Group benefits from, wait for it, the power of the platform. You've heard it one or two so far today. Where we get a ton of flow, we get a ton of leads. We get a benefit of a ton of relationships, 900 sponsors that Kipp talked about. For us, that is what we think about as people. We have a larger team working for us every day than we think many private equity managers do. Second is process. We're known as very diligent. We're known as analytical, and we're known as creative. This firm has a credit DNA to it, and our Private Equity Group has a credit DNA to it. We're very process-driven. If you want to achieve the consistency, reliability, and predictability of returns, we believe that comes from great process, great underwriting. We're very process-driven in how we approach the world and who we bring in, and how we then mentor and teach our junior professionals of what we think creates great risk-reward. Finally, culture. I've been here now at the firm just over 16 years. Culture for us, I think Tony said at the beginning, culture is critical. We use terminology which is culture can actually be causation for success. Some people think of culture as being a result of lots of things, and that's what creates culture. For us, no, it's actually the opposite. We invest in our culture so that that can create the success going forward. For us, that's teamwork, that's collaboration, that's transparency, that's accountability. That's core to who we are as a private equity group overall. Finally, on the right-hand side, we talk a lot about our competitive advantages and what makes us special. We do believe this hybrid nature of having both distressed and traditional on the same team working together is unusual. Most firms are siloed, and we actually work together as one team. That is unusual, and it provides us and it provides clients with great alternatives because we can think up and down the capital structure. We can think in all cycles. We can figure out what's best risk-reward based on what's going on in the world. For us, we think that's a core competitive advantage. The sourcing effort, we think the top of our funnel gets more deals than many private equity firms because of the power of our platform, bringing in a lot of leads, a lot of relationships, a lot of advantages. Our underwriting is incredibly rigorous. It is that credit DNA that we live every day. We are a partner of choice, and we'll talk a little bit more about why, and we create these creative capital structures. Finally, this last one I think is growing in importance. We're really good at growing companies from our perspective, and we have the track record to demonstrate that. More and more companies are seeking us out because they've seen what we've done with a company over here or a market leader over there, and they say, "I want to be part of that. I want your experience at the table, in the boardroom. For us, overall, we always look when we are investing for market share takers, for companies that are generating alpha. Mike talked about this with Ares overall as a business. We believe we're taking share in alternatives. We always look for that because that means the company is doing something special, we dig in. What are they doing special to take share, can they do that on a repeatable basis? For us, in our Private Equity Group, we're quite proud of this. We've grown our AUM at about a 22% rate since 2003 versus a private equity market of 14%. We have taken share. We think we have demonstrated that we have a special sauce, if we can continue to generate attractive net, we think we will continue to take share in the $5 trillion market that Scott referenced. What have we been doing? We've been building our team and our process to be able to scale deployment. Kipp talked about deployment as being so incredibly important in the credit business, no different in the private equity business. Over the last few years, we've really scaled our deployment into about $4 billion-$5 billion a year. You can see, and sometimes that may be more in an ACOF product or an ASOF product, a little bit in infrastructure and power, but we're in that kind of $4 billion or $5 billion range. If we can keep up that kind of momentum and generate attractive net, we're really well-positioned to be able to grow our business in the future. Let's take maybe five minutes, and we're going to go through the three main fund families in our private equity group. Corporate Opportunities Funds, Special Opportunities Funds, Corporate Infrastructure, and Power. The Corporate Opportunities Fund, or what we refer to as a COF, is a middle market and upper middle market North America and Europe fund. It's really focused on control situations or shared control. Major influence. We are driving a lot of times the businesses and partnering with great management teams to grow these businesses over an extended period of time. The two parts on the bottom there in the five buckets, the Systematic Value Creation Framework and the Great and Growing Companies, are really what defines this product. We try and find what we always call franchise businesses, just better businesses you are proud to own. We think we have done that over the course of the last 18 years, and that's what you should expect in this fund family. It does mix both traditional and distressed within this fund, which is unique. There are not many funds out there who have that mandate and that flexibility, which we think allows us to deploy more consistently and to have great relative value identification so that we can look at what's going on in the world and find the best risk-reward. Proud of the track record that's at the bottom. We focus on four core industries in this product, healthcare services, tech, consumer retail, industrials, all north of 20% gross rates of return. In the light blue bar, in those four core industries, a 25% gross, 2.4x since inception, something that we're quite proud of and why we've been able to scale this product over the last 18 years. If you're really trying to find what the ACOF product is great at, this is a slide to me of what we're great at. In the middle, there are a lot of logos of great companies, fantastic market leaders we have been proud to own or partner with. What we do is when we see these great companies, we do what's on the left. We identify these systems for growth. We identify the multiple ways to win. We identify exactly what we're going to do that's in our control to be able to try and create predictable returns. From that, we're really driving top-line growth. Our private equity business is not a huge cost-out type of business and carve-outs and lots of things. We're partnering with great companies, and we're driving top-line growth over an extended period of time. We've measured about three-quarters of our returns have come from this EBITDA growth. It's not us just trying to do multiple expansion or buy great value or rip out, again, cost, trying to generate margin improvement in that sense. We're really driving top-line and EBITDA growth in order to generate returns in this product. For us, when we differentiate ourselves, that middle market focus is hugely differentiating. Our credit business is hugely helpful as it relates to our Private Equity Business because the knowledge of what's going on in the middle market, the relationships that are in the middle market, it's super helpful for us as we invest in private equity. Our focus on these industries now over the last 18 years, we're really good. We believe we're really good in these four industries. We really focus in those sectors. We have this traditional and distressed, allows us flexibility, allows us to be unique when creating solutions that then give us these advantages from the platform. We have measured a full 85% of our deal flow. What ultimately gets done in the ACOF fund family has had an advantage from the platform, relationship, sourcing, some kind of advantage. That's the kind of power we're getting from a lot of our colleagues that's benefiting us in the fund family and obviously then our investors. Finally, these last two. We are considered a partner of choice. We have more and more teams who are coming to us saying, "We really love what you did with Aspen Dental. We really love what you did with NVA. We really love what you did with Insight Global. Can you teach us that? Can you partner with us? Can you be our financial partner and do what you did there?" So we're getting a lot of things that are just bilateral deals, where it doesn't even go into a process because they want Ares to help them with their growth efforts. We are very optimistic about where ACOF sits today and our ability to scale it, which I'll come back to probably at the end. Scott, you want to cover ASOF? Thanks, Matt. I'm going to walk you through ASOF and our Power and Infrastructure Business. As a quick reminder, ASOF is our non-control debt product that invests in minority equity as well. This is an all-weather product. We invest in both stressed, distressed, and over-levered companies, be it rescue, private market, or public market. We also invest in healthy companies that need a higher risk, higher reward direct lender, companies that may be able to take a higher cost of capital to achieve their objectives. That has proven us able to invest in all parts of the cycle, which I'll walk you through. Like ACOF, like the rest of our business, we are a middle market business. We think that provides us tremendous competitive advantage and synergy across the platform. By providing both debt and equity, we can be very flexible. We can listen to a company's needs. We can help them deliver. We can help them create cash flow. We can help them increase their capital expenditures to make positive return on invested capital-based decisions, accelerate growth, accelerate earnings, and improve. We invest in both public and private markets. This is another benefit which makes us more all-weather. In periods like COVID when we saw the public markets trading down where we could get that margin of safety by buying public debt at a discount, we did that aggressively. In times like now where the public markets are not as interesting, we are sourcing a tremendous number of very interesting private transactions, working with companies to increase their growth, improve their margins, buy a competitor, take advantage of what's happening today as we recover from COVID. Our approach in the ASOF product is exactly the same as the approach we take in our for-control Private Equity business. We are doing the same private diligence, we are doing the same control of documents, that enables us to make better decisions, and avoid some of the pitfalls that many of the public documents possess today. Our performance has been very strong. We started this strategy in 2016 and 2017. We had our first Virgin Fund with a 2019 vintage. We've deployed $4.1 billion since 2019, returns have been very high, 68% gross and 52% net. We're very proud of that. We think the engine we're building is differentiated. We think this bridge between a best-in-class direct lending business and a best-in-class private equity business is a very attractive place to live, and our deployment, our returns, our sourcing are proving that out. Here you can see how we've deployed capital over a cycle. We think that our strategy is really verified by the scope and range of opportunities we've been able to source through this COVID credit cycle that we've been through over the past two years. Prior to the pandemic, we'd invested in six private companies, mostly debt, some equity. Very successful, 15%-20% of the fund invested prior to the pandemic. In the pandemic, we saw prices trade down, we saw the public markets get really interesting. We did a lot of both public and private investing in the pandemic to help companies get through those difficult times. As we emerge from the pandemic, one of the things I'm most proud of is we saw a real V-shaped recovery in prices without the immediate V-shaped recovery in earnings and cash flows, which was a significant sell signal to us. We recycled much of that public exposure, which we had purchased at a discount at relatively high IRR, but perhaps lower MIC than we had targeted, multiple of invested capital, and we were able to recycle and compound that cost and profit into longer duration private solutions to achieve better returns for our investors. Finally, in the fourth phase, a more benign environment, the first two quarters of 2021, we are back to more of a private cadence. We have rotated the entirety of our portfolio from the majority public to the majority private, and that is the strength of our all-weather model. Again, we've talked about all weather. This is going to enable us to grow and help companies and help sponsors consistently. Our public to private lens, I think, uniquely positions us to understand value. Because we're integrated with our for-control Private Equity business, we're constantly comparing buying a company outright and what those risks and opportunities and returns are versus providing a debt or a debt and equity non-control solution. That relative value lens makes us better investors. Our private deal flow is exceptional. If there was one strength of this business, that is certainly it. It is due to the platform, it is due to the fantastic business that we built on the credit side, it is due to our integration with these four industry groups, inside the private equity group, which helps us and makes us stronger. Again, we're middle market focused. We're trying to be the capital partner of choice, Ares has really enabled us to build a best-in-class team. I couldn't be more proud of the people that I work with every day. We always have a rule, you try and hire people better than you are, certainly, I think Matt and I have done a good job of that. Let's move on to our Power and Infrastructure Business. Very exciting business. This is a group that's invested $9 billion since its inception, deep and long track record. More interesting, $3 billion of that $9 billion has been in climate infrastructure. This is a strategic shift for the platform. This is seeing an opportunity and moving toward it. You can really see the benefits of finding that shift in their overall returns. They've achieved a 57% IRR on this $3 billion of climate infrastructure, and an MIC, a multiple of invested capital, of 1.8x. Very attractive, very interesting growth area. What are the drivers of how they've achieved those returns? Again, we try and be flexible, we try and be value add. We try and enhance structuring to late-stage development and asset optimization. We focus on the contract level of these assets, where we think we can really create great risk mitigants and optimize consistency of returns. We're always trying to align interests with our partners. We do that upfront. We try and create upside sharing and incentives, and we try and really get involved in that decision-making before the assets start construction. Ultimately, we are all aligned and moving together. Finally, very important, ESG is obviously a very critical element of what we do here. This is a lens we put on this business that we think not only produces great returns for our investors, but also improves the world around us. Again, another very exciting sector to be involved with. This is an area that has had outpaced growth for all other infrastructure sectors over the past five years. That's in both total volume and in the number of deals. There's been seven times the number of transactions in climate infrastructure than the next largest infrastructure sector in the industry. If you look forward over the next 10 years, wind, solar, energy storage, they're all expected to nearly double market share, increasing from 17% in 2020 to 32% in 2030 in total operating capacity. We expect nearly $30 trillion of opportunity over the next 30 years, driven predominantly by renewable power opportunities. This is a sector, as I indicated earlier, where the wind is clearly at our back. We think that not only are we going to be able to create some great returns for our investors, help companies develop these assets to make our world greener and an overall more efficient place, but ultimately reward our limited partners with great returns. Bringing it all back together, this is a team that has been investing in infrastructure for a long time. They have deep experience across cycles. They are now applying that to climate infrastructure, really leveraging those lessons learned and all that experience to make great decisions. We've worked very hard to build out local sourcing. That is being on the ground and having partners in these local geographies, very, very important to finding differentiated opportunities and building trust. Just like our other businesses, we are value-add, we are flexible. We think that really differentiates us from core and core-plus infrastructure platforms. It reduces competition, it reduces risk, enhances return. We have a demonstrated core competency in complex assets. That is a core competency across the entirety of our Private Equity Group. Again, when you can get underneath complexity, understand it, you can take advantage of inefficiency to create better risk-reward. We have a dedicated investment team, and we have a dedicated asset management team, and we think that's really important in optimizing these assets over time. As a strategy and as a Private Equity Group, we are all benefiting from Ares scale, Ares relationships, and the tremendous information sharing that happens every day. With that, I'll hand it back to Matt to close. Great. Tony started the entire presentation with the first principle, assets follow performance. We're incredibly proud of the performance we've had, and here are metrics over the last six years where we've been able to grow our AUM by about 1/3, and that followed great performance. Drive our FRE up 20% in that period of time followed performance. Scott Graves alluded to this upfront, what we're really excited about is the future of our private equity business. Broadly, the firm is trying to double AUM and talk about a $500 billion target here in 2025. We want to take our business and do something similar. We want to take our business and take $31 billion and try to double that over the next five years. From that, it comes from two key things. One is we have plenty of room to scale our flagship products. We have plenty of room to go up in size with the Corporate Opportunities Fund, the Special Opportunities Fund, and as Scott just hit, the Climate Fund, both with market opportunity and that ability to take share. To the extent we get those consistent and attractive net returns, we think we have plenty of room to scale in core products. We have lots of things that are in the lab, so to speak, of with the core performance, where can we also increase our business? Many of the things we've done successfully throughout the firm, the checkered presentation slide that Mike used in terms of the playbook, how do we use that in these areas? How do we do what we've done very successfully, I believe, in the Special Opportunities Fund and recreate that now in a growth fund, let's say, in a sector-specific fund, in a geographic fund? There are lots of things underway. Landmark will talk about what's going on in the GP-led secondaries, of which we've already done one in our Private Equity Group. That could be another area of growth for us. I think you'll see more legs to this stool as we continue to try to grow our business. Again, though, very focused on assets follow performance, so making sure we have that core performance. With that, Scott and I are incredibly grateful for the opportunity to present today. Thank you. We will take a 10-minute break for those who are here in the room, and when we come back, we're going to talk about our real estate business with our partner, David Roth. Thank you. You got it, man. Good morning. Hope everybody had a good break. Thank you for coming, and thank you for giving me the opportunity to present the Ares Real Estate Group. My name is David Roth. I am the head of the U.S. equity business in real estate, and excited to present to you what we're up to, how we've done in the past, and how we'll do in the future. I'll give you the punchline up front, which is that we are poised for terrific growth going forward. You'll see from our performance and our strategy, we've had great growth in the past, and we're positioned to grow the business to double the size of the AUM and significantly higher levels of FRE over the next five years. Now, we'll spend a few minutes talking about what we do and how we plan to achieve that, what are the main drivers of growth. Who are we? Ares Real Estate is a leading global real estate platform. We have $33.4 billion of AUM, 195 professionals in 17 offices. We have a complementary suite of products across the real estate spectrum: core plus, value add, debt, and opportunistic, and across the capital structure from debt to equity. We have scale. We have the reputation and track record that distinguishes us in the markets in which we operate, which today are the U.S. and Europe. We have significant growth opportunities that we'll talk about today, and these have only been enhanced by the recent acquisition that you probably have heard about earlier today and probably read about, where we acquired a company called Black Creek. This transaction closed on July 1st, we're in the early days of it. It really has provided tremendous opportunities for us. It's provided scale. It's provided core plus funds, which were our critical piece for what we're going to be doing going forward. Provided vertical integration in the industrial sector, which is probably our highest conviction sector across our funds. Importantly, it provided us a leading broker-dealer, which will enable us to access capital from retail distribution channels, not just for real estate, but for other products across Ares. All of our capabilities that we'll talk about today have resulted in strong performance throughout market cycles. As everybody today that you've heard has said and will continue to say, performance drives capital formation. It's the reason we've grown. It's the reason we'll continue to grow. Let me put the business into context. The real estate industry is an enormous industry. I think it might, if I remember, was the largest of the addressable markets that others talked about earlier. $30 trillion, according to KBW. The charts on the right show transaction activity by sector in 2020. You'll notice a lot of activity in multifamily and industrial. That is a heavy focus of what we've done. We'll talk about why that is the case shortly. The real estate group, like other successful businesses at Ares, benefits from direct origination. We believe we have one of the largest footprints of any investor of our type. These footprints, 17 offices across the U.S. and Europe, provide us with market knowledge, deep experience in assets and product types and geographies, knowledge of our counterparties, owners, developers, operators, folks who control transactions, intermediaries. All of this is critically important. The scale and extensive footprint allow us to identify best-in-class market opportunities and also allow us to enhance diversity for our investor base by allowing us to really invest at the local sub-market level. We have over 420 investments across the platform. It's worth mentioning that the Black Creek transaction is significantly increasing our boots on the ground, as we call it. We inherited through that acquisition about 125 professionals and six additional offices. This footprint is incredibly important for sourcing, diligence, and management of all of our investments. To capture the benefits of scale, we offer a full suite of products across the risk spectrum, from debt to core-plus equity, value-add, and opportunistic. Having all of these types of asset classes, if you will, within real estate is incredibly important for us. When we go into the marketplace and we meet with owners of real estate or developers or counterparties, intermediaries, it's critical that we have what we think of as sort of all the arrows in the quiver. We have the ability to provide whatever the solution is that the counterparty might need. That makes us increasingly relevant in all of our markets and increasingly, the counterparty of choice to make the first phone call to and hopefully the last phone call to when somebody is trying to sell an asset or raise money. We also have a diverse pool of capital to meet the needs of our growing institutional and retail investor base. We have core open-ended institutional money, closed-end vehicles, now through Black Creek, two non-traded REITs, and public vehicles. The advantages that we bring have driven really leading investment performance. This is the most important page of the deck. Across risk-return profiles, strategies, and geographies, we've had leading performance. We'll talk a little bit about how we've almost doubled our growth in AUM in the last five years. That is really due to this. It's due to performance over cycles and meeting or exceeding the return criteria of our funds. This page highlights our most recent funds, but there are many years of strong performance in predecessor vehicles. One of the benefits of our large team and tenured leadership of 20 partners with 25 years of average experience is the ability to use all of the lessons that we've all learned through many cycles. This is, I think, what really enabled us to achieve really strong performance through a particularly tough period over the last 18 months. We had positioned going into COVID, our portfolio, in a way that happened to work out quite well. We didn't know COVID was coming, but what we did know was that we were in the 10th year of a long-dated economic cycle. For several years we positioned the portfolio to deal with that part of the cycle. What did that mean? That meant that we moved aggressively into the more defensive sectors of multifamily and industrial, and we moved aggressively to exit assets in the more difficult or cyclically sensitive sectors of hospitality and retail. As you can see, going into COVID, we only had 5% of our total assets in hospitality and retail, and that positioned us to outperform and really go on offense over the last 18 months. Obviously the landscape has evolved pretty dramatically since COVID. We are focused on industries where people gather. Obviously the pandemic has impacted those sectors. Behavioral shifts have had profound impacts on the sectors as well as geographies in which we invest. This page talks a little bit about our current views. You'll see on the left by sector how we're thinking about the industries, and on the right, a number of key drivers that drive how we think about things. To start, penetration of e-commerce. We saw this over the last 20 years. We were seeing an acceleration of e-commerce taking more and more share from brick-and-mortar retailers. Really in the last 18 months, this massively accelerated. That has had a tremendous impact on industrial and retail real estate. We've been large owners over long periods of time of industrial assets. Demand has gone up dramatically for all things industrial, warehouses, distribution centers, light industrial. We see that continuing. Obviously, we'll talk about Black Creek. It was a major incremental sort of growth into the industrial sector. We think that that sector will have legs for some time to come. De-densification. As the pandemic has hit, we've seen a growing desire for people to live in certain cities, oftentimes in the Sun Belt, less dense areas. This has helped certain markets, Southeast, Southwest. We've had a presence in Atlanta for a very long time. That has allowed us to capitalize on what's going on in those markets. It's also really driven demand for single family to rent. We took a large single family rent platform private in January called Front Yard. We think this trend will continue. The next two in the middle are related to office. Office is probably the most complicated product for investors like us to look at today, and that's because there's a bit of a push and pull going on between remote work on the one hand, which is limiting the need for office space, but office de-densification, which is increasing the need. We are cautious about office. We are looking to invest selectively, and in particular, through our debt business, where we feel we can invest in assets and lend money to assets at really attractive attachment points and choose the markets and the assets that we think are best poised for growth. The next point is about hospitality, leisure, and business travel. We do think hospitality is going to recover with leisure leading the way. That's a sector that we've had a lot of expertise and a lot of experience in over a long period of time. We will continue to look at opportunities in that sector. The last bullet point, increased capital flows to the adjacencies to our existing residential, office, industrial, and other businesses. These include things like single-family to rent, life science, medical office buildings, student housing, cold storage, data centers. These are all becoming increasingly institutionalized, and we're spending lots of time looking at growing into them. On the left, going back to that sort of green and yellow dots here. It's just an indication of kind of the areas that we think are best supported by the supply and demand fundamentals. Areas such as industrial, multifamily. We're leaning into these sectors. Single-family to rent, some of the adjacencies, and in many cases, we're developing into those sectors. The other sectors, such as office and retail, where we're going to be highly selective and we're going to look for low basis. How have we performed for the firm? I'm pleased we've had significant growth, both organically and through acquisition over the last 5+ years. Strong deployment without sacrificing performance, we believe, has compelled our investors to keep investing. We've had a 24% CAGR in the last 5+ years in both total funds raised and annual raises, and have really close to doubled our AUM through organic growth. We have an increasing base of new investors and an increasing share of wallet from our legacy investors. There's the Black Creek acquisition. Again, we'll talk more about this shortly, this was a $14 billion asset under management company. A large portion of that capital is in perpetual growth vehicles. This acquisition, which we'll talk about, adds products to our suite, additional fundraising channels that will support accelerated future growth, and tremendous synergies with our overall business. This slide speaks to the continuing support of our investor base across value add and opportunistic vehicles, which were the pre-Black Creek vehicles. In the U.S. and Europe, we've succeeded in growing our most recent funds on average 70%. You also see, on the left side of the page, the first fund raise in our current funds that we're investing, and you'll notice that there's a significant increase in that first close. We think that will translate, again, to larger fund sizes when we have our final close over the next year in those funds. We'll continue to deliberately scale the size of our funds organically in a measured way that mitigates the risk of underperformance. As you can see, with increasing fund size and product diversification has come increased fee-related earnings and business level margin expansion. We believe there are further opportunities to scale the business and enhance margins, and that will continue with the addition of Black Creek, which would have increased management and other fees by 60% for the first half of 2021, and therefore is not on the page yet. I want to talk about three other macro drivers and trends that shaped our views of opportunities in the sector for fundraising and investment and really drove the Black Creek acquisition. First, allocation to core/core-plus. This is a massive portion of the overall real estate investment world, and growing quite fast as investors seek yield. Second, retail investors. You'll see this being a growing part of our business, largely from the Black Creek acquisition. Retail investors are massively underweight real estate, less than 0.5% of their holdings, and frankly, underweight alternatives at 6%. The last thing is the tailwinds in industrial, which we've mentioned already. Industrial is poised for certainly short, intermediate, and likely long-term significant growth. All of that led to us making the acquisition of Black Creek, which we're thrilled about. Thrilled about how our two firms will come together. These were businesses that were massively complementary. If you had a white piece of paper and said, "What do we need in our real estate business?" You would have come up with Black Creek. The acquisition, we think, is going to provide tremendous growth opportunities. We have the ability to leverage relationships across the platform, add products over time to the broker-dealer network and retail distribution channel. We have a larger team across the country, that's the boots on the ground, where we can lever their relationships and market knowledge. We have vertical integration in the industrial space, and we have the ability to bring Ares resources to bear to help with all of the products and operations of Black Creek. The transaction massively deepens our industrial capabilities, a sector that we think has got terrific legs, and transforms our retail distribution capabilities across the firm. Retail distribution is key for our group going forward, and for the larger Ares platform. Black Creek had one of the largest distribution networks in the U.S., and now, of course, we do. The non-traded REIT investment sector has grown significantly as investors search for yield, but the share of that has not been borne by everybody. It's really been the top three firms, top three platforms that have taken 85%. Black Creek is one of those top firms, now we are. Combined with our strong brokerage relationships and broad product capabilities, we think we can offer real estate and other products through this platform that'll really add a lot of growth to Ares overall. We're excited about our growth prospects. As we said, we think we have the ability to double our size over the next five years with many embedded drivers of future growth. Building on the strong performance that we've had, we expect continued organic growth in the size of our successor funds. We hope to create and build adjacent strategies and strategies in new markets. We're talking all the time, for instance, with our friends at SSG about expansion to Asia. We hope to bring other perpetual capital vehicles to the market. Last, we will broaden our investor base over time to new institutional investors and retail investors throughout the world. In conclusion, we believe the Real Estate Group is extremely well-positioned for strong and continued growth. As we said, we think we'll double our AUM over the next five years and significantly grow FRE margin, and therefore more than double FRE over the next five years. Thanks for giving me the opportunity to talk about it, really excited about it, and look forward to talking to you all in the future. Now I'm going to welcome Frank Borges, my Partner and the Co-Head of our new Secondaries business. Thank you, David, for that introduction, good morning to all of you in the room. Hello, and good morning for those of you who are on virtually. I know that we all yearn for some semblance of normalcy to return, and it will. I have the distinct privilege this morning to speak to you about Ares' newest vertical, Secondary Solutions. The Landmark acquisition places Ares very much into the leadership position of a very fast-growing secondary market. We've known Ares for quite some time. We've known some of the people. We're familiar with its collaborative culture and its record of driving returns. When we were looking for a partner, we had a variety of suitors. There were many interested parties. Our decision was not economic. Our decision was not economic. As you all know Mike, he drives a very hard bargain. Our decision, culture won out. Culture won. We were very impressed with the similarity of our culture. The fact that both of our cultures believed in people, believed in collaboration, but importantly, doing the absolute right thing for our investors, doing the right thing for public shareholders, and doing the right thing for people. It was an easy choice for us. We very much are excited about the opportunity going forward, and in a very few short months, we have already begun to experience the awesome power of the platform. We could not be more excited about the expected growth and the opportunity ahead. Landmark has about $20 billion in AUM and is one of the most experienced secondary investors. That's all we do, secondaries. And over the next several minutes, I will outline the significant growth that's in front of us. Importantly, I want you to remember this, the Secondary Solutions business is at an inflection point with rapid growth occurring. We, as part of Ares, look forward to capturing that growth and accelerating the overall growth for the firm. Landmark has been a pioneer in Secondary Solutions for almost 30 years. We do that across three asset classes with very dedicated, discrete teams who focus on, number one, our first, was private equity. We started as a venture firm, in the late 1980s we were looking to raise a successor fund. We came across a very large investor who had been an investor with us. They were not interested in investing in our successor funds. This was the late 1980s.com. They said, "Thanks, but no thanks." On the way back to the office, my partner said to themselves, "Well, hell, if they're not buyers, perhaps they're sellers." That, my friends, was a very much of a novel thought back then. We came back, organized, went back to them and said, "We'll buy it." Today, we are in the process of final deployment of our 16th private equity secondary vehicle. There's a theme that you're going to feel as I go through the next one. In 1996, we were raising our fifth private equity secondary vehicle. We went to an investor who had been invested in that vehicle. That investor had no desire to talk to us about private equity and kept complaining about their real estate portfolio. In fact, what they wanted to do was to liquidate that and redeploy that capital into REITs. We thought about it. We went back to our office and said, "Same dynamics, same motivation. There's a business here." We organized a team, and we did that, interestingly enough, by not simply rebadging private equity investment professionals who may have bought a house or two and now they're real estate experts. What we did, we went out and we hired folks who had structured real estate, underwritten real estate, financed real estate, and today we are market leader in real estate secondaries and we're in the process of the final deployment of our eighth real estate vehicle. In 2015, this theme keeps coming. In 2015, we had two investors, large investor who had been in our other vehicles, come to us and said, "Look, we're interested in doing infrastructure. Do you ever see it? Do you ever see that stuff?" My response was, "Absolutely we do," because infrastructure real assets ends up residing either in a private equity portfolio or they're in a special opportunity portfolio, or they're in a private equity or real estate portfolio. The response was, "Yes, we do see them, but these are valuable assets that fall to the factory floor." These two investors said, "Well, don't let it fall to the factory floor anymore." Two separate accounts, $500 million. It put us in the infrastructure business. We have just completed recently the final close of a commingled infrastructure vehicle that's just shy of $1 billion. Common theme is that being a trusted advisor, being a thought partner generates product and it generates opportunity. We have never taken the view that with product development, that it's build it and they will come. It's really about being close enough to your investors so they share with you what it is challenging, and then using that as the opportunity. Who invests in secondaries and why? Pretty simple. Secondaries offers very distinctive advantage to the investor. Attractive risk-adjusted returns. You're buying into seasoned portfolios. You know exactly what you're buying. You know when you make a primary investment, the GP says, "Look, I'm raising Fund V. I'm going to do in V what I did in IV, and I've got a good track record." You sign up and deploy IV. When we get Fund V, which is three to five years down the road, Fund V is in the ground. We're not simply relying on the representation. It's in the ground, and we have the ability to underwrite it with the benefit of today's information. It's probably one of the few investment strategies where you have full command of the rear view mirror. Seasoned assets means reduction or elimination of J-curve. Means a lot for lots of investors. Importantly, for many investors, the secondary product provides them exposure to previous strategies, managers, and vintage years they otherwise would not have access to. Who sells and why do they sell? Sellers sell usually for reasons. There are lots of reasons. They sell for reasons that usually are unrelated to the quality of the underlying asset. They sell because something's happening to them. For LPs, it's portfolio management. A new chief investment officer comes in, looks at the portfolio and says, "You know something, if I stick with this portfolio, six months from now, it's mine. It's on my watch. Let me sell it in the other person's watch. Chief Investment Officer looks and says, "You know, these are non-core assets. I need to sell them." Yes, there are those who sell simply because they need the money. During the GFC, a very interesting thing happened. High quality college university endowments. I'm sure some of you are alma maters. Who have always had an over-commit strategy. That works really well as distributions are coming in, and you're making capital gains. During the GFC, the music stopped playing. Distributions weren't coming. You had these unfunded that you had to revive. We had the ability to do tremendous business, to get exposure to extraordinarily terrific assets as a result thereof. For GPs, GP transactions, GPs do it for two reasons. One, it allows them reduced exposure and good liquidity. It's an opportunity to address minority equity owners whom they'd like to take out. There's a founder who's looking to retire, and you need capital to address that need. Importantly, GPs are raising bigger and bigger funds requiring more and more capital. GP transactions, and I should share, up until now, LP transactions have been the predominant source of secondary transactions. Today, GP transactions last year outpaced LP transactions. The first half of this year, it's 60% of all transactions, and we fully expect it to continue to grow. It is now a full-fledged strategy for sponsors who are looking for capital options. The market is attractive and growing. In private equity, it's 20% annual growth over the past five years. Real estate and infrastructure are in their formative stage, and they too will, we expect, to have dramatic growth. Secondary solutions are just scratching the surface. Our market is the underlying primary market. Whether it's private equity, which 1.4%, we're just scratching it. Real estate, 0.7%. Infrastructure, 0.8%. As funds continue to grow and as funds continue to mature, the opportunity set will only continue to grow. We at Landmark have had a 30-year history of providing a flexible suite of transaction types, as illustrated on this slide. GP interests, LP interests, fund recaps, fund restructures. This is the page that we're really proud of. Our results speak for themselves. We are proud of the success that we've had with returns that we've achieved. $22 billion invested, Private equity, 17% net to the investors, Real estate, 25% net to the investors, Infrastructure, 10% net to investors. By the way, folks, these are unlevered returns. Every year, there's a year-end letter to our employees, and it always ends with the following. "We must continue to take care of our investors in the absolute best way possible, because if we don't, someone else will." It starts and ends with returns. Fundraising for us has been growing and expanding. We fully expect it to grow even more combined with Ares. The past two vintages of our flagship funds have grown over 50%. Infrastructure and real estate, we doubled. What are the elements for future growth? I shared earlier that our market is the underlying primary market that's growing 12%-15% a year. There are new products and innovations coming up for both buyers and sellers. The net result of it is that the growth and innovation in products, more and more assets are being sold into secondary markets. Product expansion opportunities. One is growing the size of our existing flagship funds, and we look so forward to working with Ryan and his team to do that. Two, insurance products. Our product is uniquely situated to address the needs and the requirements that insurance companies have. Three, the high net worth and retail. The Black Creek acquisition, we couldn't be more excited about. Their retail platform, we believe, will be the key to providing us with a strategic advantage in getting our product into the retail shelves. It's, again, power to platform, the integrated approach that Ares has. Ultimately, we believe that there's geographic opportunity to expand this product and various derivations thereof in Asia and in Europe. Let me conclude by saying that the strategic combination Ares and Landmark. The experience, the platform, the information edge places us in a position that this enormous growth that we see, we will be able to capture a disproportionate share of it, and we couldn't be more excited and more proud to be part of the Ares team, and look forward to success that lies ahead. Now I'd like to invite Mike Arougheti to rejoin us here on the stage so that he can discuss new platforms. Mike? Hey, everybody. Hopefully you are finding the day to be productive and informative. I'm going to come now just to talk about two of our new growth initiatives. I'm going to reference back to my earlier comments about our roadmap. You heard firsthand from Frank what he's experiencing a mere two months into his integration into the platform in terms of the revenue synergies, the fundraising momentum, and the collaboration. We're a little bit farther along on our SSG activities and our insurance build, so I thought it would be helpful to maybe give folks an update on those two businesses, where we see them going, and how we're applying that consistent strategic roadmap to the business build. SSG, if you think back to the roadmap, it's simple. Large addressable market, high-quality team with a deep track record and a unique set of capabilities, and a significant amount of growth opportunity in region to expand flagship product and to expand into adjacencies. We could not be happier. We're well over a year into the integration of the SSG platform. As it sits here today, $7.5 billion of AUM, market leadership position in the Asia-Pacific private credit markets in two flagship products today, special situations, AKA distressed, and senior secured lending. Let's just talk about the market. What did we see? Why were we so excited, and why did we choose to acquire versus build? Oftentimes, as Frank articulated, when we are going into a market through an acquisition, it's because we see transformational growth on the horizon, and we have a sense of urgency to get leadership position and capability quicker than we otherwise could if we were building organically. SSG is a great example of that. If you look at projections for global GDP growth over the next 10 years, 2/3 of the global GDP growth is coming in the Asia-Pacific region. We need to be there. We need to be there with real, deep capabilities and local knowledge. If you also look at the growth in non-bank lending in Asia, you're going to see a rapid acceleration of the growth in that market, just given some structural changes that are happening throughout the region as well. I talked earlier about pattern recognition as we build businesses. We saw this in Europe. We went into the European private credit market when no one else was there, 2006 and 2007. We had a view that we were seeing a lot of the same trends emerge in that market in terms of the growth of the middle market economy, the restructuring of the banking landscape, changing regulatory capital frameworks, growth in the private equity market, driving more consistent demand into the private credit markets. We were right. Now we've grown that to be a market leader. We're seeing similar trends begin to emerge in the Asian markets, but the market is still in its infancy. To put that in perspective, if you look at the U.S. direct lending market today, we think it's about a $1.5 trillion market that has largely debanked in the middle market. 80% of loans to middle-market companies today are getting made in the private markets. Europe is on an accelerated trend following the U.S., roughly 70%. The market there is smaller. It's one of the reasons why we're so excited about our growth opportunity in Europe. If you look at Asia today, across the region, we can identify an addressable market today of $300 billion in direct lending with meaningful growth. If you look at bank share of that market, we think it's still in excess of 75%. This idea that we're going to follow the trend and the pattern that we've seen developing as we move east from the U.S. to Europe through to Asia is something that we're keenly focused on. In order to capitalize on that, given all of the complexity in the region, different regulatory frameworks, different jurisdictional, legal frameworks, all of the licenses, all of the cultural differences, we landed on what we believe is the premier private credit manager in Asia through SSG. We have a partnership there of senior leaders who have been investing together for well over 15 years. Deep, deep track record of extraordinary performance through cycles, invested across the region, 35 professionals and growing. This has positioned us to not only scale our Private Credit business, but continue to now expand our Private Credit franchise into ancillary markets and products. We always talk today and always about the assets and the performance. This is no exception. If you look at what we've been able to do in our core flagship fund families, we are now actively investing our fifth special situations fund. That family of funds since 2009 has generated gross IRRs of 34% and net IRRs of 22%. We've used that success to start to move into less risky, higher maybe quality risk-adjusted return in some cases, senior lending product, more consistent with what we're doing in the rest of the globe. Even there, we're generating 23% gross and 13% net. We recently had a very successful close on our third fund in that family at $1.3 billion. It's almost two times the size of the predecessor fund and in excess of the cover that we set out to target. Similar to what Kipp talked about, they've been able to generate these types of returns with low loss rate. Any credit investor worth their salt has to be able to deliver differentiated returns with low losses. Our Asia business is no exception, and if you look since inception 2009, coming out of the GFC, we've had annualized loss rates in this business of about 20 basis points. Obviously, with that type of performance, we've seen meaningful growth. This platform has scaled close to 40% compound annually over the last five years, and we expect that growth to continue along this strategic path. Invest well, grow our core flagship funds, expand the product offering, which we are already doing actively, and you should expect to see new funds coming out, things like unitranche funds and sponsored lending funds in the more developed parts of the region, and then take the embedded local knowledge that we have, the experience we have in places like real assets and secondaries, and scale them into the region as well. This is the first time that we've actually been speaking to folks about where we see the opportunity through the SSG platform. If we execute just on what we see in front of us today, we think that we can take this platform from $7.5 billion today to close to $20 billion in 2025, and hopefully beyond, as we expand into other adjacencies. That's a 20%-25% CAGR, again, consistent with the firm-wide expectations. Let's talk about insurance. You heard Ryan and others talk about the opportunity to sell assets into the insurance market. It's one of our fastest-growing third-party client segments. The reason for that is obviously like most institutional investors, insurance companies are struggling to find differentiated yield in a low-interest rate environment and are frustrated by traditional fixed income assets. Not surprisingly, they're deepening their partnership with alternative asset managers like us in order to get better risk-adjusted return, excess yield, but also more access. Better allocations, more access to help really drive a shift in their portfolio composition. What we are trying to build here, and I'm really excited about the early success, is to aggregate capital and capabilities in the insurance space under our Aspida umbrella to go after the growth in the insurance market. We plan to do that through two core pillars of our strategy. One is through building a captive reinsurance platform, Aspida Re, and the second is to build a captive proprietary, and we believe differentiated annuity distribution and origination platform, under the Aspida Life brand. We're now well on our way to having acquired all of the people and capability set that we need to drive growth into this market. As Aspida sits today, we manage close to $3 billion of assets. Ares sub-advises about 30% of that book. Over time, as we add new capabilities across the alternative credit and real estate landscape, we would expect to see that 30% move to somewhere closer to 50% or 60% in terms of our ability to sub-advise our captive insurance assets. Let's talk about these two platforms quickly, annuities and reinsurance. We recently completed the acquisition of a platform called Global Bankers. Many of you know this has been in the works for quite some time. We are super excited about the capability set that has come here. We now have a team in excess of 100 people dedicated solely to the construction and distribution of fixed index and fixed annuity product. One other way to think about that part of the market is this is retail access to alternative investments. As we grow the annuity book and as we increase the distribution, this is just one more way for retail investors to get the benefit that comes with an alternative asset. Unlike some of our peers, this is effectively a de novo build. We're not coming to this with any legacy infrastructure weighing us down. We don't have a back book. This is a very modern tech-enabled distribution capability that we think that we can scale very dramatically. Many of you have asked us what we think this platform is capable of. We don't know yet because we haven't put our brand and pushed our relationships into the bank and wire channel. We haven't demonstrated what we can do from a product construction standpoint, given our unique asset capabilities. If you just look at this platform under prior ownership, they were originating close to $2 billion per year of new liabilities. Clearly, we think that we can do better. Sitting next to our Life Co is our reinsurance platform. We launched that in earnest at the end of 2020 with the acquisition of F&G Re. That came with $2.7 billion of assets. Importantly, we are already seeing meaningful growth in that platform through reinsurance flow agreements that are already in place with existing partners. As we sit today, just based on what is on the platform, we're generating $1 billion in annualized liabilities through our reinsurance platform. Adding those two based on where we are today, roughly $3 billion of growth. Needless to say, with the capital base that sits behind Aspida and the momentum we have, we continue to be active in the M&A market. The pipeline for reinsurance transactions is actually quite significant right now. We would expect to continue to see growth in that market through flow agreements, but also increased M&A. Again, what are we hoping to accomplish here? Our approach to insurance is balance sheet light, but we recognize the opportunity to scale this meaningfully in partnership with third-party capital. We're going to do it, as I mentioned, in three ways, continue to drive direct origination through the GBIG platform, continue to drive growth in our reinsurance platform through M&A and increased flow agreements, then look up and see if there are other assets that we could acquire that would be accretive to our capability and our scale there. Just based on that alone, again, what do we think success would be moderately would be to take this platform from roughly $3 billion today to $25 billion by 2025, or roughly a 50% compound annual growth rate. We're just getting started here, really looking forward to demonstrating this type of momentum as we continue to grow this platform. That concludes our presentations on our industry groups. Now I just wanted to shift gears a little bit and talk about all things impact at the firm. I'm looking forward to this. No disrespect to my investment colleagues, but I'm looking forward to this panel as much as anything. We spent most of the day today talking about growth, and you've heard up and down the line the importance of culture and how our unique culture is actually part of the special sauce that drives the firm forward. Nothing demonstrates our culture and how we live our values and how we use our influence and our position in the economy to drive change and have impact in our communities. Here we are coming out, we hope, of the pandemic, but we took the opportunity that was presented to us by COVID to really sit as a firm in a very active, collaborative way and say, "Who are we? Why do we do what we do? What do we stand for? Who benefits from the work that we do? Can we actually approach the investment business that is so core to who we are with a deeper sense of purpose and a deeper sense of service and shared values. I think the resounding answer from everybody that works here was, yes, we can absolutely do that. We've been spending the better part of the last 18 months really operationalizing the way that we think about impact across the entire Ares platform. All of the rigor that we bring to our investment business in terms of business building and the intentionality and the scalability and the operational framework, we're doing the same in impact. We think in order to have the success that we want to have in stakeholder engagement and impact, we have to approach this the same way. We have to say we need a firm-wide, collaborative, holistic view on what impact means and how we operationalize and scale it. I am just so thrilled to introduce all of you to my three partners here, Adam Heltzer, who is our Head of ESG, Indhira Arrington, who is our Chief DEI Officer, and Michelle Armstrong, who is our Head of Philanthropy, to just give you a sense of some of the exciting things that we have going on across the impact spectrum. Adam, over to you. Great. Thank you, Mike. Excited to be here. If I were to present this slide five years ago, maybe even two years ago, I probably would have raised an eyebrow or two in this audience. Today, this is the new ESG consensus. It's taken as a given. We feel that consensus on a 360-degree basis. You, our shareholders, are for the first time asking for standalone, deep dive conversations about our ESG program. Our LP base across every region are accelerating their own ESG programs, hiring dedicated teams, setting up engagements, asking for meaningful and measurable progress. Our portfolio companies and assets, they're coming to us to help them accelerate their own ESG programs. Importantly, in the war for talent, our current and prospective employees have very specific ideas about the kind of company they want to work for. The question then becomes for us, how do you continue to build an ESG program that maximizes impact and maximizes value? I love ESG programs. I do it every day. I talk to CEOs about ESG programs across regions, across industries. In talking about Ares' ESG program, and specifically in the investment management industry, and specifically for alts, there were three things that we think really set us apart. The first is simple. It's the reporting line. ESG can sit a lot of places, investor relations, public affairs, compliance. You have to erase any doubt that ESG is a strategic priority. It's an important signal internally and externally. For us, we've made it a CEO reporting line, something that we rarely see in our industry. The second is the resource model. ESG integration is always going to be limited if it consists of my team handing out checklists to investment professionals and saying, "Please fill this out." We've taken a very different approach at Ares. Yes, we charted a vision. We said, this is our responsible investment policy. Here's why we do this. It creates value, mitigates risk. It's the right thing to do. I went to all of my colleagues who've been on the stage today, and I said, "We need to mobilize 8- 12 people embedded in your teams across regions, functions, and ranks, and ask them to create a program, what's important to them." The third, which may seem quite intuitive, but actually is quite rare, is that we have to be a role model for sustainable business practices ourselves. In other words, if we have such high conviction that ESG is a value creation driver in portfolio companies, a mitigant of risk, we have to demonstrate that same high conviction ourselves in the way that we run our business. The second part is so important, it's worth double-clicking on. The idea is that in our own corporate sustainability program, if we kind of lead by example, understanding our most material ESG topics, DEI, climate change, cybersecurity, and we act with purpose and ambition to improve performance, we take that same experience, that same intellectual property, and we scale it to our platform, a platform which, as you've seen, is growing rapidly. That's exciting. That's a huge potential impact we can have on the world. What we're discovering every week is that a range of different kinds of companies and assets come to us. We have the credibility of a practitioner. We're a scaled and well-resourced platform. In terms of more tangible results and impact, one core concept of sustainability best practice is just simple transparency. We took a big step forward in this area this past May by publishing our first annual sustainability report, where we gave the full range of ESG disclosures that you all use and ESG ratings agencies use to evaluate us. Also went through details of each of our material topics, what was achieved in the past 12 months, and what we're trying to do in the next 12. Around the same time, we published a thought leadership piece on ESG and direct lending, an asset class that has been historically underappreciated and frankly, underutilized as a driver of meaningful change in companies. In that paper, we foreshadowed the emergence of ESG-linked loans, an interesting new structure where you can actually create carrots and sticks to improve ESG performance. I'm thrilled to say this past Monday, we announced that we had closed the world's largest ever ESG private credit financing to an existing portfolio company, RSK, in the U.K. On climate change, you heard Scott talk about our infrastructure and power platform moving into the climate space. We're also carbon neutral in our own operations. This coming May, we're going to publish our first TCFD-aligned climate change strategy, something that you all are very interested in. Finally, in an industry where human capital is so critical to our success, I'm very proud to work at Ares, a place that's been certified by Great Place To Work, with 91% of our U.S. employee base saying they love working at Ares. No doubt due in some measure to how we've been successful in infusing mission, meaning, and purpose into our daily work. With that, I'd like to pass it to my colleague and friend, Indhira Arrington, to talk about DEI, really an exemplar of how we lead by example in the corporate, but then scale to the investment platform. Indhira? Thank you so much, Adam. Good morning, everyone. I would like to thank Adam. As Adam so clearly articulated, at Ares, we view ESG and DEI as strategic pillars that span both our corporate sustainability and our responsible investment philosophy. At Ares, DEI is business critical because we know that diverse perspectives lead to better decision-making, which leads to innovation and greater return on investments for us, our portfolio companies, and our investors. To that end, over the past several years, we have been strategically focused on embedding DEI in all of our operations because we know, as Mike said this morning, that we need to continue to win the war for talent and that DEI drives employee motivation and satisfaction. Job seekers, 40% of them will turn down a job because of a perceived lack of inclusion. As Tony said, we don't want to just recruit great people, we want to keep them. Employees are more likely to stay at a company that they feel is equitable and that is actually driving racial equality. More importantly, we know the business case has been done, that DEI leads to outperformance. Ethnically and gender-diverse companies outperform their counterparts and lead to better overall outcomes. To that end, our DEI framework and strategy aspires to harness the power of difference, to be a force for good, and contribute to the long-term success of Ares, the companies in which we invest, and the communities in which we operate. Our framework is three pillars. It's our people and culture. How are we going to attract, develop, engage, and advance our own people and culture? It's our business and investment process. How are we going to operationalize DEI within Ares to truly be able to run it like a business? Our investment decisions, how are we driving DEI into our due diligence processes and our own procurement functions? Last but not least, our communities. How are we continuing to be a great corporate citizen and contributing to the communities that we operate in? Through our industry partnerships, for example. We are a founding member of the ILPA Diversity in Action Initiative, and Mike, our CEO, has signed the CEO Action for Diversity & Inclusion pledge. Both allow us to not only share best practices in our industry, but also learn from others so that we can continue to improve. It's our corporate partnerships. What are the organizations that we are supporting and partnering with that are doing the great work of DEI on the ground? Finally, our philanthropy. As Michelle will demonstrate, we are looking for ways to magnify the impact that we have with our philanthropic dollars from a DEI lens. At the core of our framework is to be able to make data-driven decisions, set goals, and hold ourselves accountable through KPIs because we know that what gets measured gets done. There's no better example of how to bring our framework to life than AmpliFY DEI. As Adam said, we want to be a leader in this space. We want to lead by example. At the same time, we also want to bring along those that we can bring along with us. We actually decided to create best-in-class strategic plans for DEI, but bring along with us a core group of our PE portfolio companies. To that end, we hired a premier consulting firm that helped us go through, as a cohort, through in-depth assessments, DEI infrastructure assessments. Do we have the infrastructure that it takes to truly drive DEI? Where are we from a maturity perspective with our DEI strategy? The diversity assessment, where is our representation? How do we know where our gaps are? How are we able to set goals if we truly do not understand where we sit today? Finally, an inclusion assessment that truly allowed us to understand how our employees are experiencing the organization by diversity dimension. Being able to go through this process as a cohort allowed us to create multi-year strategic plans with specific goals and KPIs. Also, I was able to personally review and work with our deal teams on the assessments and the strategic plans of our portcos to ensure that we were upskilling them to drive the accountability with their leadership teams and drive board engagement from a diversity perspective. Finally, doing it as a cohort also allowed us to create a cross-company council that allows us to share best practices, celebrate wins, and problem solve together. We will continue to support our portfolio companies through the next stage, the execution stage, to ensure that we're driving accountability and that we're able to AmpliFY DEI. Talk about the power of the platform. Finally, I'd want to end with how proud we are of what we have accomplished so far, but also acknowledge that we're humble in knowing that there's a lot more work to be done. To those that much is given, much is expected, and we are committed to driving change because our aspiration is to be a leader and advocate for DEI in our industry and in all of our spheres of influence. With that, I'm going to turn it over to my distinguished colleague, Michelle, who's going to walk us through philanthropy. Thank you, Indhira. Thank you, Adam, and good morning to all of you. To talk a little bit about philanthropy and to give you a sense of who we are and what we're doing for Ares and for our global community. As my colleagues discussed this morning, our focus on ESG and DEI helps to reflect our purpose-driven culture as a firm. In addition, our staunch commitment to philanthropy helps us drive toward our intended societal impact, even as we deliver value to our team members and to our stakeholders. Our three-pronged approach to philanthropy helps to further demonstrate our core values in action. This past June, we launched the Ares Charitable Foundation to help accelerate equality of economic opportunity for people globally. We do this through a set of key funding priorities, career preparation and reskilling, entrepreneurship, and personal finance. Ares in Motion, or as we call it, AIM, is our signature employee engagement program through which we offer volunteer opportunities for our team members to give back to the communities where we do business. In addition, AIM provides a platform that allows our team members to donate to the causes that matter most to them, and then we, in turn, can match those donations. Corporate contributions allow us as a firm to respond to some of the most pressing issues of our time, issues like COVID, youth education, and social justice. Our philanthropy at Ares allows us to be an exemplar to both our industry peers as well as to the broader philanthropic sector because we are reimagining what it means to do good. We don't just want to follow best practices when it comes to philanthropy. We want to set the standard when it comes to grant-making, employee engagement, and corporate contributions. Our efforts and the results of those efforts to date help to make that clear. Take, for example, grant-making. Ares is committing a percentage of its profits from a select group of funds to charity, and it's making that happen through our Foundation. In addition, our team members are deeply invested in the Foundation's success and have pledged over $30 million over the next five years to help support our grant-making and our operations. Employee engagement. In 2020, we saw more than 300 team members volunteer over 1,800 hours, and our team members' donations to charity allowed us to match those donations by in excess of $500,000 million. Let's talk about corporate contributions. Last year, we donated more than $6 million for causes like COVID, supporting hospitals and medical workers around the globe, as well as the employee relief programs of our portfolio companies. We donated dollars to nonprofits that deliver programming centered around youth education, DEI, and social justice. I would be remiss if I failed to mention the fact that Ares Pathfinder Fund is what we believe to be the first institutional private investment fund to utilize a predefined structure to make a substantial commitment to charity. Now to talk a little bit about how we do philanthropy at Ares. We recognize that right here, right now, we have a tremendous pipeline opportunity. While our foundation only launched this past June, my colleagues and I have worked behind the scenes to launch what is now known as AltFinance, Investing in Black Futures. This particular initiative is channeled through our foundation because it aligns with our focus on career preparation and reskilling. Specifically, it supports learners at historically Black colleges and universities with the intent to diversify the alternative asset management industry. Spearheaded by Ares, we are incredibly proud that our friends and our colleagues at Apollo and Oaktree have joined us to invest $90 million over the next 10 years in AltFinance. Specifically, AltFinance delivers a virtual institute for learners, helping students at HBCUs be able to learn about the alternative asset management industry. Any student at any HBCU can participate in it. We are so pleased to say that the Wharton School of the University of Pennsylvania has designed this institute for us. AltFinance also delivers a mentored fellowship program that we are designing right now in partnership with Management Leadership for Tomorrow. This particular fellowship program will be in collaboration with four HBCUs, Clark Atlanta University, Howard University, Morehouse College, and Spelman College. Not only will AltFinance fellows have access to one-on-one professional coaching, but they will also have access to scholarship funds. Our three firms, Ares, Apollo, and Oaktree, have committed to provide internship and career opportunities for those young students who participate in AltFinance. We're happy to say that our industry peers have also stepped up and said that they too are willing to do the same. For us, AltFinance is about more than simply diversifying the alternative asset management industry. It's about making certain that that pool of talent that enters our industry is poised for success. Concurrently, it has and it will continue to allow us to inspire and to encourage and to motivate our industry peers to not only join this effort but to stand up similar initiatives, even as we at Ares continue to model what we believe truly meaningful philanthropy looks like. I'll now turn the stage back to Mike. Thank you, guys. It's powerful. We always talk about the alignment of our investment activities with the impact that we can have. Hopefully not lost on anybody here is not just our commitment to lead, but how we're able to structurally not just embed our impact into our investment activities, but then have the value that we create through those investments fuel the growth in our impact initiatives. This holistic approach and this alignment of our purpose with our investment activities we think is a real recipe for success. Thank you guys for all the great work. One thing I heard them say here, and other times I just want to raise as well, is we want to lead by example. We want to be ambitious here the way that we're ambitious everywhere else, but it's important in everything we do that we lead with humility. I think that the way that you guys are approaching these activities is a perfect demonstration of that. Thank you guys. I'm going to wrap this up with a few closing remarks, and then we'll open it up to Q&A, both here in the room and online. I'll try to be brief because we cover a lot and hopefully most of this is self-evident at this point. I really do believe that we have a unique company and a unique culture. That unique culture that we've built and cultivated and nurtured over decades is really what's allowing us to drive our growth, integrate new businesses, and expand the way that we're expanding. We are very intentional investors. We are very intentional business builders. We have a repeatable formula for success. That formula, as we've talked about, is identifying large addressable markets. It's putting the right people in the right places with the right products in those markets and driving performance. At the end of the day, as you heard from everybody, if we keep performing the way that we have and we keep leveraging the power of our platform, the growth is inevitable. We thank you guys all for joining us. It really is wonderful to have an in-person event, and I appreciate everybody making the effort to be here, and for everybody online, thank you for your time today. I see that Carl and Jarrod have joined us on stage, why don't we just get right into the questions? Gerry, you have a question. Thanks for the presentation today. Gerry O'Hara at Jefferies. Retail was clearly a big theme throughout the presentation. I was hoping maybe you could help us get a sense for what the capacity, what the shelf space is like on these high net worth platforms, and perhaps how those conversations have evolved for enhanced distribution and being able to get this product actually into the market. Sure. It's a great question. I don't know if we have a good numerical answer because the demand is growing, so I'll try to answer it in a couple of different ways. First, maybe just to remind everybody, if you look at what we already have on the platform, between our listed vehicles, our non-traded listed vehicles, and our high net worth, we're well in excess of $40 billion of assets that are already touching the retail investor in some way. Two, as I mentioned, we believe that our annuities platform is yet another way to bring our capability into the retail market. We are incredibly excited about the capability set that Black Creek brings, but I want to make sure that we emphasize that is a meaningful part of a much broader retail strategy. In order to bring product into that market, you need the right product, and you need the ability to not just distribute, but to service that product, and that's why the Black Creek acquisition is so important. Up until this point, we've been accessing the wirehouse and bank channel largely at the upper end of the investor base, ultra high net worth, high net worth, and we've been largely selling them institutional product with great success. What the Black Creek acquisition now allows us to do is expand product but go deeper into those retail networks to touch ultra high net worth, high net worth, but now also mass affluent and retail. Capacity, again, difficult question. We know through our conversations with the head office at a lot of these platforms that on average, they're probably trying to drive today 5% client exposure into alternatives. Most folks we talk to are saying that that is likely to double or triple. When you take that just in perspective, you're talking trillions of dollars of demand to the extent that those allocations increase. We have a very meaningful first-mover advantage. As Ryan talked about with the acquisition of Black Creek and our in-place capabilities, we are a top two or top three distributor into that channel, and we'd expect that to continue. Rob. Thanks, Mike. Just kind of curious, maybe with the Landmark in-house now and your secondaries business in Landmark and 900 sponsor relationships in the direct lending business, I'm just curious, it feels like the stakes business has become the thing the last bunch of years. Is there an opportunity to leverage that, or would that not be a new business line for you guys? I'll stop with that one. Yeah. I think Frank did a good job describing this transformational shift happening in secondaries. It's broadly LP-led to GP-led. Within GP-led, it's the whole spectrum of things. It could be a single asset secondary, it could be a continuation fund, it could be a minority stake, it could be a preferred, it could be a NAV loan. I think all of those things are on the table for us. Landmark not only was a leader in developing secondaries, but if you actually look at their most recent fund, about 60% of their fund deployment in their most recent PE fund was in GP-led. A logical adjacency for us would be to go deeper into that GP market. You raised it, I'll emphasize it. One of the big competitive advantages that we bring to our partners at Landmark is our sponsor coverage effort globally, both corporate PE and real assets. If you think about the structure of that origination engine, they're out talking to institutional owners of assets and companies as a solution provider. The more we give them to talk to their clients about, the better it is for them. When you talk to our senior-most sponsor coverage folks, they are over-the-moon excited about the ability now to have another product to talk to their clients about, for sure. Thank you. Alex? Thanks. Go od morning. Good to see everybody here. Thanks for doing this in person again. First, I wanted to ask about just the evolution of the direct lending business, Mike. Clearly, it's kind of a bedrock of Ares, but still lots of growth as you articulated earlier. As you think about the percentage of the sort of sponsored debt market that direct lending channel is ultimately able to support over time, how big do you think that's going to be? In other words, are you able to start taking larger size checks in, taking more share from the syndicated markets? When you pivot over to Asia and Europe, Ares in particular has sort of an outsized share in that market relative to what you have in the U.S. How sustainable is that given that market is, again, in kind of early stages of evolution? Yeah. The good news and bad news about the private markets is we directionally know where the sizing is, but we can't actually quantify it. I make a couple of comments. Syndicated loan market and high yield market are clearly giving way to private credit providers like us. That's a combination of two things. One, it's Ares Management accumulating more scale and more product flexibility to service the lower end of that market. Like all markets, the public equity market included, the high yield bond and loan market are moving to scale. Order of magnitude, if you were to look 15 years ago at both the loan and bond market and said, what percentage of that market is to issuers below $300 million, you'd be in the 30%-40% range. Today, if you said what percent of that market is issuers below $300 million, it's probably in the mid-single digits. That whole market is moving to scale, and it's freeing up a big opportunity for us. You're now seeing an accelerated amount of large private market executions because that white space can now be filled as we're accumulating scale. That is a big part of the growth. That being said, the engine of the business is the core middle market, and Kipp does a nice job talking about this in the context of ARCC. If you look at the weighted average EBITDA as an example in that book, it's probably in the $140 million range. If you looked at the median EBITDA, it's probably $50 million-$60 million. There's an engine behind of us maintaining relationships with that core middle market SME and that core middle market sponsor. As they grow, they just stay with us longer now. If you think of it as a $1.5 trillion market here, and you look at our market share, and you also triangulate that with our selectivity that I talked about, i.e., we say yes 4% of the time, that would tell you there's still a pretty significant amount of white space available to us. I think we saw about an 80% increase over the last five years in the number of deals reviewed- Yeah. ...in that market. It's growing very significantly. 2,800 deals in the last 12 months for both European direct lending and U.S. direct lending. Ken? Hi. Ken Lee from RBC Capital Markets. Thanks for taking my question. One on the Aspida business. Certainly, we've seen a few peers of Ares doing similar things within the insurance world. Just wondering how you see the Ares operating model comparing with what some of these other peers are doing. Thanks. Sure. As I mentioned during the presentation, it should come as no surprise as to why the partnerships between insurance companies and alternative asset managers are growing, whether it's through captive/affiliated platforms or through the traditional third-party business. It's really all about a mind shift in the insurance space away from liability-led portfolio management to really asset-led, and the understanding that the differentiated sourcing and structuring that we bring on the asset side drives a lot of value to the insurance sector. As I mentioned, I think the key differentiator is our desire is to have a very meaningful platform under the Aspida brand, but we have no intention of seeing that overwhelm our core asset management business. It's consistent with what Jarrod was talking about earlier in maintaining a balance sheet light approach to everything that we do, including insurance. As you saw, we think, based on historical activities within F&G and GBIG, that there's a pretty tangible growth opportunity there to get us to $25 billion. But if you think about growing to $500 billion, it's still going to represent a pretty small fraction of our assets. Mike? Great. Thanks. Mike Cyprys, Morgan Stanley. Thanks for hosting this, and thanks for taking the question. I wanted to circle back to real estate. You guys spent some time talking about that. You seem particularly excited about multifamily and the industrial sectors in particular. There are many other firms also particularly excited about that part of the marketplace. I guess I was hoping you could maybe talk a little bit about what part of the marketplace there is your sweet spot, how you're thinking about the competitive backdrop there. Do you get concerned that there's too much capital coming in? How do you think about the TAM and the ability to penetrate that? It's a good question. We, given our fund sizes, are what I would call again, middle to upper middle market. As we scale, we're capturing more share. I don't worry about the competitive dynamic in any of our businesses because we have competitive advantages and they're getting stronger, not weaker. Post the Black Creek acquisition, if you look at our capital base, we're now squarely in the top 10 of institutional manager in this space, and I think growing. What's interesting about real estate, which goes to David Roth's comment just about the importance of boots on the ground in local markets and sub-markets. There's no market that is more local or hyper-local than real estate. When you are talking about competition in real estate, it's different than when we're talking about competition in other parts of the private markets business. You need to know street corners, not states, and you need to know street corners, not broad geographies. The competitive advantage there is just the footprint and the 30 years of experience that our senior people have across the platform investing in those markets. I think you'll see consolidation there and institutionalization the way that you've seen in other parts of the private markets business. The barriers to entry in real estate tend to be lower, but I think the barriers to success are getting higher. As institutional capital is actually flowing into that market, I think it's going to start to come disproportionately to folks like us, like other parts of our business as well. I think there's a question over here. Good morning. Paul Gulberg, Bloomberg Intelligence. Quick question on the insurance pricing power. Obviously it's a $30+ trillion market, but there are more and more alternative managers getting into provider services. What do you think longer term the opportunity and the ability to keep up the pricing for the business? Yeah. I think right now, at least our experience is you've got two dynamics. One, we are taking organic share from some of the traditional insurance platforms because of our ability to have more attractive product. Two, I think most people know most life insurance companies are shedding non-core assets, reducing exposures to certain parts of the market given some of the challenges that they've had within their companies, which also is driving assets into the alt affiliates. Right now I'm not seeing an increase in competition that's changing the pricing dynamic. If anything, because of what's happening in the traditional market, it's created an opportunity for all of us. There's one in the back. I can't see who it is, I apologize. It's Chris. Oh, hey, Chris. Yeah. We've all seen the same statistics that you have about the private markets growing at basically 2x the public markets, and it's been going on for a long time. In investor meetings, the question I always get is too much money chasing too few assets, and when does it run out? If you think about some of the trends you mentioned that 80% of the direct lending business is already non-bank in the U.S. and 70% in Europe. At some point, do we ever hit that efficient frontier where growth in the public markets is equal to growth in the private markets? When does that come and how will we know? Do you ever have to do anything in that kind of investment grade large public market to keep growing or is that just not what you do? In theory, there will be some efficient frontier. One of the reasons why we are thinking 10, 20 years out in terms of our geographic expansion and our product development is to continue to stay ahead of the maturation of our businesses. That's purely theoretical. We're not seeing anything that would indicate a slowdown in the available market to us. Remember, if the middle market, generally speaking globally, is the engine that drives GDP and you see public markets that are getting increasingly concentrated and maybe less hospitable to small companies, that's a tough trend to reverse. If you start to get to that efficient frontier, you're still going to be riding GDP plus, which for businesses like ours, given our return profile, is going to be a pretty nice efficient frontier to live on. I think we're decades away from the point where we're ever having to have that conversation with all of you. In terms of investment grade, I view that as fundamentally a different business. In terms of listed high grade, that is a rates business as much as it's a credit business and we're credit practitioners. What we are getting quite good at, and this is where the insurance piece of things becomes important and the alternative credit part of our business is getting increasingly important, is we can create high-grade fixed income alternatives. Rather than actually try to go into the liquid fixed income market, we can use our origination structuring to create high-grade alternatives that are very attractive to that client base. As Kipp talked about, that allows us to see rotation out of traditional fixed income into alt credit in a way that we haven't seen before. That's been a big driver of the business over the last couple of years. I think we also talked about Asia as just scratching the surface in terms of the size of the direct lending market and Europe is behind the U.S. If you look at the worldwide market of private company and penetration and market share is just p retty significant wide-open space. Why don't we take one from online so we can shift the screen. It looks like Rufus at BMO is asking, "One of the themes that we've seen playing out in private markets is the larger firms taking share within the institutional channel. How do you envisage market share developing in the retail channel, and would you expect it to become more concentrated?" Absolutely. When we talk about our culture, the consistency of our investment approach, the consistency of the client experience on the Ares platform, all of that you could just broadly define as brand. Like most things, people want to invest behind brands that they know and they trust. That's important in the institutional channel. It is vitally important in the retail channel. The big shift is not just increased demand, but it's the increased demand to invest behind the big brands. I think you are going to see similar type of consolidation as those platforms are looking for folks like us to bring multi-asset class solutions to the retail client, the same way that we're doing it in the institutional channel. Alex? Great. Thanks for taking the follow-up. Maybe we'll jump into some of the numbers. Starting with FRE targets, it's great to see 20%+. Obviously, that's one of the highest in the industry for some time. You previewed that a little bit obviously with the Black Creek announcement, but it's great to see that again, through 2025. I guess my question is really more of a clarification. Should we expect you guys to deliver 20%+ of FRE growth net of stock-based comp per share? How are you thinking about maybe utilizing some of the excess cash flows that the business is clearly going to be generating to, at a minimum, offset some of the share count creep? Sure. I'll take the first part there, which is, when we think about stock compensation, we really are playing that against our total share count, and we are looking at a dilution figure there. Net dilutions, I think, averaged a little bit less than 1%, and that's really how we target it. There's been a couple of years where we have larger multi-year grants where it might be 1.5%, but really, as we think about stock compensation, we are tying that to our dilution as opposed to looking at it as part of our FRE metrics. That 20% FRE that you saw up there was the FRE that we normally present increasing at a 20% annual growth rate. Yes, I think we will demonstrate that type of growth on a per-share basis, not just an absolute. Rob? Thanks. Thanks for taking my follow-up, too. Just kind of curious, you did highlight the opportunity in the Asia- Pac. It just jumped out at me that one blank hole in that was Japan. I'm just kind of curious why that wasn't on your screen there. There's only so many hours in the day. Okay. I think folks know, and some of our partners from SMBC are here, we have a meaningful investor presence in Japan, but a very small investment presence in Japan. We have a strong and growing partnership with SMBC. As we've articulated to the market, that was balance sheet, capital markets partnership, and distribution, and we're hitting on all three of those. One of the things we hope to get out of that relationship is also deepening our relationships and knowledge in that local market. A number of our businesses now are starting to turn to that part of the developed market in Asia as opportunity for us. I was only half kidding, it's just we haven't quite gotten around to that yet, but I do think that that's a market that's open to us. Mike, follow up? Great. Thanks. Taking the follow-up question. Mike Cyprys from Morgan Stanley. Just wanted to follow up on the secondaries business. There were some slides up earlier that showed about a 1% turnover or so within the secondaries market, I think a little bit lower in real assets, a little bit higher in PE. Just curious where you see that going over the next five years. Where do you see that 1% trending toward? What catalyst do you see that could drive that higher? How do you think about the role of digital platforms within the private market ecosystem as either a catalyst or a driver for growth there, but also as a risk of disruption for the private markets? I don't know if Frank is still here and he has a view. It's one of those things that I'm not sure we know. I'll let Frank give you his view. I have a very strong view on the second part of the question. Is this on? You want to come on up, Frank? Yeah. Much better. Our view is that turnover is going to increase. It's going to principally because these funds are maturing. There are new products that both buyers and sellers are interested in. My own view is it's hard to put a number on it, but one way to look at it is that if this were to move, for example, in private equity to 1.5% on this huge underlying market, it's just a large set. As I said earlier, we're just absolutely scratching the surface of what the underlying opportunity set is. Hard to tell you what that number is. All I can tell you is that the underlying, even if it stays at the same percentage. Because the underlying is growing at so dramatically and has done so over the years, we fully expect to be there. The other thing which I failed to mention is the opportunity set outstrips the capital that's available for acquisitions. Yeah. The reason we don't know is if you look at the way the product is developing, you're now seeing single asset secondaries earlier in fund life. Whereas, as recently as two or three years ago, when you were executing on single or double asset secondaries and continuation funds, it was all end of fund life. We're now starting to attach to some of these assets much earlier in the life cycle, which would have some pretty meaningful implications for what that growth could be. In terms of the digital, I don't view that as able to cannibalize the GP-led business. Similar to everything that we do in private markets, you can't really actuarially underwrite and structure a highly complex GP-led solution. That is a solutions business. It is very complex from a structuring standpoint and a diligence standpoint. Could you see some of the secondary technology platforms take share in the traditional LP-led fund of funds part of the business? Maybe. That's not where we see the big growth opportunity. I think for the GP-led, where we're going to be focusing most of our attention, probably not. Do you want to take Ravi's question? Sure. Yeah. We have one from the line. It's from Ravi at Junto. There is some notable stats shared on LP penetration opportunity. 50% of our LPs on the platform for less than 18 months, 50% of our big LPs still in only one product. How has the broadening of the investment platform, which has accelerated, changed the LP wallet opportunity? It's only made it better. Again, I think there is an overarching trend to consolidation. It's partially to do with brand. It's partially to do with economies of scale within their own organizations. It's partially to do with performance. We are seeing the larger LPs reduce the number of GPs that they do business with as folks like us can offer them broader solutions. I would say, how does it change? It gives us more access points. This was a big epiphany and credit to Ryan and his team. 10 years ago, when we were making the investments in asset gathering that we were, we didn't quite know how the product suite would either cannibalize or accelerate investor demand. What we have found is the more product of high quality that we're putting into the market, the more access points we're giving LPs to come onto the platform. While we're still early in this new investor growth behind our existing investors, if I had to guess, you'll see the same cross-selling trend that we've seen from our existing investors start to emerge in that new investor base as well. I can't see. Is that Greg? Adam. Hi. Adam Beatty from UBS. Thanks for taking the question, and thank you for the day. Another follow-up on the insurance business, specifically on annuities. On the liability side, you're planning to start writing business next year. Could you talk about the importance of Ares-initiated annuities and what that means for the firm, and why that's important versus some of the other annuities that might be available out there? Sure. At a very simple level, the way we approach the annuities business is as a spread lender. We create value for our customer by driving the cost down to them and increasing the excess spread. We feel that we have differentiated capability in both of those places. Our unique credit asset capabilities allows us to create excess return, and our tech-enabled distribution actually allows us to drive down the cost of the product as well. I think those two things give us an advantage. I think Gerry had a question. Thanks. Thanks for taking the follow-up. Clearly, ESG and impact are more than a check-the-box exercise for Ares, but perhaps you could help us frame the conversation you're having with LPs, what they're looking for, what the demand is, what the alpha generation potential that they want to see that's coming directly from those areas or really anything else that they're drilling down on as it relates to those metrics or parts of your business? Sure. The LP interaction around all things ESG, I'd say, is twofold. One is the same way maybe 10 years ago, people took it for granted that we were great investors and started spending time in our non-investment ops to understand if we were best in class there. Now they know that we're best in class in both, and they're spending a disproportionate amount of time understanding our approach to impact. It's one of the reasons why we are approaching with such systematic discipline in terms of the measurability of the things that we're doing. It is front and center for all the right reasons, and we're asking for that type of accountability. Folks like us will differentiate over time with the LPs through good ESG execution. The second way we interact with them is just through product formation. Something like our climate infrastructure fund, or as Matt talked about, growth and impact funds will become more important parts of the institutional LP portfolio. Europe is light years ahead of rest of world right now in that respect. It's where we're seeing the most active demand for ESG product in the private market. Part of the other challenge is you can't really deliver a high-quality ESG product into the private market until you get to the measurability. This is all happening in parallel, but we need to get to a place where we're not just delivering the product, but we can actually tell our clients what the measurable impact of that product is in order for them to feel that it meets their needs. Again, I think the quicker you can do that and the more credibility you bring to that exercise, the more of that demand you'll be able to access. Chris? Yeah. I guess just to follow up on that, I've often been curious about what happens to the kind of non-ESG industries in the coming world. You think about just fossil fuels. Everybody dislikes them, they're going to be with us for decades to come. Those companies are going to need capital. Does a company like Ares have a role in providing capital to some of those companies that are not checking the ESG boxes? You may not love the answer. It's sometimes and maybe. Part of what we're doing in ESG, as Adam articulated, is next year we will be coming out with a fully articulated TCFD climate strategy. Part of that is we're bringing together all of our groups in real assets and corporate side of our business to talk about just that. While we're over-indexed right now to the energy transition, in success, it's still a 30-year transition that requires somebody to actually continue to finance the generation of power here. It's something that we're thinking about, which is why I don't have a great answer for you. It will be a big opportunity for those that understand how to do it, how to do it responsibly, and how to articulate what their strategy is around it. I think, Adam, we promised early 2022 is when we'll be able to give people a view for what we're going to do there. May. Yeah. May of 2022. It's a hot topic for all the reasons you articulated, but we're not quite landed yet. Great. Well, we have no other questions online either, and we are at time. Thank you again, everybody, for spending the day with us. We really appreciate the support and the interest. Before we say goodbye, I just wanted to say a big thank you to Carl and his team, our entire IR and comms team, the Ares event planning team. These things seem to always go so smoothly, but there's such an incredible amount of work that goes on for days and months leading up to the day and on the day. I just want to say thank you to all of you for all the hard work and effort. It is incredibly appreciated. It was a wonderful day. Thank you, and thank you again. Appreciate it.