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ARES CAPITAL CORPORATION

(ARCC)
  Report
Real-time Estimate Cboe BZX  -  10:15 2022-11-28 am EST
19.46 USD   -1.52%
11/17Insider Sell: Ares Management
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AQ
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Ares Capital : Second Quarter 2022 Equity Investor Presentation

08/25/2022 | 05:11pm EST

Investor Presentation

Quarter Ended June 30, 2022

Confidential - Not for Publication or Distribution

Disclaimer

IMPORTANT NOTICE:

Statements included herein may constitute "forward-looking statements," which may relate to future events or the future performance or financial condition of Ares Capital Corporation ("ARCC"), its investment adviser Ares Capital Management LLC ("ACM"), a subsidiary of Ares Management Corporation ("Ares Management"), or of Ares Management. These statements are not guarantees of future results or financial condition and involve a number of risks and uncertainties. Actual results and conditions may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in the filings of ARCC and Ares Management with the Securities and Exchange Commission ("SEC"). These factors include, but are not limited to, the effects of the COVID-19 global pandemic.

The information contained in this presentation is summary information that is intended to be considered in the context of the SEC filings of ARCC and Ares Management and other public announcements that ARCC or Ares Management may make, by press release or otherwise, from time to time. Neither ARCC nor Ares Management undertakes any duty or obligation to publicly update or revise the forward-looking statements or other information contained in this presentation. These materials contain information about ARCC, ACM and Ares Management, and certain of their respective personnel and affiliates, information about their respective historical performance and general information about the market. You should not view information related to the past performance of ARCC, ACM or Ares Management or information about the market, as indicative of future results, the achievement of which cannot be assured.

Nothing in these materials should be construed as a recommendation to invest in any securities that may be issued by ARCC or Ares Management or as legal, accounting or tax advice. None of ARCC, ACM, Ares Management or any affiliate of ARCC, ACM or Ares Management makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. Certain information set forth herein includes estimates and projections and involves significant elements of subjective judgment and analysis. Further, such information, unless otherwise stated, is before giving effect to management and incentive fees and deductions for taxes. No representations are made as to the accuracy of such estimates or projections or that all assumptions relating to such estimates or projections have been considered or stated or that such estimates or projections will be realized.

These materials may contain confidential and proprietary information, and their distribution or the divulgence of any of their contents to any person, other than the person to whom they were originally delivered and such person's advisers, without the prior consent of ARCC, ACM or Ares Management, as applicable, is prohibited. You are advised that United States securities laws restrict any person who has material, non-public information about a company from purchasing or selling securities of such company (and options, warrants and rights relating thereto) and from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. You agree not to purchase or sell such securities in violation of any such laws.

These materials are not intended as an offer to sell, or the solicitation of an offer to purchase, any security, the offer and/or sale of which can only be made by definitive offering documentation. Any offer or solicitation with respect to any securities that may be issued by ARCC, Ares Management or any of their affiliates will be made only by means of definitive offering memoranda or prospectus, which will be provided to prospective investors and will contain material information that is not set forth herein, including risk factors relating to any such investment.

S&P Disclaimer Notice

This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,

ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.

Bank of America Disclaimer Notice

This may contain information sourced from Bank of America, used with permission. BANK OF AMERICA IS LICENSING THE ICE BOFA INDICES AND RELATED DATA "AS IS," MAKES NO WARRANTIES REGARDING SAME, DOES NOT GUARANTEE THE SUITABILITY, QUALITY, ACCURACY, TIMELINESS, AND/OR COMPLETENESS OF THE ICE BOFA INDICES OR ANY DATA INCLUDED IN, RELATED TO, OR DERIVED THEREFROM, ASSUMES NO LIABILITY IN CONNECTION WITH THEIR USE, AND DOES NOT SPONSOR, ENDORSE, OR RECOMMEND ARES MANAGEMENT, OR ANY OF ITS PRODUCTS OR SERVICES.

REF: DLUS-01735

Confidential - Not for Publication or Distribution

2

Market Leading Company in Direct Lending

Market Leading Business Development Company

Compelling Track Record

Largest publicly traded BDC1 with Significant Direct Origination and Long Tenured Management Team

Invested Approximately

$82 billion2 with a

Realized Asset Level Gross

IRR of 14%3 since IPO

Competitive Advantages

Incumbency from Large

Disciplined Underwriting

Portfolio Provides

Process Supports Highly

Attractive Investment

Selective Approach

Opportunities

Key Statistics/Track Record

1.0%4 Average Annual Net

10+ years of stable to

Realized Gains in Excess

increasing dividends

of Losses since IPO

Significant Competitive Advantages

Attractive Portfolio and Diverse Sources of Funding

$16.47

Durable Balance Sheet to

Support Investing

Through Varying Market

Conditions

Generated ~80% Higher

Stock Based Total Returns

than the S&P 500 since

IPO5

Leader in Middle Market Direct Lending With a Compelling Long Term Track Record of Delivering Shareholder Value

As of June 30, 2022, unless otherwise stated. Past performance is not indicative of future results. Please see the notes at the end of this presentation for additional

important information.

Confidential - Not for Publication or Distribution

3

Overview of Ares Management

With approximately $334 billion in assets under management, Ares Management Corporation is a global alternative investment manager operating an integrated platform across five business groups

Profile

Global Footprint2

Founded

1997

AUM

$334bn

Employees

~2,310

Investment Professionals

~810

Global Offices

30+

Direct Institutional Relationships

~1,900

Listing: NYSE - Market Capitalization

$21.1bn1

The Ares Edge

Credit

Private

Real

Secondary

Strategic

Equity

Assets

Solutions

Initiatives

Power of a broad and scaled

Deep management team with

AUM

$201.9bn

$33.4bn

$62.6bn

$23.9bn

$12.5bn

platform enhancing

integrated and collaborative

investment capabilities

approach

Corporate Private

Private Equity &

Direct Lending

Real Estate Equity

Ares SSG

Equity

Credit Secondaries

Strategies

20+ year track record of

Pioneer and a leader in

Liquid Credit

Special

Real Estate Debt

Real Estate

Ares Insurance

Opportunities

Secondaries

Solutions3

compelling risk adjusted

leveraged finance, private

returns through market

credit and secondaries

Alternative Credit

Infrastructure

Infrastructure

Ares Acquisition

cycles

Opportunities

Secondaries

Corporation

Infrastructure

Debt

Note: As of June 30, 2022. AUM amounts include funds managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of Ares Capital Corporation and registered investment adviser. Past performance is not indicative of future results.

1. As of August 2, 2022

2. Jakarta and New Delhi offices are operated by third parties with whom Ares SSG maintains an ongoing relationship relating to the sourcing, acquisition and/or management of investments.

3. AUM managed by Ares Insurance Solutions excludes assets which are sub-advised by other Ares' investment groups or invested in Ares funds and investment vehicles.

Confidential - Not for Publication or Distribution

4

Market Opportunity and Industry Shift

We believe that addressable market continues to expand which provides additional opportunities for ARCC

Banks Continue to Retrench from Middle Market Direct Lending1

Increased Borrower Size2,3,4

80.0%

Banks Share of the Leveraged Loan Market

ARCC Portfolio Weighted Average EBITDA

70.0%

76% reduction in participation from 1994-2022

60.0%

50.0%

40.0%

Leveraged Lending

Guidelines (2013)

Basel III

30.0%

(2014)

20.0%

10.0%

Dodd Frank

0.0%

(2010)

$45

$180

$73

20112016 Q2-22

The Shift to Megadeals in the Liquid Markets has Created Opportunity

~$1.5 Trillion High Yield Market5

~$1.4 Trillion Leveraged Loan Market6

% of deals with less than $300 mm

% of loans with less than $300 mm

tranche size

tranche size

37%

34%

1%

5%

2004

Q2-22

2004

Q2-22

Growing Demand for Direct Lending

  • Ease and surety to close
  • Speed of Execution
  • Value in Partnership
  • Reliable during times of volatility

As of June 30, 2022, unless otherwise indicated. Please see the notes at the end of this presentation for additional important information.

Confidential - Not for Publication or Distribution

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Ares Capital Corporation published this content on 25 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 August 2022 21:10:02 UTC.


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Financials (USD)
Sales 2022 2 029 M - -
Net income 2022 698 M - -
Net Debt 2022 11 547 M - -
P/E ratio 2022 14,3x
Yield 2022 9,27%
Capitalization 10 225 M 10 225 M -
EV / Sales 2022 10,7x
EV / Sales 2023 9,38x
Nbr of Employees -
Free-Float 98,4%
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Mean consensus BUY
Number of Analysts 15
Last Close Price 19,76 $
Average target price 20,87 $
Spread / Average Target 5,60%
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Managers and Directors
R. Kipp deVeer Chief Executive Officer & Director
Mitchell S. Goldstein Executive Vice President
Kort Schnabel Co-President
Penelope F. Roll Chief Financial Officer
Bennett Rosenthal Co-Chairman