Billionaire Investor Bets on Ares Management as It Eyes AI Data Center, Power Financing

Dan Loeb’s Third Point acquired a 375,000-share stake in Ares Management Corporation (NYSE:ARES) in the second quarter. The stake is valued at about $41.7 million as of June 30.

Recent News:

• Last week, Ares Management reported third-quarter adjusted EPS of $1.26, missing the analyst estimate of $1.29. Revenue came in at $1.057 billion, below the consensus estimate of $1.272 billion.
• CEO Michael Arougheti confirmed on a third-quarter earnings call that the company expects U.S. direct lending activity to pick up in the coming months, even as muted private equity dealmaking weighs on deployment.
• The company estimates identified AI-related capital expenditure needs will exceed $5 trillion through 2030, including approximately $2 trillion for physical data centers and related power infrastructure and $3 trillion for GPUs and chips.
• Ares sees significant opportunities in financing the infrastructure needed to support AI, but Arougheti said the firm is focusing on data centers, power generation and transmission rather than taking on greater exposure to financing graphics processing units (GPUs) and chips.
• Ares Capital Corp (NASDAQ:ARCC) agreed to acquire MidCap Financial Investment Corporation (NASDAQ:MFIC) in a stock-and-cash deal valued at approximately $2.6 billion. The deal, unanimously approved by both boards, will strengthen Ares Capital’s position as the largest publicly traded BDC and expand Ares Management’s U.S. middle-market lending platform.

Financials (XLF) Strength: Sector Tailwind for Ares

Ares Management sits in the Financial sector, tracked by the Financial Select Sector SPDR Fund (NYSE:XLF), which ranks 3 of 11 S&P sectors on Monday.

Key Performance Indicators:

• Sector Rank: 3 of 11 sectors (Leading tier)
• Daily Move: +1.95%
• 1-Month Trend: +6.89% (Outperforming)
• 90-Day Trend: -0.49% (Bearish)
• Stock vs Sector: Outperforming by 2.99 percentage points
• Top Performing Sectors Monday: Consumer Discretionary (XLY), Materials (XLB), Financials (XLF) (These are the top 3 performing sectors today, not peers of Ares Management)

Sector leadership is concentrated in Consumer Discretionary and Materials, with Financials also firmly in the lead group, suggesting a pro-cyclical tilt to risk appetite. On the lagging side, Energy is the clear underperformer, while Technology and Healthcare are also in the red, pointing to selective rotation away from defensives and rate-sensitive growth.

How Ares Stacks Up vs NTRS, TROW, PS, BEN, AMP

This peer comparison is based on a curated set of stocks selected for this analysis: Northern Trust Corp (NTRS), T Rowe Price Group Inc (TROW), Pershing Square Inc. (PS), Franklin Templeton, Inc. (BEN), and Ameriprise Financial, Inc. (AMP). Over the past year, Ares Management fell 13.22% versus a peer-group average gain of 36.26%, leaving it behind the peer-group average by 49.48 percentage points. Ares Management also trailed all five individual peers over the period.

Within the group, Pershing Square Inc. was the strongest performer at +90.29%, while T Rowe Price Group Inc was the weakest at +4.53%. The remaining peers were mixed, with Ameriprise Financial, Inc. up 10.74%, Northern Trust Corp up 34.04%, and Franklin Templeton, Inc. up 41.68%.

Top ETF Exposure: PRVT, GPZ, UDIV Weights in ARES

• Tema Listed Private Managers ETF (BATS:PRVT): 5.04% Weight
• VanEck Alternative Asset Manager ETF (NYSE:GPZ): 4.30% Weight
• Franklin US Core Dividend Tilt Index ETF (NYSE:UDIV): 3.34% Weight

Significance: Because ARES carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

ARES Stock Today: Shares Higher in Monday Trading

ARES Stock Price Activity: Ares Management shares are trading higher by 5.12% at $134.71 at the time of publication on Monday, according to Benzinga Pro data.

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