Ares Management Corp. is navigating a crucial decision: continue its dominance in private credit or expand into a diversified "alts supermarket" offering real estate, infrastructure, and private equity. While private credit has been a major growth engine, especially during economic downturns, Ares aims to provide institutional investors with a broader range of alternative asset classes.

Despite diversification efforts, private credit remains central to Ares' strategy, even influencing its real estate division. CEO Michael Arougheti emphasizes that private credit will continue to represent about 60 percent of the firm's target half-trillion dollars in assets under management by 2025. This focus is crucial as competitors like Blackstone also build strong private debt businesses.

Ares, founded in 1997, has seen significant profit and asset growth, particularly in its credit strategies. Ares Capital, its publicly traded unit, is the largest business development company, managing $22 billion and focusing on resilient sectors and senior secured loans. Despite potential increases in loan delinquencies due to economic slowdowns, Ares Capital maintains a low non-accrual rate and high principal recovery.