Presentation to Vermont Pension Investment Committee

Index Definitions Estimates of market correlation are not available for many Alternative Credit sectors due to lack of independent, publicly available data. However, where data is available, correlations with traditional markets have historically been quite low. The table herein shows five-year correlation statistics across a number of asset classes, with Private Asset-Focused Investments represented by a separately managed account managed by the Ares Alternative Credit Team (the "Team") since 2015. Observations by senior members of the Team from over decades of investment experience also support the general view that cash flow performance, default rates and loss rates in most Alternative Credit sectors are generally not correlated with markets but tend to be idiosyncratic and specific to individual transactions. Index data is provided for comparison purposes only. The information related to the various indices is sourced from the providers' websites. Ares is not responsible for any historic revision made to the indices. The indices include the reinvestment of dividends, interest and other earnings and have not been adjusted for management fees or expenses. Any indices that are not denominated in U.S. Dollars are hedged back to the U.S. Dollar currency for comparison purposes. Correlation results have been calculated using the monthly returns of the below reference indices: 1. 'US Small Cap' is represented by the Russell 3000 index. The Russell 3000Ⓡ Index measures the performance of the largest 3,000 US companies representing approximately 98% of the investable US equity market. The Russell 3000Ⓡ Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are included. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 'US Large Cap' is represented by the S&P 500 index. The S&P 500 index is designed to be a leading indicator of US equities and is meant to reflect the risk/return characteristics of the large cap universe. 'Euro Equities' is represented by the EURO STOXX 50Ⓡ Index. The EURO STOXX 50® Index represents the performance of the 50 largest companies among the 19 supersectors in terms of free-float market cap in 11 Eurozone countries. These countries include Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. The index has a fixed number of components and is part of the STOXX blue-chip index family. The index captures about 60% of the free-float market cap of the EURO STOXX Total Market Index (TMI). 'World Equities' is represented by the MSCI World Index. The MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries. With 1,649 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. DM countries include: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the UK and the US. 'US Corp Loans' is represented by the Credit Suisse Leveraged Loan Index (CSLLI'). The CSLLI is an index designed to mirror the investable universe of the $US-denominated leveraged loan market. 'Euro Corp Loans' is represented by the Western European Leveraged Loan Index (WELLI'). The WELLI is designed to mirror the investible universe of the Western European leveraged loan market, with loans denominated in $US and Western European currencies. 'US High Yield' is represented by the ICE BofAML High Yield Master II Index (HOAO'). The HOAO consists of below investment grade US dollar denominated corporate bonds that are publicly issued in the US domestic and yankee bonds (issues included in the index have maturities of one year or more and have a credit rating lower than BBB-/Baa3, but are not in default). 'Euro High Yield' is represented by the ICE BofAML European High Yield Index (HE00'). The HEOO tracks the performance of EUR denominated below investment grade corporate debt publicly issued in the euro domestic or eurobond markets. 'Barclays Agg' is represented by the Bloomberg Barclays Global Aggregate Bond Index. The Bloomberg Barclays Global Aggregate Bond Index is a flagship measure of global investment grade debt from twenty- four local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. 'Barclays ABS' is represented by the Bloomberg Barclays Asset-Backed Securities Index. The Bloomberg Barclays Asset-Backed Securities Index is the ABS component of the Bloomberg Barclays US Aggregate Bond Index and has three subsectors (credit and charge cards, autos, and utility). 'Barclays CMBS' is represented by the Bloomberg Barclays Non-Agency Investment Grade CMBS Index. 'US CLO BBB' is represented by the J.P. Morgan Collateralized Loan Obligation BBB Index (CLOIE). The J.P. Morgan Collateralized Loan Obligation BBB Index (CLOIE) is dedicated to tracking the US dollar- denominated broadly-syndicated, arbitrage CLO market. The CLOIE is not tradeable and aims to enhance market transparency and act as a potential total return benchmark. Represents US dollar- denominated post-crisis broadly syndicated CLOs rated BBB. 'US CLO BB' is represented by the J.P. Morgan Collateralized Loan Obligation BB Index (CLOIE). The J.P. Morgan Collateralized Loan Obligation BB Index (CLOIE) is dedicated to tracking the US dollar- denominated broadly-syndicated, arbitrage CLO market. The CLOIE is not tradeable and aims to enhance market transparency and act as a potential total return benchmark. Represents US dollar- denominated post-crisis broadly syndicated CLOS rated BB. 'US Govt 10yr' is represented by the ICE BofA Current 10-Year US Treasury Index (GA10). The ICE BofA Current 10-Year US Treasury Index is a one-security index comprised of the most recently issued 10-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 10-year note must be auctioned on or before the third business day before the last business day of the month. 'Euro Govt 10yr' is represented by the ICE BofA 7-10 Year German Government Index (G4D0). The ICE BofA 7-10 Year German Government Index is a subset of ICE BofA German Government Index including all securities with a remaining term to final maturity greater than or equal to 7 years and less than 10 years. Note Oil Shock defined as the period from October 2015 to June 2016. Liquidity/Rates Shock defined as the period from October 2018 to March 2019. COVID Shock defined as the period from March 2020 to June 2020. Index Disclosure: Indices are provided for illustrative purposes only and not indicative of any investment. They have not been selected to represent appropriate benchmarks or targets for the strategy. Rather, the indices shown are provided solely to illustrate the performance of well-known and widely recognized indices. Any comparisons herein of the investment performance of a strategy to an index are qualified as follows: (i) the volatility of such index will likely be materially different from that of the strategy; (ii) such index will, in many cases, employ different investment guidelines and criteria than the strategy and, therefore, holdings in such strategy will differ significantly from holdings of the securities that comprise such index and such strategy may invest in different asset classes altogether from the illustrative index, which may materially impact the performance of the strategy relative to the index; and (iii) the performance of such index is disclosed solely to allow for comparison on the referenced strategy's performance to that of a well-known index. Comparisons to indices have limitations because indices have risk profiles, volatility, asset composition and other material characteristics that will differ from the strategy. The indices do not reflect the deduction of fees or expenses. You cannot invest directly in an index. No representation is being made as to the risk profile of any benchmark or index relative to the risk profile of the strategy presented herein. There can be no assurance that the future performance of any specific investment, investment strategy, or product will be profitable, equal any corresponding indicated historical performance, or be suitable for a portfolio. ARES Confidential - Not for Publication or Distribution. 34