Presentation to Vermont Pension Investment Committee
Key Elements of Pathfinder Core
1
2
3
+
5
Durable
through Cycles
Rise of Alternative
Lending
Relative Value
Positioning
Attractive Current
Yield
Demonstrated
Performance
●
●
●
Targeted investments share key features designed to safeguard principal; including asset security,
robust covenants and structural protections, and predictable cash flows
Attributes (individually, but especially in combination) contribute to consistency in outcomes, including
low levels of losses through a default cycle
Underwritten for return stability, positioned for the unexpected
U.S. and European banks are less focused on long term lending
Regulatory capital requirements and accounting changes create more opportunities
Non-Bank lenders fill the "gaps" and provide significant liquidity solutions
Tactical allocation across various asset-focused, cash flow generating investments allows the strategy to
capitalize on attractive risk-adjusted return opportunities
We believe Ares is among very few alternative managers with capabilities and resources to pursue this
strategy in scale
All transactions are designed to benefit from conservative underwriting to withstand stressful
environments and maintain consistent income streams
90%+ of income generated is distributed to investors
Seasoned, cycle-tested investment team of 40 investment professionals led by 25 senior professionals
with ~21 years of average experience across Alt Credit sectors¹
Ares has invested ~$15.0bn across over 1,615 Alt Credit transactions with realized annualized losses of 1.3bps²
Within the Pathfinder Core Strategy Subset, 98% of invested capital in realized investments has
generated positive returns (see slide 9)
2% of realized investments had negative returns with an average recovery rate of 92%
●
●
Of ~$7.0bn invested in illiquid Alt Credit, ~$3.4bn in realizations have generated pro forma gross and net
asset-level IRRS of 15.1% / 10.8%²
ØARES
Diversification does not assure profit or protect against market loss. Past performance is not indicative of future results.
1. As of June 2021.
2. As of December 31, 2020. Reflects the total Alternative Credit track record. Please refer to endnotes on slide 33.
Confidential - Not for Publication or Distribution
15View entire presentation