Four quick takeaways from Ares on emerging market opportunities...
1. Focus on alternatives
-- Global alternatives market: $220T ($140T institutional, $80T retail)
-- Private equity growing 10% YoY
-- Private credit growing 11% YoY
-- Real assets (CRE/infrastructure) growing 7% YoY
-- Secondaries growing 9% YoY
2. Retail investor channels
-- Pool of capital from investors with $1M of retail investments to grow from $80T to $100T over next four years.
-- Retail investors' allocation to alternatives to go from 3% to 6%
-- High net worth segment to grow from $3T to $13T by 2032
3. Shrinking banks
-- $12T question: how much of bank loans will find a new home?
-- Banks under pressure (cost structure and short horizons)
-- Number of banks shrinks from 14K to 4K (and falling)
-- C&I loans were 29% of bank loans in 1982 vs. 16% in 2023
-- Private credit has grown 14%+ YoY for last 10 years
-- Private credit dry powder is a small fraction of private equity dry powder
4. Haves vs. have nots
-- Top 25 investment managers control 56% of market (up from 39%)
-- 4 of the largest 6 managers control 52% of semi-liquid market
-- 115 platform acquisitions by largest 50 managers since 2012
(Read full article here. See section that starts on slide 17.)
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