I'm sitting here with Ares Management CEO Michael Arougheti and it's interesting. Mike, good to see you today.
Good to see you. Thanks for coming down.
Oh, you're welcome. This is on the heels of some news at Ares. This is on the heels of a big set of promotions you announced, co-presidents for the firm, but that also set off a wave of promotions underneath them as well. What does this mean for the future of Ares and the direction you're trying to go?
I'm so happy. So Kipp DeVoe and Blair Jacobson, who I think you're sitting down with later, are two of my oldest friends. We've been friends for 30 years, business partners for 25 years in the case of Kipp, 15 plus years in the case of Blair. So anytime you can elevate, you know, good quality people, it's cause for celebration. But as you hinted at, we've been, I think, really good at succession. You know, private equity firms historically are great at succession, I think, within their portfolios, but when it comes to themselves, have sometimes missed the mark. And I think any good high-quality growth company needs to be great at succession, needs to create pathways for growth for future leaders. So the reality is over the last year, we've elevated co-heads in our European direct lending business, we've elevated co-heads in our US direct lending business, we've elevated people in real estate, and there's just been this massive wave of growth and promotion. I think part of what makes our culture unique, speaking to the friendship that I have with Blair and Kipp, but it pervades the whole organization, is we have people here who are now running businesses that started at Ares 20, 25 years ago as analysts and really grew up in this culture. So I just couldn't be happier.
You know, it's interesting, this is not just happening at Ares, it's kind of happening across the street where you're seeing more people in high-level roles being tapped to be elevated to the number two, three, four positions. What does this say about the talent war on Wall Street? What are you seeing when you talk to the banks and you talk to your rivals about people who might want to come here?
Look, I think you win in this game by developing and retaining great talent. I think we've been fortunate, we have very, very low turnover, and you can see that in the way that our leaders are growing and developing here. There's always going to be a war for talent. I think the reality is the large firms in our business are getting larger. There's huge benefits to size and scale, so I'd like to think that we and others are kind of net beneficiaries of that war for talent. I would imagine certain other parts of the market, whether some of the investment in commercial banks, are probably struggling to maintain talent just given some of the secular changes in the market.
And to that end, few people realized that you added about 100 investment professionals last year.
We did. So we grew our investment teams over 10% last year, and we just came out of our planning meetings for this year, and I would expect growth this year will be similar. So obviously the businesses are growing, they're diversifying, they're globalizing, and the way you support that growth and complexity is adding high-quality talent.
100 more people. Yeah, well, we're up to almost 4,000 people now, obviously. So that's part of the conversation around the elevation of Kipp and Blair, is obviously just putting some of our most proven business builders and leaders against this growth and complexity. You know, the growth is coming against an interesting backdrop. I was looking at the 10-year yield from the beginning of the year to now, and the drop-off is pretty stunning. You are more than a half a percentage point from the highs that you saw just in January. The market is afraid of growth. Are you?
We're not. You know, and if you look, consumer confidence is feeling a little wobbly, CEO confidence is not showing the same anxiety. You know, obviously one of the benefits of running the business that we run is we see things happening in the real economy all over the globe, and we're just not seeing the deceleration in growth. So our base case coming into the year was that you'd continue to see solid fundamental growth, you'd see persistently high prices and inflation, labor markets are still very tight.
