The Next Generation of Investment Leaders | Global Conference 2025

Panel Context:

• May 6, 2025; titled "The Next Generation of Leaders in the Investment Management Area: Can You Build the Next Berkshire Hathaway?"
• Panelists: Michael Arrigetti (Ares) and Todd Boley (Eldridge), whose firms' decade-long returns have exceeded Berkshire Hathaway's rate.
• Ares stock is up 746% since May 14, 2014; Eldridge remains a private company.

Ares (Michael Arrigetti) Strategic Philosophy:

• Culture as Core Strategy: The firm dedicates equal time to culture/process as to execution; partners spend decades building a mindset of "healthy paranoia" regarding disruption.
• Growth Formula: Success derived from identifying commonalities across complex global markets to replicate a simple formula: scale, flexibility, deep origination, product expertise, and rigorous relationship networks.
• Talent Metrics: Ares values resilience; Arrigetti states, "I never wanted to hire a trader that hadn't lost money... fail early."
• Core Values: Collaboration, responsibility, entrepreneurship, self-awareness, and trust.
• Leadership Stability: Partners have invested together through volatile cycles for nearly 30 years, creating a culture where risk-taking and failure are accepted as learning tools.

Eldridge (Todd Boley) Strategic Philosophy:

• Brand & Origins: Built Guggenheim to leverage a storied family brand (Meyer Guggenheim) to gain market access; learned that brand power can open doors.
• New Venture (Eldridge/Zinnia): Moved to build Eldridge from scratch after realizing the insurance industry lacked engaged, tech-enabled platforms; founded Zinnia to create an end-to-end tech stack for insurance.
• Market Opportunity: Sees massive demand for annuities offering 5%+ tax-free compounding versus 30-52% taxable bond yields.
• Security Benefit Assets: Assets under management are ~$60 billion with a target to exceed $100 billion within five years.
• Investment Strategy: 10-year cumulative returns (2014-2024) highlighted: Treasuries (9%), Investment Grade (28%), High Yield (64%), Senior Secured Loans (67%), CLOs (88%).
• Leverage Discipline: Maintains <6x assets-to-equity leverage, the lowest in the industry, to avoid mandates forcing ownership of low-yield bonds.

Sports Investments & Community Impact:

• Ares Ownership (Baltimore Orioles):
  • Acquired stake to serve as stewards of the community; aims to bridge structural divides in Baltimore (a historically segregated city).
  • Prioritized civic engagement following the Key Bridge collapse, using the team's presence to aid rebuilding and morale.
• Eldridge Ownership (Los Angeles Dodgers):
  • Partial ownership includes a focus on winning championships and community passion; celebrated 2024 World Series victory.
  • Boley noted the "unscripted live content" of sports creates drama unmatched by other media.
  • Community engagement highlighted by fans receiving Freddie Freeman tattoos (200+ in one parlor) post-game.

Comparative Analysis: Building vs. Buying (vs. Berkshire Hathaway):

• Buffett Model: Acquired existing companies (GEICO, Coca-Cola, etc.) and utilized tax shelters/dividend deferral to compound capital.
• Arrigetti/Boley Model: Focuses on building companies from scratch (e.g., Ares' credit platforms, Eldridge's Zinnia tech stack, A24 film studio).
• Decision Driver: Building is preferred when a team exists or can be assembled at a fraction of the acquisition cost; buying occurs only at the "right price."

Aviation Strategy (FlexJet):

• Union Decertification: Only US aviation business to decertify a union, allowing attachment of specific pilots to specific aircraft tails.
• Operational Model: Six pilots/assistants rotate on a plane, creating a "your plane" experience for fractional owners.
• Strategic Partnerships: Exclusive deal with Gulfstream (G700); plans to integrate luxury travel with high-end brands (e.g., Amman, Dolce & Gabbana) to monetize 900,000+ hours of flight time.

Future Growth & Scaling (Trillion-Dollar Goal):

• Ares Trajectory: Projects reaching $1 trillion in AUM within 5 years if not sooner; currently the world leader in private credit.
• Growth Drivers:
  • Compounding: Portfolio cash flow/NOI growing >10% annually; organic growth targets 8-10% via market share gains.
  • Capital Availability: Undeployed capital is sufficient to cover immediate expansion needs.
  • Culture Preservation: New divisions led by proven internal business builders to ensure culture transfer; partners remain motivated by impact rather than financial necessity.
• Eldridge Trajectory: Compounding at 15% annually from current $15B could reach $1T by age 80; aims to replicate Berkshire's scale by diversifying capital across markets.
• Industry Trend: Major alternative managers (Blackstone, KKR, Apollo, Ares) are entering insurance to access permanent capital, though regulatory environments differ.

Key Forward-Looking Statements:

• Ares: "99% of [Buffett's] wealth came after he was 50... 99% of [our] networks is going to be created in the next 40 years."
• Eldridge: "If we compound at 15%... $15 billion today would be worth a trillion."
• Investment Philosophy: "The biggest risk is not having any return."
• Succession: "If their net worth increased a hundredfold... would they be the same person?" Arrigetti confirms current partners remain focused on community and societal impact.