Ares Management's Milan Expansion: A Catalyst for Investing in Italy's Undervalued Private Markets

In an era of shifting global capital flows, Europe’s private markets are emerging as a strategic frontier for investors seeking resilient returns. Nowhere is this more apparent than in Italy, where Ares Management’s recent Milan expansion signals a bold bet on the country’s underpenetrated middle-market opportunities. With over €1.6 billion deployed in Italian assets and a localized strategy tailored to the nuances of Southern Europe, Ares is positioning itself—and its investors—to capitalize on a market poised for transformation.

Why Italy’s Private Markets Are Undervalued

Italy’s economy, despite its $2.3 trillion GDP, remains stubbornly underpenetrated by private capital. Traditional banks, constrained by regulatory pressures and risk-averse lending practices, have left a funding gap for mid-sized businesses and real estate projects. According to Ares’ executives, this shortfall has created a “sweet spot” for private lenders and real estate investors. Sectors like healthcare, logistics, and technology—critical to Italy’s economic future—are starved of the flexible, long-term capital that private equity and credit providers can deliver.

The Milan office, led by Partner Tyrone Cooney—a seasoned Italian market operator—represents more than a geographical expansion. It is a strategic pivot toward localized decision-making, where Ares’ teams can navigate cultural, regulatory, and operational complexities that global firms often overlook. This approach is already yielding results: since 2023, Ares’ European Direct Lending platform has closed over 350 transactions, with Italy accounting for a growing share.

Ares’ Playbook: Localization Meets Scale

Ares’ strategy hinges on two pillars: sector specialization and regional agility. In direct lending, the firm targets mid-market buyouts, growth financings, and long-term debt facilities—areas where banks have retreated. For instance, in Q1 2025, Ares closed $11.5 billion in U.S. direct lending commitments, showcasing its origination prowess. This model is now being replicated in Italy, where the firm’s localized teams can structure deals with the nuance required to navigate the country’s complex business environment.

In real estate, Ares is capitalizing on Italy’s structural advantages. The acquisition of GCP International in March 2025—bolstering its logistics and data center portfolio—aligns with a global shift toward New Economy assets. Italy’s central location in Europe, coupled with its underdeveloped industrial infrastructure, makes it an ideal hub for logistics networks. Meanwhile, multifamily housing demand, driven by urbanization and aging populations, is set to rise.

Timing the Opportunity: Why Now?

The convergence of three trends makes Italy’s private markets ripe for investment:
1. Funding Gaps: European banks’ retreat from riskier lending has created a $150 billion annual financing shortfall. Private capital, with its flexible terms and long-term horizons, is the only viable solution.
2. Structural Reforms: Italy’s government has accelerated privatizations and regulatory modernization, easing barriers to foreign investment and corporate innovation.
3. Valuation Discounts: Italian assets trade at discounts to peers in Germany or France, offering asymmetric upside. For example, Milan’s logistics hubs command occupancy rates above 90% but still trade at price-to-rent ratios 15% below European averages.

Risks and Mitigants

No investment is without risk. Italy’s political volatility and regulatory hurdles—such as delays in the GCP acquisition—could delay returns. Yet Ares’ localized teams and deep partnerships with Italian institutions (e.g., banks, family offices) provide a buffer. Moreover, the firm’s $546 billion AUM and global diversification reduce idiosyncratic risks.

Call to Action: Seize the Moment

The Milan office is more than a physical space—it is a catalyst. Ares’ €1.6 billion deployment is a vote of confidence in Italy’s capacity to reward patient, flexible capital. For investors, this is a rare opportunity to gain exposure to a market with:
- Resilient Sectors: Healthcare, logistics, and technology are insulated from cyclical downturns.
- Scalable Solutions: Ares’ platforms offer both debt and equity exposure, tailored to risk appetites.
- Low Competition: Traditional banks’ retreat means fewer rivals for high-quality deals.

The time to act is now. Italy’s private markets are no longer a footnote in Europe’s economic narrative—they are a central chapter. With Ares as your partner, you can turn this underpenetrated frontier into a cornerstone of your alternative asset strategy.

Investors who hesitate may find themselves chasing returns in a crowded market. Those who act decisively today will be positioned to capture the upside of Italy’s renaissance. The Milan office is open—will you be among the first to seize its promise?