Ares Management's Milan Move: A Play on Italy's Private Market Potential

Ares Management's May 2025 launch of its Milan office and the appointment of Alessandro Verdirrame as Italy's wealth management chief mark a bold bet on Italy's underpenetrated private credit and real estate sectors. The expansion reflects Ares' strategy to capitalize on a post-pandemic inflection point in European markets, where institutional and retail investors are hungry for yield and liquidity solutions. By embedding localized expertise in a region with a $50 billion credit gap and resilient real estate fundamentals, Ares is positioning itself to dominate a fragmented landscape.

Localized Leadership Drives Relationship-Building

The Milan office, led by Tyrone Cooney (Head of France and Southern Europe for Direct Lending), and Verdirrame (new Italy wealth chief), underscores Ares' focus on deepening local ties. Verdirrame's decade-long tenure at Goldman Sachs and UBS equips him to court private banks and insurers seeking alternatives to volatile public markets. His role is critical to scaling Ares' Ares European Strategic Income ELTIF Fund (AESIF ELTIF), which opens private credit to retail investors with a €50,000 minimum—a stark contrast to traditional high-net-worth barriers.

This dual leadership structure—Cooney for institutional credit and real estate deals, Verdirrame for retail distribution—creates a flywheel effect. As , the firm can now scale these returns across both institutional and retail channels.

Private Credit: Filling the Bank Withdrawal Void

Italy's banking sector, still recovering from pandemic strains, has retreated from commercial lending. Over 80% of European CRE loans are bank-originated, but shrinking bank balance sheets have left a $100 billion credit gap in Southern Europe—half of which is in Italy. Ares is stepping in with senior secured loans offering lower-risk, steady returns. Its $77 billion European Direct Lending platform, which has made 390 investments since 2007, is primed to fund sectors like manufacturing and healthcare, where Italian firms need long-term capital.

The timing is optimal. With Italian banks' CRE lending capacity constrained, Ares' ability to deploy capital quickly—paired with its 9.3% track record—gives it an edge. Meanwhile, institutional investors, including pensions and endowments, are pouring into alternatives to offset public market volatility. Ares' AUM has grown 12% annually in Europe, hitting $546 billion by Q1 2025, fueled by this demand.

Real Estate: Logistics and Rentals Lead the Charge

In real estate, Ares is targeting Italy's logistics hubs and rental housing—a move aligned with secular trends. Industrial and multifamily sectors are benefiting from supply shortages: , while industrial supply declines 50% YoY. Ares' $58.2 billion real estate platform, bolstered by the 2025 GCP acquisition ($44 billion AUM), now ranks among the top three global industrial real estate owners.

The Milan office's cross-asset integration will further amplify returns. For example, a logistics investment might pair with a Direct Lending loan for the same borrower, creating a holistic capital stack. This synergy, combined with Italy's post-pandemic urbanization and e-commerce growth, positions Ares to outperform in a market where 60% of CRE assets remain bank-financed but undercapitalized.

The Investment Case: Ares as Europe's Private Market Catalyst

Ares' Milan play is more than a geographic expansion—it's a model for unlocking mature markets through localized execution and multi-asset coordination. The firm's risk-reward calculus is compelling:

1. Institutional Demand: Growing allocations to alternatives, with Ares' track record as a key draw.
2. Retail Democratization: AESIF ELTIF lowers barriers, tapping into Italy's €1.2 trillion retail wealth pool.
3. Macro Tailwinds: Italy's post-pandemic recovery and supply-chain shifts favor logistics and rental housing.

Investors should consider Ares' strategies via its publicly traded Ares Commercial Real Estate (NYSE: ACRE) or its commingled funds. The Milan office's success could also foreshadow further European rollouts, making Ares a prime beneficiary of a continent-wide shift to private credit and real assets.

Final Take

Ares' Italy pivot is a masterclass in leveraging localized expertise to exploit structural gaps. With Europe's alternative asset market poised for growth and Ares' platform already delivering, this move isn't just about Italy—it's about owning the next phase of European private markets. For investors seeking yield and diversification, Ares' strategies are worth a serious look.