Ares Management's Strategic Solar Venture with Shell Subsidiary: A High-Yield Play on the U.S. Energy Transition

The U.S. energy transition is accelerating, and Ares Management Corporation (NYSE: ARES) is positioning itself as a key player in the renewable energy revolution. On July 28, 2025, the firm announced a strategic joint venture with Savion Equity, LLC, a subsidiary of Shell plc, to form Tango Holdings, LLC. This partnership, which will manage 496 megawatts (MW) of solar projects across four states, represents a bold step in Ares' long-term diversification strategy. By leveraging its infrastructure investing expertise and Shell's operational scale, Ares is not only expanding its renewable energy footprint but also capitalizing on a structural shift in global energy markets.

A Strategic Partnership with Tangible Scale

Tango Holdings is structured with Ares holding an 80% stake through its Ares Infrastructure Opportunities fund, while Savion retains 20% ownership. The venture includes ownership of five solar projects: the Martin County Solar Project, the Kiowa County Solar Project, and three additional facilities currently under construction in Ohio, Kentucky, Oklahoma, and Indiana. These projects, with a combined capacity of 496 MW, are poised to contribute to the U.S. grid's renewable energy supply at a time when demand for clean power is surging.

Savion, Shell's renewable energy arm, brings technical and operational expertise to the table, while Ares provides the capital and infrastructure investing know-how. This division of labor is a masterstroke: Savion, which manages 3,049 MW of solar and storage assets nationwide, will serve as the managing member of Tango, and Shell Renewable Asset Management International will oversee asset operations. The partnership allows Ares to scale its renewable portfolio without shouldering operational risks, a critical advantage in the capital-intensive energy sector.

Diversification Through Renewable Energy Momentum

Ares' infrastructure portfolio has long emphasized stable cash flow and long-term value creation. As of March 2025, the firm's Infrastructure Opportunities team had deployed $11 billion across 270 assets, with a growing emphasis on climate infrastructure. The Tango joint venture builds on this foundation by adding 496 MW of solar capacity—enough to power 100,000 homes annually—to Ares' existing renewable holdings.

This move aligns with a broader trend in Ares' strategy. Over the past year, the firm has acquired 4.0 gigawatts (GW) of U.S. power generation assets across nine states, including a 1 GW solar and storage portfolio from ENGIE North America. These acquisitions, combined with a €2 billion stake in Plenitude, an Italian energy provider, underscore Ares' commitment to diversifying its infrastructure portfolio into high-growth sectors. The solar venture with Shell further solidifies this focus, tapping into a market projected to grow at a 12% compound annual rate through 2030.

Capitalizing on Long-Term Tailwinds

The U.S. energy transition is driven by three tailwinds that Ares is uniquely positioned to exploit:
1. Regulatory Momentum: The Inflation Reduction Act of 2022 has unlocked $370 billion in clean energy incentives, including tax credits for solar and storage projects. Tango's solar assets will benefit directly from these subsidies, enhancing their cash flow profiles.
2. Corporate Demand: Major corporations, including Microsoft and Amazon, have pledged to achieve 100% renewable energy use by 2030, creating a robust market for solar power.
3. Energy Security: Geopolitical instability has heightened the urgency for domestic energy production. Solar projects like those managed by Tango reduce reliance on imported fuels, aligning with national priorities.

Ares' Infrastructure Debt team, which manages $11 billion in assets, has also been expanding its reach. Recent hires, such as Jon Plavnick and Spencer Ivey, reflect the firm's intent to deepen its infrastructure financing capabilities. This dual focus on debt and equity investments allows Ares to capture value across the capital stack, from project development to long-term asset management.

Risks and Rewards

While the venture is promising, investors should consider potential risks. Solar projects face challenges such as permitting delays, supply chain bottlenecks, and fluctuating EPC (engineering, procurement, and construction) costs. However, Ares' track record in infrastructure investing—its 270+ assets under management across 15 years—suggests it can navigate these hurdles. Additionally, Shell's involvement provides a layer of operational stability, reducing the risk of underperformance.

Investment Implications

For investors, the Tango joint venture represents a high-conviction play on the energy transition. Ares' ability to scale its renewable portfolio while maintaining disciplined capital allocation positions it as a leader in the infrastructure space. The firm's 80% ownership stake in Tango ensures it will capture a significant share of the venture's returns, which are expected to materialize over the next five to seven years as projects reach full capacity.

Given the long-term nature of infrastructure investing, Ares' shares (ARES) may not react immediately to the venture's announcement. However, the firm's consistent deployment of capital—$21 billion deployed since 2010—and its focus on assets with durable cash flows make it an attractive holding for patient investors. Those seeking exposure to the energy transition might consider Ares as a core component of a diversified infrastructure portfolio, particularly alongside complementary plays in energy storage and grid modernization.

Conclusion

Ares Management's partnership with Shell's Savion subsidiary is more than a strategic move—it's a calculated bet on the future of energy. By combining Ares' infrastructure expertise with Shell's renewable energy capabilities, Tango Holdings is poised to become a key player in the U.S. solar market. As the energy transition accelerates, Ares is not just adapting to change; it's shaping it. For investors with a long-term horizon, this venture offers a compelling opportunity to capitalize on the renewable revolution.