ARES

Ares Management Corporation

HARAM

Score: 18/100

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Is ARES Halal?

Leading global alternative-asset-management firm with credit-strategies as the largest segment — interest-bearing private-credit, leveraged-loans, and direct-lending strategies generate the majority of management-and-performance-fee revenue, which is core riba-derived income under Islamic law.

What You Should Know

Ares Management Corporation is one of the largest publicly-traded global alternative-asset-management firms, organized into reporting segments spanning Credit (the largest segment by assets-under-management and fee-related earnings — direct-lending, senior-direct-lending, junior-debt, opportunistic-credit, alternative-credit, structured-credit, syndicated-loans, and high-yield-credit strategies; Ares is one of the largest global private-credit managers and a leader in middle-market direct-lending and large-cap direct-lending), Real Estate (real-estate-equity and real-estate-debt strategies across the United States and Europe), Private Equity (corporate-private-equity, special-opportunities, and infrastructure-and-power private-equity strategies), Secondaries (secondaries strategies acquired in the 2023 Landmark Partners acquisition spanning private-equity-secondaries, infrastructure-secondaries, real-estate-secondaries, and credit-secondaries), and the Strategic Initiatives segment (Aspida insurance-and-annuity platform and other strategic-initiative investments). The Credit segment — which is the largest segment by assets-under-management and fee-related-earnings contribution — is fundamentally an interest-bearing direct-lending and leveraged-loans franchise: private-credit funds extend interest-bearing senior-and-junior debt financing to portfolio companies, leveraged-loan funds invest in interest-bearing syndicated-leveraged-loans, alternative-credit funds invest in interest-bearing structured-credit and asset-backed-finance, and the management-and-performance-fee revenue earned by Ares on these credit strategies is derived from interest-and-spread economics. Interest income from direct-lending and leveraged-loan investing is riba under Islamic law and is the core business activity of the Credit segment. The classical Islamic-finance alternative to interest-bearing direct-lending is mudarabah, musharakah, or murabaha-based profit-and-loss-sharing financing arrangements, which are structurally distinct from conventional private-credit. Ares Management is unambiguously a conventional alternative-asset-management firm with private-credit as the largest segment and fails Sharia screening on the core business-activity grounds. The verdict is unanimous across major Sharia screening agencies.

⚠️ Concerns

•The Credit segment is the largest segment by assets-under-management and fee-related-earnings contribution, and is fundamentally an interest-bearing direct-lending and leveraged-loans franchise — management-and-performance-fee revenue earned on these credit strategies is derived from interest-and-spread economics, which is riba-derived income under Islamic law
•Direct-lending and leveraged-loan investing is the primary business activity of the Credit segment — interest income from direct-lending is riba and is categorically prohibited
•The Real Estate segment includes real-estate-debt strategies (commercial-real-estate-debt, mezzanine, and other interest-bearing real-estate-credit) — real-estate-debt revenue is also riba-derived income
•The Private Equity, Secondaries, and Real Estate-equity strategies are activity-level permissible (corporate-private-equity, secondaries, and equity real-estate are general-purpose investment activities), but the segment-mix consolidated revenue is dominated by Credit, which fails the business-activity screen
•There is no Sharia-compliant component of the Credit-segment business that addresses the foundational riba concern — the verdict is unanimous across major Sharia screening agencies
•Muslim investors seeking alternative-investment exposure should look at Sharia-compliant private-equity, Sharia-compliant musharakah-mutanaqisah real-estate-equity, or Sharia-compliant sukuk-and-murabaha financing platforms rather than conventional private-credit alternative-asset managers