Jun 2, 2025 · 44m · capital-allocators
Kipp deVeer – Scaling for Private Wealth Globally in Credit (Private Wealth 5, EP.449)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Capital Allocators, host Ted Seides interviews Ares Management Co-President Kipp deVeer to discuss how leading alternative managers are expanding into the global private wealth channel. DeVeer outlines Ares' distribution infrastructure, semi-liquid product structuring, underwriting rigor, and international growth across credit, real assets, and private equity.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 32.7% of the talking time here. How this is scored →
Ted as informed peer 3.9 Guest teaching 3.6 Guest disagreement 0.1 Ted pushing back 1.0
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 23:21 Kip rejects the premise of artificial private credit marks
Kip pushes back against Ted's skepticism regarding private credit volatility, arguing that public debt creates artificial losses through forced selling while private lenders maintain genuine structural downside protection.
Hardest push from Ted ▶ 23:02 Ted challenges private credit's low volatility claimsTed presses Kip directly on whether private credit's reported superior risk-return profile is merely an artifact of infrequent marks and mark-to-model accounting rather than true structural superiority.
Biggest teaching moment ▶ 23:21 Kip explains downside restructuring and structural control in private creditKip breaks down the fundamental structural differences between public debt sellers and private direct lenders, illustrating enterprise value cushions, lead lender control, and workout options.
Ted holds their own ▶ 23:02 Ted draws parallels between private equity and private credit valuation criticismsTed demonstrates sharp industry domain expertise by comparing the public-private credit debate to private equity valuation grumblings, forcing the guest to provide a substantive defense.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Announcement: Capital Allocators University for IR and BD | 4 | 3 | 0 | 0 | Ted opens with context on Ares and inquires about the strategic growth in the private wealth space. Kip explains the acquisition of Black Creek and how taking on a 75-person wholesaling team allowed Ares to challenge Blackstone's dominant retail market share. | |
| Structuring Distribution and Global Sales Productivity Metrics | 4 | 4 | 0 | 1 | Ted probes on sales force productivity metrics and retail demand drivers. Kip breaks down retail client behavior, explaining the stickiness of $200k to $500k check sizes and why financial advisors prefer semi-liquid structures over publicly traded BDCs. | |
| Sizing the Wealth Opportunity and Shifting from 60/40 Portfolios | 3 | 3 | 0 | 0 | Ted asks about the magnitude of the wealth opportunity and what catalyzed the recent inflection. Kip explains how the breakdown of traditional 60/40 portfolios in 2021 drove mass affluent demand into alternative managers. | |
| Product Suite Strategy and Financial Advisor Manager Curation | 3 | 3 | 0 | 0 | Ted asks about managing vehicle proliferation and how Ares curates its offering. Kip explains that financial advisors typically want three to five managers with tightly curated offerings across asset classes to avoid single-firm concentration. | |
| Private Credit Value Proposition and Downside Risk Control | 6 | 5 | 1 | 4 | Ted directly challenges the idea that private credit has inherently lower volatility than public markets, questioning if it is merely due to infrequent marks. Kip defends the asset class by detailing lender control, structural downside protection, and the ability to restructure assets rather than taking public market panic discounts. | |
| Sponsor Message: Ridgeline AI-Native Investment Technology | 4 | 4 | 0 | 2 | Following the mid-roll ad, Ted presses on liquidity mismatch in interval funds holding private equity. Kip explains the importance of diversification, untamed credit lines, and advisor education regarding semi-liquid redemption terms. | |
| Standardized Fee Architecture in Wealth Management Products | 3 | 3 | 0 | 0 | Ted asks about the evolution of fee structures in wealth products. Kip notes that product and distribution fees are virtually off-the-shelf carbon copies across top managers, before discussing the heavy operational lift of building brand recognition in retail. | |
| Distribution Channels: Wirehouse Relations and RIA Aggregators | 3 | 3 | 0 | 0 | Ted asks about triaging distribution between wirehouses and independent RIAs. Kip discusses partnering with fintech platforms like iCapital and CAIS and hosting proprietary group events to cost-effectively reach independent advisors. | |
| International Wealth Expansion in Europe and Asia | 5 | 4 | 0 | 2 | Ted asks about international wealth traction and the potential market distortion from massive pro-cyclical retail inflows. Kip acknowledges that aggressive retail inflows force competitors to deploy quickly and explains how Ares maintains underwriting discipline using balanced capital pools. | |
| Managing Downside Cycles and Product Queuing Mechanisms | 4 | 4 | 0 | 1 | Ted explores downside scenarios and managing advisors through market downturns. Kip highlights product queuing mechanisms used by top managers to reject excess capital when deployment conditions are unfavorable. |
Statements from this episode (21)
deVeer: Ares Management Reaches About $500 Billion in AUM
“We're about five hundred billion of AUM today.”
DeVeer: Ares Doubled Global Wealth Distribution Team to 150 People
“Raj basically said, we need to go from 75 to a 150 people globally like yesterday. Which we did, although took a little bit of a breath before we did it.”
DeVeer: Blackstone Held 60% Share in Private Wealth Alternatives Around 2021
“When we were in the midst of negotiating the acquisition, we saw it as an asset that we could unlock, but it was really interesting period of time in 2002 1001, whenever it was, Blackstone, because of their early lead in the market, had a roughly 60, 65% marke…”
DeVeer: Five Alternative Managers Hold 40% Share in Private Wealth Channel
“There are now four or five firms, including Blackstone and Aries, that have probably 30 or 40% market share at the top of the stack.”
DeVeer: Ares Expects Asian Wealth Fundraising to Match European Surge
“The capital raising that we did in Europe was tremendous and a little bit of a surprise for us, and I think this year may be that year for Asia, but being global is important because I think it's a global opportunity.”
DeVeer: Private Wealth Investors Write Sticky $200K to $500K Checks
“Generally, what you're seeing from these clients is they're putting 200,000 to 500,000 dollar check sizes to work, and we found that that money is quite sticky.”
DeVeer: Financial advisors favor semi-liquid funds over volatile public BDCs
“I had this debate for years with financial advisors where I'd say, just buy the BDC. Well, my clients don't like it when the stock goes up and down and they don't like the correlation to the market and the volatility. And so we'll do what we do. And stock goes…”
DeVeer: Wealth Channel Accounts for $40 Billion of Ares' Total AUM
“So if you look at our roughly five hundred billion of AUM today, about Forty billion of that is from the wealth channel.”
DeVeer: Ares Expects 20% of New Capital From Wealth, Trailing Peers
“Most firms like Aries expect that 40% of their capital raising going forward will come from the wealth channel. That's not our expectation, but I mean, I think if we think about sizing new capital on an annual basis, my guess is something like 20% of our forec…”
DeVeer: Most Financial Advisors Prefer Allocating Across Three to Five Managers
“Most of the FAs we talk to will say, I want three to five managers That have a pretty well curated set of products.”
DeVeer: Retail Credit Funds Are Ares' Largest and Fastest-Growing Products
“The funds that we have in the retail channel and credit are not surprisingly the largest ones that we manage and are growing the quickest.”
deVeer: Lead private credit lenders hold a free call option on companies
“The point is you have this free call option as a lender to own companies if you have to. And if you're lending to good companies and you control your outcomes, where you're a lead investor, you can probably get to better resolutions.”
deVeer: Ares 20-year charge-offs beat public market default rates
“If you look at our historical charge-offs versus defaults in the public markets, they're just better over a twenty-year period because of that control”
Kipp deVeer: Semi-Liquid Funds in Concentrated Private Equity Are Risky
“I'd be concerned looking at a fund that was, quote, semi-liquid in a concentrated pool of private equity assets because there's no easy way to create capital to the extent you need it.”
Kipp deVeer: Redemption Gates in Semi-Liquid Funds Protect Investors
“The way these structures are set up are actually set up to protect investors because the alternative is a fire sale of assets at bad prices, which creates bad outcomes for the investor.”
DeVeer: Retail Alternative Fund Fees Are Identical Across Major Managers
“If you were to launch a non-traded BDC today, you'd say, who are the biggest non-traded BDCs? What are their fees? Boom, by the way, they're all exactly the same, and they haven't moved much. That's true of the other asset classes as well, so everybody's a car…”
DeVeer: Ares Relies on iCapital and CAIS for RIA Distribution
“There are folks out there who do that for a living, whether it's iCapital or Case. They do a really nice way of Really being deep with that community that we couldn't possibly go make one-off calls on all the time.”
DeVeer: Retail Inflows Push Competitors to Loosen Underwriting Discipline
“If they have a big flow quarter in a particular product, we'll see them be very competitive on new underwritings because they have a bunch of cash sitting around that they need to deploy.”
DeVeer: Pro-Cyclical Retail Credit Capital Inherently Risks Underwriting Discipline
“I would not want 75% of my credit capital to be in a pro-cyclical structure like this, which it inherently is, and that's where you can lose discipline.”