Ares Raises the Stakes With $8 Billion Data Center Bet

Ares Management is sharpening its focus on one of the fastest-growing frontiers in private markets: data centers. The Los Angeles-based firm told investors it is targeting more than $8 billion in near-term equity fundraising across London, Japan and Brazil. In the first half of the year, Ares already secured $2.4 billion for digital infrastructure projects, a segment CFO Jarrod Phillips described as demand-led and not speculating, with most developments pre-leased on 15-year or longer terms that include rent escalators. The firm sees AI adoption as the structural driver, with BloombergNEF projecting data centers could account for 1,600 terawatt-hours of global electricity use by 2035 an amount that would place the sector among the world's top energy consumers.

Beyond infrastructure, Ares is widening its push into the retail channel. The firm lifted its fundraising target from wealthy individuals by $25 billion to $125 billion by 2028, a move it said could generate $800 million in fees. Ares argues individuals have barely scratched the surface of the $140 trillion private markets wealth pool, suggesting ample room for expansion. At the same time, the company is aiming to raise $70 billion for alternative credit by 2028, building on an existing $47 billion platform that spans products from auto loans to mortgages. Of that, $24 billion is tied to non-investment-grade assets, which Ares noted generate fee levels comparable to far larger pools of investment-grade debt.

The firm is also positioning to capitalize on what it expects to be a much larger secondaries market in the years ahead. Ares projects that discounted sales of private equity, credit and infrastructure stakes could more than double within five years, and it has already purchased $7 billion worth of continuation vehicle deals. UBS estimates private debt exposure to technology has surged to $450 billion, up $100 billion in just a year, underscoring both the scale of the opportunity and the risks attached. For Ares, combining long-duration, pre-leased data centers with rising retail flows and discounted secondary entry points could be a way to anchor growth in an AI-driven investment cycle still in its early innings.