NEW YORK - Ares Capital Corporation (NASDAQ: ARCC), a leading specialty finance company, announced leadership changes today, including the appointment of Jim R. Miller as Co-President and the expansion of its Board of Directors. Miller will serve alongside current Co-President Kort Schnabel. Additionally, Mitchell Goldstein has joined the Board and, together with Michael L. Smith, has been appointed as Co-Chairman.
Miller, who joined Ares in 2006, is Co-Head of the Ares U.S. Direct Lending strategy and a member of the Investment Committee of Ares Capital's investment manager. He also co-leads the Ares Sports, Media and Entertainment strategy. His educational background includes a B.A. in Economics from Fairfield University and an M.B.A. from Columbia Business School.
Kipp deVeer, Director and Chief Executive Officer, praised Miller's leadership and investment experience, citing them as key factors in Ares Capital's position as a pioneer in direct lending. Michael Arougheti, who will step down as Chairman but remain a Director, expressed confidence in Goldstein and Smith's ability to lead the Board, acknowledging their significant contributions to the company's growth since its founding.
Ares Capital, founded in 2004, focuses on direct loans and investments in private middle market companies in the U.S., aiming to generate attractive risk-adjusted investment returns for shareholders. As of September 30, 2024, it was the largest publicly traded Business Development Company (BDC) by market capitalization. The company is managed by a subsidiary of Ares Management Corporation (NYSE: NYSE:ARES).
This leadership transition reflects Ares Capital's ongoing commitment to growth and success in the direct lending market. The information is based on a press release statement.
In other recent news, Ares Capital Corporation has reported significant developments. The company expanded its credit facility from $1.775 billion to $2.15 billion, extending the maturity date to October 8, 2029. This move, involving several financial institutions like Wells Fargo Bank and Bank of America, positions Ares Capital with increased financial flexibility for potential new investment opportunities or debt refinancing.
Ares Capital also received shareholder approval to issue up to 25% of its currently outstanding common stock below the company's net asset value (NAV). This authorization, valid for twelve months, may enable the board to raise capital more swiftly if needed.
In terms of financial performance, Ares Capital reported robust results for the second quarter. Core earnings per share (EPS) increased by 3% from the previous quarter and 5% year-over-year. The company also recorded a 6% year-over-year growth in NAV per share, setting a new record.
Investment activity remained strong with $3.9 billion of new commitments and a portfolio valued at approximately $25 billion. Ares Capital issued $850 million in long 5-year unsecured notes and declared a $0.48 per share dividend for the third quarter. These are recent developments that highlight Ares Capital's strategic moves and financial performance.
InvestingPro Insights
Ares Capital Corporation's recent leadership changes come at a time when the company is showing strong financial performance. According to InvestingPro data, ARCC boasts a market capitalization of $13.6 billion, reflecting its position as the largest publicly traded Business Development Company.
The company's financial metrics underscore its robust business model. ARCC's revenue growth stands at an impressive 16.01% over the last twelve months as of Q2 2024, with quarterly revenue growth in Q2 2024 reaching 19.09%. This growth trajectory aligns well with the company's strategic leadership appointments, suggesting a focus on maintaining momentum in the direct lending market.
Investors may find ARCC particularly attractive due to its dividend yield of 8.9%, which is significantly higher than many other financial sector stocks. This generous dividend policy, combined with the company's low P/E ratio of 7.5, indicates that ARCC could be undervalued relative to its earnings potential.
An InvestingPro Tip highlights that ARCC's dividend payments have been stable and growing, which is consistent with the company's strong financial position and could be appealing to income-focused investors. Another InvestingPro Tip notes that analysts have recently revised their earnings estimates upwards for ARCC, suggesting positive sentiment about the company's future performance under its new leadership structure.
For readers interested in a deeper dive into ARCC's financial health and prospects, InvestingPro offers 16 additional tips that could provide valuable insights for investment decisions.
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