Ares Capital Appoints Kort Schnabel as CEO as Earnings Miss the Mark

Ares Capital has appointed co-president Kort Schnabel as its new CEO as the company’s most recent quarterly earnings fell just short of the mark.

The New York-based alternative investment manager’s profits dipped slightly to $359 million, or 55 cents per share, during the fourth quarter of 2024 — down from $361 million, or 57 cents per share, during the third quarter of 2024, according to Ares’ fourth-quarter earnings report released Wednesday.

Ares’ net income per share also decreased to $2.44 in 2024, compared to $2.75 in 2023, according to Ares.

Scott Lem, chief financial officer at Ares, said during a Wednesday earnings call that the impacts on fourth-quarter earnings were due to a “change in market rates,” as well as “delays” that he blamed on the presidential election.

Lem added that the company “stands to benefit from rate declines in interest expense as it relates to floating debt obligations.”

Ares’ strategy to turn things around in 2025 includes appointing a new CEO in Schnabel, who joined the company in 2001 and was a founding member of its U.S. direct lending strategy in 2004, according to Ares’ Wednesday announcement.

“Together, our team has created a market-leading provider of flexible capital solutions to companies of all sizes through our disciplined, creative and relationship-oriented approach,” Schnabel said in a statement. “I am committed to extending this legacy as we maintain our focus on creating value for private equity sponsors, portfolio companies and investors for years to come.”

Schnabel will replace current CEO Kipp deVeer effective April 30, Ares said. DeVeer said during the earnings call that he will remain an “active member” of the company’s board of directors and investment committee.

Meanwhile, current co-president Jim Miller will become the sole president of the company, according to the announcement.

During the fourth quarter of 2024, Ares made new investment commitments of approximately $3.8 billion, including investments in 26 new portfolio companies and 51 existing companies, according to the earnings report.

In December, Ares purchased a 10 percent stake in the National Football League team the Miami Dolphins from Stephen Ross, according to a release at the time. As part of the transaction, Ares also acquired assets such as Miami’s Hard Rock Stadium and the Formula 1 Crypto.com Miami Grand Prix race, PE Hub reported.

“As we enter 2025, we believe we are well positioned for what we expect will be an increasingly active investing market for acquisition finance and growth capital opportunities,” DeVeer said in a statement.

Isabelle Durso can be reached at idurso@commercialobserver.com.