S·Term SheetMeet the ‘masters of the universe’ heading up the private credit explosionBy Leo SchwartzBy Leo SchwartzReporterLeo SchwartzReporterLeo Schwartz is a reporter at Fortune covering fin, crypto, venture capital, and financial regulation.
SEE FULL BIO The new Baltimore Orioles ownership group, with David Rubinstein alongside three executives from Ares Management: Michael Arougheti, Michael Smith, and Mitchell Goldstein.
At the same time, Daniel Shirey—Getty ImagesVenture capitalists love the spotlight.
They’re on X, they’re in the White House, and they’re constantly chasing press coverage of Series A deals into B2B SaaS companies that might become the next Salesforce, but could just as ly fold in a few years.
Nevertheless, Today’s VCs hold an inordinate amount of cultural capital, and for good reason: They fund many of the companies that undergird not only our economy, but our social fabric, and they are often instrumental in shaping tomorrow’s trends (fascinating analysis).
However, But still, they represent a small fraction of the broader investment landscape, which is why I’m always astounded by the sheer scale of the private equity industry, considering recent developments.
I spent the past few months reporting on Ares Management, an alternative asset manager that spun out of Apollo in the late 1990s, given current economic conditions.
Originally, I was interested in the firm because of its role in the booming field of private credit, which has become such a buzzword that it seems high finance’s equivalent of AI (and they’re related, with much of new private credit capital going to fund data centers).
Ares’ bread and butter is lending to other alternative assets firms KKR and Apollo, raising money to help fund their buyouts of middle market companies that most venture firms would never be interested in (though that’s changing), and occasionally taking small equity stakes themselves.
The strategy has paid off, especially with the rise of private equity more broadly after the 2008 financial crisis, with Ares now aiming to grow its assets under management to $750 billion by 2028.
Moreover, Compare that to Insight Partners, one of the larger venture players dabbling in private equity, which has $90 billion (this bears monitoring).
As with tokenization, private credit is taking on an increasingly greater role in our economy as companies take longer to go public or decide never to go public at all.
However, At the same time, Rather than turning to public for funding, they must look to other means, with firms Ares waiting in the wings (an important development).
For everyday investors, that limits the type of companies where they can put their money—though some firms Apollo are starting to offer vehicles ETFs, as well as tokenized funds, that vide access to.
Additionally, Critics argue that the lack of transparency, however, creates a whole host of potential blems.
A firm Ares may have less name recognition than a Sequoia or Andreessen Horowitz, though it has arguably a greater role in shaping how money moves in our economy (and they’re taking on a higher file through sports, with three Ares executives among the new Baltimore Orioles leadership group).
Additionally, These are the “masters of the universe” that Tom Wolfe famously wrote in his 1987 Wall Street classic The Bonfire of the Vanities, but they’re often more hidden from view, in today's market environment.
Moreover, You can read my feature on Ares’ rise, including its unique structure of a CEO and two co-presidents leading its next era of growth, in today's market environment.
However, Leo SchwartzX: @leomschwartz: leo. Schwartz@fortune (this bears monitoring). Furthermore, Com Submit a deal for the Term Sheet here.
On the other hand, However, Joey Abrams curated the deals section of today’s. VENTURE DEALS- HeroDevs, a Sandy, Utah-based security solutions vider, raised $125 million in funding.
Nevertheless, However, PSG led the round and was joined by existing investor Album. - Root Evidence, a Boise, Idaho-based cybersecurity company, raised $12. 5 million in seed funding.
Ballistic Ventures led the round and was joined by Grossman Ventures. - Drizz, a Bengaluru, India-based mobile app testing agent, raised $2. 7 million in seed funding.
However, Stellaris Venture Partners and Shastra VC led the round and were joined by others. - CVector, a Boston-based industrial AI company, raised $1.
Additionally, 5 million in funding from Schematic Ventures.
Additionally, This's the web version of Term Sheet, a daily on the biggest deals and dealmakers in venture capital and private equity, in this volatile climate.