CAL Automotive Collaborates with Ares Management
CAL Automotive, a part of Auto Lender’s Liquidation Center, Inc. and a key player in the vehicle leasing market, has teamed up with Ares Management. Together, they are embarking on an ambitious joint venture that aims to invest up to $1.5 billion in premium vehicle leases sourced through CAL Automotive. This partnership is set to enhance the offerings available to prime consumers seeking reliable and competitively priced leasing options.
Strategic Vision and Expertise
With an impressive history spanning over 40 years in the consumer vehicle leasing industry, Auto Lenders established CAL Automotive in 2016. The company was designed to generate profitability throughout the lifecycle of the vehicles. By strategically choosing low-mileage lease programs aimed at credit-worthy clientele, CAL Automotive strives to ensure substantial residual value when these vehicles transition from lease to resale.
Expertise in Vehicle Lifecycle Management
Brad Wimmer, the CEO of Auto Lenders, expressed enthusiasm about the joint venture with Ares. He highlighted that this collaboration would not only facilitate the growth of their operations but also allow them to leverage the current market dynamics. The partnership will expand the availability of well-maintained, low-mileage vehicles for customers, providing them with access to quality cars at attractive prices.
Commitment to Quality
Mike Wimmer, Founder and Chairman of Auto Lenders, underlined the importance of their approach to the entire lifecycle of an automobile. By focusing on low-mileage leases for prime customers and retaining these vehicles during their transition off-lease, Auto Lenders continues to build a reputation for offering some of the highest quality, low-mileage, one-owner inventories in the market.
Harnessing Market Opportunities
The collaboration positions CAL Automotive as a leading independent consumer auto lessor, having originated over 100,000 consumer leases since its inception. This joint venture is not just a financial investment but a strategic move to complement CAL's existing bank partnerships.
Ares Management's Role in the Venture
Felix Zhang, a partner with Ares Credit Group, remarked that the partnership would significantly boost CAL Automotive's prime auto lease origination capabilities. The venture exemplifies how Ares’ Alternative Credit strategy delivers tailored financing solutions for high-quality asset originators. Ares is recognized for its robust investment in asset-based credit and is keen to leverage its scale and expertise to support this joint initiative.
Ares' Commitment to Social Responsibility
Ares Management Corporation is one of the foremost investors in asset-based credit, chasing investments in large and diverse credit asset portfolios. They are not just focused on profits; they also prioritize philanthropy by committing 5-10% of performance fees from their flagship funds to charitable endeavors aimed at global health and education.
Conclusion and Future Directions
This partnership signals a new era for vehicle leasing, combining CAL Automotive's market experience and expertise with Ares Management's financial prowess. With the backing of such a substantial investment, CAL Automotive is poised to expand its services, offering consumers greater access to high-quality vehicles. The joint venture reinforces both companies' shared goals of enhancing customer experience and driving sustainable growth within the automotive leasing market.
Frequently Asked Questions
What is the purpose of the joint venture between CAL Automotive and Ares Management?
The joint venture aims to invest up to $1.5 billion in prime vehicle leases to enhance CAL Automotive's leasing offerings and expand access to high-quality vehicles for consumers.
How long has CAL Automotive been in operation?
CAL Automotive was established in 2016 and has since originated over 100,000 consumer leases, making it a significant player in the vehicle leasing sector.
What are the advantages of CAL Automotive's leasing strategy?
CAL Automotive focuses on low-mileage leases to prime consumers, ensuring strong residual values and profitability at the end of the lease term through careful selection of vehicles.
How does Ares Management contribute to the automotive financing sector?
Ares Management provides tailored capital solutions, leveraging its extensive experience in asset-based credit to support companies like CAL Automotive, enhancing their financing capabilities.
What is Ares Management's approach to social responsibility?
Ares Management pledges to donate a percentage of performance fees earned from their funds to support global health and education charities, reflecting their commitment to social responsibility.
