Financial Data and Key Metrics Changes - The company reported strong portfolio performance with positive NOI and EBITDA growth, indicating resilience in its financials [3][4] - The alternative credit business is valued at $40 billion, reflecting a robust position in the market [3] Business Line Data and Key Metrics Changes - Direct lending portfolios maintain a loan-to-value ratio of 42%, suggesting a strong backing by institutional equity [7][30] - The company has seen a 61% increase in deployment despite a 7% decline in US M&A volumes, showcasing effective management of capital [25][26] Market Data and Key Metrics Changes - Credit spreads have widened by 50 to 75 basis points post-Liberation Day, but the total return in direct lending remains attractive at around 10% [18][21] - The secondary market for private equity is experiencing significant growth, with an estimated $160 billion in secondary deployment last year, indicating a healthy demand for liquidity solutions [62] Company Strategy and Development Direction - The acquisition of GCP enhances the company's position in industrial real estate and digital infrastructure, aligning with its strategic roadmap for growth in Asia and data centers [57][58] - The company aims to double its asset-based finance business to $75-80 billion, focusing on sub-investment grade and investment grade opportunities [36][38] Management's Comments on Operating Environment and Future Outlook - Management expresses cautious optimism about the economy, noting strong fundamentals despite concerns over inflation and economic growth [4][5] - The company maintains its five-year fee-related earnings growth guidance of 16% to 20%, reflecting confidence in its business model and market position [85][86] Other Important Information - The company emphasizes the importance of maintaining a balance between retail and institutional fundraising to ensure sustainable growth and performance [78][79] - Management highlights the educational efforts made to improve investor understanding of asset-based finance, which is crucial for market expansion [42][44] Q&A Session Summary Question: What are the biggest risks to the private credit market? - Management believes that private credit is one of the last places to see losses due to the high quality of borrowers and the structure of the market [8][9] Question: How is the integration of the GCP acquisition progressing? - The acquisition is on track to enhance the company's capabilities in industrial real estate and data centers, with significant growth potential identified [57][58] Question: How does the company manage the conflict between retail and institutional flows? - The company focuses on building investment capacity to ensure that it can meet the demands of both retail and institutional investors without compromising performance [78][79]

Group 1 - The stock of Ares Management Corporation (ARES) is experiencing significant attention due to high implied volatility in the options market, particularly the June 20, 2025 $220 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Ares Management's stock price, potentially due to an upcoming event [2] - Ares Management currently holds a Zacks Rank 3 (Hold) in the Financial - Investment Management industry, which is in the bottom 11% of the Zacks Industry Rank, with recent earnings estimates decreasing from $1.24 to $1.15 per share [3] Group 2 - The high implied volatility surrounding Ares Management may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4]

Financial Performance - Total revenues for Q1 2025 reached $1,088,805, an increase of 53.8% compared to $707,363 in Q1 2024[25]. - Management fees increased to $816,987 in Q1 2025, up from $687,692 in Q1 2024, reflecting a growth of 18.8%[25]. - Net income attributable to Ares Management Corporation was $21,857 for Q1 2025, a decrease of 70% from $73,027 in Q1 2024[25]. - Comprehensive income attributable to Ares Management Corporation was $89,271 for Q1 2025, compared to $68,177 in Q1 2024, indicating a growth of 30.9%[28]. - Total consolidated expenses rose to $1,014,328, compared to $538,493 in the prior year, an increase of 88.5%[164]. - Income before taxes for Q1 2025 was $141,038, a decrease of 39% from $231,048 in Q1 2024[168]. - The company reported net realized and unrealized gains on investments of $268 for Q1 2025, down from $10,516 in Q1 2024[25]. Assets and Liabilities - Total assets as of March 31, 2025, were $27,181,768, an increase of 9.2% from $24,884,308 as of December 31, 2024[23]. - Total liabilities increased to $18,389,821 as of March 31, 2025, compared to $17,485,922 as of December 31, 2024, reflecting a rise of 5.2%[23]. - Total stockholders' equity increased to $4,454,107 as of March 31, 2025, compared to $3,543,646 as of December 31, 2024, reflecting a growth of 25.7%[23]. - The company reported cash flows used in investing activities of $1,744,690,000 for the three months ended March 31, 2025, compared to $34,071,000 in 2024[36]. - The company’s total investments reached $4.9 billion as of March 31, 2025, up from $4.6 billion at the end of 2024[63]. Growth and Expansion - The company reported a significant increase in assets under management (AUM), reaching $X billion, representing a Y% growth compared to the previous quarter[12]. - Fee paying AUM (FPAUM) increased to $X billion, reflecting a Z% rise, indicating strong demand for the company's investment products[17]. - The company anticipates a growth in fee related earnings (FRE) by X% in the upcoming quarter, driven by increased management fees and performance revenues[17]. - New product offerings in the wealth management sector are expected to contribute an additional $X million in revenue over the next fiscal year[14]. - The company plans to expand its market presence in Europe, targeting a growth of X% in AUM from this region by the end of the next fiscal year[14]. - A strategic acquisition is in progress, which is projected to enhance the company's operational capabilities and add approximately $X billion in AUM[14]. Compensation and Expenses - Performance-related compensation increased to $122,633 in Q1 2025, compared to a negative $50,532 in Q1 2024[25]. - Compensation and benefits expenses totaled $260,714, up from $205,858, indicating a rise of 26.6%[164]. - Total equity-based compensation expense for the three months ended March 31, 2025, was $257.862 million, significantly higher than $92.422 million in 2024[134]. - The company expects to recognize approximately $411.5 million in total compensation expense related to unvested equity awards over the remaining weighted average period of 3.6 years[57]. Investments and Market Strategy - The Credit Group manages credit strategies across various sectors, including liquid credit and direct lending, indicating a diversified approach to credit management[151]. - The Real Assets Group focuses on equity and debt strategies in real estate and infrastructure investments, highlighting the company's commitment to tangible asset classes[151]. - The Private Equity Group categorizes its strategies into corporate private equity and APAC private equity, suggesting a targeted investment approach in different geographical markets[152]. - The Secondaries Group invests in secondary markets across alternative asset classes, including private equity and credit, which may enhance liquidity and investment opportunities[152]. Cash Flow and Capital Management - Net cash provided by operating activities for the three months ended March 31, 2025, was $1,994,203,000, significantly higher than $710,045,000 in 2024[36]. - The company reported cash and cash equivalents decreased to $618,536 as of March 31, 2025, from $1,507,976 as of December 31, 2024[23]. - The company issued $1,657,881,000 in equity related to acquisition activities during the three months ended March 31, 2025[36]. - The company had aggregate unfunded commitments of $1,554.3 million as of March 31, 2025, compared to $1,451.4 million as of December 31, 2024, reflecting a 7.1% increase[104]. Acquisitions - The acquisition of GCP International was completed on March 1, 2025, with a total consideration of $3.9 billion, including $1.8 billion in cash and $1.7 billion in equity[50][51]. - GCP International contributed revenues of $38.8 million and net income of $7.6 million for the period from March 1, 2025, to March 31, 2025[59]. - The Company incurred $69.2 million in acquisition-related costs, with $33.7 million expensed during the three months ended March 31, 2025[58]. Tax and Deferred Assets - The income tax expense for the three months ended March 31, 2025, was $17.537 million, compared to $27.233 million for the same period in 2024[10]. - The net deferred tax asset increased from $241.9 million as of December 31, 2024, to $281.7 million as of March 31, 2025[127].

Financial Data and Key Metrics Changes - Ares Management reported a year-over-year growth in management fees of 18%, with fee-related earnings (FRE) increasing by 22% and after-tax realized income per share of Class A common stock growing by 36% [5][24]. - The company declared a quarterly dividend of $1.12 per share, representing a 20% increase over the same quarter last year [3][4]. - Total assets under management (AUM) reached $546 billion, marking a significant milestone as the company crossed over $5 trillion in total AUM for the first time [6][24]. Business Line Data and Key Metrics Changes - Fundraising activities were robust, with over $20 billion in gross new capital commitments, the highest level for first-quarter fundraising on record [6][14]. - Deployment activities also saw strong performance, with over $31 billion deployed in the quarter and a gross to net deployment ratio of 49% in private credit strategies [6][9]. - The company experienced significant inflows across various strategies, with over 45% of quarterly fundraising coming from outside the credit group, including real estate, infrastructure debt, and private equity [14][15]. Market Data and Key Metrics Changes - The market environment has been characterized by increased volatility and uncertainty, particularly following geopolitical events and tariff announcements [7][20]. - Despite these challenges, Ares has maintained a record amount of dry powder, with $142 billion of available capital, which positions the company well to capitalize on market opportunities [9][36]. - The company noted that over 72% of total AUM is in credit-related products, with more than 92% of these being senior loans, indicating a defensive positioning in the current economic climate [12][20]. Company Strategy and Development Direction - Ares Management aims to leverage its flexible private market strategies to gain market share during periods of volatility, emphasizing its asset-light business model and focus on third-party client interests [10][36]. - The integration with GCP International is progressing well, with expectations of realizing significant synergies and enhancing vertically integrated capabilities in real estate [23][24]. - The company is optimistic about growth opportunities in real estate, particularly in response to anticipated increases in construction costs due to tariffs, which may constrain supply [14][20]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic uncertainty, citing a strong investment pipeline and the ability to invest opportunistically across various strategies [20][36]. - The company remains optimistic about 2025 and beyond, highlighting its resilience during challenging market conditions and the strength of its diversified investment strategies [36][37]. - Management noted that while M&A activity may slow, there are still significant opportunities in direct lending and credit markets, with expectations of continued strong performance in these areas [20][66]. Other Important Information - The company reported a significant increase in fee-related performance revenues, totaling $28 million, up from $4 million in Q1 2024, driven by strong fund performance [26][27]. - Ares Management's corporate loan portfolios are performing well, with strong credit quality and low loan-to-value ratios, indicating a solid foundation for future growth [32][40]. - The company is actively engaged with new partners in the reinsurance sector, expanding its reach in both the U.S. and APAC regions [23][24]. Q&A Session Summary Question: What do you expect for the remainder of 2025 regarding private credit quality? - Management highlighted that 96% of their Global Credit exposure is in senior loans, with low loan-to-value ratios, indicating a strong position against defaults and non-accruals [40][42]. Question: Can you discuss the momentum in wealth management and product growth? - Management noted record capital gathering in wealth management, with a broadening distribution network and new product offerings, maintaining strong inflows despite market turbulence [50][52]. Question: What is the outlook for FRE margin expansion? - Management remains optimistic about achieving zero to 150 basis points of margin expansion, citing ongoing integration efforts and synergies from GCP [56][59]. Question: How does the M&A backdrop affect deployment strategies? - Management indicated that even with subdued M&A activity, they have demonstrated the ability to invest across various strategies, particularly in opportunistic credit and secondaries [62][66]. Question: What is the opportunity set in Europe for private credit? - Management observed increased investor appetite for European products, with a modest acceleration in deployment and a favorable competitive position in the market [78][80].

Financial Data and Key Metrics Changes - In Q1 2025, the company reported a year-over-year growth in management fees of 18%, FRE growth of 22%, and after-tax realized income per share of Class A common stock growth of 36% [6][25][32] - The total AUM reached $546 billion, marking a significant milestone as it crossed over $5 trillion for the first time [7][25] - The company declared a quarterly dividend of $1.12 per share, representing a 20% increase over the same quarter last year [4][5] Business Line Data and Key Metrics Changes - Fundraising activities reached over $20 billion in gross new capital commitments, the highest level for Q1 fundraising on record [7][15] - The private credit strategies saw a gross to net deployment ratio of 49%, with capital deployment in drawdown funds increasing nearly 20% over the previous quarter [7][9] - The company experienced strong performance across various strategies, with significant inflows in real estate, infrastructure debt, secondaries, and private equity [15][17] Market Data and Key Metrics Changes - The company noted a shift in market conditions due to increased volatility and uncertainty, particularly following the announcement of tariffs and geopolitical events [8][22] - Despite market challenges, the company maintained a record amount of dry powder, with $142 billion available for deployment [9][12] - The European direct lending business saw a 20% year-over-year increase in deployment, indicating a modest acceleration in the European market [82] Company Strategy and Development Direction - The company aims to leverage its asset-light business model and flexible private market strategies to capitalize on market dislocations [10][11] - A focus on credit-related products is emphasized, with over 72% of total AUM in credit-related assets, primarily senior loans [12][22] - The integration with GCP International is progressing well, with expectations of realizing significant synergies in the coming months [24][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating current economic uncertainties, citing a strong investment pipeline and the ability to invest opportunistically [22][37] - The company anticipates slower M&A activity until more certainty regarding tariffs and economic conditions is established, but sees potential for enhanced investment opportunities [22][23] - Management highlighted the resilience of the business model during past market dislocations, reinforcing confidence in future performance [10][37] Other Important Information - The company reported a significant increase in fee-related performance revenues, totaling $28 million, a substantial rise from $4 million in Q1 2024 [27] - The effective tax rate on realized income was reported at 8.1%, with expectations of a lower range of 8% to 12% for the remainder of the year [32] Q&A Session Summary Question: What is the outlook for private credit quality given potential negative GDP growth? - Management indicated that 96% of exposure in the Global Credit business is in senior loans, with low loan-to-value ratios, suggesting limited risk of defaults [40][42] Question: Can you discuss the momentum in wealth management and product growth? - Management noted record capital gathering in wealth management, with a broadening distribution network and new product offerings [50][51] Question: What is the outlook for FRE margin expansion? - Management remains optimistic about achieving zero to 150 basis points of margin expansion, despite some drag from GCP integration [58][59] Question: How is the pipeline for M&A and deployment in the current market? - Management highlighted the ability to invest across various strategies even in a subdued M&A environment, with significant dry powder available for opportunistic investments [63][67] Question: What are the opportunities in the European market compared to the U.S.? - Management noted an increase in investor appetite for European products and a modest acceleration in deployment in Europe [80][82]

Core Insights - Ares Management reported a revenue of $897.58 million for the quarter ended March 2025, reflecting a year-over-year increase of 21.9% and an EPS of $1.09, up from $0.80 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $913.68 million by 1.76%, while the EPS exceeded the consensus estimate of $0.94 by 15.96% [1] Financial Performance Metrics - The total FPAUM (Fee-Generating Assets Under Management) ending balance was $335.07 billion, surpassing the average estimate of $327.60 billion [4] - The Credit Group's FPAUM ending balance was $218.23 billion, slightly above the estimated $217.62 billion [4] - The Private Equity Group's FPAUM ending balance was $11.35 billion, below the estimated $13.08 billion [4] - The Real Assets Group's FPAUM ending balance was $76.43 billion, exceeding the average estimate of $66.98 billion [4] Revenue Breakdown - Other fees amounted to $38.17 million, significantly higher than the average estimate of $26.37 million, representing a year-over-year increase of 92% [4] - Fee-related performance revenues were reported at $28.05 million, compared to the estimated $12.38 million, marking a substantial increase of 654.7% year over year [4] - Management fees reached $818.38 million, slightly above the average estimate of $817.56 million, reflecting an 18% year-over-year increase [4] - Performance income-realized was $125.45 million, exceeding the estimated $70.69 million, with a year-over-year increase of 441.2% [4] Realized Income Analysis - Realized income from the Secondaries Group was $39.67 million, above the average estimate of $36.96 million, representing a year-over-year increase of 71.6% [4] - Realized income from the Real Assets Group was $87.60 million, surpassing the estimated $70.94 million, with a year-over-year change of 93% [4] - Realized income from the Credit Group was $431.94 million, slightly above the estimated $415.44 million, reflecting a 21.3% year-over-year increase [4] - Realized income from Other Businesses was reported at $10.77 million, compared to the average estimate of $9.24 million, but showed a significant year-over-year decline of 286.9% [4] Stock Performance - Ares Management shares have returned +33.1% over the past month, significantly outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Ares Management reported quarterly earnings of $1.09 per share, exceeding the Zacks Consensus Estimate of $0.94 per share, and showing an increase from $0.80 per share a year ago, indicating a 15.96% earnings surprise [1] Group 1: Earnings Performance - The company surpassed consensus EPS estimates three times over the last four quarters [2] - Ares Management's revenues for the quarter ended March 2025 were $897.58 million, missing the Zacks Consensus Estimate by 1.76%, compared to $736.42 million in the same quarter last year [2] - The company has topped consensus revenue estimates only once in the last four quarters [2] Group 2: Stock Performance and Outlook - Ares Management shares have declined approximately 11.3% since the beginning of the year, while the S&P 500 has decreased by 3.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.19 on revenues of $1.15 billion, and for the current fiscal year, it is $4.93 on revenues of $4.79 billion [7] Group 3: Industry Context - The Financial - Investment Management industry, to which Ares Management belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Ares Management's stock performance [5]

Ares Management Corporation Reports First Quarter 2025 Results NEW YORK--Ares Management Corporation (NYSE:ARES) today reported its financial results for its first quarter ended March 31, 2025. GAAP net income attributable to Ares Management Corporation was $47.2 million for the quarter ended March 31, 2025. On a basic and diluted basis, net income attributable to Ares Management Corporation per share of Class A and non-voting common stock was $0.00 for the quarter ended March 31, 2025. After-tax realized i ...

Financial Performance - GAAP net income attributable to Ares Management Corporation was $47.2 million for Q1 2025, compared to $73.0 million in Q1 2024, reflecting a decrease of 35.2%[13] - Management fees increased to $817.0 million, up 18.8% from $687.7 million in the same quarter last year[15] - Fee Related Earnings rose to $367.3 million, a 22% increase compared to $301.7 million in Q1 2024[17] - Realized Income for the quarter was $405.9 million, representing a 40.4% increase from $289.2 million in Q1 2024[17] - After-tax Realized Income per share of Class A common stock was $1.09, a 36.3% increase from $0.80 in Q1 2024[17] - After-tax realized income for Q1 2025 was $381.4 million, up 43.9% from $265.1 million in Q1 2024[99] - After-tax realized income per share increased to $1.13 in Q1 2025, compared to $0.83 in Q1 2024, reflecting a 36.1% growth[99] Assets Under Management (AUM) - Total Assets Under Management (AUM) reached $545.9 billion, with Fee Paying AUM (FPAUM) at $335.1 billion, indicating strong capital management[13] - As of March 31, 2025, Assets Under Management (AUM) reached $545.9 billion, a 27% increase from the prior year[22] - Funded Private Assets Under Management (FPAUM) was $335.1 billion, reflecting a 25% year-over-year growth[22] - Perpetual Capital increased to $154.8 billion, marking a 42% rise compared to the previous year[27] - Available Capital as of March 31, 2025, was $142.0 billion, up 24% from the prior year[35] - AUM Not Yet Paying Fees was $99.2 billion, an increase of 28% year-over-year[35] - The increase of $117.6 billion in AUM was primarily driven by commitments to SDL III, Ares Capital Europe VI, and the GCP Acquisition[24] Capital Raising and Deployment - The company raised $20.2 billion in capital, with net inflows of $19.6 billion during the quarter[13] - The company raised $10.7 billion in gross new capital commitments during Q1 2025[20] - Total Gross Capital Deployment during Q1-25 was $31.4 billion, compared to $18.6 billion during Q1-24, marking a 69% increase[52] - Gross Capital Deployment in drawdown funds was $16.7 billion in Q1-25, up from $9.4 billion in Q1-24[57] Management Fees and Performance - The effective management fee rate was 1.01%, slightly down from 1.02% in Q1 2024[17] - Management fees from perpetual capital or long-dated funds accounted for 92% of total management fees[33] - The potential incremental annual management fees from AUM Not Yet Paying Fees available for future deployment could reach approximately $764.4 million[42] - Management and other fees increased by 14% for Q1-25 compared to Q1-24, totaling $595,994 thousand[63] - Fee related performance revenues surged to $18,395 thousand in Q1-25, compared to $755 thousand in Q1-24, indicating a significant increase[63] Investment Performance - The Credit Group reported net returns of 1.9% for the alternative credit strategy in Q1-25 and 8.9% for the last twelve months (LTM)[156] - The U.S. senior direct lending strategy achieved net returns of 2.4% for Q1-25, with gross and net returns of 2.3% and 1.8% respectively for Q4-25[156] - The European direct lending strategy recorded net returns of 17% for Q1-25 and 8.5% for Q1-25 LTM, with U.S. dollar denominated feeder funds showing returns of 37% and 2.8% for Q1-25[156] - The APAC credit strategy net returns were 3.0% for Q1-25 and an impressive 77.4% for Q1-25 LTM[156] - The Americas real estate equity strategy net returns were 13% for Q1-25[161] - The European real estate equity strategy reported net returns of (0.2)% for Q1-25 and 0.1% for Q1-25 LTM[161] Corporate and Financial Strength - The company maintained a BBB+/A- rating from S&P and Fitch, indicating strong financial strength[108] - The corporate investment portfolio was valued at $1,335.0 million as of March 31, 2025, compared to $1,004.8 million on an unconsolidated basis[108] - Interest income for Q1 2025 was $22.3 million, significantly higher than the previous year's $8.3 million[96] Dividends - Declared a quarterly dividend of $1.12 per share of Class A common stock, payable on June 30, 2025[13] - The company expects to pay dividends aligned with expected annual fee-related earnings after current taxes are allocated[1]

Core Insights - Ares Management (ARES) is expected to report quarterly earnings of $0.94 per share, reflecting a 17.5% increase year over year, with revenues projected at $913.68 million, a 24.1% year-over-year increase [1] - Over the past month, the consensus EPS estimate has been revised downward by 4.3%, indicating a reassessment by analysts [1][2] Financial Performance Estimates - Analysts forecast 'Financial Details Segments- Other fees' to reach $26.37 million, a 32.7% increase year over year [4] - The estimate for 'Financial Details Segments- Fee related performance revenues' is $12.38 million, indicating a significant increase of 233% from the prior-year quarter [4] - 'Financial Details Segments- Management fees' is projected to be $817.56 million, reflecting a 17.9% increase from the previous year [5] - 'Financial Details Segments- Performance income-realized' is expected to reach $70.69 million, a 204.9% increase year over year [5] Assets Under Management (AUM) Estimates - The consensus estimate for 'FPAUM Rollforward - Ending Balance - Total' is $327.60 billion, up from $267.12 billion in the same quarter last year [6] - 'FPAUM Rollforward - Ending Balance - Credit Group' is expected to be $217.62 billion, compared to $189.83 billion a year ago [6] - 'FPAUM Rollforward - Ending Balance - Private Equity Group' is projected at $13.08 billion, up from $12.57 billion year over year [7] - 'FPAUM Rollforward - Ending Balance - Real Assets Group' is expected to reach $66.98 billion, compared to $40.84 billion in the same quarter last year [7] - 'FPAUM Rollforward - Ending Balance - Secondaries Group' is estimated at $23.20 billion, up from $19.89 billion year over year [8] - The total 'AUM Rollforward - Ending Balance' is expected to be $536.48 billion, compared to $428.34 billion a year ago [8] Recent Stock Performance - Shares of Ares Management have shown a return of +2.2% over the past month, contrasting with the S&P 500 composite's -0.2% change [9] - Ares Management holds a Zacks Rank 4 (Sell), indicating expectations of underperformance relative to the overall market in the near future [10]