Ares Management Overview - As of June 30, 2024, Ares Management Corporation has approximately $447 billion in assets under management (AUM)[16] - Ares has over 2,500 direct institutional relationships[16] - Ares has experienced 18% annualized growth in management fee revenues over the past 10+ years[23] AUM and Financial Growth - Ares' AUM has grown significantly from $49 billion in 2011 to $447 billion as of Q2 2024[24] - Management fee revenue has increased from $324 million in 2011 to $2767 million as of Q2 2024[24] - The number of direct institutional investors has increased from 182 in 2011 to 2,533 as of Q2 2024[24] Financial Performance - Fee Related Earnings (FRE) have increased from $290 million in Q2 2019 LTM to $1,269 million in Q2 2024 LTM, a 34% CAGR[35] - Realized Income has increased from $414 million in Q2 2019 LTM to $1,351 million in Q2 2024 LTM[35] Investor Base and Allocation - Retail Channel AUM is $84 billion, consisting of publicly-traded entities of $33.1 billion, semi-liquid wealth management products of $29.1 billion, and the balance of the High Net Worth Channel of $21.8 billion[45] - Institutional direct AUM has increased nearly 30% annually since Q2 2019[50] Growth Opportunities - As of June 30, 2024, $70.8 billion of AUM was not yet paying fees and was available for future deployment, which could generate approximately $674.7 million in potential incremental annual management fees[103, 104]

Core Insights - Albert Anthony is a Croatian-American business author and media contributor with a focus on financial markets, launching a book titled "Financial Markets: The Next Generation" in 2025 [1] - He has a non-traditional financial background, having worked as an analyst in the IT sector for Fortune 500 companies, which has informed his approach to equities research [1] - In 2021, he founded his own equities research firm, Albert Anthony & Company, which operates remotely [1] Company Background - Albert Anthony & Company was established in 2021 and is managed entirely remotely, reflecting a modern approach to business operations [1] - The firm provides general market commentary and research based on publicly available data and personal analysis, without offering personalized financial advisory services [1] Professional Experience - Albert Anthony has participated in numerous business and innovation conferences in Croatia, contributing to his understanding of the fast-growing southern European economy [1] - He has completed degrees and ongoing training from institutions such as Drew University and the Corporate Finance Institute, enhancing his expertise in financial markets [1] Media Presence - In addition to writing for platforms like Seeking Alpha and Investing.com, Albert Anthony is launching a YouTube show titled "Financial Markets with Albert Anthony" in 2025, where he will provide market commentary [1] - He has also been involved in European casting agencies, appearing in over five productions, showcasing a diverse skill set beyond finance [1]

Core Viewpoint - Momentum Financial Services Group has successfully renewed and expanded its secured loan facility with Ares Management Alternative Credit funds, increasing the commitment from C$575 million to C$657.9 million, which will support its growth and liquidity needs [2][3][4]. Group 1: Company Overview - Momentum Financial Services Group is a leading provider of accessible financial solutions, operating over 360 stores in Canada and 60 in the United States under the Money Mart® and The Check Cashing Store® brands [5]. - The company specializes in flexible omni-channel solutions, including personal loans, cheque cashing, money transfers, and currency exchange [5][6]. Group 2: Financial Strategy - The expanded credit facility will provide additional capital to fund Momentum's growing loan receivables portfolio and meet the financial needs of its North American customers [3][4]. - The additional funds will be utilized to repay the existing 2023 secured loan facility and support further expansion in eligible loan receivables [3]. Group 3: Leadership and Partnerships - CEO Peter Kalen emphasized that the partnership with Ares Management is crucial for future growth and meeting rising demand for financial solutions [4]. - Ares Management Corporation, as a scaled capital provider, aims to support the continued growth of Momentum and its consumer loan portfolio [4][7].

Summary of Ares Management Conference Call Company Overview - **Company**: Ares Management - **Assets Under Management**: Approximately $550 billion, making it one of the largest alternative asset managers globally [2] Macro Economic Insights - **Global Economy**: The portfolio has held up well despite macroeconomic volatility, with no significant red flags observed in portfolio companies [4][5] - **Portfolio Performance**: - Low loan-to-value (LTV) ratios around 40% indicate strong equity positions from sponsors [6] - Interest coverage improved from 1.6 times to 2 times, with EBITDA growth in the low double digits, specifically 11% in Q1 [6][7] - **Impact of Tariffs**: Minimal impact from tariffs on portfolio performance, with only a single-digit percentage effect noted [7] Market Activity and Outlook - **Transaction Activity**: Anticipation of increased transaction activity as private equity firms look to monetize aged assets, with a significant amount of dry powder available [9][10] - **Pipeline Dynamics**: Activity that was expected in Q2 may shift to Q3 and Q4 due to a temporary pause in transactions [11] - **Deployment Opportunities**: - Over $140 billion of dry powder available for deployment, with a focus on secondaries, asset-backed financing, and real estate [12][14][15] - Year-over-year increase of 160% in secondaries deployment [14] Competitive Landscape - **Private Credit Growth**: The private credit market is experiencing significant growth, attracting new entrants and increasing competition [23] - **Market Dynamics**: The influx of retail dollars has led to compressed spreads in larger check sizes, prompting a strategic pivot to core and lower middle markets [25][27] Future Growth Areas - **Direct Lending**: Expected growth rate of 15% to 20% over the next five years, supported by strong demand and dry powder [34][35] - **Asset-Backed Finance (ABF)**: Significant growth potential in both liquid rated and illiquid non-rated segments, with a focus on insurance partnerships [36][37] - **Real Estate Debt**: Anticipated growth due to maturing bank debt, providing opportunities for Ares to partner with banks [40][41] Private Wealth Management - **Market Strategy**: Ares aims to grow its private wealth management segment, targeting $100 billion in AUM by 2028 [49] - **Product Development**: Introduction of new products, including a sports media entertainment fund, to attract retail investors [45][46] Financial Performance and Projections - **Fee-Related Earnings**: Targeting a growth rate of 16% to 20% over the next five years, driven by various business segments [55] - **Retail Flows**: Strong retail inflows in Q1, with expectations for continued strength in Q2 despite slight fluctuations [54] Technological Advancements - **AI Integration**: Ares is leveraging AI to enhance portfolio management and operational efficiency, with ongoing projects to identify use cases and improve decision-making processes [67][68][71] Conclusion - Ares Management is well-positioned for growth in the alternative asset management space, with a strong portfolio, significant dry powder for deployment, and strategic focus on emerging market opportunities and technological advancements.

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 Performance - GAAP net income was $9 million, or $0.17 per diluted common share[12] - Distributable Earnings were $7 million, or $0.13 per diluted common share[12] - The company reported a stable book value of $542 million, or $9.88 per common share (or $12.43 excluding CECL reserve)[12] - A cash dividend of $0.15 per common share was declared for 2Q 2025, equating to an annualized implied dividend yield of 14.5%[12] Balance Sheet and Capital Management - Total borrowings were reduced by $228 million to $946 million[12] - The net debt to equity ratio excluding CECL reserve decreased to 1.2x at 1Q 2025 from 1.6x at 4Q 2024[12] - Available capital as of May 2, 2025, was $147 million, including cash of $113 million[12] Portfolio and Asset Quality - $307 million of repayments were collected, including nine full loan repayments[12] - Office loans were reduced by $55 million to $585 million at 1Q 2025 from $640 million at 4Q 2024[12] - The CECL reserve is $140 million, representing 10% of the outstanding principal balance for loans held for investment[12] - 93% of CECL reserves relate to risk rated 4 and 5 loans[42]

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]