Ares(ARES) - 2025 Q4 - Annual Results

Financial Performance - Q4 2025 GAAP basic and diluted earnings per share were $0.08 and $1.71, respectively, with net income attributable to Ares Management Corporation of $54.2 million and $527.4 million for the quarter and full year[11]. - Fee Related Earnings increased by 33% to $527.7 million in Q4 2025, and by 30% to $1,775.3 million for the full year[13]. - Realized Income for Q4 2025 was $589.1 million, representing a 24% increase year-over-year, and $1,848.3 million for the full year, a 26% increase[13]. - After-tax Realized Income per share of Class A and non-voting common stock was $1.45 for Q4 2025, an 18% increase from the previous year[13]. - The company reported a realized net investment income loss of $96.0 million for FY-25, compared to a loss of $43.5 million in FY-24[70]. - The company’s income before taxes for FY 2025 was $1.287 billion, slightly up from $1.275 billion in FY 2024, reflecting a growth of 0.1%[102]. - Total performance income-realized from consolidated funds for FY 2025 was $526.3 million, up from $430.2 million in FY 2024, showing a growth of 22.4%[104]. Assets Under Management (AUM) - Total Assets Under Management (AUM) reached $622.5 billion, with Total Fee Paying AUM (FPAUM) at $384.9 billion[11]. - Assets Under Management (AUM) as of December 31, 2025, was $622.5 billion, reflecting a 29% increase from the prior year[16]. - AUM reached $406.9 billion in Q4-25, up from $348.8 billion in Q4-24; FPAUM increased by 19% to $249.8 billion[51]. - Total AUM as of December 31, 2025, was $622.5 billion, with FPAUM at $384.9 billion[86]. - AUM Not Yet Paying Fees was $101.0 billion, which is a 6% increase from the prior year[29]. - Perpetual Capital as of December 31, 2025, was $200.0 billion, marking a 50% increase from the previous year[20]. Capital Deployment and Fundraising - Raised $36.9 billion in gross new capital during Q4 2025, totaling $113.2 billion for the full year, with net inflows of capital of $34.4 billion[11]. - Total Gross Capital Deployment in Q4-25 was $45.8 billion, a 42% increase from $32.1 billion in Q4-24; FY-25 total was $145.8 billion, up 37% from $106.7 billion in FY-24[44]. - The company raised $2.6 billion through the Ares Private Markets Fund (APMF) during the year[19]. - Fundraising activities included $18.4 billion raised by business development companies (BDCs) and $3.6 billion by the open-ended European direct lending fund[15]. Management Fees and Earnings - Management fees for Q4 2025 were $991.1 million, a 27% increase from Q4 2024, and $3,680.5 million for the full year, up 25% from the previous year[12]. - Management and other fees rose by 18% in Q4-25 to $690.3 million, and by 16% for FY-25 to $2.58 billion compared to the previous year[51]. - Total management fees for FY-25 were $3.68 billion, up from $2.96 billion in FY-24[70]. Performance Metrics - The company achieved a year-to-date return of 10.3% for U.S. Direct Lending funds since inception[87]. - The net returns for the alternative credit strategy were 1.7% for Q4-25 and 9.8% for FY-25[71]. - The net returns for the opportunistic credit strategy were 1.5% for Q4-25 and 8.5% for FY-25[71]. - The net returns for the U.S. senior direct lending strategy were 2.5% for Q4-25 and 9.3% for FY-25[71]. - The net returns for the U.S. junior direct lending strategy were 1.6% for Q4-25 and 10.6% for FY-25[71]. - The net returns for the European direct lending strategy were 1.4% for Q4-25 and 5.9% for FY-25[71]. Investment Strategies and Returns - The most active investment strategies included U.S. and European direct lending, real estate, and alternative credit, contributing significantly to capital deployment[49]. - The drawdown fund PCS II reported a gross IRR of 13.0% and a net IRR of 8.2%[88]. - The Corporate Private Equity fund ACOF VI achieved a gross IRR of 21.3% and a net IRR of 16.0%, with an AUM of $8,852 million[93]. - The net fund-level returns for the corporate private equity strategy were (0.6)% for Q4-25 and 2.6% for FY-25[120]. Other Financial Metrics - Interest expense for FY-25 was $171.6 million, reflecting an increase from the previous year[70]. - The company’s total performance (income) loss-unrealized for FY 2025 was $762.5 million, compared to a loss of $109.5 million in FY 2024, indicating a worsening performance[102]. - The company’s total consolidated other income (loss) for Q4 2025 was a loss of $49.6 million, contrasting with a gain of $121.6 million in Q4 2024, reflecting a significant decline[104].