Ares Management Corp (ARES) Deepening Exposure to the AI Space

Core Viewpoint - Ares Management Corp is positioned as a strong long-term investment opportunity, with significant growth potential highlighted by its recent performance and strategic initiatives [1][4]. Financial Performance - For Q4 2025, Ares Management reported an EPS of $1.45 and revenue of $1.5 billion, which were below analyst expectations of $1.70 EPS and $1.52 billion in revenue [3]. - The company achieved a 27% year-over-year increase in management fees and surpassed $100 billion in fundraising for the year, raising its assets under management to over $600 billion [3]. Growth Strategy - CEO Michael Arougheti outlined growth priorities including expansion in private credit, digital infrastructure, and real estate, with a focus on AI integration to enhance efficiency [2]. - The company has set ambitious targets of 16%–20% annual growth in fee-related earnings (FRE) and over 20% growth in revenue [2]. Market Position and Outlook - Ares Management has $150 billion in dry powder and a strong deal pipeline, indicating confidence in capitalizing on favorable market conditions [2]. - Raymond James upgraded ARES stock to a Strong Buy with a price target of $157, citing a robust outlook for fee-related earnings growth through 2028 [4]. Dividend and Investment Case - Ares Management offers a 4.1% common dividend yield, which supports the investment case for ARES stock, especially considering that over $100 billion of its assets under management are not yet earning fees [5]. Company Overview - Ares Management Corp is a global alternative investment manager with nearly $623 billion in assets under management, operating across private equity, credit, and real estate markets [6].