Financial Data and Key Metrics Changes - The company reported Q3 revenues of $1.46 billion, a 23% increase year over year, driven by growth in engineering and real estate services segments [7][10] - Adjusted EBITDA for the quarter was $191 million, reflecting a 24% increase from the previous year [7] - Assets under management reached $108 billion, a 10% increase from the previous year [6][10] Business Line Data and Key Metrics Changes - Engineering segment revenues increased by 36%, with internal growth of 6% and significant contributions from acquisitions [9] - Real estate services segment revenues rose by 13%, with capital markets up 21% and leasing revenues increasing by 14% [8][9] - Outsourcing revenues grew by 8%, led by valuation and advisory practices [9] Market Data and Key Metrics Changes - Strong sales growth was noted in the U.K., Japan, and Canada, particularly in capital markets and leasing [8] - Debt finance activity was robust, especially in U.S. multifamily originations [8] Company Strategy and Development Direction - The company is focused on unifying operations under the Harrison Street Asset Management brand, which is expected to strengthen the business and enhance shareholder value [5][10] - The engineering sector is seen as a significant growth opportunity, with plans to double revenue and profitability in the coming years [29][101] - The company maintains a decentralized operating model that allows for flexibility and responsiveness to market opportunities [5][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year guidance despite slight expected declines in investment management margins due to integration costs [10][41] - The capital markets recovery is viewed as a multi-year process, with expectations for continued growth in Q4 and beyond [48][50] - Management highlighted the importance of long-term value creation over short-term margin pressures [41][42] Other Important Information - The company raised $1 billion in new capital commitments during the quarter, with total year-to-date fundraising reaching $4.4 billion [10] - The leverage ratio was reported at 2.3 times, with expectations to decline to just under two times by year-end [11] Q&A Session Summary Question: Inquiry about engineering margins and service mix - Management noted that engineering margins were slightly impacted by service mix, with a net margin decrease of 20 to 30 basis points [16][18] Question: Discussion on investment management business and future margins - Management indicated that integration costs would impact margins for the next two to three quarters, but they remain focused on long-term growth [20][21] Question: Organic growth in engineering - Year-to-date organic growth in engineering was reported at around 8%, with expectations for continued growth in the mid-high single-digit range [24][25] Question: Capital markets activity and fourth-quarter outlook - Management expressed confidence in exceeding last year's capital markets performance, with a solid pipeline for Q4 [43][46] Question: Leasing activity and geographical performance - Strong leasing activity was noted in the U.S., particularly in industrial and office sectors, with expectations for continued growth [37][38] Question: Feedback on integration of investment management - Client feedback on the integration process has been positive, with increased capital allocations from investors [34][36] Question: Construction activity outlook - Management indicated that construction activity is currently soft, particularly in condominiums, but there is ongoing activity in data centers and related infrastructure [66][67] Question: Future growth potential in engineering across regions - Management highlighted significant growth opportunities in the U.S., Canada, Australia, and Europe, emphasizing the fragmented nature of the engineering market [100][101]

Financial Data and Key Metrics Changes - Ares Management reported a 28% year-over-year increase in management fees, totaling $971 million, and a 39% increase in fee-related earnings (FRE) [22][23] - Realized income for the quarter increased by 34% year-over-year, reaching $456 million [29] - Assets under management (AUM) grew to over $595 billion, with fee-paying AUM increasing to $368 billion, both up 28% year-over-year [8][22] Business Line Data and Key Metrics Changes - The firm raised over $30 billion in new capital during the quarter, marking the highest quarter on record, and has raised over $77 billion year-to-date [6][7] - Gross deployment reached over $41 billion, a 55% increase from the previous quarter and 30% above the previous high [8] - The infrastructure secondaries fund closed at $3.3 billion, exceeding its hard cap due to strong investor demand [10] Market Data and Key Metrics Changes - The company experienced strong demand for private credit strategies, with $19.3 billion raised in credit strategies during the quarter [11] - Approximately 40% of third-quarter inflows came from outside the U.S., indicating strong international demand [16] - The diversified non-traded REIT saw record fundraising, driven by a leading 1031 exchange program [17] Company Strategy and Development Direction - Ares Management aims to continue increasing its quarterly dividend, with a 20% increase announced for the current quarter [4][5] - The company is focused on expanding its wealth management platform and enhancing its distribution capabilities globally [18] - Ares is positioning itself to benefit from potential credit cycle opportunities, emphasizing its asset-light model and strong capital base [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, noting a rebound in transaction activity and strong M&A volumes expected in the fourth quarter [19] - The firm anticipates continued strong demand for its institutional funds and expects to exceed last year's fundraising record of $93 billion [15][48] - Management highlighted the resilience of its credit portfolios and the low realized loss rates, indicating a healthy credit environment [33][39] Other Important Information - Ares launched the "Promote Giving" initiative, committing to donate a portion of fund performance fees to charitable organizations [20][21] - The company is actively investing in expanding its investment teams across various products and geographies [40] Q&A Session Summary Question: Real estate market outlook and Ares' position - Management highlighted Ares' position as the third-largest institutional real estate manager, benefiting from scale and a vertically integrated platform [43][44] Question: Fundraising outlook for next year - Management expressed confidence in surpassing previous fundraising records, driven by strong performance and diverse strategies [47][48] Question: Impact of lower yields in private credit - Management indicated that investor appetite for private credit remains strong, as private credit spreads continue to offer better relative returns compared to traded alternatives [53][54] Question: Update on GCP transaction integration - Management reported positive integration progress with GCP, enhancing Ares' real estate platform and expanding opportunities in data centers [62][63] Question: Asset-based finance market strategy - Management discussed the significant growth in asset-based finance deployment, with nearly double the deployment in Q3 compared to Q2 [80]

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