Financial Data and Key Metrics Changes - Ares Management reported a quarterly dividend of $1.12 per share, representing a 20% increase compared to the same quarter last year [4] - The company achieved a record management fee of $900 million, reflecting a 24% year-over-year increase [33] - Fee-related earnings (FRE) for the quarter were $409 million, marking a 26% year-over-year growth, with FRE margins at 41.2% [35] Business Line Data and Key Metrics Changes - The total assets under management (AUM) increased to $572 billion, showing a quarter-over-quarter organic growth of 19% on an annualized basis [8] - Fee-paying AUM (FPAUM) rose to $350 billion, representing a quarter-over-quarter organic growth of 17% on an annualized basis [9] - The secondaries business saw a 29% increase in AUM to nearly $34 billion, with $2.5 billion raised during the quarter [16] Market Data and Key Metrics Changes - In the U.S. direct lending market, the company experienced a year-over-year comparable EBITDA growth of 13% with a low loan-to-value ratio of 43% [25] - European direct lending showed strong performance with a loan-to-value ratio of 49% and interest coverage of 2.3x, indicating healthy credit quality [70] - The company raised over $1.3 billion in infrastructure, including $850 million for its first Japan data center development fund [15] Company Strategy and Development Direction - Ares Management is focused on expanding its wealth distribution network, now partnering with over 80 firms globally, a 33% increase year-over-year [19] - The company is optimistic about the growth potential in the data center and digital infrastructure sectors, leveraging its recent GCP acquisition [30] - Ares aims to capitalize on the increasing demand for private credit and alternative investments, particularly in the wealth channel [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business amid market volatility, with strong fundraising and investment performance [7] - The company anticipates a strengthening transaction market environment in the third quarter, supported by lower short-term rates and significant private equity dry powder [28] - Management highlighted the importance of maintaining a balance between capital growth and quality deployment to mitigate risks [60] Other Important Information - The integration of GCP is progressing well, with expected synergies contributing positively to the financial outlook [32] - The company reported a net accrued performance income balance of $1.1 billion, an 8.5% increase from the previous quarter [10] - Ares Management's insurance platform, Aspida, generated over $1.9 billion in new premiums during the quarter, indicating strong demand [22] Q&A Session Summary Question: Discussion on private credit and institutional demands - Management noted that while private credit fundraising has been down sequentially, Ares continues to see institutional appetite for private credit, maintaining fee structures despite market pressures [47][49] Question: Opportunities in alternative investments - Management emphasized their commitment to democratizing access to alternative investments and readiness to offer products as the market opens [56][58] Question: Update on deployment pipelines - Management expressed confidence in the growing pipelines across various business segments, including direct lending and real estate, despite market fluctuations [64] Question: Comparison of European and U.S. direct lending markets - Management indicated that European markets are becoming more attractive due to different rate trajectories, with credit quality remaining stable across both regions [70] Question: Investment in distribution and partnerships - Management confirmed ongoing investments in product development and distribution efforts, particularly in international markets, to drive growth [76][78]

Financial Data and Key Metrics Changes - The company reported fee-related earnings (FRE) of $0.23 per share and distributable earnings (DE) of $0.21 per share for the second quarter [4] - FRE revenues grew by 29%, FRE increased by 23%, and DE rose by 20% year over year on a last twelve months basis [7] - The company raised $14 billion of new capital during the quarter, totaling a record $55 billion over the last twelve months, representing 28% of assets under management a year ago [6][7] Business Line Data and Key Metrics Changes - In alternative credit, the company closed a private offering of $850 million for a new interval fund, reflecting strong investor confidence [8] - The digital infrastructure strategy saw a final close of its third flagship fund at a $7 billion hard cap, with over half the capital already soft circled for investment [9] - The real estate credit strategy deployed over $3 billion year to date, with significant activity in the insurance channel [9] Market Data and Key Metrics Changes - Capital raised from EMEA and APAC investors increased to 23% from 14% two years ago, indicating ongoing globalization of the business [12] - The company raised $5.8 billion of equity in credit during the second quarter, marking a record quarter for the credit platform [24] - The direct lending portfolio gross returns were 3% in the second quarter and 13.5% over the last twelve months, with strong credit quality maintained [26] Company Strategy and Development Direction - The company is focused on expanding its product offerings to meet varying investor needs across the risk-return spectrum, leveraging its scale and incumbency [7] - A new strategic partnership with Voya aims to deliver private market strategies tailored for defined contribution retirement plans, broadening access to alternative investments [20] - The company plans to grow FRE management fees to over $5 billion and FRE to over $3 billion, indicating a strong long-term growth trajectory [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their investor base despite market disruptions, highlighting the secular demand for their strategies [12] - The company noted that the investments made over the past year are beginning to bear fruit, with a steady and predictable financial profile [33] - Management emphasized the importance of the current macro environment for direct lending, indicating optimism for future transaction volumes [84] Other Important Information - The company completed the listing of its technology-focused BDC, OTF, which is now the second largest publicly traded BDC by net assets [22] - The company has raised $3.5 billion of capital across strategies that did not exist two years ago, reflecting strong reception for new offerings [10] - The net lease pipeline continues to grow, with nearly $41 billion of transaction volume under letter of intent [28] Q&A Session Summary Question: Can you discuss the asset origination channel and the scaling opportunity in asset-backed finance? - Management highlighted the significant opportunity in asset-backed finance and the integration of their asset-backed business with direct lending, emphasizing their strong origination capabilities [36][40] Question: What are the thoughts on the build-out of a target date fund with Voya? - Management discussed the importance of democratizing access to alternative investments for 401(k) participants and the potential for innovation in this area [50][54] Question: What should be expected regarding the integration and scaling of recently acquired businesses? - Management indicated that integration benefits are already being realized, with strong fundraising numbers and a diversified business model [60][66] Question: Can you comment on the competitive environment in the triple net lease market? - Management stated that their leadership in the net lease market has accelerated, with a growing pipeline and strong trust built with partners [75] Question: How is the direct lending business performing, and what are the expectations for the third quarter? - Management noted strong credit quality and a positive macro environment for direct lending, with signs of increased activity in the market [84]