Financial Data and Key Metrics Changes - Ares Management achieved a record $994 million in management fees for Q4 2025, totaling $3.7 billion for the full year, reflecting a 27% and 25% year-over-year growth respectively [30] - Fee-related earnings (FRE) for the full year increased by 30%, with a record $528 million in Q4, and FRE margins improved to 41.7% [32] - Realized income for Q4 reached a record $589 million, exceeding $1.8 billion for the full year, marking a 26% increase from 2024 [34] Business Line Data and Key Metrics Changes - The wealth management business saw AUM grow to over $66 billion, a 69% increase year-over-year, driven by strong performance across various strategies [9] - The real estate group raised more than $16 billion for the year, including over $7 billion in Q4, with significant commitments in various funds [19] - The secondaries group raised $12.9 billion for the full year, with AUM increasing by 45%, nearly doubling in size since the acquisition of Landmark [23] Market Data and Key Metrics Changes - Ares Management's total AUM reached over $622 billion, a 29% increase year-over-year, with significant fundraising activities contributing to this growth [7] - The company reported a record $36 billion in fundraising for Q4, contributing to a total of $113 billion for the year [6] - Deployment across real assets more than doubled from approximately $10 billion in 2024 to over $23 billion in 2025 [11] Company Strategy and Development Direction - Ares Management is focused on expanding its investment platform and geographic reach, with strategic enhancements including new products and operational efficiencies [9] - The acquisition of GCP has positioned Ares as a top three global owner and operator of industrial real estate, enhancing its real estate and digital infrastructure offerings [9] - The company aims to leverage its diversified product suite to capture growth opportunities across various asset classes and geographies [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving transaction environment and pent-up demand for private equity sponsors seeking liquidity solutions [12] - The company anticipates strong demand for its investment strategies in 2026, supported by a substantial dry powder of $156 billion [29] - Management highlighted the resilience of its credit portfolios, with strong fundamentals and improving metrics across various strategies [46] Other Important Information - Ares Management plans to launch its fourth U.S. Senior Direct Lending Fund later in 2026 and its seventh European Direct Lending Fund in early 2027 [18] - The company has initiated over 25 AI projects aimed at enhancing investment decision-making and operational efficiency [9] - Ares has been added to the S&P 500 Index, reflecting its growth and market position [9] Q&A Session Summary Question: Impact of software AI disruption on deployment efforts - Management expressed confidence in their software investments, emphasizing the differentiation between various software companies and their resilience against disruption [49][51] Question: Wealth channel performance and sentiment - Management noted strong flows in January and February, with broad-based demand across private credit and core infrastructure products, indicating a positive sentiment despite market volatility [56][62] Question: Outlook for fundraising and deployment in real assets and secondaries - Management confirmed plans for significant fundraising in their flagship credit vehicles, with expectations for strong deployment opportunities in real estate and secondaries [68][70]

分组1 - The total portfolio approach aims to create a more predictable investment strategy, helping investors stay committed during market downturns [1] - U.S. hedge funds are expanding their presence in emerging markets, potentially benefiting from a shift in investor appetite [2] - The MSCI Emerging Markets index has outperformed the S&P 500, with expectations of continued outperformance driven by macro developments and AI exposure [4] - Private credit funds are attracting significant capital despite previous withdrawals, indicating ongoing investor interest [7] - Goldman Sachs is targeting $750 billion in alternative assets over the next four years, enhancing its private market offerings [10] 分组2 - Closed-end funds reached a net asset value of $237 billion in 2025, with a notable increase in fundraising activity [11] - The rise of online prediction markets is driven by a growing number of traders engaging in high-stakes bets on real-time events [12]

Core Insights - Private credit has emerged as a significant investment class, growing into a $3 trillion industry that is increasingly integrated with the economy, providing funding to small and midsize businesses [3][4] - The industry is preparing for a retail investor influx, with projections indicating that retail investment in private credit could rise from $80 billion to $2.4 trillion by the start of the next decade [4] - There are concerns regarding the transparency and risk associated with private credit, as the terms and conditions of loans are often opaque, leading to potential issues for retail investors [14][19] Industry Overview - Private credit involves pooling funds from various investors to lend to businesses, often providing more flexible and quicker financing options compared to traditional bank loans [5][6] - The modern private credit industry has expanded significantly since the 2008 financial crisis, with estimates indicating a tenfold growth from 2008 to 2023 [7] - The competition for investor capital in private credit is at an all-time high, prompting firms to seek access to retail investors' wealth [8] Investment Dynamics - Private credit loans typically offer higher returns than public bonds, with interest rates charged to borrowers being 1.5% to 3% higher [6] - The industry claims that access to private credit can enhance financial outcomes for investors, as seen in countries that allow private assets in retirement accounts [10] - However, there are concerns that the industry's push to include retail investors may not be entirely altruistic, as traditional capital sources are becoming overallocated [10][11] Regulatory Environment - The legal framework allows private assets to be part of retirement funds, but the risk of litigation poses a significant barrier to entry for private credit funds [11] - Recent regulatory changes and executive orders aim to facilitate the inclusion of private credit in retirement accounts, potentially leading to significant shifts in the investment landscape [11][12] Risks and Concerns - The opacity of private credit deals raises concerns about the financial stability of borrowers and the potential for defaults, especially in an economic downturn [22][29] - Critics argue that the lack of transparency and rigorous oversight could lead to retail investors being exposed to high-risk assets without adequate protection [19][28] - The potential for a wave of defaults could lead to stricter lending conditions and higher costs for businesses seeking credit [29] Market Outlook - Despite the risks, private credit continues to attract significant investment, with even skeptical firms like JPMorgan allocating substantial funds to the sector [30] - The future of private credit may hinge on achieving a balance between providing consistent returns for retail investors and managing the inherent risks associated with the asset class [30]

Core Viewpoint - Investor interest in private credit remains strong despite warnings about looser loan approval practices and rising borrower stress [1][3] Group 1: Market Dynamics - The troubles at First Brands Group highlighted risks in private credit, showcasing aggressive debt structures built during years of easy financing [2] - JPMorgan CEO Jamie Dimon warned that private credit risks are "hiding in plain sight," suggesting that issues may surface as economic conditions worsen [3] - Despite over $7 billion in withdrawals from major private credit firms like Apollo, Ares, and Blackstone, capital continues to flow into private credit funds [5] Group 2: Fundraising and Demand - KKR raised $2.5 billion for its Asia Credit Opportunities Fund II, while TPG closed over $6 billion for its third flagship Credit Solutions fund, exceeding its target [6] - Neuberger Berman's fifth flagship private debt fund closed at $7.3 billion, surpassing its original target due to strong demand from global institutional investors [7] - Granite Asia raised over $350 million for its first dedicated pan-Asia private credit strategy, indicating solid investor demand in the region [8] Group 3: Structural Forces - Demand for private credit is supported by persistent financing needs among middle-market companies and infrastructure developers, despite loosened underwriting standards [9] - Private credit has evolved into a multi-trillion-dollar market, becoming a core allocation for institutional investors like pension funds and insurers [10] - Regulatory reforms post-2008 financial crisis have led traditional banks to retreat from riskier loans, allowing private credit firms to fill the gap [13] Group 4: Signs of Strain - High interest rates have increased borrowing costs, with around 15% of borrowers unable to fully service interest payments [14] - Morningstar warned of deteriorating credit profiles among borrowers as higher interest rates impact balance sheets [15] - Concerns about leverage and borrower stress vary across regions, with U.S. and European markets showing more strain compared to the less saturated Asian market [16][17]

Core Insights - Wendel Investment Managers (WIM) has successfully raised over €11 billion in European Private Equity and US Private Credit markets, showcasing the platform's strong attractiveness [1][8] - Following the acquisition of Committed Advisors, WIM will manage more than €46 billion in assets across private equity, private debt, and secondary markets, with an expected annual FRE exceeding €200 million in 2026 [2][13] - Monroe Capital raised $6.1 billion for its Private Credit Fund V, indicating strong investor confidence in its strategy [3][4] Fundraising Performance - Monroe Capital's fundraising success highlights its ability to attract a diversified international investor base, with a focus on lower middle-market direct lending [5][8] - IK Partners closed its IK X Fund at its hard cap of €3.3 billion, marking the largest fund raised by the firm to date, with significant interest from institutional investors across EMEA, Asia, and the Americas [6][8] - IK Small Cap IV Fund also reached its hard cap of €2.0 billion in less than six months, reflecting continued investor confidence, with 80% of the capital raised from existing investors [7][8] Strategic Developments - Wendel's strategic shift into third-party asset management of private assets is underscored by its acquisitions of IK Partners and Monroe Capital, enhancing its capabilities in managing private equity and private debt [13][14] - The firm aims for an average organic FRE annual growth target of 15% through 2030, supported by a strong track record and a diversified institutional investor base [2][8]

Core Viewpoint - Faruqi & Faruqi, LLP is investigating potential claims against Blue Owl Capital Inc. due to allegations of violations of federal securities laws, with a deadline for investors to seek lead plaintiff status by February 2, 2026 [1][3]. Group 1: Allegations Against Blue Owl Capital - The complaint alleges that Blue Owl and its executives made false or misleading statements and failed to disclose significant issues, including pressure on its asset base from BDC redemptions [3]. - It is claimed that Blue Owl is facing undisclosed liquidity issues and may limit or halt redemptions of certain BDCs, which misled investors regarding the company's business and prospects [3]. - The Financial Times reported that Blue Owl has blocked redemptions in one of its private credit funds due to a merger, potentially leading to large losses for investors [4]. Group 2: Impact on Investors - Following the news of the merger, investors in Blue Owl Capital Corporation II will permanently lose the ability to redeem cash at the fund's Net Asset Value (NAV), instead trading shares for publicly traded Blue Owl shares, which are currently about 20% under NAV [5]. - On November 17, 2025, Blue Owl's stock price fell by $0.85, or 5.8%, closing at $13.77 per share, indicating a negative impact on investors [5]. Group 3: Legal Proceedings - The lead plaintiff in the class action will be the investor with the largest financial interest who can adequately represent the class, with options for other members to participate or remain absent [6]. - Faruqi & Faruqi encourages individuals with information regarding Blue Owl's conduct to come forward, including whistleblowers and former employees [7].

Core Viewpoint - Blue Owl Capital Inc. is facing a class action lawsuit due to allegations of misleading statements and undisclosed liquidity issues that have negatively impacted investors during the Class Period from February 6, 2025, to November 16, 2025 [1][4]. Group 1: Company Actions and Events - On November 16, 2025, it was reported that Blue Owl has blocked redemptions in one of its private credit funds as it merges with a larger vehicle, potentially leading to significant losses for investors [2]. - Following the announcement of the merger, investors in Blue Owl Capital Corporation II will lose the ability to redeem cash at the fund's Net Asset Value (NAV) and will instead exchange their shares for publicly traded Blue Owl shares, which are currently trading approximately 20% below the fund's NAV [3]. - The stock price of Blue Owl fell by as much as 6% during intraday trading on November 17, 2025, indicating a negative market reaction to the news [3]. Group 2: Legal Proceedings - The class action lawsuit alleges that Blue Owl's management made materially false and misleading statements and failed to disclose critical information regarding the company's asset base and liquidity issues [4]. - The lawsuit claims that the company was under pressure from Business Development Company (BDC) redemptions, which led to undisclosed liquidity problems and the likelihood of limiting or halting redemptions [4]. - Investors who purchased Blue Owl securities during the Class Period have until February 2, 2026, to file a lead plaintiff motion in the class action lawsuit [5].

Core Viewpoint - Billionaire investor Jeffrey Gundlach warns that the private credit market in America is showing signs of distress, likening it to the unregulated CDO market before the 2008 financial crisis, describing it as "the Wild West" of finance [1][3]. Private Credit Market Overview - Private credit involves direct loans to companies from investors or funds, bypassing traditional banks, and has evolved into a multitrillion-dollar market [4]. - These funds aggregate capital from pension funds, insurance companies, and wealthy investors, offering loans that typically yield higher interest rates than conventional bonds or bank loans [4]. Market Conditions and Trends - Gundlach indicates that the private credit market is experiencing a shift from theoretical concerns to real challenges, with some firms likely to survive while others may face difficulties [2]. - The recent decision by Blue Owl Capital Corporation to abandon plans to merge its private credit funds reflects current market volatility, impacting stock prices of related entities [3]. Risks and Concerns - The private credit market is characterized by a lack of public market pricing, reduced regulation, and limited transparency and liquidity, which can pose risks during adverse market conditions [6]. - Gundlach highlights a specific case where a reputable firm marked bonds at 100 cents on the dollar, only to revise the valuation to zero a month later, illustrating the potential for drastic valuation changes [7]. - The illiquidity in private credit could exacerbate financial distress, similar to the liquidity squeeze seen during the 2008 crisis, where investors struggled to meet capital calls [8]. Market Dynamics - Gundlach emphasizes that in a fearful market, investors tend to shy away from illiquid assets, leading to a mismatch between large asset pools and liquidity needs during stressful times [9].

Core Viewpoint - Jeffrey Gundlach, CEO of DoubleLine Capital, warns that many assets are overpriced and suggests investors maintain 20% of their portfolios in cash to guard against a potential downturn [1][2]. Market Conditions - Gundlach describes the current stock market as dangerously speculative, indicating it is among the least healthy he has observed in his career [2]. - He highlights speculative excess in AI-related stocks and data-center investments, cautioning that momentum investing during a boom can lead to negative outcomes [2]. Private Credit Concerns - Gundlach expresses significant concern over the rapid growth of the private credit market, valued at $1.7 trillion, which lends directly to companies [3]. - He compares the current situation in private credit to the subprime mortgage crisis, noting that lenders are making "garbage loans" [3][4]. - Recent failures in the sector, such as auto lender Tricolor and car parts supplier First Brands Group, are seen as early warning signs of potential issues [3]. Risks of Retail Investment in Private Credit - Gundlach criticizes the trend of selling private credit funds to retail investors, labeling it a "perfect mismatch" due to the promise of easy withdrawals despite the illiquid nature of these assets [4]. - He warns that if investors withdraw funds, it may force these funds to sell at significant losses [4]. Investment Strategy - Despite his warnings, Gundlach acknowledges the difficulty in profiting directly from this perspective, stating he will not short junk bonds due to ongoing losses [5]. - He maintains a positive view on gold but has reduced his recommended allocation from 25% to 15%, citing persistent inflation concerns driven by tariffs on import prices [5].

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]