Ares(US:ARES)2022-02-11 21:33Financial Data and Key Metrics Changes - The company ended the year with over $300 billion in Assets Under Management (AUM), a 55% increase from nearly $200 billion at the end of 2020 [10] - The company generated record results across nearly every key financial metric, with a nearly 50% year-over-year increase in fee-paying AUM and a 65% increase in full-year fee-related earnings [12][34] - The quarterly dividend was increased by 30% to $0.61 per share, reflecting strong growth prospects [6][36] Business Line Data and Key Metrics Changes - The company raised a record $77 billion in gross fundraising for the year, including $25 billion in the fourth quarter alone [10][18] - Fee-related performance revenues (FRPR) for the full year totaled $137.9 million, significantly up from $23 million in 2020, driven by strong performance in U.S. and European direct lending [32] - The company invested over $80 billion across more than 25 different strategies globally, with significant deployment in health care, software, technology, and renewable energy [24][25] Market Data and Key Metrics Changes - Fundraising from retail channels increased over 150% year-over-year to $14.5 billion, while fundraising from insurance clients increased over 100% to $11.7 billion [19] - The company’s retail and high net worth channel AUM stood at more than $50 billion at year-end [19] - The company’s available capital reached a record high of $90.4 billion, an increase of over 61% year-over-year [38] Company Strategy and Development Direction - The company is focused on expanding its global platform and gaining market share through scale, product, and geographic expansion [9] - The company plans to reorient its reporting segments to better align with its platform expansion, combining real estate with the newly expanded Infrastructure Debt and Equity platform [41] - The company aims to reach over $500 billion in AUM by 2025, with a target of 20% or more compound annual growth in fee-related earnings and dividends per share through 2025 [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to navigate market volatility and capitalize on growth opportunities, particularly in alternative investments [13][14] - The company is well-positioned to take advantage of market opportunities with significant available capital and AUM not yet earning fees [38] - Management highlighted the importance of ESG and DEI initiatives as part of the company’s growth strategy [44] Other Important Information - The company’s FRE margins approached 40% in the fourth quarter, an improvement of over 250 basis points year-on-year [12] - The company’s flagship U.S. direct lending fund generated strong net returns of 4.6% in the fourth quarter and 22% for the year [27] - The company’s secondary strategy generated gross returns of 18.7% for the quarter and 49.7% over the trailing 12 months [26] Q&A Session Summary Question: Comments on Black Creek's fundraising and distribution platforms - Management noted the importance of leveraging existing client service organizations to expand distribution and fundraising opportunities [46][47] Question: Launching a private BDC to supplement the public BDC - Management acknowledged the interest in non-traded BDC products and the potential for growth in that area [50][51] Question: Deployment dynamics and market activity - Management indicated that while deployment was strong in 2021, the market environment in early 2022 was more uncertain, with seasonal trends affecting activity [52][54] Question: Non-sponsored lending growth and ambitions - Management highlighted a significant non-sponsored business focused on direct corporate lending, which is expected to grow [56][64] Question: Tax rate outlook for 2022 and 2023 - Management was asked to clarify expectations regarding the tax rate moving forward [73]