Ares(US:ARES)2025-11-03 15:00Financial 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) [5][20] - Realized income increased by 34% year-over-year, reaching $456 million, with after-tax realized income per share of Class A stock growing by 25% [19][27] - Assets under management (AUM) rose to over $595 billion, with fee-paying AUM increasing to $368 billion, both up 28% year-over-year [6][20] 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 [5][6] - The infrastructure secondaries fund closed at $3.3 billion, exceeding its initial hard cap due to strong investor demand, making it one of the largest in the market [9] - In alternative credit, the open-ended core alternative credit fund raised over $1 billion, bringing total AUM to over $7.4 billion, positioning it as the largest non-rated asset-based finance fund [11] Market Data and Key Metrics Changes - The company noted strong demand for private credit strategies from both institutional and individual investors, with a significant increase in fundraising across various sectors [8][14] - The third quarter saw record fundraising for diversified non-traded REITs, driven by a leading 1031 exchange program [15] - Approximately 40% of third-quarter inflows came from outside the U.S., indicating strong international demand [14] Company Strategy and Development Direction - Ares Management aims to continue increasing its quarterly dividend, with a 20% increase announced for the current quarter [3][4] - The firm is focused on expanding its wealth management platform and enhancing its distribution capabilities globally, particularly in the semi-liquid product space [16][65] - The company is well-positioned to benefit from a potential credit cycle, leveraging its asset-light model and significant dry powder for deployment [36][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, anticipating strong M&A activity and improved financing conditions [17][18] - The firm expects to exceed last year's fundraising record of $93 billion, driven by strong performance and investor demand [5][46] - Management highlighted the importance of maintaining a diversified product lineup to meet evolving investor needs [16][46] Other Important Information - Ares Management is leading an industry initiative called Promote Giving, committing to donate a portion of fund performance fees to charitable organizations [19] - The company has raised its AUM target for semi-liquid wealth products from $100 billion to $125 billion, reflecting strong advisor demand [15] Q&A Session Summary Question: Insights on real estate market positioning - Management highlighted their global real estate business as the third-largest institutional manager, benefiting from scale and a vertically integrated platform, with significant deployment increases noted [40][41][42] Question: Fundraising outlook for next year - Management expressed confidence in surpassing previous fundraising records, attributing this to strong underlying performance and a diverse strategy mix [44][46] Question: Impact of lower yields in private credit - Management indicated that investor appetite for private credit remains strong, as relative returns compared to traded alternatives are still favorable, despite potential lower yields [49][50] Question: Update on GCP transaction integration - Management reported positive integration progress with GCP, highlighting growth opportunities in real estate and data centers as key areas of focus [57][58][60] Question: Asset-based finance market strategy - Management discussed their balanced approach to sourcing opportunities in both rated and non-rated markets, with significant deployment growth observed [73][75]