Ares(US:ARES)2025-11-03 15:02Financial 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) [6][22] - 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% [22][29] - Assets under management (AUM) rose 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, the highest on record, contributing to a year-to-date total of over $77 billion [7][8] - 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, making it one of the largest in the market [10] Market Data and Key Metrics Changes - The firm experienced strong demand for private credit strategies, with $19.3 billion raised in credit strategies during the quarter [11][12] - The wealth management segment saw a record $5.4 billion in equity inflows, with significant contributions from international markets, particularly Japan [16][18] - The diversified non-traded REIT achieved the highest quarterly common stock raise in over two years, maintaining a 20% market share in the 1031 exchange space [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 investment strategies, including launching new funds in various sectors such as digital infrastructure and special situations [15][40] - Ares is positioning itself to benefit from potential credit cycle changes, emphasizing its asset-light model and strong fundraising capabilities [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current credit market conditions, indicating that recent bankruptcies are isolated incidents and not indicative of a broader credit cycle downturn [32][33] - The firm anticipates strong M&A activity and deployment opportunities in the upcoming quarters, supported by improving financing conditions [19][20] - Management highlighted the ongoing demand for durable income and differentiated private market solutions, which positions Ares favorably for future growth [8][19] Other Important Information - Ares has committed to donating a portion of fund performance fees to charitable organizations through the Promote Giving initiative, reflecting the firm's core values [20][21] - The company is actively investing in expanding its investment teams and capabilities across various products and geographies [40] Q&A Session Summary Question: Real estate market outlook and Ares' position - Management highlighted Ares' strong 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 the previous record of $93 billion in fundraising, 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 it offers relative returns compared to traded alternatives, and lower rates could lead to increased transaction activity [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 [61][63] Question: Wealth fundraising acceleration - Management noted strong momentum in wealth fundraising, particularly from new product launches and international markets, with expectations for continued growth [70][71] Question: Acquisition of BlueCove and Liquid Credit - Management discussed the strategic fit of BlueCove within Ares' insurance capabilities, anticipating significant growth and synergies from the acquisition [73][74] Question: Asset-based finance market strategy - Management outlined a balanced approach to sourcing opportunities in both rated and non-rated markets, with significant deployment growth expected [78][80]