ARES — Ares Management Corporation

ARES Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• AUM Growth: Total Assets Under Management (AUM) increased 17% year-over-year to approximately $671 billion; fee-paying AUM rose to approximately $410 billion.
• Revenue Growth: Management fees exceeded $1 billion, up 14% year-over-year. Total revenues increased 17% from the prior year.
• Fee-Related Earnings (FRE): FRE was approximately $491 million, a 20% increase year-over-year, with a margin of 42.3%.
• Realized Income: Realized income grew 31% year-over-year to approximately $522 million, with after-tax realized income per share at $1.29, up 25%.
• Dividend: Declared a quarterly dividend of $1.35 per share, a 20% increase from the same quarter last year.

2. Strategic Updates and Business Highlights

• Record Fundraising: Raised approximately $36 billion in gross capital during the quarter, the highest in Ares' history, contributing to a record $170 billion of dry powder.
• Diversification: 70% of capital raised was outside the four largest credit fund families, indicating a broadening investor base across approximately 90 different funds.
• Investment Activity: Investment activity increased to approximately $36 billion, with a robust forward investment pipeline up nearly 20% quarter-over-quarter.
• Wealth Management Growth: Wealth products AUM increased at an annualized rate of over 25% quarter-over-quarter, with significant fundraising momentum.

3. Forward Guidance and Outlook

• Financial Objectives: Ares remains on track to achieve its financial targets for 2026, with long-term growth targets of 16% to 20% for FRE and over 20% for realized income.
• Market Positioning: Ares expects to benefit from its diversified investment capabilities and strong institutional relationships, particularly in private credit and real assets.
• Future Fundraising: Anticipates continued strong fundraising momentum, particularly in infrastructure and real estate sectors.

4. Bad News, Challenges, or Points of Concern

• Market Conditions: Although fundraising is strong, the environment for transactions remains slower, particularly in M&A, which could impact deployment rates.
• Redemption Requests: While redemption rates from core U.S. investors are stable, there is ongoing pressure from non-U.S. family offices and smaller institutions, which could affect liquidity.
• Performance Variability: Some older vintage funds in the secondary market are underperforming, which could impact overall returns and investor sentiment.

5. Notable Q&A Insights

• Institutional Demand for Private Credit: There is increasing institutional interest in private credit, driven by wider spreads and reduced competition, although the wealth channel is still recovering from redemption pressures.
• Inorganic Growth Strategy: Ares is open to potential acquisitions, focusing on culturally and strategically accretive opportunities, particularly in private equity.
• Digital Infrastructure Growth: The firm sees significant potential in digital infrastructure, with expectations for substantial contributions to future FRE.
• AI Integration: Ares is leveraging AI across its portfolio to enhance efficiency and decision-making, which could lead to improved margins and performance.

This summary encapsulates the key financial metrics, strategic initiatives, future outlook, and challenges faced by Ares Management in Q2 2026, providing a comprehensive overview for stakeholders.