Loading...
01/10 05:07
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with record high AUM growth, increased realized income, and a 20% dividend hike. Despite some concerns about the timeline for 401(k) market inclusion and vague responses on market stability, the Q&A section shows confidence in deployment pipelines and resilience in private credit. The positive outlook on FRE margins, coupled with strong retail inflows and international expansion, supports a positive sentiment. However, no market cap data is available to gauge sensitivity, but overall indicators suggest a positive stock price movement within 2% to 8%.
Quarterly AUM AUM increased to $572 billion, representing quarter-over-quarter organic growth of 19% on an annualized basis. This growth was driven by strong fundraising, investing efforts, strong investment performance, and market appreciation.
Fee-paying AUM (FPAUM) FPAUM increased to $350 billion, representing quarter-over-quarter organic growth of 17% on an annualized basis. This was due to strong perpetual fundraising efforts, deployment and drawdown funds, and market appreciation.
Management Fees Management fees were a record $900 million, representing a 24% year-over-year increase. This growth reflects the impact of the GCP acquisition and strong performance across various strategies.
Total Fee-Related Revenue Total fee-related revenue grew by 29% year-over-year. This was driven by growth in private credit strategies, private wealth franchise, secondaries business, and Real Assets business.
Fee-Related Earnings (FRE) FRE grew by 26% year-over-year to $409 million. FRE margins were 41.2%, temporarily compressed by 90 basis points due to the GCP integration.
Net Accrued Performance Income Net accrued performance income increased 8.5% in the quarter to $1.1 billion, driven by strong investment results across the business.
Perpetual Capital AUM Perpetual capital AUM increased by $50 billion over the past 12 months to $167 billion, representing nearly half of the total fee-paying AUM. This growth was driven by wealth and insurance businesses, GCP acquisition, and growth in open-end institutional funds.
Realized Income Realized income totaled $398 million for the quarter, a 10% year-over-year increase. This was supported by strong performance across various strategies.
Insurance AUM Insurance AUM across the platform reached $79 billion, driven by growth in Aspida and third-party insurance partners.
Sports Media and Entertainment Fund: Launched second fund with $1.4 billion in equity commitments, representing over 70% of the fund's equity target. Open-ended product began taking monthly subscriptions in June.
Data Center Development Fund: Raised $2.4 billion for the first Japan data center development fund, with additional locations planned in London, Tokyo, and Osaka.
European Direct Lending CLO: Priced first European direct lending CLO at over GBP 300 million, marking a significant milestone in the European market.
Global Wealth Distribution Expansion: Expanded partnerships with over 80 firms globally, a 33% increase year-over-year. Conducted business with over 1,300 new financial advisers, up 200% from last year.
International Demand: More than 1/3 of year-to-date flows came from Europe and Asia, with strong partnerships in Japan expected to drive meaningful flows in the coming quarters.
Fundraising Success: Achieved second-highest quarterly fundraising total on record with over $26 billion raised. Year-to-date gross commitments reached $46 billion, on track to meet or exceed last year's record of $92.7 billion.
Perpetual Capital Growth: Perpetual capital AUM increased by $50 billion over the past 12 months, now representing nearly half of total fee-paying AUM.
GCP Integration: Integration of GCP is progressing well, with strong collaboration across teams and new product developments. Data center business poised for growth with a large pipeline of projects.
Insurance Strategy Expansion: Aspida generated over $1.9 billion in new premiums during the quarter, with total balance sheet assets reaching $23 billion. On track to meet 2025 target of $7 billion in new premiums.
Market Volatility: The deployment environment was modestly impacted by market volatility, particularly at the beginning of the quarter, leading to a temporary slowdown in transaction activity in April and May.
Tariff Policies: New tariff policies in the U.S. caused a temporary slowdown in transaction activity, impacting the deployment environment.
Integration Costs: The integration of GCP incurred approximately $10 million in costs this quarter, with $6-7 million expected to persist over the next 12 months, temporarily compressing FRE margins.
European Waterfall Funds: Market fluctuations in the second quarter may delay the realization of performance income from European waterfall funds, potentially pushing some realizations into 2026.
Real Estate Nontraded REITs: The diversified nontraded REIT would need to generate an additional 5% return above the high watermark by year-end to generate any fee-related performance revenue this year, posing a challenge for immediate revenue generation.
Economic Uncertainty: Economic fundamentals remain solid, but the potential for lower short-term rates in the U.S. and Europe introduces uncertainty in transaction activity and investment opportunities.
Insurance Business Growth: Aspida's growth trajectory is strong, but maintaining discipline on liability costs and achieving target returns remains a challenge.
Fundraising Projections: Ares Management expects to meet or exceed last year's record fundraising of $92.7 billion, with over $46 billion in gross commitments raised year-to-date.
Growth in Perpetual Capital: Perpetual capital AUM has increased by $50 billion over the past 12 months, reaching $167 billion. This is expected to continue growing, providing consistent management fees and revenue visibility.
Data Center and Infrastructure Expansion: The company plans to raise additional capital for data center projects in London, Tokyo, and Osaka starting in the second half of 2025 and into 2026. A pipeline of future development opportunities across North America, South America, Europe, and Japan is expected to drive growth in the Real Assets Group.
European Direct Lending Growth: Ares anticipates continued strong performance in European private credit, driven by favorable interest rates and higher domestic investment. The first European direct lending CLO was priced at over GBP 300 million.
Insurance Business Expansion: Aspida, the affiliated insurance portfolio company, is on track to meet its 2025 target for new premiums of approximately $7 billion, with total balance sheet assets of $23 billion.
Real Estate Fundraising: The 11th U.S. value-add real estate fund and the fourth value-add European real estate fund are expected to meet or exceed the size of their predecessor funds.
Secondaries Business Growth: The third infrastructure secondaries fund is expected to hit its hard cap of $3 billion, more than triple the size of the previous fund vintage. A new real estate secondaries fund is planned for launch in Q4 2025.
Fee-Related Earnings (FRE) Growth: The GCP acquisition is expected to contribute $200 million in FRE within the first 12 months, with additional growth anticipated from new data center and industrial development funds.
Market Activity and Investment Pipeline: Ares is optimistic about increased transaction activity in the second half of 2025, supported by a record amount of dry powder ($151 billion) and a strong global investment pipeline.
Quarterly Dividend: A quarterly dividend of $1.12 per share on the company's Class A and nonvoting common stock was declared, representing a 20% increase over the dividend for the same quarter a year ago.
Dividend Payment Date: The dividend will be paid on September 30, 2025, to holders of record as of September 16, 2025.
The earnings call highlights strong financial performance, optimistic guidance, and strategic growth initiatives, including increased dividends, robust fundraising, and expansion in real estate and private credit. The Q&A section reinforces positive sentiment, with management addressing concerns effectively and emphasizing growth opportunities. The positive outlook for real estate and private credit, coupled with strategic acquisitions and increased dividends, suggests a strong positive impact on stock price.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
