Ares Management Corp (ARES) Q3 2024 Earnings Call Highlights: Record Fundraising and Strong ...

GuruFocus.com11-02

Management Fees: Increased by 18% year-over-year to over $757 million. Fee-Related Earnings (FRE): Grew by 24% year-over-year to approximately $339 million. Realized Income: Increased by 28% year-over...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAres Management Corp (ARES) Q3 2024 Earnings Call Highlights: Record Fundraising and Strong ...\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-02 15:02 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/ares-management-corp-ares-q3-070241064.html><strong>GuruFocus.com</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Management Fees: Increased by 18% year-over-year to over $757 million.\nFee-Related Earnings (FRE): Grew by 24% year-over-year to approximately $339 million.\nRealized Income: Increased by 28% year-over...</p>\n\n<a href=\"https://finance.yahoo.com/news/ares-management-corp-ares-q3-070241064.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AACT.U","symbol_name":"ARES ACQUISITION CORPORATION II UNIT 1 CL A & 1/2 WT","start_time":0,"source_url":"https://finance.yahoo.com/news/ares-management-corp-ares-q3-070241064.html","article_id":"2480810187","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/xj2qdau.MzND.ag5DvNBNQ--~B/aD0zMDA7dz0zMDA7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/us.finance.gurufocus/62d7c711ea0acf7280f0961edb4eb103"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2480810187","pubTimestamp":1730530961,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Management Fees: Increased by 18% year-over-year to over $757 million.Fee-Related Earnings : Grew by 24% year-over-year to approximately $339 million.Realized Income: Increased by 28% year-over-year to $339 million.Assets Under Management : Reached $464 billion, up 17% from the previous year.Fee-Paying AUM: Increased by 16% year-over-year to $287 billion.Shadow AUM: $85 billion, representing potential future fee income.Gross Deployment: Nearly $30 billion in the third quarter, totaling $74.6 billion year-to-date.Dividend: Declared a fourth-quarter dividend of $0.93 per share, a 21% increase from the previous year.Private Credit Strategies Fundraising: Raised more than $13.5 billion in the third quarter.Real Estate Investments: Over $2 billion invested in the third quarter.Ares Management Corp  reported strong year-over-year growth in key financial metrics, including an 18% increase in management fees, 24% growth in fee-related earnings, and a 28% rise in realized income.Ares Management","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"AACT.U":"ARES ACQUISITION CORPORATION II UNIT 1 CL A & 1/2 WT","ARES":"Ares Management L.P."},"translate_title":"Ares Management Corp(ARES)2024年第三季度收益看涨期权亮点：创纪录的融资和强劲的……","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AACT.U":1,"ARES":1},"content_text":"Management Fees: Increased by 18% year-over-year to over $757 million.\nFee-Related Earnings (FRE): Grew by 24% year-over-year to approximately $339 million.\nRealized Income: Increased by 28% year-over-year to $339 million.\nAssets Under Management (AUM): Reached $464 billion, up 17% from the previous year.\nFee-Paying AUM: Increased by 16% year-over-year to $287 billion.\nShadow AUM: $85 billion, representing potential future fee income.\nGross Capital Raised: $21 billion in the third quarter, with over $64 billion year-to-date.\nGross Deployment: Nearly $30 billion in the third quarter, totaling $74.6 billion year-to-date.\nDividend: Declared a fourth-quarter dividend of $0.93 per share, a 21% increase from the previous year.\nNet Accrued Performance Income: Increased nearly 10% quarter-over-quarter to $968 million.\nPrivate Credit Strategies Fundraising: Raised more than $13.5 billion in the third quarter.\nReal Estate Investments: Over $2 billion invested in the third quarter.\nEuropean Direct Lending Fund: Closed on approximately EUR2 billion of equity investments.\n\n\nWarning! GuruFocus has detected 11 Warning Signs with ARES.\n\nRelease Date: November 01, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nAres Management Corp (NYSE:ARES) reported strong year-over-year growth in key financial metrics, including an 18% increase in management fees, 24% growth in fee-related earnings, and a 28% rise in realized income.\nThe company raised nearly $21 billion in gross capital during the third quarter, contributing to a year-to-date total of over $64 billion, setting up 2024 to be a record year for fundraising.\nAres Management Corp (NYSE:ARES) declared a fourth-quarter common dividend of $0.93 per share, representing a 21% increase over the same quarter last year.\nThe company is experiencing heightened institutional and retail investor demand across its private credit strategies, including global direct lending and alternative credit.\nAres Management Corp (NYSE:ARES) is expanding its product suite and distribution partnerships, with significant growth in its wealth management channel, raising over $2.5 billion in equity commitments in the third quarter.\n\n Negative Points \n\nThe company faces challenges with supplemental distribution fees, which have increased significantly, impacting fee-related earnings and FRE margins.\nThere is a noted spread compression in the private credit market, which could be attributed to increased competition and a lack of new supply.\nAres Management Corp (NYSE:ARES) is experiencing a higher compensation expense due to increased headcount and higher Part 1 fees.\nThe company anticipates a sequentially lower overall FRE margin in the fourth quarter due to supplemental distribution fees and higher compensation costs.\nThe real estate market remains challenging, with limited transaction activity in certain sectors, although there are signs of improvement.\n\n Q & A Highlights \nQ: With the ramp in industry AUM and dry powder, do you see any challenges to deployments heading into next year, especially with the reopening of the BSL market? A: Michael Arougheti, CEO, explained that while private credit fundraising has been down sequentially for the last three years, the dollars raised and deployed are becoming more concentrated among larger managers. This concentration allows for significant diversification and benefits of scale. He noted that Ares is already 30% invested in their $34 billion Senior Direct Lending Fund III at the final close, indicating a healthy pace of capital raising and deployment. Arougheti emphasized that the private credit market is still undercapitalized relative to the opportunity.\nQ: Do you think the lack of fundraising in the public BDC market will change next year with overall rerisking activity picking up? A: Arougheti stated that the consolidation trend is rooted in the belief that scale drives performance. He noted that there is already meaningful dispersion in performance across the manager landscape in the public BDC market. The published numbers on the size of the private credit market do not include public BDCs, indicating that the private credit market is still growing independently.\nQ: Can you update us on your origination capabilities in asset-backed finance and private credit 2.0? A: Arougheti highlighted that Ares has over 70 investment professionals focusing on this market, covering 30 different asset classes. He mentioned their joint venture with CAL Automotive for prime auto leases as an example of their origination strategy. Ares focuses on owning teams with domain expertise and forming joint ventures for tactical opportunities, allowing them to grow at a sustainable pace.\nQ: How should we think about the increased contribution from ASIF and increased transaction activity relative to the rate headwind on Part 1 fees? A: Arougheti explained that Part 1 fees are expected to continue growing as the growth in absolute dollars will outpace the impact of spread compression. He noted that reduced rates could catalyze increased transaction activity, leading to more upfront fees. A 100 basis point decline in interest rates would impact FRE by $9 million per year, but this would be offset by other components of return.\nQ: Can you unpack where you're seeing strength in fundraising and how you see the building blocks for next year? A: Jarrod Phillips, CFO, mentioned that Ares will continue to have a number of different commingled products and retail products in the market next year. He expects large commingled fundraises to continue to exceed prior vintages, with strategies like special opportunities, climate infrastructure, secondaries, and real estate contributing to the fundraising efforts. Ares plans to have about 35 funds in the market next year.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2480810187"}