Ares Management Corporation (NYSE: ARES) reported higher fee-related earnings and expanded assets under management in the third quarter of 2026, supported by $31.0 billion of fundraising across its investment platform. The alternative asset manager said it continues to expect a record fundraising year and believes its year-to-date performance and anticipated fourth-quarter deployment position it to meet or exceed its key 2026 financial objectives.
Fee Related Earnings, a non-GAAP measure of core operating performance, rose 11% from a year earlier to $524.2 million for the quarter ended September 30. After-tax Realized Income increased 6% to $449.6 million, while the corresponding per-share measure advanced to $1.26 from $1.19. The Fee Related Earnings margin widened to 42.5% from 41.4%.
GAAP results moved in the opposite direction. Net income attributable to Ares fell to $85.3 million from $288.9 million a year earlier, and GAAP earnings per share declined to $0.21 from $1.15. Total revenue decreased to $1.43 billion from $1.66 billion, as carried interest allocation dropped to $161.7 million from $464.7 million. Ares also recorded $147.4 million of net realized and unrealized investment losses, compared with gains of $188.4 million in the prior-year quarter.
Management fees increased 10% on Ares’ non-GAAP reporting basis to $1.07 billion, reflecting growth in fee-paying assets. Fee-related performance revenue declined 8% to $78.8 million, while other fees rose 6% to $86.2 million. Realized Income increased 8% to $490.1 million despite higher net interest expense.
Fundraising broadens beyond credit
Ares raised $31.0 billion in gross capital commitments during the quarter and generated $28.6 billion of net inflows. More than half of the inflows came from outside the Credit Group, according to management, highlighting contributions from real assets, secondaries and other businesses.
The Credit Group raised $15.2 billion, including capital for U.S. and European direct lending and alternative credit strategies. The Real Assets Group raised $11.2 billion, led by real estate and infrastructure, while Secondaries contributed $2.6 billion. Other businesses added $2.0 billion, including managed insurance assets and proceeds from the initial public offering of Ares Acquisition Corporation III.
Total AUM reached $690.6 billion, up 16% year over year, while fee-paying AUM increased 13% to $416.4 billion. Perpetual capital rose 23% to $233.9 billion. Ares said 84% of AUM and 93% of management fees were associated with perpetual capital or long-dated funds, providing a substantial base of recurring fee revenue.
The company ended the quarter with $173.8 billion of available capital, up 16% from a year earlier. AUM not yet paying fees totaled $117.1 billion, including $93.8 billion available for future deployment and $2.3 billion of development assets not yet stabilized. Ares estimated that these two categories could collectively produce about $826.9 million of potential incremental annual management fees, although it cautioned that there is no assurance the capital will be deployed or the development assets stabilized.
Gross capital deployment was $34.8 billion, down from $41.7 billion in the prior-year quarter. Drawdown funds deployed $18.4 billion, compared with $20.2 billion a year earlier, while perpetual capital vehicles deployed $18.7 billion, down from $21.2 billion. Management said it expects improved deployment in the fourth quarter.
Real assets lead segment growth
The Credit Group remained Ares’ largest business, with Fee Related Earnings rising 11% to $521.4 million and Realized Income increasing 9% to $518.0 million. Management and other fees grew 10%, driven mainly by deployment in U.S. and European direct lending and alternative credit, along with capital raised by perpetual wealth vehicles. Credit AUM rose 14% to $446.2 billion, although quarterly deployment declined 33% to $22.3 billion.
Real Assets posted the strongest earnings growth among the major segments. Fee Related Earnings climbed 32% to $166.6 million, while Realized Income increased 33% to $149.1 million. Management fees rose 29%, supported by capital raised for an open-ended core infrastructure fund and a diversified non-traded real estate investment trust, as well as commitments to a U.S. real estate fund. Real Assets AUM increased 22% to $161.6 billion, and deployment rose 80% to $9.7 billion.
Secondaries was a notable drag on quarterly growth. Fee Related Earnings fell 32% to $50.7 million and Realized Income declined 31% to $50.0 million. Management and other fees decreased 19%, largely because the prior-year period included $27.2 million of catch-up fees, while fee-related performance revenue dropped 67% on lower incentive fees from Ares Private Markets Fund. Secondaries AUM nevertheless rose 21% to $46.3 billion.
Private Equity Fee Related Earnings increased 25% to $16.4 million, helped by lower operating expenses and a modest rise in management and other fees. Realized Income grew 32% to $14.0 million. AUM declined 2% to $24.5 billion, primarily because of distributions from an older corporate private equity fund, partly offset by new commitments.
Outlook, dividends and corporate action
Chief Executive Michael Arougheti said Ares expects a strong fourth quarter for fundraising, supported by demand from global institutional and wealth clients. Chief Financial Officer Jarrod Phillips pointed to capital already raised but not yet earning fees as a source of potential management-fee and earnings growth in 2027 and beyond.
Ares declared a quarterly dividend of $1.35 per share of Class A and non-voting common stock, payable December 31 to holders of record on December 17. It also declared a dividend of $0.84375 per share on its 6.75% Series B mandatory convertible preferred stock, payable January 1, 2027, to holders of record on December 15.
Separately, Ares said Ares Capital Corporation entered into a definitive agreement on October 26 to acquire MidCap Financial Investment Corporation in a stock-and-cash transaction with an enterprise value of approximately $2.6 billion. A subsidiary of Ares will provide the cash portion of the consideration.
The company noted that its targets and forward-looking statements depend on assumptions about fundraising, deployment, investment performance and other operating conditions. Actual results could differ materially, and Ares emphasized that past fund performance is not indicative of future results.
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