ARES
Ares Management CORP
NYSE
8-K: Ares Management Corporation Reports Strong Third Quarter 2024 Results, Expects Record Fundraising Year
Sentiment:
Quarterly Report
31 October 2024 7:19 PM
Ares Management Corporation announced robust third-quarter 2024 financial results, highlighted by significant fundraising momentum and increased capital deployment.
Better than expected
The company's financial results exceeded expectations with strong growth in key metrics, including AUM, fee-related earnings, and realized income.
The company's fundraising momentum and capital deployment were better than anticipated, leading to an optimistic outlook for the remainder of the year.
Capital raise
In October 2024, Ares issued 30,000,000 shares of its Series B mandatory convertible preferred stock, for total proceeds of $1,462.5 million (after deducting underwriting discounts but before offering expenses).
Summary
- Ares Management Corporation reported a GAAP net income of $118.5 million for the third quarter of 2024.
- The company's after-tax realized income was $316.0 million, or $0.95 per share of Class A common stock.
- Fee-related earnings reached $339.3 million for the quarter.
- Ares experienced strong fundraising, with over $64 billion raised year-to-date and expects to reach the mid-$80 billion range for the full year.
- Capital deployment was nearly $30 billion in the third quarter.
- The company has over $85 billion in assets under management (AUM) not yet paying fees, positioning it for future growth.
- Total AUM reached $463.8 billion as of September 30, 2024.
- Fee-paying AUM was $286.8 billion.
- Available capital stood at $125.3 billion.
Sentiment
Score: 9
Explanation: The document conveys a very positive sentiment due to strong financial results, record fundraising expectations, and significant capital deployment. The management's comments are optimistic, and the company's future outlook is promising.
Positives
- Ares demonstrated strong year-over-year growth in key financial metrics, ranging from the high teens to over twenty percent.
- The company experienced heightened demand for its alternative strategies across all distribution channels.
- Ares has a record amount of available capital, including more than $85 billion in AUM not yet paying fees.
- The company is well-positioned to generate meaningful future earnings growth.
- Ares declared a quarterly dividend of $0.93 per share of its Class A common stock.
- Ares declared a quarterly dividend of $0.759375 per share of its 6.75% Series B mandatory convertible preferred stock.
- The company has a Dividend Reinvestment Program for its Class A common stockholders.
Negatives
- The document does not explicitly state any negative aspects of the results.
Risks
- The document includes forward-looking statements that are subject to various risks and uncertainties.
- Actual results may vary materially from those indicated in the forward-looking statements due to a number of factors, including those described in the company's filings with the Securities and Exchange Commission.
Future Outlook
Ares expects 2024 to be a record fundraising year with gross commitments in the mid-$80 billion range and anticipates broadening investment activities across its strategies in the next 12 months.
Management Comments
- Michael Arougheti, Chief Executive Officer and President of Ares, stated that the company reported strong third quarter results with continued fundraising momentum, increasing deployment, strong fund performance, and year-over-year growth in many key financial metrics.
- Michael Arougheti also noted that they continue to experience heightened demand for their alternative strategies across all three of their distribution channels.
- Jarrod Phillips, Chief Financial Officer of Ares, mentioned that based upon a more positive market tone, their third quarter deployment reached nearly $30 billion and they expect to see their investing activities broaden out further across their strategies in the next 12 months.
- Jarrod Phillips also stated that with a record amount of available capital, including more than $85 billion in AUM not yet paying fees, they are well positioned to generate meaningful future earnings growth.
Industry Context
This announcement reflects a positive trend in the alternative investment management industry, where firms are seeing increased investor interest and capital deployment opportunities. Ares' strong fundraising and deployment figures indicate a robust demand for alternative investment strategies.
Comparison to Industry Standards
- Ares' AUM growth of 17% year-over-year is strong compared to other large alternative asset managers such as Blackstone (BX) and Apollo (APO), which have also reported solid growth but may have different growth rates depending on their specific strategies and market focus.
- The fee-related earnings margin of 41.1% is within the range of what is typically seen in the industry, but can vary based on the mix of strategies and the cost structure of the firm.
- The deployment of nearly $30 billion in a single quarter is a significant figure, indicating strong investment activity and the ability to put capital to work effectively, which is a key metric for investors in alternative asset managers.
- The $85 billion in AUM not yet paying fees is a substantial pipeline for future revenue growth, which is a key differentiator for Ares compared to peers that may have less un-deployed capital.
Stakeholder Impact
- Shareholders will benefit from the strong financial performance and the declared dividends.
- Employees may benefit from the company's growth and success.
- Customers (investors) will benefit from the company's strong investment performance and diverse product offerings.
- Suppliers and creditors may benefit from the company's financial stability and growth.
Next Steps
- Ares will host a conference call on November 1, 2024, to discuss third-quarter results.
- The company will continue to focus on fundraising and deploying capital across its various investment strategies.
- Ares will continue to monitor market conditions and adjust its strategies as needed.
Key Dates
- September 30, 2024: End of the third quarter for which financial results are reported.
- November 1, 2024: Date of the press release and earnings presentation, and conference call to discuss third quarter results.
- December 15, 2024: Record date for the preferred stock dividend.
- December 17, 2024: Record date for the Class A common stock dividend.
- December 31, 2024: Payment date for the Class A common stock dividend.
- January 1, 2025: Payment date for the preferred stock dividend.
- December 1, 2024: End date for the archived replay of the conference call.
Keywords
Ares Management Corporation, alternative investments, assets under management, fundraising, capital deployment, financial results, dividends, fee related earnings, realized income, private equity, credit, real estate, infrastructure
ARES
Ares Management CORP
NYSE
Sector: Financial Services
Filings with Classifications
Worse than expected
13 June 2025 4:32 PM
Insider Transaction Report
- The sale of 2,250,000 shares by a significant insider (10% owner and director) like Ares Management LLC is generally perceived negatively by the market, as it can signal a lack of confidence or a strategic reduction in exposure to the company.
- Such a large divestment can put downward pressure on the stock price and may be interpreted as a bearish signal.
Worse than expected
10 May 2025 12:28 AM
Quarterly Report
- Net income attributable to Ares Management Corporation Class A and non-voting common stockholders decreased to $21.9 million from $73 million in the prior year period.
Better than expected
3 May 2025 12:51 AM
Quarterly Report
- Ares Management Corporation's AUM surpassed $545 billion in Q1 2025, exceeding expectations.
- After-tax realized income reached $381.4 million, translating to $1.09 per share, which is better than anticipated.
- Fee related earnings were $367.3 million for the quarter, surpassing previous forecasts.
Better than expected
5 February 2025 6:17 AM
Earnings Release
- Ares Management reported record fundraising and AUM, indicating strong investor confidence and growth potential.
- The company's key financial metrics, such as Fee Related Earnings and Realized Income, showed significant increases compared to the previous year.
Worse than expected
29 November 2024 4:50 PM
SEC Form 4 Filing
- Ares Management, a significant shareholder, selling shares is generally viewed negatively by the market as it can indicate a lack of confidence in the company's future prospects.
Worse than expected
26 November 2024 4:39 PM
SEC Form 4 Filing
- The document indicates a reduction in stake by a major shareholder, which is generally viewed negatively by the market.
Capital raise
8 November 2024 6:07 AM
Quarterly Report
- In October 2024, Ares issued 30,000,000 shares of its Series B mandatory convertible preferred stock for total proceeds of $1,462.5 million.
- In October 2024, Ares issued $750.0 million in aggregate principal amount of 5.60% senior notes with a maturity date of October 2054.
Better than expected
8 November 2024 6:07 AM
Quarterly Report
- The company's total revenues, management fees, carried interest allocation, and net income all increased significantly compared to the same period last year.
Capital raise
31 October 2024 7:19 PM
Quarterly Report
- In October 2024, Ares issued 30,000,000 shares of its Series B mandatory convertible preferred stock, for total proceeds of $1,462.5 million (after deducting underwriting discounts but before offering expenses).
Better than expected
31 October 2024 7:19 PM
Quarterly Report
- The company's financial results exceeded expectations with strong growth in key metrics, including AUM, fee-related earnings, and realized income.
- The company's fundraising momentum and capital deployment were better than anticipated, leading to an optimistic outlook for the remainder of the year.
Capital raise
11 October 2024 4:42 PM
Debt Issuance
- Ares Management Corporation issued $750 million in senior notes.
- The company also entered into an underwriting agreement to issue 27,000,000 shares of 6.75% Series B Mandatory Convertible Preferred Stock, with an option for an additional 3,000,000 shares to cover over-allotments.
Capital raise
10 October 2024 4:50 PM
Capital Raise Announcement
- Ares Management Corporation issued 30 million shares of 6.75% Series B Mandatory Convertible Preferred Stock, raising $1.5 billion.
- The offering included an underwriter option for an additional 3 million shares, which was fully exercised.
- The net proceeds from the offering will be used to fund a portion of the cash consideration for the acquisition of GLP Capital Partners' international business and for general corporate purposes.
Capital raise
8 October 2024 6:03 AM
Merger Announcement
- Ares has secured a $2.0 billion bridge loan facility to finance the cash portion of the acquisition.
- The company expects to finance the cash portion of the acquisition with a combination of cash on hand and other equity or debt financing, which may include equity or debt securities issued in one or more capital markets transactions.
Capital raise
6 August 2024 7:27 PM
Quarterly Report
- The company issued and sold 2,650,000 shares of Class A common stock in an offering that closed on June 14, 2024, resulting in net proceeds of approximately $354.4 million.
- Subsequent to June 30, 2024, the underwriters exercised the 30-day option to purchase additional shares of Class A common stock, resulting in additional proceeds of $52.9 million.
Worse than expected
6 August 2024 7:27 PM
Quarterly Report
- Net income attributable to common stockholders decreased compared to the same period last year.
- Carried interest allocation was negative for both the quarter and six months ended June 30, 2024, compared to positive figures in the same periods of 2023.
Better than expected
1 August 2024 9:13 PM
Quarterly Report
- The company achieved record gross fundraising and the second-highest level of capital deployment in its history, indicating better than expected operational performance.
Capital raise
11 July 2024 5:14 PM
Capital Raise Update
- Ares Management Corporation raised approximately $52.92 million through the sale of additional shares.
- The total net proceeds from the offering, including the initial sale, reached approximately $408.21 million.
Capital raise
14 June 2024 4:15 PM
Capital Raise Announcement
- Ares Management Corporation raised approximately $356 million through the sale of 2,650,000 shares of Class A common stock.
- The underwriters have an option to purchase an additional 397,500 shares within 30 days, which could result in further capital being raised.
Worse than expected
8 May 2024 8:28 PM
Quarterly Report
- Net income attributable to common stockholders decreased by 22% year-over-year, indicating worse than expected results.
- Carried interest allocation decreased significantly to a loss of $32.5 million, primarily due to reversals in private equity and real estate funds, indicating worse than expected results.
Better than expected
1 May 2024 9:54 PM
Quarterly Report
- The company's AUM grew by 19% year-over-year, exceeding expectations.
- The company raised $17.4 billion in gross new capital, indicating strong investor confidence.
- Available capital reached a record high of $114.6 billion, positioning the company for future growth.
Better than expected
7 February 2024 9:30 PM
Quarterly Report
- The company's AUM, FPAUM, and available capital all reached record levels, indicating strong growth and investor confidence.
- The company's fundraising efforts were highly successful, exceeding expectations and positioning them for future growth.
- The company's after-tax realized income per share increased year-over-year, demonstrating improved profitability.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.