8-K: Ares Management Reports Record Fundraising and AUM in 2024, Eyes Active 2025

Ares Management Corporation announced strong fourth quarter and full year 2024 results, highlighted by record fundraising and assets under management, and expressed optimism for an active transaction environment in 2025.

Summary

• Ares Management Corporation reported GAAP net income attributable to Ares Management Corporation of $177.3 million for the fourth quarter ended December 31, 2024.
• After-tax realized income was $434.7 million for the same quarter.
• Fee related earnings were $396.2 million for the quarter.
• The company raised $93 billion of new funds in 2024, achieving a record year in gross fundraising.
• Ares ended the year with $484 billion of assets under management (AUM).
• The company has $95 billion of assets under management not yet paying fees.
• Ares expects the GCP International transaction to close in the first quarter of the coming year.
• A quarterly dividend of $1.12 per share was declared for Class A and non-voting common stock, payable on March 31, 2025.
• A quarterly dividend of $0.84375 per share was declared for the 6.75% Series B mandatory convertible preferred stock, payable on April 1, 2025.
• The 2025 Annual Meeting of Stockholders will be held on June 6, 2025.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with record fundraising and AUM, indicating strong growth and investor confidence. The management's optimistic comments and declared dividends further contribute to the positive sentiment.

Positives

• Record gross fundraising of $93 billion in 2024.
• Total AUM reached $484 billion.
• Significant amount of AUM not yet paying fees ($95 billion) indicates future revenue potential.
• Declared dividends for both Class A common stock and preferred stock.
• Successful acquisition of Walton Street Capital Mexico (WSM), adding $2.5 billion to AUM.
• Fee Related Earnings increased by 13% and 19% for Q4-24 and FY-24, respectively, compared to Q4-23 and FY-23, primarily driven by the increases in management fees.
• Realized Income increased by 10% and 17% for Q4-24 and FY-24, respectively, compared to Q4-23 and FY-23, primarily driven by the increases in Fee Related Earnings.

Negatives

• Fee related performance revenues decreased by 8% for Q4-24 compared to Q4-23 primarily due to lower incentive fees recognized from U.S. direct lending vehicles in Q4-24.
• Private Equity AUM decreased by 2% from Q4-23 as commitments to our seventh corporate private equity fund were offset by distributions from certain funds within the corporate private equity strategy

Risks

• Forward-looking statements are subject to various risks and uncertainties as detailed in the company's SEC filings.
• The company's performance is subject to market cycles and transaction environment.

Future Outlook

Ares is optimistic about entering a more active transaction environment in 2025, which should create more investment opportunities. The company is well-positioned to invest opportunistically and drive continued growth in key financial metrics over the next several years.

Management Comments

• Michael Arougheti, Chief Executive Officer of Ares, stated that the company set many financial records in 2024, including its best year ever in gross fundraising and capital deployed.
• Jarrod Phillips, Chief Financial Officer of Ares, noted that with a record $95 billion of assets under management not yet paying fees, the company is well positioned to drive continued strong growth in its key financial metrics over the next several years.

Industry Context

Ares's results reflect the broader trend of growth in alternative asset management, driven by investor demand for diverse investment strategies and higher returns. Competitors such as Blackstone, Apollo, and KKR have also reported significant AUM growth and fundraising success.

Comparison to Industry Standards

• Blackstone reported $991.3 billion in AUM as of Q4 2023, showcasing its leading position in the alternative asset management industry.
• Apollo Global Management reported $649 billion in AUM as of Q4 2023, demonstrating its strong presence in credit and private equity.
• KKR reported $553 billion in AUM as of Q4 2023, highlighting its diversified investment platform across various asset classes.
• Ares's $484 billion AUM positions it as a significant player in the industry, but still smaller than the largest firms.

Stakeholder Impact

• Shareholders will benefit from the declared dividends and potential for future growth.
• Employees may experience increased opportunities due to the company's expansion.
• Investors in Ares's funds can expect continued efforts to generate attractive investment returns.

Next Steps

• Ares expects the GCP International transaction to close in the first quarter.
• Ares will host a conference call on February 5, 2025, to discuss fourth quarter and full year results.
• The 2025 Annual Meeting of Stockholders will be held on June 6, 2025.

Key Dates

Keywords

Ares Management, AUM, Fundraising, Financial Results, Dividends, Alternative Investment, Realized Income, Fee Related Earnings