ARES
Ares Management CORP
NYSE
10-Q: Ares Management Reports Strong Q1 2025 Results Driven by Management Fee Growth and Strategic Acquisition
Sentiment:
Quarterly Report
10 May 2025 12:28 AM
Ares Management Corporation announces positive first quarter 2025 results, highlighting significant growth in management fees and the successful acquisition of GCP International.
Worse than expected
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.
Summary
- Ares Management Corporation reported its first quarter 2025 financial results.
- Management fees increased to $817 million, up 19% year-over-year.
- The company completed the acquisition of GCP International, expanding its real estate and digital infrastructure capabilities.
- AUM reached $545.9 billion, reflecting growth in both fee-paying and non-fee-paying assets.
- Net income attributable to Ares Management Corporation Class A and non-voting common stockholders was $21.9 million, or $0.00 per share.
- The company's credit facility was amended and extended to April 2030, increasing commitments to $1.84 billion.
Sentiment
Score: 7
Explanation: The document presents a mixed sentiment. While there's positive growth in AUM and management fees, the decrease in net income and increased expenses temper the overall outlook. The strategic acquisition is a positive sign for future growth, but potential risks in the market environment warrant caution.
Positives
- Strong growth in management fees indicates successful fundraising and deployment activities.
- Strategic acquisition of GCP International expands investment capabilities and geographic presence.
- Significant AUM not yet paying fees suggests potential for future revenue growth.
- Extension of the credit facility provides financial flexibility.
- Realized income increased to $405.9 million, up 40% year-over-year.
Negatives
- 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.
- Increased compensation and benefits expenses impacted profitability.
- Interest expense increased due to financing costs associated with the GCP Acquisition.
Risks
- Global financial market conditions and economic slowdown could impact AUM and investment performance.
- Potential implications of U.S. trade tariffs may affect business operations.
- Fluctuations in interest rates could impact the value of debt assets.
- Contingent liabilities related to acquisitions could affect future financial results.
- The company's effective tax rate is dependent on various factors, including the allocation of income and expenses to non-controlling interests.
Future Outlook
The document does not provide a specific future outlook, but it highlights the potential for future management fee growth from AUM not yet paying fees and the expansion of investment capabilities through the GCP International acquisition.
Industry Context
The announcement reflects a trend in the alternative asset management industry towards consolidation and expansion into new asset classes and geographies. Ares' acquisition of GCP International is consistent with this trend, as firms seek to diversify their revenue streams and enhance their investment capabilities.
Comparison to Industry Standards
- Blackstone's Q1 2025 results showed a similar trend of AUM growth, driven by strong fundraising and deployment activity.
- Apollo Global Management also reported increased management fees, reflecting the continued demand for alternative investment strategies.
- KKR's focus on operational improvements and digital transformation aligns with Ares' strategy to enhance long-term competitiveness.
- The commercial real estate market slowdown is a common theme across the industry, with firms like Brookfield Asset Management also navigating heightened interest rates and policy shifts.
Stakeholder Impact
- Shareholders: Potential for long-term value creation through strategic acquisitions and AUM growth.
- Employees: Increased headcount and potential for career development within the expanded organization.
- Customers: Access to a broader range of investment strategies and expertise.
- Suppliers: Potential for increased business opportunities through the expanded platform.
- Creditors: Continued compliance with debt covenants and financial stability.
Next Steps
- Continue integrating GCP International and realizing synergies.
- Focus on deploying available capital and converting AUM not yet paying fees into revenue-generating assets.
- Manage expenses and maintain financial flexibility.
- Monitor market conditions and adjust investment strategies accordingly.
Related Party Transactions
- Substantially all of the Company's revenue is earned from its affiliates.
- The Company has investment management agreements with the Ares Funds that it manages.
- Employees and other related parties may be permitted to participate in co-investment vehicles that generally invest in Ares Funds alongside fund investors.
Key Dates
- 2025-03-01: Ares Management completed the acquisition of GCP International.
- 2025-03-31: End of the first quarter 2025.
- 2025-04: Ares amended its Credit Facility.
- 2025-05-06: Date of outstanding shares calculation.
- 2025-05-12: Date of report filing.
Keywords
Ares Management, AUM, management fees, GCP International, financial results, alternative investment, credit, real assets, private equity, secondaries
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.
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
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).
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.