8-K: Ares Management Reports Strong Q3 2025 Results, AUM Jumps 28%

Ares Management Corporation announced robust third-quarter 2025 financial results, marked by significant growth in assets under management and strong earnings across most segments.

Summary

• GAAP net income attributable to Ares Management Corporation for Q3 2025 was $288.9 million, a substantial increase from $118.46 million in Q3 2024.
• GAAP basic and diluted earnings per share of Class A and non-voting common stock rose to $1.15 for Q3 2025, up from $0.55 in the prior year quarter.
• After-tax realized income reached $425.8 million for Q3 2025, compared to $316.049 million in Q3 2024.
• After-tax realized income per share of Class A and non-voting common stock was $1.19 for Q3 2025, an increase from $0.95 in Q3 2024.
• Fee Related Earnings (FRE) for Q3 2025 were $471.2 million, up from $339.311 million in Q3 2024.
• Total Assets Under Management (AUM) grew 28% year-over-year to $595.7 billion as of September 30, 2025.
• Fee Paying AUM (FPAUM) also increased by 28% year-over-year, reaching $367.6 billion.
• Available Capital stood at $149.5 billion, a 19% increase from the prior year, with $103.0 billion in AUM Not Yet Paying Fees.
• Gross new capital commitments for Q3 2025 totaled $30.9 billion, contributing to net inflows of capital of $28.5 billion.
• Capital deployment for Q3 2025 was $41.7 billion, including $20.2 billion by drawdown funds.
• A quarterly dividend of $1.12 per share of Class A and non-voting common stock was declared, payable on December 31, 2025.
• A quarterly dividend of $0.84375 per share of 6.75% Series B mandatory convertible preferred stock was declared, payable on January 1, 2026.

Sentiment

Score: 9

Explanation: The filing reports exceptionally strong financial results across most key metrics, including significant growth in AUM, FPAUM, and earnings. Management commentary is highly positive, emphasizing record fundraising and a healthy investment pipeline. The only minor negative is a slight decline in the Private Equity Group's fees and earnings, which is overshadowed by overall strong performance.

Positives

• GAAP net income attributable to Ares Management Corporation more than doubled year-over-year to $288.9 million.
• After-tax realized income per share increased by 25% to $1.19, demonstrating strong profitability.
• Fee Related Earnings (FRE) grew by 39% to $471.2 million, indicating robust core operating performance.
• Total AUM and FPAUM both increased by 28% year-over-year, reflecting successful fundraising and investment activities.
• Available capital of $149.5 billion positions the company for future earnings growth through deployment.
• Gross new capital commitments of $30.9 billion and net inflows of $28.5 billion highlight strong investor demand.
• The Credit Group showed strong performance with management and other fees up 17%, fee related performance revenues up 49%, and FRE up 21%.
• The Real Assets Group experienced significant growth, with management and other fees up 106% and FRE up 123%, largely driven by the GCP International acquisition.
• The Secondaries Group also demonstrated exceptional growth, with management and other fees up 90% and FRE up 167%.
• The company expects to meaningfully exceed its previous annual fundraising record of $93 billion for the year.

Negatives

• The Private Equity Group experienced a decrease in management and other fees by 4% for Q3 2025 compared to Q3 2024.
• Fee Related Earnings for the Private Equity Group decreased by 21% year-over-year.
• Realized Income for the Private Equity Group decreased by 17% year-over-year.

Risks

• Forward-looking statements are subject to various risks and uncertainties and assumptions relating to operations, financial results, financial condition, business prospects, growth strategy, and liquidity.
• Actual results may vary materially from those indicated in forward-looking statements due to factors described in filings with the Securities and Exchange Commission.

Future Outlook

Management expects to meaningfully exceed its previous annual fundraising record of $93 billion this year, driven by growing investor demand across various investment strategies and distribution channels. The company is well positioned to generate future earnings growth by deploying its significant available capital, supported by an improving market tone and a healthy investment pipeline.

Management Comments

• "We reported an outstanding third quarter, highlighted by strong financial results, quality fund performance, improving credit quality, a record quarter of fundraising and increased investment activity across the platform." Michael Arougheti, CEO
• "We now expect to meaningfully exceed our previous annual fundraising record of $93 billion this year, driven by the growing breadth of investor demand across our various investment strategies and distribution channels." Michael Arougheti, CEO
• "Our strong fundraising and investing activities supported a 28% year-over-year increase in AUM, FPAUM and management fees in the third quarter." Jarrod Phillips, CFO
• "Based upon an improving tone in our markets and a healthy investment pipeline, we are well positioned to generate future earnings growth as we deploy our significant available capital, which stood at $150 billion at the end of the third quarter." Jarrod Phillips, CFO

Industry Context

Ares Management's strong Q3 2025 results, particularly the significant growth in AUM and FPAUM, reflect a robust environment for alternative asset managers. The substantial capital raised and deployed, coupled with an improving market tone, indicates continued investor appetite for private credit, real assets, and secondaries strategies. The acquisition of GCP International further strengthens its position in the Real Assets sector, aligning with broader industry trends of consolidation and expansion into diverse alternative investment categories.

Stakeholder Impact

• Shareholders: Benefit from significantly increased GAAP net income, after-tax realized income per share, and a declared quarterly dividend of $1.12 per share.
• Investors in Ares' funds: Benefit from quality fund performance, increased investment activity, and the company's ability to deploy substantial available capital.
• Employees: Continued investment in compensation and benefits, reflecting the company's growth and operational expansion.
• Customers/Clients: Benefit from the growing breadth of investment strategies and distribution channels, and the company's ability to provide flexible capital.

Next Steps

• Ares will host a conference call on November 3, 2025, at 9:00 a.m. (Eastern Time) to discuss third quarter results.
• The company will continue to deploy its significant available capital of $149.5 billion to generate future earnings growth.

Key Dates

Recommendation

The filing demonstrates exceptional financial performance with significant year-over-year growth in AUM, FPAUM, GAAP net income, and Fee Related Earnings. The company's strong fundraising momentum, substantial available capital for deployment, and positive management outlook suggest continued robust growth. While the Private Equity segment showed a slight decline, it is an isolated issue within an otherwise outstanding quarter. The overall strength across Credit, Real Assets, and Secondaries groups, coupled with increased dividends, makes Ares Management a compelling investment.

Keywords

Alternative Investment Management, Assets Under Management, Fee Related Earnings, Private Credit, Real Assets, Private Equity, Secondaries, Fundraising, Capital Deployment, Dividends, Financial Results