Ares Management Corporation Q3 2024 Earnings Call Highlights

Ares Management Corporation (NYSE: ARES) reported a strong performance in its third-quarter earnings call on November 1, 2024. CEO Michael Arougheti and CFO Jarrod Phillips announced significant financial growth, including:

• 18% increase in management fees
• 24% rise in fee-related earnings
• 28% increase in realized income

The company deployed nearly $30 billion globally in Q3, contributing to a year-to-date total of $74.6 billion. Ares is on track for a record fundraising year, having raised nearly $21 billion in Q3 alone.

Key Takeaways

• Q3 2024 common dividend increased 21% to $0.93 per share.
• Significant financial growth: 18% rise in management fees, 24% in fee-related earnings, and 28% in realized income.
• Q3 deployment reached nearly $30 billion, marking Ares’ second-highest quarterly deployment ever.
• Strong performance in private credit, raising $13.5 billion in Q3.
• New product launches include a special opportunities fund and a tax-efficient core infrastructure fund.
• Wealth management saw a 57% year-over-year increase in assets under management (AUM).
• Investment activity focused on U.S. and European direct lending, primarily in lower middle-market opportunities.

Company Outlook

• Ares Management anticipates strong Q4 performance with fee-related performance revenues forecasted between $160 million and $170 million.
• Continued growth in AUM and performance income expected in 2025 and beyond.

Market Conditions

Bearish Highlights:
– FRE margin expected to decrease to around 40% in Q4 due to rising compensation costs and distribution fees.

Bullish Highlights:
– Optimism regarding future growth driven by strong market conditions and increasing investor demand.
– Well-positioned investment strategies poised to capitalize on these opportunities.

Q&A Highlights

• Growth in line with projections, focusing on domestic and international markets.
• Enhancing access to distribution points for better performance and client experience.
• Future partnerships will be evaluated for their ability to add value.

Summary

Ares Management Corporation continues to show strong performance in financial and operational metrics, focusing on private credit and asset-backed finance strategies. Confidence remains high for the future of the company in a favorable market environment.