Q2 2026 Ares Management Corp Earnings Call Transcript

Jul 31, 2026 / 01:00 PM GMT

Release Date Price: €111.05 (+3.16%)

Transcript 8-K

Key Points

Positve

Ares Management Corp (ARES) reported record quarterly fundraising of approximately $36 billion in Q2 2026, with AUM and fee-paying AUM both increasing 17% year-over-year to roughly $671 billion and $410 billion, respectively.
Fee-related earnings (FRE) grew 20% year-over-year to approximately $491 million, while realized income increased over 30% to $522 million, both at or above the high end of the company's long-term growth targets.
The company's alternative credit strategy (Pathfinder 3) completed its fundraise at $8.5 billion, significantly exceeding its $6.5 billion target and hitting its hard cap, strengthening its market-leading position in asset-based finance.
Investment performance remains strong across the platform, with gross returns over the last 12 months of 16.4% in alternative credit, 11.2% in US senior direct lending, and 19% in APAC credit, supporting continued fundraising and deployment.
The firm's wealth management platform raised approximately $3.9 billion in gross equity commitments in Q2, up 15% year-over-year, and its core infrastructure product has secured the number 2 rank in TTM gross fundraising with roughly 2% market share.
Ares Management Corp (ARES) has a record $170 billion of dry powder and $114 billion of AUM not yet paying fees, which could generate approximately $828 million in potential incremental annual management fees, providing strong visibility into future earnings growth.

Negative

The non-traded BDC experienced redemption requests, primarily from a small number of non-US family offices and smaller institutions, which represent approximately 10% of the vehicle's NAV, though core US investor redemptions declined 35% quarter-over-quarter.
US direct lending deployment was impacted by slower M&A activity in the market, with 75% of Q2 deployment coming from incumbent borrowers rather than new primary market transactions.
Realized net performance income in Q3 2026 is expected to be limited to approximately $10 million, a significant drop from the $51 million generated in Q2, due to the timing of realizations.
The company's private equity secondaries composite returns were negatively impacted by an older, larger vintage fund (Fund 16), which dragged down overall performance despite stronger returns from newer funds like Fund 17 and APMF.
G&A expenses increased in Q2 due to the firmwide AGM for institutional LPs, which added approximately $9 million in costs, though this is a one-time event that will not recur in Q3 and Q4.
The wealth channel experienced some noise and redemption pressure, particularly in the non-traded BDC, with the company expecting it may take 2-3 more quarters to reach stasis in redemption requests from certain regions.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

ARES.N - Ares Management Corp
Q2 2026 Ares Management Corp Earnings Call
Jul 31, 2026 / 01:00PM GMT

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Presentation
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On Friday, July 31st, 2026.

I will now turn the call over to Greg Mason, co-head of Public Markets Investor relations for Ares Management.

Good morning and thank you for joining us today for our second quarter 2026 conference call.

I'm joined today by Michael Arrigetti, our Chief Executive Officer, and Jared Phillips, our Chief Financial Officer.

We also have a number of executives with us today who will be available during Q&A.

Before we begin, I want to remind you that comments made during this call contain certain forward-looking statements and are subject to risks and uncertainties.

Including those identified in our risk factors in our SEC filings.

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