Ares Management Lp ((ARES)) has held its Q1 earnings call. Read on for the main highlights of the call.
Ares Management LP’s recent earnings call highlighted a robust financial performance, marked by record fundraising and capital deployment, alongside significant growth in assets under management (AUM). The company successfully integrated GCP, contributing to its impressive metrics. Despite facing challenges from market volatility and potential income delays, Ares remains optimistic about navigating the current economic landscape.
Record Fundraising and Capital Deployment
Ares Management LP achieved a milestone in the first quarter by raising over $20 billion in gross new capital commitments, marking the highest level of fundraising on record for this period. The company also deployed over $31 billion, with a notable improvement in the gross-to-net deployment ratio of 49% in private credit strategies.
Significant Year-Over-Year Growth in AUM
The firm crossed the $0.5 trillion mark in total AUM, reaching $546 billion. This represents a year-over-year growth of 27% in AUM and 25% in fee-paying AUM, underscoring Ares’ expanding influence and capacity for generating management fees.
Strong Financial Performance Metrics
Ares reported an 18% increase in management fees year-over-year, with fee-related earnings (FRE) rising by 22%. Additionally, the after-tax realized income per share of Class A common stock surged by 36%, reflecting the firm’s strong financial health.
Successful Integration of GCP
The acquisition of GCP added $45 billion to Ares’ AUM, with early signs of fundraising momentum and synergy opportunities being realized, further strengthening the company’s market position.
Robust Performance in Credit Strategies
Ares demonstrated strong performance across its credit strategies, achieving a gross return of 2.4% for European direct lending and 3.2% for US senior direct lending, showcasing the firm’s expertise in credit markets.
Increased Dividend
Reflecting its strong financial performance, Ares announced a 20% increase in its quarterly dividend, now set at $1.12 per share, signaling confidence in its future earnings potential.
Market Volatility and Uncertainty
The company acknowledged the challenges posed by increased market volatility and uncertainty due to geopolitical events and tariff policies, which have led to decreased activity in liquid credit and equity markets.
Potential Delays in European-Style Performance Income
Ares noted the possibility of delays in realizing European-style performance income, attributed to prolonged pauses in the credit markets, which could impact future income streams.
Challenges in Liquid Markets
The firm highlighted the unpredictability and selectiveness of liquid markets, with a significant drop-off in activity as banks and investors adopt a risk-off stance.
Forward-Looking Guidance
Ares Management LP provided strong forward-looking guidance, emphasizing its resilience in challenging market conditions. The company announced a 20% increase in the quarterly dividend, payable on June 30th, 2025, and reported substantial growth across key financial metrics. With over $20 billion in new capital commitments and $31 billion deployed, Ares is well-positioned for continued success, supported by its significant AUM growth and strategic acquisitions.
In conclusion, Ares Management LP’s earnings call showcased a company that is thriving despite market challenges. With record fundraising, substantial AUM growth, and strategic acquisitions, Ares is poised for continued success. The firm’s optimism in navigating market volatility and its commitment to shareholder returns through increased dividends highlight its robust financial health and strategic foresight.