Ares Management Q2 Earnings Call Highlights

Ares raised approximately $36 billion in the second quarter, bringing first-half fundraising to $66 billion. Total AUM and fee-paying AUM each increased 17% year over year to about $671 billion and $410 billion, respectively. Fee-related earnings rose 20% to approximately $491 million, while after-tax realized income increased 27% to $468 million. Ares raised its quarterly dividend by more than 20% to $1.35 per share and expects to approach the upper end of its margin-expansion outlook. Firmwide investment activity rose to $36 billion, supported by private-credit, infrastructure and real-estate deployments, while direct-lending non-accruals remained below 2%. Redemptions in the non-traded BDC declined, with core U.S. individual-investor requests representing only about 2.5% of NAV.

Ares Management NYSE: ARES reported second-quarter results marked by record fundraising, higher fee-paying assets under management and double-digit growth in fee-related earnings and realized income, as the alternative investment manager expanded activity across credit, real assets, secondaries and wealth products. Chief Executive Officer Michael Arougheti said the company raised approximately $36 billion of gross capital during the quarter, its highest quarterly fundraising total, bringing first-half fundraising to about $66 billion. Total AUM rose 17% year over year to approximately $671 billion, while fee-paying AUM increased 17% to about $410 billion.

The company ended the quarter with $170 billion of dry powder and $114 billion of AUM that was not yet paying fees. Arougheti said the fundraising performance reflected increasing diversification, with approximately 70% of capital raised so far in 2026 coming from outside Ares’ four largest credit fund families. Investors committed capital across roughly 90 funds and vehicles during the first half.

Management fees exceeded $1 billion in the second quarter, up 14% from a year earlier, while total revenue including fee-related performance revenues and other fees increased 17%, Chief Financial Officer Jarrod Phillips said. Fee-related earnings were approximately $491 million, an increase of 20% year over year. Realized income totaled approximately $522 million, up 31%, and after-tax realized income was approximately $468 million, up 27%. After-tax realized income per Class A and non-voting common share rose 25% to $1.29. Realized net performance income reached approximately $51 million, more than triple the prior-year amount. Phillips said Ares expects approximately $10 million of realized net performance income in the third quarter, while maintaining its previous full-year outlook. Ares’ year-to-date fee-related earnings margin was 42.3%, about 100 basis points above the prior-year period. Phillips said the company expects to approach the upper end of its full-year margin-expansion guidance of zero to 150 basis points, helped by revenue growth, deployment and the absence of about $9 million in second-quarter expenses tied to its biennial institutional limited-partner meeting.

The company declared a quarterly dividend of $1.35 per Class A and non-voting common share, an increase of more than 20% from the dividend for the same quarter a year ago. The dividend is payable Sept. 30 to shareholders of record on Sept. 16.

Ares highlighted demand for its private-credit strategies. During the quarter, its Ares Pathfinder Fund III, an asset-based finance strategy, completed fundraising with approximately $8.5 billion of equity commitments, su...