Ares Management Corp (ARES)

Ares Management Corporation is a leading global alternative investment manager with $622.5 billion of assets under management and over 4,250 employees in over 55 offices in more than 25 countries ¹. The company offers a range of investment strategies to an investor base that includes over 2,850 direct institutional relationships and a significant retail investor base across its publicly-traded funds, sub-advised accounts and perpetual wealth vehicles ². Since its inception in 1997, Ares has adhered to a disciplined investment philosophy focused on delivering strong risk-adjusted investment returns through market cycles, and its AUM has grown to $622.5 billion as of December 31, 2025 from $94.0 billion a decade earlier ³. The company operates as an integrated investment platform with a collaborative culture, and its investment groups in Credit, Real Assets, Secondaries and Private Equity are each considered market leaders based on assets under management and investment performance.

The investment management industry is intensely competitive, with competition based on a variety of factors including investment performance, business relationships, quality of service provided to investors, investor liquidity and willingness to invest, fund terms (including fees), brand recognition and business reputation ⁴. Ares competes with a number of private equity funds, specialized funds, hedge funds, corporate buyers, traditional asset managers, real estate development companies, commercial banks, investment banks, other investment managers and other financial institutions, and expects competition to continue to increase ⁵. Many competitors are substantially larger and have considerably greater financial, technical and marketing resources than are available to Ares, and some may have a lower cost of capital and access to funding sources not available to the company ⁶. Ares believes its consistent and strong performance has been shaped by several distinguishing features: comprehensive multi-asset class expertise and flexible capital, differentiated market intelligence from proprietary research on over 55 industries, a consistent investment approach, a robust sourcing model, talented and committed professionals, and a collaborative culture ⁷.

Ares generates revenue primarily from management fees, which are based generally on the amount of capital committed to or invested by its funds; carried interest and incentive fees, which are based on the performance of its funds; and returns on investments of its own capital in the funds and other investment vehicles that it sponsors and manages ⁸. For the year ended December 31, 2025, 93% of management fees were derived from perpetual capital vehicles or long-dated funds ⁹. The company also earns administrative, transaction and other fees, including capital markets transaction fees, property-related fees such as acquisition, development, leasing and property management fees, and sale and distribution fees for the sale and distribution of fund shares in its perpetual wealth vehicles ¹⁰. The Operations Management Group consists of shared resource groups that support the operating segments by providing infrastructure and administrative support in accounting/finance, operations, information technology, legal, compliance, human resources, strategy and relationship management, and distribution, including the wealth distribution platform Ares Wealth Management Solutions ¹¹.

The Credit Group is one of the largest managers of credit strategies across the non-investment grade credit universe, with $406.9 billion of AUM and over 305 funds as of December 31, 2025 ¹². The Credit Group provides solutions for investors seeking access to a wide range of credit assets, including liquid credit, alternative credit and direct lending products, and is one of the largest self-originating direct lenders to the U.S. and European middle markets ¹³. Within the Credit Group, the U.S. direct lending team managed $189.6 billion of AUM in approximately 90 funds and investment vehicles, the European direct lending team managed $84.7 billion of AUM in over 35 funds, the liquid credit team managed $53.1 billion of AUM in over 115 funds and separately managed accounts, the alternative credit team managed $48.1 billion of AUM in over 25 private funds and SMAs, the opportunistic credit team managed $19.8 billion of AUM in seven funds, and the APAC credit team managed $11.5 billion of AUM in over 20 funds and related co-investment vehicles, all as of December 31, 2025 ¹⁴. The Real Assets Group manages $139.1 billion of AUM in over 110 investment vehicles as of December 31, 2025, capitalizing on opportunities in equity and debt investing across real estate and infrastructure investment strategies ¹⁵. The real estate team managed $113.8 billion of AUM in over 85 investment vehicles, and the infrastructure team managed $25.3 billion of AUM in more than 25 investment vehicles as of December 31, 2025 ¹⁶. The Secondaries Group manages $42.1 billion of AUM in over 90 funds as of December 31, 2025, investing in secondary markets across private equity, real estate, infrastructure and credit ¹⁷. The Private Equity Group manages $25.3 billion of AUM in over 60 funds as of December 31, 2025, with strategies in corporate private equity and APAC private equity ¹⁸. Other businesses include Ares Insurance Solutions, which manages $25.9 billion of AUM as of December 31, 2025, of which $16.9 billion is sub-advised by Ares vehicles and included within other strategies, as well as a SPAC business and a venture capital business ¹⁹.

In 2025, Ares raised $113.2 billion in gross new capital commitments for more than 190 different investment vehicles ²⁰. Of this amount, $77.4 billion was raised directly from over 540 institutional investors, including more than 235 that were new to Ares, and $35.8 billion was raised through intermediaries ²¹. In 2025, Ares invested $145.8 billion across its diverse global platform, of which $69.1 billion was from its drawdown funds ²². On March 1, 2025, Ares completed the acquisition of the international business of GLP Capital Partners Limited and certain of its affiliates, excluding its operations in Greater China, and existing capital commitments to certain managed funds, which added complementary logistics and digital infrastructure investment capabilities and expanded its geographic presence ²³. As of December 31, 2025, Ares and its employees had more than $7.2 billion invested in or committed to Ares-managed vehicles, including $3.4 billion of capital commitments from Ares, $3.6 billion of capital commitments from its employee co-investment vehicles and $0.2 billion of employee investments in its publicly-traded funds and perpetual wealth vehicles ²⁴. During 2025, Ares declared a dividend each quarter of $1.12 (totaling $4.48 annually) per share to Class A and non-voting common stockholders, or approximately $985.5 million ²⁵. During 2025, Ares declared a dividend each quarter of $0.84375 (totaling $3.375 annually) per share to holders of record of shares of the Series B mandatory convertible preferred stock, or approximately $101.3 million ²⁶.

Total revenues for the year ended December 31, 2025 were $5,601.482 million, compared to $3,884.781 million for the year ended December 31, 2024, representing an increase of 44% ²⁷. Net income attributable to Ares Management Corporation was $527.362 million for 2025, compared to $463.742 million for 2024, an increase of 14% ²⁸. Net income attributable to Ares Management Corporation Class A and non-voting common stockholders was $426.112 million for 2025, compared to $440.961 million for 2024, a decrease of 3% ²⁹. Management fees increased 25% to $3,680.467 million for 2025 from $2,942.126 million for 2024, driven by growth across segments including $202.8 million in additional management fees from the GCP Acquisition ³⁰. Carried interest allocation increased 196% to $1,153.976 million for 2025 from $390.180 million for 2024, with significant contributions from Credit funds of $756.0 million and Private Equity funds of $177.0 million ³¹. Total expenses increased 60% to $4,708.766 million for 2025 from $2,938.691 million for 2024, driven by increases in compensation and benefits and performance related compensation, including acquisition-related expenses from the GCP Acquisition ³².

Ares expects that its fundraising in 2026 will come from a combination of its existing and new strategies in the Americas, Europe and APAC ³³. As of December 31, 2025, AUM not yet paying fees includes $78.8 billion of AUM available for future deployment and $4.3 billion of development assets not yet stabilized that could collectively generate approximately $730.4 million in potential incremental annual management fees, which represents a 23% embedded growth rate in its 2025 base management fees ³⁴. The company continues to expand its product offerings and distribution relationships throughout the wealth channel with its global wealth management offerings, as well as the needs of traditional institutional investors such as pension funds, sovereign wealth funds and endowments ³⁵. Ares also has strategic initiatives focused on expanding its presence in Latin America and Australia ³⁶.

Ares continues to expand its product offerings and distribution relationships throughout the wealth channel with its global wealth management offerings, as well as the needs of traditional institutional investors such as pension funds, sovereign wealth funds and endowments ³⁷. The company has launched a number of new investment initiatives in various asset classes and geographies, including through the acquisition of Walton Street Capital Mexico in 2024, which expanded its real estate capabilities into Mexico, and the GCP Acquisition in 2025, which launched investment initiatives in Japan, Vietnam and Brazil ³⁸. Ares also has strategic initiatives focused on expanding its presence in Latin America and Australia ³⁹. The company's growth strategy is based on the selective development or acquisition of asset management businesses, advisory businesses or other businesses complementary to its business where it thinks it can add substantial value or generate substantial returns ⁴⁰.

Ares expects expenses to fluctuate during an integration period following the GCP Acquisition as it continues to seek to generate more cost savings and to execute on synergy opportunities ⁴¹. The company expects expenses related to equity-based compensation to increase in the future as it grants equity-based awards to attract, retain and compensate employees ⁴². General, administrative and other expenses are largely influenced by changes in headcount growth, fundraising activities or strategic initiatives and acquisitions ⁴³.

Ares has over 4,250 employees as of December 31, 2025, comprised of over 1,650 professionals in its investment groups and over 2,550 operations management professionals, located in over 55 offices in more than 25 countries ⁴⁴. The company continues to develop its systems and infrastructure in response to the increasing sophistication of the investment management market and legal, accounting, regulatory and tax developments ⁴⁵. Ares has made significant investments to develop the Operations Management Group, including successfully launching new business lines, integrating acquired businesses into its operations and creating scale within the OMG to support a much larger platform ⁴⁶. In 2025, Ares restructured and expanded its capital markets professionals and formalized and expanded its Capital Solutions Group in order to improve execution on financing and capital markets activities ⁴⁷.

Ares intends to provide a fixed quarterly dividend for each calendar year that will be based on its expected fee related earnings after an allocation of current taxes paid, with future potential changes based on the level and growth of the metric ⁴⁸. Subject to the approval of its board of directors, Ares intends to pay a dividend of $1.35 per share of its Class A and non-voting common stock per quarter in 2026 ⁴⁹. The fixed dividend will be reassessed each year based upon the level and growth of its fee related earnings after an allocation of current taxes paid ⁵⁰. Ares expects to use retained earnings from realized net performance income to fund future growth with the objective of accelerating its fee related earnings growth per share, as well as for potential stock repurchases ⁵¹. As of December 31, 2025, Ares had $1,380 million borrowings outstanding under the Credit Facility and aggregate principal amount of senior notes and subordinated notes of $2,150.0 million and $450.0 million, respectively, are outstanding ⁵².

Difficult market and political conditions may adversely affect Ares' businesses in many ways, including by reducing the value or hampering the performance of the investments made by its funds or reducing the ability of its funds to raise or deploy capital, each of which could materially reduce its revenue, earnings and cash flow ⁵³. Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events such as the ongoing war between Russia and Ukraine and conflicts in the Middle East, and concerns over future increases in inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices have exacerbated market volatility ⁵⁴. Changes in trade policies, including the imposition of new tariffs or increases in existing tariffs between the U.S., Mexico, Canada, China or other countries, could adversely affect the market conditions in which Ares operates ⁵⁵. Ares' business depends in large part on its ability to raise capital from investors, and if it were unable to raise such capital, it would be unable to collect management fees or deploy such capital into investments, which would materially reduce its revenues and cash flow ⁵⁶.

Ares faces intense competition in the investment management business for investment opportunities, and many competitors are substantially larger and have considerably greater financial, technical and marketing resources than are available to the company ⁵⁷. Some competitors may have a lower cost of capital and access to funding sources that are not available to Ares, which may create competitive disadvantages with respect to investment opportunities ⁵⁸. Additionally, institutional and individual investors are allocating increasing amounts of capital to alternative investment strategies, and several large institutional investors have announced a desire to consolidate their investments in a more limited number of managers, which is expected to cause competition in the industry to intensify ⁵⁹. Ares' growth strategy contemplates acquisitions and entering new lines of business and expanding into new investment strategies, geographic markets and businesses, which subject it to numerous risks, expenses and uncertainties, including related to the integration of new businesses and strategies, acquisitions or joint ventures ⁶⁰.

Management's message emphasizes that Ares' disciplined investment philosophy across its distinct but complementary investment groups contributes to the stability of its performance throughout market cycles, and that for the year ended December 31, 2025, 93% of its management fees were derived from perpetual capital vehicles or long-dated funds ⁶⁶. Management highlights that several central tenets contributed to the growth of the platform in 2025, including the ability to fundraise and increase AUM and fee paying AUM, the ability to attract new capital and investors with a broad multi-asset class product offering, a disciplined investment approach and successful deployment of capital, and the ability to invest capital and generate returns through market cycles ⁶⁷. Management notes that as of December 31, 2025, AUM not yet paying fees includes $78.8 billion of AUM available for future deployment and $4.3 billion of development assets not yet stabilized that could collectively generate approximately $730.4 million in potential incremental annual management fees, which represents a 23% embedded growth rate in its 2025 base management fees ⁶⁸. Management also states that the company intends to provide a fixed quarterly dividend for each calendar year that will be based on its expected fee related earnings after an allocation of current taxes paid, and subject to board approval, intends to pay a dividend of $1.35 per share of its Class A and non-voting common stock per quarter in 2026 ⁶⁹.

Total revenues for the year ended December 31, 2025 were $5,601.482 million, compared to $3,884.781 million for the year ended December 31, 2024 ⁷⁰. Net income attributable to Ares Management Corporation was $527.362 million for 2025, compared to $463.742 million for 2024 ⁷¹. Net income attributable to Ares Management Corporation Class A and non-voting common stockholders was $426.112 million for 2025, compared to $440.961 million for 2024 ⁷². Management fees increased 25% to $3,680.467 million for 2025 from $2,942.126 million for 2024 ⁷³. Carried interest allocation increased 196% to $1,153.976 million for 2025 from $390.180 million for 2024 ⁷⁴. Incentive fees were $362.453 million for 2025, compared to $344.157 million for 2024 ⁷⁵. Total expenses were $4,708.766 million for 2025, compared to $2,938.691 million for 2024 ⁷⁶. Compensation and benefits were $2,565.625 million for 2025, compared to $1,731.747 million for 2024 ⁷⁷. Performance related compensation was $1,094.355 million for 2025, compared to $449.564 million for 2024 ⁷⁸. General, administrative and other expenses were $996.075 million for 2025, compared to $736.501 million for 2024 ⁷⁹. Interest expense was $171.642 million for 2025, compared to $142.966 million for 2024 ⁸⁰. Income tax expense was $198.535 million for 2025, compared to $164.617 million for 2024 ⁸¹. Net income attributable to non-controlling interests in Consolidated Funds was $253.904 million for 2025, compared to $295.772 million for 2024 ⁸². Net income attributable to non-controlling interests in Ares Operating Group entities was $305.743 million for 2025, compared to $351.118 million for 2024 ⁸³. Series B mandatory convertible preferred stock dividends declared were $101.250 million for 2025, compared to $22.781 million for 2024 ⁸⁴. Within the Credit Group, carried interest allocation was $756.0 million for 2025, compared to $607.2 million for 2024 ⁸⁵. Within the Private Equity Group, carried interest allocation was $177.0 million for 2025, compared to a reversal of $294.4 million for 2024 ⁸⁶.

Ares' business is materially affected by conditions in the global financial markets and economic and political conditions throughout the world that are outside its control, and difficult market and political conditions may reduce the value or hamper the performance of investments made by its funds or reduce the ability of its funds to raise or deploy capital, each of which could materially reduce its revenue, earnings and cash flow ⁶¹. The company depends on its executive officers, senior professionals and other key personnel, and the departure or bad acts of any of these individuals could have a material adverse effect on its ability to achieve its investment objectives and on its business and prospects ⁶². Ares derives a significant portion of its management fees from ARCC, and if ARCC's total assets or its net investment income were to decline significantly, the amount of fees Ares receives from ARCC would also decline significantly, which could have an adverse effect on its revenues and results of operations ⁶³. As of December 31, 2025, Ares had $1,380 million borrowings outstanding under the Credit Facility and aggregate principal amount of senior notes and subordinated notes of $2,150.0 million and $450.0 million, respectively, are outstanding, and its use of leverage exposes it to substantial risks, including the risk that it may be unable to refinance outstanding facilities when they mature or that an increase in short-term interest rates will increase its interest costs ⁶⁴. The company faces intense competition in the investment management business, and many competitors are substantially larger and have considerably greater financial, technical and marketing resources than are available to Ares, which may create competitive disadvantages with respect to investment opportunities ⁶⁵.