Ares Management Corp Quarterly Report for Q3 Ended Sep 30, 2024

Summary

Ares Management Corporation (ARES) reported solid financial results for the nine months ended September 30, 2024. Total revenues increased to $2.63 billion, up 2% year-over-year, driven by strong growth in management fees, which rose 17% to $2.18 billion. This growth was primarily attributed to increased fee-paying assets under management (FPAUM) across its Credit, Real Assets, and Secondaries segments, supported by successful capital deployment and new fund launches. Net income attributable to Ares Management Corporation common stockholders saw a slight decrease of 5% to $286.4 million for the nine-month period, influenced by higher operating expenses, particularly in compensation and benefits, and acquisition-related costs. Despite these increases in expenses, the company's Fee Related Earnings (FRE) and Realized Income (RI) demonstrated robust growth, indicating the strength of its core recurring revenue streams and operational efficiency. The company also reported significant growth in Assets Under Management (AUM) to $463.8 billion, up 17.4% year-over-year, highlighting continued fundraising success and investor confidence. The company is actively pursuing strategic growth, with significant acquisitions announced in September and October 2024, including Walton Street Capital Mexico and GLP Capital Partners' international business, which are expected to enhance its global real estate and alternative asset management capabilities. These strategic moves, coupled with consistent growth in its core segments and a strong focus on generating Fee Related Earnings, position Ares Management for continued expansion and value creation for its shareholders.

Key Highlights

• 1Total revenues for the first nine months of 2024 increased by 2% year-over-year to $2.63 billion.
• 2Management fees grew by 17% to $2.18 billion, driven by increased FPAUM across key segments.
• 3Assets Under Management (AUM) reached $463.8 billion as of September 30, 2024, a 17.4% increase year-over-year.
• 4Fee Related Earnings (FRE) increased by 21% to $965.5 million for the first nine months of 2024.
• 5Realized Income (RI) grew by 19% to $991.1 million for the first nine months of 2024.
• 6Net income attributable to Ares Management Corporation Class A and non-voting common stockholders decreased by 5% to $286.4 million for the nine months ended September 30, 2024, due to higher operating expenses.
• 7Significant strategic acquisitions were announced in the latter part of Q3 2024, signaling continued growth ambitions.

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