01—Abstract
Summary
Summary of the 10-Q filed May 8, 2026. Cited figures are marked; the original filing is the authoritative source.
Ares Management Corporation's Q1 2026 filing shows robust growth and operational strength, with total revenues increasing by 28% year-over-year to $1.4 billiona.
This growth was primarily driven by a significant surge in incentive fees, which more than quadrupled compared to the prior year's first quarter, indicating successful performance generation across its investment strategies. Management fees also saw a healthy 21%b increase, reflecting continued AUM growth. The company's diverse segments—Credit, Real Assets, Secondaries, and Private Equity—all contributed positively to Fee Related Earnings (FRE), which grew by 26% overall, demonstrating the recurring nature and underlying strength of its business model.
Despite an overall increase in expenses, largely due to higher compensation and benefits associated with growth and strategic acquisitions, Ares Management Corporation maintained a strong profitability profile. The substantial increase in net income attributable to Ares Management Corporation by 202%c year-over-year highlights the company's ability to leverage its growing revenue base effectively. Liquidity remains strong, with significant cash on hand and available credit facilities, positioning the company to pursue further growth initiatives and strategic opportunities.
02—Key points
Key Highlights
- Total revenues increased by 28% year-over-year to $1.4 billion, driven by strong performance across all segments.
- Incentive fees saw a substantial increase of over 400% year-over-year, indicating strong investment performance.
- Fee Related Earnings (FRE) grew by 26% year-over-year, demonstrating the stable and recurring nature of management fees and fee-related performance revenues.
- Assets Under Management (AUM) increased to $644.3 billion, with Fee Paying AUM (FPAUM) reaching $399.6 billion, reflecting continued fundraising success.
- Net income attributable to Ares Management Corporation increased by 202% year-over-year, showcasing improved profitability.
- The Credit Group reported a 26% increase in Realized Income and a 17% increase in Fee Related Earnings, driven by strong fee generation and capital deployment.
- The company maintains a strong liquidity position with $568.8 million in cash and cash equivalents and $415.0 million available under its Credit Facility.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 8, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.40B$1.09B | +28.3% |
| SG&A Expenses | $240.44M$227.91M | +5.5% |
| Operating Expenses | $1.17B$1.01B | +15.2% |
| Net Income | $142.59M$47.17M | +202.3% |
05—Questions
Frequently Asked Questions
What drove the significant increase in incentive fees?
The substantial increase in incentive fees was primarily driven by strong investment performance across various funds, particularly in the Credit Group. For example, the SDL I fund generated significant incentive fees from the sale of its remaining assets to a continuation vehicle, and the APMF fund in the Secondaries Group saw higher incentive fees due to increased Incentive Generating Assets Under Management (IGAUM).
How has the company's Assets Under Management (AUM) changed?
Total AUM increased to $644.3 billion as of March 31, 2026, up from $545.9 billion as of March 31, 2025. Fee Paying AUM (FPAUM) also saw a significant increase, reaching $399.6 billion from $335.1 billion in the same period, indicating successful fundraising and deployment of capital across the company's various investment strategies.
What is the outlook for expenses, particularly compensation and benefits?
Expenses increased, with compensation and benefits rising due to continued headcount growth (up 24% year-over-year), strategic acquisitions like GCP, and higher equity compensation expense related to increased stock prices. While expenses are increasing, the company's revenue growth is outpacing expense growth, leading to improved net income.
How is the company positioned in terms of liquidity and debt?
Ares Management Corporation maintains a strong liquidity position with $568.8 million in cash and cash equivalents and $415.0 million available under its Credit Facility as of March 31, 2026. The company is in compliance with all debt covenants and believes its liquidity is sufficient to meet its foreseeable working capital needs, contractual obligations, dividend payments, and strategic initiatives.
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