Ares Management Lp ((ARES)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Ares Management LP was marked by an optimistic tone, underscoring the company’s impressive achievements in capital raising and asset under management (AUM) growth. The management expressed confidence in their robust performance in management fees and credit strategies, while addressing concerns over potential credit cycle risks and temporary margin compression from the GCP integration as manageable issues that do not signal broader negative trends.
Record-Breaking Capital Raising
Ares Management LP achieved a milestone by raising over $30 billion in new capital during the quarter, marking the highest quarter on record. This impressive feat contributes to a year-to-date total of over $77 billion, and an astounding $105 billion over the last 12 months, reflecting a 24% increase from the previous year.
Significant Growth in AUM
The company reported a substantial increase in assets under management, which rose to more than $595 billion. Fee-paying AUM also saw a significant rise, reaching $368 billion, both metrics showing a 28% year-over-year growth.
Strong Management Fee Growth
Ares Management LP recorded a remarkable increase in management fees, which reached a record $971 million. This represents a 28% increase compared to the previous year, highlighting the company’s strong financial performance.
Successful Infrastructure Fundraising
The third infrastructure secondaries fund closed with $3.3 billion in equity commitments, exceeding its hard cap and becoming over three times larger than its predecessor. This success underscores the company’s growing infrastructure platform.
Credit Performance and Deployment
The firm raised $19.3 billion in credit strategies, showcasing strong performance across credit portfolios. These portfolios delivered impressive double-digit returns, ranging from 10% to 23% over the last 12 months.
Concerns Over Credit Market
During the call, management addressed concerns about potential credit cycle risks. They assured that current events appear idiosyncratic and isolated, with no broad deterioration in credit fundamentals, thus maintaining a positive outlook.
GCP Integration Impact
The integration of GCP has temporarily compressed margins in the third quarter. However, management expects improvements by 2026, indicating a strategic approach to managing integration challenges.
Forward-Looking Guidance
Ares Management LP provided a positive outlook for the future, reporting strong financial results and significant growth across various metrics. The company declared a quarterly dividend of $1.12 per share, a 20% increase from the previous year. With a remarkable year-over-year growth in management fees, fee-related earnings, and realized income, Ares is poised for continued success. The firm anticipates strong future fundraising momentum with several funds in the pipeline.
In conclusion, Ares Management LP’s earnings call conveyed a positive sentiment, highlighting the company’s record-breaking capital raising and significant growth in AUM. Despite some concerns over credit market risks and GCP integration impacts, the management remains confident in their strategic approach and future prospects. Investors can look forward to continued robust performance and growth from Ares Management LP.