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Ares Management Corporation (ARES) is a leading global alternative investment manager that provides investment solutions across multiple asset classes, including credit, private equity, real estate, and infrastructure. The company focuses on delivering attractive, risk-adjusted returns to its investors through market cycles. ARES operates globally, serving institutional and retail clients with a diverse range of investment strategies and products.
- Management Fees - Earned by managing assets across various investment strategies, this segment represents the core revenue driver for the company and reflects its expertise in asset management.
- Performance Income (Realized) - Generated from realized investment performance, this segment highlights the firm's ability to deliver strong returns on its investments.
- Fee-Related Performance Revenues - Derived from performance-based fees tied to specific investment outcomes, showcasing the firm's alignment with investor success.
- Other Fees - Includes administrative and transaction fees, contributing additional revenue streams to the company's operations.
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Given that your Fee-Related Performance Revenues (FRPR) growth may be modest in 2025 due to lower base interest rates and no expected FRPR from your real estate group until possibly 2026, how do you plan to sustain your FRE growth and margin expansion in the near term?
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With supplemental distribution expenses associated with your wealth management products increasing from $16.7 million in 2023 to $51.2 million in 2024, how confident are you that these expenses won't continue to pressure your FRE margins, and what steps are you taking to mitigate this?
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You mentioned that after the GCP International acquisition, there are few capabilities of consequence in the global alternative space that you don't already have; does this mean that your future growth might be limited without significant M&A opportunities, and how do you plan to drive growth organically in such a competitive environment?
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Considering the low gross-to-net deployment ratio in 2024 and the challenging M&A market, how realistic is your expectation that net deployment activity will significantly improve in 2025 to support your FRE growth, especially since you indicated slower deployment in certain periods?
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With intensifying competition in the wealth management sector and your aim to reach $100 billion in AUM across semiliquid products, what are the risks that competition could slow your fundraising momentum, and how do you plan to maintain your competitive edge in this space?
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Form Technologies | 2025 | Ares Management funds acquired a majority of Form Technologies’ common equity via a $304 million capital injection (comprising $154 million of common equity and $150 million of preferred equity) to deleverage and accelerate global growth for a precision-engineered components leader operating 32 facilities in 22 countries. |
GLP Capital Partners International Business (GCP Acquisition) | 2024 | Ares Management Corporation entered into a definitive agreement to acquire GLP Capital Partners’ international business (excluding Greater China) for an initial consideration of approximately $3.7 billion—augmented by an earn-out potential of up to $1.5 billion—thereby nearly doubling its real estate AUM and enhancing capabilities in industrial real estate and digital infrastructure. |
Walton Street Capital Mexico S. de R.L. de C.V. | 2024 | Ares Management signed an agreement to acquire Walton Street Capital Mexico, a real estate asset management platform with $2.1 billion in AUM focused on the industrial sector, aiming to capitalize on nearshoring trends and complement its Real Assets group through cultural and strategic synergies. |
Crescent Point Capital | 2023 | Ares completed the acquisition of Crescent Point Capital on October 2, 2023, adding an Asia-focused private equity firm with $3.7 billion in AUM and 50 new investment professionals, thereby strengthening its presence and capabilities in the Asia Pacific region across credit, private equity, and real assets. |
AMP Capital’s Infrastructure Debt Platform | 2022 | Ares completed the acquisition on February 10, 2022 for a total of $328.6 million (comprising $315.8 million in cash and $12.8 million in restricted units), adding one of the largest global infrastructure debt platforms with $8.0 billion in AUM and setting the stage for accelerated fundraising and geographic expansion. |
Black Creek Group | 2021 | Ares acquired Black Creek Group on July 1, 2021, expanding its Real Estate Group by integrating a firm with $13.7 billion in AUM, a strong retail distribution platform (including over 100,000 financial advisors), and a team of 100+ professionals, which also generated a bargain purchase gain of $42.3 million. |