Ares Management (ARES) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw record fundraising of $26 billion, the highest ever, and the second-highest deployment in firm history, bringing AUM to $447.2 billion, up 18% year-over-year.

• Net income attributable to common stockholders was $94.9 million, with basic and diluted EPS of $0.43, and after-tax realized income per share of $0.99, up 10% from Q2 2023.

• Fee-related earnings reached $324.5 million, up 22% year-over-year, supported by robust deployment and fundraising momentum.

• 95% of management fees were derived from perpetual capital vehicles or long-dated funds, supporting stable revenue.

• The outlook remains positive, with a strong investment pipeline and expectations for continued active deployment in the second half of the year.

Financial highlights

• Management fees totaled $721.7 million in Q2, up 17% year-over-year, driven by positive net deployment and new fees from acquisitions.

• Fee-related earnings (FRE) were $324.5 million, up 22% year-over-year, with a margin improvement to 42.1%.

• Realized income was $363.2 million, a 16% increase over the previous year; after-tax realized income per share was $0.99, up 10% from Q2 2023.

• Available capital stood at $122.1 billion, up 27% year-over-year.

• Declared a Q3 dividend of $0.93 per share, a 21% increase over the prior year, and introduced a Dividend Reinvestment Program.

Outlook and guidance

• Management expects continued strong deployment and fundraising in the second half, with 35 funds across 17 strategies in the market for the year.

• $70.8 billion of AUM not yet paying fees could generate $674.7 million in incremental annual management fees.

• Projecting $60–$70 million in additional net realized performance income from European-style funds in H2 2024, and $225–$275 million for 2025.

• Margin expansion expected to continue as scale increases and one-time distribution fees become a smaller percentage of management fees.

• Management expects to capitalize on an improving transaction environment and generate further earnings growth.