Ares Management (ARES) Q1 2025 earnings summary

Executive summary

• Achieved record AUM of $546 billion as of March 31, 2025, up 27% year-over-year, driven by strong fundraising and the GCP International acquisition, which added $45.3 billion to AUM and expanded real estate capabilities.

• Management fees grew 18% year-over-year to $818 million; fee-related earnings up 22% to $367.3 million; after-tax realized income per share of Class A stock increased 36% year-over-year.

• Declared a quarterly dividend of $1.12 per share for Class A and non-voting common stock, a 20% increase over the prior year.

• Raised over $20 billion in new capital commitments, the highest first quarter fundraising on record, and deployed $31.4 billion in capital during the quarter.

• Portfolios remain defensively positioned with 85% of debt assets and 52% of total assets in floating rate instruments, supporting resilience amid market volatility.

Financial highlights

• Total revenues for Q1 2025 were $1.09 billion, up 54% year-over-year; management fees rose 19% to $817 million.

• Fee Related Earnings (FRE) reached $367.3 million, with a margin of 41.5%; Realized Income totaled $405.9 million, up 40% year-over-year.

• Net income attributable to Ares Management Corporation was $47.2 million for Q1 2025, with basic and diluted EPS of $0.00 per share.

• Net realized performance income exceeded $40 million, mainly from European waterfall tax distributions.

• Adjusted for acquisition and equity compensation, core operating performance remained strong.

Outlook and guidance

• Management expects continued growth in AUM and FPAUM, with $81.5 billion of AUM not yet paying fees, representing 29% embedded gross base management fee growth upon deployment.

• Nearly $100 billion in AUM is not yet fee-paying, supporting future investment opportunities.

• FRE margin expansion of 0–150 basis points still expected as GCP integration progresses; cost savings and synergies anticipated.

• Maintain 2025 target of $225–$275 million net realized performance income from European-style funds; anticipate higher European-style waterfall net realized performance income in 2026.

• Lower effective tax rate of 8–12% projected for the remainder of 2025.