Ares Management (ARES) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw record fundraising of $26 billion, the second highest deployment in firm history, and AUM reached $447.2 billion, up 18% year-over-year, driven by strong investor demand and net new commitments.

• Net income attributable to common stockholders was $94.9 million for Q2 2024, with basic and diluted EPS of $0.43; after-tax realized income per share was $0.99, up 10% year-over-year.

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

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

• Declared a Q3 2024 dividend of $0.93 per share, payable September 30, 2024, and introduced a Dividend Reinvestment Program.

Financial highlights

• Management fees reached $726 million, up 17% year-over-year, driven by positive net deployment and acquisitions.

• Fee-related earnings margin improved to 42.1% for Q2 2024.

• Realized income for Q2 was $363.2 million, a 16% increase over the previous year.

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

• AUM not yet paying fees rose to $70.8 billion, representing $674.7 million in potential annual management fees.

Outlook and guidance

• Management expects continued growth in AUM and stable management fee revenue, supported by strong fundraising and capital deployment.

• For the second half of 2024, an additional $60–$70 million of net realized performance income from European-style funds is expected, with nearly all recognized in Q4.

• 2025 European-style net realized performance income is estimated at $225–$275 million, with seasonality expected to persist.

• Fundraising is expected from a broader and more diverse set of funds, with 35 funds in the market across 17 strategies for the year.

• Market volatility and muted private market realizations may continue to impact carried interest and incentive fees.