Ares Management (ARES) Q3 2024 earnings summary

Executive summary

• Achieved strong year-over-year growth in management fees (18%), fee-related earnings (24%), and realized income (28%) in Q3 2024, supported by robust fundraising and deployment activity.

• Net income attributable to Class A and non-voting common stockholders rose 92% to $118.5M for Q3 2024; diluted EPS was $0.55.

• Raised nearly $21 billion in gross capital in Q3, with year-to-date fundraising exceeding $64 billion and expectations for a record year.

• Deployment reached nearly $30 billion in Q3, bringing year-to-date deployment to $74.6 billion.

• Announced acquisitions of GCP International and Walton Street Capital Mexico, expanding global real estate and infrastructure presence.

Financial highlights

• Management fees totaled over $757 million in Q3, up 18% year-over-year, driven by positive net deployment.

• Fee-related earnings (FRE) reached $339.3 million, a 24% increase from the previous year, with an FRE margin of 41.1%.

• Realized income was $339 million, up 28% year-over-year; after-tax realized income per share was $0.95, up 14%.

• Assets under management (AUM) reached $464 billion, up 17% year-over-year; fee-paying AUM was $287 billion.

• Declared a Q4 dividend of $0.93 per share, a 21% increase over the prior year, payable December 31, 2024.

Outlook and guidance

• Expect to end 2024 with total gross capital raised in the mid-$80 billion range, surpassing the 2021 record.

• Forecasting Q4 fee-related performance revenues of $160-$170 million and net realized performance income of $90-$95 million.

• FRE margin expected to be approximately 40% in Q4, with moderate expansion anticipated in 2025 as deployment broadens.

• Over $85 billion in AUM not yet paying fees positions the company for future earnings growth.

• The GCP and WSM acquisitions are expected to close in 2025 and Q4 2024, respectively, further expanding global reach.