ARES

The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how asset management stocks fared in Q2, starting with Ares (NYSE:ARES). Asset management firms oversee investment portfolios for institutions and individuals. The industry benefits from the growing global wealth pool, retirement savings needs, and expansion into alternative investments (private equity, real estate, etc.). However, firms face significant pressure from the shift to lower-cost passive investment products, regulatory requirements for fee transparency, and increasing technology costs to stay competitive in portfolio management and client service. The 5 asset management stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 8.4%. Thankfully, share prices of the companies have been resilient as they are up 8.7% on average since the latest earnings results. With roots in the leveraged finance group of Apollo Management, Ares Management (NYSE:ARES) is an alternative investment firm that manages private equity, credit, real estate, and infrastructure assets for institutional and high-net-worth clients. Ares reported revenues of $1.28 billion, up 25.6% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ AUM estimates. Ares achieved the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 15.6% since reporting and currently trades at $143.45. Is now the time to buy Ares? Access our full analysis of the earnings results here, it’s free. Founded in 1987 with just $5 million in capital and named after the iconic New York hotel where the founders first met, The Carlyle Group (NASDAQ:CG) is a global investment firm that raises, manages, and deploys capital across private equity, credit, and investment solutions. Carlyle reported revenues of $1.11 billion, up 13% year on year, outperforming analysts’ expectations by 20.7%. The business had a stunning quarter with a beat of analysts’ EPS and AUM estimates. Carlyle delivered the biggest analyst estimate beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 2.6% since reporting. It currently trades at $49.35. Is now the time to buy Carlyle? Access our full analysis of the earnings results here, it’s free. Founded in 1994 with a focus on autonomous investment teams and a "high-value-added" approach, Artisan Partners (NYSE:APAM) is an investment management firm that offers actively managed equity and fixed income strategies to institutional and individual investors. Artisan Partners reported revenues of $307.9 million, up 8.9% year on year, exceeding analysts’ expectations by 2.3%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a beat of analysts’ EPS estimates and AUM in line with analysts’ estimates. Artisan Partners delivered the slowest revenue growth in the group. Interestingly, the stock is up 3.6% since the results and currently trades at $42.35. Read our full analysis of Artisan Partners’s results here. With over $1 trillion in assets under management and investments spanning real estate, private equity, credit, and hedge funds, Blackstone (NYSE:BX) is a global alternative asset manager that invests capital on behalf of pension funds, sovereign wealth funds, and other institutional investors. Blackstone reported revenues of $3.83 billion, up 23.8% year on year. This number beat analysts’ expectations by 10.9%. It was a stunning quarter as it also produced a beat of analysts’ EPS estimates and a narrow beat of analysts’ AUM estimates. The stock is up 17.5% since reporting and currently trades at $144.36. Read our full, actionable report on Blackstone here, it’s free. Founded in 1992 and managing over 300 active portfolio companies across more than 30 countries, TPG (NASDAQ:TPG) is a global alternative asset management firm that invests across private equity, credit, real estate, and public market strategies. TPG reported revenues of $610.4 million, up 24.7% year on year. This print topped analysts’ expectations by 7.8%. Overall, it was a stunning quarter as it also recorded a solid beat of analysts’ AUM estimates and a beat of analysts’ EPS estimates. The stock is up 9.3% since reporting and currently trades at $53.54. Read our full, actionable report on TPG here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Ares Management (ARES) shares reacted after the company reported second quarter 2026 results, including revenue of US$1,428.61m and net income of US$150.64m. Management also affirmed quarterly dividends on both common and preferred stock. See our latest analysis for Ares Management. The earnings and dividend announcements appear to have contributed to a sharp short term rebound for Ares Management, with a 30 day share price return of 17.49% and a 90 day gain of 16.18%. However, the year to date share price return is down 13.96% and the 1 year total shareholder return is down 23.02%, compared with stronger 3 and 5 year total shareholder returns of 60.64% and 131.21% respectively. This indicates that long term holders have still seen meaningful gains even though recent momentum has been weaker. If you are comparing Ares Management with other opportunities in the market, it can help to scan for established alternative asset and financial players and see how they line up on quality, risk and growth using the 18 top founder-led companies Bulls point to Ares Management's expanding earnings and resilient dividends. Bears focus on the recent pullback despite the rebound. Given that mix and the current share price, is the valuation generous or still reasonable? Ares Management last closed at $143.11, slightly under the most widely followed fair value estimate of about $145.24. This estimate is built on detailed long term earnings and margin assumptions that differ from recent share price swings. Read the complete narrative. Read the complete narrative. Want to see what sits behind that confidence in Ares Management? The narrative leans heavily on recurring fee potential, stronger profitability, and a richer earnings profile than the market is currently pricing. The exact growth, margin, and valuation assumptions might surprise you. Result: Fair Value of $145.24 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Ares Management still faces pressure from fee competition in private credit and from execution risks in newer areas such as data centers and sports or media assets. Find out about the key risks to this Ares Management narrative. The fair value narrative for Ares Management points to the stock trading about 1.5% below a $145.24 estimate. However, the current P/E of 56.8x stands far above the fair ratio of 24.5x, the US Capital Markets industry at 37.9x, and peers at 37.1x. That gap suggests meaningful valuation risk if sentiment or earnings expectations shift. To see how those P/E gaps stack up in more detail, including what the numbers imply if the ratio drifts toward the fair ratio, See what the numbers say about this price — find out in our valuation breakdown. The mixed sentiment around Ares Management makes it important to compare the narrative with the underlying data and your own risk tolerance. To see both sides clearly, review the 2 key rewards and 3 important warning signs If Ares Management has sharpened your interest, do not stop here. Broaden your opportunity set and pressure test your thinking with other focused stock ideas. Target income potential by reviewing companies screened as 8 dividend fortresses that may offer stronger yields with supporting fundamentals. Hunt for mispriced quality and compare Ares Management with companies highlighted in the screener containing 20 high quality undiscovered gems that many investors might be overlooking. Strengthen your defense by assessing businesses in the 85 resilient stocks with low risk scores which prioritize resilience and more controlled risk profiles. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ARES. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Ares Management Corporation recently reported past second-quarter 2026 results, with revenue of US$1,428.61 million and net income of US$150.64 million, alongside declaring quarterly dividends of US$1.35 per share for its common stock and US$0.84375 per share for its 6.75% Series B mandatory convertible preferred stock. The combination of higher year-on-year revenue and earnings, together with continued common and preferred dividends, highlights Ares Management’s ability to translate its alternative asset platform into growing fee income and distributable cash flows. Against this backdrop of stronger earnings and affirmed dividends, we’ll examine how Ares Management’s improved profitability reshapes the existing analyst investment narrative. Find 49 companies with promising cash flow potential yet trading below their fair value. To own Ares Management, you need to believe in the long term growth of private credit and alternative assets, and in Ares’ ability to convert rising assets under management into durable fee income. The latest quarter’s higher revenue and earnings, plus affirmed dividends, support this fee based narrative in the near term. The biggest short term catalyst remains how efficiently Ares can deploy capital and grow fee paying AUM, while a key risk is mounting pressure on fees and margins as competition intensifies. The most relevant announcement here is the declaration of the US$1.35 quarterly dividend on common stock and US$0.84375 on the 6.75% Series B preferred shares. This decision, alongside higher first half revenue of US$2,825.05 million and net income of US$293.22 million year on year, ties directly into the catalyst of building recurring, fund management driven cash flows. It also puts a spotlight on the risk that dividends may be less well covered if margins compress or fundraising slows. But beneath this steady dividend story, investors should also be aware of the rising risk that fee pressure and higher payout commitments could... Read the full narrative on Ares Management (it's free!) Ares Management’s narrative projects $6.9 billion revenue and $1.9 billion earnings by 2029. This implies 5.2% yearly revenue growth and an earnings increase of about $1.3 billion from $561.7 million today. Uncover how Ares Management's forecasts yield a $145.24 fair value, in line with its current price. Before this earnings beat, the most optimistic analysts were already modeling earnings of about US$2.7 billion by 2029, so if you believe fundraising dependence could still strain revenue, this latest quarter might either reinforce that bullish view or prompt you to question how resilient those forecasts really are. Explore 4 other fair value estimates on Ares Management - why the stock might be worth as much as 17% more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Ares Management research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision. Our free Ares Management research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ares Management's overall financial health at a glance. Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay: We've uncovered the 8 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. The future of work is here. Discover the 39 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ARES. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Ares Management delivered a quarter that met Wall Street’s revenue expectations and modestly exceeded consensus non-GAAP earnings per share for Q2, prompting a positive market response. Management attributed the performance to strong global fundraising, with CEO Michael Arougheti highlighting a record $36 billion raised across diverse strategies and approximately 17% year-over-year growth in both assets under management and fee-paying assets. The breadth of institutional investor engagement and expansion into real assets, credit, and wealth management were cited as key contributors. Is now the time to buy ARES? Find out in our full research report (it’s free). Revenue: $1.28 billion vs analyst estimates of $1.28 billion (25.6% year-on-year growth, in line) Adjusted EPS: $1.29 vs analyst estimates of $1.27 (1.4% beat) Operating Margin: 24.1%, down from 25.9% in the same quarter last year Market Capitalization: $31.16 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Craig Siegenthaler (Bank of America): Asked about accelerating institutional demand for private credit and interplay with private wealth flows. CEO Michael Arougheti highlighted increased institutional appetite due to wider spreads and less competition, while noting that wealth redemptions are stabilizing primarily in Asia. Alexander Blostein (Goldman Sachs): Inquired about inorganic growth priorities and potential private equity expansion. Arougheti described a disciplined M&A framework emphasizing cultural, strategic, and financial fit, noting that scaling private equity could broaden client relationships. Steven Chubak (Wolfe Research): Asked about the outlook for U.S. Direct Lending amid subdued sponsor M&A. Arougheti pointed to a record pipeline and rising activity, with both incumbent and new relationships contributing to deployment momentum. William Katz (TD Cowen): Questioned drivers of anticipated margin expansion and sustainability. CFO Jarrod Phillips cited normalization of one-off expenses, contributions from new products, and the structural ability to reinvest margin into growth initiatives. Benjamin Budish (Barclays): Sought details on new interval fund offerings for the mass market and liquidity considerations. Arougheti explained that interval funds offer familiar liquidity structures, and product expansion will focus on ease of use and geographic tailoring. In upcoming quarters, the StockStory team will watch (1) the pace of deployment in direct lending and infrastructure as sponsor M&A and digital projects accelerate, (2) signals of operating margin stabilization amid ongoing investments and expense normalization, and (3) the rollout and adoption of new wealth management products targeting mass affluent and global investors. Execution on recent acquisitions and integration of technology initiatives will also serve as key indicators of strategic progress. Ares currently trades at $138.00, up from $124.12 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Friday, July 31, 2026, at 11 a.m. ET Co-Head of Public Markets, Investor Relations - Greg Mason Chief Executive Officer - Michael Arougheti Chief Financial Officer - Jarrod Phillips Operator: As a reminder, this conference call is being recorded on Friday, July 31, 2026. I will now turn the call over to Greg Mason, Co-Head of Public Markets, Investor Relations for Ares Management. Greg Mason: Good morning, and thank you for joining us today for our second quarter 2026 conference call. I'm joined today by Michael Arougheti, our Chief Executive Officer; and Jarrod Phillips, our Chief Financial Officer. We also have a number of executives with us today who will be available during Q&A. Before we begin, I want to remind you that comments made during this call contain certain forward-looking statements and are subject to risks and uncertainties including those identified in our risk factors in our SEC filings. Our actual results could differ materially, and we undertake no obligation to update any such forward-looking statements. Please also note that past performance is not a guarantee of future results, and nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in Ares or any Ares Fund. During this call, we will refer to certain non-GAAP financial measures, which should not be considered in isolation from or as a substitute for, measures prepared in accordance with generally accepted accounting principles. Please refer to our second quarter earnings presentation available on the Investor Resources section of our website for reconciliations to these non-GAAP measures to the most directly comparable GAAP measures. Note that we plan to file our Form 10-Q early next month. This morning, we announced that we declared a quarterly dividend of $1.35 per share on the company's Class A and nonvoting common stock, representing an increase of over 20% over our dividend for the same quarter a year ago. The dividend will be paid on September 30, 2026 to holders of record on September 16. Now I'll turn the call over to Mike, who will start with some comments on the current market environment and our second quarter financial results. Michael Arougheti: Thank you, Greg, and good morning, everyone. I hope you're all doing well. Our strong second quarter results highlight the growing diversity and durability of our global platform. The depth of our global institutional platform drove another record quarter of fundraising and our broad-based global investment capabilities enabled us to remain very active in a slower transaction environment. This drove 17% year-over-year increases in both our AUM and fee-paying AUM to approximately $671 billion and approximately $410 billion, respectively. This AUM growth translated into even healthier increases in our fee-related earnings and realized income, which increased 20% and over 30%, respectively, as we benefit from our growing scale and strong long-term fund performance. Notably, both growth rates are at the high end or above the long-term growth rate target ranges that we provided at our 2024 Investor Day. Overall, we're pleased with how we're performing, and we remain on track to achieve our financial objectives for the year. The underlying drivers of our future growth continue to improve. We now operate leading franchises in diversified credit, real estate, infrastructure and secondaries across North America, Europe and Asia. Beyond Direct Lending, our scale and leading businesses across asset-based finance, opportunistic credit, liquid credit, global real estate, infrastructure, insurance, and our diversified secondary strategies are increasingly contributing to fundraising, deployment, management fees and earnings growth. For the second quarter, we raised approximately $36 billion of gross capital the highest quarter of fundraising in our history. This positions us with a record $170 billion of dry powder and $114 billions of AUM not yet paying fees which sets us up well for future earnings growth. We've now raised approximately $66 billion through the first half of the year, and we remain on track for another record year of fundraising. The breadth of fundraising across our platform is particularly notable, approximately 70% of the capital that we've raised this year is outside of our 4 largest credit fund families and investors committed capital across approximately 90 different funds and vehicles. This demonstrates the increasing diversification and global reach of our business. We raised our highest ever quarterly amount of contribution from our SDL and ACE franchises neither of which raised equity capital in their flagship commingled funds in the quarter. In our view, our franchise and brand have never been stronger in the eyes of our institutional investors. Institutional investors account for approximately 75% of our overall AUM and have represented more than 80% of our gross equity inflows over the last 12 months. Ares is viewed as a key strategic partner with the scale, performance and breadth of capabilities to serve a wider range of portfolio needs, during a period where global institutional investors are seeking to consolidate. We're seeing the benefits of significant investments in our broad origination capabilities, our time-tested investment approach consistent credit and investment performance and best-in-class client service. Now let me provide some additional details on our various fundraising and investing activities. Starting with fundraising in credit. We continue to see very strong institutional demand across our highly diversified credit strategies and have hit the hard cap on our last 2 private credit fund raises. In alternative credit, which is our asset-based finance strategy, we completed the higher fundraise for Pathfinder III during the second quarter, raising approximately $8.5 billion of equity commitments. The fund significantly exceeded its $6.5 billion target and had demand well in excess of its hard cap Market-leading position in the non-rated asset-backed finance sector as we now manage 4 of the 5 largest institutional ABF funds in the market. We believe that the addressable market is measuring trillions of dollars and our investment pipeline continues to expand as we partner with financial institutions and origination platform forms across various asset classes. In U.S. and European Direct Lending, we raised over [ $12 billion ] of debt and equity capital during the quarter across our vehicles. Institutional engagement for the next generation of our U.S. senior direct lending strategy is very strong, including for both our traditional commingled fund and our new Evergreen core product. We continue to expect the first close for both products sometime in the fall with additional closings next year. We expect to launch our seventh European Direct Lending fund early next year. Taken together, our institutional fundraising pipeline remains robust with our 2 largest fund families in the market with successor funds in the year ahead. Within real assets, fundraising momentum was particularly strong across infrastructure and real estate. In infrastructure, our open-ended core infrastructure fund raised approximately $1.9 billion of equity during the quarter. Demand for the strategy has been exceptional driven by investor interest in high-yielding tax advantage real assets. At the same time, the number of power and digital infrastructure assets coming to market across a diverse set of subsectors is as high as we've seen which sets us up well for accelerating deployment. These same trends are driving strong momentum in our sixth infrastructure debt fund. The fund raised approximately $500 million during the quarter and has now raised approximately $3.7 billion. We expect to complete the final close later this year at a level above the $5 billion raised for the prior vintage, including leverage and related vehicles. Recent momentum with this fund reflects an increasingly attractive infrastructure investment environment and strong performance for our infrastructure debt strategy. We're also seeing strong investor interest in our global digital infrastructure fund, driven by our [ seed ] portfolio of attractive entitled and power projects in top-tier global markets, the persistence and growing demand for computing power, the need for private capital and the differentiated nature of our operating platform. We anticipate holding a series of meaningful closings in late Q3 and into the fourth quarter and expect to complete the fundraise in 2027. In real estate, we also had an active quarter. Our fifth Japan industrial development fund raised approximately $1.8 billion, bringing total commitments to date to [ $3.4 billion ]. We expect to hold our final close in the third quarter at our hard cap and at a level meaningfully above the prior vintage of $2.5 billion based on current exchange rates. In our real estate debt strategy, we raised approximately $2.8 billion across a new global co-mingled fund and separately managed accounts. The current environment remains attractive for real estate credit, given early cycle conditions. We're also encouraged by the improving fundraising trends in our non-traded REITs, where inflows have been building each quarter since the fourth quarter of last year. Within the market, gross sales and net flows are improving as property values stabilize, transaction activity remains positive, and the supply outlook is becoming more favorable across several sectors. Within secondaries, we continue to see good momentum in our global structured solutions strategy, which raised over $500 million quarter. We also expect to complete an initial close for our next real estate secondaries fund in the second half of the year. Investor interest remains strong with the current fundraising pace both faster and ahead of the level that we were seeing at the same point in the prior vintage. Within our Wealth Management platform, our diversified product line continues to deliver solid investment performance, distinguishing us in the marketplace. We raised approximately $3.9 billion in gross equity commitments in the second quarter, an increase of approximately 15% from the prior year period and roughly in line with the approximate $4 billion that we raised in each of the prior 2 quarters. We've raised approximately $8 billion during the first half of the year, and based on our current pipeline, which includes a strong start to Q3 with approximately $1.5 billion in July, we anticipate a similar level of gross fundraising in the second half of this year. Based on industry data from Stanger, Ares has picked up meaningful market share within the channel and ranks #2 in gross fundraising over the last 12 months through June. We finished the second quarter with over $76 billion of AUM in our Wealth products and even with some noise in the channel, our Wealth AUM increased at an annualized rate of more than 25% quarter-over-quarter. Importantly the composition of our wealth fundraising continues to broaden. Our goal from the outset was to build a diverse product offering that meets the needs of investors seeking durable income, tax advantage, real assets and diversified growth. By providing quality offerings across a variety of products, we've demonstrated that we can consistently scale in the wealth channel even as investor sentiment shifts across asset classes. Our Evergreen Core infrastructure product has taken the lead in terms of [ monthly ] inflows, and we're still in the early stage of expanding our distribution partnerships. In just over 2 years, the fund has raised over $5.7 billion in AUM, securing the #2 rank in TTM gross fundraising for infrastructure evergreen funds through June, representing approximately 20% market share. In the wealth channel, we've made significant investments in distribution, education, technology, operations and product development with nearly 200 professionals focused on the channel. We're currently working on integral fund solutions designed for the mass affluent and model portfolio markets in the U.S., and we have a robust forward pipeline of additional partners in the U.S. EMEA and APAC to distribute our current flagship funds as well as product extensions. We continue to believe that we are in the early innings of capturing increased individual investor allocations to alternatives. Within our nontraded BDC, redemption themes were consistent with last quarter, with roughly 95% of investor accounts electing to stay in the fund and redemption requests primarily coming from a small number of non-U.S. family offices and smaller institutions. These types of investors represent only approximately 10% of the vehicles NAV and we intend to make certain adjustments to new share classes that we would offer to them going forward. Looking specifically at our core U.S. individual investor base, redemption requests totaled only approximately 2.5% of NAV and declined approximately 35% compared to the prior quarter. Together, these trends support our view that the investment thesis and long-term opportunity within the wealth channel remain intact with continued strength across our core U.S. investor base and sustained engagement from distribution partners and individual investors globally. We built the portfolio within our non-traded BDC with strong credit underwriting, conservative loan structures and a disciplined approach to deployment. Based on the latest public data, the portfolio is performing well with very low non-accruals at around 0.5%, healthy organic EBITDA growth of 13% year-over-year, and the fund has declared stable monthly distributions through September 2026. Let me now highlight some recent investment assets. In part, due to our broad and diversified platform, our overall investment activity increased meaningfully in Q2 to approximately $36 billion compared to approximately $27 billion in the prior year period. Our firm-wide forward investment pipeline also improved nearly 20% quarter-over-quarter to a new record and current transaction discussions across our strategies point to a stronger second half outlook for deployment. Within U.S. Direct Lending, we deployed approximately $12.4 billion gross committed during the quarter. Despite slower M&A activity in the market, deployment improved sequentially compared to the first quarter as we grew with our incumbent bonds, which represented 75% of our Q2 deployment. We're constructive on the second half environment for U.S. Direct Lending as sponsor dialogue improves and more companies return to market after delaying transactions earlier in the year. [ Quarterly ] and first half results were ahead of our initial expectations for the year, and we have a record pipeline going into the third quarter. The European direct lending market remains more fragmented than the U.S. with fewer scaled lenders and a greater premium on local origination, certainty of execution and long-term sponsored partnerships. We believe that our market-leading origination platform, scaled capital base and long tenure operating in local markets is driving more investment opportunities for us across the continent. We're also seeing tremendous demand across the firm for both debt and equity capital to finance the development of digital infrastructure and related power requirements. The capital needs are significant, and our platform is well positioned to address these opportunities. We have large and long tenured teams that have invested through multiple cycles in power generation, infrastructure equity and infrastructure debt. Notably, our digital infrastructure business and our vertically integrated data center development platform, Ada Infrastructure, continues to grow with over 100 professionals that have significant experience across investing, development, engineering, construction and power procurement. Our Ada team, which has long-standing hyperscaler relationships, is currently executing on 7 large data center campuses representing 22 individual data center investments with approximately 1 gigawatt of compute and has a strong pipeline of future projects. Within real estate, our transaction activity continues to rebound, particularly in North America and Japan as we deployed over $4 billion in the quarter, both sequentially and year-over-year. We continue to see attractive opportunities in our Core Logistics business and are beginning to selectively broaden our investments into properties where we've traditionally been underweight, including hospitality and retail. Our approach remains highly targeted and focused on assets with strong locations limited supply, resilient tenant demand and favorable demographic trends. Within secondaries, market volumes continue to grow as the need for distributions and enhanced liquidity remains a central theme. For example, industry volumes and credit secondaries through the first 6 months of the year have already matched 2025 full year volumes. Within every asset class, we're seeing certain institutional investors seeking liquidity for LP interests. While managers are evaluating GP-led solutions for high-quality assets that they want to continue owning while still delivering DPI to their investors. More broadly, portfolio performance remains strong across the firm. Jarrod will discuss our fund returns and financial results in greater detail, but the consistency of our performance continues to support fundraising, deepen our relationships with investors and reinforce the strength of our franchise. And with that, I will now turn the call over to Jarrod to provide additional details on our financial results. Jarrod? Jarrod Phillips: Thanks, Mike. Good morning, everyone. Our second quarter and year-to-date financial results reflect continued strong growth across our key financial metrics, increasing scale and diversification of our platform and the benefits of our strong long-term loan performance. We also continue to benefit from a large base of long-duration capital and strong fundraising and deployment activity across the platform. At quarter end, 84% of our AUM was in perpetual capital or long-dated funds, and 94% of our management fees were generated by those sources. We believe the durability of our capital base, the breadth of our investment capabilities, management fee-centric business model and our asset-light balance sheet help insulate us from market and credit cycles and positions us well to continue generating attractive long-term earnings growth. Turning to our results. Management fees were over $1 billion for the quarter, increasing 14% compared to the prior year period with no catch-up fees in the second quarter. Including FRPR and other fees, total revenues increased 17% from the prior year period. This growth continues to be supported by the expansion of fee-paying AUM, which increased 17% year-over-year to approximately $410 billion. The increase in fee-paying AUM was broad-based. Credit FPAUM increased 17%, secondary increased 28%. Credit equity increased 27%, real assets increased 11% and other businesses. which is primarily comprised of Ares Insurance Solutions increased 54% compared to the prior year period. We're benefiting from strong fund raising and consistent deployment across the platform. [ Part 1 ] fees, which are included in management fees, totaled approximately $154 million in the second quarter, up 20% from the prior year period, driven by positive inflows across 5 different funds that now generate Part 1 fees. Fee-related performance revenues totaled approximately $41 million in the quarter, increasing 143% compared to the prior year period. The majority of this quarter's FRPR was generated by APMF reflecting both continued capital formation and strong underlying investment performance. As a reminder, the timing of FRPR varies by fund and investment strategy, with a meaningful portion of annual revenues typically recognized in the second half of the year. For the third quarter, we expect FRPR from our open-ended core alternative credit fund to be in line for the third quarter of 2025 at approximately $62 million, regarding the potential for fourth quarter FRPR from our nontraded REITs, we currently have approximately $32 million of FRPR accrued by these REITs for potential recognition in the fourth quarter. As I mentioned on last quarter's earnings call, G&A expenses increased this quarter, partially due to our firm-wide AGM for institutional LPs, which we hold every other year during the second quarter. The second quarter included approximately $9 million of expenses associated with this meeting that will now occur in the third and fourth quarter. Fee-related earnings were approximately $491 million in the quarter, increasing 20% year-over-year. Our year-to-date FRE margin was 42.3%, approximately 100 basis points above the prior year period. And we continue to expect that we'll be approaching the upper end of our margin guidance of 0 basis points to 150 basis points for the full year. Turning to performance income. We generated approximately $51 million of realized net performance income during the quarter, more than 3x the amount generated in the prior year period. Year-to-date realized net performance income was approximately $126 million, up 119% compared to approximately $58 million in the prior year period. Based on our current visibility and the realizations, and the performance of our portfolio, we anticipate a limited amount of approximately $10 million of realized net performance income in the third quarter, but continue to feel good about our previously communicated full year expectations. Realized income totaled approximately $522 million for the quarter, representing a growth of 31% year-over-year. After-tax realized income was approximately $468 million for the quarter, increasing 27% year-over-year. An after-tax realized income per share of Class A and nonvoting common stock was $1.29, representing a growth of 25%. Our tax rate for the quarter was 13.7%, which is within our full year tax guidance range of 11% to 15%. As Mike discussed, the underlying financial drivers of the business remain strong. We ended the quarter with approximately $170 billion of available capital, representing an increase of 13% year-over-year. We also had approximately $114 billion of AUM that's not yet paying fees, including approximately $93 million available for future deployment. If deployed the AUM available for future deployment and development assets not yet stabilized, could collectively generate approximately $828 million potential incremental annual management fees. This provides substantial visibility and future growth in fee-paying AUM and management fees even before considering future fund rate. Turning to investment performance. Overall fund returns remain strong, led by our credit and real asset strategies. Over the last 12 months, we generated gross returns of 16.4% in alternative credit, 8.9% in opportunistic credit, 11.2% in U.S. senior Direct Lending, 8.9% in U.S. junior Direct Lending, 8.3% in European Direct Lending and 19% in APAC credit. Across our direct lending portfolios, underlying credit fundamentals remain strong and stable with low loan to values and healthy interest coverage. In U.S. Direct Lending, nonaccrual levels were flat quarter-over-quarter and remain low at less than 2%. We're not seeing any signs of a turn in the credit cycle as evidenced by 9% year-over-year organic EBITDA growth from our portfolio companies. Within real assets, our infrastructure equity and infrastructure debt strategy generated gross 12-month returns of 9.8% and 7.5% respectively. In secondaries, APMF generated a net quarterly return of 6.9%, a net 12-month return of 16.2% and a net return since inception of 15%. In our latest institutional secondaries private equity funds had gross IRR of 26.5% since inception. Within Private Equity, our corporate private equity strategy generated a gross quarterly return of 2.4%. And ACOF VI continues to perform well with a gross IRR of 19.5% since inception. Overall, the breadth and consistency of our investment performance continues to support fundraising, deployment and growth in both management fees and performance-related revenues. We believe the combination of strong fund performance, significant available capital and the scale of our origination platform provide meaning or visibility into continued financial growth. In conclusion, our second quarter and year-to-date results leave us well positioned to achieve our financial objectives for 2026, which remain consistent with our long-term compound annual growth target of 16% to 20% for FRE, 20% plus for RI and dividend growth. I'll now turn the call back over to Mike for his concluding remarks. Michael Arougheti: Thanks, Jarrod. In closing, we're very pleased with our progress, the broad-based strength and momentum we're seeing across the firm and the positioning of our leading global businesses in dynamic growth markets. We raised a record amount of capital across a highly diversified set of strategies. Our deployment pipelines are increasing, and our portfolios continue to perform well for our investors. We believe that the bath and diversity of our investment platform, the flexibility of our product set, the in duration of our capital base, our asset-light balance sheet and the strength of our institutional and wealth franchises position us well for continued durable growth over the long term. These characteristics are even more valuable during periods of market volatility and shifts in business cycles as we can pivot capital formation and deployment towards the most attractive opportunities in the market. We also believe that the scale of our platform is creating meaningful opportunities for continued margin improvement. As we grow, we're benefiting from operating leverage, while our investments in technology and AI are set to improve efficiencies and enhance investment capabilities as we leverage our proprietary data and increase the capacity of our teams. We're also working on strategic growth initiatives like our capital solutions business as well as extensions of certain investment strategies, both organically and inorganically through potential joint ventures and opportunities that will continue to drive the business forward. But before wrapping up, I want to highlight the recent fifth anniversary of the Ares Charitable Foundation which has now committed more than $68 million in grant since 2021 to advance economic mode to help people become workforce ready, start and scale up businesses and strengthen personal financial and skills. In addition to the Ares Foundation, Promote Giving launched last year as an initiative established by Ares in our Pathfinder funds, that commits a portion of performance fees to charitable organizations without reducing returns to our fund investors. We're proud that we've expanded our promote giving initiative across our industry and there are now 15 different asset managers with more than $44 billion of pledged assets that have the potential to generate an estimated $300 million to $350 million of charitable contributions over the next decade. This support will help to create a more durable source of funding for organizations that are advancing education, human well-being and healthier communities around the world. We remain committed, as always, to using the reach of the Ares platform to deliver strong outcomes for our investors, our employees, our shareholders and the communities in which we operate. As always, I'm just so deeply grateful to our employees around the world for their continued hard work, collaboration and commitment to our clients. And I also want to thank you, our investors, for their continued support and trust. We're excited about the opportunities ahead and remain focused on delivering strong long-term results for all of our stakeholders. And with that, operator, could you please open up the line for questions? Operator: Our first question comes from Craig Siegenthaler with Bank of America. Craig Siegenthaler: And it was nice to see another strong fundraising quarter and also to see how much Ares has supported charitable organizations, especially out of the Pathfinder fund. Michael Arougheti: Thanks, Craig. Craig Siegenthaler: So within that, we wanted to see if you could unpack your commentary that institutional demand for private credit is accelerating. What is driving institutions to private credit now? And when do you expect to see private wealth demand come back? And going forward, do you think these 2 channels will behave somewhat countercyclically? Michael Arougheti: Sure. So the evidence for the acceleration is just based on what we're seeing in the field. So to reiterate, in the quarter, we raised our third Pathfinder fund first and final close, $8.5 billion against a $6.5 billion cover, which was the hard cap and had meaningful demand in excess of the hard cap. So I don't think in the history of Ares, we've ever seen a fund get raised in a first and final at the hard cap. I think that's a reflection of just extraordinary performance and market positioning, but also just increasing appetite. We had a similar, maybe not as dramatic experience in the third vintage of our opportunistic credit fund, which also raised quicker than prior vintage and got to the hard cap, which was well in excess of the prior. And as we mentioned, we are in market with our fourth institutional loan fund and everything that we're seeing on the ground in terms of demand would indicate that appetite is increasing. I think it's both long-term secular, Craig. When you look at some of the industry data and consulting data, generally speaking, institutions still remain under-allocated to private credit. And I think at this moment in time, given some of the reduction in capital coming from the wealth channel, people perceive an opportunity to capture excess return given a shift in the competitive set, meaning spreads have widened, less competition and therefore, an ability to deploy maybe quicker and better returns. That does go hand-in-hand with what we're seeing in wealth, but I do want to reiterate some of the commentary around wealth. First of all, the entire channel for us grew year-over-year. And that's just based on demand that we're seeing broad-based for the non-U.S. private credit fund. We're particularly pleased with the significant demand that we're seeing in our core infrastructure fund. The momentum in wealth continues. Our July flows on equity were about $1.5 billion. And so we're not seeing any slowdown on the diverse product set. And when you drill down on the nontraded BDC, a couple of things to consider. Number one, we talked about in the prepared remarks, the fundamental performance there is delivering exactly what it's supposed to deliver in terms of dividend yield. Non-accruals are 0.5%. EBITDA is growing 13%. So there's nothing in that fund that would indicate the performance isn't at or above underwriting. Two, when you look at the core ultra-high net worth and individual investor market, which is supported by the adviser platforms in the U.S., we're not seeing any acceleration in redemption requests. It's been consistent in the 2% to 2.5% range, which is what it was before the noise in the channel began. And as I mentioned in my prepared remarks, redemptions in that particular part of our investor base were down 30% quarter-over-quarter. So we're actually seeing a reduced redemption queue in the core investor base. And then lastly, and I think our peers would say the same, the redemption queue in the U.S. private credit funds, and we're not actually seeing it in our European funds, is largely concentrated in the hands of family offices and small institutions in the APAC region. To put that in perspective, if you were to look at the top 10 redeemers in our non-traded BDC, they were about half of redemption requests. And 2/3 of our Q2 redemption requests were from the Q1 Q. So while the individual investor is slowing its request for redemptions, we're satisfying the disproportionate demand coming out of Asia. And that number has been cut in half over the last 2 quarters from about $1.2 billion to a little over $600 million. So assuming that those 2 trends hold, and I have no reason to believe that they won't, that would probably mean that you get back to stasis in the next 2 to 3 quarters is my guess. The other thing I would also highlight because it's going to impact the profitability coming out of that fund, despite the redemption queue just based on Q1 inflows and being underlevered in that fund, I would expect that when we get to the end of the year, our nontraded BDC will actually be larger at year-end '26 than it was at year-end '25. Whether they act countercyclically, I think maybe, obviously, one of the reasons why we have been measured in the way that we've developed our wealth business as we learned through experience running ARCC for the last 20-plus years that the individual investor can sometimes look to divest when they should be investing and running a diversified book in institutional and wealth markets is prudent. I still think it's early days to know exactly how these will play over time, but there is a risk that some of the wealth flows could be more pro-cyclical than people thought they were, which is why we continue to index aggressively into the institutional market. Operator: Our next question is coming from Alex Blostein with Goldman Sachs. Alexander Blostein: So lots going on, on the organic side and the business continues to hum. But I have to ask, I think, the inorganic question given the headlines in the last few days here. So Mike, I heard your comments around open to deals, both JVs as well as more inorganic opportunities broadly. Maybe you can kind of comment about where on your priority list is something inorganic on the private equity side? And just remind us the key parameters around financial and strategic fit when you think about deals for Ares. Michael Arougheti: Sure. Thanks for the question. Obviously, I can't comment on any rumors or speculation in the market, but I appreciate the opportunity to reiterate our framework for thinking about inorganic growth. And as you said, at a very, very high level, regardless of the end market, it's a simple framework, which is we needed it to be culturally accretive because this is a people business at the end of the day. We needed to be strategically accretive, i.e., bring new capability or capacity or distribution to the table. And then we need to have a view that we can actually make the business better by delivering revenue synergy and information and resources. And then lastly, it needs to be financially accretive. If you look at our recent history, that framework has served us very well as we've acquired and integrated Landmark and doubled that business with meaningful growth in secondaries. You've seen what we were able to do with the acquisition of Black Creek and turning that into what is now the engine of growth in our Wealth Management business, and so on and so forth. So it's a pretty well-honed framework, both for identifying candidates and then also for unlocking growth post acquisition. With regard to Private Equity, obviously, Ares has been in the Private Equity business for 20 years with a very strong track record. I mentioned our sixth fund in PE right now is generating close to 20% growth. It's a top quartile performer. I think that the question that we have posed and we've done it publicly with all of you as well is as Ares continues to scale the way that it is, should we be bigger in private equity. And I think the answer is probably if we check all of those three boxes and the industrial logic for that is that if you look at our institutional LP base, they are committed to being in the private equity business. As we continue to deepen and broaden those relationships, I think they would like to continue to invest with us in scale. And so to the extent that we scaled up in PE, I think that we would be able to drive incremental flows. That's all happening at a time when GPs are seeing consolidation of relationships from their LPs. Two, as we kind of hone our origination engines here, being larger in PE will just allow us to offer broader solutions to the companies and entrepreneurs that find their way to Ares. And I think that, that would be value add. It would allow us to deepen our relationships with our banking partners and our capital markets partners in terms of driving equity and debt capital markets business and financing, and that's obviously accretive to other parts of the business as we grow our wallet. It allows us to lean in more heavily to capital markets and fee-generating business in a way that we can just given our scale. And probably lastly, as demand in the wealth channel continues to grow, and we're seeing that, for example, in our APMF fund, the ability to deliver larger amounts of direct exposure either through primary or secondary private equity, I think, will become more relevant. So there's a lot to argue in favor of it. But as I mentioned in last quarter's call, the price has to be right because the growth profile of these businesses is less linear and more episodic than some of the core businesses. And we have to really believe that we can drive culture strategy and the financial piece of it. So a lot of boxes to check, but I think the industrial logic would make a lot of sense for the right situation. Operator: And we will take our next question from Steven Chubak with Wolfe Research. Steven Chubak: So I wanted to double-click into the U.S. Direct Lending outlook. Despite more tepid activity in the quarter, you struck a more constructive tone on U.S. Direct Lending, which is consistent with what [indiscernible] actually said on the ARCC call, talking about activity really building towards the end of 2Q and into 3Q. That said, sponsor M&A remains fairly subdued based on what we've seen in the public data. I just want to get a better sense as to what you're hearing from sponsor clients regarding the appetite to transact -- and how does the pace of deployment that you envisage based on the pipeline inform expectations for management fee growth in the back half? Michael Arougheti: Sure. So a couple of things. Number one, I think one of the most important things this quarter was the demonstration of just how broad-based and diversified the deployment has become. When you look at a slower Q1 in our U.S. Direct Lending business, we were still able to deploy $36 billion across the platform because we saw accelerated deployment in places like ABF, secondaries, real estate, digital infra. And so while Direct Lending in the U.S. and Europe continue to be big drivers of deployment, the P&L is just fundamentally less dependent on that core direct lending deployment than it has been in years past. If you look at the pipelines across the platform broadly, the pipeline sits at a record level. It's about 20% higher than it was last quarter. So we're seeing broad-based acceleration in deployment as we head into the back part of the year. Europe, as I said in the prepared remarks, has actually been a bright spot. We saw significant deployment in Q1 and Q2, and the pipeline sits at probably the highest level that we've ever seen heading into Q3. With regard to U.S. Direct Lending, we have demonstrated both because of our incumbent relationships and our non-sponsored business that we are able to deploy quite considerably even when sponsor M&A is slow, and I think that will continue. But as [indiscernible] said, which I think is probably the most important is when we look at the U.S. pipeline, we are seeing an acceleration in the pipeline quarter-over-quarter. And then what I would call the shadow pipeline, which would be looking at how many confidentiality agreements are we logging and how many new deals are we logging. The number of NDAs that we've signed is up about 35% quarter-over-quarter and the number of deals we've logged is slightly behind at 30%. So that's kind of the precursor to what we would call pipeline. I can't say with perfect certainty to you that, that 30% to 35% converts perfectly, but it is an indication that sponsor activity is picking up dramatically as we head into the back half of the year. Operator: Our next question is coming from Bill Katz with TD Cowen. William Katz: Appreciate all the color this morning. Maybe switching gears a little bit, for one for Jarrod perhaps. Sort of intrigued by your comment that you should be accelerating toward the upper end of your 0 to 150 basis points. year-on-year margin improvement into the back half of the year. I was wondering if you could unpack the drivers for that? Maybe which lines you sort of see the greatest opportunity. And I appreciate it's early days, but just given the step function of earnings power that seems to be building here based on your flows, deployment dynamics et cetera. How are you thinking about maybe the incremental margin opportunity into 2027? Jarrod Phillips: Sure. Thanks, Bill. Great to hear from you. Margin is a number of different factors as you know. It's not just the amount of expenses, but the velocity at which we increase our revenue. And right now, as we look forward and we talked a little bit about it in the prepared remarks, we have a great line of sight on some new products like the data center business that will be coming online. Also with the acquisition of GCP, which we've talked about, we've moved past the TSA that we had with the left behind vehicle, and we've now really integrated them as part of the Ares. So when you're adding those new revenues, you're taking away some of those more fixed expenses. And this quarter, I talked about in the prepared remarks, the AGM that we had in the second quarter. Every 2 years, we do that for once in a year as opposed to spread out in a number of events. So you have one giant expense quarter related to those meetings as opposed to have spread out over 4 periods. So we have a little structural items like that, that give us a lot of confidence on margin in the back half of the year. At the same time, the normal pace of the business is still very much driven by deployment. So the more we're able to deploy, the more revenue we generate, which then provides that margin expansion. The one thing that I always caution though is our primary goal is growth. We want to hit 20% plus on RI. And to do that, we often need to invest in. And one of the ways that we do that, you'll see a really strong valuation between how much we spend on marketing expenses and dollars we raised at the same time we also see a healthy correlation between the number of front office professionals we have and our ability to originate. And our business origination is really the king across our credit business in sourcing high-quality assets, which are limited. So the ability to do that and to originate is very, very valuable for us to invest in. So even when we have margin expansion, we're constantly looking at the team. Are there areas where we can be investing to create more business. And once we have that margin expansion, that's a onetime expansion of FRE as sustainable as just the organic growth of creating more revenue. So we feel really, really good about the structure of the business in terms of how it will just provide that natural margin expansion, but we also love how that forward look at our business allows us to choose those areas to reinvest that margin so we can continue to hit our growth targets. Operator: And we'll move next to Patrick Davitt with Autonomous Research. Patrick Davitt My question is on the ABF pipeline that you mentioned. We've actually been seeing at least one of the large consumer lenders take more loans on balance sheet instead of pushing through the flow agreement channel. So in that vein, I'd be curious to get your thoughts on to what extent you're seeing issues with flows from the consumer ABF channel? Or do you think there's something else going on there? Michael Arougheti: Sure. So as I said, our ABF business continues to be a real bright spot, both on fundraising and deployment. It is a very large team that has been growing rapidly across all the different channels. One of the things that differentiates us is our lack of focus and exposure on the consumer part of the market, which I think a lot of our peers spend time because that is your point, a place where you can originate through agreements as opposed to kind of owned origination, which is the way that we think about it. So if you were to actually look at consumer exposure and our ABF portfolio, very low, less than 5%. If you look at subprime consumer, it's de minimis. It's less than 1%. And if you were to look at even auto as kind of an extension of consumer all of our exposure there is prime, and it's probably less than 1%. So I think the market is probably 30% plus exposed to consumer ABF. It's just not been a big area of focus for us. And so to the extent that the captive consumer finance companies are taking more on balance sheet as opposed to flow. I don't think that's going to have any meaningful impact on our ability to deploy. Operator: And we will move next to Ken Worthington with JPMorgan. Kenneth Worthington: Returns in private equity secondaries was negative this quarter. You called out that APMF is performing particularly well, but some of the other funds are struggling. So maybe first, what's going on there? And then Mike, you mentioned in the prepared remarks that activity levels in secondary markets have been very strong. Can you talk about some of the industry dynamics around secondary returns? Michael Arougheti: Yes. So with regard to the secondary performance, APMF obviously continues to have strong performance. That performance though I'd highlight also is to be impacted on mix between LP portfolios and GP led. So to the extent that you are more aggressive in originating on the LP side, you tend to see for the NAV discount. And then as you transition to GP-led more consistency, but maybe less volatility. With regard to the secondary performance, Fund 17 is actually which is the first fund that we deployed under Ares. The performance there is pretty strong since inception, returns about 26% gross and net was about 17%. Fund 16 which was the last fund, which is a much older vintage, but a much larger fund can have an outside impact on the composite as we report, and that's basically what's happening there. The older vintage funds, just given its size move down. But if you look at all of the kind of active in the ground funds, Fund 17, APMF, we're actually continuing to see strong, strong returns. I think there was a question about private equity secondaries, I didn't quite understand what the second part of the question was, I apologize. Kenneth Worthington: Yes. It's just what we have observed is that even though secondaries is very popular that the returns are lagging Private Equity in general, there's a lag. We expect that but it seems like the lag is maybe more pronounced this cycle than we've seen last cycle. Any comments on how industry dynamics are impacting sort of PE secondary returns? Michael Arougheti: Got it. I think if you were to look at the historical return data, the secondaries returns will generally but they also tend to be range bound. So if you were to look at PE secondary returns first quartile to fourth quartile, the dispersion of returns is much tighter than you see in the primary market. So one of the ways I would encourage you to think about it is just when people are using the secondaries market, particularly the LP product, they're trying to buy diversified private equity beta for the most part, but they're doing it in a way that structures out a lot of the volatility in return, and so you're going to get a generally lower return but a much lower volatility of return versus the primary market. And I think that's always been the case. That may change over time as the private equity secondary market moves a little bit more towards GP-led and continuation vehicles. But I think what you're highlighting is largely just the legacy LP-led part of the market that's always been lower. Operator: And we'll move next to Ben Budish with Barclays. Benjamin Budish: Mike, in your prepared remarks, you talked about a slew of new products coming. I think you mentioned interval funds for mass market, model portfolios. Can you maybe talk about what these look like? How might liquidity need to be structured differently as you go maybe a little further down market? And maybe what's the timing -- what should we be looking for over the next 12 months with these kind of initiatives? Michael Arougheti: I'm not getting into too much of the detail and kind of publicized trade secrets in the lab. I think that the key is interval fund structures, I think, will be the path forward to move down the individual investor spectrum just in terms of ease of use, ease of on-boarding, et cetera. I think with regard to liquidity despite again some of the noise and the way that the media would like to amplify the noise, I think that the individual investor is buying the product with the 5% quarter liquidity and seems very happy with it. So I'm not sure that the expectation in the market is that same liquidity to change. I think it's more about what does it look like to get onboarded what's the subscription process. And I think that for a segment of the market that's used to buying [CUSIP] securities, the interval fund is probably just going to be more familiar and easier. A lot of what we now have the opportunity to do as well around product extension is when you think about our 8 products in real estate, global direct lending, diversified credit, core infrastructure, et cetera. We now have building blocks that could be mixed and matched to provide different portfolio outcomes for people in different geographies and in different markets. And so a lot of the product extension work is continuing to focus on those building blocks and then thinking about how we wrap them offer them into the market, whether it's through fund format or model portfolios. Operator: And we'll move next to Mike Brown with UBS. Michael Brown: Mike, I wanted to ask on digital infrastructure, where it's still a relatively small percentage of the firm-wide AUM today, but as it stands could be a significant growth driver for FRE over the next several years. So as the platform scales, new funds come to market, maybe just any updated views on how we should think about the longer-term fee rate margin profile of the business versus the broader real asset segment, particularly given the vertical integrated development model that you have? Michael Arougheti: Sure. I'm going to let Blair take that one because he's doing a lot of work driving that business formation and growth forward. So Blair, do you want to take that? Blair Jacobson: Yes, sure. It's a great question. First thing to say is that we continue to have a lot of excitement and conviction in the business, which we added to the firm at the beginning of last year when we folded GCP international in two areas. And as we think about the development, that business came with a very large seed portfolio, which is incredibly attractive. So from an investor perspective, when they look at what's available, they see 700 megawatts of development opportunity that they can identify, and that's helping to drive the strong fundraising momentum that Mike mentioned earlier. As we think about how that rolls out from a profitability perspective, I would say that the rack rate, fees and economics on the fund are very attractive and in line with other Ares offerings. One slight difference, as you noted, is that we do have a vertically integrated model. So we're able to articulate to the investor base that the existing team can deliver good service controlled outcomes, whereas maybe our peer set would pay more to outsource those capabilities. So we charge back the cost of that team to the fund, which ultimately, we think, leads to better returns for the investors but also better economics for Ares, when we flow all of that through, I think we talked to all of you last fall in Baltimore about our forecasts for how that would flow through to the Ares FRE P&L. Think we said I think we said $50 million to $100 million of FRE in 2027 and beyond, I think we would say that we feel very, very good about that forecast based on what we see today, given the portfolio, the fundraising traction and the economics to the firm. Operator: And we'll take our next question from Bart Dziarski with RBC Capital Markets. Bart Dziarski: I wanted to ask around GCP. I would love just a mark-to-market update on how that transaction is going in terms of performance. And maybe tie that into -- relative to the earnout objectives set when you completed the deal? Michael Arougheti: Yes, thanks for the question. I could not be more pleased with the progress that we've made. Again, if folks remember, the investment thesis for the acquisition, and this is consistent with what I talked about earlier with regard to just the M&A framework was market-leading business in Japan both institutional and retail through our market-leading J-REIT. Consolidated growth in our industrial and logistics platform globally and then break out growth opportunity in data center development and digital infrastructure. We have made significant progress on all three. If you were look at the Japan business, as we talked about in the prepared remarks, we are in the market with the next vintage of our institutional development fund, and that will get to its hard cap and be significantly larger than prior very quickly out of the gate. We closed a significant data center fund in Japan, probably larger than we had originally expected. Julie and our global real estate teams have already consolidated our logistics platform globally. We have reorganized our business under a global brand Marq Logistics, and we have integrated the teams and realized both revenue and expense synergy there. And then on the digital side as Blair said, we could not be happier with the momentum that we have on the data center development side. And I think we're really pleased with the way that, that fund family is growing as well. You tend to know very quickly when you got it right. And I would say, culturally, absolutely got it right. The teams are fully integrated working well together. Strategically, the synergy is what we know it would be and obviously, financially, the combination of the revenue coming in probably a little bit quicker and to Jarrod point, getting out of the DSA and to Blair's point, getting charged back on the development platform. I think that we're going to see an acceleration of earnings coming off of that business for the earnout. And so we would expect that with that continued momentum that an earn-out will get paid. One of the beautiful things about that, though, is the way that we structure these transactions as the earnouts are milestone based that usually refer to fundraising, management fee and/or FRE growth. And when they get paid, it effectively is reflected as buying down our multiple. And so one of the ways that we're able to drive performance and align performances through these earn-outs. But when they get paid, they actually come in at a reduced multiple. So we're kind of happy when we hit those earnouts the same way we did, for example, with the Black Creek acquisition. Operator: And we'll move next to Brennan Hawken with BMO Capital Markets. Brennan Hawken: Its Mark on for Brennan. Gross to net performance remained relatively resilient despite industry-wide pressure. What factors have helped support spreads and economics in the middle market? And what would need to occur for gross to net trends to improve meaningfully for -- from current levels? Michael Arougheti: Well, gross to net has been fairly consistent. I think [indiscernible] did a really nice job and Jim on the ARCC call talking a little bit about improving conditions competitively and from a return perspective in the Direct Lending market. So they leaned in pretty heavily to incumbent relationships in the quarter. About 75% of the USPL deployment was existing, that will tend to show itself differently from a gross to net standpoint than when we're more active in the primary market. So I don't know that a lot needs to happen to see that gross to net improve quarter-over-quarter, just referencing some of my prior commentary around how the pipeline is developing into the back half of the year and the momentum we're seeing in the sponsor M&A market. I think that, that 75% was obviously going to be lower this quarter. I think to their credit, they were able to deploy actively while probably being more selective than they have been in quite some time and [indiscernible] talked a lot about just the lower closing rate this quarter relative to historical averages. And I think that was a reflection of their experience in understanding that the market is improving from a spread and return perspective and our competitive advantage is improving as some of the retail heavy competitors are not forming capital to the same extent that we are. And so the opportunity to deploy more aggressively into an improving market, I think, is also a big driver. So I don't think a lot needs to happen. I think we just got to let the market continue to play out the way that it has been, and you should see that number normalize. Operator: And we'll move next to Devin Ryan with Citizens Bank. Devin Ryan: Mike and Jarrod. Most have been asked here. But I want to ask a question just on insurance. You saw fee-paying AUM increased 54%. So materially faster than kind of broader platform. Just love to get a little bit more color on what's driving that and just the bigger picture kind of long-term opportunity that you see and just how much insurance could meaningfully change kind of the deployment visibility across alternative credit or infrastructure debt over time? Michael Arougheti: Yes. Look, we've -- we're really, really pleased with the growth and continued kind of evolution and maturation of our insurance platform, both Ares Insurance Solutions, where we have been adding capability and management talent as well as the growth of our Aspida platform. We have been quite public in articulating our view of the insurance market and how important it is to our future growth, but how similar to our views on diversifying between wealth and institutional fundraising that we want to maintain our diversification between our captive and affiliated insurance business and our third-party clients. And so we've just chosen to build that business balance sheet light and as focused on third-party insurance clients and partners as driving the kind of unfettered growth of Aspida. We do have everything we need to continue to hit the targets that we laid out at our Investor Day, both in terms of our annuities platform but also our reinsurance business. And we feel really good about it. If you look at this quarter's production, we did about $2 billion of growth and in both channels. And I think that's kind of a healthy place for us to be. I do think your question just about the importance of insurance to driving things like digital infrastructure, credit, real estate credit is a good thing to point out. But obviously, one of the benefits of building that business is it enhances our origination, not just on the high grade, but also supporting the sub-investment grade part of the business as well. And so a lot of the talent ads and capability adds have been driven to further integrate that origination capability into the business. Operator: And we'll move next to Wilma Burdis with Raymond James. Wilma Jackson Burdis: Is Ares institutes new structures for private BDC redemptions by geography, how long would it take before Ares has some and protection from outsized redemptions from certain regions? Michael Arougheti: Sure. I think you should -- it's really about flows from here and structure on share classes on new product as well. So I think going forward, to the extent that we implement some of the new features around lockups and redemption penalties and regional redemption queues that would be protective of this happening again in the future. With regard to what's already in the ground I would just refer back to what I highlighted earlier, which is that queue of about $1.2 billion to $600 million is working its way through the system. And if you look at the 5% that was satisfied last quarter, that was a little over $700 million. So that redemption queue regionally now is below the -- so again, I feel good about both, but I don't know that the forward stuff you're not really going to see. It's more about just working through that remaining $600 million redemption queue. Operator: And we will take our last question from Michael Cyprus with Morgan Stanley. Michael Cyprys: Just a question on AI. As you look across your portfolio of companies, curious where you're starting to see tangible revenue and EBITDA lift or even market share gains from portfolio companies adopting AI. And when you think about the scope for AI dramatically changing workflows and increasing automation, where do you think those changes could be most meaningful to the bottom line and over what time frame? Michael Arougheti: Yes. It's a really broad question, Michael, but I appreciate it. I mean we have -- we touch so many different types of businesses and assets. I think the opportunity for efficiency gains and margin improvement are significant, and we're seeing it across the portfolio. We're also seeing it across areas, both the deployment of what we call productivity AI just for some of the off-the-shelf tool or increasing capacity within our teams. And then as we build out our applied AI frameworks and deploy those. We're seeing significant opportunities in places like workforce automation around some of our repeatable functions, RFPs, DDQs, AML, KYC. A lot of our [ management ] teams are already harnessing a lot of our proprietary data to inform origination and portfolio management decisions. Our legal teams are deploying it around the reading and comparing of legal documents. It's not an easy question to answer other than to say that the deployment at Ares and within the portfolio is broad based. And we're already seeing the benefits in terms of capacity increasing and margin improvement. I think the biggest opportunity for us once we get through that, what I would call, first phase is just harnessing all the proprietary data that we have here, not just on the deals that we do and the deals that we own, but the deals that we don't do and then redirecting that data into better decision-making and the early indications are that, that's going to be very, very value accretive to us. Operator: Ladies and gentlemen, this concludes our conference call for today. If you missed any part of today's call, an archived replay of this conference call will be available through August 31, 2026, to domestic callers by dialing 1 (800) 839-5676 and to international callers by dialing 1 (402) 220-2565. An archived replay will also be available on a webcast link located on the homepage of the Investor Resources section of our website. Goodbye. Before you buy stock in Ares Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ares Management wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Ares (ARES) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

July 31 (Reuters) - Ares Capital and Blue Owl Capital reported resilient second-quarter results this week, while Ares Management posted record fundraising, highlighting continued institutional demand for private credit despite rising defaults, ‌retail redemptions and liquidity concerns. Ares Management, one of the industry's largest players, raised a record $36 billion ‌in the second quarter, including $23.7 billion for its credit strategies. Assets under management rose 17% from a year earlier to $671.3 billion. "Clients continue to ​reward us due to our strong and consistent fund performance across our strategies," Ares Management Chief Executive Michael Arougheti said. Ares Management deployed $35.9 billion during the quarter and ended June with a record $170 billion of uninvested capital. The firm said its investment pipeline was improving after a subdued period for dealmaking, as geopolitical uncertainty weighed on sponsor-backed transactions. Separately, Ares ‌Capital, the largest publicly traded business ⁠development company (BDC), reported core earnings of 47 cents per share, in line with the LSEG consensus estimate. It maintained its quarterly dividend and had about $6 billion of available liquidity ⁠as of July 23. Blue Owl Capital reported $319 billion of assets under management at the end of June, up 12% from a year earlier. Its distributable earnings rose 9%, matching analysts' average estimate. But signs of stress remain across parts of the ​market. Fitch ​Ratings said the U.S. private-credit default rate rose to a ​record 6.0% in the 12 months through June, ‌from 5.7% in the previous quarter. The agency recorded 32 default events in the second quarter involving 20 new borrowers. Industrials and manufacturing had the highest default rate among major sectors, at 10.4%, while healthcare stood at 9.4%, Fitch said. At the same time, retail-focused private-credit funds continued to receive redemption requests well above their normal quarterly repurchase limits. Jefferies said private-credit inflows were down about 25% year-to-date from the same period in 2025. Second-quarter redemption requests ‌reached 38.1% of net asset value at Blue Owl Technology Income ​Corp, 18.9% at Blue Owl Credit Income Corp and 16.8% at ​Apollo Debt Solutions. Most funds repurchased shares equivalent ​to about 5% of net asset value during the quarter, leaving some investors with withdrawal ‌requests rolled into future periods. Evercore estimated global private ​credit secondary-market volume reached $20.4 billion ​in the first half of 2026, up 122% from a year earlier and exceeding the total recorded in all of 2025. GP-led deals, in which managers offer investors the option of selling or ​rolling holdings into a new vehicle, ‌accounted for 83% of the total. Evercore expects BDCs, semi-liquid funds and interval funds to account for ​about a quarter of credit-secondary activity this year as managers seek to meet investor liquidity needs. (Reporting ​by Patturaja Murugaboopathy. Editing by Vidya Ranganathan and Mark Potter)

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly fundraising of approximately $36 billion, driven by institutional demand for private credit and infrastructure, despite a slower broader transaction environment. AUM and fee-paying AUM grew 17% year-over-year to $671 billion and $410 billion, respectively, supported by the depth of the global platform and broad-based investment capabilities. Strategic diversification is accelerating, with approximately 70% of capital raised this year coming from outside the four largest credit fund families, spanning 90 different vehicles. Deployment activity increased to $36 billion, a 20% sequential improvement in the forward pipeline, led by asset-based finance, secondaries, and digital infrastructure. The wealth management channel remains a growth engine with $76 billion in AUM, though management noted a shift in redemption patterns primarily concentrated among non-U.S. family offices. Operational leverage and investments in technology and AI are expected to drive continued margin improvement as the platform scales toward long-term growth targets. Management expects 2026 to be another record year for fundraising, supported by successor funds for the two largest fund families launching in the coming year. Anticipate a stronger second half for deployment as sponsor dialogue improves and the 'shadow pipeline' of NDAs has increased approximately 35% quarter-over-quarter. Fee-related earnings (FRE) margins are projected to approach the upper end of the 0 to 150 basis point expansion guidance for the full year. Digital infrastructure is positioned as a significant future earnings driver, with the Ada Infrastructure platform executing on 7 large campuses representing 1 gigawatt of compute. Strategic growth will focus on capital solutions, product extensions for mass affluent markets, and potential inorganic opportunities that meet strict cultural and financial criteria. Redemption requests in the non-traded BDC are largely concentrated in a small number of non-U.S. investors representing approximately 10% of the vehicle's NAV. Management intends to implement new share classes with structural protections, such as lockups and redemption penalties, to mitigate future regional redemption volatility. G&A expenses were impacted by approximately $9 million in the second quarter due to the biennial firm-wide institutional investor meeting. The firm maintains a record $170 billion in dry powder, providing a buffer against market volatility and enabling opportunistic deployment. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Institutional demand is accelerating due to secular under-allocation and a perceived opportunity to capture excess returns as the competitive set shifts. Wealth channel redemptions from core U.S. individual investors actually declined 35% quarter-over-quarter; the 'noise' is primarily from Asian family offices. Management expects the redemption queue to reach stasis within the next two to three quarters as the current backlog is processed. Management confirmed interest in scaling Private Equity to meet LP demand for consolidated relationships and to enhance the firm's overall origination engine. Any acquisition must be 'culturally, strategically, and financially accretive,' with a focus on driving revenue synergies rather than just buying AUM. Acknowledged that Private Equity growth can be more 'episodic' than credit, requiring disciplined pricing for any potential deals. Margin improvement is driven by the transition from transition service agreements (TSAs) to integrated operations and the launch of high-margin products like digital infrastructure. Management prioritizes growth over pure margin maximization, frequently reinvesting efficiency gains into front-office talent to drive origination. The firm remains confident in hitting the upper end of its 2026 margin expansion guidance due to the velocity of revenue growth.

This article first appeared on GuruFocus. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Ares Management Corp (NYSE:ARES) reported record quarterly fundraising of approximately $36 billion in Q2 2026, with AUM and fee-paying AUM both increasing 17% year-over-year to roughly $671 billion and $410 billion, respectively. Fee-related earnings (FRE) grew 20% year-over-year to approximately $491 million, while realized income increased over 30% to $522 million, both at or above the high end of the company's long-term growth targets. The company's alternative credit strategy (Pathfinder 3) completed its fundraise at $8.5 billion, significantly exceeding its $6.5 billion target and hitting its hard cap, strengthening its market-leading position in asset-based finance. Investment performance remains strong across the platform, with gross returns over the last 12 months of 16.4% in alternative credit, 11.2% in US senior direct lending, and 19% in APAC credit, supporting continued fundraising and deployment. The firm's wealth management platform raised approximately $3.9 billion in gross equity commitments in Q2, up 15% year-over-year, and its core infrastructure product has secured the number 2 rank in TTM gross fundraising with roughly 2% market share. Ares Management Corp (NYSE:ARES) has a record $170 billion of dry powder and $114 billion of AUM not yet paying fees, which could generate approximately $828 million in potential incremental annual management fees, providing strong visibility into future earnings growth. The non-traded BDC experienced redemption requests, primarily from a small number of non-US family offices and smaller institutions, which represent approximately 10% of the vehicle's NAV, though core US investor redemptions declined 35% quarter-over-quarter. US direct lending deployment was impacted by slower M&A activity in the market, with 75% of Q2 deployment coming from incumbent borrowers rather than new primary market transactions. Realized net performance income in Q3 2026 is expected to be limited to approximately $10 million, a significant drop from the $51 million generated in Q2, due to the timing of realizations. The company's private equity secondaries composite returns were negatively impacted by an older, larger vintage fund (Fund 16), which dragged down overall performance despite stronger returns from newer funds like Fund 17 and APMF. G&A expenses increased in Q2 due to the firmwide AGM for institutional LPs, which added approximately $9 million in costs, though this is a one-time event that will not recur in Q3 and Q4. The wealth channel experienced some noise and redemption pressure, particularly in the non-traded BDC, with the company expecting it may take 2-3 more quarters to reach stasis in redemption requests from certain regions. Warning! GuruFocus has detected 7 Warning Signs with ARES. Is ARES fairly valued? Test your thesis with our free DCF calculator. Q: Can you unpack your commentary that institutional demand for private credit is accelerating, what is driving institutions to private credit now, and when do you expect to see private wealth demand come back?A: Michael Arrigetti, CEO, highlighted that the acceleration is evidenced by the Pathfinder 3 fund raising $8.5 billion against a $6.5 billion target, hitting the hard cap in a first and final close, which is unprecedented for Ares. He attributed this to long-term secular trends, as institutions remain under-allocated to private credit, and a current opportunity to capture excess returns due to wider spreads and less competition. Regarding wealth demand, he noted the channel grew year-over-year, with core US investor redemptions down 35% quarter-over-quarter, and expects the redemption queue, concentrated in APAC family offices, to reach stasis in the next 2-3 quarters. He also predicted the non-traded BDC will be larger at year-end 2026 than at year-end 2025. Q: Given the headlines around inorganic growth, where on your priority list is something inorganic on the private equity side, and what are the key parameters around financial and strategic fit?A: Michael Arrigetti, CEO, reiterated the firm's M&A framework: culturally accretive, strategically accretive (new capability or distribution), and financially accretive. He acknowledged that Ares has been in private equity for 20 years with a strong track record (ACO 6 generating close to 20% gross IRR) and sees industrial logic in scaling up, as LPs are consolidating relationships and would invest more in scale. He noted that being larger in PE would broaden solutions for companies, deepen banking relationships, and support wealth channel demand for PE exposure. However, he stressed the price must be right, as PE growth is more episodic than core businesses. Q: Despite more tepid activity in the quarter, you struck a more constructive tone on US direct lending. What are you hearing from sponsor clients regarding appetite to transact, and how does deployment inform management fee growth?A: Michael Arrigetti, CEO, emphasized the diversification of deployment, with $36 billion deployed across the platform despite slower US direct lending. He noted the firmwide pipeline is at a record level, about 20% higher than last quarter. In US direct lending, the shadow pipeline is accelerating, with NDAs signed up 35% quarter-over-quarter and new deals logged up 30%, indicating sponsor activity is picking up dramatically heading into the back half of the year. He also highlighted that 75% of Q2 USDL deployment came from incumbent borrowers, demonstrating resilience even in a slow M&A environment. Q: You mentioned accelerating toward the upper end of your 0 to 150 basis point FRE margin guidance. What are the drivers, and how are you thinking about incremental margin opportunity into 2027?A: Jared Phillips, CFO, cited several factors: new revenue streams coming online (e.g., data center business, GCP integration past the TSA), and one-time expense items like the biennial AGM in Q2 that won't recur. He noted that margin expansion is driven by revenue velocity and deployment, but cautioned that the primary goal is growth (16-20% FRE, 20%+ RI), which requires reinvestment in marketing and front-office professionals to sustain origination. He emphasized that margin expansion is a one-time benefit, while organic growth is more sustainable. Q: On the ABF pipeline, we've seen some large consumer lenders take more loans on balance sheet instead of pushing through flow agreements. Are you seeing issues with flows from the consumer ABF channel?A: Michael Arrigetti, CEO, clarified that Ares' ABF business has minimal exposure to consumer credit, with less than 5% in consumer and de minimis in subprime consumer. He noted that the market is probably 30%+ exposed to consumer ABF, but Ares differentiates through owned origination rather than flow agreements. Therefore, any shift by captive consumer finance companies to hold loans on balance sheet would not meaningfully impact Ares' ability to deploy. Q: Returns in private equity secondaries were negative this quarter. What's going on there, and how are industry dynamics impacting secondary returns?A: Michael Arrigetti, CEO, explained that the negative composite return was driven by an older, larger vintage fund (Fund 16) having an outsized impact, while newer funds like Fund 17 (26.5% gross IRR since inception) and APMF (16.2% 12-month return) are performing well. He noted that LP-led secondary returns are generally lower but more range-bound, with tighter dispersion between quartiles compared to primary markets, as investors buy diversified private equity beta with lower volatility. He suggested this dynamic may shift as the market moves toward GP-led and continuation vehicles. Q: You talked about new products like interval funds for mass affluent and model portfolios. What do these look like, how might liquidity be structured differently, and what's the timing?A: Michael Arrigetti, CEO, stated that interval fund structures will be the path forward to move down the individual investor spectrum, offering ease of use and onboarding. He noted that investors are comfortable with the 5% quarterly liquidity, so the focus is on subscription processes rather than liquidity changes. He highlighted that Ares' 8 products (real estate, direct lending, diversified credit, core infrastructure) can be mixed and matched to provide different portfolio outcomes, with product extensions focusing on wrapping these building blocks into fund formats or model portfolios. Q: On digital infrastructure, how should we think about the longer-term fee rate and margin profile versus the broader real asset segment, given the vertically integrated development model?A: Blair Jacobson, Co-Head of European Credit, noted that the business came with a large seed portfolio of 700 megawatts of development opportunity, driving strong fundraising momentum. He stated that rack rate fees and economics are attractive and in line with other Ares offerings. The vertically integrated model allows charge-backs for the development team's costs, leading to better returns for investors and better economics for Ares. He reaffirmed the forecast of $50-100 million of FRE in 2027 and beyond, feeling very good about that forecast given current traction. Q: Can you provide a mark-to-market update on the GCP transaction, including performance relative to earnout objectives?A: Michael Arrigetti, CEO, expressed extreme satisfaction with progress on all three investment theses: the Japan business is raising a significantly larger institutional development fund at hard cap, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Ares Management (ARES) reported $1.26 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 20.4%. EPS of $1.29 for the same period compares to $1.03 a year ago. The reported revenue represents a surprise of -4.16% over the Zacks Consensus Estimate of $1.32 billion. With the consensus EPS estimate being $1.29, the company has not delivered EPS surprise. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Ares Management performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: FPAUM Rollforward - Ending Balance - Total: $409.92 billion versus the four-analyst average estimate of $417.14 billion. AUM Rollforward - Ending Balance - Total: $671.32 billion versus $669.87 billion estimated by four analysts on average. FPAUM Rollforward - Ending Balance - Real Assets Group: $88.61 billion versus the three-analyst average estimate of $90.7 billion. FPAUM Rollforward - Ending Balance - Secondaries Group: $31.47 billion versus $31.48 billion estimated by three analysts on average. Financial Details Segments- Other fees: $91.96 million versus $71.81 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +20.8% change. Financial Details Segments- Fee related performance revenues: $40.53 million compared to the $22.9 million average estimate based on four analysts. The reported number represents a change of +142.7% year over year. Financial Details Segments- Management fees: $1.03 billion versus $1.06 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +14.4% change. Financial Details Segments- Performance income-realized: $140.33 million versus the four-analyst average estimate of $171.57 million. The reported number represents a year-over-year change of +152.6%. Realized Income- Secondaries Group: $59.97 million compared to the $52.51 million average estimate based on two analysts. The reported number represents a change of +23.1% year over year. Realized Income- Real Assets Group: $144.4 million compared to the $121.54 million average estimate based on two analysts. The reported number represents a change of +47.9% year over year. Realized Income- Private Equity Group: $12.15 million versus $18.6 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -5.5% change. Realized Income- Credit Group: $543.81 million compared to the $558.7 million average estimate based on two analysts. The reported number represents a change of +24.9% year over year. View all Key Company Metrics for Ares Management here>>> Shares of Ares Management have returned +6.2% over the past month versus the Zacks S&P 500 composite's -0.5% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ares Management Corporation (ARES) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Ares Management (ARES) came out with quarterly earnings of $1.29 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $1.03 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this private equity firm would post earnings of $1.32 per share when it actually produced earnings of $1.24, delivering a surprise of -6.06%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Ares Management, which belongs to the Zacks Financial - Investment Management industry, posted revenues of $1.26 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 4.16%. This compares to year-ago revenues of $1.05 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Ares Management shares have lost about 23.2% since the beginning of the year versus the S&P 500's gain of 8.7%. While Ares Management has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Ares Management was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.43 on $1.44 billion in revenues for the coming quarter and $5.98 on $5.91 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Investment Management is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Great Elm Capital (GECC), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.34 per share in its upcoming report, which represents a year-over-year change of -33.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Great Elm Capital's revenues are expected to be $11.13 million, down 22.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ares Management Corporation (ARES) : Free Stock Analysis Report Great Elm Capital Group, Inc. (GECC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Ares Management Corporation’s ARES second-quarter 2026 after-tax realized income per share of $1.29 met the Zacks Consensus Estimate. The bottom line increased from $1.03 in the prior-year quarter. Results reflected growth from higher management fees and fee-related performance revenues. A higher AUM balance was another positive. However, the upside was partly offset by higher expenses. Net income attributable to the company was $150.6 million, up from $137.1 million in the year-ago quarter. The company's total revenues of $1.26 billion missed the Zacks Consensus Estimate of $1.32 billion by 4.2%.  This compares to year-ago revenues of $1.05 billion. Management fees rose to $1.02 billion from $900.6 million in the prior-year quarter. Carried interest allocation declined to $249.9 million from $323.9 million, while incentive fees increased to $42.8 million from $23.1 million. Administrative, transaction and other fees rose to $116.1 million from $91.6 million. Total expenses increased 3.7% year over year to $1.18 billion from the year-ago quarter. The increase was primarily driven by higher compensation and benefits as well as general, administrative and other expenses. As of June 30, 2026, total assets under management (AUM) were $671.3 billion, up from $565.3 billion a year earlier. Fee-paying AUM increased to $409.9 billion from $343.9 billion in the prior-year period. During the quarter, the company raised $36.4 billion in capital, generated $34.4 billion in net inflows and deployed $35.9 billion. The company announced a quarterly cash dividend of $1.35 per share of its Class A and non-voting common stock, payable Sept. 30, 2026, to shareholders of record as of Sept. 16, 2026. Ares Management continues to benefit from strong AUM growth across fee-paying and perpetual capital platforms, supported by steady capital inflows and strategic acquisitions such as BlueCove and GCP International. However, softer revenue relative to expectations and higher operating expenses are likely to remain near-term headwinds. Ares Management Corporation price-consensus-eps-surprise-chart | Ares Management Corporation Quote Currently, the company carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Invesco’s IVZ second-quarter 2026 adjusted earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 67 cents. The bottom line surged 97.2% from the prior-year quarter. IVZ’s results primarily benefited from an increase in adjusted revenues and substantial growth in the AUM balance. Record net long-term inflows also supported the quarterly results. However, an increase in adjusted expenses was a headwind. SEI Investments Co.’s SEIC second-quarter 2026 adjusted earnings per share of $1.66 surpassed the Zacks Consensus Estimate of $1.45. The bottom line reflected a rise of 38.3% from the prior-year quarter. SEIC's results were aided by higher revenues and a rise in AUM. However, higher expenses acted as a spoilsport. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ares Management Corporation (ARES) : Free Stock Analysis Report Invesco Ltd. (IVZ) : Free Stock Analysis Report SEI Investments Company (SEIC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Ares Management Corporation? Here are five stocks we like better. Record fundraising and AUM growth: Ares raised approximately $36 billion in the second quarter, bringing first-half fundraising to $66 billion. Total AUM and fee-paying AUM each increased 17% year over year to about $671 billion and $410 billion, respectively. Strong financial performance and dividend increase: Fee-related earnings rose 20% to approximately $491 million, while after-tax realized income increased 27% to $468 million. Ares raised its quarterly dividend by more than 20% to $1.35 per share and expects to approach the upper end of its margin-expansion outlook. Broad investment activity with manageable redemptions: Firmwide investment activity rose to $36 billion, supported by private-credit, infrastructure and real-estate deployments, while direct-lending non-accruals remained below 2%. Redemptions in the non-traded BDC declined, with core U.S. individual-investor requests representing only about 2.5% of NAV. Ares Management (NYSE:ARES) reported second-quarter results marked by record fundraising, higher fee-paying assets under management and double-digit growth in fee-related earnings and realized income, as the alternative investment manager expanded activity across credit, real assets, secondaries and wealth products. Chief Executive Officer Michael Arougheti said the company raised approximately $36 billion of gross capital during the quarter, its highest quarterly fundraising total, bringing first-half fundraising to about $66 billion. Total AUM rose 17% year over year to approximately $671 billion, while fee-paying AUM increased 17% to about $410 billion. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The company ended the quarter with $170 billion of dry powder and $114 billion of AUM that was not yet paying fees. Arougheti said the fundraising performance reflected increasing diversification, with approximately 70% of capital raised so far in 2026 coming from outside Ares’ four largest credit fund families. Investors committed capital across roughly 90 funds and vehicles during the first half. Management fees exceeded $1 billion in the second quarter, up 14% from a year earlier, while total revenue including fee-related performance revenues and other fees increased 17%, Chief Financial Officer Jarrod Phillips said. → Microsoft Just Flipped the AI Spending Narrative Overnight Fee-related earnings were approximately $491 million, an increase of 20% year over year. Realized income totaled approximately $522 million, up 31%, and after-tax realized income was approximately $468 million, up 27%. After-tax realized income per Class A and non-voting common share rose 25% to $1.29. Realized net performance income reached approximately $51 million, more than triple the prior-year amount. Phillips said Ares expects approximately $10 million of realized net performance income in the third quarter, while maintaining its previous full-year outlook. → Carrier Earnings Could Send the Stock to a New All-Time High Ares’ year-to-date fee-related earnings margin was 42.3%, about 100 basis points above the prior-year period. Phillips said the company expects to approach the upper end of its full-year margin-expansion guidance of zero to 150 basis points, helped by revenue growth, deployment and the absence of about $9 million in second-quarter expenses tied to its biennial institutional limited-partner meeting. The company declared a quarterly dividend of $1.35 per Class A and non-voting common share, an increase of more than 20% from the dividend for the same quarter a year ago. The dividend is payable Sept. 30 to shareholders of record on Sept. 16. Ares highlighted demand for its private-credit strategies. During the quarter, its Ares Pathfinder Fund III, an asset-based finance strategy, completed fundraising with approximately $8.5 billion of equity commitments, surpassing its $6.5 billion target and hard cap. The company also raised more than $12 billion of debt and equity capital across U.S. and European direct-lending vehicles. Arougheti said Ares expects first closes for its next U.S. senior direct-lending commingled fund and a new evergreen core product in the fall. The company expects to launch its seventh European direct-lending fund early next year. Within infrastructure, Ares’ open-ended core infrastructure fund raised approximately $1.9 billion of equity in the quarter. Its sixth infrastructure debt fund raised about $500 million and had raised approximately $3.7 billion to date. Ares expects its final close later this year at a level above the $5 billion raised by the prior vintage, including leverage and related vehicles. Real estate fundraising included approximately $1.8 billion for the company’s fifth Japan industrial development fund, bringing total commitments to $3.4 billion. Ares expects the fund to reach its hard cap in the third quarter. The company also raised approximately $2.8 billion in its real estate debt strategy through a new global commingled fund and separately managed accounts. In its wealth-management platform, Ares raised about $3.9 billion in gross equity commitments, up approximately 15% from a year earlier. Wealth-product AUM exceeded $76 billion at quarter-end. Arougheti said the company raised approximately $1.5 billion in July and expects a similar level of gross fundraising in the second half as in the first half. Firmwide investment activity increased to approximately $36 billion from approximately $27 billion a year earlier. The company’s forward investment pipeline rose nearly 20% from the first quarter to a record level, according to Arougheti. U.S. direct lending deployed approximately $12.4 billion of gross commitments during the quarter. About 75% of the activity involved existing borrowers, amid a slower merger-and-acquisition environment. Arougheti said the number of nondisclosure agreements signed by the U.S. direct-lending business rose about 35% quarter over quarter, while the number of newly logged deals rose about 30%, signaling improved sponsor activity heading into the second half. Real estate deployed more than $4 billion, with activity rebounding in North America and Japan. Ares said it continues to see opportunities in logistics assets and is selectively broadening investments into hospitality and retail properties. Phillips said credit and real-asset strategies delivered strong 12-month results. Alternative credit generated a gross return of 16.4%, U.S. senior direct lending returned 11.2% and APAC credit returned 19%. U.S. direct-lending non-accruals were below 2% and flat sequentially, while portfolio companies recorded 9% year-over-year organic EBITDA growth. Ares also cited demand for digital infrastructure and related power development. Its Ada Infrastructure platform was executing seven large data-center campuses, representing 22 individual investments and approximately one gigawatt of compute capacity. Co-President Blair Jacobson said the digital infrastructure business remains on track to contribute an estimated $50 million to $100 million of fee-related earnings in 2027 and beyond. Arougheti addressed redemption requests in Ares’ non-traded business development company, saying roughly 95% of investor accounts elected to remain in the fund. Requests from the company’s core U.S. individual investor base totaled approximately 2.5% of net asset value and declined about 35% from the prior quarter. He said requests were concentrated among a relatively small number of non-U.S. family offices and smaller institutions, particularly in Asia. Ares intends to adjust new share classes offered to those investors, including potential features related to lockups, redemption penalties and regional redemption queues. Arougheti said the remaining regional redemption queue had declined from about $1.2 billion to a little over $600 million and could return to normal levels within two to three quarters if current trends persist. On acquisitions, Arougheti said Ares evaluates opportunities based on cultural, strategic and financial fit. He said private equity could offer industrial benefits if the company can find the right opportunity, including deeper relationships with institutional limited partners, broader company financing capabilities and more direct private-equity exposure for wealth products. Management reiterated its long-term compound annual growth targets of 16% to 20% for fee-related earnings and more than 20% for realized income and dividend growth. Ares Management Corporation (NYSE: ARES) is a global alternative asset manager that provides investment solutions across credit, private equity and real estate. The firm originates and manages capital across a range of strategies including direct lending, syndicated and special situations credit, private equity buyouts and growth investments, and real estate equity and debt. Ares serves institutional investors, insurance companies, pension funds, sovereign wealth funds, and high‑net‑worth clients through both commingled funds and bespoke managed account structures. Within credit, Ares offers strategies spanning leveraged loans, structured credit, opportunistic and distressed debt, and specialty finance, with an emphasis on underwriting, portfolio construction and active asset management. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Ares Management Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.