Ares Management Q2 2025 slides: AUM surges 28% YoY, Fee Related Earnings up 26%

Ares Management Corporation (NYSE:ARES) reported strong second quarter 2025 results on August 1, showcasing significant growth across key metrics while announcing a quarterly dividend of $1.12 per share. The alternative asset manager’s presentation revealed robust expansion in assets under management and fee-related earnings, though the stock traded down 2.5% in premarket trading following the announcement.

Quarterly Performance Highlights

Ares reported GAAP net income attributable to the corporation of $137.1 million for Q2 2025, with after-tax realized income reaching $367.9 million. Fee Related Earnings grew 26% year-over-year to $409.1 million, while after-tax realized income per share increased 4% to $1.03 compared to the same period last year.

As shown in the following comprehensive financial summary, management fees grew 24% year-over-year to $900.3 million, while other fees surged 230% to $76.1 million, offsetting a 23% decline in fee-related performance revenues:

The company’s declared quarterly dividend of $1.12 per share of Class A and non-voting common stock will be payable on September 30, 2025, to stockholders of record as of September 16, 2025. Additionally, Ares declared a quarterly dividend of $0.84375 per share of its Series B mandatory convertible preferred stock.

Assets Under Management Analysis

Ares Management’s total assets under management (AUM) reached $572.4 billion as of June 30, 2025, representing a 28% increase from $447.2 billion in Q2 2024. Fee-paying AUM grew to $349.6 billion, up 27% year-over-year from $275.8 billion.

The following chart illustrates the significant growth across the company’s business segments:

The Credit Group remains Ares’ largest segment with $377.1 billion in AUM (66% of total), while the Real Assets Group saw the most dramatic growth, expanding 92% year-over-year to $129.8 billion, primarily driven by the acquisition of GCP International, which was mentioned in the company’s Q1 2025 earnings as a strategic enhancement to its infrastructure capabilities.

Perpetual capital, a key focus for the firm, grew 43% year-over-year to $166.6 billion, providing stable, long-term revenue streams:

The composition of Ares’ AUM and management fees highlights the company’s focus on stable, long-term capital sources. As shown in the following breakdown, 82% of AUM is categorized as either perpetual capital or long-dated funds, while 91% of management fees were earned from these sources:

Strategic Capital Deployment and Fundraising

During Q2 2025, Ares raised $26.2 billion in new capital commitments, with net inflows of $25.1 billion. The Credit Group led fundraising efforts with $18.1 billion in new commitments, followed by the Real Assets Group with $3.7 billion, the Secondaries Group with $2.5 billion, and Other Businesses with $1.9 billion.

The following breakdown shows the diverse sources of new capital commitments across the firm’s various strategies:

Ares deployed $26.9 billion of capital during the quarter, including $13.0 billion by drawdown funds. The Credit Group accounted for the majority of deployment at $20.6 billion:

Looking ahead, Ares has substantial dry powder with $150.8 billion in available capital as of June 30, 2025, up from $122.1 billion a year earlier. Additionally, the company has $104.8 billion in AUM not yet paying fees, of which $86.8 billion is available for future deployment that could generate approximately $822.7 million in potential incremental annual management fees:

Segment Performance

The Credit Group, Ares’ largest segment, saw management and other fees increase by 16% year-over-year to $630.5 million, while Fee Related Earnings grew at the same rate to $426.3 million. However, fee-related performance revenues declined 95% to just $314,000:

The Real Assets Group delivered the strongest growth among all segments, with management and other fees more than doubling (+112%) to $224.5 million and Fee Related Earnings surging 120% to $113.6 million. This exceptional growth was primarily driven by the acquisition of GCP International:

The Private Equity Group experienced a 5% decline in management and other fees to $32.2 million, primarily due to a corporate private equity extended value fund that stopped paying fees at the end of Q4 2024. Fee Related Earnings decreased 32% to $9.8 million, though Realized Income increased 13% to $12.9 million:

The Secondaries Group showed strong growth with management and other fees increasing 40% to $67.4 million, driven by higher management fees from capital raised by Ares Private Markets Fund (APMF) and commitments to the company’s third infrastructure secondaries fund. Fee Related Earnings grew 50% to $50.5 million, while Realized Income surged 84% to $48.7 million:

Forward Outlook

Ares Management is well-positioned for future growth with significant capital available for deployment. The $86.8 billion in AUM not yet paying fees that’s available for future deployment represents substantial potential for incremental management fee growth:

This strong position aligns with CEO Michael Aragetti’s comments from the Q1 2025 earnings call, where he highlighted the company’s "record amount of available capital to continue to drive growth in our AUM and earnings metrics." The firm continues to capitalize on opportunities in alternative and private credit markets, with alternative credit noted as "one of our fastest growing businesses."

While the Q2 2025 after-tax realized income per share of $1.03 represents a slight sequential decline from the Q1 2025 EPS of $1.09, the year-over-year growth of 4% demonstrates the company’s ability to continue expanding its earnings despite market volatility and economic uncertainties.

The stock’s premarket decline of 2.5% to $180.90 suggests investors may have been expecting even stronger results, particularly given the stock’s strong performance year-to-date, trading well above its 52-week low of $110.63 but below its high of $200.49.

Full presentation:

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