Ares Management Corporation

ARES · NYSE · USD

Analysis

Last 4 earnings calls · through Q2 FY2026

Ares is no longer a private-credit story. Money keeps pouring in — a record fundraising quarter in Q2 FY2026 — even as the U.S. retail credit funds that drove the last cycle faced a wave of exit requests, because institutions and newer engines took over. How much of the capital raised still sits uninvested and fee-free?

  • Fundraising is now led by everything except the flagship credit funds.

    Q2 FY2026 was Ares' biggest fundraising quarter ever, and 70% of this year's capital came from outside its four biggest credit funds. Pathfinder III closed at its hard cap, a first for the firm. Growth no longer hangs on one product cycle. Which newer strategy is scaling fastest by fees raised?

  • Institutions kept buying while retail credit funds faced exit requests.

    Over 95% of non-traded BDC investors asked for no money back, and the exit queue has halved to about $600 million, largely a few family offices abroad. Institutions read wider spreads as a chance. The retail worry costs less than it sounds. How much of the non-traded BDC's net assets come from that small group?

  • The new engines cost money before they earn any.

    GCP integration squeezed margins, and the data centre business loses money until its fund charges fees, not expected until 2027. Reported per-share profit has missed analyst estimates even as its own measure grew over 20%.

Bullish
  • Fundraising breadth beyond credit
    The bull case is that Ares raises capital across many strategies and geographies, so growth no longer depends on one flagship credit fund coming to market.
  • Institutional demand for private credit
    Institutions remain under-allocated to private credit and are narrowing their manager lists, which the bull says lets Ares raise successor funds faster and larger.
  • Committed capital converts to fees
    Because a large block of capital is already raised but not yet invested, deploying it should lift management fees without requiring any new fundraising.
Bearish
  • Retail credit redemptions
    The bear case is that redemption requests in the non-traded BDC show individual investors souring on private credit, which could slow the wealth channel that drove recent growth.
  • Wealth flows are procyclical
    Wealth money can reverse when confidence falls, and management itself now concedes those flows may be more cyclical than the industry had assumed.
  • Slower sponsor deal activity
    Direct lending deployment depends on private equity sponsors closing deals, and management reports a sharp drop in middle market transaction activity during the quarter.
See the full bull & bear case
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Donald Trump
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Donald Trump
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Purchase≥$1KMay 18Jul 1
Donald Trump
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Product segmentsGeography
FY2025 · USD

How Ares Management turned $5.6B of revenue into $1.8B of operating income.

Revenue
Management Service$3.7B▲ 24.64% YoY
Carried Interest$1.2B▲ 184.32% YoY
Administrative Service$366.1M▲ 124.03% YoY
Management Service, Incentive$364.7M▲ 5.57% YoY
Principal Investment Income (Loss)$138.6M
Total revenue$5.6B
Operating income$1.8B31.4%
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