Ares Management Corporation (ARES) | Investment Case

1. Company Snapshot

1.a. Company Description

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia.The company's Tradable Credit Group segment manages various types of investment funds, such as commingled and separately managed accounts for institutional investors, and publicly traded vehicles and sub-advised funds for retail investors in the tradable and non-investment grade corporate credit markets.Its Direct Lending Group segment provides financing solutions to small-to-medium sized companies.

The company's Private Equity Group segment focuses on majority or shared-control investments primarily in under-capitalized companies.Its Real Estate Group segment invests in new developments and the repositioning of assets, with a focus on control or majority-control investments; and originates and invests in a range of self-originated financing opportunities for middle-market owners and operators of commercial real estate.The firm was previously known as Ares Management, L.P. Ares Management Corporation was founded in 1997 and is headquartered in Los Angeles, California with additional offices in the United States, Europe and Asia.

Ares Management GP LLC is the general partner of the company.

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1.b. Last Insights on ARES

Ares Management Corporation's recent performance was negatively impacted by decreased holdings from major investors, including Allspring Global Investments Holdings LLC, which trimmed its stake by 18.5%, and Nisa Investment Advisors LLC, which reduced its stake by 27.7%. Despite this, the company reported strong Q3 2025 earnings, with GAAP net income attributable to Ares Management Corporation of $288.9 million and after-tax realized income of $425.8 million. Oppenheimer upgraded Ares Management to Outperform from Perform with an $180 price target. The company is expanding aggressively in energy infrastructure, private wealth, and insurance.

1.c. Company Highlights

Last Price	163.07
Change Percentage	0.63%
Open	163.65
Previous Close	162.05
Market Cap ( Millions)	35362
Volume	1407385
Year High	200.49
Year Low	110.63
M A 50	151.45
M A 200	163.2

FCF Yield	11.25%
Dividend Yield	2.63%
ROE	13.30%
Debt / Equity	308.84%
Net Debt / EBIDTA	1047.35%
Price To Book	8.18
Price Earnings Ratio	74.37
Price To FCF	8.89
Price To sales	7.12
EV / EBITDA	41.49

2. Ares Management's Strong Q3 2025 Earnings Driven by Broad-Based Investment Platform

Ares Management Corporation reported outstanding financial results for the third quarter of 2025, with management fees reaching a record $971 million, up 28% year-over-year. Fee-related earnings (FRE) increased 39% year-over-year to $471 million, with FRE margins of 41.4%. The company's earnings per share (EPS) came in at $1.19, beating analyst estimates of $1.15. The quarterly dividend was declared at $1.12 per share, a 20% increase from the same quarter last year.

Publication Date: Nov -04

                                    📋 Highlights
                                    Dividend Increase::
                                                Declared $1.12/share quarterly dividend, a 20% rise YoY.
Fee-Related Earnings (FRE)::
                                                FRE surged 39% YoY to $471M, with 41.4% margins.
Assets Under Management (AUM)::
                                                AUM reached $595B, with fee-paying AUM up 28% to $368B.
Fundraising Momentum::
                                                Raised $30B in Q3, totaling $77B YTD and $105B in 12 months (24% YoY growth).
Credit Portfolio Strength::
                                                93% of credit exposures in senior debt, with U.S. direct lending recovery rates at 93% and European at 95%.

                                

Business Performance and Fundraising

Ares raised over $30 billion in new capital during the quarter, bringing the total to $77 billion year-to-date and $105 billion over the last 12 months, up 24% from the prior year. Assets under management (AUM) reached over $595 billion, and fee-paying AUM increased to $368 billion, both up 28% year-over-year. The company's investment pipeline remains elevated, with nearly $150 billion in dry powder.

Investment Performance and Outlook

Ares' investment portfolios showed strong performance, with net accrued performance income increasing 9.2% to $1.2 billion. The company expects to recognize $500 million in total net realized performance income across 2025 and 2026. The credit portfolios remain healthy, with over 93% of credit exposures in senior debt. The company is optimistic about its growth prospects, citing a robust pipeline and broad-based deployment across its businesses.

Valuation and Growth Prospects

With a P/E Ratio of 70.92 and an ROE of 13.3%, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 21.5%, which is in line with the company's guidance of 16% to 20% FRE growth. The Dividend Yield is 2.76%, providing a relatively stable return component. The company's strong franchise position and diversified businesses are expected to drive continued growth.

Private Credit and Real Estate Business

Ares believes that investor appetite for private credit is driven by relative return, not absolute return, and that private credit spreads remain attractive. The company's real estate business is seeing improvements in rent growth and property values, with the Americas real estate equity composite up 9.1% on a gross basis over the last 12 months. The company has a strong franchise position in real estate, with a global platform and a vertically integrated business.

3. NewsRoom

Market Today: Fed hopes lift stocks; AWS AI rollout; Prada-Versace deal

Dec -03

Source: gurufocus.com

MGT and Ares Management Combine Forces to Create First Unicorn in SLED Services Industry

Dec -03

Source: prnewswire.com

First Look: Airbus trims targets, AWS AI, AEO hikes outlook

Dec -03

Source: gurufocus.com

Ares Management Corporation $ARES Shares Sold by Hsbc Holdings PLC

Dec -03

Source: defenseworld.net

Market Today: Deal Talks, Retail Wins, AI Chips, and Crypto Volatility

Dec -02

Source: gurufocus.com

First Look: Versace deal, crypto slump, WBD bids and Airbus woes

Dec -02

Source: gurufocus.com

Ares Management Introduces Marq to Further Unify its Global Logistics Platform Within its Real Estate Business

Dec -01

Source: businesswire.com

Billions Down The Toilet As Private Equity Firms Take Bath On Hot New 'Continuation Vehicle' Strategy

Nov -26

Source: feeds.benzinga.com

4. Business Breakdown

4.a. Revenues by Country

High Yield Bonds

Ares Management Corporation invests in high yield bonds, providing financing to companies with below-investment-grade credit ratings.

Leveraged Loans

Ares Management Corporation invests in leveraged loans, providing financing to companies with high levels of debt.

Private Equity

Ares Management Corporation provides private equity investments, taking an active role in guiding portfolio companies' growth and operations.

Real Assets

Ares Management Corporation invests in real assets, including infrastructure, real estate, and energy projects.

Credit Opportunities

Ares Management Corporation provides credit opportunities investments, focusing on distressed or undervalued debt securities.

8. Ares Management Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Ares Management Corporation operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the availability of alternative investment options.

Bargaining Power Of Customers

Ares Management Corporation's customers are primarily institutional investors, who have limited bargaining power due to the company's strong brand reputation and diversified investment offerings.

Bargaining Power Of Suppliers

Ares Management Corporation has a diversified supplier base, and the company's suppliers have limited bargaining power due to the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the alternative investment management industry, including regulatory hurdles and the need for significant capital and expertise.

Intensity Of Rivalry

The alternative investment management industry is highly competitive, with many established players competing for market share and investor capital.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	89.27%
Debt Cost	6.28%
Equity Weight	10.73%
Equity Cost	9.84%
WACC	6.66%
Leverage	832.15%

11. Quality Control: Ares Management Corporation passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

BNY Mellon

A-Score: 6.7/10

Value: 3.9

Growth: 6.6

Quality: 6.8

Yield: 5.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

Ameriprise Financial

A-Score: 5.9/10

Value: 5.1

Growth: 7.8

Quality: 7.8

Yield: 2.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

BlackRock

A-Score: 5.8/10

Value: 2.2

Growth: 5.3

Quality: 7.5

Yield: 4.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

Blackstone

A-Score: 5.2/10

Value: 0.3

Growth: 4.1

Quality: 7.5

Yield: 7.0

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

Ares Management

A-Score: 4.9/10

Value: 2.4

Growth: 5.7

Quality: 4.9

Yield: 6.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

KKR

A-Score: 3.9/10

Value: 1.7

Growth: 6.6

Quality: 3.8

Yield: 2.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-4.69%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.66%

Ares Management Corporation - US03990B1017

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ARES

1.c. Company Highlights

Expensive

Strong Momentum

Average Growth

Earnings Miss

Earnings Beats

Revenues Beats

Average Quality

Stable Momentum

Revenues Miss

Medium Volatility

Higher Growth

Lower Quality

2. Ares Management's Strong Q3 2025 Earnings Driven by Broad-Based Investment Platform

Business Performance and Fundraising

Investment Performance and Outlook

Valuation and Growth Prospects

Private Credit and Real Estate Business

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.00%)

6. Segments

Credit Group

Expected Growth: 10.5%

Real Assets Group

Expected Growth: 8.5%

Secondaries Group

Expected Growth: 9.5%

Private Equity Group

Expected Growth: 8.0%

Other

Expected Growth: None%

Unconsolidated Performance (Income) Loss-Unrealized

Expected Growth: None%

Unallocated Administrative Fees

Expected Growth: None%

Unallocated Principal Investment Income, Net of Eliminations

Expected Growth: None%

Unallocated Income before Taxes of Non-Controlling Interests in Consolidated Subsidiaries

Expected Growth: None%

Unallocated OMG Expense, Net

Expected Growth: None%

Administrative, Transaction and Other Fees of Consolidated Funds Eliminated in Consolidation

Expected Growth: None%

Unallocated Performance Income of Consolidated Funds Eliminated In Consolidation

Expected Growth: None%

Unallocated Management Fees of Consolidated Funds Eliminated in Consolidation

Expected Growth: None%

7. Detailed Products

Direct Lending

High Yield Bonds

Leveraged Loans

Private Equity

Real Assets

Credit Opportunities

8. Ares Management Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Ares Management Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.e Scoring ^Insights

12.f DCF ^BETA