Key Takeaways
- • Ares Management reported Q3 2026 fee-related earnings of $524M, up 19% year-to-date, with the FRE margin expanding to 42.5% from 41.4% a year earlier.
- • Total AUM reached $691B, up 16% year-over-year, while fee-paying AUM rose 13% to $416B; gross fundraising exceeded $31B in the quarter.
- • Management fees were nearly $1.1B, up 10% year-over-year, and the board declared a quarterly dividend of $1.35 per share, a more than 20% increase.
- • Ares reaffirmed full-year 2026 FRE growth within its 16%-20% target and realized income growth within its 20%-25%-plus target, with $117B of AUM not yet paying fees.
- • Management said it expects more portfolio acquisitions such as a $1.1B direct lending purchase, and pointed to record U.S. direct lending pipeline levels and a digital infrastructure fund first close in Q4.
Summary
Ares Management reported third-quarter 2026 results highlighting the scale and diversification of its platform. Fee-related earnings rose 19% year-to-date to $524M, and the FRE margin improved to 42.5% from 41.4% a year earlier. Management fees reached nearly $1.1B, up 10% year-over-year, driven by higher fee-paying AUM from European direct lending, alternative credit, perpetual vehicle capital formation and real assets. Part I fees totaled $169M, up 21%. Realized income was $490M for the quarter, or $1.26 per share after tax; for the first nine months, realized income rose 20% to $1.5B and after-tax realized income per share rose 15% to $3.79.
Gross fundraising exceeded $31B in the quarter across credit, real estate, infrastructure and secondaries, lifting total AUM to $691B (up 16%) and fee-paying AUM to $416B (up 13%). Ares held a first close of over $8B in equity commitments for its latest U.S. senior direct lending institutional funds, 80% of target and 60% above the prior vintage's first close. In real estate, the fifth Japan Logistics Development Fund reached its $4B hard cap, the largest closed-end real estate fundraise in the firm's history. Infrastructure AUM grew more than 50% over the past year, and the open-ended core infrastructure fund raised about $2.7B in the quarter. The inaugural Global Structured Solutions secondaries fund closed at $4.2B against a $1B initial target. Wealth AUM reached $82B, up 41%.
Investment performance remained strong, with the Pathfinder alternative credit series returning 15.2% gross over twelve months and U.S. senior direct lending returning 12.0%. The U.S. direct lending non-accrual rate improved to 1.8% from 1.9%, and interest coverage ratios stood at 2.1x for U.S. and 2.3x for European direct lending. The board declared a quarterly dividend of $1.35 per share, payable December 31, 2026, to holders of record on December 17.
For full-year 2026, Ares expects FRE growth within its 16%-20% target and realized income growth within its 20%-25%-plus range, with FRE margin slightly above the midpoint of its 0-150 basis point annual expansion range. The firm guided Q4 2026 credit SMA fee-related performance revenues of $115M-$125M and net realized performance income of $160M-$185M. CEO Michael Arougheti said the firm is not reading higher rates as slowing deployment, citing record U.S. direct lending pipeline levels and the aging PE-owned installed base. He said Ares is focused on the roughly $2T portion of the $5T digital infrastructure capex need through 2030 covering data centers and power, and that the M&A bar is higher than ever. Arougheti also said he expects more portfolio acquisitions, referring to a $1.1B direct lending portfolio purchase, and described those portfolios as not underperforming. CFO Jarrod Phillips noted that 83% of credit group debt assets are floating rate.
Gross fundraising exceeded $31B in the quarter across credit, real estate, infrastructure and secondaries, lifting total AUM to $691B (up 16%) and fee-paying AUM to $416B (up 13%). Ares held a first close of over $8B in equity commitments for its latest U.S. senior direct lending institutional funds, 80% of target and 60% above the prior vintage's first close. In real estate, the fifth Japan Logistics Development Fund reached its $4B hard cap, the largest closed-end real estate fundraise in the firm's history. Infrastructure AUM grew more than 50% over the past year, and the open-ended core infrastructure fund raised about $2.7B in the quarter. The inaugural Global Structured Solutions secondaries fund closed at $4.2B against a $1B initial target. Wealth AUM reached $82B, up 41%.
Investment performance remained strong, with the Pathfinder alternative credit series returning 15.2% gross over twelve months and U.S. senior direct lending returning 12.0%. The U.S. direct lending non-accrual rate improved to 1.8% from 1.9%, and interest coverage ratios stood at 2.1x for U.S. and 2.3x for European direct lending. The board declared a quarterly dividend of $1.35 per share, payable December 31, 2026, to holders of record on December 17.
For full-year 2026, Ares expects FRE growth within its 16%-20% target and realized income growth within its 20%-25%-plus range, with FRE margin slightly above the midpoint of its 0-150 basis point annual expansion range. The firm guided Q4 2026 credit SMA fee-related performance revenues of $115M-$125M and net realized performance income of $160M-$185M. CEO Michael Arougheti said the firm is not reading higher rates as slowing deployment, citing record U.S. direct lending pipeline levels and the aging PE-owned installed base. He said Ares is focused on the roughly $2T portion of the $5T digital infrastructure capex need through 2030 covering data centers and power, and that the M&A bar is higher than ever. Arougheti also said he expects more portfolio acquisitions, referring to a $1.1B direct lending portfolio purchase, and described those portfolios as not underperforming. CFO Jarrod Phillips noted that 83% of credit group debt assets are floating rate.
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