Ares Management Corporation · NYSE:ARES
Ares Management — Q1 2025 Earnings Presentation
44 slides from Ares Management's earnings presentation, May 5, 2025
Slide 1: Earnings Presentation First Quarter 2025
Earnings Presentation First Quarter 2025 Exhibit 99.2
Slide 2: Important Notice
2 Important Notice This presentation is prepared for Ares Management Corporation (“Aresˮ) (NYSE: ARES) for the benefit of its public stockholders. This presentation is solely for information purposes in connection with evaluating the business, operations and financial results of Ares and certain of
Slide 3: First Quarter 2025 Highlights
3 Q1-25 Financial Results Assets Under Management Corporate Actions Recent Developments First Quarter 2025 Highlights 1. Unconsolidated management fees includes $9.9 million from Consolidated Funds that are eliminated upon consolidation for GAAP for Q1-25 and excludes management fees attributable to
Slide 4: GAAP Statement of Operations
4 Three months ended March 31, $ in thousands, except share data 2025 2024 Revenues Management fees $816,987 $687,692 Carried interest allocation 160,008 (32,478) Incentive fees 32,048 8,667 Principal investment income 21,998 7,050 Administrative, transaction and other fees 57,764 36,432 Total reven
Slide 5: RI and Other Measures Financial Summary
5 RI and Other Measures Financial Summary Three months ended March 31, LTM ended March 31, $ in thousands, except share data (and as otherwise noted) 2025 2024 % Change 2025 2024 % Change Management fees(1) $818,376 $693,365 18% $3,082,441 $2,662,259 16% Fee related performance revenues 28,051 3,717
Slide 6: Q1 2025 Capital Raised by Group
6 $ in billions Q1 2025 Primary Activities Credit Group U.S. Direct Lending $2.7 Equity and debt commitments to various funds, including debt commitments of $1.2 billion to Ares Senior Direct Lending Fund III, L.P. (“SDL IIIˮ) Business Development Companies (“BDCsˮ) 4.1 Capital raised of $2.7 billio
Slide 7: Assets Under Management
7 Q1-24 Q4-24 Q1-25 Assets Under Management 1. AUM amounts include vehicles managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of ARCC and a SEC-registered investment adviser (“IHAMˮ). AUM as of March 31, 2025 was $545.9 billion, an increase of 27% from prior year(1) • The
Slide 8: Perpetual Capital
8 Q1-24 Q4-24 Q1-25 $1.2 Perpetual Capital Perpetual Capital AUM Perpetual Capital as of March 31, 2025 was $154.8 billion, an increase of 42% from prior year • The increase of $45.6 billion was primarily driven by: ◦ commitments to certain funds and SMAs in our alternative credit and U.S. and Europ
Slide 9: AUM and Management Fees by Type
9 8% 8% 8% 5% 54% 17% 24% 14% 6% 4% 44% 8% AUM and Management Fees by Type 83% 1. Long-dated funds generally have a contractual life of five years or more at inception. For the quarter ended March 31, 2025: • 83% of assets under management were perpetual capital or long-dated funds • 92% of manageme
Slide 10: Available Capital and AUM Not Yet Paying Fees
10 Q1-24 Q4-24 Q1-25 Available Capital and AUM Not Yet Paying Fees Available Capital as of March 31, 2025 was $142.0 billion, an increase of 24% from prior year • The increase of $27.4 billion was primarily driven by: ◦ commitments to our U.S. and European direct lending and real estate strategies;
Slide 11: AUM Not Yet Paying Fees Available for Future Deployment
11 $81.5 $12.0 $4.5 $1.2 $67.5 $8.5 $2.7 $2.8 AUM Not Yet Paying Fees Available for Future Deployment AUM Not Yet Paying Fees As of March 31, 2025, AUM Not Yet Paying Fees includes $81.5 billion of AUM available for future deployment that could generate approximately $764.4 million in potential incr
Slide 12: Incentive Eligible AUM and Incentive Generating AUM
12 Q1-24 Q4-24 Q1-25 $20.7 Incentive Eligible AUM and Incentive Generating AUM ($ in billions) ($ in billions) Credit(3) Real Assets(3) Private Equity Secondaries(3) Other Businesses Total Incentive Generating AUM $89.6 $21.7 $7.8 $10.7 $1.2 $131.0 + Uninvested IEAUM 67.5 11.1 4.7 9.3 0.6 93.2 + IEA
Slide 13: Capital Deployment
13 $24.6 $5.2 $1.6 Q1-25 Gross Capital Deployment Capital Deployment ($ in billions) (2) Capital Deployment in Drawdown Funds ($ in billions) Total Gross Capital Deployment during Q1-25 was $31.4 billion compared to $18.6 billion during Q1-24 • Deployment by our drawdown funds was $16.7 billion in Q
Slide 14: Credit Group
14 Note: Past performance is not indicative of future results. Please refer to the endnotes on slide 36 for additional information. Credit Group(1) Alternative Credit 2.9% / 12.7% $ in thousands Q1-25 Q1-24 % Change Q1-25 LTM Q1-24 LTM % Change Management and other fees $595,994 $520,877 14% $2,294,
Slide 15: Real Assets Group
15 Note: Past performance is not indicative of future results. Please refer to the endnotes on slide 37 for additional information. Financial Summary and Highlights Americas Real Estate Equity 1.8% / 7.3% Strategy Performance Highlights European Real Estate Equity 0.2% / 1.0% Infrastructure Debt (0.
Slide 16: Private Equity Group
16 • Management and other fees decreased by 8% for Q1-25 compared to Q1-24, primarily driven by a corporate private equity extended value fund that stopped paying fees at the end of Q4-24 • Fee Related Earnings decreased by 7% for Q1-25 compared to Q1-24, primarily due to the decrease in management
Slide 17: Secondaries Group
17 Note: Past performance is not indicative of future results. Please refer to the endnotes on slide 40 for additional information. Financial Summary and Highlights Private Equity Secondaries (3.3)% / (7.1)% Strategy Performance Highlights Real Estate Secondaries (1.8)% / (4.7)% Q1-25 / Q1-25 LTM gr
Slide 18: Supplemental Details
Supplemental Details
Slide 19: Financial Details – Segments
19 Financial Details – Segments lease refer to “GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting and $0.0 million and $0.0 million for Q1-25 and Q1-24, respectively, Three months ended March 31, 2025 $ in thousands Credit Group Real Assets Group Private Equity Group Secondaries Group Other
Slide 20: Realized Income per Share Data
20 Realized Income per Share Data Three months ended March 31, $ in thousands, except share data 2025 2024 After-tax Realized Income Realized Income before taxes $405,924 $289,156 Entity level foreign, state and local taxes (8,805) (5,908) Realized Income before corporate income taxes 397,119 283,24
Slide 21: Weighted-Average Shares
21 Weighted-Average Shares 1. Represents proportional dilutive impact based upon the weighted average percentage of Ares Operating Group owned by Ares Management Corporation (65.77% and 62.32% as of March 31, 2025 and 2024, respectively). 2. Represents units exchangeable for shares of Class A common
Slide 22: Balance Sheet
22 69% 19% 13% 4% Substantial balance sheet value related to investments primarily in Ares managed vehicles and net accrued performance income as of March 31, 2025 Balance Sheet 1. Unconsolidated investments includes $835.9 million of investments in Consolidated Funds that are eliminated upon consol
Slide 23: Balance Sheet Investments by Strategy
23 Balance Sheet Investments by Strategy(1) $ in millions As of March 31, 2025 As of December 31, 2024 Credit Liquid Credit $134.4 $139.8 Alternative Credit 27.0 25.5 Opportunistic Credit 34.1 36.8 U.S. Direct Lending 102.2 93.6 European Direct Lending 39.7 40.3 APAC Credit 10.7 10.1 Credit $348.1 $
Slide 24: AUM Rollforward
24 Credit • AUM increased by 16% from Q1-24, primarily driven by commitments to SDL III, ACE VI and our third opportunistic credit fund, and by capital raised by our BDCs and by our open-ended European direct lending fund Real Assets • AUM increased by 94% from Q1-24 primarily driven by the GCP Acqu
Slide 25: FPAUM Rollforward
25 Credit • FPAUM increased by 15% from Q1-24, primarily driven by deployment of capital in funds across our U.S. and European direct lending and alternative credit strategies, and by capital raised by our BDCs and our open-ended European direct lending fund Real Assets • FPAUM increased by 87% from
Slide 26: AUM and FPAUM by Strategy
26 AUM and FPAUM by Strategy As of March 31, 2025 $ in billions AUM % AUM FPAUM % FPAUM Credit Liquid Credit $46.5 13% $44.5 20% Alternative Credit 42.9 12 31.5 14 Opportunistic Credit 15.6 4 8.3 4 U.S. Direct Lending(1) 164.8 46 90.4 41 European Direct Lending 77.5 22 38.4 18 APAC Credit 11.5 2 5.1
Slide 27: Credit Group Fund Performance Metrics
27 Credit Group Fund Performance Metrics The following table presents the performance data for funds that are not drawdown funds as of March 31, 2025: Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the ap
Slide 28: Credit Group Fund Performance Metrics (cont'd)
28 Credit Group Fund Performance Metrics (cont'd) Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not b
Slide 29: Real Assets Group Fund Performance Metrics
29 Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not be considered meaningful due to the limited time
Slide 30: Private Equity Group Fund Performance Metrics
30 Private Equity Group Fund Performance Metrics Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not be
Slide 31: Secondaries Group Fund Performance Metrics
31 Secondaries Group Fund Performance Metrics Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not be co
Slide 32: Reconciliation and Disclosures
0 42 65 155 112 42 4 94 109 127 127 127 0 42 65 2 87 133 71 126 163 120 163 198 Credit Private Equity Real Estate Strategic Initiative s BUSINESS SECTOR PALETTE GENERAL PALETTE Reconciliation and Disclosures
Slide 33: Corporate Data
33 Corporate Data Board of Directors Michael Arougheti Co-Founder and Chief Executive Officer of Ares Ashish Bhutani Former Chairman and Chief Executive Officer of Lazard Asset Management and Former Vice Chairman of Lazard Ltd Antoinette Bush Senior Advisor to News Corp Kipp deVeer Co-President Paul
Slide 34: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis
34 GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis Three months ended March 31, LTM ended March 31, $ in thousands 2025 2024 2025 2024 Realized Income and Fee Related Earnings: Income before taxes $141,038 $231,048 $1,185,342 $1,322,989 Adjustments: Amortization of intangibles 37,29
Slide 35: GAAP to Non-GAAP Reconciliation (cont'd)
35 GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd) Note: These tables reconcile consolidated carried interest allocation and incentive fees reported in accordance with GAAP to unconsolidated realized performance income and consolidated GAAP other income to unconsolidated re
Slide 36: Investment Group Highlights and Fund Performance Endnotes
36 The tables for each of the investment group highlights on slides 14-17 are a financial summary only and segment results are shown before the unallocated support costs of the Operations Management Group. Please refer to “Financial Details - Segmentsˮ on slide 19 for complete financial results. Cre
Slide 37: Credit Group Endnotes (cont'd)
37 Credit Group (cont’d) 13. ACE V is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE V (E) Unlevered, ACE V (G) Unlevered, ACE V (E) Levered, and ACE V (G) Levered, and two feeder funds: ACE V (D) Levered and ACE V (Y) Unlevered. ACE V (E) Levered
Slide 38: Endnotes (cont'd) Real Assets Group
38 Investment Group Highlights and Fund Performance Endnotes (cont'd) Real Assets Group (cont’d) 5. Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. S
Slide 39: Real Assets Group Endnotes (cont'd)
39 Real Assets Group (cont’d) 16. EF IV is made up of two parallel funds, one denominated in U.S. Dollars and one denominated in Euros. The gross and net MoIC presented in the table are for the Euro denominated parallel fund. The gross and net MoIC for the U.S. Dollar denominated parallel fund are 1
Slide 40: Private Equity Group Endnotes (cont'd)
40 Private Equity Group (cont’d) 8. The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRRs reflect returns to the fee-paying limited partners and, if applicable, ex
Slide 41: Glossary
41 Glossary Ares Operating Group Entities Ares Operating Group entities or an “AOG Entityˮ refers to, collectively, Ares Holdings L.P. (“Ares Holdingsˮ) and any future entity designated by our board of directors in its sole discretion as an Ares Operating Group entity. Ares Operating Group Unit Ares
Slide 42: Glossary (Cont'd)
42 Glossary (Cont'd) Fee Paying AUM Fee Paying AUM or “FPAUMˮ refers to the AUM from which we directly earn management fees. FPAUM is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees. For our funds other than CLOs, our FPAUM represents the
Slide 43: Glossary (Cont'd)
43 Glossary (Cont'd) Management Fees Management Fees refers to fees we earn for advisory services provided to our funds, which are generally based on a defined percentage of fair value of assets, total commitments, invested capital, gross asset value, net asset value, net investment income, total as
Slide 44: Glossary (Cont'd)
44 Glossary (Cont'd) Perpetual Capital Perpetual Capital refers to the AUM of: (i) our publicly-traded vehicles, including ARCC, Ares Commercial Real Estate Corporation (NYSE: ACRE) (“ACREˮ), Ares Dynamic Credit Allocation Fund, Inc. (NYSE: ARDC) (“ARDCˮ) and GLP J-REIT (TSE: 3281) (“J-REITˮ); (ii)