Ares Fee Earnings Jump 20% as AUM Hits Record $671 Billion
Fee Related Earnings at Ares Management (ARES) climbed 20% to $491.1 million in the second quarter, even as management-fee growth cooled to 14% from the 25% pace set earlier in the year [1][7][15][17].
Ares Management (ARES), the alternative-asset manager whose credit and private-equity strategies span drawdown funds and perpetual-capital vehicles, reported Fee Related Earnings of $491.1 million in the second quarter, up 20% from $409.1 million a year earlier, with the FRE margin widening to 42.2% from 41.2%. The gain came on management fees of $1,030.0 million, up 14% year over year. That growth rate marks a deceleration from the 25% pace logged in the first quarter and across full-year 2024, a sign that the fee base is normalizing even as it expands.
The Credit Group carried much of the quarter's momentum. Fee Related Earnings in credit rose 17% year over year to $498.5 million on a 14% increase in management and other fees to $721.3 million, while Realized Income in the segment climbed 25% to $543.8 million. Part of that realized-income gain came from a one-time source: a $47.4 million realized performance fee from ACE V after the fund's investment period ended.
After-tax Realized Income for the firm overall rose 27% year over year to $467.6 million, or $1.29 a share, up from $367.9 million ($1.03 a share) in the prior-year quarter and ahead of the $452.4 million ($1.24 a share) posted in the first quarter of 2025. GAAP net income attributable to Ares rebounded to $150.6 million, building on the $142.6 million reported in the first quarter and well above the $54.2 million logged in the fourth quarter of 2024, when performance-related income had been depressed.
Assets under management reached a record $671.3 billion as of June 30, up 17% year over year and up from $644.3 billion at the end of the first quarter, extending a run that first crossed $600 billion in the fourth quarter of 2024. Fee-paying AUM grew at the same 17% clip, to $409.9 billion. Perpetual-capital AUM, the more durable end of that base, grew 34% year over year to $223.3 billion and now accounts for 84% of total AUM and 94% of management fees, a mix shift that underpins the steadier fee trajectory even as headline growth rates ease.
Fundraising set a new high-water mark. Ares raised $36.4 billion in gross commitments during the quarter, with $34.4 billion in net inflows, surpassing the prior record of $30 billion set in the first quarter, which itself had been up 45% year over year. Available capital, the firm's dry powder, climbed to a record $170.0 billion, up 13% from $150.8 billion a year earlier and above the roughly $160 billion reported at the end of the first quarter.
Deployment kept pace with the capital on hand. Ares put $35.9 billion to work in the quarter, including $15.2 billion by drawdown funds, up from $26.9 billion a year earlier. There was a "meaningful pickup" in the firmwide investment pipeline, a shift in tone from the first quarter's characterization of a "volatile market environment" and from the "slower transaction environment" cited more recently.
The quarterly common dividend held at $1.35 a share for a third consecutive quarter, unchanged since the 20% increase announced alongside fourth-quarter 2024 results. The flat payout, against rising fee earnings and record fundraising, suggests the firm is prioritizing capital retention to fund deployment rather than layering on a near-term dividend increase.
With perpetual capital now generating the bulk of management fees and dry powder at a record $170.0 billion, the quarter's real signal is durability: Ares built a larger, stickier fee base even as the headline management-fee growth rate came down from last year's pace, and management's pivot to describing a pickup in deployment activity points to that dry powder converting into deployed capital, and eventually fee-earning AUM, over coming quarters.