Ares Fee Related Earnings Rise as GAAP Profit Falls

The Tip Desk · October 29, 2026 · 3 min read

Fee related earnings were $524.2 million in the third quarter, up 11% from a year earlier, as GAAP net income attributable to Ares was $85.3 million, or $0.21 a share.

Ares Management Corporation (ARES) reported fee related earnings of $524.2 million for the quarter ended September 30, 2026, up 11% from $471.2 million a year earlier, as GAAP net income attributable to the company fell to $85.3 million, or $0.21 a share, from $150.6 million, or $0.49 a share, in the prior quarter.

The global alternative investment manager said the third-quarter results showed the depth of its investment platform as it raised more than $31 billion in gross capital commitments, with over half of inflows coming outside the Credit Group. Gross fundraising slowed from more than $36 billion in the second quarter. Net inflows of capital were $28.6 billion.

GAAP total revenues were $1,433.4 million, down from $1,657.6 million a year earlier. Management fees rose to $1,057.1 million from $971.8 million. Carried interest allocation fell to $161.7 million from $464.7 million and incentive fees fell to $82.3 million from $100.7 million. Fee related earnings margin was 42.5%, versus 41.4% a year earlier.

After-tax realized income was $449.6 million, or $1.26 a share of Class A common stock, down from $467.6 million, or $1.29 a share, in the second quarter. Realized Income was $490.1 million, up 8% from $455.5 million a year earlier.

Capital deployment was $34.8 billion, including $18.4 billion by drawdown funds. Chief Executive Officer Michael Arougheti said the firm invested $35 billion across its diversified strategies. The Credit Group raised $15.2 billion, the Real Assets Group $11.2 billion, the Secondaries Group $2.6 billion and other businesses $2.0 billion.

Assets under management were $690.6 billion as of September 30, 2026, up 16% from $595.7 billion a year earlier. The company said the $94.9 billion increase was driven primarily by commitments to drawdown funds, capital raised by perpetual vehicles and additional managed assets from its insurance platform. Fee paying AUM was $416.4 billion, up 13% from $367.6 billion a year earlier.

Available capital was $173.8 billion, up 16% from $149.5 billion a year earlier. AUM not yet paying fees was $117.1 billion, including $93.8 billion available for future deployment and $2.3 billion of development assets not yet stabilized, which the company said could collectively generate about $826.9 million of potential incremental annual management fees. Eighty-four percent of AUM was perpetual capital or long-dated funds; 93% of management fees came from those vehicles.

Arougheti said the company continues to expect another record year in fundraising with visibility for a strong fourth quarter, driven by sustained demand in global institutional and wealth channels. Chief Financial Officer Jarrod Phillips said year-to-date performance and expectations for improved fourth-quarter deployment position Ares to meet or exceed its key financial objectives for 2026, with substantial embedded growth from capital already raised but not yet earning fees.

Ares declared a quarterly dividend of $1.35 a share of Class A and non-voting common stock, payable December 31, 2026. On October 26, 2026, ARCC entered a definitive merger agreement to acquire MidCap Financial Investment Corporation in a stock-and-cash transaction for an enterprise value of about $2.6 billion, with the cash portion provided by an Ares subsidiary.