Ares Management Raises Record $36 Billion in Q2 on Strong Private Credit Demand

Ares Management Corp. reported a record $36 billion in fundraising for the second quarter, underscoring sustained institutional investor appetite for private credit despite a slower transaction environment. The inflows pushed the alternative asset manager's total assets under management up 17% year-over-year to $671.3 billion.

Record Inflows and Earnings

The firm's credit segment was the primary driver of the record haul, attracting $23.7 billion in new capital, according to its quarterly report. The real assets division also saw significant interest, raising $9.7 billion. A major contributor was Ares’ flagship asset-based finance fund, which alone secured $8.5 billion during the quarter.

This fundraising success translated directly to financial performance. Fee-related earnings, a key metric of stable income, rose 20% from the prior year to $491.1 million. After-tax realized income was $1.29 per share of Class A common stock, a significant increase from $1.03 in the same period a year ago.

Institutional Capital Shifts

Ares' results highlight a broader market trend where large institutional investors, such as pension funds, are increasingly allocating capital to established alternative asset managers. The firm noted that its number of direct institutional investors has more than tripled since 2019.

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"Clients continue to reward us due to our strong and consistent fund performance across our strategies," CEO Michael Arougheti said in a statement. This demand has proven resilient, helping to offset a slowdown in the wealth channel and persisting despite recent negative headlines surrounding the private credit sector.

Capital Deployment and Outlook

While M&A activity remained somewhat subdued due to market uncertainty, Ares deployed $35.9 billion of capital in the quarter. One notable transaction was its leadership of a more than $1.7 billion debt financing for KSL Capital Partners’ acquisition of Invited Clubs.

Arougheti expressed optimism about future dealmaking, noting a "meaningful pickup in our firmwide investment pipeline." The company's uninvested capital, or dry powder, swelled 13% to a record $170 billion. According to Chief Financial Officer Jarrod Phillips, this substantial reserve positions Ares to capitalize on future investment opportunities and drive continued earnings growth as the funds are deployed.