Ares raises $31 billion on private credit, real assets fundraising strength

Oct 29 (Reuters) - Ares Management ARES.N, one of the world's biggest alternative asset managers, raised $31 billion in the third quarter, driven by strength across its private credit, real estate and infrastructure businesses.

The Los Angeles, California-based company bolstered its business beyond private credit through last year's acquisition of GCP International, gaining a stronger foothold in real estate and digital infrastructure.

Over half of the inflows came from its non-credit businesses. The real assets division raised $11.2 billion in the quarter, while the credit group hauled $15.2 billion.

Ares is on track for its best-ever fundraising year as institutional investors continue strong allocations to alternative assets.

"We continue to expect another record year in fundraising with visibility for a strong fourth quarter, driven by sustained demand in our global institutional and wealth channel," CEO Michael Arougheti said.

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Ares' asset gathering engine is largely focused on institutional clients, shielding it from fundraising volatility in private credit from wealthy investors.

Major recent Ares fundraising includes a roughly $4 billion Japan-focused logistics real estate development fund and a $4.2 billion debut secondaries fund.

Assets under management jumped 16% to $690.6 billion in the three months ended September 30, while fee-related earnings rose 11% to $524.2 million.

Investors will later in the day focus on management commentary on the AI infrastructure boom. A selloff in AI stocks earlier this month has sharpened scrutiny on asset managers that are key financiers in the build out.

SLOW DEAL ACTIVITY IN Q3

Deal activity for private credit firms remained slow in the quarter, reflecting subdued buyout activity and competition from the broadly syndicated loan market.

Ares deployed $34.8 billion of capital, driven by US and European direct lending, alternative credit and infrastructure debt and equity strategies.

For institutional funds, Ares begins earning management fees as it invests the capital. Uninvested capital jumped 16% to $173.8 billion as of September 30. The company expects investing activity to pick up in the fourth quarter.

"As we head into our strongest seasonal quarter, recent market volatility is driving increased demand for our scaled and reliable capital," Arougheti said.

After-tax realized income per share of Class A common stock was $1.26 for the quarter, compared with $1.19 a year ago.

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