CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open platformOpen platform

Ares heads for record fundraising year on private credit, real assets strength

By Reuters News

By Arasu Kannagi Basil

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.

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

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

"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.

Ares shares rose over 1.5% in premarket trading. The stock has slipped 23% so far this year.

https://www.reuters.com/graphics/ARES-RESULTS/lgvdbbonjvo/chart.png

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.

"Credit performance was strong, particularly in direct lending," RBC analyst Bart Dziarski said.

Alternative credit posted a gross return of 3.6% in the quarter, while ⁠US senior direct lending returned 3.3%. European direct lending returned 2.2%.

Fundraising, capital deployment and investment performance are key metrics that Wall Street watches closely as they drive future earnings.

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

https://www.reuters.com/graphics/USA-ALTS/egvbggagwpq/chart.png

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.