Private investment firm Ares Management Corp is eyeing a record annual fundraising total in the mid-$80bn range for 2024, surpassing last year’s total of $74bn, after gathering $64bn up to the end of September, according to a report by Bloomberg.
The firm reported a 17% increase in assets under management (AUM) in its Friday earnings release, reaching $464bn in the third quarter, as strong demand for US direct lending and strategic private equity acquisitions fuelled growth.
The firm’s quarterly revenue rose 68% year-over-year to $1.1bn, and new capital raised totalled $20.9bn, closely matching Bloomberg Intelligence’s estimate.
Private credit remains central to Ares’ strategy, with nearly 40% of third-quarter fundraising directed to US and European direct lending. In July, the firm closed its largest-ever direct lending fund with $15bn in equity commitments.
Despite the competitive environment in leveraged loans, which have seen record sales of $986bn this year, Ares’ CEO Michael Arougheti emphasised that Ares’ approach spans beyond sponsor lending, encompassing real estate, infrastructure, and other alternative credit strategies. He noted a “general de-banking trend” that is “outpacing whatever competition we’re seeing from the traded sub-investment grade markets.”
On Friday’s earnings call, Arougheti highlighted the importance of manager quality as private credit competition grows. “In the public BDC market, we’re seeing significant performance variation across managers, which is increasingly critical in discussions about quality and scale,” he said.
The firm reported after-tax realised income of $316m, or 95 cents per share, for the third quarter. Of its AUM, approximately $74.1bn remains undeployed and non-fee-paying, including $33.2bn reserved for US direct lending.
Third-quarter returns showed strong results in opportunistic credit (4.7% net) and Asia-Pacific credit (4.9% net), while real assets posted modest gains, with US real estate equity delivering 1.3%. Addressing recent losses in credit secondaries, Arougheti clarified that returns in this sector are forward-looking, with initial gains from discounted portfolios potentially balanced by returns over the fund’s lifespan.
Income from management and other fees in Ares’ credit business rose 19% to $567m, while fees from its real assets segment, including real estate and infrastructure, grew by 14%. A recent deal to acquire GLP Capital Partners’ operations outside China will double Ares Real Estate’s AUM to $96 billion, furthering its expansion across North America, Europe, Asia, and Latin America.
