Q3 2024 Ares Management Corp Earnings Call Transcript
Key Points
- Ares Management Corp (ARES) reported strong year-over-year growth in key financial metrics, including an 18% increase in management fees, 24% growth in fee-related earnings, and a 28% rise in realized income.
- The company raised nearly $21 billion in gross capital during the third quarter, contributing to a year-to-date total of over $64 billion, setting up 2024 to be a record year for fundraising.
- Ares Management Corp (ARES) declared a fourth-quarter common dividend of $0.93 per share, representing a 21% increase over the same quarter last year.
- The company is experiencing heightened institutional and retail investor demand across its private credit strategies, including global direct lending and alternative credit.
- Ares Management Corp (ARES) is expanding its product suite and distribution partnerships, with significant growth in its wealth management channel, raising over $2.5 billion in equity commitments in the third quarter.
- The company faces challenges with supplemental distribution fees, which have increased significantly, impacting fee-related earnings and FRE margins.
- There is a noted spread compression in the private credit market, which could be attributed to increased competition and a lack of new supply.
- Ares Management Corp (ARES) is experiencing a higher compensation expense due to increased headcount and higher Part 1 fees.
- The company anticipates a sequentially lower overall FRE margin in the fourth quarter due to supplemental distribution fees and higher compensation costs.
- The real estate market remains challenging, with limited transaction activity in certain sectors, although there are signs of improvement.
Welcome to Ares Management Corporation's third quarter earnings conference call. (Operator Instructions) As a reminder, this conference call is being recorded on Friday, November 1, 2024.
I will now turn the call over to Greg Mason, Co-Head of Public Markets, Investor Relations for Ares Management.
Good morning and thank you for joining us today for our third quarter conference call. Speaking on the call today will be Michael Arougheti, our Chief Executive Officer; and Jarrod Phillips, our Chief Financial Officer. We also have several executives with us today who will be available during the Q&A session.
Before we begin, I want to remind you that comments made during this call contain forward-looking statements and are subject to risks and uncertainties, including those identified in our risk factors in our SEC filings.
Our actual results could differ materially, and we undertake no obligation to update any such forward-looking statements.
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