Ares Management reported a record $36 billion in fundraising in the second quarter, driven primarily by institutional allocations to private credit and real assets. The tally places the firm among the leading fundraisers in alternative assets and reflects continued moves by institutional investors toward large, established managers.
Management highlighted that demand from institutions has remained broad-based, helping to offset a moderation in the wealth channel amid negative headlines about private credit in recent months. The firm has also expanded its institutional footprint, with the number of direct institutional investors more than tripling since 2019. Ares' business is largely focused on institutional capital.
Fundraising composition and performance metrics
Inflows were concentrated in the credit business, which attracted $23.7 billion during the quarter. The real assets division raised $9.7 billion. One of the quarter's largest closings was Ares' flagship asset-based finance fund, which secured $8.5 billion.
Assets under management rose 17% to $671.3 billion. Fee-related earnings increased 20% year-over-year to $491.1 million. Management noted that a meaningful portion of Ares' earnings is generated by fees on assets under management, a revenue stream that tends to be more stable and predictable than performance-based income.
Deployment and pipeline
Ares deployed $35.9 billion of capital during the quarter, with activity led by U.S. and European direct lending, real estate and alternative credit strategies. Deal activity for private credit firms remained slightly subdued during the quarter as geopolitical uncertainty restrained sponsor-backed M&A, but Ares said its global origination platform allowed it to remain active in a slower transaction environment.
The firm reported it is sitting on its largest-ever forward investment pipeline and is seeing a meaningful pickup in firmwide origination. Among notable transactions, Ares led a debt financing of more than $1.7 billion to support KSL Capital Partners' acquisition of private clubs operator Invited Clubs.
Capital positioning and future fee generation
Uninvested capital rose 13% to a record $170 billion in the quarter. Finance chief Jarrod Phillips said that the elevated pool of uninvested capital positions Ares to execute on its forward pipeline and supports continued earnings growth. As the firm deploys that capital, it will begin to generate additional management fees, which contributes to profit expansion.
Reported investment returns for the quarter included an alternative credit gross return of 4.1%, U.S. senior direct lending at 2.5%, and infrastructure equity returning 9%.
After-tax realized income per share of Class A common stock was $1.29 for the quarter ended June 30, compared with $1.03 in the year-ago quarter.
Management commentary
Chief Executive Michael Arougheti attributed the fundraising performance to consistent fund returns, saying that clients continue to reward the firm for strong and steady performance across strategies. The firm also emphasized that its broadened institutional base and global origination capabilities helped it remain active in a more muted deal environment.
Overall, the quarter combined record fundraising with robust deployment and a sizeable backlog of uninvested capital, giving Ares both near-term activity and a runway for fee generation as capital is put to work.