Ares Management's Q1 2025: Unpacking Contradictions in Private Credit Stability, M&A Appetite, and Margin Expansion
Monday, May 5, 2025 7:41 pm ET
2min read None
Financial Performance and Fundraising:
- Ares Management reported record management fees of $818 million for Q1 2025, representing an 18% year-over-year increase, and fee-related earnings of $367 million, up 22% year-over-year.
- The company raised over $20 billion in gross new capital commitments, the highest level for a first quarter on record, driven by strong demand across all major strategies.
Market Environment and Strategy Adjustment:
- Ares observed increased market volatility and growing uncertainty, but noted that traditional capital providers retreated, making private market strategies more valuable.
- The company leveraged its significant dry powder and flexible private market strategies to invest opportunistically during market retrenchment, positioning itself for future growth.
Real Estate and Infrastructure Growth:
- Ares raised over $3.1 billion in commitments across real estate and infrastructure, including $1.5 billion for its first Japan data center development fund.
- Growth in these sectors was driven by demand for data center capacity, need for power generation, and opportunities associated with supply constraints in real asset markets.
European Strategy and Pipeline:
- Ares launched its largest direct lending fund in Europe, raising $1 billion, and its European semi-liquid product reached over $3 billion in AUM.
- The European direct lending business showed deployment acceleration, with an increase of 5% period-over-period, and expectations for continued growth due to market trends and competitive positioning.
Financial Performance and Fundraising:
- Ares Management reported record management fees of $818 million for Q1 2025, representing an 18% year-over-year increase, and fee-related earnings of $367 million, up 22% year-over-year.
- The company raised over $20 billion in gross new capital commitments, the highest level for a first quarter on record, driven by strong demand across all major strategies.
Market Environment and Strategy Adjustment:
- Ares observed increased market volatility and growing uncertainty, but noted that traditional capital providers retreated, making private market strategies more valuable.
- The company leveraged its significant dry powder and flexible private market strategies to invest opportunistically during market retrenchment, positioning itself for future growth.
Real Estate and Infrastructure Growth:
- Ares raised over $3.1 billion in commitments across real estate and infrastructure, including $1.5 billion for its first Japan data center development fund.
- Growth in these sectors was driven by demand for data center capacity, need for power generation, and opportunities associated with supply constraints in real asset markets.
European Strategy and Pipeline:
- Ares launched its largest direct lending fund in Europe, raising $1 billion, and its European semi-liquid product reached over $3 billion in AUM.
- The European direct lending business showed deployment acceleration, with an increase of 5% period-over-period, and expectations for continued growth due to market trends and competitive positioning.
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