Ares 'Pretty Unaffected' by Tariffs, CEO Arougheti Says
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Yahoo
04-08-2025
- Yahoo
Citi names industry veteran as head of North America private credit, memo shows
(Reuters) -Citigroup has appointed Aashish Dhakad as the head of its private credit origination division in North America, according to an internal memo seen by Reuters on Monday, as banks vie for a larger share of the lucrative private credit market. Dhakad, with an industry experience spanning two decades, will join the third largest U.S. lender in October. He most recently worked at investment manager Ares Management. Private credit refers to loans provided by non-bank lenders that are not subject to the same level of regulations as banks. These loans are typically extended to riskier borrowers or companies pursuing large buyouts with debt. Once seen as a threat to banks, private credit firms have increasingly partnered with traditional lenders over the past year to gain more customers. Banks help them source customers more easily and earn a fee without putting their own capital at risk. In September 2024, Citi and investment firm Apollo Global partnered for a $25 billion private credit and direct lending program. Dhakad, who has also worked at Bank of America for a decade, will be based in New York in the new role with Citi. "The growth in corporate direct lending beyond traditional acquisition financing presents a massive opportunity and we are uniquely situated to seize it," the Citi memo said. The move marks the Wall Street bank's effort to expand its presence in the private credit market. Private credit firms have also widened their focus in recent years, moving beyond traditional buyout financing to areas such as investment-grade corporate lending, asset-backed deals and sports-related investments. Sign in to access your portfolio
Yahoo
02-08-2025
- Yahoo
Ares Management Corp (ARES) Q2 2025 Earnings Call Highlights: Record Fundraising and Robust AUM ...
Quarterly AUM: Increased to $572 billion, representing 19% organic growth on an annualized basis. Fee-Paying AUM (FPAUM): Increased to $350 billion, representing 17% organic growth on an annualized basis. Fundraising: Second highest quarterly total on record with over $26 billion raised. Management Fees: Record $900 million, a 24% year-over-year increase. Total Fee-Related Revenue Growth: Increased by 29% year-over-year. Fee-Related Earnings (FRE): $409 million, a 26% year-over-year increase. FRE Margin: 41.2% in the second quarter. Net Accrued Performance Income: Increased 8.5% to $1.1 billion. Net Realized Performance Income: $16 million for the quarter. Effective Tax Rate on Realized Income: 9.5% for the quarter. Dividend: Declared a quarterly dividend of $1.12 per share, a 20% increase over the same quarter last year. Gross Commitments Raised Year-to-Date: Over $46 billion. Perpetual Capital AUM: Increased by $50 billion over the past 12 months to $167 billion. Insurance AUM: $79 billion across the platform. Real Estate Composite Returns: Americas real estate equity composite increased 3.4% on a gross basis. Corporate Private Equity Composite: Rose 3.3% on a gross basis during the quarter. Warning! GuruFocus has detected 11 Warning Signs with ARES. Release Date: August 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Ares Management Corp (NYSE:ARES) reported strong second quarter results with significant growth in AUM and fee-paying AUM, driven by successful fundraising and investment performance. The company achieved its second highest quarterly fundraising total on record, raising over $26 billion across more than 20 strategies and 40 funds. Management fees increased by 24% year-over-year, reflecting strong growth across private credit strategies, private wealth franchise, secondaries business, and Real Assets business. Ares Management Corp (NYSE:ARES) declared a quarterly dividend of $1.12 per share, representing a 20% increase over the same quarter last year. The integration of the GCP acquisition is progressing well, contributing $103 million in revenues and $34 million in FRE, with expectations for significant future contributions. Negative Points The deployment environment was modestly impacted by market volatility, particularly at the beginning of the quarter, affecting transaction activity. The integration of GCP temporarily compressed FRE margins by 90 basis points, although this is expected to be temporary. There is a risk of fee pressure in the private credit market as some peers have cut fees to attract capital, although Ares Management Corp (NYSE:ARES) has resisted this trend. The potential for a credit cycle remains a concern, although Ares Management Corp (NYSE:ARES) believes it is well-positioned to manage through it. The timeline for deploying AUM not yet paying fees remains uncertain, with expectations ranging from 18 to 24 months, although historical trends suggest a closer timeline to one year. Q & A Highlights Q: How is the compression in US direct lending spreads impacting institutional demands and fee rates? A: Michael Arougheti, CEO, explained that while private credit fundraising institutionally is down sequentially, Ares continues to see growth due to its track record and consistency of returns. Despite some peers cutting fees to attract capital, Ares has resisted this, maintaining that their scale and origination capabilities are unique. The spreads in private credit remain attractive, offering a premium over liquid markets, which continues to draw institutional interest. Q: What is the outlook for Ares in the 401(k) market for alternative investments? A: Arougheti noted that Ares is optimistic about the democratization of alternatives and is prepared to offer products in the 401(k) market once regulatory frameworks are in place. However, he cautioned that the process might not be linear due to the need for plan sponsors to adjust to new fee structures and litigation risks. Ares is ready with products and partnerships to enter the market when it opens. Q: How does the European direct lending market compare to the US, especially post-Trump tariffs? A: Arougheti highlighted that Europe is becoming more attractive due to different rate trajectories and fiscal policies. Deployment and investor appetite are increasing, with European direct lending showing strong performance metrics similar to the US. The European market is benefiting from increased investment and transaction activity. Q: Can you discuss the investments in retail distribution and the potential for international growth? A: Arougheti stated that Ares has been expanding its global wealth business, with significant investments in product innovation and distribution networks. The firm has added personnel in Europe and Asia-Pacific, contributing to a 30% increase in partnerships. International flows, particularly from Japan, are expected to grow, with July and August showing record equity inflows. Q: What are the factors affecting FRE margins, and how does net credit AUM growth impact this? A: Jarrod Phillips, CFO, explained that FRE margins are influenced by deployment and fundraising. While GCP integration has temporarily compressed margins, strong deployment and fundraising, especially from non-traded products, are expected to support margins. The firm anticipates that GCP synergies will improve margins in the future. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. 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Yahoo
01-08-2025
- Yahoo
Ares Management (ARES) Misses Q2 Earnings Estimates
Ares Management (ARES) came out with quarterly earnings of $1.03 per share, missing the Zacks Consensus Estimate of $1.11 per share. This compares to earnings of $0.99 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -7.21%. A quarter ago, it was expected that this private equity firm would post earnings of $0.94 per share when it actually produced earnings of $1.09, delivering a surprise of +15.96%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Ares Management, which belongs to the Zacks Financial - Investment Management industry, posted revenues of $1.05 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.41%. This compares to year-ago revenues of $786.5 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Ares Management shares have added about 4.8% since the beginning of the year versus the S&P 500's gain of 7.8%. What's Next for Ares Management? While Ares Management has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Ares Management was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.14 on $1.08 billion in revenues for the coming quarter and $5.12 on $4.78 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Investment Management is currently in the top 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. GCM Grosvenor Inc. (GCMG), another stock in the same industry, has yet to report results for the quarter ended June 2025. The results are expected to be released on August 7. This company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. GCM Grosvenor Inc.'s revenues are expected to be $118.85 million, up 1.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ares Management Corporation (ARES) : Free Stock Analysis Report GCM Grosvenor Inc. (GCMG) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
