stockrowWhat it does
Ares Management is a global alternative investment manager. It raises money from institutional and individual investors and invests it across credit, real assets, secondaries and private equity. Founded in 1997, Ares is led by co-founder and chief executive officer Michael J. Arougheti.
Its credit business lends to companies and invests in traded loans, bonds and other credit assets. Its real assets business invests in real estate and infrastructure through both debt and equity. The secondaries business buys existing interests in investment funds and provides capital for fund restructurings. Private equity teams invest in businesses and work with their management teams.
Investors access these strategies through funds, separately managed accounts and other vehicles. Some vehicles hold capital for a specified period; others are perpetual vehicles. Ares also manages investments for insurance companies and offers products through wealth-management channels.
As of December 31, 2025, Ares managed $622.5 billion in assets. Its credit group accounted for $406.9 billion of assets under management, including $274.3 billion in direct lending. Ares ended the third quarter of 2026 with $691 billion of total assets under management and $416 billion of fee-paying assets under management.
How it makes money
Ares earns management fees for managing investment vehicles. It can also earn carried interest and incentive fees when funds meet performance requirements, as well as administrative, transaction and other fees. Its own investments contribute principal investment income.
In FY2025, management fees were $3.7 billion. In the third quarter of 2026, management fees were nearly $1.1 billion. Ares presents segment results differently from consolidated results, including by excluding results attributable to consolidated funds and certain non-controlling interests.
Management fees represented 65.7% of FY2025 revenue. For 2025, 93% of management fees came from perpetual capital vehicles or long-dated funds; the latter generally have a contractual life of at least five years at inception. Fee-paying assets under management are the assets on which Ares directly earns management fees. Fundraising, investment deployment and asset values can affect the fee base.
Carried interest revenue was $1.2 billion in FY2025, while incentive fees were $362.5 million. Significant funds may generate these fees when they achieve performance hurdles. The timing can vary: Ares said slower transactions and realizations had delayed European-style fund payment distributions for some funds by a year or more. These structures affect when Ares receives performance income.
Across its businesses, Ares manages funds and accounts with different mandates. Direct lending vehicles include commingled funds, separately managed accounts and joint ventures. Its secondaries funds acquire existing fund interests or help restructure funds, while its real assets strategies manage real estate and infrastructure investments.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Management fees | $3.7 billion | 65.7% | 25.1% |
| Carried interest | $1.2 billion | 20.6% | 195.8% |
| Incentive fees | $362.5 million | 6.47% | 5.32% |
| Administrative, transaction and other fees | $356.4 million | 6.36% | 118.8% |
| Principal investment income | $48.1 million | 0.86% | 6.00% |
Customers and how it sells
Ares serves institutional investors and individual investors. Its institutional clients include pension funds, sovereign wealth funds and endowments. As of December 31, 2025, it had over 2,850 direct institutional relationships and a retail investor base across publicly traded funds, sub-advised accounts and perpetual wealth vehicles.
In 2025, Ares raised $77.4 billion directly from over 540 institutional investors, including more than 235 that were new to Ares. It raised another $35.8 billion through intermediaries. Of fundraising from direct institutional investors, 79% came from existing investors who committed to a new product or a subsequent fund in the same product line.
Ares operates in the Americas, Europe and Asia-Pacific. At year-end 2025, it had over 55 offices in more than 25 countries. Its real estate teams work across those regions, and its direct lending business operates in the U.S. and Europe with a growing presence in Asia-Pacific.
The company’s wealth channel serves investors through a range of products. Ares said wealth assets under management reached $82 billion in the third quarter of 2026. It is developing interval fund solutions focused on defined contribution plans, model portfolios and the mass-affluent investor segment.
Suppliers and costs
Ares is an investment manager rather than a manufacturer. Its operations depend on investment and operating professionals, as well as service providers and counterparties used by its funds. It faces competition for qualified employees and seeks to attract and retain them through salary, performance-based bonuses, equity and carried interest participation.
At December 31, 2025, Ares had over 4,250 employees, including over 1,650 professionals in its investment groups and over 2,550 operations management professionals. Its activities are subject to regulatory and compliance requirements in the jurisdictions where it operates.
Ares also incurs costs when evaluating and integrating acquisitions. Its GCP acquisition added logistics and digital infrastructure capabilities in 2025; some acquisition-related payments to people who became Ares employees are accounted for as compensation. The company expects integration-period expenses to fluctuate. In the third quarter of 2026, higher distribution expenses were primarily related to increased inflows into an open-ended infrastructure fund from a large distribution platform.
- Revenue$5.6B
- Selling, general and administrative−$4.7B
- Other operating costs−$52.7M
- Operating income$892.7M
Competitive position
Ares competes for both investor capital and investment opportunities. Its competitors include traditional asset managers, business development companies, specialized funds, investment managers and other financial institutions. No competing company is named as such in the available material.
Investors can compare managers on performance, fees, service, reputation, product breadth and relationships. When seeking investments, Ares competes on access to capital, market coverage, relationships, execution, products and price. Some competitors have greater resources, lower costs of capital or access to funding sources unavailable to Ares.
Ares combines investment teams across credit, real assets, secondaries and private equity. Its research covers over 55 industries, and its investment committees generally have overlapping members from different groups. Its direct lending teams use a multi-channel approach to originate loans and seek to be lead or sole lender to portfolio companies.
Our reading: The breadth of Ares’s investment platform and research is a meaningful competitive asset because teams can share information and source opportunities across strategies, although competitors also have substantial resources. Our reading: Investor relationships and distribution provide another source of strength, reflected in repeat institutional fundraising, but continued access to capital depends in part on investment performance and investor demand.
Growth opportunities
Ares grows by raising capital, deploying it into investments and expanding its range of strategies and distribution channels. In 2025, it raised $113.2 billion in gross new capital commitments and invested $145.8 billion. Its assets under management grew 29% during the year.
The company also uses acquisitions to add capabilities. Its 2025 GCP acquisition added logistics and digital infrastructure investing and expanded its geographic presence, including in Japan, Brazil, Vietnam, Europe and the U.S. Ares continues to develop products for institutional investors and wealth channels.
In the third quarter of 2026, Ares raised over $31 billion of gross capital and invested $35 billion. It subsequently held a first close for its latest U.S. senior direct lending institutional funds, with over $8 billion of equity commitments. It also launched an infrastructure secondaries fund focused on transactions led by fund managers.
Ares ended the quarter with assets under management not yet paying fees, including approximately $94 billion available for future deployment. The company estimates that deployable capital and development assets not yet stabilized could collectively generate over $800 million in potential incremental annual management fees if deployed or stabilized, subject to assumptions in its earnings materials.
For digital infrastructure, Ares estimates about $2 trillion of capital spending need through 2030 for physical data-center buildings and adjacent power generation and transmission. Its development strategy focuses on major metropolitan markets and facilities that can serve both core computing and AI customers.
- $4.2BFY2021
- $3.1BFY2022
- $3.6BFY2023
- $3.9BFY2024
- $5.6BFY2025
Structural risks
- Markets and fundraising: Difficult market or political conditions can reduce investment values, impair fund performance, or make it harder to raise and deploy capital. Lower asset values can also reduce management fees where fees are based on market values.
- Credit and interest rates: A downturn in global credit markets could hurt investments. Changes in interest rates can affect asset values and portfolio companies’ access to debt, while leverage exposes Ares and its funds to additional risks.
- Performance income and redemptions: Illiquid markets can slow investment realizations and performance income. Fund investors may fail to meet capital calls or exercise redemption, termination or dissolution rights. Ares said 80% of capital had been returned to investors who submitted a first-quarter tender for its Ares Strategic Income Fund as of the third quarter of 2026.
- Competition and fees: Ares faces competition for investments and employees. Investor demands, including potential fee compression and changes to other terms, could adversely affect future revenue. A significant portion of management fees comes from Ares Capital Corporation.
- Regulation and operations: Domestic and foreign regulation can restrict activities and increase compliance costs. Cyberattacks, third-party service-provider failures, conflicts of interest and reputational harm can also affect the business.
- Acquisitions and expansion: Entering new strategies, markets and businesses brings integration risks, expenses and uncertainty. Asset valuations can also be subjective and differ from amounts ultimately realized.
Leadership
Ares has a controlled-company structure. Holdco members’ ownership and control of common shares generally leave Class A shareholders with no influence over matters put to a common-stock vote and limited ability to influence business decisions.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Michael J Arougheti, | Co-Founder and Chief Executive Officer | — | $68.3 million |
| R. Kipp deVeer, Co- | President | — | $71.9 million |
| Blair Jacobson, Co- | President | — | $49.8 million |
| Jarrod Phillips, | Chief Financial Officer | — | $9.8 million |
| Naseem Sagati Aghili, General Counsel and Corporate | Secretary | — | $7.8 million |
| Ryan Berry, | Chief Marketing and Strategy Officer | — | $11.8 million |
Bottom line
Our reading
Our reading: Ares is a fee-based alternative investment manager whose long-duration capital and range of strategies support its business, with credit central to its asset base. Growth depends on raising and deploying capital and delivering investment performance; market disruption, redemption requests, competition and delayed realizations can affect fees and cash flows. Its controlled-company structure also limits the influence of Class A shareholders.