ARES Q3 Deep Dive: Diversified Fundraising and Broad-Based Deployment Drive Earnings Upside

Alternative asset manager Ares Management (NYSE:ARES) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 35.7% year on year to $1.14 billion. Its GAAP profit of $1.23 per share was 8.2% above analysts’ consensus estimates.

Is now the time to buy ARES? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Ares Management’s third quarter was marked by strong financial performance that exceeded Wall Street’s expectations, with the market reacting positively to the results. Management attributed the outperformance to robust growth in management fees, significant capital deployment, and strong investor demand across both institutional and wealth channels. CEO Michael Arougheti highlighted, “We raised more than $30 billion of new capital in the quarter, our highest quarter on record,” underscoring the firm’s fundraising strength. The quarter also saw broad-based contributions across credit, infrastructure, and real estate platforms, reflecting the diversity and scale of Ares’ investment strategies.

Management’s outlook for the months ahead remains anchored in sustained fundraising momentum, expanding product offerings, and a constructive market environment. They expect strong investment activity as transaction volumes rebound and lower interest rates stimulate deployment opportunities. As Arougheti noted, “We believe the secular shift toward private markets and wealth portfolios is still in its early innings,” emphasizing Ares’ positioning to capture demand for private credit, real assets, and wealth products. Ongoing investments in global distribution and product innovation are expected to support further growth, even as management monitors macroeconomic headwinds and evolving investor sentiment.

Key Insights from Management’s Remarks

Management credited the quarter’s results to exceptional fundraising, rapid deployment across asset classes, and expanding wealth management channels, while also highlighting contributions from new product launches and strategic acquisitions.

• Record fundraising momentum: Ares raised over $30 billion in new capital during the quarter, with year-to-date fundraising surpassing $77 billion—a 24% increase over the prior year. This growth was supported by strong investor appetite for private credit, infrastructure, and real assets.
• Deployment surge across strategies: Gross capital deployment totaled over $41 billion, up 55% sequentially and 30% above Ares’ previous high. Deployment was broad-based, spanning credit, real estate, and infrastructure, with no single asset class or geography dominating activity.
• Wealth channel acceleration: The wealth management business saw its highest-ever quarterly equity inflows, with approximately 40% of inflows from outside the U.S. Notably, new product launches in Japan and growing demand from registered investment advisors contributed to this acceleration.
• Infrastructure and real estate platforms scale: The final close of Ares’ third infrastructure secondaries fund reached $3.3 billion—over three times the size of its predecessor fund. The GCP acquisition further expanded Ares’ vertically integrated real estate and data center capabilities, positioning the firm to capitalize on global demand in these sectors.
• Strong credit performance resilience: Management emphasized that Ares’ credit portfolios continue to perform well, with realized loss rates remaining near historical lows and the majority of exposures in senior secured debt. They highlighted robust performance in direct lending and alternative credit strategies, and noted that the business model is relatively insulated from credit market volatility.

Drivers of Future Performance

Ares’ near-term outlook is driven by continued fundraising momentum, growing demand for private market solutions, and opportunities created by evolving credit and real estate markets.

• Robust fundraising pipeline: Management expects to exceed last year’s fundraising record, supported by the launch and closing of large institutional funds across credit, real estate, and infrastructure. The expansion of semi-liquid wealth products and entry into new geographies are expected to increase AUM and fee-related earnings.
• Deployment and transaction rebound: Lower interest rates and improving market sentiment are expected to drive higher transaction volumes and deployment opportunities, especially in private credit and real assets. Management views this environment as a tailwind for management fees and long-term growth, though they remain cautious about potential market volatility.
• Margin expansion and operational leverage: The integration of recent acquisitions such as GCP is anticipated to drive margin expansion in 2026. Continued discipline in expenses and scaling of global platforms are expected to support fee-related earnings margin improvement, even as management invests in product innovation and distribution.

Catalysts in Upcoming Quarters

In coming quarters, our analyst team is focused on (1) monitoring continued fundraising success—especially as large flagship funds reach final closes, (2) tracking the pace of deployment across credit, infrastructure, and real estate as market activity rebounds, and (3) watching for margin improvements from integration of acquisitions and scaling of new products. Progress on global wealth expansion and the impact of macroeconomic shifts on private credit demand will also be key areas of attention.

Ares currently trades at $155.98, up from $148.63 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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