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Ares Management: Compounding Wealth With This Asset Manager


  • Ares Management is a consistently growing asset manager that has performed well in both good times and bad.
  • Assets under management hit a record high despite the pandemic-induced economic downturn.
  • The firm is firing on all cylinders with continued AUM growth into Q2 and plenty of dry powder to deploy.

Investment Thesis

Ares Management (NYSE:ARES) is a premier asset manager that has shown resiliency and an ability to thrive during recessions and the current pandemic-induced downturn. Through shrewd capital allocation and prudent risk management, Ares has managed to grow AUM during both good times and bad. Although shares are not exactly cheap, I believe the company has a long runway of fee-generated earnings growth ahead through the trend of increasing capital flows to capably managed private funds.

Source: Company Website

Brief Overview

Ares Management is a global alternative investment manager founded in 1997 that operates in the three complementary segments of Credit, Private Equity, and Real Estate. Ares currently has $148.6 billion in total assets under management (AUM), with about 76% of fee-paying assets in credit-related investments, 15% in private equity assets, and the remaining 9% in Real Estate. It has a stable and high-quality investor base that includes pension funds, insurance companies, banks, sovereign wealth funds, and university endowments. The company generates revenues from charging AUM base and performance incentive fees.

Source: Q1’20 Investor Presentation

Latest Results

Ares pulled off another strong quarter with Q1 being the twelfth consecutive quarter of sequential fee-related earnings (FRE) growth, with FRE of $93 million, representing a 31% YoY growth. Fee-paying assets under management (AUM) growth also showed no signs of slowing down during COVID-19 as it crossed the $100 billion mark for the first time in company history, with $6.6 billion being raised in just Q1 alone.

Source: Q1’20 Investor Presentation

This is highly encouraging and suggests that the client base may have shifted funds out of the perceived riskier stocks and into lower-risk credit-related investments that are the bread and butter of Ares. Interestingly, this is reflective of Ares financial performance during the Great Recession, in which it grew AUM and management fees at

This article was written by

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I am Gen Alpha. I have more than 14 years of investment experience, and an MBA in Finance. I focus on stocks that are more defensive in nature, with a medium- to long-term horizon.

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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (3)

Seems like a big story in Wsj this morning. Ares May be liable for an illegal asset transfer of 900 million out of Neiman Marcus
In at $18 buck's a share! Long!
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