Ares has raised $31 billion thanks to its fundraising strength in private credit and real asset sectors.

Reuters, October 29 - As one of the world's largest alternative asset managers, Ares Management (ARES.N) raised $31 billion in the third quarter, mainly thanks to strong performance in its private credit, real estate, and infrastructure businesses.

This California-based company, headquartered in Los Angeles, further expanded its business beyond private credit through the acquisition of GCP International last year (link), establishing a solid presence in the real estate and digital infrastructure sectors.

More than half of the inflows came from its non-credit businesses. In this quarter, the real assets division raised $11.2 billion, while the credit division raised $15.2 billion.

With institutional investors continuing to allocate heavily to alternative assets, Ares is steadily moving toward what could be its best fundraising year ever.

"We expect to set another fundraising record this year, with strong fourth-quarter prospects driven by continued demand from global institutional and wealth management channels," said CEO Michael Arougheti.

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Ares' fundraising engine focuses primarily on institutional clients, shielding it from volatility in fundraising from high-net-worth investors in the private credit sector (link).

Recent major fundraising initiatives for Ares include a logistics real estate development fund focused on the Japanese market, about $4 billion in size (link), and its first secondaries fund, totaling $4.2 billion.

In the three months ending September 30, assets under management surged 16% to $690.6 billion, while fee-related earnings rose 11% to $524.2 million.

Later today, investors will pay attention to management's comments on the AI infrastructure boom (link). Earlier this month, an AI stock selloff intensified scrutiny of asset managers who are key financiers in this sector’s construction.

Third quarter deal activity remained sluggish

This quarter, private credit companies' deal activity remained sluggish (link), reflecting weak acquisition activity and competition from the broad syndicated loan market.

Driven by direct lending in the Americas and Europe, alternative credit, and infrastructure debt and equity strategies, Ares deployed $34.8 billion in capital.

For institutional funds, Ares has started charging management fees when capital is invested. As of September 30, uninvested capital jumped 16% to $173.8 billion. The company expects investment activity to rebound in the fourth quarter.

"As we enter the seasonally strongest quarter of the year, recent market volatility is driving greater demand for our significant and reliable capital," said Arougheti.

This quarter, after-tax realized income per class A common share was $1.26, compared to $1.19 a year earlier.

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