Ares Management Corp ($ARES) Crushes Q2: $8.8B Direct Lending Surge Signals Market Dominance

Ares Management just flexed its private credit muscles—$8.8 billion in direct lending commitments proves Wall Street's hunger for yield hasn't faded (even if their creativity has).

Private credit's silent takeover

While banks dither over compliance paperwork, Ares keeps writing checks—big ones. Their Q2 haul suggests institutional money still trusts shadow banking more than your local branch manager.

The cynical take? Another quarter, another pile of leveraged loans dressed up as 'alternative assets.' But with returns like these, even skeptics might hold their noses and dive in.

TLDR

• ARES stock closed at $182.83 on August 1, 2025, down 1.46%
• $8.8B in direct lending commitments across 70 transactions during Q2 2025
• Quarterly AUM rose to $572 billion, a 19% organic growth rate
• Declared a quarterly dividend of $1.12 per share, up 20% YoY
• Fee-Related Earnings climbed to $409 million, a 26% YoY increase

Ares Management Corporation (NYSE: ARES) reported strong second-quarter earnings for 2025, closing at $182.83 on August 1, 2025, despite a 1.46% dip.

Ares Management Corporation (ARES)

The company’s stellar performance was highlighted by $8.8 billion in U.S. direct lending commitments across 70 deals and a sharp rise in AUM and fee-related earnings.

Lending Commitments and Transaction Highlights

Ares closed $8.8 billion in direct lending commitments for Q2 and $46.5 billion over the past 12 months. Notable transactions include financing Bertram Capital’s acquisition of Applied Adhesives and supporting Clarience Technologies via Genstar Capital. Other key deals involved Buckman, HealthEdge Software, Divisions Holding Corp, and Redwood Services, showcasing Ares’ reach across industrial, healthcare, tech, and insurance sectors.

Record Fundraising and Expanding AUM

Total AUM increased to $572 billion, up 19% on an annualized basis, while Fee-Paying AUM grew to $350 billion at a 17% annualized rate. Over $26 billion was raised in Q2, marking Ares’ second-highest fundraising quarter ever. Notably, perpetual capital AUM expanded by $50 billion year-over-year, reaching $167 billion.

Revenue, FRE, and Dividend Growth

Ares recorded $900 million in management fees in Q2, a 24% year-over-year increase. Fee-related revenue jumped 29%, and Fee-Related Earnings (FRE) ROSE 26% to $409 million with a FRE margin of 41.2%. Net accrued performance income stood at $1.1 billion. Ares declared a quarterly dividend of $1.12 per share, a 20% increase from last year.

Performance Overview

As of August 1, 2025, ARES delivered a strong long-term performance. While its YTD return was 4.79% versus the S&P 500’s 6.06%, Ares outperformed over longer periods: 25.79% 1-year, 174.59% 3-year, and 434.29% 5-year, compared to the S&P 500’s 14.53%, 51.46%, and 90.70% respectively.

The quarter’s deployment environment faced headwinds from early-quarter market volatility. The GCP integration, while strategically positive, temporarily reduced FRE margins. Concerns also linger around potential fee pressure in private credit markets and uncertainty in deploying non-fee-paying AUM.

Still, Ares’ diversified strategies and its ability to resist fee compression position it well to navigate future market cycles. The Q2 results reaffirm the firm’s strong momentum and continued investor confidence.

Investment Strategy and Sector Trends

Ares continues to benefit from long-term structural tailwinds in private markets, where institutional investors are increasingly allocating to alternative credit and private equity. The firm’s growing emphasis on perpetual capital and scalable platforms aligns with investor demand for durable income-generating strategies. This shift provides Ares with a steady capital base and greater operational leverage, reinforcing its competitive position in a maturing private markets landscape.