Ares reported another record fundraising quarter, driven by strong demand across credit, real assets, and wealth products. While deployment was strong, management noted that US direct lending activity is tied to incumbent relationships rather than M&A-driven primary market, and pointed to a strong pipeline building. They also provided color on stabilizing wealth channel redemptions. Record fundraising of ~$36B in Q2, with ~$66B raised YTD, on track for another record year.
Ares reported another record fundraising quarter, driven by strong demand across credit, real assets, and wealth products. While deployment was strong, management noted that US direct lending activity is tied to incumbent relationships rather than M&A-driven primary market, and pointed to a strong pipeline building. They also provided color on stabilizing wealth channel redemptions. Record fundraising of ~$36B in Q2, with ~$66B raised YTD, on track for another record year.
Ares reported another record fundraising quarter, driven by strong demand across credit, real assets, and wealth products. While deployment was strong, management noted that US direct lending activity is tied to incumbent relationships rather than M&A-driven primary market, and…
Management expressed strong confidence in the business, citing record fundraising, robust pipelines, and broad-based growth across strategies, while also highlighting strategic initiatives and market opportunities.
Wealth channel redemptions are stabilizing, with core US investor redemptions declining ~35% QoQ; pressure is concentrated in APAC family offices.
Management discussed substantial capital deployment into digital infrastructure, including data center development through Ada Infrastructure, with multiple projects and about one gigawatt of compute, and strong pipelines. They also highlighted significant investments in…
Management noted significant investments in technology and AI are set to improve efficiencies and enhance investment capabilities, leveraging proprietary data and increasing team capacity. They are seeing benefits in capacity and margin improvement and expect value from harnessing proprietary data for better decision-making.
Pathfinder 3 raised $8.5 billion, above $6.5 billion target. Management expressed strong confidence in the business, citing record fundraising, robust pipelines, and broad-based growth across strategies, while also highlighting strategic initiatives and market opportunities.
Management discussed substantial capital deployment into digital infrastructure, including data center development through Ada Infrastructure, with multiple projects and about one gigawatt of compute, and strong pipelines. They also highlighted significant investments in distribution, technology, operations, and product development for the wealth channel.
Management expressed strong confidence in the business, citing record fundraising, robust pipelines, and broad-based growth across strategies, while also highlighting strategic initiatives and market opportunities.
“redemption requests totaled only approximately 2.5% of NAV and declined approximately 35% compared to the prior quarter... redemption requests primarily coming from a small number of non-US family offices and smaller institutions.”
“We deployed approximately $12.4 billion gross committed during the quarter... our incumbent bonds, which represented 75% of our Q2 deployment.”
“Our ADA team... is currently executing on seven large data center campuses, representing 22 individual data center investments with approximately one gigawatt of compute.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 Q3 | $10 | $10 | GUIDED |
Management references their own BDC, ARCC, to validate deployment activity building in US direct lending, indicating organic growth for their own vehicle.
“talking about activity really building towards the end of 2Q and into 3Q. That said, sponsor M&A remains fairly subdued based on what we see in the public data.”
Good morning, Mike and Jarrod, and thanks for taking my question. So I wanted to double-click into the U.S. direct lending outlook. Despite more tepid activity in the quarter, you struck a more constructive tone on U.S. direct lending, which is consistent with what Corda actually said on the ARCC call. talking about activity really building towards the end of 2Q and into 3Q. That said, sponsor M&A remains fairly subdued based on what we see in the public data. I just want to get a better sense as to what you're hearing from sponsor clients regarding the appetite to transact, and how does the pace of deployment that you envisage based on the pipeline inform expectations for management fee growth in the back half?
The firm's digital infrastructure platform, ADA Infrastructure, is not just an investor but a vertically integrated developer, owning the development process from power procurement to construction, with ~1GW under construction. — As Ares vertically integrates into power and construction, it will likely drive a more efficient build-out, impacting power suppliers and equipment manufacturers who rely on such developers.
Wealth channel redemption pressure is specifically concentrated in APAC family offices and small institutions, with core US investor redemptions declining ~35% QoQ, suggesting the market's fear of sustained outflows is overblown and the channel is stabilizing faster than expected.