Ares Management reported strong Q1 2026 results, with record fundraising and management fees exceeding $1 billion for the first time. Management expressed high confidence in growth despite market volatility, highlighting its dry powder and a record deployment pipeline. AUM grew 18% YoY to $644B; fee-paying AUM grew 19% to $400B.
Ares Management reported strong Q1 2026 results, with record fundraising and management fees exceeding $1 billion for the first time. Management expressed high confidence in growth despite market volatility, highlighting its dry powder and a record deployment pipeline. AUM grew 18% YoY to $644B; fee-paying AUM grew 19% to $400B.
Management expressed confidence in the strength of the platform, record fundraising, and ability to grow through market dislocations, citing strong performance and a robust pipeline.
Management addressed concerns about AI disruption to their software portfolio, stating an independent consultant's study concluded 86% of their software-oriented portfolio has low risk of AI disruption, with high risk representing less than 1% of total firm-wide AUM. They also…
Record first-quarter fundraising of $30 billion gross capital. Management expressed confidence in the strength of the platform, record fundraising, and ability to grow through market dislocations, citing strong performance and a robust pipeline.
Record first-quarter fundraising of $30 billion gross capital. Management expressed confidence in the strength of the platform, record fundraising, and ability to grow through market dislocations, citing strong performance and a robust pipeline.
Management addressed concerns about AI disruption to their software portfolio, stating an independent consultant's study concluded 86% of their software-oriented portfolio has low risk of AI disruption, with high risk representing less than 1% of total firm-wide AUM. They also highlighted AI-driven demand in digital infrastructure and data centers, with a multi-trillion-dollar market opportunity.
Record first-quarter fundraising of $30 billion gross capital. Management expressed confidence in the strength of the platform, record fundraising, and ability to grow through market dislocations, citing strong performance and a robust pipeline.
Management did not discuss Ares' own capital expenditure plans directly, but highlighted significant investment opportunities in data centers and digital infrastructure, citing a multi-decade supply-demand imbalance and a third-party market opportunity of around $900 billion. They also mentioned the successful IPO of X Energy, a small modular nuclear reactor company, which reflects their investmen
Management expressed confidence in the strength of the platform, record fundraising, and ability to grow through market dislocations, citing strong performance and a robust pipeline.
“The transaction market environment for U.S. direct lending was slower in the first quarter as industry-wide deal count and middle market M&A declined by 41% in Q126 versus Q125 due to impacts from the Iran war”
“we've tracked a basket of companies focused on core operational software... their loans have traded down 2% on average year-to-date to 98.99, versus another basket of software companies primarily focused on content generation... their loan…”
“The study graded each company on a spectrum based of risk characteristics and concluded that our software-oriented portfolio is very well positioned with 86% of the portfolio with low risk of potential AI disruption.”
“for which we raised about $2.5 billion last summer for some of the initial assets in the Japanese market, and currently going out with a broader fundraise to address not only the seed assets that we have in-house, but the significant pipel…”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| Capex | FY2026 | $125B | $125B | MAINTAINED |
| Free cash flow | FY2026 | $125B | $125B | MAINTAINED |
| Free cash flow | FY2026 | $125B | $125B | MAINTAINED |
| Op margin | FY2026 | 0%–1.5% | 0.75% | MAINTAINED |
The U.S. middle market M&A deal count declined 41% year-over-year in Q1 2026, but ARES notes a recent pickup in activity over the past few weeks.
… to be minimal. Any deployment that would have gone to these non-traded vehicles will likely be taken up by other traded and institutional funds and SMAs with limited to no impact to our current year profitability. On the investing side, overall deployment activity increased modestly compared to the first quarter of 2025, driven by real estate, alternative credit, European direct lending, and private equity. The transaction market environment for U.S. direct lending was slower in the first quarter as industry-wide deal count and middle market M&A declined by 41% in Q126 versus Q125 due to impacts from the Iran war and changing inflation and rate expectations. During slower periods, we often gained considerable market share due to our certainty of capital and broad sourcing capabilities, and the first quarter was no exception. Over the past several weeks, we're beginning to see a pickup in new U.S. direct lending transaction activity as market participants adjust to changing market conditions. As Jared will discuss later in the call, our investment portfolios are performing well and credit fundamentals remain positive. Of course, the broader market will see defaults, which will …
The software lending market is showing a sharp bifurcation: 'core operational software' loans are trading at 98.99, while 'content generation' software loans have fallen 24% to below 65.
A top-tier consulting firm reviewed ARES's software portfolio and concluded that 86% of it has low AI disruption risk, with only 1% at high risk.
… this week, we engaged one of the top three global management consulting firms to supplement our own internal analysis of our software-oriented portfolio. They conducted a nine-week independent and detailed review of the potential forward-looking AI risk in our software-oriented portfolio companies, and the study also included our relatively lower software exposure in our European direct lending portfolio. The study graded each company on a spectrum based of risk characteristics and concluded that our software-oriented portfolio is very well positioned with 86% of the portfolio with low risk of potential AI disruption. Approximately 13% of the portfolio was classified as medium risk. These companies are performing well today but have a greater need and an opportunity to adapt to AI risks in their business and and only 1% of the portfolio was categorized as having high risk of AI disruption. If the consultant's framework, which aligns with our own rigorous underwriting views, proves directionally correct, the portion of our software exposure that is medium to high risk represents less than 2% of our U.S. and European direct lending AUM and well under 1% of our total firm-wide …
ARES raised $2.5 billion for seed projects from its Ada Infrastructure platform last summer and is now raising a dedicated global data center equity fund.
Hey, good afternoon. Could you go into a little bit more detail in your data center business? Do you have data center AUM outside the digital infrastructure business? And what do you think the total market size could be for data centers in the intermediate term? Thanks.
… where he's spending a significant amount of time, obviously, given the opportunity set there. And I can come back and answer in color. So maybe to give a little bit of background, we've been investing in the digital space broadly for the past 10 or 15 years, broadly defined, and that's everything from towers to networks to data centers themselves. We've been doing it across several different areas within the firm. That includes real estate, infrastructure, special situations, asset-backed. as well as our direct lending business and secondaries, both real estate and infrastructure. So this has been a longstanding investment focus for us. We have over $10 billion historically in the space. One of the exciting developments with the GCP acquisition last year was adding that ADA digital development capability that Mike mentioned, which came already with a very, very attractive seed portfolio for which we raised about $2.5 billion last summer for some of the initial assets in the Japanese market, and currently going out with a broader fundraise to address not only the seed assets that we have in-house, but the significant pipeline behind it. So, the answer to your question is yes, we have it elsewhere, but adding this new development capability is just very powerful for us in the future. In terms of the market size, it is absolutely massive. It is a multi-trillion-dollar market opportunity. Some of that will be in the domain of the hyperscalers themselves. However, we've sized the third-party market opportunity at around $900 billion. for which when you look at the supply-demand imbalance in terms of capital being raised to address it, it's meaningful. So we are really excited about that market opportunity ahead. Certainly, you know, the interest in what we're doing in the market, very exciting. I would also add one other overlay here, and I think people are beginning to make this part of the conversation. When you talk about data centers, it's not just data centers, it's GPUs, it's power and energy. We are one of the leaders also in the renewable energy and energy transition space. You saw what we were able to do with our Xenergy IPO. The digital infrastructure opportunity here is pulling together all of these different teams at scale to address the market opportunity. We obviously have a large infrastructure debt business as well where we are one of the larger …