Ares’ record $30 billion fundraising eases private credit ‘doomsday’ fears

By Arasu Kannagi Basil and Pritam Biswas

May 1 (Reuters) – Ares Management, one of the biggest names in private credit, reported record first-quarter fundraising of about $30 billion on Friday, a sign that investor appetite for the asset class continues to remain strong.

The multi-trillion-dollar private credit sector has found itself in the middle of a barrage of negative headlines in recent months, drawing intense scrutiny to the industry.

While fundraising in the private wealth channel has slowed across the industry, analysts expect overall fundraising to be strong for Ares given its institutional strength.

“We are on track for another record year of fundraising as we continue to see broad-based investor demand across our platform. We also continue to see strong fundamental performance across our investment portfolios despite the volatile market environment,” CEO Michael Arougheti said in a statement.

Over the years, Ares has broadened its investor base, with the number of direct institutional clients surging about 50% from 2022 to 2025.

Institutional investors such as pension funds typically commit money for longer periods. They also tend to be more patient and predictable compared to retail investors during periods of volatility.

“Ares results highlight the strength of its franchise which should drive a positive reaction in the shares given resilient results despite continued negative sentiment around private credit,” RBC analyst Bart Dziarski said.

Shares of the company rose 2% in light premarket trading. The stock has slipped 27.4% so far this year.

While Ares invests across asset classes such as real estate, private equity, and infrastructure, the alternative asset manager is best known for its strong presence in the credit landscape.

Its credit segment generated $20.4 billion in capital in the quarter, while the real assets division drew $6.2 billion.

Assets under management jumped 18% to $644.3 billion from a year earlier. Ares had set a target of surpassing $750 billion by 2028.

Ares completed the acquisition of London-based systematic fixed income manager BlueCove in February, boosting its assets under management by $5.5 billion.

RECORD INVESTMENT PIPELINE

Ares has a record investment pipeline, finance chief Jarrod Phillips said, adding that it was well-positioned to invest capital opportunistically and meet its financial targets for 2026.

The firm ended the quarter with $158.1 billion in uninvested capital, up 11% from a year ago.

Ares deployed $32.3 billion of capital in the quarter, most of it dedicated to U.S. and European direct lending, real estate and alternative credit strategies.

As it invests available capital, Ares starts earning fees on the AUM, further boosting profit.

A huge chunk of Ares’ earnings comes from the fees its earns on assets it manages, providing a more stable and predictable stream of income even when markets are turbulent.

Fee-related earnings jumped 26% to $464.4 million in the quarter from a year ago.

After-tax realized income was $452.4 million, or $1.24 per share, in the three months ended March 31, compared with $381.4 million, or $1.09 per share, a year earlier.

(Reporting by Arasu Kannagi Basil and Pritam Biswas in Bengaluru; Editing by Arun Koyyur)