Alternative asset manager Ares Management (NYSE: ARES) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 25.6% year on year to $1.28 billion. Its non-GAAP profit of $1.29 per share was 1.4% above analysts’ consensus estimates.

Is now the time to buy ARES? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Ares Management delivered a quarter that met Wall Street’s revenue expectations and modestly exceeded consensus non-GAAP earnings per share for Q2, prompting a positive market response. Management attributed the performance to strong global fundraising, with CEO Michael Arougheti highlighting a record $36 billion raised across diverse strategies and approximately 17% year-over-year growth in both assets under management and fee-paying assets. The breadth of institutional investor engagement and expansion into real assets, credit, and wealth management were cited as key contributors.

Looking ahead, management emphasized continued confidence in the firm’s ability to drive durable growth through its diversified platform. CEO Michael Arougheti pointed to robust pipelines in direct lending, infrastructure, and digital assets, while highlighting strategic investments in technology and AI to enhance operational efficiency. CFO Jarrod Phillips noted that upcoming product launches and integration of recent acquisitions are expected to support margin expansion, though ongoing investments in team capacity and distribution could temper near-term profitability. Management described the outlook as supported by a record level of available capital and a growing base of long-duration funds.

Key Insights from Management’s Remarks

Ares Management’s leadership attributed Q2’s performance to record fundraising, strong deployment momentum, and platform diversification, while noting margin pressures from increased operating expenses and ongoing investments.

• Record fundraising momentum: Management reported that Q2 marked the highest fundraising quarter in the company’s history, raising approximately $36 billion across 90 funds and vehicles. Notably, 70% of capital raised was outside the four largest credit fund families, signaling increasing diversification.
• Growing institutional demand: CEO Michael Arougheti explained that institutional investors are accelerating allocations to private credit and alternative assets, with institutions now accounting for about 75% of overall assets under management. The firm’s “scale, performance, and breadth of capabilities” were cited as differentiators in a consolidating market.
• Platform diversification benefits: The quarter saw significant contributions from asset-based finance, digital infrastructure, real estate, and secondaries, reducing dependence on the core direct lending business. The Ada Infrastructure team executed on seven large data center campuses, and the Japan industrial development fund neared its hard cap.
• Margin compression factors: Operating margin declined year-over-year due to elevated general and administrative expenses, partly tied to the firm’s biennial global meeting and ongoing investments in technology, distribution, and front-office capacity.
• Wealth management and product expansion: The wealth channel grew over 25% annualized, with strong inflows into core infrastructure and continued product expansion, including interval fund structures for mass affluent investors. Management is developing new offerings tailored to different geographies and investment needs.

Drivers of Future Performance

Ares Management’s forward outlook is shaped by robust capital pipelines, anticipated deployment acceleration, and margin expansion efforts, balanced by ongoing investments in growth and technology.

• Deployment acceleration outlook: Management expects deployment to increase across direct lending, infrastructure, and real estate as sponsor M&A activity builds and pipelines reach record levels. The U.S. and Europe are both cited as areas with strengthening transaction activity, supporting future fee revenue.
• Margin improvement and reinvestment: CFO Jarrod Phillips noted confidence in margin expansion in the second half of the year as one-off expenses subside and new products contribute to revenue. However, ongoing investments in technology, AI, and team growth will continue, as management prioritizes long-term earnings growth over near-term margin maximization.
• Product and market expansion: Strategic priorities include scaling digital infrastructure, expanding wealth management offerings, and launching new fund structures. Management also sees insurance asset management as a key long-term growth area, with integration efforts in recent acquisitions expected to deliver both revenue and expense synergies.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will watch (1) the pace of deployment in direct lending and infrastructure as sponsor M&A and digital projects accelerate, (2) signals of operating margin stabilization amid ongoing investments and expense normalization, and (3) the rollout and adoption of new wealth management products targeting mass affluent and global investors. Execution on recent acquisitions and integration of technology initiatives will also serve as key indicators of strategic progress.

Ares currently trades at $126.90, up from $124.12 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

High Quality Stocks for All Market Conditions

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.