Key Highlights

  • After-tax realized income of USD 1.26 per share rose 6% and edged past the consensus estimate of USD 1.25.
  • Revenue of USD 1.43 billion exceeded the consensus estimate of USD 1.24 billion but fell 13.5% from USD 1.66 billion.
  • Fee related earnings rose 11% to USD 524.2 million, with a margin of 42.5% compared with 41.4% a year earlier.
  • Assets under management reached USD 690.6 billion, up 16%, after USD 31.0 billion of gross capital raised in the quarter.

Ares Management Corporation (NYSE:ARES) reported third quarter 2026 after-tax realized income of USD 1.26 per share of Class A and non-voting common stock, a non-GAAP measure that compares with a consensus estimate of USD 1.25 and USD 1.19 a year earlier. GAAP basic and diluted earnings per share were USD 0.21. GAAP net income attributable to the company was USD 85.3 million, down from USD 288.9 million in the prior year quarter.

Total GAAP revenues were USD 1.43 billion, above a consensus estimate of USD 1.24 billion but below USD 1.66 billion a year earlier, as carried interest allocations dropped to USD 161.7 million from USD 464.7 million. Management fees offset part of that decline, rising to USD 1.06 billion from USD 971.8 million.

Fee Earnings, Realized Income and Platform Growth

Fee related earnings were USD 524.2 million, up from USD 471.2 million, and realized income before taxes was USD 490.1 million against USD 455.5 million. After-tax realized income totaled USD 449.6 million, up 6%. Nine month after-tax realized income reached USD 3.79 per share, up from USD 3.31. Fee related performance revenues were USD 78.8 million, and the effective management fee rate was 0.99%.

Assets under management climbed to USD 690.6 billion, and fee paying assets rose 13% to USD 416.4 billion. The firm raised USD 31.0 billion of gross capital commitments with net inflows of USD 28.6 billion, and Chief Executive Officer Michael Arougheti said more than half of inflows came from outside the Credit Group. Capital deployment totaled USD 34.8 billion, including USD 18.4 billion from drawdown funds. Available capital stood at USD 173.8 billion.

Merger, Dividends and Management Commentary

On October 26, 2026, Ares Capital Corporation agreed to acquire MidCap Financial Investment Corporation in a stock-and-cash transaction with a total enterprise value of about USD 2.6 billion, with a subsidiary of the company providing the cash portion. The board declared a quarterly dividend of USD 1.35 per share of Class A and non-voting common stock, payable December 31, 2026 to holders of record on December 17, 2026. A dividend of USD 0.84375 per Series B mandatory convertible preferred share is payable January 1, 2027.

Mr. Arougheti said the company projects another record year of fundraising, with visibility into a strong fourth quarter driven by institutional and wealth channels. The chief financial officer said year to date results and improved fourth quarter deployment support meeting or exceeding its key 2026 financial objectives, and pointed to capital already raised but not yet earning fees as a source of management fee growth into 2027 and beyond.

Data Points to Follow Into the Fourth Quarter

Fourth quarter deployment is the first item, given that the company cited improved deployment in its remarks following USD 34.8 billion in the third quarter. A second is the pool of fee earning capital still to come, with USD 93.8 billion of AUM not yet paying fees available for future deployment. Carried interest allocations of USD 161.7 million and realized net performance income of USD 11.8 million show how much performance revenue is flowing through. The closing of the MidCap Financial transaction, the December 17 dividend record date and the fee related earnings margin of 42.5% are the other dated or measurable items.