Ares Estimates Third-Quarter Realized Performance Income at About $10 Million
Key Facts
Ares Management estimated net realized performance income of about $10 million for the quarter ended September 30, 2026, compared with $9 million in the corresponding period of 2025, according to a company filing with the U.S. Securities and Exchange Commission. The company reported its full third-quarter results on October 29, showing net income attributable to Ares of $85.3 million and basic and diluted earnings per share of $0.21. Those two figures differ from the preliminary estimate of net realized performance income in the filing. Ares had said actual results could differ, possibly materially, from that estimate. It also said net realized performance income comprises realized income and is a measure management uses to evaluate the business, rather than a measure prepared in accordance with generally accepted accounting principles. The company was unable to reconcile it with those principles before completing the financial close.
Among other operating measures, third-quarter after-tax realized income was $449.6 million, or $1.26 per share, while fee-related earnings reached $524.2 million. These measures differ from net income and basic and diluted earnings per share reported under generally accepted accounting principles. After-tax realized income was $467.6 million, or $1.29 per share, in the second quarter, while fee-related earnings were $491.1 million. Also in the second quarter, net income attributable to Ares was $150.6 million, and basic and diluted earnings per share were $0.49. The comparison between the two quarters shows divergent movements in these measures, with after-tax realized income per share declining while fee-related earnings rose; each has a different definition in the company's presentation of its results.
The figures reflect the asset base managed by Ares: assets under management stood at $671.3 billion on June 30, 2026, including $409.9 billion in fee-generating assets. During the second quarter, the company raised $36.4 billion, while net capital flows totaled $34.4 billion. Ares described the period as “another record quarter for fundraising,” while emphasizing that total capital raised is not the same as net flows. Chief Executive Michael Arougheti also said clients “continue to reward us for the strong and consistent performance of our funds across our strategies.” The scale of assets and flows provides context for the company's activity before the third quarter, but on its own does not determine its revenue or earnings movements in that quarter.
In the second quarter, total revenue rose to $1,428,610 thousand from $1,350,128 thousand in the corresponding quarter of 2025, an increase of $78,482 thousand, or 6%. Fee-related earnings then were $491.1 million, alongside after-tax realized income of $467.6 million. Net income under generally accepted accounting principles was $150.6 million. These figures represent different sources and measures of the asset manager's performance, from revenue to realized income and fee-related earnings. In the third-quarter results, fee-related earnings rose to $524.2 million, while net income was $85.3 million, underscoring the importance of reading each item according to its definition and period.
Arougheti said Ares raised more than $31 billion in gross capital commitments in the third quarter, with more than half of flows coming from outside the credit group. He added that the company invested $35 billion across its diverse strategies. Ares expects “another record year for fundraising,” he said, with visibility into a strong fourth quarter. Chief Financial Officer Jarrod Phillips said the company's year-to-date performance and expected improvement in capital deployment in the fourth quarter put it in a position to achieve or exceed its key financial targets for 2026. Management said capital raised that has not yet begun generating fees provides visibility into management fee and earnings growth in 2027 and beyond.
Ares shares closed at $123.82 on October 28, the eve of the results announcement. The company reported third-quarter results on October 29, after the conference call had been rescheduled to 9:00 a.m. Eastern Time that day. A replay of the call is available through November 29, 2026. Subsequent announced dates include Ares' participation in the “BMO 2026 Financials Conference” on November 10. These events follow the release of full results for the quarter ended September 30.