ARES - Ares Management Q4 earnings beat on strong growth in management fees FRE

Ares Management ( NYSE: ARES ) stock gained 2.3% in Thursday premarket trading after the asset manager's Q4 profit topped Wall Street expectations and rose from a year before, as management fees and fee-related earnings climbed despite a slower market environment throughout the year.

For 2023, "we are embarking on a significant fundraising cycle with seven of our top ten largest institutional commingled fund families in the market this year and we are seeing strong initial interest from investors as we seek to continue to generate attractive returns,” said CEO and President Michael Arougheti.

Q4 adjusted EPS of $1.21, exceeding the average analyst estimate of $1.08, accelerated from $0.85 in the year-ago quarter.

Assets under management rose to $352.0B from $341.4B in Q3 and from $305.8B in Q4 2021. The increase was mostly driven by fundraising from U.S. direct lending funds and from its open-end core alternative credit fund.

Funds managed by its Credit Group closed around $8.3B in U.S. direct lending commitments across 50 transactions during the quarter.

Total gross invested capital was $21.8B compared with $31.5B in the year-earlier period.

Management fees of $590.08M for the quarter ended Dec. 31, 2022, versus $475.23M for the quarter ended Dec. 31, 2021.

Fee-related earnings was $335.74M, up from $253.33M in Q4 2021. FRE margin of 39.9% vs. 39.7% in Q4 2021.

Conference call at 12:00 p.m. ET.

Earlier, Ares Management hiked its quarterly dividend by 26% to $0.77 per share.

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