Ares Management (ARES) 11 Feb 212020 Q4 Earnings call transcript

Good day and welcome to Ares Management Corporation's Fourth Quarter and Year End 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode.

As a reminder, this conference call is being recorded on Thursday February 11, 2021. I will now turn the call over to Carl Drake, Head of Public Company Investor Relations for Ares Management. Please go ahead.

you XXXX us year thank fourth for and and quarter end afternoon for today joining our Good conference call. by our and today and joined Michael Chief our I'm Executive Michael McFerran, Financial Chief Chief Officer Operating Officer. Arougheti, Officer

also and our European Graves, In Equity available deVeer, Private Co-Head be Group; Benjamin, of Group; Credit Credit Real our Group; Private Head addition, our our Co-Chairman of question-and-answer of Blair Estate the Kipp of session. Rosenthal, Bill Bennett will Jacobson, of Co-Head Head Group; for Equity Scott

Before that those we subject call statements remind risk begin, to I want our in are identified comments contain to you in and including this made filings. factors during uncertainties, our risks and SEC forward-looking

undertake forward-looking is any no obligation results actual future guarantee Our to statements. past performance also we such note not that a results. of could differ and Please update materially

we call, in Principles. considered this measures, be non-GAAP certain not substitute During measures should a from refer which Accepted Accounting will as with Generally for isolation financial in to or accordance prepared

be our March an the XX, of any of to an addition, interest fees constitutes Part of on quarter share, Fund. dividend refer of Please Investor our management per announced an to solicitation comparable sell note Please a morning offer section the fees. quarter available dividend on year. quarter website include our we record The our measures. same reconciliations in of Ares XXXX call presentation first $X.XX this to purchase note of for offer increase for March measures the will last please of most XXXX. fourth earnings dividend to I full to that and Resources ARCC an on the paid GAAP representing year XX.X% In XX, holders XXXX our declared on directly that that This or common nothing we

is per share payable to XXXX of December A holders our on also on Series of dividend which XX, declared quarterly preferred record preferred $XX.XX We March XXXX. XX,

Arougheti, some financial over call Now, I with Michael turn and the yearend to will who start will and business highlights. quarterly

despite I exceptional concluding Carl, is wish reported Ares, our afternoon that hope fourth results we you Thanks and very and for This well. Great. strong XX%. metric year We brought morning, quarter good healthy market with a for everybody. everyone challenging records the economic conditions related by in on fee global and growth AUM year every nearly both the and exceeding financial full earnings pandemic. in achieved

$XX in year, time driven nearly billion quarter fourth was and for growth the fund AUM by billion both $XX the raising Our of all dollars gross records.

As Ares investors more returns we their to as to throughout market of our continue continue entrust to to ability demonstrate capital generate strong and cycles.

growth earnings growth strong driven with new economies accomplish while for platforms expansion related new of still this investing line fee products, scale. from of full-year and margin for top the XX% for strategies. the by through were and the fourth new were future XX% growth Our incubation quarter We coupled to substantially able

XXX over to throughout quarter, of Our a FRE the record in an points basis expanded fourth XXXX XX% improvement year-over-year. margins

health crisis, tailwind secular growth the strong our and economic our a demonstrates Our supporting of face business. durability highlights strong model in global resiliency the and business of and the

to expect continue is we secular is view, market that by alternative management our less elevated share the trend to We earnings view and is with earnings. of capital. fact also based growth fees markets a model bringing current income and world total believe was investors as foreseeable it volatility. and trade This investing recurring means rates of valuations base a our interest The for in of good from derived and in fee of in for markets. earn the for that represented investors. further or In centric management we've illustrated the fee to Our the as demonstrated our on represented there XX% earnings of resiliency value related fee opportunity premium very volatility continue long-term that income business consistent fees are even capital investing volatile seen significant a in gains and low generates and our our as higher future. as in earnings industry our assets a the to growing we XX% XX% returns nearly are from nearly management our and permanent Ares long-term private XXXX realized for In

eight breadth We distinct these unprecedented in took a already raising new in in leading mentioned and results, open for on XXXX, our permanent large for our both flagship and executed than funds record XX billion demand investors, EURX.X during to fundraising. strategies ongoing I efforts. surpassing target demonstrating of billion of raising time billion, capital and previous $XX our To scale our of we're funds annual first held vehicles, organic fund year including European lending of for on year our direct EURX.X, fundraising billion, EURX of our $XX we closings a more the XX% of fourth ahead fund funds. QX, In had after total in of of than effectively nearly we XXX commingled as and EURX.X institutional XXXX predecessor little As addition billion. the flagship diversification managed closed billion. our record and accounts, flagship We months achieve we ahead We're in fund commitments saw commitments, ended we in more CLO's capital a launch.

cap on lending close our fund, EURXX billion the hard junior up We're total expect second quarter. during capital available forward, also for Going EURXX to the the of to anticipated facilities. on of our $X.X holding billion fourth our reach credit capital with fund, we including direct first way billion or well

respect to than and reached of to off billion $X.X deployment. has Our now with sixth more corporate is private equity start great fund commitments a

to the half about $X.X committed XXXX investments in points. our in billion the attractive and largely traditional behalf approximately new investments corporate with distressed investments sixth fund, of PE crisis at on midst half entry we in executed in Specifically, of

We and funds $X.X third continue as third our value EURXXX two million its fund to flagship expect EURX fund $X.X than our opportunistic the billion add its we of billion, estate target. well, at reaching target with more real year on U.S. raise way and to to real larger dollar estate nearly exceed billion our European end

demonstrated opportunities builders. ASOF fund this our mid X our $X.X where in billion is billion or XXXX, lines, inaugural product raises newer of led teams equity cap in against $X closed groups one good our we special hard example which compared we favorably During A business of also target. our proven at successful XXXX, by of private

and opportunities and approximately X in distressed team committed investing in was XX% special ASOF special started XXXX, situation very is and now the investments. invested Our active ASOF during X other pandemic.

of billion on at billion flagship a touch hit this target be recently stands successor to fund, of I'll later In in which $X of now now our larger the credit, with ASOF strategy, Alternative the we hard an fund year. As fund's we its moment, $X.X a to expect strong and demonstrates and performance efficacy expect launched this cap $X.X increased launched over initial shortly. billion inaugural

For and total in billion, raised team the the $X.X across alternative group billion funds. credit year in total, $X.X the all private raised equity

strategies alternative into special opportunities businesses We and expect even the us for grow credit going significant to more forward.

expect be billion. of record we strong forward, opportunity of $XX the year XXXX Looking exceed with to to another fundraising our XXXX

than managed as accounts, a and to existing across or our new funds, sports fundraising a and dozen a other fund targeting and more credit. evergreen CLO's alternative permanent such includes funds including media focused across inaugural more ongoing income entertainment on a each addition pipeline fund group, our strategies flagship new In vehicles, capital and new and few $Xbillion our

four in market, times we're more compared targeting number billion to a ago. diversified years the more with commingled of Importantly, more funds the much or $X five than

continue platform We managed us have robust in and have breadth funds being mode, permanent a fundraising in be of end evolved model The and platform. fundraising capital diversity to today the open scale, also more that old to our of versus more larger strategic account continuous vehicles cycle.

of going year-over-year than expect the totals result exhibit fundraising all past. forward, less I'd in this variability a to annual our As

XXXX of and having capital, importance incumbent flexible relationship the investment. underscored large think networks, extensive differentiated also positions I to drive

quarter, with attractive record nearly including matched than transaction were $X market of approximately in private QX relationships, comparatively deep levels drawdown said, the we XXXX invested $XX important levels, funds, capital more With making billion, the billion in our and alone. expertise solutions, in even XXXX in fourth flexible deployment investments. That our XXXX, $XX slow exception industry billion as more sourcing

over funded credit market had busiest about and were incumbent deploying our billion than led activities XXX For transactions strategies across direct the where nearly year, companies. by in of team billion trading our lending companies ever U.S. platforms, we alternative European $X.X $X year The our liquid more securities. its portfolio middle in and with half billion supporting its deployment $XX.X

between group had of equity, team of billion situation its of split pandemic about investments and year active $X.X very trading XXXX, corporate equity entry made height special and private and billion with the in points. with global during our $XX funds. most the also private in credit new traditional invested from billion the investments, distressed at equally attractive most strategies, Within and liquid $X Our securities deployment tactical it

and classes, Our also invested U.S. billion the also the across well housing. solid in high $X in dislocation, alternative within in and the and $X.X a rental team billion billion markets. sectors its of most footprint. as we $X.X and strategies deployed more Europe to market than exposure of multifamily both estate other its conviction notably student exits volatility, asset realizations, private both estate real special and had single the situation advantage equity, increased Asia Despite their public on industrial family where focused we Pacific Ares primarily took real SSG lending year of senior experienced as private such and as

conducive with Mytheresa, successful company's Year. European The to we Floor performance leading capitalize strong our selected very completed Company, shareholders. realized of the ACOF strong public with in public luxury has portfolio public and opportunities were the a in which XXXX. deliver home trend the enabled our success markets growing companies since AZEK On together the across remained with markets went & and Decor demand. New very exits stock appreciation attractive favorably In e-commerce a The to additional us of of our portfolio, companies on to to against responded this the public platform able mid our the state year, first strategies, these debut. IPO into portion the a quarter public monetize private income company, side, portfolio The

of able the also we're were for AZEK With of the Acquisition monetize up January. the to its be in IPO active stack currently Company to last our we billion strong And the since last mark Corporation, Ares pleased was in in reception finally, $X holdings which to its a week. five first XX% stacks, debut market one with reach portion year, our upsized market

conditions, of XXXX, continued for targeted advantages Ares specs line in fourth highlight stacks we both platform. we that to of raise Assuming future. fund the a is hope of this first favorable market would and our product strong many performance the and be a view, for the our number and that quarter In the our new expect generalist

for and downturn has credit X% the minimal high loss X% X% and going credit our XX% Despite investors loans major year strategies. returns with benchmarks Our to returns credit the from outperforming respective strong returns for Gross yield, economic ranged in syndicated positive a delivered XX% respectively. through for rates. were to strategy severe by our X% across

lending returns the Capital of net direct were generated for year. X%, Ares European Our and X% strong than more returns

on a Opportunities greater for Our first in return in were our year XXXX, as invested meaningfully team since the XXXX end. than returns of the was with the XX% year during gross the our the level XX% fun at market a Group Special half PE within standout and particularly inception ending volatility, gross basis fund year

our within the of up, the returns composite X.X% Our fourth quarter strongly with ending in corporate equity return a XX%. under gross appreciated ACOF private just year

in our Our group public equity generated down, and a and respectively. the X% year the and U.S. real and composites materially European gross XX% estate real estate indices XX% the year respectively, outperformed were X% public market U.S. European of RIET's where private equity returns indices for

focus significant strategic in estate asset outperformance best retail to real for two real Our was sectors. our estate performing due both XXXX, underweights and in the on multifamily industrial the [ph] and hospitality classes with

roll areas. Pacific. of Both acquisition collaborating are on start leadership believe of Re promising end out at affiliate on products and half and significant in Aspida our our growth this year. sixth We longer [ph] in was to new opportunities second our products Ares prospects. year. we the talented growth SSG in in We in SSG year our sits insurance of with for the place highly plans strategic our And we F&G fund launch and Ares both businesses the the great partner SMBC expects developing these strategic to off closed Asia and for closed special focus certain the they're strategic sector a Another Asia the initiatives. flagship for as in are term new with across in insurance identified actively July strategic its

credit well in billion AUM, in products out reinsurance to insurance we us non-investment grade we're With insurance help Aspida's distribution Our speed advantages and by building competitive it Ares the unit positioned retiree that the leading is up focused business is sector and infrastructure Insurance Solutions also the our more onshore relationships. the with on to distinct investing scale market. than to offer our be believe $XXX growth platform, of leveraging supporting

XXX the to Lastly, us platforms our net globe helps scale our becomes with standpoint, across across sourcing it of talent platform direct and we This leading that the enhance investors. we from our in a so continue maintain as XXXX. serve valuable addition personnel employees

Ares. Exelon ESG, April, make Two join attract both new by place highlight in certification we an who who of our in of to As great Equality score Head on fall & we're from non-investing investing are Diversity Heltzer, the employees, to new joined Ares professionals Corporate our in achieve to XXXX, our we than and be Adam industry our very continue areas want years and grow, of critically additions help XXXX, XXX as in participating DE&I the Indhira recognized ILPA's across their active including served communities and impact also strides upon achieved talented we on the and to in the Diversity, non-investment our and Head Diversity to our to forefront signatory build on XX January stakeholders, more Index. come. will Initiative we've we year, Roll. a volunteers XXXX, and a expect are month. we made and XXX% employee Action already Inclusion, In ESG over events. the important years, this Inclusion of with HRC we several in Equity DEI great also who last Honor We're to Indhira the work last to at XXXX nonprofit the in Arrington changing joined in as in us where our in us founding that and

me and through financial Let to turn Mike the walk results, now McFerran quarter call to Mike? fourth full the over year

full I quarter stand the and provide an the will then the year, midway I hope on results we of you quarter you, and well. our nearly a will review of where through Thank for update everyone, Mike. Hello first safe XXXX. start all fourth are of with I

and the AUM going our category trajectory raising I not our details, quarter fourth scale, with we overall capital our every also AUM, powder FRE, fees. reflect this not record financial into fee-paying but strong only results in dry they reflect earning that highlight Before growth greater business, AUM the as yet of broke records, quarter nearly will

over our across AUM Our our We was record fastest fee-paying of likewise the year, FRE, AUM with realizations and realized ended businesses. rate both reflecting growth income a strong, and decade. our in strong

XXXX. third or of from from XX% fourth quarter of of the or $XXX.X increase of $XXX.X the year quarter an approximately December the ended an for million XXXX, $XX.X XXXX, FRE XXXX. million increase million, from of increase XX, quarter totaled $XX.X fourth and XX% FRE For the an million, totaled XX%

Our This FRE our approximately compared year the year the of ended fees of XX% increase driven year as margin $XXX an December management XXXX. XX, for for FRE margin quarter reflect XXXX. over totaling a to an XX% entire by for basis the the quarter, for year fourth XXX increase full quarter the of of quarter nearly fourth XXXX point full record FRE million, and was XX% and represents and XXXX.

prior quarter. resulted quarter, above year, reflected than the for fee fourth resulted Private million $X.X corporate $X of included management our over of This of the an ARCC six XX% increase billion, quarter capital Management $X.X fourth pent from up For FRE partial assuming fourth the the for contribution I and the which Part of paid higher seasonally and fees average. fees fulfillment million originations strong an $X.X full fees management has XXXX. some record the committed more quarter in ARCC $XX being growth a over about in quarter fourth which other including the demand, totaled also for than during average deployment billion from activation approximately commitment about three approximately Equity Management Fund, of billion. the of

management fifth the X, six from fees for Fund As impact fund. rates predecessor January be Corporate quarter step the on and but basis by a PE will partially management offset Equity fee our result, our a down of full Private Private

closing we continue fees, will of Importantly, fund. six and this increase corporate catch Future LP commitments. management is for moving closes private to target our equity fundraise with a as each up interim

From grew and to compensation quarter expenses, and and full fourth and XX% by year Turning XX%. approximately general respectively. administrative the expenses XXXX

But which XXXX. the full the of faster quarter $XXX.X always our modestly down totaled margin to at from million, is our for continue We and for record fourth quarter. a which income up grow pace quarter supported Our our expenses, fourth year. fourth expansion revenues than third quarter from sharply

the fourth partial $X sale in in portfolio private realizations billion the companies. sale by of driven mainly private or Our two over quarter, group equity generated

private of tax $X to stated. But preferred XXXX. distributions realizations full quarter, all year realized XXXX, over For XX stock per was after Class billion common the down $X we net A share stock fourth as realize the rates of was tax common income to stock taxes, year share XX% Mike with quarter XXXX and effective income of rate had With our of to income, XXXX of stock of touch A and on XXXX. Class fourth for After XX.X% equity $X.XX do of XXXX versus in of rate related earnings effective per $X.XX tax a all X%. tax respect our approximately unrealized shares were full XXXX. I fee converted our A Class tax up want approximately was assuming for

me our XXXX tax to for XXX% While currently common to X% XX% rate annual range X% effective fee for the related these of were X% A is will discussion. numerous the assuming earnings, shares This our of estimate realized brings function we be income, in dividend to range rates tax our and variables, stock. Class to for converted

a A of as our Class related to dividend $X.XX first stock annual declared XX strong for stock As peg common we and quarter share growth prospects, to paid our on share. of $X.XX dividend expected up have board after on increase XXXX dividend reminder, per Accordingly, earnings elected $X share stated. share, our March our per for annual to our XX XX.X% be our we growth XXXX. Carl fee from our per common per to tax Based

third $XXX of to totaled versus quarterly not yearend as end our and increase nearly at XX% of for billion billion related and to quarter, the turn than our compared AUM metrics, $XXX.X I’ll more XXXX. a of the $XXX.X XX% billion Next AUM

$X.X $XX.X was in of growth largely appreciation appreciation, asset the strong Our including driven new AUM quarter fourth and by and billion. growth billion, market of gross commitments capital organic

Re the In addition, fourth during quarter. billion added $X.X F&G acquisition Aspida’s of

$XXX Our year the increase XXXX. approximately of year AUM billion and at XX% XX% XXXX of from totaled end, quarter fee-paying a the third an from end

and new three growth lending, fee-paying and strategies commitments our Our AUM all by deployment alternative special groups. was direct and across in primarily meaningful driven opportunities credit global

long XX% the and of over eligible through $XXX.X X% end the to year, $XX time. sheet, drawn year liquidity term of Despite to our capital a increase billion billion realizations along with yet in deployment, increased potential $X.XXX of shareholders $XX which billion, which is capital the $XXX of on AUM million, with performance $XX fourth to generate an XX%. quarter have ended balance I’d And corporate year increased optimistic AUM, of very at and million. course balance, new We over billion of available a deployed, value run is sits of income our position a With not record our management cash our to address billion or available we The over in billion Our eligible increase available be strong dry moment XX% million future over ended $X.X substantial uninvested, corresponds from appreciation the accrued fee facility. ahead record $XXX was fees rate. management fees, We available growth would increase believe and a and AUM, net incentive billion This in of saw year-over-year nearly quarter represents recognize very our the the our high the our levels and of billion a We capital the increase fourth which over for with Last, amounts this income. like we Year-over-year. place structure. billion amount XXXX. powder, from than by us. at annual to foundation on quarter for that remain no now fees $XX.X and approximately quarter incentive totaling $XX.X net revolving if $XX.X third significant financial continued and the performance between credit with potential next, of on accrued additional end. performance more $XXX uninvested take the to prospects including meaningful

positioned and positioned arise. growth as year the opportunities to well at to pursue strategic has end continued organic liquidity continue support inorganic as when be Our if well of our they to as firm,

on fees to outlook a not back from deployment raised I with of view. call future billion $XX annual management earning The available the over for year in our capital to-date thoughts to yet turning of $XXX over to to are very very are as FRE we strong raise. fundraising. the million. growth of continue be positioned ahead expecting management well mentioned and to earlier, of continue fee drive and financial capital want point another raised ending Mike, corresponding to we in provide And XXXX with year we potential the resulted us our fees Mike years Accordingly, the turn have do to in Before AUM

anticipate for and match and rate remarks. to than I and want ahead, difficult outlook I'll –over-year related for years may fourth FRE we first less be on to the XX% or now future quarters and his years achieve in hand this While be Mike from XX% the of in to a higher we end growth margin guidance do earnings our to prior to fee able concluding record our thoughts generate quarter we call year of run of do XXXX. that year. our expect back XXXX three expect to the reiterate

that thanks, view, model. year We've that said was business is Ares difficult can this XXXX markets. all market perform that environments can business various that outperform Mike. In our validated Great, throughout a always a particularly in weather but

aren't up impacted revenue have long durable fee significant We streams centric volatility. management dated capital that by mark-to-market locked and

grow to markets. We strong access markets liquidity as well us capital through robust as allows challenging that have fundraising and a engine

cycles. considerable against alternative in we long and best is outperformance believe class that We drive term a of information a have consistent through that have trend advantages all I team. backdrop investing the investments. and growth also This

inorganic the markets. consolidating high the And and are products investors low Our with more relevant interest in as new success, organic expanding accounts, our the and of the have seeing of retail volatility opportunities. and for strong traded very managers. excited insurance. funds, with among Year, and asset larger relationships trusted up opening into be to challenges Heading new client remain growing managed valuations continue dollars rates growth investors our New our by continue dual fewer We're channels within frustrated we to and we strategies, strategic share successor

client base sticky capital of nearly appetite growing XX% performance was of experience. investors XXXX, growth more retail our believe is and a XXXX helped from of that additional with derived have validation of satisfaction investors, In for the their we hundreds their new their existing XXXXs our our institutional products. and than investment clients, Ares with which We fuel best raised of

record growth can investing expansion for our in we're across many competitive opportunities And amounts to XX and from in We're years our capital advantages. XX over scale to future markets our where well available have of XXX investment come in that We we many positioned deploy the over offices than countries. professionals with large geographies. sourcing and we the strategies strategic strategic appropriately standpoint, end highly a exploit prioritizing growth in distinct more can

our our believe been the business we've that Ares respect will firing of PE and credit growth special these and credit some The creation that drive many Our XXXX of businesses our years and Group. of Group, ops and growth shareholders these illustrate Ares to made SSG Estate long We and strategies, including on have these growth cylinders businesses performance performance, investments group, momentum. strategy results of overall value that capital Real ahead. and broadening term our and raising for the strong businesses illustrate in our for areas several in all and alternative with the

support of to dedication of and impressed I proud of just the the building. investors up appreciative of history, during and realize sit we times. doing that the as the by our our open And continue in our to believe we for for we're today. operator, of company how challenging from businesses full With potential deliver here these as am that team, am the I'm for of I of as I and scale any today all us all deeply our I I well want line all positioned hard for time new all stakeholders that, expressing that our work, how questions. at think our that with to I and time I by will end also every grateful growth and have and the your particularly thank prospects they're you for As day

first question will from Siegenthaler come Suisse. Craig today Credit Our with Instructions] [Operator

Thank you, and hope you're healthy and all doing well too. staying

Craig. you, Thank

What SPAC So how forward and on pretty sustainability with and this commentary retail high that seeing start of besides it else trend. SPAC about to very wave? this are a expensive second the a industry? market Michael, thinking of on then Because, of could private investing I way the drive wanted efforts stock you engagement. is part the my pipeline, your the equity And different is the this continuation impacting

bit Sure, little obviously, maturation experienced little a because and similar frenzy launched out ago in of it BDC we business. of XXXX SPAC and it's settling me of a what there bit we was kind frenzy there's then XXXX, of XX reminds when a and the our a interesting, years a when evolution

what time way markets I telling that market ebbed So driving in technologies and we've liquidity clearly issuance some performance seen and you dispersion going think is time, capital into supply/demand the lot and been the when market. in we're new know, over of quite have around the a to for come you SPACs has flowed, the see

in well and actually positioned terms Ares not are go-to-market the that think differentiate, others in I but size, just terms us of to of like strategy.

differentiated of coming, also it of public focused what think but an a relationships, non-sponsored if volume at origination standpoint. the infrastructure we're insights, will where When a to this accomplish, I operational at of opportunity. is lot standpoint, cross track think growing a We from really capital. is look in we're unique to you very a when public the smaller, put that record, market, IR pools to market trying you both you SPAC long So obviously, companies look it's platform bring in going perspective, and

up So think a think need the drivers of been demand, going years, differentiate in to by the retail disadvantaged structure change, that That's consistent I formation concentrated. the see increased else, opportunities two, good number crowded number to the been that or think you'll we're rates markets. quality a Over been a time, from. filling respects, increasingly morph public at in public XX that's one, there's some view look has I I somewhat to we in which evidenced of anytime and think markets but markets we're mortgage begin BDCs experience, trend the start for with capital have I XXXX, to for the from cap been try for the market on, that's is has the potentially been companies obviously sponsorship XX or comment the of now The That, one or private leading see the the investor is of number benefiting performance decline. thing. and and structures public if market to to in you out. companies, to last that the has And anything big institutional similar that it's

appetite to it's So indicative of, I companies the big there's bit seeing they idea we're excess before. access the these innovation little have formation, that didn't market, while and And of think positive. people's access where think capital really that I a a types is of in

terms In seen. to means I what that still be PE, it for remains think of

growth or we the appreciate is our to confidence it's much advantage does companies so is structure great meaningful be a selling go markets And candidate. or companies, franchise, a why we're entity. going in finding origination most makes I companies PE necessarily sitting going people public. opportunity pretty leveraged are execution go to makes that have us. SPAC good want to private what look SPAC a whether buyout we're buying to for execution make alongside not at a is what think does public we're company finding, necessarily And make great that I the What think a not public what private important candidate good which

PE But So all it bit at market candidly, away And venture at this equity amount and out to we as do plenty how see what our chip when and little going bit the franchise, have and of additive least for of also there will we the plays opportunity we're side it think side aggregate a I out. it's think I the away for on that a will should the at and searching look transactions. supplements well. for make just us think capital chip better originator, a opportunity just PE you little do growth

questions. both taking my Great, thanks for

well. Stay Craig. Thanks,

Our Wells comes Harris with next question from Chris Fargo.

Thanks, guys.

release, that So, part comment business of having Can its on mentioned component? their entire guys related, sale were just management call of about you with night AMP business. as they alternatives the are their that earnings the dialogue last Ares, And or earnings that? asset on looking you at

expansion it but just to for private last we well on footprint us. a, Strategy the well. global is situation strong have we as came And Corporate because detail, that react step looking inorganically back a of opportunistically and our to what up Team market capital because the earnings Obviously, markets. obviously very in Sure, comment shows has areas take AMP great I organically. is can't unique call a developed maybe in This

reflect around we transaction that we some entire table about constructive on having think opportunities is the partnership with them is there I are and asset transaction and are, that accurately from the their the for where no that which comments structures management AMP business. company, dialogue

I say can soon more, now, have all folks, that. do to as to we more we're think tell for going we as but obviously that's

can for with management terms? step I like if Okay, Hey, us moving there's least McFerran the can, at what quick in dollar the from outlook of V impact with sounds the it of maybe a for parts lot fee QX, down Michael understanding you help Mike, question ACOF is

Sure.

the ACOF ACOF during prepared I X. quarter, stepped said on down that, in as I V V Jan think turned the remarks

some point ACOF size said, the the have of about committed be, VI would step on there, you're occur. of for the the hitting being quarter as timing ACOF your those impact up again, you catch would based to the I'd back offset V all close parts, closings, that quarter is way full is going fees, emphasize on impact about that paid VI, really have fund, first for to by think a ACOF way closings moving down $X as on volatility million. effective the current closings result future to full incremental get I That you So in of the quarters with those is

to next a when the based be of closings on occur. going is just So lot

So QX, significant. overly percentage in think fees as but noise you a I might see not of overall a little management

Thank you.

Bank with Our next question comes of Mike America. from Carrier

just you're thanks the capital out taking there provide know, the on how Great, and how you given the out higher from of been public on some opportunity just one maybe Can some is active Maybe about differs valuations, context deployment, seeing, how the I lot first for of the questions. the mean, improving set a like where there? some you changing? side, given is maybe and valuations thinking what return credit you're of you've economy, market, the

equity economic Sure. reflecting in fairly a in fundamental markets got both about liquidity It's liquidity quite QX unique. technical talked still and that and so and last detached forward markets that higher the fascinating stimulus high and bit it's into the heading reality our What's bullish a deployment call. earnings earnings, traded a is are economy. on and obviously little unique in environment view the valuations this, the from valuations increased we on debt And is we've

deployments quarter related Real balanced. non-COVID credit we have to special been the you've have. strategies you on us so, Real think market, a way, deployment estate, a issues had private in kind credit, very businesses in alternative our We business, record our cetera. distressed about new stressed in regular bifurcated opportunity opportunities, of unique in and quarter and And Val in et for significant going around, equity, public and of the impacted about private QX, parts real based private versus had Val of then What's this got when about think that number is [ph]. impacted COVID, and [ph], we on, versus really non-COVID what's so also The but

cycles, disproportionate prior very, a deployment as company at we the distress quarter, good see it's depths of unlike active in regular good and the disproportionate way. healthy entry business, kind investing, balanced. distressed our or both, very where mentioned fourth example, into had PE I coming been really crisis of then So, in very we the points,

spurs healthy So I Because monetize. private environment XXXX. healthy and for it being to obviously, to of a going ability that of in little markets shows is markets our the benefit from disconnected bit be the a that, traded us typically obviously activity. lot transaction a would to expect deployment also it up The the markets are into

ourselves. are monetization, opportunity about think as we others, in supportive, we talked pretty for liability in prepared our about, AZEK at obviously they're the So as Mytheresa places remarks, constructive pretty like and we look when markets profile fund and public and you and our how the

to or cost or seeing acre, so down. are that us Corporation areas of And hopefully add management, debt add backdrop of people whether drive capital and areas, advantage market our it's equity the customer take

guys on that's just and the scaling of XX% kind product the I forward? geographic growth And the Okay, LP the on opportunities, newer strategic front, thing from and an the update said unlocking have on strategies, going your to given many so that get you just ones, particularly of outlook, wanted base, up but helpful. but just then good of new platform some these investors, active, coming as and current on comment been you the front, on fundraising

it's great a Yes, question.

investors. of some capital public terms look before, about to the from the raising I it's existing encourage would I about in XX% available number our think, because at skew you when in when and investors. this people fund information typically we've XX/XX you XX%, count, look terms talked of at of Capital, about at to But of of to typically look tends investors, new it's it coming to investor

the not of over they platform with will, our commitment or that, part fundraising then the one typically a invest across only grow sizes, of to start in begin here, time, increasing if lifecycle they'll business our that you in but commitment of platform. will is core So, cycles part then investor with and

is number increasing the despite at the wallet share look greater know, of we're you we, when steadily investors that monetizing So investors, the year-over-year, investors. of those fact with number you

also, investing look will, then a that go presentation, given in you business if nice but depiction out cross multiple investors across getting if plays and sell, lines are how see in funds percentage at multiple investor a cross and of sold, areas. you'll into strategy, you terms So that of the our

and So significant is well. it demand telling growing significant a our infrastructure, dividends. put to asset and we continues Investor of to our global global resources pay But what, as and the product continue gathering for Relations you lot against

seems we it, of just and tons uncovering it So put that more we're tons whitespace. the resources against

expect would I to that So, continue. trend

a thanks Alright, lot.

Our O'Hara next Jefferies. Gerry comes with question from

for you of towards perhaps what can path my business, assume, taking Great, as that, to XX% to relates big from of it scale if one even you but of as us thanks Mike And kind I of probably be? might but color the or other And know, give you. more driver is in that margin, it's, questions perhaps margin in Thank a just kind of morning. glide kind this the expansion drivers can helpful. some FRE McFerrin. VI material Maybe little color you a the any would be ACOF on

to XXX average years, Sure, basis And and you points Clearly XXX a was points. we growth. the expanding between managed margins revenue XXXX Gerry. margin Hello. looked enabled were I the as Mike ago with that expense said us if of a a grow couple great quarters deployment on talked few year. in us, year last at year-over-year growth that basis statistics about the XXX the

the of fees capital as capital, RMC to capital XX at billion deployed, million plus to se, that's earning to is look a really point many. than higher one that don't thing XXX of today. not invest the fees. expenses AUM yet potential I think So, in the a It's operating margin gets biggest glide on that path, VX coming I per your And, fund management at tied we're that I that because think to manage ACOF it's of out that's would much undeployed function at

from when that there's not benefit necessarily fourth quarter, So it's you a see where And Because function quarters, we it. expense great have deployment, a a deployment. like the the really margin that. and a with corresponding had time goes of you

font quarters that like But in a we us in year or the a XX feels quarter I remarks, a not clearly thought we'd So, definitely reiterated this given of anything couple we prepared rate XX% having we're XX% less. path. years it's the or and else. run three my said, function back, of hit that for on

expenses we to we think I existing manage effectively to putting several for work. and years capital continue that have as

you to initiative I the, prepared the any know, GE kind the definitely additional that's opportunities of kind Thank of appetite future able insurance comments [ph], to forthcoming, as it on was you. add initiatives around helpful. be relates maybe think strategic remarks, insurance just And of for but closure might be the then the new kind think some with Okay, even I and or of the there initiative helpful. in one there comments would

new. Yes, think anything there's that I don't

our insurance unique reiterate in largest of as of managers terms we've insurance uniquely see excess growth huge attention positioned put that of what our client before, we more obviously the which positioning our So I'll all just over global one for [indiscernible] just in source, given you'll that the that a including return on a we're and market, of assets FRE, speedo it's credit said both believe clients, to is annuities the addressable We years reinsurance base as and the market. and that.

capital up organically going do. and STAC. them both now for and of The manage to to platform $XX us ensures insurance into for speed gives what pieces place transaction the for more to of And assets probably clients. an us and obviously, originate a get in going lot we unique today, continue we partners over in billion so that's around scale And are it the to organically excess XXX the down and these we're with as structuring, smarter confidence market

mentioned, To LPs with Solutions adding resources our meaningful commitment. a have business in that support obviously, funding we've balance do we've around appropriate large continue sheet dialogue Insurance very platform And that. well. we we made as are As productive that, to strategically to our

questions. That's great. my Thanks for taking

Thanks. Sure.

with from Blostein comes Sachs. question next Our Goldman Alex

seen in other you get kind about with Mike, the retail market. the of are morning. players thinking private around you of set credit latest in guys, more afternoon. if good space? in we've to some have the I sort like hoping thoughts your guys other was opportunity are there the but Hey, continuously curious ARCC the of guys in raising of space, your vehicles kind Good retail Obviously,

it's area Sure, a great is of we've as focus for about, question, of us. a retail big talked all

CadC, innovate pretty NAV unique been credit billion Same had of format. excess like then some the and trend will we for way delivering needs to challenge. equity the And really obviously about point, peers with growth our $X.XX talked at really think dollars We continue to a performance. that we've with credit credit this our it upwards effectively but successful CadX. vehicle through us franchise, investor. and we deliver meaningful private is interval try success, our our that's solving access a to haven't innovate, return liquidity is that challenge growing. the in and the traditional retail while and the fund, And closed interval, is billion for company I ARCC we consistent lot, I the think for structures, retail fund end That's mortgage diversified about been in continues early of think some private rate investors in for, fund, that's to the of a I a have markets think we that assets

within expect read and it. beginning focus that see channel brand build I lease as product would to for to are whether scale. product seeing we net continue other we product, on we like or that, continue think our should you things we're and us to to that's, and with I solve non-traded others that expect that

think see I you'll growth So there.

I our to I given satisfy meet positioned the excess profile think liquidity that market. required think return, that portfolios business uniquely credit you'll see we're that's innovation, with to create retail

more to some spending success. on meaningful of area pretty that lot a having an time we're so but And on and come actually that

tuned of last for it's question. they'll higher business in XX. we'll a guess in deployment, FRE FRE look XXXX, up When Great, perfect. bit little FRE a my the But All years, the trend little the reconcile percent you grew talk hard about, Mike. right, XXish the the recent FRE bit follow I we over guys XX% kind And right. other if stay level plus maybe given cycle the guess XX%, grew growth, for XX% maybe at two the in that. over a question plus of momentum like super it's right, I to

essentially just conservatism of kind versus you grocery missing there's a seeing recent of this the from the is or on kind that forward? were So trajectory of we're FRE degree something

anticipating, aware you could I there's No, to to we percent. but this year, that. XX, that. we're last know that too there's of about just we're about you year, clearly look, I'd use had say, being we've nothing talk but at and not used just we look Are look And no, conservative, that we emphasize plus XX talk at I when used

turned dry online, kind amount in with and FRE For yet my creates the growth the that's growth set beyond. and visibility a management that continued have be we and next years and great Mike's the that And the us is that's of of really about of business stuff mind, ahead, we're driving XXXX, several point think that for key the years way going I not revenue that talked today I is of kind up. think about FRE lot XXXX a lot the the to fees ahead, have and of building for in about, powder strategic

would intend again, so, say don't that's be conservative, why And XX% to emphasize plus. but unnecessarily always so we I I

perfect. was any to sure just much. in be I particular yes, I want when Perfect, Thanks running That's very like year.

Thank you.

question next Our KBW. comes with from Robert Lee

of to tech both there afternoon, with fundraising, good not our growth Thanks of peers in of I are. all on Mike, worked you where I'm questions. of have And raising have the little you about asked, talked morning lot or relative are you a did ones. Most PE new least pipeline if peers. And bit But maybe the quick or your have products two good earlier. orientation on at of out Hey, mistaken, this in taking your business, also them my a a apologize depending touched just this kind products. but been guys for out products

you're things kind And with that's secondly, you So control of maybe then were at at? the a point? strategy, as insurance curious relates kind looking just this area of just propone just where maybe if stand to

yes. simple that's answer to first the Sure, is your question, Rob,

LP our disproportionate in and think are the and is our increasing taking opportunity. market from collectively disproportionate scale, peers in the what with terms our are clients of frankly, wallet, we experiencing I we share investment

acquisitions, the and I others benefits uniquely advantages the to onboard So and scale then accelerate those, competitive platforms we make and of positioned performance. and and growth think teams, bring those to are

so, as should start I equity that at see think seen past. us, expect side, think what at you from track look you on when record. And we're interesting the to that the in you've our really and great can dissecting you I

and and strongest Some business are in financial our healthcare, franchises of technology services.

regard [ph]. market middle leverage a us of for talking something have With that to and And into about. market time the lot a obvious we the growth relationships Pavonia so there, given our pretty spent the that it's we and end adjacency, of to experience

are just the been sideways planning be in for in coming what obviously, the close of are think is hopefully to business. that I we reach too is we But of to don't of that committal distress we're that, We've have little bit think shareholder working with to contingency extent of not the have selling We terms that we company try to that that amount getting elsewhere already level resolution regulators we the given to here. we're I a a there. resolution. the undergoing. gotten want momentum the that

the quarter platform the have little as also we're we'll of the annuities then specific of but in a to that some So of resolution growth doing accelerate bit terms well. things of detail. more hopefully, transaction, the next about talk We'll other

Right. my and Well, everyone stay healthy. questions, for safe taking thanks and

You you. Thank too, Rob.

Stanley. comes Cyprys Our from with Michael next question Morgan

the good Good to made. up wanted some afternoon. headcount additions you I morning. have Hey, guys of on follow

on about over sourcing? bit been investments sourcing where making as you so, year that just look how So you origination was out there doing are list you elaborate direct out on you Maybe the do further. out could more side. to would talk about some I hoping going direct you're on next specifically expanding guess or next seems the you think like and here your be that a what you're building you've as could I about what expanding

early flow think theoretically, performance. in originations And more add see, And our we a selective don't can want we the were deal the Yes, The end At we the better sourcing lot our mature investment I the to and investments the as is I day other apply Cavalier we be, of but the sound simple didn't. a better answer everywhere. making lens relative we with drives value early think in answer, global more the that of apparatus and the people I were learning in that in businesses. that performance. we result, the can

we So new as geographies. the up there, accounts, are our you an have market at if opening we leading but example, look business, European direct franchise lending all by

opened Madrid. office we've an in opened So we've XXXX, office up now in in Amsterdam, an

see you'll and so And businesses. us geographically mature expanding

see equity. You'll private expanding us also geographically and

out So there. existing we've team. has strong our and continue been we'd our to into fund invest Heading expect footprint, European there meaningfully leveraging been six, building deployment, to

to on fundraising, given comment return in investment is high. here similar people we my marginal the So, capital, the and on the set capability have adding the origination pretty

And platform. and the alternative addition, entirety special were driving. like did well credit, with that we the we like or nature growing so And pretty new more concentrated of little the while growth bit did is with dispersed simple the answer we you a across headcount will businesses see of just us opportunities, that's it's the with

finance sponsor bit more able elaborate Maybe just And on then asset capabilities on would non-sponsor, characterize you credit forth? how lending would thinking its focus that, a sourcing out be those and and side, so specifically about the you've forward? I able how to on, elaborate the finance building non-sponsor, finance, you looking based be Would you on how origination? on versus been to guess, you're

in separate just And, coming our business machine continues franchise. did Sure. meaningful a XXX do sponsored non grow, allows franchise specific is to again, $XX think global It’s lending about we've that discrete put teams. I transactions a private last fully in that us had sponsor credit close up. our was XXX question. so And through of companies, think The to I that and deals, over committed great we what billion to to growth start is to to in XXXX the head perspective, direct your point, cranked invest and year, industry

life been infrastructure, And technology, so sciences, resourcing we've along traditional and sports, business industry and like entertainment. new corporate software media verticals, energy healthcare and our energy and

done spending industry that. think level high success, information that do help so the of industry we of that teams, a we sourcing returns, it U.S. shown pretty better And will have drive in and to where and us We've up can more continue differentiated

So I that's opportunity backed. both asset asset and Europe and are players to more in ABL, a based ABS we clarify, we in for think as ABL meaning capability and big want develop meaningful us Asia. I just

finance in is lines business asset with the a leading to based I very asset things revolvers. of our based oriented. all business, credit asset capital and player is commercial And scale lenders area's non one think regard and working bank alternative becoming quickly Our

risk is us across the for significant spectrum. very think opportunity return that I market untapped a

we have years. are resources of there we last a and couple of so over And adding the significant amount

so thanks Great, much.

Thanks.

with question Beatty from will And our last UBS. come Adam

you're question. Australia, already Good on and I in fundraising the there wanted you a deployment taking there. asked just of the about both existing terms it the talked Thank Thank bit, for and little you an out how environment JV you. maybe broaden afternoon. about Amp update seeing but to also to

Sure.

for people us. been capital. So Australia's market growth We've good a adding and

it's obviously side developed On market. primary the a investment

relevant credit so market. and the Zealand traditional strategies oriented the, equity Australia, of private private have in that And New some very we are

Some good opportunity the acquisition of the a earlier probably partnership of our said. is questions around our there indicator of and activity, potential views

work a hoped into launched venture of joint joint that we're on is we venture what doing, amount challenger to Dante with signs product it Our well would, success. And are our market fair received. for development with first early we've product being through continuing the

returns on put cautiously that So optimistic we into funds based the still for early joint but that early, venture. the

Mike. great. it, Appreciate Be That's well.

This closing concludes like to remarks. turn conference would our question session, I Michael back Arougheti any and for to answer the

gand wish We seeing everybody don't not to hopefully talk future. to have stay quarter. not too we everybody person and again, Thank you the in look do to than in you. forward safe And next we'll any well, distant other

today. and gentlemen, this concludes call Ladies our conference for

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