Ares Management (ARES) 31 Oct 232023 Q3 Earnings call transcript

Welcome to Ares Management Corporation's Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded on Tuesday, October 31, 2023.

I will now turn the call over to Carl Drake, Head of Public Market Investor Relations for Ares Management.

Good morning, and thank you for joining us today for our third quarter conference call.

I'm joined today by Michael Arougheti, our Chief Executive Officer; and Jarrod Phillips, our Chief Financial Officer.

number available professionals during a who us have be will the also of with senior today We Q&A session.

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

actual could differ obligation such any update results materially, no Our forward-looking to and we statements. undertake

call an performance past and also not an guarantee of sell that results a offer this any Please future of nothing on fund. or a is constitutes to interest offer an note Ares solicitation to in purchase

During this for most available in on generally third of accepted in certain considered isolation presentation financial call, from refer section our measures. quarter website accounting or earnings the principles. directly to accordance comparable measures with Please of substitute to to prepared non-GAAP which as our the should measures be the will we Resources measures not a reconciliations GAAP Investor refer for

Note our quarter new on our next stock, year. Class our of XX. about early of that in our December over Of dividend for $X.XX company's dividend will plan ago. of record update quarter XXXX, in share quarter announced dividends nonvoting same we year investors fourth for and common be the call XX, XXXX The note, XX-Q a file increase holders we fourth that paid per Form to on This earnings to December quarterly to during morning, week dividend November. the first representing of the an A common plan we XX% declared our we

to over Now I the Arougheti. will turn Michael call

and good morning. you, Carl, Thank

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business and like strategic some market and begin highlights. with Now commentary to quarterly I'd

with a markets growth the and for modest to rates economic labor underlying GDP, robust adjusted to slow and lag across uneven the play third we the resilient seeing the invest rates growth stay the out profits. in. from for higher and global effects higher market the strong We're while remained longer quarter, During markets the corporate that expectation in continued economy

Transaction remains cost and the usual buyers valuation to capital sellers among pent-up equity than available powder activity yet demand private significant there's slower large due a higher to be disparities and of invested. of aging dry amount and

and growth seeing market. secondaries. pipeline solutions, strong We're private our with more and to growing for need characteristics We're rescue also coming build seeing recapitalizations in quality assets a interest liquidity higher generally financings and creative

that backdrop, it time defensive to with in as characteristics we've economic as this seen With we particularly credit, are a see assets across risk-reward private as private within favorable years. many characteristics, compelling invest remains market

raised highest Our commitments and our We slower in our these end the third billion the quarter, and of and quarter. quarterly second more the new results in in now in environments. through to demonstrate continue firm, market $XX.X $XX.X resiliency billion our raised fundraising of strong we've history challenging quarter growth the

fund We existing who continue over cross leadership performance along products, with re-up recognize our to new Ares managing into new benefit institutional in investors our from who assets. private fund or investors consistent and

by supported flows BDC. increase in saw also from wealth our non-traded newly an launched our We management channel,

exceeded indices also approximately returns our a those investment be across respective relative in highlight the their compared quarter. X/X strategies public performed to or well primary continues third target annualized to their of Fund strategies performance as

fee-related our in our which We earnings. quarter also management incrementally deployment, and increased third growth supported fees

fees management the year. or each same period by compared to better X months, fee-related last grew first earnings our the For and XX%

on all our close leverage. for on update which first committed $X.X senior $X quarter, excess are commitments already closed the plus or of of held track prior billion lending fund nearly our billion Now an let U.S. in third In levels me nearly we vintages. provide in equity private the have third X in at funds, direct credit fund

fund exceed closing expected of first capital. of the and commitments The the billion With fund. of in in the equity $X half fund we commitments total investable first commitments LP prior size expect year, for for equity additional exceeded to this XX% predecessor closes billion of total into $XX next meaningfully the

raised our our AUM third $XX.X Overall, the which quarter billion. business in total billion in strategy nearly $XXX U.S. lending brought this direct to

direct are business meaningfully of AUM. white have leader, private our compared undersized as market believe that lending As significant to the continues private equity space to we the trillion global markets a credit $X

additional an EUR XXX quarter X.X European billion our more raised to third in fund EUR direct for to XXX bringing lending also sixth million We October, EUR almost and million total in the commitments date.

which We of exceed would equal have or commitments year-end to billion vintage. fund our EUR line equity sight prior by of over XX

expect $XX with in our surpass franchise We we closings XXXX. early the in over the largest direct have investment we second of our XX most by located professionals offices in on that believe billion to tenured X pipeline and vintage from continent, managing Europe, of With additional lending investors AUM. quarter prior over the across

third approximately held at publicly quarter, announced we hitting fund. double $X.X end. II Credit close Alternative final experienced billion, of nearly the investor billion Pathfinder closed its total in quarter predecessor since size $X.X demand in billion hard its strategy, bringing only as And We commitments significant closing. to leading X the months our hard at cap the the of yesterday, our With cap first $X.X Pathfinder II

segment Credit Credit to filling In the strong by market and total bringing Alternative from The our traditional a with the our market. business along to is of billion $X the a in AUM, the $X.X witnessing raised changes in over for in Alternative by Alternative growth a is illiquid in With created asset-backed billion. addressable industry. poised is than believe providers, we Pathfinder $XXX Credit quarter, commitments fund that leader more pullback we're the demand trillion gaps and is least in open-end global core million investor for II, what nonrated structural the banking driven at addition part $XX in strategies private,

across in we financing seeing these an $XXX economic Asia million Australia corporate set In and trends XX% raised including solutions markets. growth seeing Capital million close nearly bringing account credit, approximate to Ares acquisitions which we're and and earnings billion, including final sidecar investments a SSG region, in our growing of in for robust opportunity We're sponsor-led quarter, for for the fund. India $X.X commitments the $XXX in strong VI, final Partners a

more to European a over debt this estate we which raised Real $XXX we than will continue mandate, $X Within and in million strategy grow. that Assets, billion, anticipate real totals now

capital estate current demand real exceeds for believe acute business $XX need to and Our well the positioned and due industry. billion, team debt we growth the the for investor now in is further

fund the Our total vintage. second equity $X.X million first of prior another commitments $XXX climate funds this closed the billion in an in the and million with equity $XXX in infrastructure total fund raised XX% completed approximately the October, plus quarter, of additional commitments or nearly

fund, first the We to year-end, secondaries and closes equity and fund equity our market, larger opportunistic expect our by corporate fund inaugural fund currently sixth real such as funds private infrastructure over have in closings credit our secondaries and Direct have our third in our fourth funds, seventh fund, XX our U.S. as well estate just climate as as fund, additional European infrastructure our discussed. second in Lending we

we largest opportunities for total infrastructure have $XX fundraising ahead fund, fund year, the billion, Through we the several funds, year junior last raised and we next to and raised third special series have end now closings $XX fund expect Throughout successor hold our of billion billion, well the lending direct of third expected for our $XX our year. October, including nearly our to exceed fund. we X debt U.S. of first

to by growth. While management expanding within fundraising poised our strategically for be our the supported institutional market, and wealth important global are also continues insurance channels core

by more investors organic assets technological quarter continued that total credit bringing affiliated insurance with attracted AUM business, to market. Aspida, believe investing billion We also end. the Aspida $X is growth to billion, are Ares' only but the new Our to bringing expertise, annuity its not of $XX.X advantages than

XXXX. as is opportunities seeing we're end We reaching which flow or that we believe expect outlook on would $XX for meet to exceed of we demand for Aspida promising and block fund new are of third-party more to billion in capital. the annuities, reinsurance by AUM track trades, growth Our with goal or our largely

across accomplishing a several our wealth Management, to channel. objective core way semiliquid years ongoing Wealth We're our the market our quality this well global products number footprint limited over through institutional products with is on Within management next wealth largest to of private major alternative the Asia, and wirehouse with today, professionals, and we're managers every America, one over and industry XXX a the in bank. X Europe relationships nearly and of North

and continue to one we adding market scale each as expect of products. We these partnerships strategic share gain

September on Exchange X, non-traded additional in to raised the X in estate After the ASIF steady including continue a despite expect market see collectively programs. will BDC, net first in X non-traded aggregate launching first tough $X.X we ASIF, to million half closed over wirehouse There June global which our with that add flows October real billion. that X And $XXX has of AUM momentum we one on flows, approximately our platforms seen months, XXXX. bringing including are primarily the fundraising, for the XXXX across REITs, total

deals third in was down billion large the beginning credit second signs QX unit $XX.X returning tranche invested third to markets. by billion Turning up $XX.X billion quarter third XXXX. deployment. as financed was the $XX.X of which the We're from $X billion quarter to quarter, highest private the quarter, We deal in activity for in but plus the from the see of

pipeline. like, by early slower still than we'd remain quarter-to-date markets we're While our and our investment encouraged and activity fourth

period, activity due further capital that approaching private For longer. XXXX, of end as equity growing dry return to capital, market currently and sentiment and middle expect to higher to is investment stay aging on pressure from market powder the for stronger rates companies its the LPs balance structures we among pressure improve sheets

mismatches participate market. segments opportunity also changed curve, business. Alternative sector be all bank a changes, of yield banks The the inverted to which asset-liability the We're our with to by of growing an and way market impacted Credit certain partner in seeing the banking regulatory through continues

have generate we've partnerships we capital to the for weightings same our developed time where reduce improve provide existing their Over to extensive solutions the while opportunity to charges, returns augment at and years, attractive businesses risk the bank investors.

Our these of team that transactions an in innings types and in banking we're our our collaboration the believes we're increase partners. Credit with seeing of early Alternative

private our both equity to acquisition a for through our to and October, Asia we investment and us continue and may continue explore closed of that on geographic at organic under leading partnership through closed look or Pacific a target of with America. business strategic geographic also ways Vinci inorganic product a either expand is Asia-focused the billion to firm expansion. a you we Crescent Point, Finally, asset acquisitions. region into manager we region, as strategic alternative business The lines to team Partners, in In growth And seen, management. expand $X.X various leading in opportunities assets in recently builds we have key each Latin

and the particularly across early and in We've growth out within to shifting markets We for Brazil the XXXXs region. early opportunities over now are product our American that in similar We'll we are in believe collaborate into development business. we're continue and in of This look America. decade the saw for Vinci the markets, business to seeing stages and team opportunities the and that capital attractive other the beginning very on play known what the excited Europe, in a Latin distribution, APAC private unique to credit. trends private global for to is Latin

Jarrod the our turn to for Jarrod? comments on to like financial results. I'd now And over call

Thanks, joining us everyone. for Mike. Hello, Thanks today.

our of to In the quarter XXXX. and compared growth see fees, the we paying management to continued third fee-related strong fee AUM quarter, third AUM in earnings,

funds, quarter of quarter meaningful sight we will light While line We're as stronger track were a fourth I year-over-year expected, in credit recognize waterfall realizations also the European-style on funds. due we discuss. have to FRPR from our third to increase realizations as in on clear our a

meet the with well billion $XXX more we're or We and target to AUM. XXXX. $XXX our with Starting end of exceed the ended tracking by quarter AUM of of billion or third

$XXX new $XXX deployment grew billion driven last in Our FP AUM credit over across over funds and to our from year, our time up commitments opportunities Assets special to billion, Real funds this Group. by and

of powder would and history, in continued firm's we time incremental efficiencies. million margin in over AUM which not and billion our for this available $XXX future management paying For Upon have for deployment, in and generate FRE nearly the over deployment. yet $XX first dry position us $XXX is growth billion fees fees

totaled group. certain by contributed second deployment revenue of an credit XX% From in over prior quarter, our compared that increase last period a episodic perspective, approximately our the income primarily down management driven million to were million from same fees of $XXX year, in available our Other capital was our of the there to period quarter's as fees $XX results. transaction fee the

tighter relates funds it a our quarter. from our from modestly the credit in to higher benefits ahead impact of FRPR FRPR longer continue well rate realized a we loan with be approximately environment, spreads. FRPR of on to potential interest year tracking As the in XXXX, to we're pricing along Currently, credit positive fourth of for as XX% expect last experiencing is the

currently $XXX $XX We credit to million of funds to fourth the FRE million from million FRPR of compensation $XX approximately estimating expense. million quarter for our $XXX are or after

will the total for credit that in changes year, values in performance I subject the strategies full quarter. including to this of fourth return the caveat still is market these

real Regarding their not group of on FRPR estate as the any fees had X incentive sheets. REITs September XX, our from balance non-traded accrued

to FRPR upward improvement valuation REITs pressure in not and recognize an may rates, do the expect REITs require from earning on these from non-traded in the these Given XXXX in environment. we current cap FRPR XXXX

driven an by fees management third of million, deployment. $XXX from higher the totaled quarter of earnings XXXX, from XX% Fee-related increase

the For REITs we growth XX% on non-traded in better discussed tracking remain our our period, ability call in We our confident to XXXX excluding annually growth or at year-to-date XX% FRPR over FRE. from as in generate we're FRE through February. any

basis from was of roughly improvement improvement year third from margin FRE point point the XX XXXX, a Our XXX second ago period. and the quarter XX.X%, basis in the quarter a

margins to As accelerate we a and see have in higher in that expansion in said in periods gradual FDAUM. the past, deployment we of growth expect corresponding could

typically on range. a As we quarter, which our see fourth are reminder, to the in a typically related mid-XX% margins in the FRPR, drag FRE

Excluding QX, reach remain of expect confident run expansion to we margin impact, our this FRE continued do margin in the XX% end XXXX. modest and in rate a FRPR by we FRE ability

limited on for of typically slow our Our equity American realization activity realizations was in due discussed with several as slower strategies, style quarter in last realizations coupled the to waterfall the our call. quarter European-style third third

cleanup early distributions second funds, the waterfall tax many of ages Given fourth of European to our with quarter the in style we in the typically a tax-related related quarter amount filing. see

as expect waterfall see our continue funds beginning and European waterfall thereafter. more European likely and in season, consistent and XXXX XXXX to style to XXXX However, larger we vintage realizations

$XX For waterfall net million income. the we expect style quarter, approximately realized fourth in currently performance European

as timing continued our of Looking European seeing earlier of these effect rates but European expected amount investments $X.X there style the higher are the value forward, This the funds. to as we're in funds, At along has overall fewer longer, activity. our fee less fund billion. it potential year the repayments The to grow $X.X these from our extend flows with potential time, interest billion net duration has has positive extended impacts duration and realization compounding increased raise the in same credit we from like income the portfolio as a cash in of performance compounding style effect realizations. total funds remain on additional the transaction out

in I the on about provided, our million XXXX income realized fourth XXXX. net $XXX performance we $XX million approximately waterfall from and quarter expect in including funds our Based and EU estimates currently guidance of updated

there's that XXXX. is million view than initial more $XXX in Our

funds hurdle risk. performance from seeing despite fixed last growth, the rates. of appreciation increases Notably, million, realized net more by hurdle performance generate predictable our at where are fees comes the receivables this can net stood accrued performance fixed above in rates based Our of net market up limited our the benefits distributed capital $XXX year with eligible X% ago period style interest where EBITDA we're in equity multiples $XXX returns XX credit any income above funds nearly funds, credit rates $XX from losses after mark-to-market million approximately our on higher million over increase and credit months. Unlike from income driven

the like will balance funds, million have now and funds. For $XXX over grow. example, billion to European-style AUM were private or in in accrued of we waterfall $XXX of credit performance incentive $XXX net receivables, nearly eligible over in waterfall million XX% European expect million over style or continue this of our with XX% We $XXX funds

quarter the per A Realized realized compared share stock was of and income XXXX. third third to the in quarter XX% income $XXX million common up after-tax of totaled Class $X.XX,

to our exceeded mentioned returns As public Alternative special across quarter, for X/X earlier, strategies investment performed U.S. their credit, opportunities. primary with their well Asia target Credit, relative infrastructure and or Mike direct of lending, strength approximately particular respective compared indices debt the third annualized

of have benefit double-digit we In strong last and fundamental low generated from as defaults higher continue credit, all investment our returns the in base rates, primary performance. attractive XX months to strategies gross spreads,

our Our credit across metrics remain strong portfolios.

remains the the European to also lending direct XX% in nonaccruals below portfolio average portfolios. direct U.S. at our U.S. example, industry ratios and X.X%, mid-XX% an averages. Capital the our digits remains in well historical and low healthy U.S. cost declined in Loan-to-value Ares mid- As single for high portfolios. attractive the in lending, remain which company Corp's to EBITDA for European growth And our and range

private performed In to the equity well public investment strategies third of the in both compared our equity, quarter. markets

growth EBITDA across double-digit see our We ACOF continue to portfolios.

more growth This which in is leading in our which portfolios, real quarter, sectors. well real XX% rates the to industrial strongest respective are our than public the and relatively heavily to and multifamily estate, European past a of years. the estate returns Within our sectors performing strong third that relative overweighting due these higher over gross for seeing muted industrial and rent real markets multifamily, weighted strategies towards more for the of U.S. estate our estate are offsetting resilient real significant performed have yet account value, to X we're cap

remarks. to that, I'll the closing back turn for Mike With call

Great. Thanks, Jarrod.

seeing seek time, returns play In adjusted providers out a alternative for drivers retail continue business our banks Both for to host uncorrelated continues the traditional and very the retrench providing our remain less to and continue long-term At reasons, capital view, and in key the and volatile same we're much risk intact. institutional higher filling these and assets. whole to gaps markets. secular investors solutions into Ares of role a in

past date environments. As you saw strong performance as with market our can tougher even as well we generate in growth market to cycles,

geographies to With and investments continue enhancing into sectors. expanding of adjacent We our for record attractive capabilities future powder, we're dry invest distribution deepening make in product our highly amount in new opportunistically by positioned well capital growth our areas, channels. a to

of realize over to the waterfall private we're because growing a past great scaling years position of in a from performance business European-style And our years, the our the income in X credit amount of coming funds.

have dividend this on to that say of margin growth expansion. is earnings continued strong All and growth, visibility we

our of I'm support and the hard company. always, dedication for our globe and As I'm team for investors' appreciative around continuing our of grateful work the

open And, for line operator, up now the can we I questions. think

Instructions] [Operator

from comes the question Bank of of first Craig with line America. Our Siegenthaler

especially first Ares well. update with doing on question now is is an closer in market. the how everyone partnership asset My on and working hope bank much formation banks I ABF of acquisitions, is the Jarrod, Mike,

might the purchase think announcement. in have big that PacWest, been I June last

what flow have then, you from the expectations Are up assets for banks, the partners? future your bank new you partnerships? and are been since pick your of with So forming seeing

couple for with fashion, balance on continue regional that books. think risk I the a assets largest question. strategic we the a to bank picked weeks to some about some we going some the bank. that yes, mention significant thanks where not we expect the or of was press estate transaction to very challenges see real $X of up get activity back of trillion Craig, sitting to we'll transfer consumer that too PacWest, announced, but the form a recent There's addressed need loan sheets did in in are

that this Pathfinder, just partner early it. optimistic that's given $X.X to bulk still funded activity positioned So to still we're that close the in we're for opportunity final pretty going the billion, is that, our we reside, the that had with where banks given well and and on is the of innings

today follow-up, team Pathfinder What could is the all investment now my and white more question in you now? focusing fill finance avoiding any Are still $X at I the as and is verticals? very there verticals asset-backed professionals this know spaces fill fund. are vertical on on in, the Ares' broadly on do And future? similar and ABF, there just Joe add that they're Are investing And where at looking broadly the which you capabilities you a billion is large. some of but $XX in billion -- Ares, sort side, focusing to

focused Craig, talked a Without space, specifics, about think the portfolios sub-investment the news and portfolios Difficulty] think requires on loan which probably of finance biggest in resolution market too have of within good lender the many one [Technical of we're is we and We the now. getting the grade the into consumer banking we teams part some system. around particularly broadest I

put lending, In a which opportunity. that the a is on NAV was thought billion there in pretty I that a out, $XXX opportunity recent newsletter team discussion, good about

I and So be a I'd geographies develops in value But are the between can set few and types about who can. to people markets very finance. team make and as be time core of think the decisions want being, lender yes, you bank we've going around move there those of say broadly been speaking, the to to much relative partnerships way opportunity position on the focused talking that we're for our that things

Sachs. of next from question comes Our Goldman Blostein Alex with line the

a fundraising quick like refresher see credit, opportunities things next XX on X it, months maybe guys in just the other you call My private question over and outside for to verticals. equity for you of the

could So start maybe we there.

the Thanks question. Sure. for

you're talked the Obviously, prior news larger wealth core and the we're increased an are going channel channel and on family on about largely we flagship and because open-ended in in see insurance dispersion year-over-year, good products then of to that less we As number is, fundraising calls, continuous outcomes think the the building I of offer growing. momentum have vehicles. are

So a large we're going of jump higher with institutional any floor with into just given year much off flagships. the to

debt junior about the of X ops towards As then infrastructure our fund. third prepared large debt I closes the be credit so private forth. infrastructure sixth end next seventh into special see our equity And year we here talked year our And year growing in fund our this and remarks, next to we'll of on corporate fund, to our climate the going into year. on and infrastructure big clean up the year our we'll of first are funds fund, things fund, next into then for sixth expect probably obviously, big of we end the third think, so debt the the funds, be the half first the towards ones. And horizon, are beginning for the would then

handful and can performance, as of fundraising flagships. of see we're in into quarter-over-quarter that half interesting, I'd you it's no we're can expect world showing just And this well. and vintage is in vintage, longer the diversifying the scale first as we then on where So a continue over set that to terms the that and we're just product focusing growing

Great. That helps.

guys I second Helpful that I X well. seen from that other I learned, we've of the mentioned, the read good platforms ASIF be as the half The you had some to you retail pretty and of Any is in guess, year. across to that additional ones some to so far. I guess, hear that of is zoning lessons next existing given in could initiatives. going European first of question for think be, then how on the robust version a you And launched platform a of momentum on

understand version the U.S. competitive Europe So the European you're product of sort there this seeing early the opportunity vary to the see the in you maybe us does help how the in of and versus for traction U.S? market relative

Sure.

about frame the it, did products so the at our $X.X same billion with with ASIF wealth traded wealth we in looking looking platform. product, Just momentum numbers, third so alone, is the obviously, product, quarter, our to everybody good in not on at raised one only we

I would the know given at private this expect, we're that We'll a is that time the and just debt record of adding But in product moment our track pretty Alex, in platforms those BDC good leadership in amount much across. I pretty a for think brand when read the demand platforms respect significant in it those in just how channel. they pent-up there's scale. of and attractiveness

good a good a starting be that expect so would think to read it that's across. I And point

because market developed. is it's interesting generally European wealth the Europe, less

terms in team. and a to amount of we of market, credit a don't great track just standpoint, record, from know. we precedent have, of private So that by But size of far, the franchise have scale in capital leading of length competitive both

interesting, in others but positioning, you that have competitive better we a relative market. distribution to mature significantly channel, a think, an it's less So have I

so the having And combined with us product. we're the similar two product hopefully has having with experience that U.S. as

of comes Our question from Ben next Budish with Barclays. the line

dynamics. some asking Ares concessions. some seen private general, some like about the sort of the LP ask credit been wanted things not hurdles, funds. of competitors We've about but lower reports incentive pricing seeing in We've investors some for fees of specifically, in concede about I media, credit in to their

in your hearing elsewhere? clients been that seeing are interactions if your anything with what there's similar Just we've curious you're to

catch or market just seeing not absolutely at the We into that would are not that track to in that attract read a any the comment that least I in generally. vis-a-vis or platform form. our shape I way, would make bit. our extent maybe to that performance, trying order fee not someone capital, growing a cut record but you to long a has up to play one in without have market in been was experience of might

All one right. That's very follow-up. Maybe clear.

sort not beta -- I kind Aspida sort but business, on How of you portion Aspida your us a exposure? what of the sort much of your is growth business just the much your of -- of DOL overall prospects today, what is about that annuity today? And or thinking Can proposed of huge thinking is of Just the makeup is the expected of rule. reliant are remind channel? rule how know fiduciary

Sure. this time. highlighting your real obviously, and unfolding And all we appreciate is

that way So you we're the digesting same that are.

approach company our sheets our We and some to but have, insurance expertise more a to in of of insurance peers. insurance grow as investment as that We of we've with very our growth well. and large stable the said affiliate continue growing third-party believe of taken thesis asset partners measured a married with the of our part continue important company balance business to in have before,

to of would $XX.X by Aspida that AUM close as and expect. the About $XX total Ares XX% sub-advised about billion billion. and raised one $X advised there capital billion, is today has sheet of is balance

$X to that AUM of to our forward the Investor summer back the largely you'll our of guidance, billion Day see put end we when in would of get XXXX. grow us go XXXX Aspida $XX year billion roughly you If at a expected to we that

billion $XXX that business assets. are if we for billion if at look the that. have about X% of to out you $XX that put at for that we're it looked plan, And at of on kind So our you we where tracking would guidance, Aspida,

to would that we that measured a grow in continue expect will I So fashion.

also not think new have we we that have smaller, but technological de many we're do advantages way I business. a given know, as of the we was obviously We in that think are exposures this folks and that build. any novo legacy do originating onboarding terms some And

at you the look credit. when so in it's effectively And all what new is book, vintage

an change the around seen like around past, in will economic channel, in not disclosures of the But the keep Ares, is and expectation I we'll good for So eye my on this. here be least really develops the whatever small a for it's is products what do, at again, hopefully client. enhanced we news that think part it but certain the proposition to we've largely

question Brennan comes from the line next with Hawken Our of UBS.

you are is maybe those to where but just an non-traded had couple you, a of know and there ago? about the curious changed cap of REITs give base some the rent I on real much years as small color rates. kind spoken versus the maybe your could offset. growth estate But have in how You cap rates for

Head it. do Real Bill, you thought Estate Benjamin, to happy take I want of our that take to on. one? was I'm Bill

depending If the QX we this vehicle. the had you look REITs for when to roughly what's X.X% non-traded look X.X% the you valuation, year rates cap on at underpinning at

If of we go XX tight a that basis you year, probably XX to X.X% were back points, and X.X%.

either seen fundamental have given significant on properties rent development multis, and the rate to we expansion of as logistics we funds of performance growth healthy So that industrial mentioned, terms are continuing rolls. focused are exclusively and pretty see largely NOI cap these but we the in and

million. I But potential you believe kind then of last expectations said European like for that more $XXX the on on about XXXX. that And with curious call, thought was I $XXX upside. for -- million the waterfall and about the

here? correctly? And happened should can from you upside what that what through And drive walk could be we I remembering that maybe how So and that about to thinking am revision?

it extension Sure, of That's I'll with these that credit which that overall actually these are 'XX. us it market and as little periods are these little are a yielding is of added being between current they ends of of aren't above for what kind early But one. of they assets duration. the the to splitting quite net the and duration out positive terms assets, what yes, we're the take the more means XXXX tried clarity, little lay that refinancing on as in seeing environment, market the used fund what's bit, out, bit pushes of a a we we actually current a out underlying environment, 'XX the guidance maturity well up pushing Based assets of out hurdle. the because funds, Ultimately, the of the to. that bit

given a longer bit of now little period we're in opposed is end as build what what we're to of that's a extending of into happen to the seen kind in that guidance as really we've XXXX with XXXX XXXX. XXXX. a QX towards what ultimately, we've in more and some over push in some past of as we're as expecting of here And that the XXXX well of of So then time expecting seeing of a that terms period land -- it into

bit really build due a it's loss a and but It's So market to the environment. it. build, pushing current a just out it actually I little it a call larger wouldn't of

that or for continue Got extended, for we get see challenging conditions to if refi now? like right a worst-case remain And it is that duration scenario is it. possible realistic to

lot Yes, much those of approaching a too really we're assets. not maturity of the because natural

like. that. really which refi market accelerate well, could just cause all terms And in the refinances the the that in it's would if and recognition looks what portfolios turnover up, earlier picks activity So of then of those

the could matter perfectly and really will along It's when dates it's way. exact continues arbitrary to be the a that occur So what is We what amount total the of of just total there's timing. amount know the kind and grow.

Our next JPMorgan. of Ken line the from question with comes Worthington

the Maybe first on fundraising guide.

think Is you more this being just a in fourth us that the recently funds there? Can $XX billion get flavor quarter expect suggests for conservative? reasonable give you that track that -- a in I you you're maybe commitments. XQ? pushed some on little Or slowdown comments your XQ did year to

of end that certain said get either just in have the excess the you year, $XX we think I billion, things roll. pulled of because you Ken, as or into forward Yes, will be

or that's the given closes slip, ultimate going funds not, in the timing may just be that the drive having or their but we're going X we've One may to So may than in things that of outcome quarter. slip, really there's be. the to fourth here to articulated cautious ultimate trying X and X the other are nothing is some all I affecting process what but think change,

what's Alt what that. sort that of this been And Is I into there's deals year-end? of figured Credit, you're Okay. In think I come Great. expecting? a push rush before talk driving year-end. to a of

there's building there now. pipeline focused the parts that. busiest think construction parts of activity other of pipeline significantly. the on I going than think into probably I Basel game so year. composition more is anything end on The one of this now. has driven are building, probably of the than absolutely firm and turned more folks end is right the firm the think the of balance just there don't that, lot and experiencing right but is A trying get we I to sheet transaction It's

question from next Cyprys Our Morgan comes Michael the Stanley. of with line

Great. expect on just come mentioned past, that CRE out Maybe of the the opportunity the to market banks primary commercial believe you've you'd bulk from the I lending. regional real of estate, in

I you seen you What capture so platform, see? need how the to far on you guess or that much activity all, of have So front? enhance terms at in steps CRE order guys might set the opportunity to take if in hiring the market lending build-out best to

currently than a I more Yes, we don't lot to we're doing. do think need that

Europe. team, well. Pacific We've well-developed a U.S. in We very as been both and have capability the Asia building in in

capital and do on prepared forming to have highlighted we been continue we'll so. As remarks, our we

estate solutions, of what's entities, basis, real about be be a going in estate of X think change most opportunistic obviously, you to top large when part in middle happening those. equity going through against of we on of exciting is have the teams business. real these world real think commercial to the in to of the stuff and estate sheet going lending, real secondaries, I the the combination structured that's And our and all balance of estate

going you bigger appreciates playing lot as of a investor that think investors also big an the because issue as of is, behavior how I have to really be So much is are everybody their opportunity they heads that I own, get their within kind think it to around exposures. be offense. And hard until existing currently on a what of to it's little going is get them defense they for that

think on to side, for capability the it's be I capital side. me, going the all really So not

Okay. circle And follow-up your on deployment. wanted comments to just back to I a question.

the far quarter in and I so think pipeline. that here you activity were fourth encouraged mentioned the by you the

of I part think you the firm. mentioned Credit Alternative busiest

that. on double-click wanted to Just

a next deployment months. but the you what's XX If little you just firm? see picked out out the you to beyond could areas the Alternative elaborate Credit, evolving up deployment of as in XX opportunity the more, broaden and other to credit And activity maybe some how third the to activity quarter bit for beyond here, of set look the over do

in that of Does could quarter? around the So some seasonality. maybe the up you broadly pick and in then just XQ down first slow us remind

you'll of slowdown when to basis, my have, similar strategies we commentary hit on the different couple places. look a relative comments diversity similar deployment. a given obviously I fundraising, I'll of one, think which try from at I'll deployment that a to on but Number this the on healthy you make still experience, is see deployment, a

That was XXXX, year by deployed $XX.X up credit. And deployed we about billion. billion, 'XX, look in $XX.X QX you quarter. ago, obviously from a So we billion if in led QX last at $XX.X

these to of see So begin ranges emerge. you kind

this billion. $XX at about look on year, LTM about year, you $XX LTM basis, billion, LTM it If an last

the heightened into So that think seeing a outcomes to we a the obviously, you of also earlier get dry and another where for $XXX we'll of are give just against that range that deploy gives we sense the powder. opportunity referenced we market measure activity, if billion standpoint powder you and way we transaction then dry where deployment about from general a as we're

et refinancings, opportunistic structured equity of the of in lending, and new to going to talked in is what Most estate equity, it because cetera, about with I around the is slow. be now corporate what side and issue rescue institutional happening the estate, both and secondaries, opportunistic business, are back goes volumes just private real real

our the advantage and We given portfolio. have our just incumbency a competitive of continue to size

our at Ares the U.S. deal see volume lending look direct to of installed XX% portfolios, European from and book at coming you'll you is of So if continuing business. XX%

think that's a to about tougher ability ballast a nice you so And issue as deploy new the market. into

it I will volume pipelines. am build pick We're the transaction that optimistic that in up. seeing

asset for aging market. pent-up across demand buyout example, tell you look side, just talk unexited sales be to trillion it, assets look $X.X X installed seeing -- been that equity $X.X are But at companies years. if about dry trillion of the by they'll there's in it, coming you to are today, or owned private the you If math significant for it of of We're XX% you base of a currently of platform. have that the that sitting to funds the at, excess say, to on relative powder. funds the if buyout sell and are of And about you owned

that return believe just the money what while of environment. stabilized needing that most think that of particularly and you I now up, transact about transaction that LPs pick to weight doing is on you're see side, into we're still you're kind if opportunistic to of so getting capital rate to And going new a volumes

from comes the question Autonomous with Davitt line next Research. Patrick Our of

in immediately we on more to A follow-up of quick cadence the pipeline one. should building expect XXXX that pick Is the pop? Or up of a more XQ?

typically it's and year-end, nicely. closing -- as year. get is I around out done shaping up pickup think tax planning always the there's deals QX QX in to by always just Again, people rush seasonal a

activity a flurry of of year. the always end the there's So towards

I a I'm QX seeing. that it sometimes doesn't. But based ramp would it then expect will nice be that through everything QX Sometimes and slips, into on

deals no a was week large rating with There maintenance coming showing question. higher-level a increasingly then lending a out agency covenants. report direct And last with

broadly pressure to guess, deals, even is argument, And I Is your trying how [indiscernible]. the participating? know private trend the converge sure terms not you're that market, I more that that a is protection so, argue with lowering these Ares to there's syndicated what think for if given I'm are but seeing? they

continue think to of these private executions of borrower-friendly. from not don't same one entire know that syndicated proxies, know private is not I loan the brush. I'll some be obviously don't paint would to or the market market. noteworthy. loan that That core has find syndicated their would into do newsworthy couple the that with seen. and more you point, be the that's coming I pendulum market, that to credit your middle a The can't lender-friendly as in where expect to really good comments. structures ever is are strong. as Yes. some swung me I terms make private really -- we've the The documentation case. than In way They're

but feels sensational, and little -- will so would it expect continue. that And a I that

reason sad point a get thing money loans, loans. put downgrade. other of or that of can as into evidence be, two, so new covenanted and different take the those number participants the just I go is a CLO in And syndicates those than you say a have actually to out, twofold. constraints there's think agendas I in actually The it that the actually And can't credits structures. that at better structural of can't may quality oftentimes would or back covenant-light many if history syndicated in worse restructuring you when and One, ratings no you structures, loans conversation, command may look performed are the covenant-light best

have credit fund the a can't and junior that of at may fund is in security. end a life participate You

saw think in I you of that's And borrowers for so those outperform. actually loans covenant-light value. strongly see syndicated argue covenants, there's through of That's the And you could we the protective all you it's what no that happen actually why that, sorts have when best will frankly, pretty friction loans GFC. the

are credit so agreement a can a and no small for see in that market, in obviously, and given is not When last excited else you why a or And or which don't come entry just different the anyone to borrower everybody agenda see is default. a destroy private covenanted, and into credit I'd credit, least value. the the structure traded make in you lender in is capital different there with to instrument, point vis-a-vis into a a being and market. comment, think traded security relative oftentimes, very group way and ability coming market lender that a you people disruptive in defaults bilateral private private between one I at covenanted loss it's or about

So done years. deals restructure that seen what through are even bilateral between last a in no lender the we've than absence different and the of covenants, getting and for negotiation they them XX perform the differently borrower because are you

the next KBW. question with of comes our line And Mike from Brown

Great. I follow to just fund wanted European dynamic. the up on waterfall

amount about cumulative talked in XXXX XXXX base were guys Jarrod, to So the that and be would the like sounds period past. estimate the with you line that it in had the for guiding about you

recall You did of talk estimate million about if a correctly. potential I previously, $XXX high for

it's has wide talked some still that high that timing still been point? perhaps of does that a still out this range is So you based at commentary should that we matter the estimate is and just of relatively pushed just Or somewhat and the uncertain duration hold assume about? on

I think terms higher the of the an advantageous range. end is of end we of overall can we call, wouldn't is yes, -- market of the if mentioned balance range. well, earlier, to as continues change that actually to earlier that a the more happen extending is this at in as to occurring for there's accrued and in a that again, mentioned to the lower But of lot you're accurate I repayments say with it's It's the be environment, to that. duration. as case to going terms The grow, be I news that the trying that good pulling that really see in as of again, start I up. range We're come closer a looking you're faster, to because

really the your to they outlook Ares? on greater view kind the your Great. to pressure kind higher out seem strength think to that next on here the really What XX would and And credit And of Okay. continue XX be up does in start here, then rates from I of have is a well expectations. What side we credit particularly driving when over flows just the outperforming to really if months? really cash guess impact? be metrics, for hold

And in to it. some think because been recession hope funny time. just everyone not for we the It's have I quite camp for continues

we've quarter given put economy out print is For and plus really the And breadth some of in our and up not without that the the play one reason, the cheeky being answer strong, a articulate in seeing have, GDP X.X% just portfolios, benefits we're and we is it's that just we of And tried coming. to platform, that of the is a the broad that most it pockets information the economy strength. basis. the that we're for part, of certain a picture through that aggregate, in obviously are of are our economy strength. private weaker, but paints we're are There the monthly seeing roll market taken simple seeing There segments are continued consumer weakening. on economic

at I think the protection But talking the portfolios done credit those which Kipp value growth and the and book. biggest deleveraging. and the credit metrics ARCC, job dollar they're continued in loan good consistent is coming the promoting to reiterate obviously team across private of EBITDA, positioning have about is from I'd a the

environment, today's not trailing. I look you to those whether coverage, And X.Xx towards books we end. rate If that where today, here a X we that X conservative pro X.Xx or forma very all on interest we're they're of hikes think definition coverage for would at about at the sit interest ratio meaning agree get

ratio. a I have safe so of that in And the think know coverage more that feel interest that place in we terms confident we're we we

now. their that diminishment bad not But indicator, has those generating want in levels, longer, you'll get and more thing to margin companies in these stay net incremental I credit owners at with for just more performance, a is and higher any probably past participate we're Obviously, if is conversations highlight and books necessarily having again, rates of rates higher ability And value if to that for any to given the having of be than fees. performance. return, assets equity fundamental

right books again, really now. think And a are so good in the I spot

the turn have Michael question-and-answer will call session. And for reached closing end we Therefore, of the I to over remarks. Arougheti back

we're to in we most business this you on, might Operator, before one Mike's or focused going Craig Ares Credit have fill move the what are today? Craig further answer horizontally in repeat Siegenthaler now avoiding to remarks. what as investment closing missed on to space focused staff we're where Alternative to so the spaces white we additional and asked need verticals question, is that most

Sure.

hope say least we So I I is to capability. need think consistent said simple the do is what what Look, what you with heard. that before, not at now I guys answer for add I

larger our are the why of that platforms one the that it we in of and the is, business capitalized the way market. the is teams of one reasons growing One is better

that fully capability alternative We advantage. of have of segments developed a relevant the a around is important and most credit, big large

obviously parts is different This the order of we not We're capability, that it. is we to landscape different continue opportunity. to other growing of as around market credit a big in build geographies to market both private classes. moving And and grow, alongside But in capture invest full in asset the scale. a like

So other to be form to continuing drive again, and market banks. capital, it's participants partnerships going with the just about

right asset we're lender in portfolios estimation, billion we're and execute. as and of uniquely $XXX including is a my that lot market time lending. Places a talked are we've opportunity NAV to now, positioned finance, spending about NAV on lending bank

balance what bad platforms number sheets. investments the I of and on We structured are services would rescue working into equity type a with for financial market good call loans

I'd see that. so more of you'll that expect And

consumer on. Eventually, part will turn I the think of business the

addressable said if had consumer going us. big some pretty As $X we is are Craig earlier, are that form avoid. which sheets loans that I market think to for of need about on And there of resolution, bank sitting asked we trillion balance there's things a

of done the or litigation, at move able between is relative whole really for different value are the lens the I to things a has end we be there parts categorically to different with day, exist job think that But avoid Alternative the landscape reason good saying like for to the good geographies. the the team a generally, example, of Credit viatical. this platform certain patent around in that

that what ahead pretty excited we're about So team. for lies

Okay.

thanks, us pulling back Carl, online. for So

to support. we get their quarter, time continued everybody didn't that for to forward to the happy sorry, Halloween. other say next first and And time again, anything than, you everybody I and And Craig, today look around. have seeing we didn't thank to

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

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