ARES (ARES) Q3 2025: $41B Deployment Surges 55% as Fundraising and Fee Base Expand

November 3, 2025 | By EarningsIQ Research

ARES posted record deployment and fundraising in Q3, with $41 billion invested and $30 billion raised, as broad-based demand for private markets solutions accelerated across credit, real estate, and infrastructure. The firm’s management fee base and fee-related earnings continued their double-digit climb, supported by robust net inflows and new product launches. With a record pipeline, growing wealth platform, and substantial dry powder, ARES enters 2026 positioned for further scale and margin expansion.

Summary

• Deployment Spike Drives Fee Growth: Record $41 billion invested, fueling management fee and AUM expansion.
• Wealth Platform Momentum: Global semi-liquid products and new geographies accelerated inflows, lifting long-term fundraising floor.
• Margin Upside Ahead: Integration and scale initiatives set the stage for improved efficiency and higher FRE margins in 2026.

Performance Analysis

ARES delivered a quarter marked by broad-based strength across its private markets platform, with management fees up 28% year-over-year and fee-related earnings (FRE) rising 39%. The $30 billion in capital raised set a new quarterly record, while $41 billion in gross deployment—up 55% sequentially—underscored robust transaction activity across strategies. Assets under management (AUM) grew to $595 billion, with fee-paying AUM at $368 billion, both up 28% YoY, reflecting the firm’s ability to convert its fundraising into revenue-generating assets.

The performance was not confined to a single area: institutional and wealth channels both contributed, with the latter seeing $5.4 billion in quarterly equity inflows, including significant offshore demand. Catch-up fees and crystallized performance revenues provided additional upside, while G&A and compensation expenses grew at a slower rate than management fees, supporting margin expansion. FRE margins reached 41.4%, and management signaled that expense reductions and GCP integration will drive further improvement in 2026.

• Deployment Breadth: Activity was diversified across credit, infrastructure, and real estate, rather than concentrated in any one asset class or geography.
• Performance Revenue Visibility: Annual crystallization in alternative credit and improving high watermarks in real estate funds set up potential for higher future fee-related performance revenues (FRPR).
• Fee Base Expansion: $81 billion of AUM not yet paying fees provides embedded future earnings power as capital is deployed.

ARES’s results highlight the firm’s ability to scale fee-generating assets while maintaining cost discipline, with a strong pipeline and ample dry powder positioning it for continued growth and operating leverage.

Executive Commentary

Strategic Positioning

1. Multi-Channel Fundraising Engine

ARES’s fundraising machine is firing on all cylinders, with over 40 institutional funds in the market and eight semi-liquid wealth products delivering record inflows. The wealth business—now targeting $125 billion AUM by 2028—benefited from global expansion, especially in Japan, and new product launches. This diversified engine raises the baseline of annual fundraising and reduces reliance on any single flagship fund.

2. Deployment and Dry Powder Advantage

With nearly $150 billion in dry powder, ARES is positioned to capitalize on improving transaction markets and narrowing bid-ask spreads. The firm’s “open source” investment model enables flexible capital deployment across asset classes, while proprietary sourcing and direct structuring provide downside protection and margin resilience, particularly in credit strategies.

3. Margin Expansion and Scale from GCP Integration

The GCP acquisition is driving both revenue and cost synergies, expanding ARES’s global real estate and infrastructure footprint and supporting vertical integration. Management expects GCP to be a lever for higher FRE margins in 2026, with scale in data centers and self-storage providing new growth vectors and operational efficiency.

4. Real Estate and Infrastructure Tailwinds

ARES’s real estate business is benefiting from supply constraints, rent growth, and rising transaction volumes, especially in logistics and multifamily. The infrastructure platform is seeing accelerating demand for debt, equity, and secondaries, with $10 billion raised in the last 12 months and new funds in data centers and digital infrastructure on the horizon.

5. Resilient Credit Model and Cycle Positioning

The firm’s credit portfolios remain healthy, with low non-accruals, conservative loan-to-value ratios, and minimal exposure to subprime consumer assets. Management emphasizes that its management fee-centric, asset-light model is positioned to outperform in downturns, as new deployment during cycles historically drives higher fees and returns.

Key Considerations

ARES’s Q3 performance demonstrates the power of its diversified platform, fee-centric business model, and ability to capture secular shifts toward private markets. Investors should weigh the following:

• Embedded Fee Upside: Large not-yet-fee-paying AUM and development assets provide a pipeline for future management fee growth as capital is deployed and stabilized.
• Wealth Channel Scale: The semi-liquid product suite and expanding global distribution raise the long-term fundraising floor and diversify sources of inflows.
• Margin Expansion Path: GCP integration and operating leverage are set to drive FRE margin improvement in 2026, with expense growth lagging fee growth.
• Deployment Breadth and Flexibility: The ability to invest across credit, real estate, and infrastructure allows ARES to pivot with market conditions and maximize relative value.
• Cycle Resilience: Management’s emphasis on downside protection, proprietary sourcing, and dry powder positions the firm to outperform through credit cycles and market dislocations.

Risks

ARES faces risks from market volatility, macroeconomic shifts, and potential credit cycle turn, though management emphasizes portfolio health and limited direct exposure to losses. Integration of GCP and realization of synergies could take longer than expected, and competition for capital and deal flow remains intense across private markets. Regulatory scrutiny and isolated instances of fraud in the industry are being monitored, though management views recent events as idiosyncratic rather than systemic.

Forward Outlook

For Q4 2025, ARES guided to:

• Approximately $125 million in fee-related performance revenues (FRPR) from the credit group
• Continued strong deployment pipeline across asset classes

For full-year 2025, management raised expectations to “meaningfully exceed” last year’s $93 billion fundraising record, citing robust demand and strong fund performance.

• Full-year FRE margins expected to be at or slightly above 2024 levels, with further margin expansion in 2026

Management highlighted tailwinds from improving transaction volumes, growing wealth inflows, and a record investment pipeline as drivers for 2026 performance.

• Ongoing new fund launches in credit, real estate, and infrastructure
• Potential S&P 500 index inclusion as a future milestone

Takeaways

ARES’s Q3 marks a pivotal inflection in scale, diversification, and margin trajectory, reinforcing its position as a leading global private markets manager.

• Fee Growth Embedded: Not-yet-fee-paying AUM and new product launches support a multi-year runway for management fee and FRE expansion.
• Wealth and Institutional Synergy: Parallel momentum in both channels reduces fundraising cyclicality and supports higher baseline inflows.
• Watch Deployment and Margin Leverage: Investors should track how quickly dry powder is deployed and how FRE margins progress as GCP integration matures through 2026.

Conclusion

ARES’s record deployment, robust fundraising, and margin discipline in Q3 underscore the strength of its diversified, fee-centric business model. With a deep pipeline, expanding wealth platform, and operating leverage from recent acquisitions, the firm is well positioned for continued growth and margin expansion into 2026.

Industry Read-Through

ARES’s results provide a clear signal that institutional and individual demand for private market solutions remains resilient and is accelerating, especially in credit, infrastructure, and real estate. The firm’s ability to raise and deploy capital at record levels, while maintaining margin discipline, sets a benchmark for scale and efficiency that competitors must match. Wealth channel adoption of semi-liquid products is rapidly becoming a key battleground, and the success of vertically integrated, multi-asset managers will likely shape industry dynamics as capital migrates from public to private markets. Firms lacking global distribution, product breadth, or scale in deployment may struggle to keep pace in the next phase of private markets growth.

ARES Financials Asset management Private markets Wealth management Real estate Infrastructure Fee revenue