Ares Management Corporation (ARES): Business Model Canvas [Dec-2025 Updated]

You're looking to dissect how a giant like Ares Management Corporation (ARES) actually makes its money, especially now that they're sitting on nearly \$596 billion in Assets Under Management as of Q3 2025. Honestly, it's a masterclass in alternative asset management: they lock up capital for the long haul-83% of that AUM is perpetual-and then deploy that firepower, with about \$150 billion in dry powder ready to go. Their revenue engine is a predictable two-punch: recurring Management Fees hitting \$971.8 million last quarter, plus the performance-based Carried Interest of \$464.7 million, showing they get paid for both managing the assets and making them grow. Below, I've mapped out the nine essential blocks that make this powerhouse tick, from their key partnerships with sovereign wealth funds to their dual-channel distribution strategy.

Ares Management Corporation (ARES) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that fuel Ares Management Corporation's engine, the Key Partnerships block of the Business Model Canvas. These aren't just casual acquaintances; these are deep, capital-providing, and operational relationships that directly scale the firm's Assets Under Management (AUM) and deployment capabilities.

Strategic joint ventures with sovereign wealth funds like Mubadala and ADIC

The relationship with major Middle Eastern sovereign wealth funds is critical for large-scale capital formation, especially in private credit. Abu Dhabi's Mubadala Investment Company and the Abu Dhabi Investment Authority (ADIC) are significant anchors.

For the first nine months of 2025, MENA sovereign wealth funds deployed $56.3 billion across 97 transactions. Within this, Mubadala invested $17.4 billion, and ADIC invested $9.6 billion. These two funds alone accounted for nearly half of all regional activity.

Ares Management has a history of these deep ties; for instance, in 2023, Mubadala partnered with Ares and Aldar Properties on a $1 billion private credit fund. Mubadala's private credit portfolio itself reached approximately $20 billion (AED 73.5bn) in 2024, a growth supported by partnerships with institutions including Ares.

Co-investment partners in direct lending deals (e.g., New Mountain Capital, Altas Partners)

Ares Management's Credit Group relies heavily on sponsor relationships to source and execute direct lending deals. The volume of activity shows the scale of these partnerships.

In the third quarter of 2025, Ares closed approximately $15.2 billion in U.S. direct lending commitments across 88 transactions. Over the trailing 12 months ending September 30, 2025, this totaled approximately $49.3 billion across 329 transactions.

These deals frequently involve private equity sponsors acting as the acquirers or owners of the underlying companies. Here are some partners involved in recent financings where Ares served as an agent or lead arranger:

The firm's total global platform AUM stood at over $595 billion as of September 30, 2025.

Financial advisors and wealth platforms for retail distribution push

Ares is actively diversifying its investor base by targeting the retail and high-net-worth segment, which requires partnerships with wealth managers and advisory platforms. The firm has a stated goal to quadruple assets from this channel.

• Ares targets $100 billion of AUM from private wealth fundraising by 2028.
• This target compares to about $25 billion of AUM across semi-liquid pools as of Investor Day 2024.
• A key strategic move was the acquisition of a significant minority stake in EP Wealth Advisors.
• Ares financed a facility supporting Merit Financial Advisors, noted as an advisory platform with $20+ billion AUM as of Q3 2025.

The global assets of high-net-worth investors are estimated by Ares to total $80 trillion in 2025, expected to rise to nearly $100 trillion by 2028.

Global real estate operating partners, like the team integrated from GCP International

The integration of GCP International significantly enhanced Ares' vertically integrated real estate capabilities. This partnership was formalized with a completed acquisition in early 2025.

The upfront purchase price for GCP International was $3.7 billion, with an earn-out provision up to $1.5 billion contingent on performance targets through the end of 2027.

The impact on scale is clear:

• Ares Real Estate AUM was targeted to reach $96 billion post-acquisition.
• As of December 31, 2024, the combined platform AUM was over $525 billion, with the Real Assets business exceeding $115 billion.
• By June 30, 2025, the Real Assets Group AUM grew to $129.8 billion.
• GCP International contributed approximately $42 billion of AUM across geographies including Japan, Europe, the U.S., Brazil, and Vietnam.

This integration also bolstered Ares' digital infrastructure focus, which now includes projects representing over 1GW of IT capacity, with approximately 500MW currently underway. Finance: draft 13-week cash view by Friday.

Ares Management Corporation (ARES) - Canvas Business Model: Key Activities

You're looking at the core engine of Ares Management Corporation, the activities that actually put capital to work and generate fees. It's all about managing that massive pool of capital and keeping the fundraising engine hot. Here's the quick math on what they were actively doing through the third quarter of 2025.

The primary activity is the active management and deployment of capital. As of September 30, 2025, Ares Management Corporation was actively managing total assets under management (AUM) of $596 billion. This scale requires constant deployment, and in Q3 2025, gross capital deployment was over $41 billion invested during the quarter.

Keeping that AUM growing requires relentless capital raising. Ares Management Corporation was raising capital across more than 20 strategies and 40 funds in market across three channels as of Q2 2025. Q3 2025 was a record quarter for fundraising, with the firm bringing in more than $30 billion in new capital commitments, surpassing the previous record of $19.3 billion set in Q2 2025. Year-to-date fundraising through Q3 2025 exceeded $77 billion, and the last twelve months saw over $105 billion raised. This activity directly translated into record management fees of $971.8 million for Q3 2025, a 28% increase year-over-year.

The day-to-day work involves the sourcing and underwriting of credit and private equity investments. This is where the firm's deep teams execute. The Credit Group, for instance, is one of the largest self-originating direct lenders to the U.S. and European middle markets. The firm's ability to deploy capital across the capital structure-from senior debt to common equity-is a core function of this activity.

A key strategic activity was integrating strategic acquisitions for global platform expansion. Ares completed the acquisition of GCP International, excluding its Greater China operations, for $3.7 billion in March 2025. This move was designed to firmly establish Ares Real Estate as one of the largest global vertically integrated platforms, nearly doubling its real estate AUM to approximately $109.5 billion as of September 30, 2025.

Finally, a major ongoing activity is managing and optimizing the Credit Group portfolio. As of September 30, 2025, the Ares Credit Group was managing approximately $391.5 billion of AUM across its liquid and illiquid credit strategies. This segment is the largest by far, and its performance drives a significant portion of the firm's overall results, supported by $150 billion in available capital at the end of Q3 2025 to capture new opportunities.

Here is a breakdown of the AUM managed across the key investment groups as of the end of Q3 2025:

The deployment and management activities are further detailed by the capital structure Ares is deploying:

• Fee-Paying AUM reached $368 billion as of Q3 2025, a 28% year-over-year growth.
• Available Capital (dry powder) stood at $150 billion at the end of Q3 2025.
• AUM not yet paying fees was $103.0 billion year-over-year as of Q3 2025, up 21% from the prior year.
• Perpetual capital grew 43% year-over-year to $166.6 billion as of Q2 2025.
• The firm expects to exceed its previous annual fundraising record of $93 billion set in 2024.

Ares Management Corporation (ARES) - Canvas Business Model: Key Resources

You're looking at the core assets Ares Management Corporation has built to drive its business, the stuff that can't easily be copied. Honestly, the people are the engine here.

The firm operates a global investment platform supported by approximately 4,200 employees as of September 30, 2025. This scale is necessary to manage the sheer volume of capital and deals across their specialized groups.

The most significant resource is the scale of capital under management. As of September 30, 2025, Ares Management Corporation had $596 billion in Assets Under Management (AUM). This massive pool of capital is strategically segmented across the platform, giving you a clear view of where the firm's focus lies:

Next up is the deployable capital, or dry powder, which is what fuels near-term growth and opportunistic deployment. As of June 30, 2025, Ares Management Corporation held a significant available capital position of $150.8 billion for future investments. That's a huge war chest ready to be put to work.

A key element underpinning the stability of the revenue base is the nature of the capital they manage. Perpetual and long-dated capital vehicles are a major resource, accounting for 83% of the total AUM. This structure means less reliance on short-term fundraising cycles.

The proprietary sourcing network is critical, especially for private credit and deal flow, which is where Ares has a distinct advantage. This network allows them to access opportunities that might not hit broader auction processes. The success of this sourcing is evident in the size of the Credit Group, which alone commands $391.5 billion in AUM as of September 30, 2025. This network also helps them manage capital across different strategies:

• Direct Lending
• Liquid Credit
• Alternative Credit
• Opportunistic Credit

The firm also maintains deep relationships with its investor base, totaling approximately 2,700 Direct Institutional Relationships as of late 2025.

Ares Management Corporation (ARES) - Canvas Business Model: Value Propositions

You're looking at Ares Management Corporation's value proposition as of late 2025; it's built on scale and diversification, which helps them weather different economic climates. The core promise is delivering flexible capital solutions across the entire market cycle, which you can see reflected in their substantial dry powder.

As of September 30, 2025, Ares Management Corporation had over $150 billion in available capital, ready for deployment. This significant pool of capital, up 19% from the prior year for one reported figure, means they can act decisively when others might be constrained. This ability to provide capital when needed is a major draw for businesses seeking partnership.

The diversification across asset classes is key to managing risk and capturing varied opportunities. This isn't just a credit shop anymore; the integration of the GCP International business has substantially bolstered their Real Assets offering. Here's the quick math on their asset base as of the third quarter of 2025:

The Real Assets segment saw dramatic growth, partly due to the GCP International acquisition which added $45.3 billion in AUM in the first quarter of 2025 alone. This diversification helps Ares generate consistent, attractive risk-adjusted returns for long-term investors. Their operational efficiency is evident in their fee structure; for the third quarter of 2025, Fee-Related Earnings (FRE) hit $471.2 million on record management fees of $971.8 million. This translated to a healthy FRE margin of 41.4%.

Ares is actively broadening its investor base beyond traditional institutions, recognizing the shift toward democratized alternatives. This push into the retail investor market is being supported by strategic moves, such as the acquisition of a significant minority stake in EP Wealth Advisors. This effort is designed to diversify their investor base and strengthen wealth management capabilities, helping to secure long-term fee earnings stability. They are seeing strong investor interest across their institutional, wealth, and insurance channels.

Finally, the scale and global reach are undeniable, providing a platform advantage, especially in high-conviction sectors like logistics and digital infrastructure following the GCP integration. Ares now has approximately 4,200 employees operating across North America, South America, Europe, Asia Pacific, and the Middle East, with 60+ global offices. In the infrastructure space specifically, they raised over $10 billion across various infrastructure products in the 12 months leading up to Q3 2025. Their digital infrastructure business is substantial, managing several large hyperscale projects that collectively represent over 1GW of IT capacity, with about 500MW currently underway. This defintely positions them as a top-three global owner and operator of logistics assets.

Ares Management Corporation (ARES) - Canvas Business Model: Customer Relationships

You're looking at how Ares Management Corporation (ARES) keeps its capital providers close, which is the whole game in alternative asset management. It's all about deep, long-term relationships, especially with the big institutional players.

Dedicated, high-touch relationship management for institutional Limited Partners (LPs).

The core relationship strategy centers on providing bespoke service to the largest pools of capital. As of September 30, 2025, Ares Management Corporation's global platform directly engaged with approximately ~2,700 institutional relationships. These relationships are the bedrock, supporting the total Assets Under Management (AUM) which stood at $596 billion as of September 30, 2025. The firm's focus on perpetual capital from these channels helps secure a stickier base of AUM.

Long-term, trust-based partnerships to secure repeat fund commitments.

The goal here is to build partnerships that lead to continuous re-ups and increased allocations across Ares Management Corporation's complementary strategies. The success of this is visible in the fundraising momentum; for instance, in Q2 2025, the firm logged more than $26 billion raised in the quarter. Furthermore, Ares Management Corporation expected to meaningfully exceed its previous annual fundraising record of $93 billion in 2025, driven by broad investor demand. This trust translates directly into the fee-related revenue base, with Fee Related Earnings (FRE) growing 26% year-over-year in Q2 2025.

Scalable, technology-enabled service for the growing retail wealth channel.

ARES is actively diversifying its funding sources by scaling up its Ares Wealth Management Solutions (AWMS) platform to reach individual investors. The firm is forecasting AWMS to reach $50 billion in Assets Under Management in 2025, an increase from $40 billion in 2024. This push is strategic, aiming to capitalize on the mass affluent segment, not just the ultra-high-net-worth individuals. The firm also made a move to deepen its wealth channel capabilities by acquiring a significant minority stake in EP Wealth Advisors. Ares Management Corporation has also set an ambitious target for this channel, lifting its year-end 2028 AUM target for AWMS to $125 billion, up from the prior target of $100 billion.

Here's a quick look at the key relationship metrics as of late 2025:

Direct engagement with approximately 2,700 institutional relationships.

This number represents the direct touchpoints with the institutional base, which is crucial for securing large, multi-year fund commitments. The Credit Group, Ares Management Corporation's largest segment, accounted for $377.1 billion in AUM as of Q2 2025. The firm's focus on providing flexible capital across credit, real estate, private equity, and infrastructure is what keeps these relationships engaged across the platform.

The relationship strategy is clearly bifurcated:

• Deep, customized service for the institutional base of ~2,700 relationships.
• Scalable product development for the growing retail segment, targeting $800m in management fees by 2028.
• Securing capital commitments that drive growth, like the $20.2 billion raised in new commitments during Q1 2025.

Finance: draft 13-week cash view by Friday.

Ares Management Corporation (ARES) - Canvas Business Model: Channels

You're looking at how Ares Management Corporation gets its investment products in front of clients, which is a multi-pronged approach spanning the globe and different investor types.

The firm's overall reach is substantial, reporting total Assets Under Management (AUM) of approximately $595.7 billion as of September 30, 2025. This scale is supported by a global platform with operations across North America, South America, Europe, Asia Pacific, and the Middle East.

The physical presence is key to servicing these diverse channels. Ares Management Corporation maintains more than 55 global offices, supported by approximately 4,200 employees as of November 2025.

The primary distribution channels are segmented based on the client type and product structure:

• Direct institutional sales team to pension funds and sovereign wealth funds.
• Ares Wealth Management Solutions (AWMS) for individual investors and advisors.
• Publicly traded vehicles like Business Development Companies (BDCs).
• Non-traded real estate investment trusts (REITs) and semi-liquid funds.
• Global offices across North America, Europe, and Asia Pacific.

The direct institutional channel, largely driven by the Credit Group, is the largest component of the business. This group alone managed $391.5 billion of AUM as of September 30, 2025. Ares Management reports maintaining approximately 2,700 Direct Institutional Relationships.

For the wealth channel, Ares Wealth Management Solutions (AWMS) is a major focus area for growth. AWMS is forecasting its AUM to reach $50 billion in 2025. The firm has set an updated target for its AWMS platform to reach $125 billion in AUM by the end of 2028. This channel targets the mass affluent segment through products like interval funds and European Long-Term Investment Funds.

Publicly traded vehicles offer a distinct route to market, particularly for private credit exposure. The broader Business Development Company (BDC) sector's AUM grew to approximately $450 billion in 2025. Specifically, Ares Capital Corporation, an externally managed BDC under the Ares Management franchise, holds nearly $30 billion in AUM.

The Real Assets Group, which includes real estate and infrastructure, has an AUM of $132.4 billion as of September 30, 2025. This segment accesses investors through various structures, including non-traded REITs in the U.S. and publicly traded REITs in the U.S. and Japan. Furthermore, Ares is actively growing its semi-liquid fund offerings, which are targeted at private wealth, with a goal of $125 billion in AUM for these products by 2028.

The geographic distribution of these channels is supported by a wide physical footprint. Here's a look at the scale by region as of late 2025:

The firm's strategy relies on collaboration across these groups to enhance deal flow and market insights, which is a key differentiator for all distribution channels.

Ares Management Corporation (ARES) - Canvas Business Model: Customer Segments

As of September 30, 2025, Ares Management Corporation's total Assets Under Management (AUM) stood at approximately $595.7 billion.

The core customer segments providing capital and receiving financing solutions are detailed below with associated financial metrics from late 2025 reporting periods.

Large Institutional Investors (e.g., pension funds, insurance companies, endowments)

This segment represents the largest source of capital for Ares Management Corporation, primarily through commingled funds and separately managed accounts (SMAs).

• Direct Institutional Relationships: Approximately ~2,700 as of September 30, 2025.
• Credit Group AUM: Accounted for $391.5 billion of total AUM as of September 30, 2025.
• Institutional Fundraising Share: Approximately 55% of total fundraising during Q2 2025 came from institutional products (30% directly into commingled funds and 25% into SMAs or open-end institutional fund structures).

Sovereign Wealth Funds and Central Banks

These entities are included within the broader institutional investor base, contributing to the overall capital commitments across Ares Management Corporation's strategies.

High-Net-Worth (HNW) and Retail Investors via wealth solutions push

Ares Management Corporation has a strategic focus on expanding capital raising through its wealth channel.

• Wealth Channel Fundraising: Totaled $7 billion in equity commitments for the first half of 2025.
• Year-over-Year Growth: This H1 2025 wealth channel fundraising represented a 54% increase over the first half of 2024.
• Total New Capital Raised in Q2 2025: $26.2 billion in new capital commitments.

Portfolio Companies (as recipients of flexible capital)

These companies are the counterparties receiving financing solutions from the capital raised from the investor segments above, across Ares Management Corporation's investment groups.

Ares Management Corporation maintained substantial capacity to deploy capital to these companies, evidenced by its available capital, or dry powder.

The scale of capital managed for these recipients is reflected in the AUM breakdown by group as of September 30, 2025:

Ares Management Corporation (ARES) - Canvas Business Model: Cost Structure

You're looking at the expense side of the Ares Management Corporation engine, which is how they fund their global operations to manage that massive $572.4 billion in Assets Under Management (AUM) as of June 30, 2025. Honestly, for an asset manager like Ares Management Corporation, the cost structure is dominated by the people who source, manage, and grow that capital.

The total reported expenses for the year ended December 31, 2024, were $2,938,691 thousand (or approximately $2.94 billion). This is the big bucket that covers everything from salaries to office space.

Employee Compensation and Benefits

This is definitely the largest operating expense for Ares Management Corporation, reflecting the high value placed on investment professionals. For the year ended December 31, 2024, Compensation and Benefits totaled $1,731,747 thousand (or about $1.73 billion). This represented a $245,049 thousand (or $245 million) decrease, or 16%, compared to the prior year, primarily due to lower performance-related compensation. Still, the underlying cost base is growing to support scale.

The components driving this expense include:

• The increase in compensation and benefits was driven by higher Part I Fee compensation of $43.1 million, corresponding to the increase in Part I Fees.
• Higher fee related performance compensation of $27.7 million, corresponding to the increase in fee related performance revenues.
• An increase in salary expense of $11.0 million, primarily attributable to headcount growth.
• Equity-based compensation expense increased by $96.9 million from the prior year due to newly issued unvested awards, magnified by the increased stock price.
• Stock-Based Compensation for the fiscal year ending December 31, 2024, was reported at $352.85 million.

General and Administrative (G&A) Costs for Global Office Network and Compliance

General, administrative and other expenses were $736,501 thousand (or about $736.5 million) for the year ended December 31, 2024, which was a 12% favorable change (decrease) from 2023. This category covers the costs of running a global platform, including compliance infrastructure necessary for managing assets across multiple jurisdictions.

Here's a quick look at the major expense categories that feed into G&A and other operating costs for 2024:

Technology and Data Infrastructure Costs to Support Scale

Supporting the growth in AUM to $572.4 billion as of mid-2025 requires significant investment in the digital backbone. For the year ended December 31, 2024, occupancy costs, information services, and information technology costs collectively increased by $39.7 million compared to the prior year. This increase was explicitly tied to supporting the growing headcount and business expansion, which included costs for the new corporate headquarters occupied beginning in the third quarter of 2024. Furthermore, Ares Management Corporation is actively targeting significant capital raises for digital infrastructure, such as seeking to raise over US$8 billion in equity for data center projects across London, Japan, and Brazil.

Fund-Related Expenses and Investment Professional Compensation

Beyond the direct compensation listed above, fund-related expenses are a distinct cost. Expenses of Consolidated Funds were $20,879 thousand (or about $20.9 million) for 2024, a 52% increase from 2023. Investment professional compensation tied directly to fund performance is captured in the $449,564 thousand (or $449.6 million) in Performance related compensation recorded for 2024, which was a 26% favorable change (decrease) from 2023.

Integration Costs for Acquisitions like GCP International, Offset by Synergies

Ares Management Corporation closed the strategic acquisition of GCP International in March 2025, which significantly expanded the Real Assets Group AUM by 92% year-over-year to $129.8 billion as of Q2 2025. Acquisition-related costs increased by $45.4 million for the year ended December 31, 2024, with the majority related to the GCP Acquisition. For the second quarter of 2025, the first full quarter including GCP, the company reported approximately $10 million of integration costs. Management expects about $6 to $7 million per quarter of these costs will eventually run off over the next 12 months, suggesting a planned reduction in integration-specific spending as synergies are realized. The GCP acquisition contributed $34 million in Fee Related Earnings (FRE) for Q2 2025, achieving a 33% FRE margin on its revenues.

Ares Management Corporation (ARES) - Canvas Business Model: Revenue Streams

You're looking at how Ares Management Corporation actually brings in the money, which is key to understanding its valuation, especially as we move through late 2025. The revenue mix shows a strong reliance on recurring management fees, but the performance fees are what really move the needle when markets are active. Honestly, the core profitability metric, Fee Related Earnings (FRE), tells a very clear story about the underlying business health.

Here's a quick look at the key Q3 2025 figures that define the revenue streams for Ares Management Corporation:

The total GAAP revenue for the three months ended September 30, 2025, hit $1.66 billion, a 47% increase compared to the same period in 2024. That growth shows the platform is scaling up well.

The revenue streams are clearly segmented, which helps you see where the stability and the upside potential lie. You want to track these components closely:

• Management Fees (recurring revenue), which hit $971.8 million in Q3 2025.
• Carried Interest Allocation (performance fees), which was $464.7 million in Q3 2025.
• Other Fees, which include transaction and monitoring fees; for example, incentive fees reached $100.7 million in the quarter.
• Investment income from the firm's balance sheet investments, which contributes to the overall realized income figure of $455.5 million.
• Fee Related Earnings (FRE) of $471.2 million in Q3 2025 shows strong core profitability.

The FRE margin is also telling; it was reported at 41.4% for the quarter. That number is what you use to gauge the efficiency of the management fee base. Also, Ares Management Corporation had $150 billion in significant available capital at the end of the third quarter, ready for deployment. That capital base is the engine for future fee and performance income.