Ares Management Corporation

As a reminder, this conference call is being recorded on Friday, July 31st, 2026. I will now turn the call over to Greg Mason, Co-Head of Public Markets Investor Relations for Aries Management.

Good morning and thank you for joining us today for our second quarter 2026 conference call. I'm joined today by Michael Arougheti, our Chief Executive Officer, and Jarrod Phillips, our Chief Financial Officer. We also have a number of executives with us today who will be available during Q&A. Before we begin, I want to remind you that comments made during this call contain certain forward-looking statements and are subject to risks and uncertainties, including those identified in our risk factors in our SEC filings. Our actual results could differ materially, and we undertake no obligation to update any such forward-looking statements. Please also note that past performance is not a guarantee of future results and nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in ARIES or any ARIES fund. During this call we will refer to certain non-GAAP financial measures which should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. Please refer to our second quarter earnings presentation available on the Investor Resources section of our website for reconciliations to these non-GAAP measures. To the most directly comparable GAAP measures, note that we plan to file our Form 10-Q early next month. This morning, we announced that we declared a quarterly dividend of $1.35 per share on the company's Class A and non-voting common stock. representing an increase of over 20% over our dividend for the same quarter a year ago. The dividend will be paid on September 30th, 2026 to holders of record on September 16th. Now I'll turn the call over to Mike who will start with some comments on the current market environment and our second quarter financial results.

Thank you, Greg, and good morning, everyone. I hope you're all doing well. Our strong second quarter results highlight the growing diversity and durability of our global platform. The depth of our global institutional platform drove another record quarter of fundraising, and our broad-based global investment capabilities enabled us to remain very active in a slower transaction environment. This drove 17% year-over-year increases in both our AUM and fee-paying AUM to approximately $671 billion and approximately $410 billion, respectively. This AUM growth translated into even healthier increases in our fee-related earnings and realized income, which increased 20% and over 30%, respectively, as we benefit from our growing scale and strong long-term fund performance. Notably, both growth rates are at the high end or above the long-term growth rate target ranges that we provided at our 2024 Investor Day. Overall, we're pleased with how we're performing and we remain on track to achieve our financial objectives for the year. The underlying drivers of our future growth continue to improve. We now operate in leading franchises in diversified credit, real estate, infrastructure, and secondaries across North America, Europe, and Asia. Beyond direct lending, our scaled and leading businesses across asset-based finance, opportunistic credit, liquid credit, global real estate, infrastructure, insurance, and our diversified secondary strategies are increasingly contributing to fundraising, deployment, management fees, and earnings growth. For the second quarter, we raised approximately $36 billion of gross capital, the highest quarter of fundraising in our history. This positions us with a record $170 billion of dry powder and $114 billion of AUM not yet paying fees, which sets us up well for future earnings growth. We've now raised approximately $66 billion through the first half of the year, and we remain on track for another record year of fundraising. The breadth of fundraising across our platform is particularly notable. Approximately 70% of the capital that we've raised this year is outside of our four largest credit fund families, and investors committed capital across approximately 90 different funds and vehicles. This demonstrates the increasing diversification and global reach of our business. We raised our highest ever quarterly amount of capital, and this was without a meaningful contribution from our SDL and ACE franchises, neither of which raised equity capital in their flagship commingled funds in the quarter. In our view, our franchise and brand have never been stronger in the eyes of our institutional investors. Institutional investors account for approximately 75% of our overall AUM and have represented more than 80% of our gross equity inflows over the last 12 months. ARIES is viewed as a key strategic partner with the scale, performance, and breadth of capabilities to serve a wider range of portfolio needs during a period where global institutional investors are seeking to consolidate their relationships. We're seeing the benefits of significant investments in our broad origination capabilities, our time tested investment approach, consistent credit and investment performance, and best in class client service. Now let me provide some additional details on our various fundraising and investing activities. Starting with fundraising and credit, we continue to see very strong institutional demand across our highly diversified credit strategies and have hit the hard cap on our last two private credit fundraisers. In alternative credit, which is our asset-based finance strategy, we completed the entire fundraise for Pathfinder 3 during the second quarter, raising approximately $8.5 billion in equity commitments. The fund significantly exceeded its $6.5 billion target and had demand well in excess of its hard cap. With this fundraise, we've strengthened our market leading position in the non-rated asset-backed finance sector as we now manage four of the five largest institutional ABS funds in the market. We believe that the addressable market is measured in trillions of dollars and our investment pipeline continues to expand as we partner with financial institutions and origination platforms across various asset classes. In U.S. and European direct lending, we raised over $12 billion of debt and equity capital during the quarter across our vehicles. Institutional engagement for the next generation of our U.S. senior direct lending strategy is very strong, including for both our traditional commingled fund and our new Evergreen core product. We continue to expect a first close for both products sometime in the fall, with additional closings next year. We expect to launch our seventh European direct lending fund early next year, Taken together, our institutional fundraising pipeline remains robust, with our two largest fund families in the market with successor funds in the year ahead. Within real assets, fundraising momentum was particularly strong across infrastructure and real estate. In infrastructure, our open-ended core infrastructure fund raised approximately $1.9 billion of equity during the quarter. Demand for the strategy has been exceptional, driven by investor interest in high-yielding, tax-advantaged real assets. At the same time, the number of power and digital infrastructure assets coming to market across a diverse set of subsectors is as high as we've seen, which sets us up well for accelerating deployment. These same trends are driving strong momentum in our sixth infrastructure debt fund, The fund raised approximately $500 million during the quarter and has now raised approximately $3.7 billion. We expect to complete the final close later this year at a level above the $5 billion raised for the prior vintage, including leverage and related vehicles. Recent momentum with this fund reflects an increasingly attractive infrastructure investing environment and strong performance for our infrastructure debt strategy. We're also seeing strong investor interest in our global digital infrastructure fund driven by our seed portfolio of attractive entitled and power projects in top tier global markets, the persistent and growing demand for computing power, the need for private capital and the differentiated nature of our operating platform. We anticipate holding a series of meaningful closings in late Q3 and into the fourth quarter and expect to complete the fundraise in 2027. In real estate, we also had an active quarter. Our fifth Japan Industrial Development Fund raised approximately $1.8 billion, bringing total commitments to date to $3.4 billion. We expect to hold our final close in the third quarter at our hard cap and at a level meaningfully above the prior vintage of $2.5 billion based on current exchange rates. In our real estate debt strategy, we raised approximately $2.8 billion across a new global commingled fund and separately managed accounts. The current environment remains attractive for real estate credit given early cycle conditions and a broadening of attractive sectors. We're also encouraged by the improving fundraising trends in our non-traded REITs, where inflows have been building each quarter since the fourth quarter of last year. Within the market, gross sales and net flows are improving. As property values stabilize, transaction activity remains positive, and the supply outlook is becoming more favorable across several sectors. Within secondaries, we continue to see good momentum in our global structured solution strategy, which raised over $500 million in the quarter. We also expect to complete an initial close for our next real estate secondaries fund in the second half of the year. Investor interest remains strong, with the current fundraising pace both faster and ahead of the level that we were seeing at the same point in the prior vintage. With our wealth management platform, our diversified product line continues to deliver solid investment performance, distinguishing us in the marketplace. We raised approximately $3.9 billion in gross equity commitments in the second quarter, an increase of approximately 15% from the prior year period, and roughly in line with the approximate $4 billion that we raised in each of the prior two quarters. We've raised approximately $8 billion during the first half of the year, and based on our current pipeline, which includes a strong start to Q3 with approximately a billion and a half in July, we anticipate a similar level of gross fundraising in the second half of this year. Based on industry data from Stanger, Aries has picked up meaningful market share within the channel and ranks number two in gross fundraising over the last 12 months through June. We finished the second quarter with over $76 billion of AUM in our wealth products, and even with some noise in the channel, our wealth AUM increased at an annualized rate of more than 25% quarter over quarter. Importantly, the composition of our wealth fundraising continues to broaden. Our goal from the outset was to build a diverse product offering that meets the needs of investors seeking durable income, tax advantage, real assets, and diversified growth. By providing quality offerings across a variety of products, we've demonstrated that we can consistently scale in the wealth channel, even as investor sentiment shifts across asset classes. Our Evergreen core infrastructure product has taken the lead in terms of monthly inflows, and we're still in the early stage of expanding our distribution partnerships. In just over two years, the fund has raised over $5.7 billion in AUM, securing the No. 2 rank in TTM gross fundraising for infrastructure Evergreen funds through June, representing approximately 20% market share. In the Wealth Channel, we've made significant investments in distribution, education, technology, operations, and product development, with nearly 200 professionals focused on the channel. We're currently working on interval fund solutions designed for the mass affluent and model portfolio markets in the U.S., and we have a robust forward pipeline of additional partners in the U.S., EMEA, and APAC to distribute our current flagship funds as well as product extensions. We continue to believe that we are in the early innings of capturing increased individual investor allocations to alternatives. Within our non-traded BDC, redemption themes were consistent with last quarter with roughly 95% of investor accounts electing to stay in the fund and redemption requests primarily coming from a small number of non-US family offices and smaller institutions. These types of investors represent only approximately 10% of the vehicle's NAV, and we intend to make certain adjustments to new share classes that we would offer to them going forward. Looking specifically at our core U.S. individual investor base, redemption requests totaled only approximately 2.5% of NAV and declined approximately 35% compared to the prior quarter. Together, these trends support our view that the investment thesis and long-term opportunity within the wealth channel remain intact with continued strength across our core U.S. investor base and sustained engagement from distribution partners and individual investors globally. We built the portfolio within our non-traded BDC with strong credit underwriting, conservative loan structures, and a disciplined approach to deployment. Based on the latest public data, the portfolio is performing well with very low non-accruals at around 0.5%, healthy organic EBITDA growth of 13% year-over-year, and the fund has declared stable monthly distributions through September 2026. Let me now highlight some recent investment activities and discuss market conditions. In part, due to our broad and diversified platform, our overall investment activity increased meaningfully in Q2 to approximately $36 billion compared to approximately $27 billion in the prior year period. Our firm-wide forward investment pipeline also improved nearly 20% quarter-over-quarter to a new record, and current transaction discussions across our strategies point to a stronger second half outlook for deployment. Within U.S. Direct Lending, we deployed approximately $12.4 billion gross committed during the quarter. Despite slower M&A activity in the market, deployment improved sequentially compared to the first quarter as we grew with our incumbent bonds, which represented 75% of our Q2 deployment. We're constructive on the second half environment for U.S. Direct Lending as sponsor dialogue improves and more companies return to market after delaying transactions earlier in the year. In European direct lending, second quarter and first half results were ahead of our initial expectations for the year, and we have a record pipeline going into the third quarter. The European direct lending market remains more fragmented than the U.S., with fewer scaled lenders and a greater premium on local origination, certainty of execution, and long-term sponsor partnerships. We believe that our market leading origination platform, scaled capital base, and long tenure operating in local markets is driving more investment opportunities for us across the continent. We're also seeing tremendous demand across the firm for both debt and equity capital to finance the development of digital infrastructure and related power requirements. The capital needs are significant and our platform is well positioned to address these opportunities. We have large and long-tenured teams that have invested through multiple cycles in power generation, infrastructure equity, and infrastructure debt. Notably, our digital infrastructure business with our vertically integrated data center development platform, Ada Infrastructure, continues to grow with over 100 professionals that have significant experience across investing, development, engineering, construction, and power procurement. Our ADA team, which has long-standing hyperscalar relationships, is currently executing on seven large data center campuses, representing 22 individual data center investments with approximately one gigawatt of compute, and has a strong pipeline of future projects. Within real estate, our transaction activity continues to rebound, particularly in North America and Japan, as we deployed over $4 billion in the quarter, both sequentially and year-over-year. We continue to see attractive opportunities in our core logistics business and are beginning to selectively broaden our investments into properties where we've traditionally been underweight, including hospitality and retail. Our approach remains highly targeted and focused on assets with strong locations, limited supply, resilient tenant demand, and favorable demographic trends. Within secondaries, market volumes continue to grow as the need for distributions and enhanced liquidity remains a central theme across private markets. For example, industry volumes and credit secondaries through the first six months of the year have already matched 2025 full-year volumes. Within every asset class, we're seeing certain institutional investors seeking liquidity for LP interests, while managers are evaluating GP-led solutions for high-quality assets that they want to continue owning while still delivering DPI to their investors. More broadly, portfolio performance remains strong across the firm. Jarrod will discuss our fund returns and financial results in greater detail, but the consistency of our performance continues to support fundraising, deepen our relationships with investors, and reinforce the strength of our franchise. And with that, I will now turn the call over to Jarrod to provide additional details on our financial results. Jarrod?