A global alternative investment manager that lends to and invests in middle-market companies across credit, real estate, infrastructure, and private equity. Founded in 1997 in Los Angeles by Antony Ressler and colleagues, the firm started with a focus on credit and leveraged loans before expanding into other strategies. Its name comes from Ares, the ancient Greek god of war, chosen by the founders to evoke courage and strength.
Management fees crossed $1B in a quarter for the first time, rising 13% to $1.02B, while carried interest fell 23%.
Management fees crossed $1 billion in a single quarter for the first time. rose 24% to $1.29 billion and increased 35% to $385.9 million, driven by a 13% rise in management fees to $1.02 billion from credit fund deployment and perpetual wealth vehicles, though fell 23% to $249.9 million as lower credit and private equity fund gains offset strong real assets performance. The core fee engine is scaling, but the quarter shows carried interest remains uneven even as reaches $671.3 billion.
Key takeaways
Management fees rose 13% to $1.02 billion, crossing $1 billion in a quarter for the first time, driven by capital deployment in Credit Group direct lending and alternative credit strategies and higher fees from perpetual wealth funds.
fell 23% to $249.9 million, as lower contributions from Credit and Private Equity funds were partially offset by strong performance in Real Assets funds.
, a measure of core operating profitability, grew 20% to $491.1 million, with all segments reporting double-digit percentage increases led by Real Assets at 30% and Private Equity at 55%.
Section summaries
Management's Discussion and Analysis
Ares Q2 FY2026 revenue rose 6% to $1.43B on higher management fees, while net income attributable to AMC grew 10% to $150.6M.
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Total reached $671.3B, up 17% , driven by $41.9B in new commitments and $24.0B in new debt commitments across segments.
Management fees increased 13% to $1.02B, primarily from Credit Group perpetual wealth funds and capital deployment in direct lending and alternative credit strategies.
Total reached $671.3 billion, up 17% , after the firm raised $41.9 billion in new commitments and $24.0 billion in new debt commitments.
A derivative suit filed May 26, 2026 alleges Ares Capital Management received excessive advisory fees from ARCC in violation of the Investment Company Act; the company disputes the allegations and the litigation is in preliminary stages.
rose 35% to $385.9 million with widening 2.3 points to 29.8%, while attributable to AMC increased 10% to $150.6 million.
What changed
The Q4 2025 carried interest reversal flagged as a risk did not extend into 2026: was $249.9 million in Q2 2026, down from $323.9 million a year ago but a gain rather than a reversal, and Q1 2026 had already shown a recovery with $161.9 million in incentive fees including $138.5 million from the SDL I fund's asset sale.
GCP-related compensation costs, which totaled $77 million in Q2 2025 and $69.4 million in Q3 2025, have receded as a distinct : compensation rose only 7% in Q2 2026 to $688.7 million on 15% headcount growth, suggesting integration costs are normalizing.
The $78.8 billion in flagged in FY 2025 remains the embedded growth pipeline, with the estimated $730.4 million in potential incremental annual management fees still unconverted; management fee growth of 13% this quarter was driven by deployment and perpetual vehicles rather than a step-change in conversion.
The BlueCove acquisition, which generated a $37.4 million in Q1 2026, did not produce a comparable non-cash boost in Q2 2026, and growth of 10% to $150.6 million reflects a more normalized quarter without that item.
What to watch
Whether the derivative suit alleging excessive advisory fees from ARCC progresses beyond preliminary stages or attracts additional claims, and whether it affects the fee structure of the firm's largest perpetual capital vehicle.
The conversion rate of into fee-paying , which would unlock the estimated $730.4 million in incremental annual management fees and determine whether management fee growth can be sustained if direct lending deployment moderates.
The trajectory of Part I Fees from ARCC, ASIF, and CADC if interest rates decline, given that rising rates have been a for management fee growth and the company flags rate sensitivity as a market risk.
Whether the 23% decline in this quarter reflects timing of fund realizations or a broader slowdown in credit and private equity fund appreciation that could pressure future performance income.
fell 23% to $249.9M, as lower contributions from Credit and Private Equity funds were partially offset by strong Real Assets fund performance.
grew 20% to $491.1M, with all segments reporting double-digit percentage increases, led by Real Assets (30%) and Private Equity (55%).
Compensation costs rose 7% to $688.7M on 15% headcount growth, while general expenses increased 10% due to higher marketing, professional fees, and technology costs.
Liquidity remains strong with $557.1M in cash and $1.39B available under the , supporting dividends, distributions, and strategic initiatives.
Quantitative and Qualitative Disclosures About Market Risk
Our primary exposure to market risk is related to our role as general partner or investment adviser to our funds and the sensitivity to movements in the fair value of their investments, including the effect on management fees, performance income and investment income. There have…
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Our primary exposure to market risk is related to our role as general partner or investment adviser to our funds and the sensitivity to movements in the fair value of their investments, including the effect on management fees, performance income and investment income.
There have been no material changes in our market risks for the six months ended June 30, 2026. For additional information on our market risks, refer to our Annual Report on Form 10-K for the year ended December 31, 2025, which is accessible on the SEC’s website at www.sec.gov.
A derivative suit alleges Ares Capital Management received excessive advisory fees from ARCC in violation of the Investment Company Act.
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A was filed on May 26, 2026, by Martin Siegel purportedly on behalf of Ares Capital Corporation (ARCC) in the Southern District of New York.
The suit alleges that Ares Capital Management, an indirect subsidiary, received excessive advisory fees in breach of its statutory fiduciary duty under Section 36(b) of the Investment Company Act.
The plaintiff seeks damages including of fees, , costs, and of the advisory agreement under Section 47(b) of the Act.
The litigation is in its preliminary stages; the company disputes the allegations and intends to defend vigorously.
The company states the outcome is inherently uncertain and it cannot estimate the amount or range of potential loss.
In addition to the other information set forth in this report, you should carefully consider the risk factors described in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which is accessible on the SEC’s website at www.sec.…
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In addition to the other information set forth in this report, you should carefully consider the risk factors described in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which is accessible on the SEC’s website at www.sec.gov. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2025 are not the only risks facing us. These risks and additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.