Yahoo Finance Ares Aims to Surpass $750 Billion in Assets by 2028
(Bloomberg) -- Ares Management Corp., unveiling a fresh slate of financial targets, predicted it will boost assets under management more than 75% to surpass $750 billion by the end of 2028.
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“We expect to grow faster than the projected industry average over the next five years,” the Los Angeles-based alternative asset manager wrote in a presentation posted to its website Tuesday.
Ares, led by Chief Executive Officer Mike Arougheti, set out a series of targets for the next half-decade as part of its planned investor day on Tuesday. More than two dozen executives are expected to offer guidance on their business lines as the firm sets expectations for the money it manages, the fees that will generate and the impact on its bottom line.
Ares is among several publicly traded alternative asset managers to set ambitious targets for growth in the coming years, as these firms look to fast-growing areas like credit and new client segments like wealthy individuals to boost their fortunes.
Brookfield Asset Management has said it aims to raise fee-bearing capital to $1 trillion by 2028, while KKR & Co. Inc. is looking to pass $1 trillion in assets in five years and Apollo Global Management plans to reach the same target by 2026. Blackstone Inc. hit the $1 trillion milestone last year.
Shares of Ares have surged nearly 73% over the past 12 months as the firm benefited from higher interest rates and strong demand for private credit. Executives identified credit – its largest asset class – as well as wealth and insurance as key areas of growth.
Annual fee-related earnings are expected to increase between 16% and 20% a year, with the midpoint of that range amounting to $2.65 billion in 2028, according to the presentation. That’s up from $1.2 billion for the last 12 months through this year’s first quarter.
Annual realized income is projected to grow between 20% and 25% a year, to $3.5 billion at the midpoint, the firm said. That’s up from $1.3 billion through the first quarter. The company aims to generate $3.6 billion in cash over the next 10 years from realized income.
Ares said its target annual dividend will increase to at least $7.66 per share by the end of 2028, up from $3.08 per share through the end of last year.
In the wealth business, Ares aims to increase assets under management to about $100 billion in 2028, up from about $25 billion now. The firm aims to boost assets under management in alternative credit, its fastest organically growing strategy, to about $70 billion by 2028, from $33.9 billion at the end of 2023.
Aspida, the firm’s insurance strategy, is expected to grow assets under management to $50 billion by 2028, Ares said. That’s up from $14 billion at the end of the first quarter.
(Updates with additional context starting in the fourth paragraph.)
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