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Ares grows AUM 55% in 2021, a ‘transformational’ year

The asset manager organically raised a record $25bn in Q4, $77bn for the full year.

Ares Management reported that its assets under management soared 55 percent, or $108.8 billion, in 2021 to $305.8 billion in what chief executive officer Michael Arougheti called a “transformational” year. The increase included the acquisitions of Landmark Partners and Black Creek.

The asset manager said organic fundraising soared to records for both the fourth quarter and the year, totalling $25 billion and $77 billion, respectively.

Arougheti said in a news release that both fundraising numbers were “well in excess” of expectations, “as both institutional and retail investors are seeing the benefits of higher returns and lower volatility” that Ares generates with its alternative investments.

“All key financial metrics were at record levels in the fourth quarter”, said Jarrod Phillips, chief financial officer, with AUM, fee-related earnings and after-tax realised income all rising more than 50 percent year-on-year.

The Los Angeles-based manager said fee-related earnings rocketed 85 percent in the fourth quarter to $253.3 million and 65 percent for the full year to $712 million. After-tax realised income jumped 81 percent in the quarter to $291.1 million and 55 percent for the year to $803.7 million.

Fee-paying AUM totalled $187.8 billion at year end. That was primarily driven by “meaningful deployment” in direct lending, special opportunities and alternative credit strategies which are paid on invested capital, along with $30 billion in fee-paying AUM from Landmark and Black Creek, Phillips said during a call with analysts.

In the credit group, AUM surged 32 percent in the quarter to $192.7 billion from the previous year, while fee-paying AUM rose 33 percent to $117.4 billion. Management and other fees increased 30 percent during the quarter to $314.5 million and 28 percent in the year to $1.1 billion from the like year-ago periods.