Key Takeaways:
- Fundraising Momentum: Record $30B raised in Q3, exceeding $105B over 12 months.
- Price Projection: Based on current execution, ARES stock could reach $209 by December 2027.
- Potential Gains: This target implies a total return of 39% from the current price of $150.
- Annual Return: Investors could see roughly 18.9% growth over the next 1.9 years.
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Ares Management Corporation (ARES) just closed its largest fundraising quarter ever. The alternative asset manager raised over $30 billion in Q3, pushing its trailing 12-month total past $105 billion—up 24% from the prior year.
CEO Michael Arougheti is executing a diversified growth strategy that raised more capital in three months than most competitors manage in a year.
With nearly $150 billion in dry powder, record deployment of $41 billion in Q3, and a wealth management business growing at 70% year-over-year, Ares is grabbing market share across private credit, infrastructure, and real estate.
Management fees jumped 28% to $971 million. Fee-related earnings climbed 39% to $471 million. The company just announced a 20% increase in the dividend and expects to surpass last year’s $93 billion fundraising record.
Despite potential headwinds from declining base rates, Ares stock trades at $149.80, offering compelling upside for investors who recognize the company’s scale advantages and platform diversity.
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What the Model Says for Ares Stock
We analyzed Ares as it transforms into a global alternatives powerhouse with unmatched breadth across asset classes.
The company is scaling rapidly in infrastructure. It closed its third infrastructure secondaries fund at $3.3 billion—over 3x the size of its predecessor.
The sixth infrastructure debt fund hit $5.3 billion, including $2 billion raised after quarter-end. Across all infrastructure products, Ares raised over $10 billion in the past year.
Wealth management is accelerating.
- The semi-liquid funds business pulled in $5.4 billion in Q3, marking a record quarter and bringing year-to-date inflows to over $12 billion.
- Management raised its 2028 wealth AUM target from $100 billion to $125 billion. International demand accounted for 40% of Q3 inflows, with a strong appetite following the first Japan product launch.
Using a forecast of 23.1% annual revenue growth and 36.7% operating margins, our model projects the stock price will reach $208.86 in 1.9 years. This assumes a 21.7x price-to-earnings multiple.
That’s below Ares’s historical P/E averages of 30x (one year) and 26.1x (five years). The lower multiple factors in near-term pressure from falling base rates, which could compress absolute yields in private credit.
However, management noted that spread widening and higher transaction volumes typically offset this dynamic.
The real opportunity lies in converting dry powder to fee-paying assets. Ares has $81 billion of capital raised but not yet deployed, plus $4.6 billion in development projects that could generate an additional $770 million in management fees once stabilized.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for ARES stock:
1. Revenue Growth: 23.1%
Ares’s growth engine runs on two cylinders: fundraising and deployment.
Fundraising hit record levels. The company raised $30 billion in Q3 alone—its best quarter ever. Over 12 months, it generated $105 billion, up 24% year over year. Management expects to “meaningfully exceed” last year’s $93 billion total.
Deployment surged even more dramatically. Ares invested $41 billion in Q3, up 55% from Q2 and 30% above the previous record. This wasn’t concentrated in one strategy—direct lending, alternative credit, real estate, and infrastructure all showed strong activity.
The wealth channel is gaining serious traction. Semi-liquid fund inflows of $5.4 billion in Q3 brought Ares’s market share above 10%, ranking second in the industry.
With eight semi-liquid products gaining momentum and half of the 80+ distribution partnerships currently selling only one product, there’s significant room for multi-product expansion.
2. Operating margins: 36.7%
Ares is expanding margins while investing in growth.
Fee-related earnings of $471 million grew 39% year-over-year. Margins reached 41.4% in Q3. Management expects full-year margins to match or slightly exceed 2024 levels, even with temporary compression from the GCP integration.
The GCP acquisition is delivering expense synergies that should accelerate margin expansion in 2026. Management targets the high end of its 0-150 basis point annual margin guidance next year.
Management fees grew 28% while compensation increased just 4.6% quarter-over-quarter. Long-term, G&A expenses should grow at only 50-75% of the management fee growth rate.
3. Exit P/E Multiple: 21.7x
The market values Ares at 24.3x earnings today. We assume the P/E compresses to 21.7x over our forecast period.
Declining base rates create near-term uncertainty around private credit yields. But management emphasized that lower rates historically drive higher transaction volumes and wider credit spreads, which offset the base rate impact.
In its BDC business, Ares Capital Corporation’s model shows minimal sensitivity to rate changes.
As dry powder gets deployed and new funds start charging fees, Ares should command a premium multiple. The company delivered 25% growth in after-tax realized income per share and maintains the industry’s largest dry powder position at nearly $150 billion.
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What Happens If Things Go Better or Worse?
Alternative asset managers face cyclical fundraising and deployment risks. Here’s how Ares stock might perform under different scenarios through December 2029:
- Low Case: If revenue growth slows to 16.9% and margins compress to 26.0%, investors still see a 46.1% total return (10.1% annually).
- Mid Case: With 18.8% growth and 28.7% margins, we expect a total return of 99.9% (19.3% annually).
- High Case: If deployment accelerates and Ares maintains 30.6% margins while growing at 20.7%, total returns could reach 160.9% (27.7% annually).
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The range reflects execution on fundraising, deployment timing, and margin expansion.
In the worst case, declining rates hurt yields and transaction volumes stall.
In the best-case scenario, deployment accelerates as M&A activity rebounds, wealth inflows surge from international expansion, and infrastructure investments scale with booming data center demand.
How Much Upside Does Ares Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
