Ares Management Corporation (ARES) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 1, 2023 12:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to Ares Management Corporation's Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. As a reminder, this conference call is being recorded on Tuesday, August 1, 2023.

I will now turn the call over to Carl Drake, Head of Public Markets and Investor Relations for Ares Management.

Carl Drake

Good afternoon, and thank you for joining us today for our second quarter conference call. I'm joined today by Michael Aragetti, our Chief Executive Officer; and Jarrod Phillips, our Chief Financial Officer.

We will also have a number of executives with us today who will be available during the Q&A session.

Before we begin, I want to remind you that comments made during this call contain forward-looking statements and are subject to risks and uncertainties, including those identified in the 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 any Ares 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 of the measures to the most directly comparable GAAP measures.

Note that we plan to file our Form 10-Q later this month. This morning, we announced that we declared our third quarter common dividend of $0.77 per share on the company's Class A and non-voting common stock. Representing an increase of 26% over our dividend for the same quarter a year ago. The dividend will be paid on September 29 to holders of record on September 15.

Now I'll turn the call over to Michael Arougheti, who will start with some quarterly business and strategic highlights.

Michael Arougheti

Thanks, Karl, and good afternoon. I hope everybody is doing well. During the second quarter, the equity and credit markets generated strong investment returns as the U.S. economy remained resilient despite a rapid increase in interest rates over the past 12 months. While transaction activity remains slower than last year, it is recovering modestly as market participants gain more confidence in transacting with improved visibility to the end of the Fed hiking cycle. Although activity is slower than we'd like, it's still a good environment for us as we believe it favors private capital managers with broad and deep sourcing capabilities scaled and flexible capital, significant relationships and well-known brands. In fact, our deployment picked up notably versus the first quarter, and our pipelines are generally higher compared to 3 months ago.