Ares Management, one of the world's largest alternative-asset managers, said it pulled in $31 billion of new investor money during the third quarter, a sign that demand for private credit, real estate, and infrastructure remains robust even as traditional markets wobble.
The Los Angeles-based firm reported that assets under management (AUM) rose 16% in the three months ended September 30, reaching $690.6 billion. Fee-related earnings, a key profitability metric for asset managers, climbed 11% to $524.2 million. Reuters noted that Ares is on pace for its strongest fundraising year yet.
Why alternatives are attracting so much money
Alternatives are investments that fall outside the traditional categories of stocks, bonds, and cash. They include private equity, private credit (loans made directly to companies rather than through public markets), real estate, and infrastructure projects like toll roads and energy grids.
Institutional investors—such as pension funds, endowments, and insurance companies—have been steadily increasing their allocations to these assets for years. The appeal is often higher potential returns and diversification away from public markets, which can be volatile. Private credit, in particular, has boomed as banks have pulled back from some lending, leaving room for firms like Ares to step in.
More than half of Ares's quarterly inflows came from outside its credit business, according to the brief. That suggests the firm's push into real estate and infrastructure is gaining traction, not just its core lending operations.
What this means for everyday investors
For most individual investors, direct access to private markets is limited—these funds often require high minimum investments and are restricted to accredited or institutional investors. However, the trend is relevant because it reflects where large pools of money are flowing, which can influence valuations and returns across the broader economy.
When big investors pour billions into private credit, for example, it can affect borrowing costs for mid-sized companies. When they buy infrastructure assets, it can shape how projects like renewable energy farms or data centers get financed. These dynamics can ripple into public markets and even into the prices of goods and services.
Retail investors can gain indirect exposure to alternatives through publicly traded asset managers like Ares, whose shares rise and fall with their earnings and AUM growth. They can also find alternative-like strategies in some mutual funds and exchange-traded funds, though these often come with higher fees and different risk profiles.
It's worth noting that alternatives are not without risks. Private assets are often illiquid, meaning investors may not be able to cash out quickly. Valuations can be less transparent than public markets, and performance can vary widely by manager and strategy.
Strong quarter for asset managers
Ares's results come amid a broader trend of asset managers benefiting from rising markets and steady inflows. Other firms, such as Amundi, have also reported solid, if slower, inflows. Meanwhile, energy giants like TotalEnergies and Shell have posted record profits, showing that cash is flowing across sectors.
For Ares, the key question is whether it can sustain this pace. The firm has been expanding its product lineup, including in private credit and infrastructure, and has been raising capital from new types of investors, such as wealth management platforms. If the fundraising momentum continues, Ares could end the year with a record haul, which would likely please shareholders.
Investors will be watching Ares's next earnings report for signs of continued inflows and any updates on its pipeline of deals. The firm's ability to deploy the new capital effectively—finding investments that generate strong returns—will be just as important as the raw fundraising numbers.
For now, the message from Ares is clear: alternatives remain in vogue, and the money keeps coming in.
