Michael J. Arougheti, Co-Founder, CEO, and President of Ares Management Corp (NYSE:ARES), has sold a significant portion of his holdings in the investment advice company. According to a recent SEC filing, Arougheti disposed of shares valued at approximately $15.2 million. The transactions were executed on November 25 and 26, 2024, with prices ranging from $174.41 to $178.67 per share. Following these sales, Arougheti holds 30,465 shares indirectly through Atticus Enterprises LLC. These transactions were conducted under a 10b5-1 trading plan adopted in December 2023.
In other recent news, Ares Management Corporation reported significant financial growth in its third-quarter earnings, marking an 18% rise in management fees, a 24% increase in fee-related earnings, and a 28% growth in realized income. The company also deployed nearly $30 billion globally during the quarter, contributing to a yearly total of $74.6 billion. Furthermore, Ares set a new record in fundraising, securing nearly $21 billion in the third quarter alone.
RBC Capital Markets has updated its outlook on Ares Management, raising the price target to $185 from the previous $170 while maintaining an Outperform rating. The updated outlook reflects a revised perspective on the company's financial potential within the private credit sector. Despite slight revisions to the Earnings Per Share (EPS) estimates, the analyst from RBC Capital acknowledged the resilience in Ares Management's fundraising momentum.
In addition to these developments, Ares Management launched new products, including a special opportunities fund and a tax-efficient core infrastructure fund, which contributed to diversifying its portfolio. The company's wealth management sector also saw a notable increase, with a 57% rise in Assets Under Management (AUM) year-over-year.
However, Ares Management anticipates a decrease in the Fee-Related Earnings (FRE) margin to around 40% in Q4 due to factors like increased compensation costs. Despite this, the company projects strong Q4 performance with anticipated fee-related performance revenues between $160 million and $170 million and expects continued growth in AUM and performance income in 2025 and beyond.
InvestingPro Insights
As Michael J. Arougheti reduces his stake in Ares Management Corp (NYSE:ARES), investors might be curious about the company's current financial standing and market position. According to InvestingPro data, Ares boasts a substantial market capitalization of $36.09 billion, reflecting its significant presence in the investment advice sector.
The company's stock performance has been notably strong, with a 68.66% total return over the past year and a 23.15% return in the last three months. This impressive performance aligns with an InvestingPro Tip indicating that Ares is trading near its 52-week high, currently at 99.97% of that peak.
Ares has demonstrated a commitment to shareholder returns, with an InvestingPro Tip highlighting that the company has raised its dividend for 5 consecutive years. The current dividend yield stands at 2.08%, with a robust dividend growth rate of 20.78% over the last twelve months.
However, investors should note that Ares is trading at a high earnings multiple, with a P/E ratio of 80.2. This valuation metric suggests that the market has high growth expectations for the company, which may be supported by its strong recent performance but also indicates potential risks if those expectations are not met.
For those seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Ares Management Corp, providing deeper insights into the company's financial health and market position.
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