Ares Management

Methodology

Ares Management generates earnings from management fees on growing AUM plus performance fees from investment exits. The company's focus on credit, private equity, and real estate creates diversified fee streams, though performance fees create earnings volatility. Normalizing earnings around fee-related earnings rather than lumpy performance carry provides more reliable fair value estimates for this alternative asset manager.

Methodology

Ares' PEG ratio can fluctuate based on fundraising momentum and performance fee realizations in a given period. The company's diversification across credit, PE, and real estate plus expansion into wealth management channels provides multiple growth drivers. Compare to peers like Apollo, Blackstone, and KKR to assess whether Ares' credit focus and direct lending platform justify its current multiple in the competitive alternatives landscape.

Methodology

Ares' dividend includes both recurring management fee-based distributions and variable performance fee payouts. The company's conversion to traditional C-corp structure has improved dividend consistency focused on fee-related earnings. PEGY is relevant for income-seeking investors, though understanding the composition between stable management fees and lumpy performance carry is crucial for assessing dividend sustainability.