Ares Management Corp at Morgan Stanley Financials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mike Cyprys - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>Great. Well, why don't we start off with your thoughts on the macro. First half has been a bit volatile, to put it kindly, a lot of uncertainty. Some of this has normalized a bit here since some of the peak volatility that we have seen in April. So I guess through the lens of your portfolio companies at Ares, how are you seeing the state of the global economy, inflation? And how is the portfolio holding up?

Question: Mike Cyprys - Morgan Stanley - Analyst : So do you think maybe activity that otherwise would have taken place in 2Q gets pushed out 3Q, 4Q? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 4:15PM, ARES.N - Ares Management Corp at Morgan Stanley Financials Conference

Question: Mike Cyprys - Morgan Stanley - Analyst : And just given that backdrop, you guys have over $140 billion of dry powder on the platform today. Where are you seeing some of the most interesting areas to put capital to work? Any particular areas that you're avoiding? And could ultimately '25 here be a better year than last year from a deployment standpoint?

Question: Mike Cyprys - Morgan Stanley - Analyst : Past couple of quarters, you talked about gross to net deployment ratio improving, suggesting deployment was less skewed toward refis and therefore, supporting fee paying AUM growth. So how is that evolving here in the second quarter? And what's your expectation as you look out over the next 12 months?

Question: Mike Cyprys - Morgan Stanley - Analyst : Great. Private credit has seen significant growth across the industry. It's now attracting some newer entrants. We see existing players doubling down on private credit opportunity. We've seen acquisitions across the space as firms want to lean in. What impact are you seeing on the industry, whether it's spreads, terms, overall behavior among participants? And maybe talk about your moat around your credit business and how you sustain that as more firms are entering. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 4:15PM, ARES.N - Ares Management Corp at Morgan Stanley Financials Conference

Question: Mike Cyprys - Morgan Stanley - Analyst : And the other question that comes up as we think about the competitive backdrop is around the bank side of the equation. And expectation is capital rules could be lightened up for the banks here. How do you think about the impact that could have on the overall marketplace, the magnitude of lending moving out of the banking system, which was a big view in recent years and had been playing out? What areas do you think the banks might have more appetite?

Question: Mike Cyprys - Morgan Stanley - Analyst : Great. So as you think about the private credit market opportunity, say, over the next five years, how do you think about that next chapter in the evolution of private credit, whether it's asset-backed finance, whether it's on the investment-grade side, sub-investment-grade side, ABF to real estate credit? Where are some of the biggest opportunities? Talk about some of the steps you're taking there. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 4:15PM, ARES.N - Ares Management Corp at Morgan Stanley Financials Conference

Question: Mike Cyprys - Morgan Stanley - Analyst : Is that sustainable from here in the next five years?

Question: Mike Cyprys - Morgan Stanley - Analyst : Great. Why don't we pivot and talk about private wealth? You alluded to that earlier, a very large addressable market, where you and your peers have all been making some headway here with new products and distribution efforts. Just curious, what do you think will ultimately drive success in the channel and separate the winners from the laggards? And talk about some of the steps that you're taking in the coming years to be on the winning side of that.

Question: Mike Cyprys - Morgan Stanley - Analyst : And how are flows holding up here in April and May, just given all the volatility in the markets?

Question: Mike Cyprys - Morgan Stanley - Analyst : Sounds quite encouraging, that's great. Maybe just on fee-related earnings. Back at your Investor Day, you put out a target to grow fee-related earnings 16% to 20%. You alluded to that earlier over the next five years. Maybe just talk about some of the key building blocks you see behind that, maybe the direct lending growing 15% to 20% being part of that. But just how do you think about that all go there? And where might there be some scope for upside? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 4:15PM, ARES.N - Ares Management Corp at Morgan Stanley Financials Conference

Question: Mike Cyprys - Morgan Stanley - Analyst : Great. And we have just a few minutes left. You mentioned data centers. Maybe I'll just double-click on that as we think about the AI opportunity for Ares. Just taking a step back, advances in new technology, AI, reshaping a number of different sectors. So I was hoping you'd talk about how you see AI impacting the asset management industry and in particular, the alternative asset management industry. One thing unique for the alts that AI cuts across a number of opportunities from AI application at the management company to harnessing AI as a tool for value creation as well as AI as a deployment theme. So on each of those three threads, I know we just have a few minutes left. Maybe just talk about how you're seeing some of the opportunities around that.

Question: Mike Cyprys - Morgan Stanley - Analyst : Great. We'll have to leave it there. Thank you. Greatly appreciate it.