Mike Brown

Martin credited performance fee mix in part but said the margin ex performance fees and related comp still expanded 230 basis points on structural growth categories.

Martin pointed to GIP and HPS running at FRE margins north of 50% but gave no numeric 2027 margin target or fourth-quarter margin view.

Martin outlined two structural levers (FRE margin toward 50%+, higher fee rates on flows), noted BlackRock ran ~47% in 2021, and did not see 45-46% as a ceiling.

Larry reported no sovereign fund withdrawals, continued co-investment participation, and an upcoming retirement win in the Middle East. Noted higher energy costs drive infrastructure and public-private partnership opportunities.

Martin detailed $700B insurance general account base with 450+ relationships. Targeting 10% migration from public to private high-grade ($70B opportunity). Combined turnkey capabilities across public fixed income, private credit, Aladdin, accounting and middle office services.

Larry emphasized BlackRock's hyper-local approach across 30+ countries since founding 37 years ago. Noted Europe shifting from containment to growth could drive reallocation but macro mega trends unchanged despite trade tensions.

Martin outlined disciplined budgeting with mid-to-high single-digit core G&A increase ex-HPS. Noted AUM up $3 trillion since end of 2022 while headcount up only 7%. Expects positive markets to drive further margin expansion.

Blair Jacobson said digital-infra fund economics are in line with other Ares offerings, and the vertically integrated model charges back team costs, aiding both returns and Ares economics.

Arougheti emphasized the ~40% LTV with 60% equity cushion, approximately 3-year weighted average maturity allowing orderly resolution, continued ~10% EBITDA growth in software portfolio, and opportunistic exits from lower-conviction names.

Mike outlined PE M&A framework: cultural fit, strategic accretion, financial accretion. Benefits include serving LP demand, deepening equity value creation skills across platform, generating leveraged finance deal flow, and building scale for 401(k)/wealth PE exposure. Cautioned PE doesn't grow linearly at 20%+ like credit/real assets, and growth differential must be reflected in acquisition price.

Mike described shift from LP-led to balanced GP/LP-led secondaries, expansion across real estate, infrastructure, and credit. University endowments reducing exposure due to research funding cuts and endowment tax concerns.

Mike argued bank competition narrative is overblown, citing symbiotic relationships. When banks are risk-on, Ares' CLO machine activates. Core middle market differentiation provides pricing resilience. Post-election saw record SRT/CRT and bank portfolio activity.

Management noted 2024 European performance exceeded expectations. Portfolio skews toward locally focused companies with limited trade exposure. Investment activity picking up with lower rates.

Kelly reaffirmed the 20% FRE growth algorithm, mid/high-teens revenue growth against low-teens expense growth, supporting continued margin expansion.

Kelly confirmed spread trajectory is tracking expectations with prepayment headwinds expected to dissipate. Defensive positioning includes approximately $40 billion in cash and treasuries.

Rowan explained ARI helps de-risk the 10% SRE growth target but doesn't add to it. Kelly confirmed it fits within the existing guidance framework. Zelter emphasized the principal mindset philosophy behind the transaction.

Rowan acknowledged some foreign LP pressure but noted U.S. is still 60% of global funding needs. Zelter added that large allocators like Australian super funds have no alternative and Apollo is gaining share.

Rowan confirmed M&A is back but scoped to small, origination-focused acquisitions. Cited Argo as prototype. Said size is not material to capital allocation plans.

Direct: attributed the sequential decline to a prior-quarter one-time benefit and pointed to committed-but-not-yet-fee-earning credit capital up 33% year-over-year.

Rob declined to share Arctos-specific financials but said profile is generally consistent with KKR's business. Craig noted excitement about global distribution support and potential new wealth solutions including evergreen vehicles.

Rob confirmed upward trajectory for realized investment income over next couple years, potentially meaningful. Noted strategic capital allocation: marginal free cash flow reinvested into strategic M&A, insurance, strategic holdings, and buybacks to increase recurring EPS. Over long term, realized investment income should decrease as percentage of more recurring earnings.

Craig confirmed Infra 5 at $11.3B, Asia infra launch coming shortly, Americas to have multiple closes, then Asia PE launch. Scott noted LTM flagships were just over 20% of total, down from historical levels.

Craig attributed flat PE returns to small/mid-cap benchmark dynamics (Russell flat vs S&P +2.5%). Scott broadened deployment themes to public-to-privates, carve-outs (best-performing historically), and Japan/Europe opportunities.

Gray attributed easing BCRED redemptions to lower market noise plus extensive adviser outreach, framing it as a repeat of the earlier BREIT experience.

Gray expects 2026 to be foundational for 401(k) access with rulemaking, capital raising starting in 2027. Vanguard/Wellington product launch expected in H1 2026. Also filed a hedge fund area product recently.

Gray said two weeks into Q2 there was no pullback in wealth sales, and expected credit to benefit at the margin from a move toward caution.

Gray provided limited detail citing legal constraints, noting the product will span broader credit strategies beyond direct lending in a more accessible structure.

Attributed PAL growth to easy digital access and clients with concentrated, low-basis positions who prefer to borrow than sell.

Mike described margin expansion as outcome of balanced revenue diversification and expense discipline rather than a specific target. On AI, already seeing efficiency in moderating client-facing rep growth while expanding accounts/assets. Key metrics: EOCA and cost per account.

Rick reiterated strong crypto engagement including 400% increase in crypto site traffic with 70% prospects, and goal to launch direct spot crypto within 12 months.