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ARES · Ares Management Corp

12 filings

10-K

ARES 10-K Annual Reports

Ares Management Corp - 12 annual reports

Filing record · 2016–202610-K1110-Q328-K128

2025
Ares Management Corp Annual Report, Year Ended Dec 31, 2025
Ares Management Corp. (NYSE: ARES) closed 2025 with record scale and a sharp step-up in earnings power. Assets under management reached $622.5 billion, up 29% year over year, and the firm raised $113.2 billion of gross new capital and deployed $145.8 billion. Total revenues rose 44% to $5.60 billion, driven largely by a $1.15 billion carried interest allocation (up from $390 million), management fees up 25% to $3.68 billion, and a $1.1 billion lift in administrative, transaction and other fees tied to the March 2025 GCP International acquisition. GAAP net income attributable to Ares Management Corporation rose 14% to $527 million, but net income to Class A and non-voting common holders fell 3% to $426 million after $101 million of Series B preferred dividends, and GAAP results were weighed down by a $301 million non-cash revaluation of GCP earnout liabilities. The more important investor metric is fee related earnings (FRE), which grew 30% to $1.78 billion, and realized income (RI), which grew 26% to $1.85 billion. Management highlights that 93% of management fees came from perpetual capital or long-dated funds, that AUM not yet paying fees implies roughly $730 million of potential incremental annual management fees, and that dry powder reached $156.0 billion. Management fees are expected to decline by about $40 million in 2026 from the ACOF VI fee step-down. The quarterly dividend on Class A common stock was set at $1.35 for 2026, up from $1.12 per quarter in 2025, and it is tied to FRE after current taxes. Key risks include a higher leverage profile after the GCP deal (Credit Facility borrowings of $1.38 billion and total debt of $3.94 billion), goodwill and intangibles that rose to $5.6 billion, a 2025 effective tax rate of 15.3%, a $580 million TRA liability, the concentration of management fees in ARCC (about 31% of Credit Group fees), and a governance structure in which the Holdco Members control the Class B vote while the Ares Ownership Condition is met. The auditor (Ernst & Young) issued an unqualified opinion and excluded GCP International from the internal control assessment, which covers about 2% of assets and 6% of revenue.
Feb 25, 2026
2024
Ares Management Corp Annual Report, Year Ended Dec 31, 2024
Ares Management Corp (NYSE: ARES) closed 2024 with $484.4 billion in assets under management, up 16% year over year, and grew management fees 15% to $2.94 billion. Total revenues rose 7% to $3.88 billion, while GAAP net income attributable to Ares Management Corporation declined 2% to $463.7 million. Growth was driven by fundraising of $92.7 billion in gross new capital commitments and $106.7 billion of capital deployed, though carried interest allocation fell 37% to $390.2 million, reflecting reversals tied to weaker valuations in certain private equity funds. The most important investor metric is Fee Related Earnings (FRE), a non-GAAP measure of core, recurring profitability, which rose 17% to $1.36 billion. Realized Income, which adds realized performance and investment income, grew 16% to $1.47 billion. Management highlights 95% of management fees coming from perpetual capital or long-dated funds, supporting earnings stability. AUM not yet paying fees includes $81.0 billion available for deployment, which management estimates could generate roughly $728.8 million in incremental annual management fees. Balance sheet and capital return items include the October 2024 issuance of $1.46 billion of 6.75% Series B mandatory convertible preferred stock, a $750 million 5.60% senior note due 2054 issued to refinance near-term debt, and a Credit Facility balance reduced to zero. The Class A dividend rose to $0.93 quarterly in 2024 and was set at $1.12 per quarter for 2025, a fixed-dividend policy tied to FRE after taxes. Risks flagged include ARCC's concentration in management fees, the potential $2.8 billion TRA termination liability, fundraising sensitivity, and regulatory scrutiny of private fund practices.
Feb 27, 2025
2023
Ares Management Corp Annual Report, Year Ended Dec 31, 2023
Ares Management Corp. (NYSE: ARES) closed 2023 with record scale: $418.8 billion of AUM (up 19% year over year), $74.5 billion of gross new capital commitments, and $68.1 billion deployed. Growth was led by Credit, which holds $284.8 billion (68% of AUM), while Private Equity, Real Assets and Secondaries contributed the rest. Management fees rose 19% to $2.55 billion, and roughly 95% of management fees came from perpetual capital vehicles and long-dated funds, which supports earnings durability. Profitability improved sharply. Fee related earnings (FRE, the non-GAAP measure of recurring core earnings) grew 17% to $1.16 billion, and realized income grew 12% to $1.27 billion. GAAP net income attributable to Class A and non-voting stockholders rose 183% to $474.3 million, or $2.42 diluted EPS, helped by higher carried interest allocation ($618.6 million, up 35%) and performance income. Carried interest and incentive fees remain volatile by nature, so investors should weigh the recurring fee base separately from performance revenue. Key risks include a heavy reliance on Ares Capital Corporation (ARCC), which contributed about 37% of Credit Group management fees; elevated leverage (about $2.97 billion of debt obligations); a $1.7 billion estimated TRA termination exposure; and a controlled-company structure in which Class B and C holders effectively control director elections. The Board also raised the dividend policy anchor, declaring a $0.93 quarterly dividend for Q1 2024 (up from $0.77), which reflects a fixed dividend tied to FRE after taxes.
Feb 27, 2024
2022
Ares Management Corp Annual Report, Year Ended Dec 31, 2022
Ares Management Corp (NYSE: ARES) closed 2022 with $352.0 billion of assets under management, up roughly 15% year over year, and over 2,550 employees. Its fee-driven franchise is the key investor story: management fees rose 33% to $2.14 billion, while fee related earnings (FRE), the non-GAAP measure of recurring core profitability, grew 40% to $994 million. Realized income rose 28% to $1.13 billion. Gross fundraising was $56.8 billion across more than 135 vehicles, and about 95% of management fees came from perpetual capital or long-dated funds, which supports earnings stability. GAAP results were far weaker than the operating metrics. Total revenue fell 27% to $3.06 billion because carried interest allocation dropped 78% to $458 million, reflecting markdowns in the 2022 market. Net income attributable to Class A and non-voting common stockholders fell 57% to $167.5 million, and diluted EPS was $0.87 versus $2.15 in 2021. Results were also hit by $181.6 million of non-cash intangible impairments, including the Landmark trade name, and by a $218 million Black Creek earnout expense. Capital returns and balance sheet items stand out. The quarterly dividend was raised to $0.61 per share in 2022 (about $429 million total) and set at $0.77 for 2023, with the policy tied to fee related earnings after taxes. Debt rose to $2.27 billion, including a $700 million drawn revolver, and carried-interest contingent repayment exposure was approximately $128 million. The company is a controlled company, with the Holdco Members effectively controlling votes through Class B and C stock, which limits Class A holders' influence. Management also flagged pending acquisitions, including the remaining SSG interest, expected to close in Q2 2023.
Feb 24, 2023
2021
Ares Management Corp Annual Report, Year Ended Dec 31, 2021
Ares Management Corp (NYSE: ARES) closed 2021 with $305.8 billion in assets under management, up roughly 55% from $197.0 billion a year earlier, driven by $76.8 billion of gross new capital raised and $81.0 billion deployed. Fee-related earnings (FRE), the metric management emphasizes for core recurring profitability, rose 65% to $712.3 million, and realized income rose 52% to $882.9 million. GAAP results were far stronger still: total revenues nearly tripled to $4.21 billion, driven by a $2.07 billion carried interest allocation (up from $505.6 million), and net income attributable to Ares Management Corporation Class A and non-voting common stockholders was $386.7 million, or $2.15 diluted EPS. Investors should note that carried interest is volatile and unrealized, so GAAP earnings are more sensitive to fund valuations than the fee-based metrics. The firm's earnings quality is anchored by its fee base: about 95% of management fees came from perpetual capital vehicles and long-dated funds, and management fees rose 40% to $1.61 billion. Credit remains the core franchise, with $192.7 billion of AUM and $719.1 million of FRE. Real Estate and Secondary Solutions contributed meaningfully after the Black Creek and Landmark acquisitions completed in 2021, though those deals also added intangible amortization, earnouts, and compensation costs. ARCC is a notable concentration, accounting for about 45% of Credit Group management fees. The company also reported $90.4 billion of available capital, $57.9 billion of AUM not yet paying fees, and a steady dividend policy tied to FRE after allocated taxes, set at $0.61 per quarter for 2022. Key risks flagged in the filing include fee compression pressure from institutional investors, the Holdco Members' effective voting control through the Class B and C structure (the company is a 'controlled company'), a $1.7 billion estimated early-termination payment under the tax receivable agreement, rising leverage through a $1.5 billion debt stack, and the expected Fed rate hikes and geopolitical tensions (Russia-Ukraine) that could affect valuations and fundraising. The Series A preferred was fully redeemed in June 2021, simplifying the capital structure ahead of 2022.
Feb 28, 2022
2020
Ares Management Corp Annual Report, Year Ended Dec 31, 2020
Ares Management Corp. (NYSE: ARES) closed 2020 with $197.0 billion of AUM, up roughly 32% year over year, driven by $41.2 billion of gross new capital raised and $26.7 billion deployed. Fee Related Earnings (FRE), the core recurring metric, rose 31% to $424.5 million, while Realized Income rose 16% to $582.0 million. GAAP income before taxes fell 11% to $379.5 million, mainly because carried interest allocation dropped 19% to $505.6 million and performance-related compensation fell only 19%, so the GAAP picture is more volatile than the fee-based picture. Growth was supported by the July 2020 SSG acquisition, the December 2020 Aspida (F&G Re) reinsurance acquisition, and strong direct lending fundraising. Management fees rose 17% to $1.15 billion, including $184.1 million of ARCC Part I Fees, and the company says roughly $428 million of annual potential fee revenue sits in AUM not yet paying fees. Investors should note the concentration in ARCC (about 48% of Credit Group management fees), the dependence on performance income and its clawback exposure, and the structure in which Holdco Members control the vote through Class B and Class C shares while the Ares Ownership Condition is met. Balance sheet liquidity is solid, with $539.8 million of cash and an undrawn $1.065 billion revolver against $650 million of senior notes, and the board set a quarterly Class A dividend of $0.47 for 2021, reflecting the company's policy of tying dividends to after-tax FRE. The filing also highlights several 2021 risks and developments: the COVID-19 pandemic and its effect on energy, hospitality and retail holdings, the LIBOR transition, Brexit's effect on EU passporting, the IRS final carried-interest regulations, and a May 2020 SEC order with a $1.0 million civil penalty tied to MNPI policies. Ares Acquisition Corp (a SPAC) IPO'd in February 2021 with $1.0 billion of gross proceeds, and the company invested $23.0 million as sponsor.
Feb 25, 2021
2019
Ares Management Corp Annual Report, Year Ended Dec 31, 2019
Ares Management Corp. (NYSE: ARES) closed 2019 with $148.9 billion of assets under management, up roughly 14% year over year, and reported GAAP net income attributable to Class A common stockholders of $127.2 million, or $1.06 diluted EPS, versus $0.30 in 2018. Headline results were driven by a sharp swing in performance income: carried interest allocation rose to $621.9 million from $42.4 million, largely on market appreciation in private equity and real estate funds, and performance related compensation rose correspondingly to $497.2 million. Investors should therefore focus on the non-GAAP measures management uses to assess the recurring business. Fee related earnings (FRE) increased 27% to $323.7 million, and realized income (RI) rose 27% to $503.5 million, with the Credit Group contributing the majority of both. The core fee franchise remains strong. Management fees grew 22% to $979.4 million, supported by ARCC Part I Fees ($164.4 million) and higher fee-paying AUM, which reached $96.9 billion at year-end. Gross new capital raised was $23.8 billion across more than 75 funds, and $27.4 billion was deployed. The firm reported $34.6 billion of available capital and $27.1 billion of AUM not yet paying fees, representing roughly $255.6 million of potential annual management fees. Management also set a fixed quarterly Class A dividend policy of $0.40 per share for 2020, anchored to after-tax FRE. Pending transactions include the acquisition of a controlling stake in Asian manager SSG Capital (expected 2Q/3Q 2020) and the Aspida insurance platform acquisition. Key risks include the high volatility of performance income, which can reverse and create contingent repayment obligations; ARCC's concentration in management fees (about 52% of Credit Group management fees); and a governance structure in which the Holdco Members control voting through Class B and Class C shares. Ares also has $316.6 million of debt, a $878.5 million hypothetical tax receivable agreement termination estimate, and exposure to Brexit, COVID-19 (cited as a risk factor), and evolving regulation. Management also disclosed a $20.0 million impairment on EIF intangibles and $6.5 million of costs related to an ongoing SEC compliance matter.
Feb 28, 2020
2018
Ares Management Corp Annual Report, Year Ended Dec 31, 2018
Ares Management Corp. (NYSE: ARES) closed 2018 with approximately $130.7 billion in assets under management, up roughly 23% year over year, and about 1,100 employees across 18 offices. Its three investment groups are Credit ($95.9B AUM), Private Equity ($23.5B) and Real Estate ($11.3B). Management highlights $36.1B of gross new capital raised in 2018 and $22.4B deployed, with $38.1B of dry powder available. Fee-related earnings (FRE) rose 18% to $255.3M, and realized income (RI) rose 21% to $395.4M, driven mainly by the Credit Group. Management fees grew 11% to $802.5M, helped by ARCC Part I fees and new fund launches. GAAP results were noisier. Total revenues fell 35% to $958.5M because carried interest allocation dropped 93% to $42.4M from $620.5M in 2017, when a one-time ARCC-related realization boosted results. Performance-related compensation fell correspondingly. Net income attributable to Ares Management Corporation Class A common stockholders declined to $35.3M ($0.30 per share) from $54.5M. Management points to the 2017 comparison base and the 2018 Tax Election, which subjected previously pass-through carried interest to corporate tax, as factors depressing reported GAAP earnings. The company completed its conversion from a partnership to a Delaware corporation on November 26, 2018, and elected corporate tax treatment effective March 1, 2018. Management set a new dividend policy: $0.32 per quarter for 2019, tied to after-tax FRE rather than volatile performance income. The board also authorized a $150M share repurchase program. Investors should weigh the attractive fee-based growth and dividend visibility against the earnings volatility of carried interest, consolidated CLO and fund leverage, and the governance concentration created by the Class B/C share structure held by the Holdco Members.
Feb 26, 2019
2017
Ares Management Corp Annual Report, Year Ended Dec 31, 2017
Ares Management Corp (NYSE: ARES) filed its 2017 Form 10-K on March 1, 2018, reporting approximately $106.4 billion of assets under management (AUM) at December 31, 2017, up about 11.8% for the year and a 12% five-year CAGR. The firm operates three investment groups (Credit, Private Equity, Real Estate) plus an Operations Management Group. Credit Group accounts for roughly $71.7 billion of AUM, Private Equity $24.5 billion and Real Estate $10.2 billion. Total GAAP revenues rose 18% to $1.415 billion, and performance fees rose 23% to $636.7 million, while GAAP net income attributable to Ares Management, L.P. common unitholders fell to $54.5 million from $99.6 million, largely because of a one-time $275.2 million transaction support payment tied to ARCC's acquisition of American Capital. The more important signals for investors are on a non-GAAP basis. Fee related earnings (FRE), the most stable measure, rose 26% to $217.0 million, and distributable earnings rose 3% to $271.6 million. Management fees grew 13% to $722.4 million. Fee related earnings represented about 80% of distributable earnings. Fundraising was $16.7 billion gross across more than 65 funds, and dry powder (available capital) was $25.1 billion. The filing also describes a structural change effective March 1, 2018: Ares elected to be taxed as a corporation for U.S. federal income tax purposes, while remaining a Delaware limited partnership. The company adopted a steadier distribution policy of $0.28 per common share per quarter from Q2 2018, based on after-tax FRE, and plans to retain net performance fees for potential share repurchases and growth. Governance remains concentrated: the Holdco Members control roughly 71.6% of voting power, and the company relies on exemptions from NYSE governance rules. The company also carries a tax receivable agreement with an estimated early-termination payment of about $398 million, and consolidated fund activity grosses up the balance sheet substantially.
Mar 1, 2018
2016
Ares Management Corp Annual Report, Year Ended Dec 31, 2016
Ares Management Corp. (NYSE: ARES) ended 2016 with approximately $95.3 billion in assets under management (about $98.9 billion pro forma for the American Capital acquisition by ARCC), up roughly 1.7% for the year. Gross new capital raised was $13.9 billion across more than 50 funds, and the firm deployed $10.2 billion, versus about $13.2 billion in 2015. Management fees rose modestly to $642.1 million, while total revenues jumped 47% to $1.20 billion, driven mainly by performance fees of $517.9 million, up from $150.6 million. Consolidated GAAP net income attributable to Ares Management, L.P. was $111.8 million, and fee related earnings (FRE) rose 4% at the segment level to $347.5 million. Distributable earnings on a segment basis grew 19% to $475.9 million, and stand-alone DE rose 15% to $264.3 million. The quality of the 2016 earnings is mixed. Fee related earnings are the more stable and recurring component, representing roughly 65% of distributable earnings, which management argues supports distribution stability. The sharp rise in performance fees reflects strong private equity realizations and unrealized appreciation, and these are inherently volatile and subject to contingent repayment obligations. The filing shows about $759 million of accrued performance fees on the balance sheet, and up to $418.3 million (net of tax) of potential clawback exposure if all investments were worthless, though management considers that scenario remote. Liquidity was solid, with $342.9 million of cash, no drawn balance on the $1.03 billion credit facility (later upsized to $1.04 billion and extended to 2022), and $305.8 million of debt. Key forward-looking considerations include the ARCC acquisition of American Capital, which closed January 3, 2017. Ares provided about $275 million of cash support and agreed to waive up to $10 million per quarter of ARCC Part I fees for ten quarters, starting Q2 2017. The tax treatment of that payment is uncertain and could materially affect taxable income and distributions. The company also faces regulatory and tax uncertainty, including possible changes to carried interest taxation and Brexit-related risks to its European business. Common unit distributions for 2016 totaled $0.83 per unit, versus $0.88 in 2015, reflecting the variability of performance-related earnings.
Feb 27, 2017
2015
Ares Management Corp Annual Report, Year Ended Dec 31, 2015
Ares Management Corp. (NYSE: ARES) reported its first full year as a public holding partnership for 2015, with assets under management (AUM) of approximately $93.6 billion, up roughly 14.5% from $81.8 billion at year-end 2014, driven by $22.0 billion of gross commitments and $1.1 billion of change in fund value, partially offset by distributions and capital reductions. Management highlighted fee-related earnings (FRE) of $334.8 million, up about 15% year over year, with management fees rising 30% to $634.4 million on a GAAP basis. However, GAAP net income attributable to Ares Management, L.P. fell to $19.4 million from $35.0 million, reflecting a sharp decline in performance-related earnings (PRE) to $40.1 million from $141.9 million, mainly due to Tradable Credit Group mark-to-market reversals of performance fees and $35.9 million of merger-related costs tied to the terminated Kayne Anderson Capital Advisors (KACALP) transaction. Distributable earnings were roughly flat at $398.5 million on a segment basis, and the company declared $0.88 per unit in distributions during 2015. The consolidated GAAP picture is heavily affected by consolidated funds, which were significantly reduced in 2015 after the adoption of ASU 2015-02 (56 entities deconsolidated), shrinking total assets from $21.6 billion to $4.3 billion. Investors should focus on the segment (non-GAAP) measures and on the quality of fee revenue: roughly 77% of distributable earnings came from fee-related earnings, but performance fees are volatile, and the credit market weakness in late 2015 reduced fund values. Management also announced in February 2016 the combination of the Tradable Credit and Direct Lending groups into a single Credit Group, effective Q1 2016. Key risks flagged in the filing include the company's dependence on ARCC-related management fees (ARCC Part I Fees were $121.5 million), the proposed or potential taxation of publicly traded partnerships as corporations, carried interest tax proposals, clawback exposure of roughly $322.2 million (net of tax, before professional reimbursements), a $444.0 million estimated tax receivable agreement termination liability, and a concentrated governance structure in which the co-founders control about 78% of voting power.
Feb 29, 2016
2014
Ares Management Corp Annual Report, Year Ended Dec 31, 2014
Ares Management, L.P. (NYSE: ARES) reported its first full annual report as a public company for fiscal 2014, following its May 2014 IPO and holding-partnership reorganization. The firm ended 2014 with approximately $82 billion of AUM (about $86 billion pro forma for the January 1, 2015 acquisition of EIF Management), up 10.5% for the year (15.8% pro forma), and raised $16.5 billion of gross new capital. Total revenues rose 26% to $603.9 million, and management fees grew 29.5% to $486.5 million, driven largely by ARCC fees and new real estate and direct lending funds. Performance fees were more modest at $91.4 million, and GAAP net income attributable to Ares Management, L.P. was only $35.0 million, reflecting the post-IPO period, consolidation of funds, and a one-time $56.2 million equity compensation charge. The more relevant investor metrics are non-GAAP. Fee related earnings rose 14% to $290.3 million and distributable earnings fell about 7% to $381.6 million, as weaker Tradable Credit performance reduced realized and unrealized performance fees. The company declared a $0.24 per-unit quarterly distribution for Q4 2014, payable March 24, 2015, and targets distributing 80% to 90% of distributable earnings. Governance is concentrated: the Co-Founders control roughly 78% of voting power, common unitholders have limited voting rights, and the company relies on NYSE partnership exemptions. Key risks include ARCC fee concentration (about 41% of management fees), fee compression, performance-fee volatility, a $536 million estimated tax receivable agreement obligation, and exposure to potential changes in partnership tax treatment.
Mar 20, 2015