10-KPeriod: FY2015

Ares Management Corp Annual Report, Year Ended Dec 31, 2015

Filed February 29, 2016For Securities:ARESARES-PB

Summary

Ares Management Corporation's 2015 10-K report details a year of significant growth and strategic positioning within the alternative investment management sector. The company demonstrated robust expansion in its fee-paying assets under management (AUM), a key metric for valuation and future revenue generation in this industry. This growth was primarily driven by strong performance across its diverse investment strategies, including credit, private equity, and real estate. Investors should note Ares' focus on expanding its global reach and product offerings, aiming to capture a larger share of the increasing institutional investor demand for alternative assets. The report also highlights Ares' commitment to operational efficiency and disciplined capital allocation. While acknowledging the inherent risks associated with the alternative investment landscape, such as market volatility and regulatory changes, management emphasizes its experienced team and diversified business model as key strengths. For potential investors, this filing provides a comprehensive overview of Ares' financial health, strategic direction, and the opportunities and challenges it faces heading into the subsequent fiscal year. Understanding the drivers of AUM growth, fee income streams, and the company's risk mitigation strategies will be crucial for evaluating its long-term investment potential.

Financial Highlights

24 data points
Beta

Revenue

$814.44M

Net Income

$19.38M

2.4% Net Margin

Total Assets

$4.32B

Free Cash Flow

-$538.66M

Financial Statements
Beta
Revenue$814.44M
Operating Expenses$769.04M
Interest Expense$18.95M
Net Income$19.38M

Key Highlights

  • 1Significant growth in Fee-Paying Assets Under Management (AUM) across Ares' various investment strategies.
  • 2Diversified revenue streams, with contributions from management fees, performance fees (incentive fees), and other sources.
  • 3Expansion of global presence and product offerings to cater to increasing investor demand for alternative investments.
  • 4Emphasis on operational efficiency and disciplined capital deployment strategies.
  • 5Detailed discussion of risk factors, including market volatility, interest rate fluctuations, and regulatory changes impacting the alternative investment industry.
  • 6Strong focus on deploying capital within credit, private equity, and real estate segments.
  • 7Demonstration of a resilient business model capable of navigating complex market conditions.

Frequently Asked Questions

Ares Management's revenue growth is primarily driven by an increase in fee-paying Assets Under Management (AUM), which generates management fees. Additionally, performance fees (incentive fees) earned from successful investments in its funds contribute significantly to revenue, particularly in periods of strong market performance.

Ares Management is positioned to capitalize on investor demand through its diversified product offerings across credit, private equity, and real estate, coupled with a growing global footprint. The company's experienced investment teams and established track record aim to attract institutional investors seeking alternative investment solutions.

Key risks highlighted include general economic and market conditions, volatility in financial markets, interest rate fluctuations, competition within the alternative investment industry, regulatory changes, and the ability to raise new capital and deploy existing capital effectively. The firm also notes risks specific to its investment strategies and geographic diversification.

Fee-paying AUM is a critical metric for alternative asset managers like Ares. It directly correlates to the recurring management fees the company earns, forming a stable base of revenue. Growth in fee-paying AUM generally indicates successful fundraising and investment deployment, signaling future revenue potential.