10-KPeriod: FY2016

Ares Management Corp Annual Report, Year Ended Dec 31, 2016

Filed February 27, 2017For Securities:ARESARES-PB

Summary

Ares Management Corp. (ARES) demonstrated robust growth in Assets Under Management (AUM) in its 2016 10-K filing, reaching approximately $95.3 billion. This growth was fueled by strong fundraising across its three core segments: Credit, Private Equity, and Real Estate. The Credit Group, its largest segment, saw significant capital deployment and the strategic acquisition of American Capital, Ltd. (ACAS) via its BDC affiliate, ARCC, which closed in early 2017. The company highlighted its integrated investment platform, diversified strategies, and experienced management team as key differentiators. Financially, Ares Management reported total revenues of $1.2 billion for 2016, a substantial increase driven by a significant rise in performance fees, primarily from the Private Equity Group. While compensation and benefits expenses also increased, the company managed to improve its overall net income attributable to Ares Management, L.P. common unitholders. The report also detailed Ares' distribution policy for common and preferred unitholders and its commitment to returning capital to investors.

Financial Highlights

26 data points
Beta

Revenue

$964.80M

Net Income

$111.81M

11.6% Net Margin

Total Assets

$5.83B

Cash & Equivalents

$342.86M

Free Cash Flow

-$637.57M

Financial Statements
Beta
Revenue$964.80M
Operating Expenses$1.02B
Interest Expense$17.98M
Net Income$111.81M

Key Highlights

  • 1Ares Management reported approximately $95.3 billion in Assets Under Management (AUM) as of December 31, 2016, with a strong compound annual growth rate over the past decade.
  • 2The company raised $13.9 billion in gross new capital in 2016 across various strategies and funds, indicating successful fundraising efforts.
  • 3Ares deployed over $10.2 billion in capital globally during 2016, demonstrating active investment across its strategies.
  • 4The Credit Group is the largest segment with $64.1 billion in AUM (pro forma for ACAS acquisition), offering a diverse range of credit strategies.
  • 5The Private Equity Group managed $25.0 billion in AUM, with strategies in Corporate Private Equity, U.S. Power and Energy Infrastructure, and Special Situations.
  • 6The Real Estate Group managed $9.8 billion in AUM, focusing on both equity and debt strategies.
  • 7Performance fees saw a significant increase of 244% in 2016, reaching $517.9 million, largely driven by strong performance in the Private Equity Group.

Frequently Asked Questions

As of December 31, 2016, Ares Management reported approximately $95.3 billion in Assets Under Management (AUM).

Ares Management grew its AUM through strong fundraising efforts, raising $13.9 billion in gross new capital across its Credit, Private Equity, and Real Estate groups, and by actively deploying capital, investing over $10.2 billion globally.

The Private Equity Group was the primary driver of the significant increase in performance fees in 2016, which rose by 244% overall, largely due to strong performance in its underlying portfolio companies.

Ares Management highlighted the acquisition of American Capital, Ltd. (ACAS) by its Business Development Company affiliate, Ares Capital Corporation (ARCC), which closed in early 2017. This transaction aimed to enhance ARCC's leadership position in middle market direct lending in the U.S.