10-KPeriod: FY2020

Ares Management Corp Annual Report, Year Ended Dec 31, 2020

Filed February 25, 2021For Securities:ARESARES-PB

Summary

Ares Management Corporation's 2020 10-K filing reveals a robust year characterized by significant growth in Assets Under Management (AUM), reaching $197 billion. The company successfully raised $41.2 billion in gross new capital across its diverse investment strategies, underscoring strong investor confidence. Ares demonstrated resilience amidst the COVID-19 pandemic, with management fees increasing by 17% year-over-year, primarily driven by its Credit Group, particularly in direct lending and ARCC's performance. While performance income saw a decrease due to market volatility, the company's Fee Related Earnings (FRE) grew by a substantial 31%, highlighting the strength of its recurring management fee business. Strategic initiatives, including the acquisition of F&G Reinsurance and the successful IPO of Ares Acquisition Corporation, signal continued expansion and diversification. The company's focus on talent management, diversity, and inclusion remains a core strategic pillar. Despite broader market challenges, Ares maintained a disciplined investment approach, deploying $26.7 billion in capital and ending the year with $56.3 billion in available capital for future investments, positioning it well for continued growth.

Financial Highlights

29 data points
Beta

Revenue

$1.75B

Net Income

$152.14M

8.7% Net Margin

Total Assets

$15.17B

Cash & Equivalents

$539.81M

Free Cash Flow

-$425.66M

Financial Statements
Beta
Revenue$1.75B
SG&A Expenses$259.00M
Operating Expenses$1.45B
Interest Expense$24.91M
Net Income$152.14M

Key Highlights

  • 1AUM grew to $197 billion as of December 31, 2020, with a 17% compound annual growth rate over the past decade.
  • 2Raised $41.2 billion in gross new capital in 2020 across over 85 investment vehicles.
  • 3Management fees increased by 17% to $1.15 billion in 2020, driven by growth in the Credit Group, particularly direct lending and ARCC.
  • 4Fee Related Earnings (FRE) increased by 31% to $424.5 million in 2020, indicating strong core operational performance.
  • 5Deployed $26.7 billion in capital globally in 2020, maintaining a disciplined investment approach.
  • 6Ended 2020 with $56.3 billion in available capital for investment, demonstrating significant dry powder.
  • 7Acquired F&G Reinsurance Ltd (now Aspida Life Re Ltd) and sponsored the initial public offering of Ares Acquisition Corporation, indicating strategic expansion.

Frequently Asked Questions

As of December 31, 2020, Ares Management Corporation's Assets Under Management (AUM) reached $197.0 billion. This represents significant growth from $42.0 billion a decade prior, demonstrating a compound annual growth rate (CAGR) of 17% over that period.

In 2020, Ares Management Corporation raised $41.2 billion in gross new capital across more than 85 different investment vehicles. This capital was raised from 358 institutional investors, including 155 new investors to Ares.

While the COVID-19 pandemic caused market volatility, Ares demonstrated resilience. Management fees increased by 17% year-over-year, driven by its Credit Group. Fee Related Earnings (FRE), a measure of core operating performance, grew by 31%. However, performance income saw a decrease of 19% due to market conditions, and the company noted decreases in certain operating expenses like travel and entertainment due to remote work arrangements.

Ares Management's growth strategy focuses on several key areas: expanding its product offering across multiple asset classes, enhancing its distribution channels to reach a broader investor base, increasing its global presence, investing in its operational infrastructure, securing strategic partnerships, and completing strategic acquisitions. The company also emphasizes attracting and retaining top talent and fostering a collaborative culture.