What was Ares Management's overall financial performance in Q2 2015?

Ares Management showed strong top-line growth, with total revenues increasing by 33.5% to $175.8 million in Q2 2015. This was driven by increases in both management fees and performance fees across its business segments, partially offset by higher operating expenses related to growth and acquisitions.

How did the EIF acquisition impact the company's results?

The acquisition of EIF, completed in Q1 2015, contributed to the growth in management fees for the Private Equity Group by adding approximately $4.1 million and $7.0 million from USPF III and USPF IV respectively in Q2 2015. It also led to increased compensation and administrative expenses to support the integration and growth of EIF's operations.

What drove the significant increase in performance fees?

The substantial increase in performance fees, particularly in the Private Equity segment, was primarily due to ACOF IV exceeding its hurdle rate for the first time, leading to the recognition of performance fees. Other funds also contributed positively through increased market appreciation.

How is the company managing its liquidity and capital resources?

Ares Management maintained strong liquidity with $101.5 million in cash and cash equivalents and $980.0 million available under its credit facility as of June 30, 2015. The company expects these resources to be sufficient for working capital, investments, and operational needs. The company also plans to continue making quarterly distributions to unitholders, aiming for 80-90% of Distributable Earnings.

ARES/ARES-PB 10-Q Quarterly Report Q2 FY2015

Summary

Ares Management, L.P. reported its financial results for the quarter and six months ended June 30, 2015. The company experienced a significant increase in revenues, driven by growth across its four segments: Tradable Credit, Direct Lending, Private Equity, and Real Estate. Notably, management fees rose due to increased assets under management and the recent acquisition of EIF, which added a new energy infrastructure equity strategy. Performance fees also saw a substantial increase, particularly in the Private Equity segment, driven by stronger investment returns in certain funds like ACOF IV. While total expenses increased, largely due to higher compensation and administrative costs reflecting business growth and acquisitions, Ares Management maintained a focus on managing its cost structure. The company's liquidity remains strong, supported by cash on hand and its revolving credit facility, allowing for continued investment and operational growth.

Financial Highlights

19 data points

Beta

Revenue

$241.16M

Net Income

$12.09M

0.1% Net Margin

Total Assets

$20.44B

Free Cash Flow

$65.00M

Financial Statements

Beta

Revenue	$241.16M
Operating Expenses	$212.57M
Net Income	$12.09M
Shares Outstanding (Basic)	80.67M

Key Highlights

1Total revenues increased by 33.5% to $175.8 million for the three months ended June 30, 2015, compared to $131.6 million in the prior year period.
2Management fees grew by 17.7% to $134.7 million for the three months ended June 30, 2015, driven by growth across all segments and the EIF acquisition.
3Performance fees significantly increased by 205.4% to $34.1 million for the three months ended June 30, 2015, primarily due to strong investment performance in the Private Equity segment (ACOF IV).
4Compensation and benefits expenses decreased by 34.4% to $99.1 million for the three months ended June 30, 2015, mainly due to a reduction in equity compensation expense compared to the IPO-related acceleration in the prior year.
5General, administrative and other expenses increased by 35.2% to $53.3 million for the three months ended June 30, 2015, reflecting investments in personnel, geographical expansion, and acquisition-related costs (EIF, Keltic, FCC).
6The company's Assets Under Management (AUM) stood at $87.5 billion as of June 30, 2015, with Fee Earning AUM at $66.0 billion.
7Subsequent to the quarter, Ares announced a significant business combination with Kayne Anderson Capital Advisors, L.P., expected to close around January 1, 2016, aiming to create a larger, more diversified alternative asset manager.

Ares Management Corp Quarterly Report for Q2 Ended Jun 30, 2015

Summary

Financial Highlights

Key Highlights

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