Ares Management Corp Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Ares Management, L.P. reported strong growth in its third quarter 2017 results compared to the previous year, driven by robust performance across its Credit and Private Equity segments. Total revenues increased significantly due to higher management and performance fees. While compensation and administrative expenses also rose, this was largely offset by the substantial increase in revenue. The company's Assets Under Management (AUM) grew to $105.6 billion, with Fee Paying AUM (FPAUM) reaching $72.4 billion. Key strategic initiatives, including the ARCC-ACAS merger, contributed to operational expansion and improved financial metrics. Despite an increase in total expenses, largely due to transaction support expenses related to the ARCC-ACAS merger and higher compensation and benefits, Ares Management demonstrated improved profitability on a consolidated and segment basis. The company's diversified business model and strategic focus on growing AUM across its Credit, Private Equity, and Real Estate segments positions it well for continued growth. The company's liquidity remains strong, with ample capacity under its credit facility to fund operations and strategic growth initiatives.

Key Highlights

• 1Total revenues increased by 26% year-over-year to $1.06 billion for the nine months ended September 30, 2017.
• 2Management fees grew by 12% year-over-year to $536 million for the nine months ended September 30, 2017, primarily driven by growth in the Private Equity and Credit segments.
• 3Performance fees saw a significant increase of 42% year-over-year to $480 million for the nine months ended September 30, 2017, particularly strong in the Private Equity segment.
• 4Assets Under Management (AUM) grew to $105.6 billion as of September 30, 2017, a notable increase from $97.3 billion at the end of the prior year's comparable period.
• 5Fee Paying Assets Under Management (FPAUM) increased to $72.4 billion as of September 30, 2017, up from $60.0 billion at the end of the prior year's comparable period.
• 6The company completed the ARCC-ACAS merger, which contributed to AUM and FPAUM growth, alongside a $275.2 million transaction support payment recorded in the nine-month period.
• 7Net income attributable to Ares Management, L.P. common unitholders decreased by 71% year-over-year to $20.3 million for the nine months ended September 30, 2017, primarily due to the impact of transaction support expenses and other costs.

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