Summary
Ares Management, L.P. (ARES) reported its financial results for the period ending June 29, 2018. The company experienced a significant increase in total assets, reaching $10.14 billion, primarily driven by growth in consolidated funds. Management and administrative fees showed steady growth, reflecting the company's expanding AUM across its Credit, Private Equity, and Real Estate segments. The company also reported a notable shift in its tax status, electing to be treated as a corporation for U.S. federal income tax purposes effective March 1, 2018. This change, along with new accounting standards adoption (ASC 606), impacted revenue recognition and tax expenses. Operationally, while total revenues decreased due to a substantial decline in carried interest allocation (largely a timing difference and impact from prior year's strong performance), management fees continued to grow, signaling underlying business strength. Expenses also saw changes, with performance-related compensation decreasing in line with carried interest, while compensation and benefits increased due to growth and equity awards. The company's liquidity remains robust, supported by cash on hand and credit facilities, enabling continued investment and operational activities.
Financial Highlights
20 data points| Revenue | $204.16M |
| Operating Expenses | $221.02M |
| Net Income | -$11.78M |
Key Highlights
- 1Total assets grew to $10.14 billion, up from $8.56 billion at the end of 2017, driven by increased assets in consolidated funds.
- 2Management fees increased by 9% year-over-year for the six months ended June 30, 2018, reaching $383.5 million, indicating consistent fee-earning AUM growth.
- 3Carried interest allocation saw a significant year-over-year decrease of $345.1 million for the six months ended June 30, 2018, primarily due to a reduction in fair value of certain Private Equity investments and a strong prior year performance.
- 4The company adopted ASC 606, impacting the timing of incentive fee recognition, delaying recognition of unrealized incentive fees until realization.
- 5Ares Management elected to be treated as a corporation for U.S. federal income tax purposes effective March 1, 2018, leading to increased tax expense on performance-related earnings.
- 6Equity-based compensation expenses increased year-over-year, driven by higher restricted unit awards.
- 7Despite a decrease in total revenues, Fee Related Earnings (FRE) increased by 22% year-over-year for the six months ended June 30, 2018, highlighting improved core operational profitability.