Summary
Ares Management, L.P. reported total revenues of $240.8 million for the three months ended September 30, 2018, a decrease of 17% compared to the prior year's quarter, primarily driven by a significant drop in carried interest allocation. For the nine months ended September 30, 2018, total revenues were $711.0 million, down 36% year-over-year, also heavily influenced by lower carried interest. Despite revenue declines, management fees saw a healthy increase of 12% and 10% for the three and nine-month periods, respectively, indicating growth in assets under management and consistent fee-generating activities. Operating expenses also saw a notable increase, particularly compensation and benefits, which rose 13% for the quarter and 9% year-to-date, partly due to equity compensation increases. Performance-related compensation decreased significantly, correlating with the decline in carried interest. The company's adoption of ASC 606 impacted the timing of incentive fee recognition. Net income attributable to common shareholders decreased by 53% for the quarter to $10.5 million and increased by 42% year-to-date to $28.8 million, reflecting the impact of revenue fluctuations and higher expenses. Total AUM grew to $125.1 billion, with the Credit Group showing strong growth.
Financial Highlights
23 data points| Revenue | $240.78M |
| Operating Expenses | $227.19M |
| Net Income | $15.91M |
Key Highlights
- 1Total revenues decreased by 17% year-over-year to $240.8 million for the three months ended September 30, 2018, and by 36% to $711.0 million for the nine months ended September 30, 2018, primarily due to a substantial decline in carried interest allocation.
- 2Management fees increased by 12% for the quarter and 10% year-to-date, reaching $204.5 million and $588.1 million, respectively, driven by growth in Fee Paying Assets Under Management (FPAUM) and contributions from new funds.
- 3Compensation and benefits expenses increased by 13% for the quarter and 9% year-to-date, attributed to merit increases, headcount growth, and increased equity compensation.
- 4Net income attributable to Ares Management, L.P. common shareholders declined by 53% to $10.5 million for the quarter but rose by 42% to $28.8 million year-to-date.
- 5Total Assets Under Management (AUM) grew to $125.1 billion as of September 30, 2018, up from $105.6 billion at the end of 2017, with the Credit Group showing significant growth in AUM.
- 6The company adopted ASC 606, which impacted the timing and recognition of incentive fees, leading to a delay in recognizing unrealized incentive fees until they become realized.
- 7Debt obligations decreased to $350.8 million as of September 30, 2018, from $616.2 million as of December 31, 2017, primarily due to paydowns of term loans.