Ares Management Corp Quarterly Report for Q3 Ended Sep 30, 2020

Summary

Ares Management Corporation (ARES) reported its third quarter 2020 financial results, showcasing a significant increase in total assets to $14.9 billion from $12.0 billion in the prior year. This growth was largely driven by strategic acquisitions and increased investments within its consolidated funds. Revenues demonstrated resilience, with management fees rising 16% year-over-year for the quarter, indicating continued AUM growth across its credit and other segments. While carried interest saw a notable decline, particularly for the nine-month period, reflecting market conditions, the company's Fee Related Earnings (FRE) showed robust growth, up 23% year-over-year for the quarter, highlighting the stable, recurring nature of its management fee business. Diluted earnings per Class A common share stood at $0.27 for the quarter, a slight increase from $0.23 in the prior year. The company has strategically expanded its footprint through acquisitions, notably the majority interest in SSG Capital Holdings Limited in July 2020, enhancing its presence in the Asia-Pacific region. Despite the ongoing economic uncertainties stemming from the COVID-19 pandemic, Ares Management maintained a strong liquidity position with $868.8 million in cash and cash equivalents at the end of the period and no outstanding borrowings under its credit facility. The company's diversified business model and focus on long-term capital, coupled with its strategic acquisitions, position it to navigate market volatility and capitalize on future opportunities.

Key Highlights

• 1Total assets grew to $14.9 billion as of September 30, 2020, up from $12.0 billion at December 31, 2019, driven by acquisitions and increased fund investments.
• 2Management fees increased by 16% for the three months ended September 30, 2020, compared to the prior year, indicating healthy growth in fee-generating assets under management.
• 3Fee Related Earnings (FRE) increased by 23% year-over-year for the quarter, demonstrating the strength and stability of recurring management fees.
• 4Diluted earnings per Class A common share were $0.27 for the third quarter of 2020, up from $0.23 in the prior year.
• 5The company successfully completed the acquisition of a majority interest in SSG Capital Holdings Limited, strengthening its Asia-Pacific market presence.
• 6Ares Management maintained a strong liquidity position with $868.8 million in cash and cash equivalents and no outstanding borrowings under its credit facility as of September 30, 2020.
• 7Carried interest allocation decreased by 10% for the quarter and 52% year-to-date, reflecting market conditions and the timing of fund performance.

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