Ares Management Corp Quarterly Report for Q1 Ended Mar 31, 2021

Summary

Ares Management Corporation's first quarter 2021 results show significant revenue growth, primarily driven by a substantial increase in carried interest allocation and management fees. Total revenues surged to $658.4 million, a dramatic increase from $13.4 million in the prior year's quarter, largely due to positive market performance leading to higher carried interest and stronger fee-paying assets under management. Net income attributable to Ares Management Corporation improved to $58.4 million from a net loss of $35.8 million in the first quarter of 2020. The company's assets under management (AUM) also saw robust growth, reaching $207.2 billion, up from $148.6 billion year-over-year, indicating successful fundraising and investment activity across its Credit, Private Equity, and Real Estate segments. The company's financial health appears strong, with a healthy increase in Fee Related Earnings (FRE), indicating the core, recurring revenue streams are growing and efficiently covering operating expenses. This growth is supported by strategic acquisitions and continued capital deployment in key investment strategies, particularly in direct lending and private equity. While performance fees can be volatile and are subject to market fluctuations, the overall trend for the quarter is positive, demonstrating Ares' ability to generate value for its investors and shareholders in an improving economic environment.

Key Highlights

• 1Total revenues increased significantly to $658.4 million for Q1 2021, up from $13.4 million in Q1 2020, driven by strong carried interest allocation and management fees.
• 2Net income attributable to Ares Management Corporation was $58.4 million for Q1 2021, a substantial improvement from a net loss of $35.8 million in Q1 2020.
• 3Assets Under Management (AUM) grew to $207.2 billion as of March 31, 2021, compared to $148.6 billion as of March 31, 2020.
• 4Fee Related Earnings (FRE) increased by 38% year-over-year to $128.5 million, indicating growth in recurring revenue and operational efficiency.
• 5The Credit Group showed strong performance, with Fee Related Earnings up 29% and Realized Income up 28% year-over-year, driven by increased AUM and capital deployment.
• 6The company completed an initial public offering for its SPAC, Ares Acquisition Corporation (AAC), in February 2021, raising $1.0 billion.
• 7Ares Management Corporation continues to manage its debt effectively, with total debt obligations of $811.3 million as of March 31, 2021, and a revolving credit facility extended to March 2026.

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