Summary
Ares Management Corporation (ARES) reported its second quarter 2022 financial results, showing a year-over-year decrease in total revenues, primarily driven by a significant drop in carried interest allocation, which fell from $852.5 million in Q2 2021 to $47.3 million in Q2 2022. This decline was partially offset by substantial growth in management fees, which increased by 42% year-over-year to $520.6 million, reflecting strong fundraising and deployment across various strategies, particularly in direct lending. Despite the challenging macroeconomic environment marked by rising inflation, tighter financial conditions, and recession risks, Ares Management demonstrated resilience. The company's Fee Related Earnings (FRE), a key metric for its recurring business, grew significantly, indicating the strength of its core advisory and management operations. While net income attributable to common stockholders saw a year-over-year decrease due to lower performance fees and principal investment losses, the company's diversified business model and long-term investment focus position it to navigate market volatility. The company's Assets Under Management (AUM) continued to grow, reaching $334.3 billion as of June 30, 2022, up from $247.9 billion in the prior year period.
Financial Highlights
27 data points| Revenue | $601.43M |
| SG&A Expenses | $122.57M |
| Operating Expenses | $552.87M |
| Interest Expense | $17.22M |
| Net Income | $39.73M |
Key Highlights
- 1Management fees increased by 42% year-over-year to $520.6 million in Q2 2022, driven by growth in Fee Paying Assets Under Management (FPAUM) and contributions from recent acquisitions.
- 2Carried interest allocation significantly decreased by 94% year-over-year to $47.3 million in Q2 2022, reflecting market volatility impacting investment valuations.
- 3Fee Related Earnings (FRE) increased by 49% year-over-year to $219.8 million in Q2 2022, demonstrating the underlying strength and recurring nature of the Company's core business.
- 4Total AUM grew to $334.3 billion as of June 30, 2022, an increase of approximately 35% from the prior year period, highlighting continued fundraising success.
- 5The company reported a net income attributable to common stockholders of $39.7 million for Q2 2022, a decrease from $125.0 million in Q2 2021, impacted by lower carried interest and principal investment losses.
- 6General, administrative, and other expenses increased by 47% year-over-year, largely due to expenses associated with recent acquisitions and higher operating costs, partially offset by a decrease in acquisition-related costs.