10-QPeriod: Q1 FY2023

Ares Management Corp Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 8, 2023For Securities:ARESARES-PB

Summary

Ares Management Corporation reported solid financial performance for the first quarter of 2023, with total revenues increasing by 14% year-over-year to $813.4 million. Net income attributable to Ares Management Corporation Class A and non-voting common stockholders surged by 105% to $94.0 million, or $0.49 per diluted share. This growth was driven by a significant increase in management fees, up 26% to $600.5 million, reflecting strong fundraising and capital deployment across its Credit, Private Equity, Real Assets, and Secondaries segments. Despite a decrease in carried interest and incentive fees compared to the prior year, the company demonstrated resilience and effective management of its diverse investment strategies. The company's Assets Under Management (AUM) grew to $360.3 billion, up from $325.0 billion in the prior year's first quarter, highlighting continued investor confidence and the success of its long-term investment focus. The company's Fee Paying Assets Under Management (FPAUM) also saw a healthy increase, reaching $233.9 billion from $199.0 billion year-over-year. This growth underscores the increasing revenue-generating base for Ares. The company's Fee Related Earnings (FRE) increased by 24% to $254.6 million, demonstrating the core profitability of its asset management operations. The company's diversified business segments performed well, with the Credit Group showing particularly strong growth in Fee Related Earnings. The company maintains a robust liquidity position, with $272.2 million in cash and cash equivalents at the end of the quarter.

Financial Highlights

27 data points
Beta

Revenue

$813.36M

Net Income

$94.04M

11.6% Net Margin

Total Assets

$21.93B

Cash & Equivalents

$272.25M

Free Cash Flow

$707.57M

Financial Statements
Beta
Revenue$813.36M
SG&A Expenses$148.34M
Operating Expenses$628.64M
Interest Expense$24.99M
Net Income$94.04M

Key Highlights

  • 1Total revenues increased 14% year-over-year to $813.4 million.
  • 2Net income attributable to Ares Management Corporation Class A and non-voting common stockholders increased 105% to $94.0 million ($0.49 per diluted share).
  • 3Management fees increased 26% to $600.5 million, driven by capital deployment and increased AUM.
  • 4Fee Related Earnings (FRE) increased 24% to $254.6 million, indicating strong core operational profitability.
  • 5Total Assets Under Management (AUM) grew to $360.3 billion from $325.0 billion in the prior year's first quarter.
  • 6Fee Paying Assets Under Management (FPAUM) increased to $233.9 billion from $199.0 billion year-over-year.
  • 7The Credit Group showed significant growth in Fee Related Earnings, up 34% year-over-year.

Frequently Asked Questions

Ares Management Corporation reported total revenues of $813.4 million for the first quarter of 2023, an increase of 14% compared to $715.0 million in the same period of the prior year.

Net income attributable to Ares Management Corporation Class A and non-voting common stockholders increased significantly by 105% to $94.0 million in the first quarter of 2023, compared to $45.9 million in the first quarter of 2022. This translated to diluted earnings per share of $0.49 for the quarter.

Management fees increased by 26% to $600.5 million. This growth was primarily driven by capital deployment in direct lending funds within the Credit Group, growth in Fee Paying Assets Under Management (FPAUM), and increased fees from the company's non-traded REITs in the Real Assets Group.

Total Assets Under Management (AUM) grew to $360.3 billion as of March 31, 2023, an increase from $325.0 billion in the prior year's first quarter, reflecting continued fundraising success and deployment of capital across its various investment strategies.