01—Abstract
Summary
Summary of the 10-Q filed May 9, 2024. Cited figures are marked; the original filing is the authoritative source.
Ares Management Corporation reported mixed financial results for the first quarter of 2024.
Total revenues decreased by 13% year-over-year to $707.4 milliona, primarily due to a significant drop in carried interest allocation, which was down 150% from the prior year. This was partially offset by a 15% increase in management fees, reaching $687.7 million, and a 23% rise in administrative, transaction, and other fees. Net income attributable to common stockholders declined by 22% to $73.0 million.
Despite the revenue dip, the company saw growth in Fee Related Earnings (FRE), up 18% to $301.7 millionb, and Realized Income (RI), up 14% to $289.2 million, highlighting the resilience of its core fee-generating businesses. Assets Under Management (AUM) grew to $428.3 billion, an increase from $360.3 billion in the prior year, demonstrating continued fundraising success. The company also amended its credit facility, increasing commitments and extending its maturity, indicating proactive balance sheet management.
02—Key points
Key Highlights
- Total revenues decreased 13% year-over-year to $707.4 million, largely impacted by a significant decrease in carried interest allocation.
- Management fees increased by 15% to $687.7 million, driven by growth in Fee Paying Assets Under Management (FPAUM) across various segments, particularly Credit.
- Fee Related Earnings (FRE) grew by 18% to $301.7 million, reflecting the strength of recurring revenue streams.
- Realized Income (RI) increased by 14% to $289.2 million, indicating improved operating performance.
- Assets Under Management (AUM) grew to $428.3 billion, up from $360.3 billion in the prior year, showcasing successful fundraising efforts.
- Net income attributable to Ares Management Corporation Class A and non-voting common stockholders decreased by 22% to $73.0 million.
- The company amended its Senior Credit Facility, increasing commitments to $1.4 billion and extending the maturity to March 2029.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 9, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $707.36M$813.36M | −13.0% |
| SG&A Expenses | $170.93M$148.34M | +15.2% |
| Operating Expenses | $538.49M$628.64M | −14.3% |
| Net Income | $73.03M$94.04M | −22.3% |
05—Questions
Frequently Asked Questions
What drove the decrease in total revenues?
Total revenues decreased by 13% year-over-year primarily due to a significant 150% decrease in carried interest allocation, which fell from $151.5 million in Q1 2023 to a negative $32.5 million in Q1 2024. This was partially offset by a 15% increase in management fees and a 23% increase in administrative, transaction, and other fees.
How did the company's Fee Related Earnings (FRE) and Realized Income (RI) perform?
Both FRE and RI showed positive growth, indicating the strength of Ares' core, fee-generating businesses. FRE increased by 18% to $301.7 million, and RI grew by 14% to $289.2 million, demonstrating effective operational management and earnings generation.
What is the current status of Ares Management's Assets Under Management (AUM)?
Ares Management's AUM continued to grow, reaching $428.3 billion as of March 31, 2024, up from $360.3 billion in the prior year. This growth reflects successful fundraising efforts across its various investment strategies.
What impact did the acquisitions have on the financial results?
The acquisition of Crescent Point Capital contributed an additional $7.4 million in management fees during the quarter. However, the company also incurred acquisition and merger-related expenses and acquisition-related compensation expenses, which impacted overall profitability.
06—Continue