Summary
This Form 8-K filed by Ares Management, L.P. on February 16, 2016, provides an update on its assets under management (AUM) as of December 31, 2015, and announces a strategic organizational change. The company reported total AUM of approximately $93.6 billion and fee-earning AUM of $68.3 billion. This filing clarifies the impact of General Electric's exit from certain corporate lending sectors, which reduced AUM by $5.7 billion in Q4 2015, but notes this reduction was more than offset by $9.9 billion in net new commitments during the same period. Importantly for investors, Ares Management is combining its Tradable Credit Group and Direct Lending Group into a new, single segment called the Ares Credit Group, effective in the first quarter of 2016. This consolidation, which will result in a combined AUM of $62.2 billion and fee-earning AUM of $50.1 billion for the new segment, is intended to enhance operational efficiency and capitalize on future growth opportunities within its credit offerings. The company expects no material changes to existing strategies or teams due to this reorganization.
Key Highlights
- 1Total Assets Under Management (AUM) reached approximately $93.6 billion as of December 31, 2015.
- 2Fee-earning AUM stood at approximately $68.3 billion as of December 31, 2015.
- 3A $5.7 billion reduction in AUM in Q4 2015 was primarily due to GE's exit from U.S. and European corporate lending sectors.
- 4This reduction was more than offset by $9.9 billion in net new equity and debt commitments during Q4 2015.
- 5Ares Management is combining its Tradable Credit and Direct Lending groups into a new 'Ares Credit Group' segment.
- 6The new Ares Credit Group will have combined AUM of $62.2 billion and fee-earning AUM of $50.1 billion as of December 31, 2015.
- 7The organizational change is aimed at improving management of credit products and capturing growth opportunities, with no expected material changes to strategies or teams.