Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36429 | |
Entity Registrant Name | ARES MANAGEMENT CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0962035 | |
Entity Address, Address Line One | 2000 Avenue of the Stars | |
Entity Address, Address Line Two | 12th Floor | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90067 | |
City Area Code | 310 | |
Local Phone Number | 201‑4100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001176948 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A common stock, par value $0.01 per share | |
Trading Symbol | ARES | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 107,486,372 | |
Series A Preferred Stock [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 7.00% Series A Preferred Stock, par value $0.01 per share | |
Trading Symbol | ARES.PRA | |
Security Exchange Name | NYSE | |
Class B common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,000 | |
Class C common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | |||||||
Total assets | $ 10,979,749 | $ 10,154,692 | |||||
Liabilities | |||||||
Right-of-use operating lease liabilities | 179,192 | ||||||
Total liabilities | 9,377,425 | 8,760,351 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at June 30, 2019 and December 31, 2018) | 298,761 | 298,761 | |||||
Additional paid-in-capital | 379,789 | 326,007 | |||||
Retained earnings | (35,247) | (29,336) | |||||
Accumulated other comprehensive loss, net of tax | (8,879) | (8,524) | |||||
Total stockholders' equity | 635,499 | 587,924 | |||||
Total equity | 1,602,324 | $ 1,479,824 | 1,394,341 | $ 1,491,319 | $ 1,535,249 | $ 1,565,195 | $ 1,460,292 |
Total liabilities, non-controlling interests and equity | 10,979,749 | 10,154,692 | |||||
Class A common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 1,075 | 1,016 | |||||
Class B common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 0 | 0 | |||||
Class C common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 0 | 0 | |||||
Consolidated Funds | |||||||
Assets | |||||||
Cash and cash equivalents | 376,328 | 384,644 | |||||
Investments, at fair value | 7,926,615 | 7,673,165 | |||||
Due from affiliates | 15,888 | 17,609 | |||||
Other assets | 25,912 | 23,786 | |||||
Receivable for securities sold | 76,993 | 42,076 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 75,647 | 83,876 | |||||
Due to affiliates | 0 | 0 | |||||
Payable for securities purchased | 369,465 | 471,390 | |||||
CLO loan obligations, at fair value | 7,030,841 | 6,678,091 | |||||
Fund borrowings | 126,110 | 209,284 | |||||
Non-controlling interest in Consolidated Funds | 613,943 | 503,637 | |||||
AOG | |||||||
Liabilities | |||||||
Non-controlling interest in Ares Operating Group entities | 352,882 | 302,780 | |||||
Ares Management L.P | |||||||
Assets | |||||||
Cash and cash equivalents | 247,220 | 110,247 | $ 125,448 | $ 118,929 | |||
Investments, at fair value | 1,566,042 | 1,326,137 | |||||
Due from affiliates | 234,081 | 199,377 | |||||
Other assets | 358,091 | 377,651 | |||||
Right-of-use operating lease assets | 152,579 | 0 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 76,838 | 83,221 | |||||
Accrued compensation | 114,936 | 29,389 | |||||
Due to affiliates | 65,527 | 82,411 | |||||
Performance related compensation payable | 772,592 | 641,737 | |||||
Debt obligations | 566,277 | 480,952 | |||||
Right-of-use operating lease liabilities | 179,192 | 0 | |||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 379,789 | 326,007 | |||||
Retained earnings | (35,247) | (29,336) | |||||
Accumulated other comprehensive loss, net of tax | (8,879) | (8,524) | |||||
Total stockholders' equity | 635,499 | 587,924 | |||||
Ares Management L.P | Class A common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 1,075 | 1,016 | |||||
Ares Management L.P | Class B common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 0 | 0 | |||||
Ares Management L.P | Class C common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | $ 0 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Preferred stock, shares issued (in shares) | 12,400,000 | 12,400,000 |
Preferred stock, shares outstanding (in shares) | 12,400,000 | 12,400,000 |
Common stock, shares outstanding (in shares) | 107,459,310 | 101,595,096 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 107,458,309 | 101,594,095 |
Common stock, shares outstanding (in shares) | 107,458,309 | 101,594,095 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, shares issued (in shares) | 1,000 | 1,000 |
Common stock, shares outstanding (in shares) | 1,000 | 1,000 |
Class C common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 499,999,000 | 499,999,000 |
Common stock, shares issued (in shares) | 1 | 1 |
Common stock, shares outstanding (in shares) | 1 | 1 |
Ares Management L.P | ||
Investments | $ 1,566,042 | $ 1,326,137 |
Ares Management L.P | Accrued Interest | ||
Investments | $ 1,071,954 | $ 841,079 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | Jun. 14, 2019 | Mar. 15, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Expenses | |||||||||||
Total expenses | $ 335,701 | $ 221,017 | $ 704,808 | $ 427,300 | |||||||
Other income (expense) | |||||||||||
Total other income | 35,262 | 67,926 | 63,132 | 70,166 | |||||||
Income before taxes | 84,383 | 51,072 | 220,343 | 113,118 | |||||||
Income tax expense | 9,505 | 36,903 | 23,889 | 24,528 | |||||||
Net income | 74,878 | $ 121,576 | $ 16,337 | $ 47,212 | 14,169 | $ 74,421 | 196,454 | 88,590 | |||
Net income (loss) attributable to Ares Management Corporation | 32,139 | (11,775) | 77,088 | 29,173 | |||||||
Less: Series A Preferred Stock dividends paid | 5,425 | 5,425 | 10,850 | 10,850 | |||||||
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | $ 26,714 | $ (17,200) | $ 66,238 | $ 18,323 | |||||||
Net income (loss) attributable to Ares Management Corporation per share of Class A common stock: | |||||||||||
Basic (in dollars per share) | $ 0.24 | $ (0.20) | $ 0.60 | $ 0.16 | |||||||
Diluted (in dollars per share) | $ 0.23 | $ (0.20) | $ 0.58 | $ 0.16 | |||||||
Weighted-average shares of Class A common stock: | |||||||||||
Basic (in shares) | [1] | 105,188,966 | 98,037,252 | 104,054,035 | 91,861,946 | ||||||
Diluted (in shares) | [1] | 116,603,887 | 98,037,252 | 113,657,864 | 91,861,946 | ||||||
Dividend declared and paid per share of Class A common stock (in dollar per share) | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.37 | $ 0.64 | $ 0.77 | |||||
Consolidated Funds | |||||||||||
Expenses | |||||||||||
Expenses of Consolidated Funds | $ 15,427 | $ 35,112 | $ 19,981 | $ 36,428 | |||||||
Other income (expense) | |||||||||||
Net realized and unrealized gain on investments | (116) | 34,487 | 4,248 | 21,402 | |||||||
Interest expense | (68,005) | (56,754) | (132,917) | (101,179) | |||||||
Interest and other income of Consolidated Funds | 102,206 | 92,633 | 195,390 | 157,055 | |||||||
Net income attributable to non-controlling interests related to consolidated VIEs | 8,346 | 9,882 | 25,970 | 10,249 | |||||||
AOG | |||||||||||
Other income (expense) | |||||||||||
Net income attributable to non-controlling interests related to consolidated VIEs | 34,393 | 16,062 | 93,396 | 49,168 | |||||||
Ares Management L.P | |||||||||||
Revenues | |||||||||||
Total revenues | 384,822 | 204,163 | 862,019 | 470,252 | |||||||
Expenses | |||||||||||
Compensation and benefits | 162,170 | 138,992 | 319,016 | 273,631 | |||||||
Performance related compensation | 92,688 | (13,005) | 249,208 | 12,873 | |||||||
General, administrative and other expenses | 65,416 | 59,918 | 116,603 | 104,368 | |||||||
Other income (expense) | |||||||||||
Net realized and unrealized gain on investments | 521 | 3,267 | 3,997 | 2,428 | |||||||
Interest and dividend income | 1,652 | 2,356 | 3,496 | 5,703 | |||||||
Interest expense | (5,793) | (6,076) | (11,382) | (12,945) | |||||||
Other income (expense), net | 4,797 | (1,987) | 300 | (2,298) | |||||||
Management fees | Ares Management L.P | |||||||||||
Revenues | |||||||||||
Total revenues | 237,846 | 194,032 | 462,505 | 383,547 | |||||||
Carried interest allocation | |||||||||||
Revenues | |||||||||||
Total revenues | 317,005 | ||||||||||
Carried interest allocation | Ares Management L.P | |||||||||||
Revenues | |||||||||||
Total revenues | 119,712 | (13,444) | 317,005 | 40,685 | |||||||
Incentive fees | Ares Management L.P | |||||||||||
Revenues | |||||||||||
Total revenues | 10,220 | 7,740 | 27,035 | 12,811 | |||||||
Principal investment income | Ares Management L.P | |||||||||||
Revenues | |||||||||||
Total revenues | 5,844 | 1,871 | 34,603 | 6,780 | |||||||
Administrative, transaction and other fees | |||||||||||
Revenues | |||||||||||
Total revenues | 0 | 0 | 0 | 0 | |||||||
Administrative, transaction and other fees | Ares Management L.P | |||||||||||
Revenues | |||||||||||
Total revenues | $ 11,200 | $ 13,964 | $ 20,871 | $ 26,429 | |||||||
[1] | Three and six months ended June 30, 2018 represents common units. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Ares Management L.P | Affiliated entity | ARCC | ||||
Management fees, part I fees | $ 39,157 | $ 29,866 | $ 77,550 | $ 58,283 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net income | $ 74,878 | $ 14,169 | $ 196,454 | $ 88,590 |
Ares Management L.P | ||||
Other comprehensive income: | ||||
Foreign currency translation adjustments, net of tax | (1,991) | (12,377) | (907) | (6,892) |
Total comprehensive income | 72,887 | 1,792 | 195,547 | 81,698 |
Comprehensive income (loss) attributable to Ares Management Corporation | 30,500 | (14,532) | 76,733 | 26,623 |
Consolidated Funds | ||||
Other comprehensive income: | ||||
Less: Comprehensive income (loss) attributable to non-controlling interests | 9,852 | 4,193 | 25,817 | 7,735 |
AOG | ||||
Other comprehensive income: | ||||
Less: Comprehensive income (loss) attributable to non-controlling interests | $ 32,535 | $ 12,131 | $ 92,997 | $ 47,340 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Additional Paid-in-CapitalAres Management L.P | Retained EarningsAres Management L.P | Accumulated Other Comprehensive Income (loss)Ares Management L.P | Non-Controlling interestAOG | Non-Controlling interestConsolidated Funds | Series A Preferred Stock | Class A common stock | Class A common stockCommon StockAres Management L.P | Partners' CapitalAres Management L.P | Partners' CapitalPreferred Partner | Non-Controlling interestAOG |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
As adjusted balance at January 1, 2018 | $ 1,437,681 | $ (4,208) | $ 341,069 | $ 533,821 | $ 268,238 | $ 298,761 | ||||||
Balance at Dec. 31, 2017 | 1,460,292 | (4,208) | 358,186 | 528,488 | 279,065 | 298,761 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Changes in ownership interests and related tax benefits | 10,459 | 18,810 | (8,351) | |||||||||
Contributions | 113,441 | 8,000 | 105,441 | $ 0 | ||||||||
Dividends/Distributions | (98,188) | (58,677) | (983) | (33,103) | (5,425) | |||||||
Net income | 74,421 | 0 | 33,106 | 367 | 35,523 | 5,425 | ||||||
Currency translation adjustment | 6,687 | 2,103 | 3,175 | |||||||||
Equity compensation | 20,694 | 12,409 | 0 | 8,285 | ||||||||
Balance at Mar. 31, 2018 | 1,565,195 | (4,001) | 348,820 | 544,380 | 377,235 | 298,761 | ||||||
Balance at Dec. 31, 2017 | 1,460,292 | (4,208) | 358,186 | 528,488 | 279,065 | 298,761 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 88,590 | |||||||||||
Balance at Jun. 30, 2018 | 1,535,249 | (6,758) | 316,048 | 577,217 | 349,981 | 298,761 | ||||||
Balance at Mar. 31, 2018 | 1,565,195 | (4,001) | 348,820 | 544,380 | 377,235 | 298,761 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Changes in ownership interests and related tax benefits | 11,105 | (4,711) | 15,816 | |||||||||
Contributions | 64,596 | 62,990 | 842 | 764 | ||||||||
Dividends/Distributions | (129,585) | (53,174) | (34,346) | (36,640) | (5,425) | |||||||
Net income | 14,169 | 0 | 16,062 | 9,882 | (17,200) | 5,425 | ||||||
Currency translation adjustment | (12,377) | (2,757) | (3,931) | (5,689) | ||||||||
Equity compensation | 22,146 | 12,218 | 0 | 9,928 | ||||||||
Balance at Jun. 30, 2018 | 1,535,249 | (6,758) | 316,048 | 577,217 | 349,981 | 298,761 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Changes in ownership interests and related tax benefits | (31,179) | 3,499 | (34,678) | |||||||||
Contributions | 917 | 0 | 917 | |||||||||
Dividends/Distributions | (82,486) | (30,928) | (11,466) | (34,667) | (5,425) | |||||||
Net income | 47,212 | 0 | 18,133 | 13,169 | 10,485 | 5,425 | ||||||
Currency translation adjustment | (1,919) | (645) | (774) | (500) | ||||||||
Equity compensation | 23,525 | 12,925 | 0 | 10,600 | ||||||||
Balance at Sep. 30, 2018 | 1,491,319 | (7,403) | 319,820 | 578,420 | 301,721 | 298,761 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Consolidation of a new fund | 42,942 | 42,942 | ||||||||||
Changes in ownership interests and related tax benefits | 8,404 | $ 9,140 | (1,237) | 501 | ||||||||
Contributions | 1,466 | 19 | $ 1,447 | |||||||||
Dividends/Distributions | (183,797) | $ (30,348) | (35,018) | (112,915) | $ (5,425) | (91) | ||||||
Net income | 16,337 | 1,012 | 7,306 | (2,906) | 5,425 | 5,500 | ||||||
Currency translation adjustment | (4,379) | 0 | (1,121) | (1,335) | (1,923) | |||||||
Equity compensation | 22,049 | 2,820 | 0 | 11,797 | 0 | 7,432 | ||||||
Reclassifications resulting from conversion to a corporation | 0 | 314,047 | 298,761 | $ 1,016 | (315,063) | (298,761) | ||||||
Balance at Dec. 31, 2018 | 1,394,341 | 326,007 | (29,336) | (8,524) | 302,780 | 503,637 | 298,761 | 1,016 | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Relinquished with deconsolidation of funds | (55) | (55) | ||||||||||
Changes in ownership interests and related tax benefits | (18,397) | (6,339) | (12,073) | |||||||||
Contributions | 55,911 | 1,876 | 54,035 | |||||||||
Dividends/Distributions | (101,640) | (35,367) | (40,112) | (20,736) | (5,425) | |||||||
Net income | 121,576 | 39,524 | 59,003 | 17,624 | 5,425 | |||||||
Currency translation adjustment | 1,084 | 1,284 | 1,459 | (1,659) | ||||||||
Equity compensation | 27,004 | 12,637 | 14,367 | |||||||||
Balance at Mar. 31, 2019 | 1,479,824 | 332,305 | (25,179) | (7,240) | 327,300 | 552,846 | 298,761 | 1,031 | ||||
Balance at Dec. 31, 2018 | 1,394,341 | 326,007 | (29,336) | (8,524) | 302,780 | 503,637 | 298,761 | 1,016 | $ 0 | $ 0 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Repurchases of Class A common stock | $ (10,400) | |||||||||||
Net income | 196,454 | |||||||||||
Balance at Jun. 30, 2019 | 1,602,324 | 379,789 | (35,247) | (8,879) | 352,882 | 613,943 | 298,761 | 1,075 | ||||
Balance at Mar. 31, 2019 | 1,479,824 | 332,305 | (25,179) | (7,240) | 327,300 | 552,846 | 298,761 | 1,031 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Changes in ownership interests and related tax benefits | (11,508) | (32,128) | 20,615 | |||||||||
Repurchases of Class A common stock | (10,449) | (10,445) | (4) | |||||||||
Contributions | 61,464 | 0 | 0 | 61,464 | ||||||||
Dividends/Distributions | (92,529) | (36,782) | (40,103) | (10,219) | (5,425) | |||||||
Net income | 74,878 | 26,714 | 34,393 | 8,346 | 5,425 | |||||||
Currency translation adjustment | (1,991) | (1,639) | (1,858) | 1,506 | ||||||||
Equity compensation | 23,841 | 11,306 | 12,535 | |||||||||
Stock option exercises | 78,794 | 78,751 | 43 | |||||||||
Balance at Jun. 30, 2019 | $ 1,602,324 | $ 379,789 | $ (35,247) | $ (8,879) | $ 352,882 | $ 613,943 | $ 298,761 | $ 1,075 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 196,454 | $ 88,590 |
Adjustments to reconcile net income to net cash used in operating activities | 48,114 | 225,963 |
Cash flows due to changes in operating assets and liabilities | (12,824) | 66,969 |
Net cash used in operating activities | (1,291,312) | (1,287,601) |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net | (5,653) | (7,126) |
Net cash used in investing activities | (5,653) | (7,126) |
Allocable to non-controlling interests in Consolidated Funds: | ||
Net cash provided by financing activities | 1,445,125 | 1,293,015 |
Ares Management L.P | ||
Cash flows from financing activities: | ||
Proceeds from issuance of common shares | 0 | 105,333 |
Proceeds from credit facility | 235,000 | 325,000 |
Proceeds from term notes | 0 | 44,050 |
Repayments of credit facility | (150,000) | (410,000) |
Repayments of term loans | 0 | (206,089) |
Dividends and distributions | (152,364) | (181,594) |
Series A Preferred Stock dividends and distributions | (10,850) | (10,850) |
Repurchases of Class A common stock | (10,449) | 0 |
Stock option exercises | 78,794 | 950 |
Taxes paid related to net share settlement of equity awards | (31,424) | (17,225) |
Other financing activities | (3,258) | 764 |
Allocable to non-controlling interests in Consolidated Funds: | ||
Effect of exchange rate changes | (11,187) | 8,231 |
Net change in cash and cash equivalents | 136,973 | 6,519 |
Cash and cash equivalents, beginning of period | 110,247 | 118,929 |
Cash and cash equivalents, end of period | 247,220 | 125,448 |
Consolidated Funds | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income to net cash used in operating activities | (1,360,106) | (1,634,788) |
Cash flows due to changes in operating assets and liabilities | (162,950) | (34,335) |
Allocable to non-controlling interests in Consolidated Funds: | ||
Contributions from non-controlling interests in Consolidated Funds | 115,499 | 70,990 |
Distributions to non-controlling interests in Consolidated Funds | (30,955) | (35,329) |
Borrowings under loan obligations by Consolidated Funds | 1,934,087 | 2,206,816 |
Repayments under loan obligations by Consolidated Funds | (528,955) | $ (599,801) |
Cash and cash equivalents, beginning of period | 384,644 | |
Cash and cash equivalents, end of period | $ 376,328 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Ares Management Corporation ("the Company"), a Delaware corporation, together with its subsidiaries, is a leading global alternative investment manager operating three integrated businesses across Credit, Private Equity and Real Estate. Information about segments should be read together with Note 14, “Segment Reporting.” Subsidiaries of the Company serve as the general partners and/or investment managers to various investment funds and managed accounts within each investment group (the “Ares Funds”). Such subsidiaries provide investment advisory services to the Ares Funds in exchange for management fees. Ares is managed and operated by its Board of Directors and Executive Management Committee. Unless the context requires otherwise, references to “Ares” or the “Company” refer to Ares Management, L.P., together with its subsidiaries prior to November 26, 2018 and thereafter to Ares Management Corporation, together with its subsidiaries. The accompanying unaudited financial statements include the condensed consolidated results of the Company and its subsidiaries. The Company is a holding company, and the Company’s sole assets are equity interests in Ares Holdings Inc. (“AHI”), Ares Offshore Holdings, Ltd., and Ares AI Holdings L.P. In this quarterly report, the following of the Company’s subsidiaries are collectively referred to as the “Ares Operating Group”: Ares Offshore Holdings L.P. (“Ares Offshore”), Ares Holdings L.P. (“Ares Holdings”), and Ares Investments L.P. (“Ares Investments”). The Company, indirectly through its wholly owned subsidiaries, is the general partner of each of the Ares Operating Group entities. The Company operates and controls all of the businesses and affairs of and conducts all of its material business activities through the Ares Operating Group. Non-Controlling Interests in Ares Operating Group Entities |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent, and that all such adjustments are of a normal recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC. The condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. All intercompany balances and transactions have been eliminated upon consolidation. The Company has reclassified certain prior period amounts to conform to the current year presentation. Adoption of ASC 842 Effective January 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) Topic 842 (“ASC 842”), Leases . The Company adopted ASC 842 under the modified retrospective approach using the practical expedient provided for within paragraph 842-10-65-1; therefore, the presentation of prior year periods has not been adjusted. No cumulative effect of initially adopting ASC 842 as an adjustment to the opening balance of components of equity as of January 1, 2019 was necessary as the recognition of the right-of-use operating lease assets equaled the corresponding lease liabilities. The amount established in conjunction with the implementation was consistent with the amount previously disclosed. The Company has entered into operating and finance leases for corporate offices and certain equipment and makes the determination if an arrangement constitutes a lease at inception. Operating leases are included in right-of-use operating lease assets and right-of-use operating lease liabilities in the Company's Condensed Consolidated Statements of Financial Condition. Finance leases are included in accounts payable, accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Statements of Financial Condition. Right-of-use leases assets represent the Company's right to use an underlying asset for the lease term and right-of-use lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses the its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The right-of-use operating lease asset also includes any lease prepayments and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Lease expense is primarily recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. However, for certain equipment leases where the non-lease components are not material, the Company account for the lease and non-lease components as a single lease component. Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standard updates ("ASU") issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its condensed consolidated financial statements. In May 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The objective of the guidance in ASU 2016-13 is to allow entities to recognize estimated credit losses in the period that the change in valuation occurs. ASU 2016-13 requires an entity to present financial assets measured on an amortized cost basis on the balance sheet net of an allowance for credit losses. Available for sale and held to maturity debt securities are also required to be held net of an allowance for credit losses. The guidance should be applied using a modified retrospective approach. ASU 2016-13 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods. Early adoption is permitted for annual and quarterly reporting periods beginning after December 15, 2018. In April and May 2019, ASU 2019-04, C odification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, were issued to provide clarification to previously issued credit losses guidance (ASU 2016-13) that has not yet been implemented. These updates are required to be adopted with ASU 2016-13. The Company is currently evaluating the impact of these pronouncements on its condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). ASU 2018-15 amends ASC 350-40 to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. This ASU aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, ASU 2018-15 amends ASC 350 to include in its scope implementation costs of a cloud computing arrangement that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in a cloud computing arrangement that is considered a service contract. The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. In addition, this ASU states that a cloud computing arrangement that is a service contract does not give rise to a recognizable intangible asset because it is an executory service contract. Consequently, any costs incurred to implement a cloud computing arrangement that is a service contract would not be capitalized as an intangible asset since they do not form part of an intangible asset but instead would be characterized in the financial statements in the same manner as other service costs and assets related to service contracts such as prepaid expense. That is, these costs would be capitalized as part of the service contract and the related amortization would be consistent with the ongoing periodic costs of the underlying cloud computing arrangement. ASU 2018-15 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods, with early adoption permitted. The guidance may be applied either prospectively or retrospectively. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. ASU 2018-17, amends ASC 810 to address whether indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. This is consistent with how indirect interests held through related parties under common control are considered for determining whether a reporting entity must consolidate a VIE. For example, if a decision maker or service provider owns a 20 percent interest in a related party and that related party owns a 40 percent interest in the legal entity being evaluated, the decision maker’s or service provider’s indirect interest in the VIE held through the related party under common control should be considered the equivalent of an eight percent direct interest for determining whether its fees are variable interests. ASU 2018-17 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods, with early adoption permitted. The guidance should be applied retrospectively. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Finite Lived Intangible Assets, Net The following table summarizes the carrying value, net of accumulated amortization, for the Company's intangible assets, included within other assets in the Condensed Consolidated Statements of Financial Condition: Weighted Average Amortization Period as of June 30, 2019 As of June 30, As of December 31, 2019 2018 Management contracts 2.6 years $ 12,498 $ 42,335 Client relationships 9.0 years 38,600 38,600 Trade name 3.0 years 3,200 3,200 Intangible assets 54,298 84,135 Less: accumulated amortization (25,287 ) (52,701 ) Intangible assets, net $ 29,011 $ 31,434 Amortization expense associated with intangible assets was $1.2 million and $3.3 million for the three months ended June 30, 2019 and 2018 , respectively, and $2.4 million and $6.6 million for the six months ended June 30, 2019 and 2018 , respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. During the first quarter of 2019, the Company removed $29.8 million of intangible assets that were fully amortized. Goodwill The following table summarizes the carrying value of the Company's goodwill assets, included within other assets in the Condensed Consolidated Statements of Financial Condition: Credit Private Real Total Balance as of December 31, 2018 $ 32,196 $ 58,600 $ 52,990 $ 143,786 Foreign currency translation — — (7 ) (7 ) Balance as of June 30, 2019 $ 32,196 $ 58,600 $ 52,983 $ 143,779 There was no impairment of goodwill recorded during the six months ended June 30, 2019 and 2018 |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Investments in and Advances to Affiliates [Abstract] | |
INVESTMENTS | INVESTMENTS The Company’s investments are comprised of the following: Percentage of total investments as of June 30, December 31, June 30, December 31, 2019 2018 2019 2018 Private Investment Partnership Interests and Other: Equity method private investment partnership interests - principal (1) $ 364,109 $ 357,655 23.3 % 27.0 % Equity method - carried interest (1) 1,071,954 841,079 68.4 % 63.4 % Equity method private investment partnership interests and other (held at fair value) 48,785 46,450 3.1 % 3.5 % Equity method private investment partnership interests and other 15,969 18,845 1.0 % 1.4 % Total private investment partnership interests and other 1,500,817 1,264,029 95.8 % 95.3 % Collateralized loan obligations 26,241 20,824 1.7 % 1.6 % Other fixed income 37,810 40,000 2.4 % 3.0 % Collateralized loan obligations and other fixed income, at fair value 64,051 60,824 4.1 % 4.6 % Common stock, at fair value 1,174 1,284 0.1 % 0.1 % Total investments $ 1,566,042 $ 1,326,137 (1) Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date. Equity Method Investments The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant as defined by guidance from the SEC. As of and for the three and six months ended June 30, 2019 and 2018 , no individual equity method investment held by the Company met the significance criteria. The Company recognized net gains related to its equity method investments of $5.4 million and $3.8 million for the three months ended June 30, 2019 and 2018 , respectively, and $34.5 million and $7.3 million for the six months ended June 30, 2019 and 2018 , respectively. The net gains were included within principal investment income, net realized and unrealized gain on investments, and interest and dividend income within the Condensed Consolidated Statements of Operations. With respect to the Company's equity method investments, the material assets are expected to generate either long-term capital appreciation and or interest income, the material liabilities are debt instruments collateralized by, or related to, the financing of the assets and net income is materially comprised of the changes in fair value of these net assets. Investments of the Consolidated Funds Investments held in the Consolidated Funds are summarized below: Fair value at Fair value as a percentage of total investments as of June 30, December 31, June 30, December 31, 2019 2018 2019 2018 Fixed income investments: Bonds $ 201,792 $ 318,499 2.6 % 4.3 % Loans 7,229,083 6,886,749 91.2 % 89.8 % Collateralized loan obligations 35,260 — 0.4 % — % Total fixed income investments 7,466,135 7,205,248 94.2 % 94.1 % Equity securities 166,623 196,470 2.1 % 2.4 % Partnership interests 293,857 271,447 3.7 % 3.5 % Total investments, at fair value $ 7,926,615 $ 7,673,165 |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair Value Measurements GAAP establishes a hierarchal disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model‑derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available. In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period. Fair Value of Financial Instruments Held by the Company and Consolidated Funds The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of June 30, 2019 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 64,051 $ — $ 64,051 Common stock and other equity securities 137 1,037 12,397 — 13,571 Partnership interests — — 35,192 1,196 36,388 Total investments, at fair value 137 1,037 111,640 1,196 114,010 Derivatives—foreign exchange contracts — 1,890 — — 1,890 Total assets, at fair value $ 137 $ 2,927 $ 111,640 $ 1,196 $ 115,900 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (610 ) $ — $ — $ (610 ) Total liabilities, at fair value $ — $ (610 ) $ — $ — $ (610 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 201,792 $ — $ 201,792 Loans — 6,954,671 274,412 7,229,083 Collateralized loan obligations — 35,260 — 35,260 Total fixed income investments — 7,191,723 274,412 7,466,135 Equity securities 34,891 — 131,732 166,623 Partnership interests — — 293,857 293,857 Total investments, at fair value 34,891 7,191,723 700,001 7,926,615 Derivatives: Foreign exchange contracts — 342 — 342 Asset swaps - other — — 705 705 Total assets, at fair value $ 34,891 $ 7,192,065 $ 700,706 $ 7,927,662 Liabilities, at fair value Foreign exchange contracts $ — $ (345 ) $ — $ (345 ) Asset swaps - other — — (647 ) (647 ) Loan obligations of CLOs — (7,030,841 ) — (7,030,841 ) Total liabilities, at fair value $ — $ (7,031,186 ) $ (647 ) $ (7,031,833 ) The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2018 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 60,824 $ — $ 60,824 Common stock and other equity securities 280 1,004 10,397 — 11,681 Partnership interests — — 35,192 861 36,053 Total investments, at fair value 280 1,004 106,413 861 108,558 Derivatives-foreign exchange contracts — 1,066 — — 1,066 Total assets, at fair value $ 280 $ 2,070 $ 106,413 $ 861 $ 109,624 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (869 ) $ — $ — $ (869 ) Total liabilities, at fair value $ — $ (869 ) $ — $ — $ (869 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 316,850 $ 1,649 $ 318,499 Loans — 6,340,440 546,309 6,886,749 Total fixed income investments — 6,657,290 547,958 7,205,248 Equity securities 45,718 — 150,752 196,470 Partnership interests — — 271,447 271,447 Total investments, at fair value 45,718 6,657,290 970,157 7,673,165 Derivatives: Foreign exchange contracts — 1,881 — 1,881 Asset swaps - other — — 1,328 1,328 Total derivative assets, at fair value — 1,881 1,328 3,209 Total assets, at fair value $ 45,718 $ 6,659,171 $ 971,485 $ 7,676,374 Liabilities, at fair value Foreign exchange contracts $ — $ (1,864 ) $ — (1,864 ) Asset swaps - other — — (648 ) (648 ) Loan obligations of CLOs — (6,678,091 ) — (6,678,091 ) Total liabilities, at fair value $ — $ (6,679,955 ) $ (648 ) $ (6,680,603 ) The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2019 : Level III Assets Level III Assets of the Company Equity Securities Fixed Income Partnership Total Balance, beginning of period $ 10,397 $ 67,190 $ 35,192 $ 112,779 Deconsolidation of fund — 1,883 — 1,883 Purchases(1) 2,000 — — 2,000 Sales/settlements(2) — (6,206 ) — (6,206 ) Realized and unrealized appreciation, net — 1,184 — 1,184 Balance, end of period $ 12,397 $ 64,051 $ 35,192 $ 111,640 Increase in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ — $ 1,818 $ — $ 1,818 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 159,032 $ 564,304 $ 283,059 $ (3,031 ) $ 1,003,364 Deconsolidation of fund (10,325 ) (115,711 ) — — (126,036 ) Transfer in — 29,438 — — 29,438 Transfer out — (261,674 ) — — (261,674 ) Purchases(1) 110 113,708 4,000 — 117,818 Sales/settlements(2) (51 ) (56,530 ) (2,000 ) (555 ) (59,136 ) Amortized discounts/premiums — (345 ) — 171 (174 ) Realized and unrealized appreciation (depreciation), net (17,034 ) 1,222 8,798 3,473 (3,541 ) Balance, end of period $ 131,732 $ 274,412 $ 293,857 $ 58 $ 700,059 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (17,031 ) $ (389 ) $ 8,798 $ 2,865 $ (5,757 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2019 : Level III Assets Level III Assets of the Company Equity Securities Fixed Income Partnership Total Balance, beginning of period $ 10,397 $ 60,824 $ 35,192 $ 106,413 Deconsolidation of fund — 10,021 — 10,021 Purchases(1) 2,000 2,146 — 4,146 Sales/settlements(2) — (11,169 ) — (11,169 ) Realized and unrealized appreciation, net — 2,229 — 2,229 Balance, end of period $ 12,397 $ 64,051 $ 35,192 $ 111,640 Increase in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ — $ 2,479 $ — $ 2,479 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 150,752 $ 547,958 $ 271,447 $ 680 $ 970,837 Deconsolidation of fund (10,325 ) (174,593 ) — — (184,918 ) Transfer in — 41,245 — — 41,245 Transfer out — (247,573 ) — — (247,573 ) Purchases(1) 10,882 238,870 8,000 — 257,752 Sales/settlements(2) (5,137 ) (136,329 ) (2,000 ) (581 ) (144,047 ) Amortized discounts/premiums — (37 ) — 22 (15 ) Realized and unrealized appreciation (depreciation), net (14,440 ) 4,871 16,410 (63 ) 6,778 Balance, end of period $ 131,732 $ 274,412 $ 293,857 $ 58 $ 700,059 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (14,442 ) $ 1,114 $ 16,410 $ (49 ) $ 3,033 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2018 : Level III Assets Level III Assets of the Company Fixed Income Partnership Total Balance, beginning of period $ 242,984 $ 44,769 $ 287,753 Sales/settlements(2) (219,744 ) — (219,744 ) Realized and unrealized appreciation (depreciation), net (1,115 ) 2,450 1,335 Balance, end of period $ 22,125 $ 47,219 $ 69,344 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (100 ) $ 2,450 $ 2,350 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 160,422 $ 240,763 $ 252,700 $ 86 $ 653,971 Transfer in — 94,776 — — 94,776 Transfer out — (68,328 ) — — (68,328 ) Purchases(1) — 273,879 6,000 — 279,879 Sales/settlements(2) — (57,206 ) — (17 ) (57,223 ) Amortized discounts/premiums — (9 ) — (21 ) (30 ) Realized and unrealized appreciation (depreciation), net 24,161 (1,500 ) (7,092 ) 182 15,751 Balance, end of period $ 184,583 $ 482,375 $ 251,608 $ 230 $ 918,796 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (2,090 ) $ (3,785 ) $ — $ 134 $ (5,741 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2018 : Level III Assets Level III Assets of the Company Fixed Income Partnership Total Balance, beginning of period $ 195,158 $ 44,769 $ 239,927 Deconsolidation of fund 78 — 78 Purchases(1) 48,731 — 48,731 Sales/settlements(2) (220,571 ) — (220,571 ) Realized and unrealized appreciation (depreciation), net (1,271 ) 2,450 1,179 Balance, end of period $ 22,125 $ 47,219 $ 69,344 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (829 ) $ 2,450 $ 1,621 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 162,577 $ 267,889 $ 232,332 $ 904 $ 663,702 Deconsolidation of fund — (233 ) — — (233 ) Transfer in — 95,450 — — 95,450 Transfer out — (73,777 ) — — (73,777 ) Purchases(1) — 313,462 16,000 — 329,462 Sales/settlements(2) — (117,503 ) — (194 ) (117,697 ) Amortized discounts/premiums — 35 — (14 ) 21 Realized and unrealized appreciation (depreciation), net 22,006 (2,948 ) 3,276 (466 ) 21,868 Balance, end of period $ 184,583 $ 482,375 $ 251,608 $ 230 $ 918,796 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (12,211 ) $ (1,671 ) $ 3,276 $ (566 ) $ (11,172 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The Company recognizes transfers between the levels as of the beginning of the period. Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service. The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of June 30, 2019 : Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 12,397 Transaction price(1) N/A N/A Partnership interests 35,192 Discounted cash flow Discount rate 8.0% Collateralized loan obligations 26,241 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 37,810 Other N/A N/A Total $ 111,640 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Assets Equity securities $ 609 Enterprise value market multiple analysis EBITDA multiple(2) 8.7x - 22.4x 13.2x 74,241 Other Net income multiple 36.1x - 40.0x 37.8x Illiquidity discount 25.0% 25.0% 56,882 Transaction price(1) N/A N/A N/A Partnership interest 293,857 Discounted cash flow Discount rate 21.4% 21.4% Fixed income securities 191,789 Broker quotes and/or 3rd party pricing services N/A N/A N/A 82,623 Income approach Yield 5.0% - 13.2% 8.9% Derivative instruments 705 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 700,706 Liabilities Derivatives instruments $ (647 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (647 ) (1) Transaction price consists of securities recently purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2018 : Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 10,397 Transaction price(1) N/A N/A Partnership interests 35,192 Discounted cash flow Discount rate 8.0% Collateralized loan obligations 20,824 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 40,000 Other N/A N/A Total $ 106,413 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 23,871 Enterprise value market multiple analysis EBITDA multiple(2) 7.2x - 22.9x 7.7x 41,562 Other Net income multiple 38.8x 38.8x Illiquidity discount 25.0% 25.0% 271,447 Discounted cash flow Discount rate 20.8% 20.8% 85,319 Transaction price(1) N/A N/A N/A Fixed income securities 441,368 Broker quotes and/or 3rd party pricing services N/A N/A N/A 106,590 Income approach Yield 1.0% - 14.8% 9.6% Derivative instruments 1,328 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 971,485 Liabilities Derivatives instruments $ (648 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (648 ) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The Company has an insurance-related investment in a private fund managed by a third party that is valued using net asset value (“NAV”) per share. The terms and conditions of this fund do not allow for redemptions without certain events or approvals that are outside the Company's control. This investment had a fair value of $1.2 million and $0.8 million as of June 30, 2019 and December 31, 2018 , respectively. The Company has no |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management. The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds as of June 30, 2019 and December 31, 2018 : As of June 30, 2019 As of December 31, 2018 Assets Liabilities Assets Liabilities The Company Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ 37,667 $ 1,890 $ 75,252 $ 610 $ 33,026 $ 1,066 $ 27,140 $ 869 Total derivatives, at fair value(2) $ 37,667 $ 1,890 $ 75,252 $ 610 $ 33,026 $ 1,066 $ 27,140 $ 869 As of June 30, 2019 As of December 31, 2018 Assets Liabilities Assets Liabilities Consolidated Funds Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ 342 $ 342 $ 342 $ 345 $ 1,881 $ 1,881 $ 1,881 $ 1,864 Asset swap - other 4,830 705 2,292 647 5,226 1,328 2,605 648 Total derivatives, at fair value(3) $ 5,172 $ 1,047 $ 2,634 $ 992 $ 7,107 $ 3,209 $ 4,486 $ 2,512 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of June 30, 2019 and December 31, 2018 , the Company had the right to, but elected not to, offset $0.6 million and $0.9 million of its derivative liabilities, respectively. (3) As of June 30, 2019 and December 31, 2018 , the Consolidated Funds offset $10.6 million and $5.7 million of their derivative assets and liabilities, respectively. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of June 30, 2019 As of December 31, 2018 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility(1) Revolver 3/21/2024 N/A $ 320,000 3.69% $ 235,000 4.00% Senior Notes(2) 10/8/2014 10/8/2024 $ 250,000 246,277 4.21% 245,952 4.21% Total debt obligations $ 566,277 $ 480,952 (1) The AOG entities are borrowers under the Credit Facility, which provides a $1.065 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. On March 21, 2019, the Company amended the Credit Facility to, among other things, extend the maturity date from February 2022 to March 2024 and to reduce borrowing costs on the drawn and undrawn amounts. As of June 30, 2019 , base rate loans bear interest calculated based on the base rate plus 0.25% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.25%. The unused commitment fee is 0.15% per annum. There is a base rate and LIBOR floor of zero . (2) The Senior Notes were issued in October 2014 by Ares Finance Co. LLC, a subsidiary of the Company, at 98.268% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture . As of June 30, 2019 , the Company and its subsidiaries were in compliance with all covenants under the debt obligations. The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the Company's Senior Notes are recorded as a reduction of the corresponding debt obligation, and debt issuance costs related to the Credit Facility are included in other assets in the Condensed Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the remaining term of the related obligation. The following table presents the activity of the Company's debt issuance costs: Credit Facility Senior Notes Unamortized debt issuance costs as of December 31, 2018 $ 4,972 $ 1,334 Debt issuance costs incurred 1,521 — Amortization of debt issuance costs (677 ) (116 ) Unamortized debt issuance costs as of June 30, 2019 $ 5,816 $ 1,218 Loan Obligations of the Consolidated CLOs Loan obligations of the Consolidated Funds that are CLOs ("Consolidated CLOs") represent amounts due to holders of debt securities issued by the Consolidated CLOs. The Company measures the loan obligations of the Consolidated CLOs using the fair value of the financial assets of its Consolidated CLOs. As of June 30, 2019 and December 31, 2018 , the following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of June 30, 2019 As of December 31, 2018 Loan Obligations Fair Value of Loan Obligations Weighted Loan Fair Value of Loan Obligations Weighted Average Remaining Maturity In Years Senior secured notes(1) $ 6,879,407 $ 6,789,415 11.14 $ 6,642,616 $ 6,391,643 10.94 Subordinated notes(2) 383,443 241,426 11.20 455,333 286,448 11.21 Total loan obligations of Consolidated CLOs $ 7,262,850 $ 7,030,841 $ 7,097,949 $ 6,678,091 (1) Original borrowings under the senior secured notes totaled $6.9 billion , with various maturity dates ranging from July 2028 to April 2032. The weighted average interest rate as of June 30, 2019 was 3.56% . (2) Original borrowings under the subordinated notes totaled $383.4 million , with various maturity dates ranging from July 2028 to April 2032. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO. Loan obligations of the Consolidated CLOs are collateralized by the assets held by the Consolidated CLOs, consisting of cash and cash equivalents, corporate loans, corporate bonds and other securities. The assets of one Consolidated CLO may not be used to satisfy the liabilities of another Consolidated CLO. Loan obligations of the Consolidated CLOs include floating rate notes, deferrable floating rate notes, revolving lines of credit and subordinated notes. Amounts borrowed under the notes are repaid based on available cash flows subject to priority of payments under each Consolidated CLO’s governing documents. Based on the terms of these facilities, the creditors of the facilities have no recourse to the Company. Credit Facilities of the Consolidated Funds Certain Consolidated Funds maintain credit facilities to fund investments between capital drawdowns. These facilities generally are collateralized by the unfunded capital commitments of the Consolidated Funds’ limited partners, bear an annual commitment fee based on unfunded commitments and contain various affirmative and negative covenants and reporting obligations, including restrictions on additional indebtedness, liens, margin stock, affiliate transactions, dividends and distributions, release of capital commitments and portfolio asset dispositions. The creditors of these facilities have no recourse to the Company and only have recourse to a subsidiary of the Company to the extent the debt is guaranteed by such subsidiary. Credit facilities of the Consolidated Funds are reflected at cost in the Condensed Consolidated Statements of Financial Condition. As of June 30, 2019 and December 31, 2018 , the Consolidated Funds were in compliance with all covenants under such credit facilities. The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding as of June 30, 2019 and December 31, 2018 : As of June 30, 2019 As of December 31, 2018 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan(1) Effective Rate Outstanding Loan(1) Effective Rate Credit Facilities: 1/1/2023 $ 18,000 $ 16,153 4.00% $ 14,953 3.98% 12/29/2019(2) 28,033 28,033 1.55% (3) 43,624 1.55% (3) 3/7/2020 71,500 71,500 3.47% 71,500 3.47% 6/30/2021 200,375 — N/A 38,844 1.00% (3) 7/15/2028 75,000 9,000 4.75% 39,000 4.75% Revolving Term Loan 1/31/2022 1,900 1,424 8.07% 1,363 8.07% Total borrowings of Consolidated Funds $ 126,110 $ 209,284 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. (2) On June 27, 2019, one of the Consolidated Funds amended the Credit Facility to, among other things, extend the maturity date from June 2019 to December 2019 and to reduce the facility size from €40.0 million to €24.6 million . (3) The effective rate is based on the three month EURIBOR or zero , whichever is higher, plus an applicable margin. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Indemnification Arrangements Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the Condensed Consolidated Statements of Financial Condition. As of June 30, 2019 , the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. Commitments As of June 30, 2019 and December 31, 2018 , the Company had aggregate unfunded commitments of $304.1 million and $267.6 million , respectively. ARCC Fee Waiver In conjunction with ARCC's acquisition of American Capital, Ltd. (“ACAS”), the Company agreed to waive up to $10 million per quarter of ARCC's Part I Fees for ten calendar quarters, which began in the second quarter of 2017. ARCC Part I Fees will only be waived to the extent they are paid. The maximum amount of fees that may be waived in a quarter is $10 million , and if ARCC Part I Fees are less than $10 million in any single quarter, the shortfall will not carry over to subsequent quarters. As of June 30, 2019 , there is one remaining quarter as part of the fee waiver agreement, with a maximum of $10 million in potential waivers. ARCC Part I Fees are reported net of the fee waiver. Performance Income Generally, if at the termination of a fund (and increasingly at interim points in the life of a fund), the fund has not achieved investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company will be obligated to repay carried interest that was received by the Company in excess of the amounts to which the Company is entitled. This contingent obligation is normally reduced by income taxes paid by the Company related to its carried interest. At June 30, 2019 and December 31, 2018 , if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment, net of tax, which may differ from the recognition of revenue, would have been approximately $401.0 million and $469.0 million , respectively, of which approximately $297.5 million and $351.9 million , respectively, is reimbursable to the Company by certain professionals who are the recipients of such performance income. Management believes the possibility of all of the investments becoming worthless is remote. As of June 30, 2019 and December 31, 2018 , if the funds were liquidated at their fair values, there would be $0.6 million and $0.4 million , respectively, of repayment obligations, so the Company recorded a contingent repayment liability as of each respective period that is presented on a gross basis within accrued carried interest within investments and performance related compensation payable on the Company's Condensed Consolidated Statements of Financial Condition. Litigation From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows. Leases The Company leases office space and certain office equipment. The Company's leases have remaining lease terms of one to 11 years. The tables below present certain supplemental quantitative disclosures regarding the Company's leases as of and for the period ending June 30, 2019 : Classification As of June 30, 2019 Operating lease assets Right-of-use operating lease assets $ 152,579 Finance lease assets Other assets(1) 1,313 Total lease assets $ 153,892 Operating lease liabilities Right-of-use operating lease liabilities $ 179,192 Finance lease obligations Accounts payable, accrued expenses and other liabilities 1,009 Total lease liabilities $ 180,201 (1)Finance lease assets are recorded net of accumulated amortization of $0.4 million as of June 30, 2019 . Classification Three months ended June 30, 2019 Six months ended June 30, 2019 Operating lease expense General, administrative and other expenses $ 7,211 $ 14,149 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 78 105 Interest on finance lease liabilities Interest expense 8 21 Total lease expense $ 7,297 $ 14,275 Maturity of lease liabilities Operating Leases Finance Leases 2019 $ 16,006 $ 32 2020 29,516 356 2021 28,627 356 2022 30,067 321 2023 26,923 — After 2023 74,530 — Total future payments 205,669 1,065 Less: interest 26,477 56 Total lease liabilities $ 179,192 $ 1,009 Lease term and discount rate As of June 30, 2019 Weighted-average remaining lease terms (in years): Operating leases 6.9 Finance leases 2.8 Weighted-average discount rate: Operating leases 4.00 % Finance leases 3.43 % Other information Six months ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 15,313 Operating cash flows from finance leases 52 Financing cash flows from finance leases 264 Leased assets obtained in exchange for new finance lease liabilities 114 Leased assets obtained in exchange for new operating lease liabilities 47,866 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Substantially all of the Company’s revenue is earned from its affiliates, including management fees, carried interest allocation, incentive fees, principal investment income and administrative expense reimbursements. The related accounts receivable are included within due from affiliates within the Condensed Consolidated Statements of Financial Condition, except that accrued carried interest allocations and incentive fees receivable, which are predominantly due from affiliated funds, are presented separately within investments and other assets, respectively, within the Condensed Consolidated Statements of Financial Condition. The Company has investment management agreements with Ares Funds that it manages. In accordance with these agreements, these Ares Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Ares Funds. The Company also has entered into agreements to be reimbursed for its expenses incurred for providing administrative services to certain related parties, including ARCC, ACRE, ARDC, Ivy Hill Asset Management, L.P., ACF FinCo I L.P, and CION Ares Diversified Credit Fund. Employees and other related parties may be permitted to participate in co-investment vehicles that generally invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These co-investment vehicles generally do not require these individuals to pay management or performance income. Performance income the Company earns from the funds can be distributed to professionals or their related entities on a current basis, subject to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several, and not joint, and are limited to distributions received by the relevant recipient. The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of June 30, As of December 31, 2019 2018 Due from affiliates: Management fees receivable from non-consolidated funds $ 174,668 $ 151,455 Payments made on behalf of and amounts due from non-consolidated funds and employees 59,413 47,922 Due from affiliates—Company $ 234,081 $ 199,377 Amounts due from portfolio companies and non-consolidated funds $ 15,888 $ 17,609 Due from affiliates—Consolidated Funds $ 15,888 $ 17,609 Due to affiliates: Management fee rebate payable to non-consolidated funds $ 2,125 $ 2,105 Management fees received in advance 3,724 5,491 Tax receivable agreement liability 24,927 24,927 Undistributed carried interest and incentive fees 25,700 31,162 Payments made by non-consolidated funds on behalf of and payable by the Company 9,051 18,726 Due to affiliates—Company $ 65,527 $ 82,411 Due from Ares Funds and Portfolio Companies In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional services, travel and other costs associated with particular portfolio company holdings, are subject to reimbursement by the portfolio companies. The Company reimbursed ARCC approximately $0.6 million for certain recurring rent and utilities incurred by ARCC during the first quarter of 2018. In addition, in the second quarter ended June 30, 2018, the Company reimbursed ARCC approximately $2.2 million , $3.0 million , $3.2 million and $2.9 million of rent and utilities for the years ended 2017, 2016, 2015 and 2014, respectively, for an aggregate reimbursement to ARCC of $11.8 million . Beginning April 1, 2018, the Company directly incurs these expenses. ARCC Investment Advisory and Management Agreement In connection with ARCC's board approval of the modification of the asset coverage requirement applicable to senior securities from 200% to 150% effective on June 21, 2019, the investment advisory and management agreement was amended effective June 6, 2019 to reduce the annual base management fee paid to the Company from 1.5% to 1.0% on all assets financed using leverage over 1.0 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Effective March 1, 2018, the Company elected to be treated as a corporation for U.S. federal and state income tax purposes (the “Tax Election”). Upon the effectiveness of this election, all earnings are subject to U.S. federal, state and local income taxes and certain of its foreign subsidiaries are subject to foreign income taxes (for which a foreign tax credit can generally offset U.S. corporate taxes imposed on the same income). Prior to March 1, 2018, a substantial portion of the Company's share of carried interest and investment income flowed through to investors without being subject to corporate level income taxes. Consequently, the Company did not reflect a provision for income taxes on such income except those for foreign, state and local income taxes incurred at the entity level. Beginning March 1, 2018, the Company's share of unrealized gains and income items became subject to U.S. corporate tax. The Company’s income tax provision includes corporate income taxes and other entity level income taxes, as well as income taxes incurred by certain affiliated funds that are consolidated in these financial statements. For the three and six months ended June 30, 2019 , the Company recorded income tax expense of $9.5 million and $23.9 million , respectively. For the three and six months ended June 30, 2018 , the Company recorded income tax expense of $36.9 million and $24.5 million , respectively. In connection with its election to be taxed as a corporation effective March 1, 2018, the Company recorded a significant one-time deferred tax liability arising from the embedded net unrealized gains of both carried interest and the investment portfolio that were not previously subject to corporate taxes. The Company’s effective income tax rate is dependent on many factors, including the estimated nature and amounts of income and expenses allocated to the non-controlling interests without being subject to federal, state and local income taxes at the corporate level. Additionally, the Company’s effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment entities that are consolidated in the Company's condensed consolidated financial statements. For the three and six months ended June 30, 2019 , the Company recorded its interim income tax provision utilizing the estimated annual effective tax rate. In 2018 , the Company utilized the discrete effective tax rate method to calculate its interim income tax provision since the conversion to a U.S. corporation for tax purposes occurred in an interim period. The income tax effects of temporary differences give rise to significant portions of deferred tax assets and liabilities, which are presented on a net basis. As of June 30, 2019 and December 31, 2018 , the Company recorded a net deferred tax asset of $42.4 million and $42.1 million , respectively, within other assets in the Condensed Consolidated Statements of Financial Condition. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. With limited exceptions, the Company is no longer subject to income tax audits by taxing authorities for any years prior to 2015. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed consolidated financial statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share of Class A common stock is computed by using the two-class method. Diluted earnings per share of Class A common stock is computed using the more dilutive method of either the two-class method or the treasury stock method. For the three and six months ended June 30, 2019 , the treasury stock method was the more dilutive method. For the three and six months ended June 30, 2018 , the two-class method was the more dilutive method. The computation of diluted earnings per share for the three and six months ended June 30, 2019 and 2018 excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Options 9,841,385 19,111,390 10,788,784 19,471,589 Restricted units 9,172,641 15,271,381 10,036,334 15,811,964 AOG Units 116,831,583 120,231,237 116,913,353 124,211,007 The following table presents the computation of basic and diluted earnings per share: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 26,714 $ (17,200 ) $ 66,238 $ 18,323 Distributions on participating unvested restricted units (1,886 ) (1,970 ) (3,693 ) (3,877 ) Net income (loss) available to Class A common stockholders $ 24,828 $ (19,170 ) $ 62,545 $ 14,446 Basic weighted-average shares of Class A common stock 105,188,966 98,037,252 104,054,035 91,861,946 Basic earnings (loss) per share of Class A common stock $ 0.24 $ (0.20 ) $ 0.60 $ 0.16 Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 26,714 $ (17,200 ) $ 66,238 $ 18,323 Distributions on unvested restricted units — (1,970 ) — (3,877 ) Net income (loss) available to Class A common stockholders $ 26,714 $ (19,170 ) $ 66,238 $ 14,446 Effect of dilutive shares: Restricted units 7,212,754 — 6,349,061 — Options 4,202,167 — 3,254,768 — Diluted weighted-average shares of Class A common stock 116,603,887 98,037,252 113,657,864 91,861,946 Diluted earnings (loss) per share of Class A common stock $ 0.23 $ (0.20 ) $ 0.58 $ 0.16 Dividends declared and paid per Class A common stock $ 0.32 $ 0.37 $ 0.64 $ 0.77 |
EQUITY COMPENSATION
EQUITY COMPENSATION | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY COMPENSATION | EQUITY COMPENSATION Equity Incentive Plan In 2014, the Company adopted the 2014 Equity Incentive Plan, as amended and restated on March 1, 2018 and as further amended and restated effective November 26, 2018 (the “Equity Incentive Plan”). Based on a formula as defined in the Equity Incentive Plan, the total number of shares available to be issued under the Equity Incentive Plan resets and may increase on January 1 each year. Accordingly, on January 1, 2019 , the total number of shares available for issuance under the Equity Incentive Plan reset to 32,792,005 shares, and as of June 30, 2019 , 29,536,100 shares remain available for issuance. Generally, unvested phantom shares, restricted units and options are forfeited upon termination of employment in accordance with the Equity Incentive Plan. The Company recognizes forfeitures as a reversal of previously recognized compensation expense in the period the forfeiture occurs. Equity-based compensation expense, net of forfeitures is included in the following table: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Restricted units $ 21,783 $ 18,516 $ 44,796 $ 36,547 Restricted units with a market condition 901 — 1,791 — Options 1,157 3,630 4,258 6,293 Phantom shares 188 361 736 754 Equity-based compensation expense $ 24,029 $ 22,507 $ 51,581 $ 43,594 Restricted Units Each restricted unit represents an unfunded, unsecured right of the holder to receive a share of the Company's Class A common stock on a specific date. The restricted units generally vest and are settled in shares of Class A common stock either (i) at a rate of one‑third per year, beginning on the third anniversary of the grant date, (ii) in their entirety on the fifth anniversary of the grant date, (iii) at a rate of one quarter per year, beginning on either the first or second anniversary of the grant date or the holder's employment commencement date, or (iv) at a rate of one third per year, beginning on the first anniversary of the grant date in each case generally subject to the holder’s continued employment as of the applicable vesting date (subject to accelerated vesting upon certain qualifying terminations of employment). Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award. The holders of restricted units other than the market condition awards described below generally have the right to receive as current compensation an amount in cash equal to (i) the amount of any dividend paid with respect to a share of Class A common stock multiplied by (ii) the number of restricted units held at the time such dividends are declared (“Dividend Equivalent”). During the six months ended June 30, 2019 , the Company declared dividends of $0.32 and $0.32 per share to Class A common stockholders at the close of business on March 15, 2019 and June 14, 2019, respectively. For the three and six months ended June 30, 2019 , Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $5.2 million and $10.8 million , respectively, which are presented as dividends within the Condensed Consolidated Statements of Changes in Equity. When units are forfeited, the cumulative amount of dividend equivalents previously paid is reclassified to compensation and benefits expense in the Condensed Consolidated Statements of Operations. The following table presents unvested restricted units' activity during the six months ended June 30, 2019 : Restricted Units Weighted Average Grant Date Fair Value Per Unit Balance - January 1, 2019 16,255,475 $ 19.21 Granted 3,881,203 20.01 Vested (3,534,621 ) 17.92 Forfeited (216,662 ) 19.21 Balance - June 30, 2019 16,385,395 $ 19.68 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $229.0 million as of June 30, 2019 and is expected to be recognized over the remaining weighted average period of 3.08 years. Restricted Unit Awards with a Market Condition The following table presents the unvested market condition awards' activity during the six months ended June 30, 2019 : Market Condition Awards Units Weighted Average Balance - January 1, 2019 1,333,334 $ 9.30 Granted — — Vested — — Forfeited — — Balance - June 30, 2019 1,333,334 $ 9.30 The total compensation expense expected to be recognized in all future periods associated with the market condition awards is approximately $9.1 million as of June 30, 2019 and is expected to be recognized over the remaining weighted average period of 2.66 years. Options A summary of options activity during the six months ended June 30, 2019 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value Balance - January 1, 2019 18,741,504 $ 18.99 4.88 $ — Exercised (4,289,316 ) 19.00 — — Expired (366,366 ) 19.00 — — Forfeited (42,270 ) 19.00 — — Balance - June 30, 2019 14,043,552 $ 18.99 4.75 $ 100,858 Exercisable at June 30, 2019 13,933,735 $ 18.99 4.74 $ 100,015 Net cash proceeds from exercises of stock options were $78.8 million for the six months ended June 30, 2019 . The Company realized tax benefits of approximately $3.3 million from those exercises. Phantom Shares A summary of unvested phantom shares' activity during the six months ended June 30, 2019 is presented below: Phantom Shares Weighted Average Balance - January 1, 2019 66,287 $ 19.00 Vested (61,502 ) 19.00 Forfeited (4,785 ) 19.00 Balance - June 30, 2019 — $ — During the six months ended June 30, 2019 the Company paid $1.5 million to settle vested phantom shares. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Common Stock The Company completed its conversion from a Delaware limited partnership to a Delaware corporation (the "Conversion") effective on November 26, 2018. Prior to the Conversion, common shares represented limited partnership interests in the Company. The holders of common shares were entitled to participate pro rata in distributions from the Company and to exercise the rights or privileges that were available to common shareholders under the Company’s limited partnership agreement. The common shareholders had limited voting rights and had no right to remove the Company’s general partner, Ares Management GP LLC, or, except in limited circumstances, to elect the directors of the general partner. Since the Conversion on November 26, 2018, the Company's common stock consists of Class A, Class B and Class C common stock. As a result of the Conversion on November 26, 2018, (i) each outstanding common share representing limited partner interests in the Company before the Conversion converted into one issued and outstanding, fully paid and nonassessable share of Class A common stock, $0.01 par value per share, of the Company, (ii) the general partner share of the Company before the Conversion converted into 1,000 issued and outstanding, fully paid and nonassessable shares of Class B common stock, $0.01 par value per share, of the Company and (iii) the special voting share of the Company before the Conversion converted into one issued and outstanding, fully paid and nonassessable share, of Class C common stock, $0.01 par value per share, of the Company. The Class B common stock and Class C common stock are non-economic and holders are not entitled to (i) dividends from the Company or (ii) receive any assets of the Company in the event of any dissolution, liquidation or winding up of the Company. Ares Management GP LLC is the sole holder of the Class B common stock and Ares Voting LLC is the sole holder of the Class C common stock. In February 2019, the Company's board of directors authorized the repurchase of up to $150 million of shares of Class A common stock. Under this stock repurchase program, shares may be repurchased from time to time in open market purchases, privately negotiated transactions or otherwise, including in reliance on Rule 10b5-1 of the Securities Act. The program is scheduled to expire in February 2020. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the three and six months ended June 30, 2019 , the Company repurchased 0.4 million shares as part of the stock repurchase program at a total cost of $10.4 million . As of June 30, 2019 , the amount remaining available for repurchases under the program was $139.6 million . The following table presents the changes in each class of common stock for the six months ended June 30, 2019 : Class A Common Stock Class B Common Stock Class C Common Stock Total Balance - January 1, 2019 101,594,095 1,000 1 101,595,096 Exchanges of AOG Units 97,493 — — 97,493 Stock option exercises 4,168,449 — — 4,168,449 Repurchases of stock (400,000 ) — — (400,000 ) Vesting of restricted stock awards 1,998,272 — — 1,998,272 Balance outstanding - June 30, 2019 107,458,309 1,000 1 107,459,310 The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities as of June 30, 2019 and December 31, 2018 , as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities for the three and six months ended June 30, 2019 and 2018 . Daily Average Ownership As of June 30, 2019 As of December 31, 2018 For the Three Months Ended June 30, For the Six Months Ended June 30, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2019 2018 2019 2018 Ares Management Corporation 107,458,309 47.94 % 101,594,095 46.47 % 47.38 % 44.92 % 47.09 % 42.51 % Ares Owners Holding L.P. 116,707,849 52.06 % 117,019,274 53.53 % 52.62 % 53.82 % 52.91 % 54.4 % Affiliate of Alleghany Corporation — — % — — % — % 1.26 % — % 3.09 % Total 224,166,158 100.00 % 218,613,369 100.00 % Preferred Stock In connection with the Conversion on November 26, 2018, each 7.00% Series A preferred share of the Company before the Conversion was converted into one share of 7.00% Series A Preferred Stock, $0.01 par value per share of the Company. As of June 30, 2019 and December 31, 2018 , the Company had 12,400,000 shares of the Series A Preferred Stock outstanding. When, as and if declared by the Company’s board of directors, dividends on the Series A Preferred Stock are payable quarterly at a rate per annum equal to 7.00% . The Series A Preferred Stock may be redeemed at the Company’s option, in whole or in part, at any time on or after June 30, 2021, at a price per share of $25.00 . |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company operates through its three distinct operating segments. During the six months ended June 30, 2019 , the Company reclassified certain expenses from OMG to its operating segments. The Company has modified historical results to conform with its current presentation. The Company’s three operating segments are: Credit Group: The Company’s Credit Group is a leading manager of credit strategies across the non-investment grade credit universe in the U.S. and Europe, with approximately $105.5 billion of AUM and 170 funds as of June 30, 2019 . The Credit Group offers a range of credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, credit opportunities, alternative credit investments and U.S. and European direct lending. The Credit Group provides solutions for traditional fixed income investors seeking to access the syndicated loans and high yield bond markets and capitalizes on opportunities across traded corporate credit. It additionally provides investors access to directly originated fixed and floating rate credit assets and the ability to capitalize on illiquidity premiums across the credit spectrum. The Credit Group’s syndicated loans strategy focuses on liquid, traded non-investment grade secured loans to corporate borrowers. The high yield bond strategy seeks to deliver a diversified portfolio of liquid, traded non-investment grade corporate bonds, including secured, unsecured and subordinated debt instruments. Credit opportunities is a “go anywhere” strategy seeking to capitalize on market inefficiencies and relative value opportunities across the capital structure. The alternative credit strategy seeks investment opportunities that fall outside of traditional, well-defined markets such as corporate debt, real estate and private equity. Alternative credit investments include certain structural features designed to protect value and minimize loss such as asset security, seniority, covenants, and cash flow prioritization. These investments include asset-backed securities, specialty assets, real assets, and structured credit. The Company has one of the largest self-originating direct lending platforms in the U.S. and European middle markets, providing one-stop financing solutions for small-to-medium sized companies, which the Company believes are increasingly underserved by traditional lenders. The Company provides investors access to these capabilities through several vehicles, including commingled funds, separately managed accounts and a publicly traded vehicle. The Credit Group conducts its U.S. direct lending activities primarily through ARCC, the largest business development company as of June 30, 2019 , by both market capitalization and total assets. In addition, the Credit Group manages a commercial finance business that provides asset-based and cash flow loans to small and middle-market companies, as well as asset-based facilities to specialty finance companies. The Credit Group’s European direct lending platform is one of the most significant participants in the European middle-market, focusing on self-originated investments in illiquid middle-market credits. Private Equity Group: The Company’s Private Equity Group has approximately $24.7 billion of AUM as of June 30, 2019 , broadly categorizing its investment strategies as corporate private equity, infrastructure and power, special opportunities and energy opportunities. As of June 30, 2019 the group managed five corporate private equity commingled funds focused on North America and Europe and three focused on greater China, five commingled funds and six related co-investment vehicles focused on infrastructure and power, three commingled special opportunities funds and the Company's first energy opportunities fund. In its North American and European flexible capital corporate private equity strategy, the Company targets opportunistic majority or shared-control investments in businesses with strong franchises and attractive growth opportunities in North America and Europe. The infrastructure and power strategy targets infrastructure-related assets across the power generation, transmission, midstream sectors and renewables seeking attractive risk-adjusted equity returns with current cash flow and capital appreciation. The special opportunities strategy seeks to invest opportunistically across a broad spectrum of distressed or mispriced investments, including corporate debt, rescue capital, private asset-backed investments, post-reorganization securities and non-performing portfolios. The energy opportunities strategy targets investments in the energy industry where its flexible capital can provide attractive risk-adjusted returns while mitigating commodity risk. Real Estate Group: The Company’s Real Estate Group manages comprehensive equity and debt strategies, with approximately $11.9 billion of AUM across 45 funds as of June 30, 2019 . Real Estate equity strategies focus on applying hands-on value creation initiatives to mismanaged and capital-starved assets, as well as new development, ultimately selling stabilized assets back into the market. The Real Estate Group manages both a value-add strategy and an opportunistic strategy. The value-add strategy seeks to create value by buying assets at attractive valuations and through active asset management of income-producing properties across the U.S. and Western Europe. The opportunistic strategy focuses on manufacturing core assets through development, redevelopment and fixing distressed capital structures across major properties in the U.S. and Europe. The Company’s debt strategies leverage the Real Estate Group’s diverse sources of capital to directly originate and manage commercial mortgage investments on properties that range from stabilized to requiring hands-on value creation. In addition to managing private debt funds, the Real Estate Group makes debt investments through a publicly traded commercial mortgage REIT, ACRE. The Company has an OMG that consists of shared resource groups to support the Company’s operating segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, strategy and relationship management, legal, compliance and human resources. Additionally, the OMG provides services to certain of the Company’s investment companies and partnerships, which reimburse the OMG for expenses equal to the costs of services provided. The OMG’s expenses are not allocated to the Company’s three reportable segments but the Company does consider the cost structure of the OMG when evaluating its financial performance. Non-GAAP Measures: These measures supplement and should be considered in addition to, and not in lieu of, the Consolidated Statements of Operations prepared in accordance with GAAP. Fee related earnings (“FRE”), a non-GAAP measure, is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes performance income, performance related compensation, investment income from the Consolidated Funds and non-consolidated funds and certain other items that the Company believes are not indicative of its core operating performance. Realized income (“RI”), a non-GAAP measure, is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and expenses, which may or may not be eventually realized at the levels presented and whose realizations depend more on future outcomes than current business operations. RI differs from net income by excluding (a) income tax expense, (b) operating results of the Consolidated Funds, (c) depreciation and amortization expense, (d) the effects of changes arising from corporate actions, (e) unrealized gains and losses related to performance income and investment performance and (f) certain other items that the Company believes are not indicative of operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital transactions, underwriting costs and expenses incurred in connection with corporate reorganization. Beginning in 2018, placement fees are no longer excluded from RI but are amortized to match the period over which management fees are recognized. Management believes RI is a more appropriate metric to evaluate the Company's current business operations. Management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non‑consolidated funds. The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2019 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $39,157) $ 172,347 $ 52,162 $ 21,770 $ 246,279 $ — $ 246,279 Other fees 3,939 — 672 4,611 — 4,611 Compensation and benefits (64,965 ) (21,291 ) (11,928 ) (98,184 ) (33,994 ) (132,178 ) General, administrative and other expenses (13,381 ) (4,912 ) (3,523 ) (21,816 ) (19,874 ) (41,690 ) Fee related earnings 97,940 25,959 6,991 130,890 (53,868 ) 77,022 Performance income—realized 15,959 18,369 1,666 35,994 — 35,994 Performance related compensation—realized (9,564 ) (14,696 ) (969 ) (25,229 ) — (25,229 ) Realized net performance income 6,395 3,673 697 10,765 — 10,765 Investment income (loss)—realized (310 ) 1,030 1,546 2,266 — 2,266 Interest and other investment income (expense) —realized 4,631 3,318 2,119 10,068 (17 ) 10,051 Interest expense (1,908 ) (2,436 ) (1,050 ) (5,394 ) (399 ) (5,793 ) Realized net investment income (loss) 2,413 1,912 2,615 6,940 (416 ) 6,524 Realized income $ 106,748 $ 31,544 $ 10,303 $ 148,595 $ (54,284 ) $ 94,311 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2018 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $29,866) $ 135,848 $ 49,318 $ 17,138 $ 202,304 $ — $ 202,304 Other fees 6,877 337 7 7,221 — 7,221 Compensation and benefits (52,271 ) (18,672 ) (8,768 ) (79,711 ) (30,680 ) (110,391 ) General, administrative and other expenses (11,294 ) (4,175 ) (2,391 ) (17,860 ) (19,236 ) (37,096 ) Fee related earnings 79,160 26,808 5,986 111,954 (49,916 ) 62,038 Performance income—realized 41,672 80,415 521 122,608 — 122,608 Performance related compensation—realized (23,577 ) (64,311 ) 7 (87,881 ) — (87,881 ) Realized net performance income 18,095 16,104 528 34,727 — 34,727 Investment income (loss)—realized 595 9,016 (250 ) 9,361 798 10,159 Interest and other investment income—realized 3,035 2,920 667 6,622 584 7,206 Interest expense (3,596 ) (1,440 ) (452 ) (5,488 ) (588 ) (6,076 ) Realized net investment income (loss) 34 10,496 (35 ) 10,495 794 11,289 Realized income $ 97,289 $ 53,408 $ 6,479 $ 157,176 $ (49,122 ) $ 108,054 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2019 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $77,550) $ 335,313 $ 103,558 $ 40,420 $ 479,291 $ — $ 479,291 Other fees 7,005 — 681 7,686 — 7,686 Compensation and benefits (125,313 ) (42,487 ) (21,212 ) (189,012 ) (66,655 ) (255,667 ) General, administrative and other expenses (26,886 ) (8,969 ) (6,655 ) (42,510 ) (40,506 ) (83,016 ) Fee related earnings 190,119 52,102 13,234 255,455 (107,161 ) 148,294 Performance income—realized 37,884 62,492 4,191 104,567 — 104,567 Performance related compensation—realized (22,227 ) (49,993 ) (2,226 ) (74,446 ) — (74,446 ) Realized net performance income 15,657 12,499 1,965 30,121 — 30,121 Investment income—realized 548 11,966 5,026 17,540 — 17,540 Interest and other investment income (expense) —realized 7,536 3,612 3,224 14,372 (2 ) 14,370 Interest expense (3,807 ) (4,611 ) (2,169 ) (10,587 ) (795 ) (11,382 ) Realized net investment income (loss) 4,277 10,967 6,081 21,325 (797 ) 20,528 Realized income $ 210,053 $ 75,568 $ 21,280 $ 306,901 $ (107,958 ) $ 198,943 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2018 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $58,283) $ 267,614 $ 99,205 $ 32,311 $ 399,130 $ — $ 399,130 Other fees 12,607 677 10 13,294 — 13,294 Compensation and benefits (102,965 ) (37,871 ) (16,407 ) (157,243 ) (60,872 ) (218,115 ) General, administrative and other expenses (21,148 ) (8,216 ) (4,823 ) (34,187 ) (37,627 ) (71,814 ) Fee related earnings 156,108 53,795 11,091 220,994 (98,499 ) 122,495 Performance income—realized 46,743 84,813 14,159 145,715 — 145,715 Performance related compensation—realized (26,665 ) (67,871 ) (8,214 ) (102,750 ) — (102,750 ) Realized net performance income 20,078 16,942 5,945 42,965 — 42,965 Investment income—realized 1,366 9,687 3,100 14,153 1,636 15,789 Interest and other investment income—realized 6,224 2,979 884 10,087 1,736 11,823 Interest expense (8,269 ) (2,668 ) (872 ) (11,809 ) (1,136 ) (12,945 ) Realized net investment income (loss) (679 ) 9,998 3,112 12,431 2,236 14,667 Realized income $ 175,507 $ 80,735 $ 20,148 $ 276,390 $ (96,263 ) $ 180,127 The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Segment revenues Management fees (includes ARCC Part I Fees of $39,157, $77,550 and $29,866, $58,283 for the three and six months ended June 30, 2019 and 2018, respectively) $ 246,279 $ 202,304 $ 479,291 $ 399,130 Other fees 4,611 7,221 7,686 13,294 Performance income—realized 35,994 122,608 104,567 145,715 Total segment revenues $ 286,884 $ 332,133 $ 591,544 $ 558,139 Segment expenses Compensation and benefits $ 98,184 $ 79,711 $ 189,012 $ 157,243 General, administrative and other expenses 21,816 17,860 42,510 34,187 Performance related compensation—realized 25,229 87,881 74,446 102,750 Total segment expenses $ 145,229 $ 185,452 $ 305,968 $ 294,180 Segment realized net investment income Investment income—realized $ 2,266 $ 9,361 $ 17,540 $ 14,153 Interest and other investment income- realized 10,068 6,622 14,372 10,087 Interest expense (5,394 ) (5,488 ) (10,587 ) (11,809 ) Total segment realized net investment income $ 6,940 $ 10,495 $ 21,325 $ 12,431 The following table reconciles the Company's consolidated revenues to segment revenue: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Total consolidated revenue $ 384,822 $ 204,163 $ 862,019 $ 470,252 Performance income-unrealized (98,662 ) 124,343 (245,237 ) 89,225 Management fees of Consolidated Funds eliminated in consolidation 8,735 8,272 17,148 15,583 Incentive fees of Consolidated Funds eliminated in consolidation 4,750 4,000 5,184 4,000 Principal investment income of Consolidated Funds eliminated in consolidation (4,265 ) 12,851 (3,132 ) 10,650 Administrative fees(1) (6,602 ) (6,770 ) (13,204 ) (13,182 ) Performance income reclass(2) (26 ) (31 ) 580 (1,006 ) Principal investment income (1,579 ) (14,722 ) (31,471 ) (17,430 ) Net (revenue) expense of non-controlling interests in consolidated subsidiaries (289 ) 27 (343 ) 47 Total consolidation adjustments and reconciling items (97,938 ) 127,970 (270,475 ) 87,887 Total segment revenue $ 286,884 $ 332,133 $ 591,544 $ 558,139 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gain (loss) on investments in the Company’s Condensed Consolidated Statements of Operations. The following table reconciles the Company's consolidated expenses to segment expenses: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Total consolidated expenses $ 335,701 $ 221,017 $ 704,808 $ 427,300 Performance related compensation-unrealized (67,459 ) 100,886 (174,762 ) 89,877 Expenses of Consolidated Funds added in consolidation (28,912 ) (47,382 ) (42,313 ) (56,011 ) Expenses of Consolidated Funds eliminated in consolidation 13,485 12,270 22,332 19,583 Administrative fees(1) (6,602 ) (6,770 ) (13,204 ) (13,182 ) OMG expenses (53,868 ) (49,916 ) (107,161 ) (98,499 ) Acquisition and merger-related expense (4,207 ) (47 ) (5,980 ) 272 Equity compensation expense (24,029 ) (22,507 ) (51,581 ) (43,594 ) Unamortized placement fees (12,432 ) (1,852 ) (12,953 ) (3,516 ) Depreciation and amortization expense (5,221 ) (7,711 ) (11,045 ) (14,887 ) Other expense(2) — (11,836 ) — (11,836 ) Expense of non-controlling interests in consolidated subsidiaries (1,227 ) (700 ) (2,173 ) (1,327 ) Total consolidation adjustments and reconciling items (190,472 ) (35,565 ) (398,840 ) (133,120 ) Total segment expenses $ 145,229 $ 185,452 $ 305,968 $ 294,180 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) 2018 period includes $11.8 million payment to ARCC for rent and utilities for the years ended 2017, 2016, 2015 and 2014, and the first quarter of 2018. The following table reconciles the Company's consolidated other income to segment realized net investment income: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Total consolidated other income $ 35,262 $ 67,926 $ 63,132 $ 70,166 Investment (income) loss - unrealized 7,618 (1,382 ) (8,565 ) 4,269 Interest and other investment (income) loss - unrealized (4,628 ) 1,373 350 1,296 Other expense from Consolidated Funds added in consolidation, net (33,008 ) (69,193 ) (64,215 ) (76,445 ) Other (income) expense from Consolidated Funds eliminated in consolidation, net 282 (993 ) (90 ) (534 ) OMG other income (188 ) (3,699 ) (158 ) (6,467 ) Performance income reclass(1) 26 31 (580 ) 1,006 Principal investment income 1,579 14,722 31,471 17,430 Other expense, net 2 1,718 1 1,725 Other income of non-controlling interests in consolidated subsidiaries (5 ) (8 ) (21 ) (15 ) Total consolidation adjustments and reconciling items (28,322 ) (57,431 ) (41,807 ) (57,735 ) Total segment realized net investment income $ 6,940 $ 10,495 $ 21,325 $ 12,431 (1) Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gain (loss) on investments in the Company’s Consolidated Statements of Operations. The following table presents the reconciliation of income before taxes as reported in the Condensed Consolidated Statements of Operations to segment results of RI and FRE: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Income before taxes $ 84,383 $ 51,072 $ 220,343 $ 113,118 Adjustments: Depreciation and amortization expense 5,221 7,711 11,045 14,887 Equity compensation expense 24,029 22,507 51,581 43,594 Acquisition and merger-related expense 4,207 47 5,980 (272 ) Unamortized placement fees 12,432 1,852 12,953 3,516 OMG expense, net 53,680 46,217 107,003 92,032 Other expense, net(1) 2 13,554 1 13,561 Expense of non-controlling interests in consolidated subsidiaries 933 719 1,809 1,359 Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (8,079 ) (9,951 ) (25,124 ) (10,318 ) Total performance income - unrealized (98,662 ) 124,343 (245,237 ) 89,225 Total performance related compensation - unrealized 67,459 (100,886 ) 174,762 (89,877 ) Total investment (income) loss - unrealized 2,990 (9 ) (8,215 ) 5,565 Realized income 148,595 157,176 306,901 276,390 Total performance income - realized (35,994 ) (122,608 ) (104,567 ) (145,715 ) Total performance related compensation - realized 25,229 87,881 74,446 102,750 Total investment income - realized (6,940 ) (10,495 ) (21,325 ) (12,431 ) Fee related earnings $ 130,890 $ 111,954 $ 255,455 $ 220,994 (1) 2018 period includes $11.8 million payment to ARCC for rent and utilities for the years ended 2017, 2016, 2015 and 2014, and the first quarter of 2018. |
CONSOLIDATION
CONSOLIDATION | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
CONSOLIDATION | CONSOLIDATION Investments in Consolidated Variable Interest Entities The Company consolidates entities in which the Company has a variable interest and as the general partner or investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at fair value and represent the Company’s maximum exposure to loss. Investments in Non-Consolidated Variable Interest Entities The Company holds interests in certain VIEs that are not consolidated as the Company is not the primary beneficiary. The Company's interest in such entities generally is in the form of direct equity interests, fixed fee arrangements or both. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. Investments in the non-consolidated VIEs are carried at fair value. The Company's interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of June 30, As of December 31, 2019 2018 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs $ 224,154 $ 222,477 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs 197,296 186,455 Assets of consolidated VIEs 8,421,736 8,141,280 Liabilities of consolidated VIEs 7,634,429 7,479,383 For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Net income attributable to non-controlling interests related to consolidated VIEs $ 8,346 $ 9,882 $ 25,970 $ 10,249 Consolidating Schedules The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of June 30, 2019 and December 31, 2018 and results from operations for the three and six months ended June 30, 2019 and 2018 . As of June 30, 2019 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 247,220 $ — $ — $ 247,220 Investments (includes $1,071,954 of accrued carried interest) 1,763,338 — (197,296 ) 1,566,042 Due from affiliates 242,515 — (8,434 ) 234,081 Other assets 358,091 — — 358,091 Right-of-use operating lease assets 152,579 — — 152,579 Assets of Consolidated Funds Cash and cash equivalents — 376,328 — 376,328 Investments, at fair value — 7,926,615 — 7,926,615 Due from affiliates — 15,888 — 15,888 Receivable for securities sold — 76,993 — 76,993 Other assets — 25,912 — 25,912 Total assets $ 2,763,743 $ 8,421,736 $ (205,730 ) $ 10,979,749 Liabilities Accounts payable, accrued expenses and other liabilities $ 76,838 $ — $ — $ 76,838 Accrued compensation 114,936 — — 114,936 Due to affiliates 65,527 — — 65,527 Performance related compensation payable 772,592 — — 772,592 Debt obligations 566,277 — — 566,277 Right-of-use operating lease liabilities 179,192 — — 179,192 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 75,647 — 75,647 Due to affiliates — 8,434 (8,434 ) — Payable for securities purchased — 369,465 — 369,465 CLO loan obligations, at fair value — 7,054,773 (23,932 ) 7,030,841 Fund borrowings — 126,110 — 126,110 Total liabilities 1,775,362 7,634,429 (32,366 ) 9,377,425 Commitments and contingencies Non-controlling interest in Consolidated Funds — 787,307 (173,364 ) 613,943 Non-controlling interest in Ares Operating Group entities 352,882 — — 352,882 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (107,458,309 shares issued and outstanding) 1,075 — — 1,075 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding) — — — — Additional paid-in-capital 379,789 — — 379,789 Retained earnings (35,247 ) — — (35,247 ) Accumulated other comprehensive loss, net of tax (8,879 ) — — (8,879 ) Total stockholders' equity 635,499 — — 635,499 Total equity 988,381 787,307 (173,364 ) 1,602,324 Total liabilities, non-controlling interests and equity $ 2,763,743 $ 8,421,736 $ (205,730 ) $ 10,979,749 As of December 31, 2018 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 110,247 $ — $ — $ 110,247 Investments (includes $841,079 of accrued carried interest) 1,512,592 — (186,455 ) 1,326,137 Due from affiliates 207,924 — (8,547 ) 199,377 Other assets 377,651 — — 377,651 Assets of Consolidated Funds Cash and cash equivalents — 384,644 — 384,644 Investments, at fair value — 7,673,165 — 7,673,165 Due from affiliates — 17,609 — 17,609 Receivable for securities sold — 42,076 — 42,076 Other assets — 23,786 — 23,786 Total assets $ 2,208,414 $ 8,141,280 $ (195,002 ) $ 10,154,692 Liabilities Accounts payable, accrued expenses and other liabilities $ 83,221 $ — $ — $ 83,221 Accrued compensation 29,389 — — 29,389 Due to affiliates 82,411 — — 82,411 Performance related compensation payable 641,737 — — 641,737 Debt obligations 480,952 — — 480,952 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 83,876 — 83,876 Due to affiliates — 8,547 (8,547 ) — Payable for securities purchased — 471,390 — 471,390 CLO loan obligations — 6,706,286 (28,195 ) 6,678,091 Fund borrowings — 209,284 — 209,284 Total liabilities 1,317,710 7,479,383 (36,742 ) 8,760,351 Commitments and contingencies Non-controlling interest in Consolidated Funds — 661,897 (158,260 ) 503,637 Non-controlling interest in Ares Operating Group entities 302,780 — — 302,780 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 units issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (101,594,095 shares issued and outstanding) 1,016 — — 1,016 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding) — — — — Additional paid-in-capital 326,007 — — 326,007 Retained earnings (29,336 ) — — (29,336 ) Accumulated other comprehensive loss, net of taxes (8,524 ) — — (8,524 ) Total stockholders' equity 587,924 — — 587,924 Total equity 890,704 661,897 (158,260 ) 1,394,341 Total liabilities, non-controlling interests and equity $ 2,208,414 $ 8,141,280 $ (195,002 ) $ 10,154,692 For the Three Months Ended June 30, 2019 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $39,157) $ 246,581 $ — $ (8,735 ) $ 237,846 Carried interest allocation 119,712 — — 119,712 Incentive fees 14,970 — (4,750 ) 10,220 Principal investment income 1,579 — 4,265 5,844 Administrative, transaction and other fees 11,200 — — 11,200 Total revenues 394,042 — (9,220 ) 384,822 Expenses Compensation and benefits 162,170 — — 162,170 Performance related compensation 92,688 — — 92,688 General, administrative and other expense 65,416 — — 65,416 Expenses of the Consolidated Funds — 28,912 (13,485 ) 15,427 Total expenses 320,274 28,912 (13,485 ) 335,701 Other income (expense) Net realized and unrealized gain on investments 927 — (406 ) 521 Interest and dividend income 2,324 — (672 ) 1,652 Interest expense (5,793 ) — — (5,793 ) Other income, net 5,078 — (281 ) 4,797 Net realized and unrealized loss on investments of the Consolidated Funds — (486 ) 370 (116 ) Interest and other income of the Consolidated Funds — 102,206 — 102,206 Interest expense of the Consolidated Funds — (68,712 ) 707 (68,005 ) Total other income 2,536 33,008 (282 ) 35,262 Income before taxes 76,304 4,096 3,983 84,383 Income tax expense (benefit) 9,772 (267 ) — 9,505 Net income 66,532 4,363 3,983 74,878 Less: Net income attributable to non-controlling interests in Consolidated Funds — 4,363 3,983 8,346 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 34,393 — — 34,393 Net income attributable to Ares Management Corporation 32,139 — — 32,139 Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Net income attributable to Ares Management Corporation Class A common stockholders $ 26,714 $ — $ — $ 26,714 For the Three Months Ended June 30, 2018 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $29,866) $ 202,304 $ — $ (8,272 ) $ 194,032 Carried interest allocation (13,444 ) — (13,444 ) Incentive fees 11,740 (4,000 ) 7,740 Principal investment income 14,722 — (12,851 ) 1,871 Administrative, transaction and other fees 13,964 — — 13,964 Total revenues 229,286 — (25,123 ) 204,163 Expenses Compensation and benefits 138,992 — — 138,992 Performance related compensation (13,005 ) — — (13,005 ) General, administrative and other expense 59,918 — — 59,918 Expenses of the Consolidated Funds — 47,382 (12,270 ) 35,112 Total expenses 185,905 47,382 (12,270 ) 221,017 Other income (expense) Net realized and unrealized loss on investments 4,438 — (1,171 ) 3,267 Interest and dividend income 2,356 — — 2,356 Interest expense (6,076 ) — — (6,076 ) Other expense, net (2,978 ) — 991 (1,987 ) Net realized and unrealized gain on investments of the Consolidated Funds — 33,819 668 34,487 Interest and other income of the Consolidated Funds — 92,633 — 92,633 Interest expense of the Consolidated Funds — (57,259 ) 505 (56,754 ) Total other income (expense) (2,260 ) 69,193 993 67,926 Income before taxes 41,121 21,811 (11,860 ) 51,072 Income tax expense 36,834 69 — 36,903 Net income 4,287 21,742 (11,860 ) 14,169 Less: Net income attributable to non-controlling interests in Consolidated Funds — 21,742 (11,860 ) 9,882 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 16,062 — — 16,062 Net loss attributable to Ares Management L.P. (11,775 ) — — (11,775 ) Less: Preferred equity dividends paid 5,425 — — 5,425 Net loss attributable to Ares Management L.P. common shareholders $ (17,200 ) $ — $ — $ (17,200 ) For the Six Months Ended June 30, 2019 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $77,550) $ 479,653 $ — $ (17,148 ) $ 462,505 Carried interest allocation 317,005 — — 317,005 Incentive fees 32,219 — (5,184 ) 27,035 Principal investment income 31,471 — 3,132 34,603 Administrative, transaction and other fees 20,871 — — 20,871 Total revenues 881,219 — (19,200 ) 862,019 Expenses Compensation and benefits 319,016 — — 319,016 Performance related compensation 249,208 — — 249,208 General, administrative and other expense 116,603 — — 116,603 Expenses of the Consolidated Funds — 42,313 (22,332 ) 19,981 Total expenses 684,827 42,313 (22,332 ) 704,808 Other income (expense) Net realized and unrealized gain on investments 5,351 — (1,354 ) 3,997 Interest and dividend income 4,648 — (1,152 ) 3,496 Interest expense (11,382 ) — — (11,382 ) Other income, net 210 — 90 300 Net realized and unrealized gain on investments of the Consolidated Funds — 3,262 986 4,248 Interest and other income of the Consolidated Funds — 195,390 — 195,390 Interest expense of the Consolidated Funds — (134,437 ) 1,520 (132,917 ) Total other income (expense) (1,173 ) 64,215 90 63,132 Income before taxes 195,219 21,902 3,222 220,343 Income tax expense (benefit) 24,735 (846 ) — 23,889 Net income 170,484 22,748 3,222 196,454 Less: Net income attributable to non-controlling interests in Consolidated Funds — 22,748 3,222 25,970 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 93,396 — — 93,396 Net income attributable to Ares Management Corporation 77,088 — — 77,088 Less: Series A Preferred Stock dividends paid 10,850 — — 10,850 Net income attributable to Ares Management Corporation Class A common stockholders $ 66,238 $ — $ — $ 66,238 For the Six Months Ended June 30, 2018 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $58,283) $ 399,130 $ — $ (15,583 ) $ 383,547 Carried interest allocation 40,685 — — 40,685 Incentive fees 16,811 — (4,000 ) 12,811 Principal investment income 17,430 — (10,650 ) 6,780 Administrative, transaction and other fees 26,429 — — 26,429 Total revenues 500,485 — (30,233 ) 470,252 Expenses Compensation and benefits 273,631 — — 273,631 Performance related compensation 12,873 — — 12,873 General, administrative and other expense 104,368 — — 104,368 Expenses of the Consolidated Funds — 56,011 (19,583 ) 36,428 Total expenses 390,872 56,011 (19,583 ) 427,300 Other income (expense) Net realized and unrealized gain on investments 3,260 — (832 ) 2,428 Interest and dividend income 5,703 — — 5,703 Interest expense (12,945 ) — — (12,945 ) Other expense, net (2,831 ) — 533 (2,298 ) Net realized and unrealized gain on investments of the Consolidated Funds — 21,367 35 21,402 Interest and other income of the Consolidated Funds — 157,055 — 157,055 Interest expense of the Consolidated Funds — (101,977 ) 798 (101,179 ) Total other income (expense) (6,813 ) 76,445 534 70,166 Income before taxes 102,800 20,434 (10,116 ) 113,118 Income tax expense 24,459 69 — 24,528 Net income 78,341 20,365 (10,116 ) 88,590 Less: Net income attributable to non-controlling interests in Consolidated Funds — 20,365 (10,116 ) 10,249 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 49,168 — — 49,168 Net income attributable to Ares Management L.P. 29,173 — — 29,173 Less: Preferred equity dividends paid 10,850 — — 10,850 Net income attributable to Ares Management L.P. common shareholders $ 18,323 $ — $ — $ 18,323 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after June 30, 2019 through the date the condensed consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure: In July 2019 , the Company's board of directors declared a quarterly dividend of $0.32 per share of Class A common stock payable on September 30, 2019 to common stockholders of record at the close of business on September 16, 2019 . In July 2019 , the Company's board of directors declared a quarterly dividend of $0.4375 per share of Series A Preferred Stock payable on September 30, 2019 to preferred stockholders of record at the close of business on September 15, 2019 . As September 15, 2019 falls on a Sunday , the effective record date for the dividend will be Friday , September 13, 2019 . |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Presentation The accompanying condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent, and that all such adjustments are of a normal recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC. The condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. All intercompany balances and transactions have been eliminated upon consolidation. |
Reclassifications | The Company has reclassified certain prior period amounts to conform to the current year presentation. |
Adoption of ASC 842 and Recent Accounting Pronouncements | Adoption of ASC 842 Effective January 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) Topic 842 (“ASC 842”), Leases . The Company adopted ASC 842 under the modified retrospective approach using the practical expedient provided for within paragraph 842-10-65-1; therefore, the presentation of prior year periods has not been adjusted. No cumulative effect of initially adopting ASC 842 as an adjustment to the opening balance of components of equity as of January 1, 2019 was necessary as the recognition of the right-of-use operating lease assets equaled the corresponding lease liabilities. The amount established in conjunction with the implementation was consistent with the amount previously disclosed. The Company has entered into operating and finance leases for corporate offices and certain equipment and makes the determination if an arrangement constitutes a lease at inception. Operating leases are included in right-of-use operating lease assets and right-of-use operating lease liabilities in the Company's Condensed Consolidated Statements of Financial Condition. Finance leases are included in accounts payable, accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Statements of Financial Condition. Right-of-use leases assets represent the Company's right to use an underlying asset for the lease term and right-of-use lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses the its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The right-of-use operating lease asset also includes any lease prepayments and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Lease expense is primarily recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. However, for certain equipment leases where the non-lease components are not material, the Company account for the lease and non-lease components as a single lease component. Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standard updates ("ASU") issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its condensed consolidated financial statements. In May 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The objective of the guidance in ASU 2016-13 is to allow entities to recognize estimated credit losses in the period that the change in valuation occurs. ASU 2016-13 requires an entity to present financial assets measured on an amortized cost basis on the balance sheet net of an allowance for credit losses. Available for sale and held to maturity debt securities are also required to be held net of an allowance for credit losses. The guidance should be applied using a modified retrospective approach. ASU 2016-13 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods. Early adoption is permitted for annual and quarterly reporting periods beginning after December 15, 2018. In April and May 2019, ASU 2019-04, C odification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, were issued to provide clarification to previously issued credit losses guidance (ASU 2016-13) that has not yet been implemented. These updates are required to be adopted with ASU 2016-13. The Company is currently evaluating the impact of these pronouncements on its condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). ASU 2018-15 amends ASC 350-40 to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. This ASU aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, ASU 2018-15 amends ASC 350 to include in its scope implementation costs of a cloud computing arrangement that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in a cloud computing arrangement that is considered a service contract. The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. In addition, this ASU states that a cloud computing arrangement that is a service contract does not give rise to a recognizable intangible asset because it is an executory service contract. Consequently, any costs incurred to implement a cloud computing arrangement that is a service contract would not be capitalized as an intangible asset since they do not form part of an intangible asset but instead would be characterized in the financial statements in the same manner as other service costs and assets related to service contracts such as prepaid expense. That is, these costs would be capitalized as part of the service contract and the related amortization would be consistent with the ongoing periodic costs of the underlying cloud computing arrangement. ASU 2018-15 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods, with early adoption permitted. The guidance may be applied either prospectively or retrospectively. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. ASU 2018-17, amends ASC 810 to address whether indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. This is consistent with how indirect interests held through related parties under common control are considered for determining whether a reporting entity must consolidate a VIE. For example, if a decision maker or service provider owns a 20 percent interest in a related party and that related party owns a 40 percent interest in the legal entity being evaluated, the decision maker’s or service provider’s indirect interest in the VIE held through the related party under common control should be considered the equivalent of an eight percent direct interest for determining whether its fees are variable interests. ASU 2018-17 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods, with early adoption permitted. The guidance should be applied retrospectively. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. |
Fair Value Measurements | Fair Value Measurements GAAP establishes a hierarchal disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model‑derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available. In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period. |
Derivative Financial Instruments | In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying value for the Company's intangible assets | The following table summarizes the carrying value, net of accumulated amortization, for the Company's intangible assets, included within other assets in the Condensed Consolidated Statements of Financial Condition: Weighted Average Amortization Period as of June 30, 2019 As of June 30, As of December 31, 2019 2018 Management contracts 2.6 years $ 12,498 $ 42,335 Client relationships 9.0 years 38,600 38,600 Trade name 3.0 years 3,200 3,200 Intangible assets 54,298 84,135 Less: accumulated amortization (25,287 ) (52,701 ) Intangible assets, net $ 29,011 $ 31,434 |
Schedule of goodwill rollforward | The following table summarizes the carrying value of the Company's goodwill assets, included within other assets in the Condensed Consolidated Statements of Financial Condition: Credit Private Real Total Balance as of December 31, 2018 $ 32,196 $ 58,600 $ 52,990 $ 143,786 Foreign currency translation — — (7 ) (7 ) Balance as of June 30, 2019 $ 32,196 $ 58,600 $ 52,983 $ 143,779 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments in and Advances to Affiliates [Abstract] | |
Summary of investments held | The Company’s investments are comprised of the following: Percentage of total investments as of June 30, December 31, June 30, December 31, 2019 2018 2019 2018 Private Investment Partnership Interests and Other: Equity method private investment partnership interests - principal (1) $ 364,109 $ 357,655 23.3 % 27.0 % Equity method - carried interest (1) 1,071,954 841,079 68.4 % 63.4 % Equity method private investment partnership interests and other (held at fair value) 48,785 46,450 3.1 % 3.5 % Equity method private investment partnership interests and other 15,969 18,845 1.0 % 1.4 % Total private investment partnership interests and other 1,500,817 1,264,029 95.8 % 95.3 % Collateralized loan obligations 26,241 20,824 1.7 % 1.6 % Other fixed income 37,810 40,000 2.4 % 3.0 % Collateralized loan obligations and other fixed income, at fair value 64,051 60,824 4.1 % 4.6 % Common stock, at fair value 1,174 1,284 0.1 % 0.1 % Total investments $ 1,566,042 $ 1,326,137 (1) Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date. Investments held in the Consolidated Funds are summarized below: Fair value at Fair value as a percentage of total investments as of June 30, December 31, June 30, December 31, 2019 2018 2019 2018 Fixed income investments: Bonds $ 201,792 $ 318,499 2.6 % 4.3 % Loans 7,229,083 6,886,749 91.2 % 89.8 % Collateralized loan obligations 35,260 — 0.4 % — % Total fixed income investments 7,466,135 7,205,248 94.2 % 94.1 % Equity securities 166,623 196,470 2.1 % 2.4 % Partnership interests 293,857 271,447 3.7 % 3.5 % Total investments, at fair value $ 7,926,615 $ 7,673,165 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of valuation of investments and other financial instruments by fair value hierarchy levels | The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of June 30, 2019 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 64,051 $ — $ 64,051 Common stock and other equity securities 137 1,037 12,397 — 13,571 Partnership interests — — 35,192 1,196 36,388 Total investments, at fair value 137 1,037 111,640 1,196 114,010 Derivatives—foreign exchange contracts — 1,890 — — 1,890 Total assets, at fair value $ 137 $ 2,927 $ 111,640 $ 1,196 $ 115,900 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (610 ) $ — $ — $ (610 ) Total liabilities, at fair value $ — $ (610 ) $ — $ — $ (610 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 201,792 $ — $ 201,792 Loans — 6,954,671 274,412 7,229,083 Collateralized loan obligations — 35,260 — 35,260 Total fixed income investments — 7,191,723 274,412 7,466,135 Equity securities 34,891 — 131,732 166,623 Partnership interests — — 293,857 293,857 Total investments, at fair value 34,891 7,191,723 700,001 7,926,615 Derivatives: Foreign exchange contracts — 342 — 342 Asset swaps - other — — 705 705 Total assets, at fair value $ 34,891 $ 7,192,065 $ 700,706 $ 7,927,662 Liabilities, at fair value Foreign exchange contracts $ — $ (345 ) $ — $ (345 ) Asset swaps - other — — (647 ) (647 ) Loan obligations of CLOs — (7,030,841 ) — (7,030,841 ) Total liabilities, at fair value $ — $ (7,031,186 ) $ (647 ) $ (7,031,833 ) The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2018 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 60,824 $ — $ 60,824 Common stock and other equity securities 280 1,004 10,397 — 11,681 Partnership interests — — 35,192 861 36,053 Total investments, at fair value 280 1,004 106,413 861 108,558 Derivatives-foreign exchange contracts — 1,066 — — 1,066 Total assets, at fair value $ 280 $ 2,070 $ 106,413 $ 861 $ 109,624 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (869 ) $ — $ — $ (869 ) Total liabilities, at fair value $ — $ (869 ) $ — $ — $ (869 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 316,850 $ 1,649 $ 318,499 Loans — 6,340,440 546,309 6,886,749 Total fixed income investments — 6,657,290 547,958 7,205,248 Equity securities 45,718 — 150,752 196,470 Partnership interests — — 271,447 271,447 Total investments, at fair value 45,718 6,657,290 970,157 7,673,165 Derivatives: Foreign exchange contracts — 1,881 — 1,881 Asset swaps - other — — 1,328 1,328 Total derivative assets, at fair value — 1,881 1,328 3,209 Total assets, at fair value $ 45,718 $ 6,659,171 $ 971,485 $ 7,676,374 Liabilities, at fair value Foreign exchange contracts $ — $ (1,864 ) $ — (1,864 ) Asset swaps - other — — (648 ) (648 ) Loan obligations of CLOs — (6,678,091 ) — (6,678,091 ) Total liabilities, at fair value $ — $ (6,679,955 ) $ (648 ) $ (6,680,603 ) |
Summary of changes in the fair value of the Level III investments | The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2019 : Level III Assets Level III Assets of the Company Equity Securities Fixed Income Partnership Total Balance, beginning of period $ 10,397 $ 67,190 $ 35,192 $ 112,779 Deconsolidation of fund — 1,883 — 1,883 Purchases(1) 2,000 — — 2,000 Sales/settlements(2) — (6,206 ) — (6,206 ) Realized and unrealized appreciation, net — 1,184 — 1,184 Balance, end of period $ 12,397 $ 64,051 $ 35,192 $ 111,640 Increase in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ — $ 1,818 $ — $ 1,818 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 159,032 $ 564,304 $ 283,059 $ (3,031 ) $ 1,003,364 Deconsolidation of fund (10,325 ) (115,711 ) — — (126,036 ) Transfer in — 29,438 — — 29,438 Transfer out — (261,674 ) — — (261,674 ) Purchases(1) 110 113,708 4,000 — 117,818 Sales/settlements(2) (51 ) (56,530 ) (2,000 ) (555 ) (59,136 ) Amortized discounts/premiums — (345 ) — 171 (174 ) Realized and unrealized appreciation (depreciation), net (17,034 ) 1,222 8,798 3,473 (3,541 ) Balance, end of period $ 131,732 $ 274,412 $ 293,857 $ 58 $ 700,059 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (17,031 ) $ (389 ) $ 8,798 $ 2,865 $ (5,757 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2019 : Level III Assets Level III Assets of the Company Equity Securities Fixed Income Partnership Total Balance, beginning of period $ 10,397 $ 60,824 $ 35,192 $ 106,413 Deconsolidation of fund — 10,021 — 10,021 Purchases(1) 2,000 2,146 — 4,146 Sales/settlements(2) — (11,169 ) — (11,169 ) Realized and unrealized appreciation, net — 2,229 — 2,229 Balance, end of period $ 12,397 $ 64,051 $ 35,192 $ 111,640 Increase in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ — $ 2,479 $ — $ 2,479 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 150,752 $ 547,958 $ 271,447 $ 680 $ 970,837 Deconsolidation of fund (10,325 ) (174,593 ) — — (184,918 ) Transfer in — 41,245 — — 41,245 Transfer out — (247,573 ) — — (247,573 ) Purchases(1) 10,882 238,870 8,000 — 257,752 Sales/settlements(2) (5,137 ) (136,329 ) (2,000 ) (581 ) (144,047 ) Amortized discounts/premiums — (37 ) — 22 (15 ) Realized and unrealized appreciation (depreciation), net (14,440 ) 4,871 16,410 (63 ) 6,778 Balance, end of period $ 131,732 $ 274,412 $ 293,857 $ 58 $ 700,059 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (14,442 ) $ 1,114 $ 16,410 $ (49 ) $ 3,033 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2018 : Level III Assets Level III Assets of the Company Fixed Income Partnership Total Balance, beginning of period $ 242,984 $ 44,769 $ 287,753 Sales/settlements(2) (219,744 ) — (219,744 ) Realized and unrealized appreciation (depreciation), net (1,115 ) 2,450 1,335 Balance, end of period $ 22,125 $ 47,219 $ 69,344 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (100 ) $ 2,450 $ 2,350 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 160,422 $ 240,763 $ 252,700 $ 86 $ 653,971 Transfer in — 94,776 — — 94,776 Transfer out — (68,328 ) — — (68,328 ) Purchases(1) — 273,879 6,000 — 279,879 Sales/settlements(2) — (57,206 ) — (17 ) (57,223 ) Amortized discounts/premiums — (9 ) — (21 ) (30 ) Realized and unrealized appreciation (depreciation), net 24,161 (1,500 ) (7,092 ) 182 15,751 Balance, end of period $ 184,583 $ 482,375 $ 251,608 $ 230 $ 918,796 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (2,090 ) $ (3,785 ) $ — $ 134 $ (5,741 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2018 : Level III Assets Level III Assets of the Company Fixed Income Partnership Total Balance, beginning of period $ 195,158 $ 44,769 $ 239,927 Deconsolidation of fund 78 — 78 Purchases(1) 48,731 — 48,731 Sales/settlements(2) (220,571 ) — (220,571 ) Realized and unrealized appreciation (depreciation), net (1,271 ) 2,450 1,179 Balance, end of period $ 22,125 $ 47,219 $ 69,344 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (829 ) $ 2,450 $ 1,621 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 162,577 $ 267,889 $ 232,332 $ 904 $ 663,702 Deconsolidation of fund — (233 ) — — (233 ) Transfer in — 95,450 — — 95,450 Transfer out — (73,777 ) — — (73,777 ) Purchases(1) — 313,462 16,000 — 329,462 Sales/settlements(2) — (117,503 ) — (194 ) (117,697 ) Amortized discounts/premiums — 35 — (14 ) 21 Realized and unrealized appreciation (depreciation), net 22,006 (2,948 ) 3,276 (466 ) 21,868 Balance, end of period $ 184,583 $ 482,375 $ 251,608 $ 230 $ 918,796 Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (12,211 ) $ (1,671 ) $ 3,276 $ (566 ) $ (11,172 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. |
Summary of quantitative inputs and assumptions used for Level III inputs | The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of June 30, 2019 : Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 12,397 Transaction price(1) N/A N/A Partnership interests 35,192 Discounted cash flow Discount rate 8.0% Collateralized loan obligations 26,241 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 37,810 Other N/A N/A Total $ 111,640 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Assets Equity securities $ 609 Enterprise value market multiple analysis EBITDA multiple(2) 8.7x - 22.4x 13.2x 74,241 Other Net income multiple 36.1x - 40.0x 37.8x Illiquidity discount 25.0% 25.0% 56,882 Transaction price(1) N/A N/A N/A Partnership interest 293,857 Discounted cash flow Discount rate 21.4% 21.4% Fixed income securities 191,789 Broker quotes and/or 3rd party pricing services N/A N/A N/A 82,623 Income approach Yield 5.0% - 13.2% 8.9% Derivative instruments 705 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 700,706 Liabilities Derivatives instruments $ (647 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (647 ) (1) Transaction price consists of securities recently purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2018 : Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 10,397 Transaction price(1) N/A N/A Partnership interests 35,192 Discounted cash flow Discount rate 8.0% Collateralized loan obligations 20,824 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 40,000 Other N/A N/A Total $ 106,413 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 23,871 Enterprise value market multiple analysis EBITDA multiple(2) 7.2x - 22.9x 7.7x 41,562 Other Net income multiple 38.8x 38.8x Illiquidity discount 25.0% 25.0% 271,447 Discounted cash flow Discount rate 20.8% 20.8% 85,319 Transaction price(1) N/A N/A N/A Fixed income securities 441,368 Broker quotes and/or 3rd party pricing services N/A N/A N/A 106,590 Income approach Yield 1.0% - 14.8% 9.6% Derivative instruments 1,328 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 971,485 Liabilities Derivatives instruments $ (648 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (648 ) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value and notional amounts of derivative contracts by major product type on a gross basis | The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds as of June 30, 2019 and December 31, 2018 : As of June 30, 2019 As of December 31, 2018 Assets Liabilities Assets Liabilities The Company Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ 37,667 $ 1,890 $ 75,252 $ 610 $ 33,026 $ 1,066 $ 27,140 $ 869 Total derivatives, at fair value(2) $ 37,667 $ 1,890 $ 75,252 $ 610 $ 33,026 $ 1,066 $ 27,140 $ 869 As of June 30, 2019 As of December 31, 2018 Assets Liabilities Assets Liabilities Consolidated Funds Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ 342 $ 342 $ 342 $ 345 $ 1,881 $ 1,881 $ 1,881 $ 1,864 Asset swap - other 4,830 705 2,292 647 5,226 1,328 2,605 648 Total derivatives, at fair value(3) $ 5,172 $ 1,047 $ 2,634 $ 992 $ 7,107 $ 3,209 $ 4,486 $ 2,512 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of June 30, 2019 and December 31, 2018 , the Company had the right to, but elected not to, offset $0.6 million and $0.9 million of its derivative liabilities, respectively. (3) As of June 30, 2019 and December 31, 2018 , the Consolidated Funds offset $10.6 million and $5.7 million of their derivative assets and liabilities, respectively. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings outstanding | The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding as of June 30, 2019 and December 31, 2018 : As of June 30, 2019 As of December 31, 2018 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan(1) Effective Rate Outstanding Loan(1) Effective Rate Credit Facilities: 1/1/2023 $ 18,000 $ 16,153 4.00% $ 14,953 3.98% 12/29/2019(2) 28,033 28,033 1.55% (3) 43,624 1.55% (3) 3/7/2020 71,500 71,500 3.47% 71,500 3.47% 6/30/2021 200,375 — N/A 38,844 1.00% (3) 7/15/2028 75,000 9,000 4.75% 39,000 4.75% Revolving Term Loan 1/31/2022 1,900 1,424 8.07% 1,363 8.07% Total borrowings of Consolidated Funds $ 126,110 $ 209,284 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. (2) On June 27, 2019, one of the Consolidated Funds amended the Credit Facility to, among other things, extend the maturity date from June 2019 to December 2019 and to reduce the facility size from €40.0 million to €24.6 million . (3) The effective rate is based on the three month EURIBOR or zero , whichever is higher, plus an applicable margin. As of June 30, 2019 and December 31, 2018 , the following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of June 30, 2019 As of December 31, 2018 Loan Obligations Fair Value of Loan Obligations Weighted Loan Fair Value of Loan Obligations Weighted Average Remaining Maturity In Years Senior secured notes(1) $ 6,879,407 $ 6,789,415 11.14 $ 6,642,616 $ 6,391,643 10.94 Subordinated notes(2) 383,443 241,426 11.20 455,333 286,448 11.21 Total loan obligations of Consolidated CLOs $ 7,262,850 $ 7,030,841 $ 7,097,949 $ 6,678,091 (1) Original borrowings under the senior secured notes totaled $6.9 billion , with various maturity dates ranging from July 2028 to April 2032. The weighted average interest rate as of June 30, 2019 was 3.56% . (2) Original borrowings under the subordinated notes totaled $383.4 million , with various maturity dates ranging from July 2028 to April 2032. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO. The following table presents the activity of the Company's debt issuance costs: Credit Facility Senior Notes Unamortized debt issuance costs as of December 31, 2018 $ 4,972 $ 1,334 Debt issuance costs incurred 1,521 — Amortization of debt issuance costs (677 ) (116 ) Unamortized debt issuance costs as of June 30, 2019 $ 5,816 $ 1,218 The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of June 30, 2019 As of December 31, 2018 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility(1) Revolver 3/21/2024 N/A $ 320,000 3.69% $ 235,000 4.00% Senior Notes(2) 10/8/2014 10/8/2024 $ 250,000 246,277 4.21% 245,952 4.21% Total debt obligations $ 566,277 $ 480,952 (1) The AOG entities are borrowers under the Credit Facility, which provides a $1.065 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. On March 21, 2019, the Company amended the Credit Facility to, among other things, extend the maturity date from February 2022 to March 2024 and to reduce borrowing costs on the drawn and undrawn amounts. As of June 30, 2019 , base rate loans bear interest calculated based on the base rate plus 0.25% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.25%. The unused commitment fee is 0.15% per annum. There is a base rate and LIBOR floor of zero . (2) The Senior Notes were issued in October 2014 by Ares Finance Co. LLC, a subsidiary of the Company, at 98.268% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture . |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease | The tables below present certain supplemental quantitative disclosures regarding the Company's leases as of and for the period ending June 30, 2019 : Classification As of June 30, 2019 Operating lease assets Right-of-use operating lease assets $ 152,579 Finance lease assets Other assets(1) 1,313 Total lease assets $ 153,892 Operating lease liabilities Right-of-use operating lease liabilities $ 179,192 Finance lease obligations Accounts payable, accrued expenses and other liabilities 1,009 Total lease liabilities $ 180,201 (1)Finance lease assets are recorded net of accumulated amortization of $0.4 million as of June 30, 2019 . Classification Three months ended June 30, 2019 Six months ended June 30, 2019 Operating lease expense General, administrative and other expenses $ 7,211 $ 14,149 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 78 105 Interest on finance lease liabilities Interest expense 8 21 Total lease expense $ 7,297 $ 14,275 Lease term and discount rate As of June 30, 2019 Weighted-average remaining lease terms (in years): Operating leases 6.9 Finance leases 2.8 Weighted-average discount rate: Operating leases 4.00 % Finance leases 3.43 % Other information Six months ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 15,313 Operating cash flows from finance leases 52 Financing cash flows from finance leases 264 Leased assets obtained in exchange for new finance lease liabilities 114 Leased assets obtained in exchange for new operating lease liabilities 47,866 |
Operating Lease, Liability, Maturity | Maturity of lease liabilities Operating Leases Finance Leases 2019 $ 16,006 $ 32 2020 29,516 356 2021 28,627 356 2022 30,067 321 2023 26,923 — After 2023 74,530 — Total future payments 205,669 1,065 Less: interest 26,477 56 Total lease liabilities $ 179,192 $ 1,009 |
Finance Lease, Liability, Maturity | Maturity of lease liabilities Operating Leases Finance Leases 2019 $ 16,006 $ 32 2020 29,516 356 2021 28,627 356 2022 30,067 321 2023 26,923 — After 2023 74,530 — Total future payments 205,669 1,065 Less: interest 26,477 56 Total lease liabilities $ 179,192 $ 1,009 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of amounts due from and to affiliates | The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of June 30, As of December 31, 2019 2018 Due from affiliates: Management fees receivable from non-consolidated funds $ 174,668 $ 151,455 Payments made on behalf of and amounts due from non-consolidated funds and employees 59,413 47,922 Due from affiliates—Company $ 234,081 $ 199,377 Amounts due from portfolio companies and non-consolidated funds $ 15,888 $ 17,609 Due from affiliates—Consolidated Funds $ 15,888 $ 17,609 Due to affiliates: Management fee rebate payable to non-consolidated funds $ 2,125 $ 2,105 Management fees received in advance 3,724 5,491 Tax receivable agreement liability 24,927 24,927 Undistributed carried interest and incentive fees 25,700 31,162 Payments made by non-consolidated funds on behalf of and payable by the Company 9,051 18,726 Due to affiliates—Company $ 65,527 $ 82,411 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from earnings per common unit | The computation of diluted earnings per share for the three and six months ended June 30, 2019 and 2018 excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Options 9,841,385 19,111,390 10,788,784 19,471,589 Restricted units 9,172,641 15,271,381 10,036,334 15,811,964 AOG Units 116,831,583 120,231,237 116,913,353 124,211,007 |
Schedule of the computation of basic and diluted earnings per common unit | The following table presents the computation of basic and diluted earnings per share: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 26,714 $ (17,200 ) $ 66,238 $ 18,323 Distributions on participating unvested restricted units (1,886 ) (1,970 ) (3,693 ) (3,877 ) Net income (loss) available to Class A common stockholders $ 24,828 $ (19,170 ) $ 62,545 $ 14,446 Basic weighted-average shares of Class A common stock 105,188,966 98,037,252 104,054,035 91,861,946 Basic earnings (loss) per share of Class A common stock $ 0.24 $ (0.20 ) $ 0.60 $ 0.16 Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 26,714 $ (17,200 ) $ 66,238 $ 18,323 Distributions on unvested restricted units — (1,970 ) — (3,877 ) Net income (loss) available to Class A common stockholders $ 26,714 $ (19,170 ) $ 66,238 $ 14,446 Effect of dilutive shares: Restricted units 7,212,754 — 6,349,061 — Options 4,202,167 — 3,254,768 — Diluted weighted-average shares of Class A common stock 116,603,887 98,037,252 113,657,864 91,861,946 Diluted earnings (loss) per share of Class A common stock $ 0.23 $ (0.20 ) $ 0.58 $ 0.16 Dividends declared and paid per Class A common stock $ 0.32 $ 0.37 $ 0.64 $ 0.77 |
EQUITY COMPENSATION (Tables)
EQUITY COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of equity-based compensation expense, net of assumed forfeitures | Equity-based compensation expense, net of forfeitures is included in the following table: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Restricted units $ 21,783 $ 18,516 $ 44,796 $ 36,547 Restricted units with a market condition 901 — 1,791 — Options 1,157 3,630 4,258 6,293 Phantom shares 188 361 736 754 Equity-based compensation expense $ 24,029 $ 22,507 $ 51,581 $ 43,594 |
Summary of unvested restricted units' activity | The following table presents unvested restricted units' activity during the six months ended June 30, 2019 : Restricted Units Weighted Average Grant Date Fair Value Per Unit Balance - January 1, 2019 16,255,475 $ 19.21 Granted 3,881,203 20.01 Vested (3,534,621 ) 17.92 Forfeited (216,662 ) 19.21 Balance - June 30, 2019 16,385,395 $ 19.68 The following table presents the unvested market condition awards' activity during the six months ended June 30, 2019 : Market Condition Awards Units Weighted Average Balance - January 1, 2019 1,333,334 $ 9.30 Granted — — Vested — — Forfeited — — Balance - June 30, 2019 1,333,334 $ 9.30 |
Summary of unvested options activity | A summary of options activity during the six months ended June 30, 2019 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value Balance - January 1, 2019 18,741,504 $ 18.99 4.88 $ — Exercised (4,289,316 ) 19.00 — — Expired (366,366 ) 19.00 — — Forfeited (42,270 ) 19.00 — — Balance - June 30, 2019 14,043,552 $ 18.99 4.75 $ 100,858 Exercisable at June 30, 2019 13,933,735 $ 18.99 4.74 $ 100,015 |
Summary of unvested phantom units activity | A summary of unvested phantom shares' activity during the six months ended June 30, 2019 is presented below: Phantom Shares Weighted Average Balance - January 1, 2019 66,287 $ 19.00 Vested (61,502 ) 19.00 Forfeited (4,785 ) 19.00 Balance - June 30, 2019 — $ — |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock by Class | The following table presents the changes in each class of common stock for the six months ended June 30, 2019 : Class A Common Stock Class B Common Stock Class C Common Stock Total Balance - January 1, 2019 101,594,095 1,000 1 101,595,096 Exchanges of AOG Units 97,493 — — 97,493 Stock option exercises 4,168,449 — — 4,168,449 Repurchases of stock (400,000 ) — — (400,000 ) Vesting of restricted stock awards 1,998,272 — — 1,998,272 Balance outstanding - June 30, 2019 107,458,309 1,000 1 107,459,310 |
Schedule of Ownership Interests | The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities as of June 30, 2019 and December 31, 2018 , as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities for the three and six months ended June 30, 2019 and 2018 . Daily Average Ownership As of June 30, 2019 As of December 31, 2018 For the Three Months Ended June 30, For the Six Months Ended June 30, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2019 2018 2019 2018 Ares Management Corporation 107,458,309 47.94 % 101,594,095 46.47 % 47.38 % 44.92 % 47.09 % 42.51 % Ares Owners Holding L.P. 116,707,849 52.06 % 117,019,274 53.53 % 52.62 % 53.82 % 52.91 % 54.4 % Affiliate of Alleghany Corporation — — % — — % — % 1.26 % — % 3.09 % Total 224,166,158 100.00 % 218,613,369 100.00 % |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of financial results for Company's operating segments, as well as the OMG | The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2019 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $39,157) $ 172,347 $ 52,162 $ 21,770 $ 246,279 $ — $ 246,279 Other fees 3,939 — 672 4,611 — 4,611 Compensation and benefits (64,965 ) (21,291 ) (11,928 ) (98,184 ) (33,994 ) (132,178 ) General, administrative and other expenses (13,381 ) (4,912 ) (3,523 ) (21,816 ) (19,874 ) (41,690 ) Fee related earnings 97,940 25,959 6,991 130,890 (53,868 ) 77,022 Performance income—realized 15,959 18,369 1,666 35,994 — 35,994 Performance related compensation—realized (9,564 ) (14,696 ) (969 ) (25,229 ) — (25,229 ) Realized net performance income 6,395 3,673 697 10,765 — 10,765 Investment income (loss)—realized (310 ) 1,030 1,546 2,266 — 2,266 Interest and other investment income (expense) —realized 4,631 3,318 2,119 10,068 (17 ) 10,051 Interest expense (1,908 ) (2,436 ) (1,050 ) (5,394 ) (399 ) (5,793 ) Realized net investment income (loss) 2,413 1,912 2,615 6,940 (416 ) 6,524 Realized income $ 106,748 $ 31,544 $ 10,303 $ 148,595 $ (54,284 ) $ 94,311 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2018 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $29,866) $ 135,848 $ 49,318 $ 17,138 $ 202,304 $ — $ 202,304 Other fees 6,877 337 7 7,221 — 7,221 Compensation and benefits (52,271 ) (18,672 ) (8,768 ) (79,711 ) (30,680 ) (110,391 ) General, administrative and other expenses (11,294 ) (4,175 ) (2,391 ) (17,860 ) (19,236 ) (37,096 ) Fee related earnings 79,160 26,808 5,986 111,954 (49,916 ) 62,038 Performance income—realized 41,672 80,415 521 122,608 — 122,608 Performance related compensation—realized (23,577 ) (64,311 ) 7 (87,881 ) — (87,881 ) Realized net performance income 18,095 16,104 528 34,727 — 34,727 Investment income (loss)—realized 595 9,016 (250 ) 9,361 798 10,159 Interest and other investment income—realized 3,035 2,920 667 6,622 584 7,206 Interest expense (3,596 ) (1,440 ) (452 ) (5,488 ) (588 ) (6,076 ) Realized net investment income (loss) 34 10,496 (35 ) 10,495 794 11,289 Realized income $ 97,289 $ 53,408 $ 6,479 $ 157,176 $ (49,122 ) $ 108,054 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2019 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $77,550) $ 335,313 $ 103,558 $ 40,420 $ 479,291 $ — $ 479,291 Other fees 7,005 — 681 7,686 — 7,686 Compensation and benefits (125,313 ) (42,487 ) (21,212 ) (189,012 ) (66,655 ) (255,667 ) General, administrative and other expenses (26,886 ) (8,969 ) (6,655 ) (42,510 ) (40,506 ) (83,016 ) Fee related earnings 190,119 52,102 13,234 255,455 (107,161 ) 148,294 Performance income—realized 37,884 62,492 4,191 104,567 — 104,567 Performance related compensation—realized (22,227 ) (49,993 ) (2,226 ) (74,446 ) — (74,446 ) Realized net performance income 15,657 12,499 1,965 30,121 — 30,121 Investment income—realized 548 11,966 5,026 17,540 — 17,540 Interest and other investment income (expense) —realized 7,536 3,612 3,224 14,372 (2 ) 14,370 Interest expense (3,807 ) (4,611 ) (2,169 ) (10,587 ) (795 ) (11,382 ) Realized net investment income (loss) 4,277 10,967 6,081 21,325 (797 ) 20,528 Realized income $ 210,053 $ 75,568 $ 21,280 $ 306,901 $ (107,958 ) $ 198,943 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2018 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $58,283) $ 267,614 $ 99,205 $ 32,311 $ 399,130 $ — $ 399,130 Other fees 12,607 677 10 13,294 — 13,294 Compensation and benefits (102,965 ) (37,871 ) (16,407 ) (157,243 ) (60,872 ) (218,115 ) General, administrative and other expenses (21,148 ) (8,216 ) (4,823 ) (34,187 ) (37,627 ) (71,814 ) Fee related earnings 156,108 53,795 11,091 220,994 (98,499 ) 122,495 Performance income—realized 46,743 84,813 14,159 145,715 — 145,715 Performance related compensation—realized (26,665 ) (67,871 ) (8,214 ) (102,750 ) — (102,750 ) Realized net performance income 20,078 16,942 5,945 42,965 — 42,965 Investment income—realized 1,366 9,687 3,100 14,153 1,636 15,789 Interest and other investment income—realized 6,224 2,979 884 10,087 1,736 11,823 Interest expense (8,269 ) (2,668 ) (872 ) (11,809 ) (1,136 ) (12,945 ) Realized net investment income (loss) (679 ) 9,998 3,112 12,431 2,236 14,667 Realized income $ 175,507 $ 80,735 $ 20,148 $ 276,390 $ (96,263 ) $ 180,127 |
Schedule of segment’ revenue, expenses and other income (expense) | The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Segment revenues Management fees (includes ARCC Part I Fees of $39,157, $77,550 and $29,866, $58,283 for the three and six months ended June 30, 2019 and 2018, respectively) $ 246,279 $ 202,304 $ 479,291 $ 399,130 Other fees 4,611 7,221 7,686 13,294 Performance income—realized 35,994 122,608 104,567 145,715 Total segment revenues $ 286,884 $ 332,133 $ 591,544 $ 558,139 Segment expenses Compensation and benefits $ 98,184 $ 79,711 $ 189,012 $ 157,243 General, administrative and other expenses 21,816 17,860 42,510 34,187 Performance related compensation—realized 25,229 87,881 74,446 102,750 Total segment expenses $ 145,229 $ 185,452 $ 305,968 $ 294,180 Segment realized net investment income Investment income—realized $ 2,266 $ 9,361 $ 17,540 $ 14,153 Interest and other investment income- realized 10,068 6,622 14,372 10,087 Interest expense (5,394 ) (5,488 ) (10,587 ) (11,809 ) Total segment realized net investment income $ 6,940 $ 10,495 $ 21,325 $ 12,431 |
Schedule of segment revenues components | The following table reconciles the Company's consolidated revenues to segment revenue: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Total consolidated revenue $ 384,822 $ 204,163 $ 862,019 $ 470,252 Performance income-unrealized (98,662 ) 124,343 (245,237 ) 89,225 Management fees of Consolidated Funds eliminated in consolidation 8,735 8,272 17,148 15,583 Incentive fees of Consolidated Funds eliminated in consolidation 4,750 4,000 5,184 4,000 Principal investment income of Consolidated Funds eliminated in consolidation (4,265 ) 12,851 (3,132 ) 10,650 Administrative fees(1) (6,602 ) (6,770 ) (13,204 ) (13,182 ) Performance income reclass(2) (26 ) (31 ) 580 (1,006 ) Principal investment income (1,579 ) (14,722 ) (31,471 ) (17,430 ) Net (revenue) expense of non-controlling interests in consolidated subsidiaries (289 ) 27 (343 ) 47 Total consolidation adjustments and reconciling items (97,938 ) 127,970 (270,475 ) 87,887 Total segment revenue $ 286,884 $ 332,133 $ 591,544 $ 558,139 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gain (loss) on investments in the Company’s Condensed Consolidated Statements of Operations. |
Schedule of segment expenses components | The following table reconciles the Company's consolidated expenses to segment expenses: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Total consolidated expenses $ 335,701 $ 221,017 $ 704,808 $ 427,300 Performance related compensation-unrealized (67,459 ) 100,886 (174,762 ) 89,877 Expenses of Consolidated Funds added in consolidation (28,912 ) (47,382 ) (42,313 ) (56,011 ) Expenses of Consolidated Funds eliminated in consolidation 13,485 12,270 22,332 19,583 Administrative fees(1) (6,602 ) (6,770 ) (13,204 ) (13,182 ) OMG expenses (53,868 ) (49,916 ) (107,161 ) (98,499 ) Acquisition and merger-related expense (4,207 ) (47 ) (5,980 ) 272 Equity compensation expense (24,029 ) (22,507 ) (51,581 ) (43,594 ) Unamortized placement fees (12,432 ) (1,852 ) (12,953 ) (3,516 ) Depreciation and amortization expense (5,221 ) (7,711 ) (11,045 ) (14,887 ) Other expense(2) — (11,836 ) — (11,836 ) Expense of non-controlling interests in consolidated subsidiaries (1,227 ) (700 ) (2,173 ) (1,327 ) Total consolidation adjustments and reconciling items (190,472 ) (35,565 ) (398,840 ) (133,120 ) Total segment expenses $ 145,229 $ 185,452 $ 305,968 $ 294,180 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) 2018 period includes $11.8 million payment to ARCC for rent and utilities for the years ended 2017, 2016, 2015 and 2014, and the first quarter of 2018. |
Schedule of segment other income (expense) components | The following table reconciles the Company's consolidated other income to segment realized net investment income: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Total consolidated other income $ 35,262 $ 67,926 $ 63,132 $ 70,166 Investment (income) loss - unrealized 7,618 (1,382 ) (8,565 ) 4,269 Interest and other investment (income) loss - unrealized (4,628 ) 1,373 350 1,296 Other expense from Consolidated Funds added in consolidation, net (33,008 ) (69,193 ) (64,215 ) (76,445 ) Other (income) expense from Consolidated Funds eliminated in consolidation, net 282 (993 ) (90 ) (534 ) OMG other income (188 ) (3,699 ) (158 ) (6,467 ) Performance income reclass(1) 26 31 (580 ) 1,006 Principal investment income 1,579 14,722 31,471 17,430 Other expense, net 2 1,718 1 1,725 Other income of non-controlling interests in consolidated subsidiaries (5 ) (8 ) (21 ) (15 ) Total consolidation adjustments and reconciling items (28,322 ) (57,431 ) (41,807 ) (57,735 ) Total segment realized net investment income $ 6,940 $ 10,495 $ 21,325 $ 12,431 (1) Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gain (loss) on investments in the Company’s Consolidated Statements of Operations. |
Reconciliation of segment results to the Company's income before taxes and total assets | The following table presents the reconciliation of income before taxes as reported in the Condensed Consolidated Statements of Operations to segment results of RI and FRE: For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Income before taxes $ 84,383 $ 51,072 $ 220,343 $ 113,118 Adjustments: Depreciation and amortization expense 5,221 7,711 11,045 14,887 Equity compensation expense 24,029 22,507 51,581 43,594 Acquisition and merger-related expense 4,207 47 5,980 (272 ) Unamortized placement fees 12,432 1,852 12,953 3,516 OMG expense, net 53,680 46,217 107,003 92,032 Other expense, net(1) 2 13,554 1 13,561 Expense of non-controlling interests in consolidated subsidiaries 933 719 1,809 1,359 Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (8,079 ) (9,951 ) (25,124 ) (10,318 ) Total performance income - unrealized (98,662 ) 124,343 (245,237 ) 89,225 Total performance related compensation - unrealized 67,459 (100,886 ) 174,762 (89,877 ) Total investment (income) loss - unrealized 2,990 (9 ) (8,215 ) 5,565 Realized income 148,595 157,176 306,901 276,390 Total performance income - realized (35,994 ) (122,608 ) (104,567 ) (145,715 ) Total performance related compensation - realized 25,229 87,881 74,446 102,750 Total investment income - realized (6,940 ) (10,495 ) (21,325 ) (12,431 ) Fee related earnings $ 130,890 $ 111,954 $ 255,455 $ 220,994 (1) 2018 period includes $11.8 million payment to ARCC for rent and utilities for the years ended 2017, 2016, 2015 and 2014, and the first quarter of 2018. |
CONSOLIDATION (Tables)
CONSOLIDATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of interest in VIEs | The Company's interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of June 30, As of December 31, 2019 2018 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs $ 224,154 $ 222,477 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs 197,296 186,455 Assets of consolidated VIEs 8,421,736 8,141,280 Liabilities of consolidated VIEs 7,634,429 7,479,383 For the Three Months Ended For the Six Months Ended 2019 2018 2019 2018 Net income attributable to non-controlling interests related to consolidated VIEs $ 8,346 $ 9,882 $ 25,970 $ 10,249 |
Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition | The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of June 30, 2019 and December 31, 2018 and results from operations for the three and six months ended June 30, 2019 and 2018 . As of June 30, 2019 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 247,220 $ — $ — $ 247,220 Investments (includes $1,071,954 of accrued carried interest) 1,763,338 — (197,296 ) 1,566,042 Due from affiliates 242,515 — (8,434 ) 234,081 Other assets 358,091 — — 358,091 Right-of-use operating lease assets 152,579 — — 152,579 Assets of Consolidated Funds Cash and cash equivalents — 376,328 — 376,328 Investments, at fair value — 7,926,615 — 7,926,615 Due from affiliates — 15,888 — 15,888 Receivable for securities sold — 76,993 — 76,993 Other assets — 25,912 — 25,912 Total assets $ 2,763,743 $ 8,421,736 $ (205,730 ) $ 10,979,749 Liabilities Accounts payable, accrued expenses and other liabilities $ 76,838 $ — $ — $ 76,838 Accrued compensation 114,936 — — 114,936 Due to affiliates 65,527 — — 65,527 Performance related compensation payable 772,592 — — 772,592 Debt obligations 566,277 — — 566,277 Right-of-use operating lease liabilities 179,192 — — 179,192 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 75,647 — 75,647 Due to affiliates — 8,434 (8,434 ) — Payable for securities purchased — 369,465 — 369,465 CLO loan obligations, at fair value — 7,054,773 (23,932 ) 7,030,841 Fund borrowings — 126,110 — 126,110 Total liabilities 1,775,362 7,634,429 (32,366 ) 9,377,425 Commitments and contingencies Non-controlling interest in Consolidated Funds — 787,307 (173,364 ) 613,943 Non-controlling interest in Ares Operating Group entities 352,882 — — 352,882 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (107,458,309 shares issued and outstanding) 1,075 — — 1,075 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding) — — — — Additional paid-in-capital 379,789 — — 379,789 Retained earnings (35,247 ) — — (35,247 ) Accumulated other comprehensive loss, net of tax (8,879 ) — — (8,879 ) Total stockholders' equity 635,499 — — 635,499 Total equity 988,381 787,307 (173,364 ) 1,602,324 Total liabilities, non-controlling interests and equity $ 2,763,743 $ 8,421,736 $ (205,730 ) $ 10,979,749 As of December 31, 2018 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 110,247 $ — $ — $ 110,247 Investments (includes $841,079 of accrued carried interest) 1,512,592 — (186,455 ) 1,326,137 Due from affiliates 207,924 — (8,547 ) 199,377 Other assets 377,651 — — 377,651 Assets of Consolidated Funds Cash and cash equivalents — 384,644 — 384,644 Investments, at fair value — 7,673,165 — 7,673,165 Due from affiliates — 17,609 — 17,609 Receivable for securities sold — 42,076 — 42,076 Other assets — 23,786 — 23,786 Total assets $ 2,208,414 $ 8,141,280 $ (195,002 ) $ 10,154,692 Liabilities Accounts payable, accrued expenses and other liabilities $ 83,221 $ — $ — $ 83,221 Accrued compensation 29,389 — — 29,389 Due to affiliates 82,411 — — 82,411 Performance related compensation payable 641,737 — — 641,737 Debt obligations 480,952 — — 480,952 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 83,876 — 83,876 Due to affiliates — 8,547 (8,547 ) — Payable for securities purchased — 471,390 — 471,390 CLO loan obligations — 6,706,286 (28,195 ) 6,678,091 Fund borrowings — 209,284 — 209,284 Total liabilities 1,317,710 7,479,383 (36,742 ) 8,760,351 Commitments and contingencies Non-controlling interest in Consolidated Funds — 661,897 (158,260 ) 503,637 Non-controlling interest in Ares Operating Group entities 302,780 — — 302,780 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 units issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (101,594,095 shares issued and outstanding) 1,016 — — 1,016 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding) — — — — Additional paid-in-capital 326,007 — — 326,007 Retained earnings (29,336 ) — — (29,336 ) Accumulated other comprehensive loss, net of taxes (8,524 ) — — (8,524 ) Total stockholders' equity 587,924 — — 587,924 Total equity 890,704 661,897 (158,260 ) 1,394,341 Total liabilities, non-controlling interests and equity $ 2,208,414 $ 8,141,280 $ (195,002 ) $ 10,154,692 |
Schedule of results from operations | For the Three Months Ended June 30, 2019 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $39,157) $ 246,581 $ — $ (8,735 ) $ 237,846 Carried interest allocation 119,712 — — 119,712 Incentive fees 14,970 — (4,750 ) 10,220 Principal investment income 1,579 — 4,265 5,844 Administrative, transaction and other fees 11,200 — — 11,200 Total revenues 394,042 — (9,220 ) 384,822 Expenses Compensation and benefits 162,170 — — 162,170 Performance related compensation 92,688 — — 92,688 General, administrative and other expense 65,416 — — 65,416 Expenses of the Consolidated Funds — 28,912 (13,485 ) 15,427 Total expenses 320,274 28,912 (13,485 ) 335,701 Other income (expense) Net realized and unrealized gain on investments 927 — (406 ) 521 Interest and dividend income 2,324 — (672 ) 1,652 Interest expense (5,793 ) — — (5,793 ) Other income, net 5,078 — (281 ) 4,797 Net realized and unrealized loss on investments of the Consolidated Funds — (486 ) 370 (116 ) Interest and other income of the Consolidated Funds — 102,206 — 102,206 Interest expense of the Consolidated Funds — (68,712 ) 707 (68,005 ) Total other income 2,536 33,008 (282 ) 35,262 Income before taxes 76,304 4,096 3,983 84,383 Income tax expense (benefit) 9,772 (267 ) — 9,505 Net income 66,532 4,363 3,983 74,878 Less: Net income attributable to non-controlling interests in Consolidated Funds — 4,363 3,983 8,346 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 34,393 — — 34,393 Net income attributable to Ares Management Corporation 32,139 — — 32,139 Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Net income attributable to Ares Management Corporation Class A common stockholders $ 26,714 $ — $ — $ 26,714 For the Three Months Ended June 30, 2018 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $29,866) $ 202,304 $ — $ (8,272 ) $ 194,032 Carried interest allocation (13,444 ) — (13,444 ) Incentive fees 11,740 (4,000 ) 7,740 Principal investment income 14,722 — (12,851 ) 1,871 Administrative, transaction and other fees 13,964 — — 13,964 Total revenues 229,286 — (25,123 ) 204,163 Expenses Compensation and benefits 138,992 — — 138,992 Performance related compensation (13,005 ) — — (13,005 ) General, administrative and other expense 59,918 — — 59,918 Expenses of the Consolidated Funds — 47,382 (12,270 ) 35,112 Total expenses 185,905 47,382 (12,270 ) 221,017 Other income (expense) Net realized and unrealized loss on investments 4,438 — (1,171 ) 3,267 Interest and dividend income 2,356 — — 2,356 Interest expense (6,076 ) — — (6,076 ) Other expense, net (2,978 ) — 991 (1,987 ) Net realized and unrealized gain on investments of the Consolidated Funds — 33,819 668 34,487 Interest and other income of the Consolidated Funds — 92,633 — 92,633 Interest expense of the Consolidated Funds — (57,259 ) 505 (56,754 ) Total other income (expense) (2,260 ) 69,193 993 67,926 Income before taxes 41,121 21,811 (11,860 ) 51,072 Income tax expense 36,834 69 — 36,903 Net income 4,287 21,742 (11,860 ) 14,169 Less: Net income attributable to non-controlling interests in Consolidated Funds — 21,742 (11,860 ) 9,882 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 16,062 — — 16,062 Net loss attributable to Ares Management L.P. (11,775 ) — — (11,775 ) Less: Preferred equity dividends paid 5,425 — — 5,425 Net loss attributable to Ares Management L.P. common shareholders $ (17,200 ) $ — $ — $ (17,200 ) For the Six Months Ended June 30, 2019 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $77,550) $ 479,653 $ — $ (17,148 ) $ 462,505 Carried interest allocation 317,005 — — 317,005 Incentive fees 32,219 — (5,184 ) 27,035 Principal investment income 31,471 — 3,132 34,603 Administrative, transaction and other fees 20,871 — — 20,871 Total revenues 881,219 — (19,200 ) 862,019 Expenses Compensation and benefits 319,016 — — 319,016 Performance related compensation 249,208 — — 249,208 General, administrative and other expense 116,603 — — 116,603 Expenses of the Consolidated Funds — 42,313 (22,332 ) 19,981 Total expenses 684,827 42,313 (22,332 ) 704,808 Other income (expense) Net realized and unrealized gain on investments 5,351 — (1,354 ) 3,997 Interest and dividend income 4,648 — (1,152 ) 3,496 Interest expense (11,382 ) — — (11,382 ) Other income, net 210 — 90 300 Net realized and unrealized gain on investments of the Consolidated Funds — 3,262 986 4,248 Interest and other income of the Consolidated Funds — 195,390 — 195,390 Interest expense of the Consolidated Funds — (134,437 ) 1,520 (132,917 ) Total other income (expense) (1,173 ) 64,215 90 63,132 Income before taxes 195,219 21,902 3,222 220,343 Income tax expense (benefit) 24,735 (846 ) — 23,889 Net income 170,484 22,748 3,222 196,454 Less: Net income attributable to non-controlling interests in Consolidated Funds — 22,748 3,222 25,970 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 93,396 — — 93,396 Net income attributable to Ares Management Corporation 77,088 — — 77,088 Less: Series A Preferred Stock dividends paid 10,850 — — 10,850 Net income attributable to Ares Management Corporation Class A common stockholders $ 66,238 $ — $ — $ 66,238 For the Six Months Ended June 30, 2018 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $58,283) $ 399,130 $ — $ (15,583 ) $ 383,547 Carried interest allocation 40,685 — — 40,685 Incentive fees 16,811 — (4,000 ) 12,811 Principal investment income 17,430 — (10,650 ) 6,780 Administrative, transaction and other fees 26,429 — — 26,429 Total revenues 500,485 — (30,233 ) 470,252 Expenses Compensation and benefits 273,631 — — 273,631 Performance related compensation 12,873 — — 12,873 General, administrative and other expense 104,368 — — 104,368 Expenses of the Consolidated Funds — 56,011 (19,583 ) 36,428 Total expenses 390,872 56,011 (19,583 ) 427,300 Other income (expense) Net realized and unrealized gain on investments 3,260 — (832 ) 2,428 Interest and dividend income 5,703 — — 5,703 Interest expense (12,945 ) — — (12,945 ) Other expense, net (2,831 ) — 533 (2,298 ) Net realized and unrealized gain on investments of the Consolidated Funds — 21,367 35 21,402 Interest and other income of the Consolidated Funds — 157,055 — 157,055 Interest expense of the Consolidated Funds — (101,977 ) 798 (101,179 ) Total other income (expense) (6,813 ) 76,445 534 70,166 Income before taxes 102,800 20,434 (10,116 ) 113,118 Income tax expense 24,459 69 — 24,528 Net income 78,341 20,365 (10,116 ) 88,590 Less: Net income attributable to non-controlling interests in Consolidated Funds — 20,365 (10,116 ) 10,249 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 49,168 — — 49,168 Net income attributable to Ares Management L.P. 29,173 — — 29,173 Less: Preferred equity dividends paid 10,850 — — 10,850 Net income attributable to Ares Management L.P. common shareholders $ 18,323 $ — $ — $ 18,323 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 6 Months Ended |
Jun. 30, 2019segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of investing groups | 3 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Carrying Value of Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Finite-lived intangible assets, net | ||||||
Intangible assets | $ 54,298 | $ 54,298 | $ 84,135 | |||
Less: accumulated amortization | (25,287) | (25,287) | (52,701) | |||
Intangible assets, net | 29,011 | 29,011 | 31,434 | |||
Amortization expense | $ 2,400 | $ 6,600 | ||||
Fully-amortized intangibles, amount removed during the period | $ 29,800 | |||||
General, administrative and other expense | ||||||
Finite-lived intangible assets, net | ||||||
Amortization expense | 1,200 | $ 3,300 | ||||
Management contracts | ||||||
Finite-lived intangible assets, net | ||||||
Weighted average amortization period (less than for other) | 2 years 10 months 24 days | |||||
Intangible assets | 12,498 | $ 12,498 | 42,335 | |||
Client relationships | ||||||
Finite-lived intangible assets, net | ||||||
Weighted average amortization period (less than for other) | 9 years | |||||
Intangible assets | 38,600 | $ 38,600 | 38,600 | |||
Trade name | ||||||
Finite-lived intangible assets, net | ||||||
Weighted average amortization period (less than for other) | 3 years | |||||
Intangible assets | $ 3,200 | $ 3,200 | $ 3,200 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 143,786,000 | |
Foreign currency translation | (7,000) | |
Goodwill, ending balance | 143,779,000 | |
Goodwill impairment | 0 | $ 0 |
Credit | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 32,196,000 | |
Foreign currency translation | 0 | |
Goodwill, ending balance | 32,196,000 | |
Private Equity | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 58,600,000 | |
Foreign currency translation | 0 | |
Goodwill, ending balance | 58,600,000 | |
Real Estate | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 52,990,000 | |
Foreign currency translation | (7,000) | |
Goodwill, ending balance | $ 52,983,000 |
INVESTMENTS (Fair Value Investm
INVESTMENTS (Fair Value Investments, excluding Equity Method Investments Held at Fair Value) (Details) - Ares Management L.P - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Investments | ||
Equity method investments | $ 1,566,042 | $ 1,326,137 |
Partnership interests | 36,388 | 36,053 |
Total private investment partnership interests and other | 114,010 | 108,558 |
Collateralized loan obligations | 26,241 | 20,824 |
Equity securities | $ 13,571 | $ 11,681 |
Percentage of total investments as of | 1.70% | 1.60% |
Other fixed income | ||
Investments | ||
Total private investment partnership interests and other | $ 37,810 | $ 40,000 |
Percentage of total investments as of | 2.40% | 3.00% |
Collateralized loan obligations | ||
Investments | ||
Collateralized loan obligations | $ 64,051 | $ 60,824 |
Percentage of total investments as of | 4.10% | 4.60% |
Partnership interests | ||
Investments | ||
Total private investment partnership interests and other | $ 1,500,817 | $ 1,264,029 |
Percentage of total investments as of | 95.80% | 95.30% |
Common Stock | ||
Investments | ||
Equity securities | $ 1,174 | $ 1,284 |
Percentage of total investments as of | 0.10% | 0.10% |
Partnership interests | ||
Investments | ||
Equity method investments | $ 364,109 | $ 357,655 |
Percentage of total investments as of | 23.30% | 27.00% |
Carried interest allocation | ||
Investments | ||
Equity method investments | $ 1,071,954 | $ 841,079 |
Percentage of total investments as of | 68.40% | 63.40% |
Equity method private investment partnership interests and other (held at fair value) | ||
Investments | ||
Equity method investments | $ 48,785 | $ 46,450 |
Percentage of total investments as of | 3.10% | 3.50% |
Equity method private investment partnership interests and other | ||
Investments | ||
Partnership interests | $ 15,969 | $ 18,845 |
Percentage of total investments as of | 1.00% | 1.40% |
INVESTMENTS (Equity Method Inve
INVESTMENTS (Equity Method Investments) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments in and Advances to Affiliates [Abstract] | ||||
Equity method investments gain (loss) | $ 5.4 | $ 3.8 | $ 34.5 | $ 7.3 |
INVESTMENTS (Investments of the
INVESTMENTS (Investments of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Investments | ||
Total investments | $ 7,926,615 | $ 7,673,165 |
Fixed Income | ||
Investments | ||
Total investments | $ 7,466,135 | $ 7,205,248 |
Percentage of total investments as of | 94.20% | 94.10% |
Fixed Income | Bonds | ||
Investments | ||
Total investments | $ 201,792 | $ 318,499 |
Percentage of total investments as of | 2.60% | 4.30% |
Fixed Income | Loans | ||
Investments | ||
Total investments | $ 7,229,083 | $ 6,886,749 |
Percentage of total investments as of | 91.20% | 89.80% |
Fixed Income | Collateralized loan obligations | ||
Investments | ||
Total investments | $ 35,260 | $ 0 |
Percentage of total investments as of | 0.40% | 0.00% |
Equity securities | ||
Investments | ||
Total investments | $ 166,623 | $ 196,470 |
Percentage of total investments as of | 2.10% | 2.40% |
Partnership Interests | ||
Investments | ||
Total investments | $ 293,857 | $ 271,447 |
Percentage of total investments as of | 3.70% | 3.50% |
FAIR VALUE (Assets and Liabilit
FAIR VALUE (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | $ 7,466,135 | $ 7,205,248 |
Common stock and other equity securities | 166,623 | 196,470 |
Partnership interests | 293,857 | 271,447 |
Total investments, at fair value | 7,926,615 | 7,673,165 |
Total derivative assets, at fair value | 3,209 | |
Total assets, at fair value | 7,927,662 | 7,676,374 |
Liabilities, at fair value | ||
Loan obligations of CLOs | (7,030,841) | (6,678,091) |
Total liabilities, at fair value | (7,031,833) | (6,680,603) |
Consolidated Funds | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 342 | 1,881 |
Liabilities, at fair value | ||
Derivative liabilities | (345) | |
Derivatives—foreign exchange contracts | (1,864) | |
Consolidated Funds | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 705 | 1,328 |
Liabilities, at fair value | ||
Derivative liabilities | (647) | (648) |
Consolidated Funds | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 35,260 | |
Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 201,792 | 318,499 |
Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 7,229,083 | 6,886,749 |
Consolidated Funds | Level I | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Common stock and other equity securities | 34,891 | 45,718 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 34,891 | 45,718 |
Total derivative assets, at fair value | 0 | |
Total assets, at fair value | 34,891 | 45,718 |
Liabilities, at fair value | ||
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Consolidated Funds | Level I | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Derivatives—foreign exchange contracts | 0 | |
Consolidated Funds | Level I | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Level I | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | |
Consolidated Funds | Level I | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Level I | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Level II | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 7,191,723 | 6,657,290 |
Common stock and other equity securities | 0 | 0 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 7,191,723 | 6,657,290 |
Total derivative assets, at fair value | 1,881 | |
Total assets, at fair value | 7,192,065 | 6,659,171 |
Liabilities, at fair value | ||
Loan obligations of CLOs | (7,030,841) | (6,678,091) |
Total liabilities, at fair value | (7,031,186) | (6,679,955) |
Consolidated Funds | Level II | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 342 | 1,881 |
Liabilities, at fair value | ||
Derivative liabilities | (345) | |
Derivatives—foreign exchange contracts | (1,864) | |
Consolidated Funds | Level II | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Level II | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 35,260 | |
Consolidated Funds | Level II | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 201,792 | 316,850 |
Consolidated Funds | Level II | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 6,954,671 | 6,340,440 |
Consolidated Funds | Level III | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 274,412 | 547,958 |
Common stock and other equity securities | 131,732 | 150,752 |
Partnership interests | 293,857 | 271,447 |
Total investments, at fair value | 700,001 | 970,157 |
Total derivative assets, at fair value | 1,328 | |
Total assets, at fair value | 700,706 | 971,485 |
Liabilities, at fair value | ||
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (647) | (648) |
Consolidated Funds | Level III | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Derivatives—foreign exchange contracts | 0 | |
Consolidated Funds | Level III | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 705 | 1,328 |
Liabilities, at fair value | ||
Derivative liabilities | (647) | (648) |
Consolidated Funds | Level III | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | |
Consolidated Funds | Level III | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 1,649 |
Consolidated Funds | Level III | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 274,412 | 546,309 |
Ares Management L.P | ||
Assets, at fair value | ||
Common stock and other equity securities | 13,571 | 11,681 |
Partnership interests | 36,388 | 36,053 |
Total investments, at fair value | 114,010 | 108,558 |
Total assets, at fair value | 115,900 | 109,624 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | (869) | |
Total liabilities, at fair value | (610) | (869) |
Ares Management L.P | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 1,890 | 1,066 |
Liabilities, at fair value | ||
Derivative liabilities | (610) | |
Ares Management L.P | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 64,051 | 60,824 |
Ares Management L.P | Level I | ||
Assets, at fair value | ||
Common stock and other equity securities | 137 | 280 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 137 | 280 |
Total assets, at fair value | 137 | 280 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level I | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level I | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Ares Management L.P | Level II | ||
Assets, at fair value | ||
Common stock and other equity securities | 1,037 | 1,004 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 1,037 | 1,004 |
Total assets, at fair value | 2,927 | 2,070 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | (869) | |
Total liabilities, at fair value | (610) | (869) |
Ares Management L.P | Level II | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 1,890 | 1,066 |
Liabilities, at fair value | ||
Derivative liabilities | (610) | |
Ares Management L.P | Level II | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Ares Management L.P | Level III | ||
Assets, at fair value | ||
Common stock and other equity securities | 12,397 | 10,397 |
Partnership interests | 35,192 | 35,192 |
Total investments, at fair value | 111,640 | 106,413 |
Total assets, at fair value | 111,640 | 106,413 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level III | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 64,051 | 60,824 |
Ares Management L.P | Investments Measured at NAV | ||
Assets, at fair value | ||
Partnership interests | 1,196 | 861 |
Total investments, at fair value | 1,196 | 861 |
Total assets, at fair value | $ 1,196 | $ 861 |
FAIR VALUE (Changes in Fair Val
FAIR VALUE (Changes in Fair Value of Level III Measurements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Consolidated Funds | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | $ 1,003,364 | $ 653,971 | $ 970,837 | $ 663,702 |
Deconsolidation of fund | (126,036) | (184,918) | (233) | |
Transfer in | 29,438 | 94,776 | 41,245 | 95,450 |
Transfer out | (261,674) | (68,328) | (247,573) | (73,777) |
Purchases | 117,818 | 279,879 | 257,752 | 329,462 |
Sales/settlements | (59,136) | (57,223) | (144,047) | (117,697) |
Amortized discounts/premiums | (174) | (30) | (15) | 21 |
Realized and unrealized appreciation (depreciation), net | (3,541) | 15,751 | 6,778 | 21,868 |
Balance, end of period | 700,059 | 918,796 | 700,059 | 918,796 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (5,757) | (5,741) | 3,033 | (11,172) |
Consolidated Funds | Equity securities | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 159,032 | 160,422 | 150,752 | 162,577 |
Deconsolidation of fund | (10,325) | (10,325) | ||
Transfer in | 0 | 0 | 0 | 0 |
Transfer out | 0 | 0 | 0 | 0 |
Purchases | 110 | 0 | 10,882 | 0 |
Sales/settlements | (51) | 0 | (5,137) | 0 |
Amortized discounts/premiums | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | (17,034) | 24,161 | (14,440) | 22,006 |
Balance, end of period | 131,732 | 184,583 | 131,732 | 184,583 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (17,031) | (2,090) | (14,442) | (12,211) |
Consolidated Funds | Fixed Income | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 564,304 | 240,763 | 547,958 | 267,889 |
Deconsolidation of fund | (115,711) | (174,593) | (233) | |
Transfer in | 29,438 | 94,776 | 41,245 | 95,450 |
Transfer out | (261,674) | (68,328) | (247,573) | (73,777) |
Purchases | 113,708 | 273,879 | 238,870 | 313,462 |
Sales/settlements | (56,530) | (57,206) | (136,329) | (117,503) |
Amortized discounts/premiums | (345) | (9) | (37) | 35 |
Realized and unrealized appreciation (depreciation), net | 1,222 | (1,500) | 4,871 | (2,948) |
Balance, end of period | 274,412 | 482,375 | 274,412 | 482,375 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (389) | (3,785) | 1,114 | (1,671) |
Consolidated Funds | Partnership interests | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 283,059 | 252,700 | 271,447 | 232,332 |
Deconsolidation of fund | 0 | 0 | ||
Transfer in | 0 | 0 | 0 | 0 |
Transfer out | 0 | 0 | 0 | 0 |
Purchases | 4,000 | 6,000 | 8,000 | 16,000 |
Sales/settlements | (2,000) | 0 | (2,000) | 0 |
Amortized discounts/premiums | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 8,798 | (7,092) | 16,410 | 3,276 |
Balance, end of period | 293,857 | 251,608 | 293,857 | 251,608 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 8,798 | 0 | 16,410 | 3,276 |
Consolidated Funds | Derivatives, Net | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | (3,031) | 86 | 680 | 904 |
Deconsolidation of fund | 0 | 0 | ||
Transfer in | 0 | 0 | 0 | 0 |
Transfer out | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales/settlements | (555) | (17) | (581) | (194) |
Amortized discounts/premiums | 171 | (21) | 22 | (14) |
Realized and unrealized appreciation (depreciation), net | 3,473 | 182 | (63) | (466) |
Balance, end of period | 58 | 230 | 58 | 230 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 2,865 | 134 | (49) | (566) |
Ares Management L.P | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 112,779 | 287,753 | 106,413 | 239,927 |
Deconsolidation of fund | 1,883 | 10,021 | 78 | |
Purchases | 2,000 | 4,146 | 48,731 | |
Sales/settlements | (6,206) | (219,744) | (11,169) | (220,571) |
Realized and unrealized appreciation (depreciation), net | 1,184 | 1,335 | 2,229 | 1,179 |
Balance, end of period | 111,640 | 69,344 | 111,640 | 69,344 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 1,818 | 2,350 | 2,479 | 1,621 |
Ares Management L.P | Equity securities | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 10,397 | 10,397 | ||
Deconsolidation of fund | 0 | 0 | ||
Purchases | 2,000 | 2,000 | ||
Sales/settlements | 0 | 0 | ||
Realized and unrealized appreciation (depreciation), net | 0 | 0 | ||
Balance, end of period | 12,397 | 12,397 | ||
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 0 | 0 | ||
Ares Management L.P | Fixed Income | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 67,190 | 242,984 | 60,824 | 195,158 |
Deconsolidation of fund | 1,883 | 10,021 | 78 | |
Purchases | 0 | 2,146 | 48,731 | |
Sales/settlements | (6,206) | (219,744) | (11,169) | (220,571) |
Realized and unrealized appreciation (depreciation), net | 1,184 | (1,115) | 2,229 | (1,271) |
Balance, end of period | 64,051 | 22,125 | 64,051 | 22,125 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 1,818 | (100) | 2,479 | (829) |
Ares Management L.P | Partnership interests | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 35,192 | 44,769 | 35,192 | 44,769 |
Deconsolidation of fund | 0 | 0 | 0 | |
Purchases | 0 | 0 | 0 | |
Sales/settlements | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 0 | 2,450 | 0 | 2,450 |
Balance, end of period | 35,192 | 47,219 | 35,192 | 47,219 |
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | $ 0 | $ 2,450 | $ 0 | $ 2,450 |
FAIR VALUE (Valuation Technique
FAIR VALUE (Valuation Techniques) (Details) $ in Thousands | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Consolidated Funds | ||
Assets | ||
Equity securities | $ 166,623 | $ 196,470 |
Partnership interests | 293,857 | 271,447 |
Collateralized loan obligations | 7,030,841 | 6,678,091 |
Other fixed income | 7,466,135 | 7,205,248 |
Derivative instruments | 3,209 | |
Total assets | 7,927,662 | 7,676,374 |
Liabilities | ||
Liabilities, at fair value | (7,031,833) | (6,680,603) |
Consolidated Funds | Level III | ||
Assets | ||
Equity securities | 131,732 | 150,752 |
Partnership interests | 293,857 | 271,447 |
Collateralized loan obligations | 0 | 0 |
Other fixed income | 274,412 | 547,958 |
Derivative instruments | 1,328 | |
Total assets | 700,706 | 971,485 |
Liabilities | ||
Liabilities, at fair value | (647) | (648) |
Consolidated Funds | Level III | Transaction price | ||
Assets | ||
Equity securities | 56,882 | 85,319 |
Consolidated Funds | Level III | Discounted cash flow | ||
Assets | ||
Equity securities | $ 271,447 | |
Partnership interests | $ 293,857 | |
Consolidated Funds | Level III | Discounted cash flow | Discount rate | ||
Unobservable Input | ||
Equity securities | 0.208 | |
Partnership interest | 0.214 | |
Consolidated Funds | Level III | Discounted cash flow | Discount rate | Weighted Average | ||
Unobservable Input | ||
Equity securities | 0.208 | |
Partnership interest | 0.214 | |
Consolidated Funds | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Other fixed income | $ 191,789 | $ 441,368 |
Derivative instruments | 705 | 1,328 |
Liabilities | ||
Derivatives instruments | (647) | (648) |
Consolidated Funds | Level III | Other | ||
Assets | ||
Equity securities | $ 74,241 | $ 41,562 |
Consolidated Funds | Level III | Other | Net income multiple | ||
Unobservable Input | ||
Equity securities | 38.8 | |
Consolidated Funds | Level III | Other | Net income multiple | Minimum | ||
Unobservable Input | ||
Equity securities | 36.1 | |
Consolidated Funds | Level III | Other | Net income multiple | Maximum | ||
Unobservable Input | ||
Equity securities | 40 | |
Consolidated Funds | Level III | Other | Net income multiple | Weighted Average | ||
Unobservable Input | ||
Equity securities | 37.8 | 38.8 |
Consolidated Funds | Level III | Other | Illiquidity discount | ||
Unobservable Input | ||
Equity securities | 0.250 | 0.250 |
Consolidated Funds | Level III | Other | Illiquidity discount | Weighted Average | ||
Unobservable Input | ||
Equity securities | 0.250 | 0.250 |
Consolidated Funds | Level III | Enterprise value market multiple analysis | ||
Assets | ||
Equity securities | $ 609 | $ 23,871 |
Consolidated Funds | Level III | Enterprise value market multiple analysis | EBITDA multiple | Minimum | ||
Unobservable Input | ||
Equity securities | 8.7 | 7.2 |
Consolidated Funds | Level III | Enterprise value market multiple analysis | EBITDA multiple | Maximum | ||
Unobservable Input | ||
Equity securities | 22.4 | 22.9 |
Consolidated Funds | Level III | Enterprise value market multiple analysis | EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
Equity securities | 13.2 | 7.7 |
Consolidated Funds | Level III | Income approach | ||
Assets | ||
Other fixed income | $ 82,623 | $ 106,590 |
Consolidated Funds | Level III | Income approach | Yield | Minimum | ||
Unobservable Input | ||
Fixed income securities | 0.050 | 0.010 |
Consolidated Funds | Level III | Income approach | Yield | Maximum | ||
Unobservable Input | ||
Fixed income securities | 0.132 | 0.148 |
Consolidated Funds | Level III | Income approach | Yield | Weighted Average | ||
Unobservable Input | ||
Fixed income securities | 0.089 | 0.096 |
Ares Management L.P | ||
Assets | ||
Equity securities | $ 13,571 | $ 11,681 |
Partnership interests | 36,388 | 36,053 |
Total assets | 115,900 | 109,624 |
Liabilities | ||
Liabilities, at fair value | (610) | (869) |
Ares Management L.P | Level III | ||
Assets | ||
Equity securities | 12,397 | 10,397 |
Partnership interests | 35,192 | 35,192 |
Total assets | 111,640 | 106,413 |
Liabilities | ||
Liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Transaction price | ||
Assets | ||
Equity securities | 12,397 | 10,397 |
Ares Management L.P | Level III | Discounted cash flow | ||
Assets | ||
Partnership interests | $ 35,192 | $ 35,192 |
Ares Management L.P | Level III | Discounted cash flow | Discount rate | ||
Unobservable Input | ||
Partnership interest | 0.080 | 0.080 |
Ares Management L.P | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Collateralized loan obligations | $ 26,241 | $ 20,824 |
Ares Management L.P | Level III | Other | ||
Assets | ||
Other fixed income | $ 37,810 | $ 40,000 |
FAIR VALUE (Investments Using N
FAIR VALUE (Investments Using NAV per Share) (Details) - Non-core investments - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
FAIR VALUE | ||
Unfunded Commitments | $ 0 | |
Investments Measured at NAV | ||
FAIR VALUE | ||
Fair Value | $ 1,200,000 | $ 800,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Consolidated Funds | ||
Assets | ||
Notional amount, Assets | $ 5,172 | $ 7,107 |
Fair Value, Assets | 1,047 | 3,209 |
Liabilities | ||
Notional amount, Liabilities | 2,634 | 4,486 |
Fair Value, Liabilities | 992 | 2,512 |
Derivative asset, amount offset | 10,600 | 10,600 |
Derivative liability, amount offset | 5,700 | 5,700 |
Consolidated Funds | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 342 | 1,881 |
Fair Value, Assets | 342 | 1,881 |
Liabilities | ||
Notional amount, Liabilities | 342 | 1,881 |
Fair Value, Liabilities | 345 | 1,864 |
Consolidated Funds | Asset swap - other | ||
Assets | ||
Notional amount, Assets | 4,830 | 5,226 |
Fair Value, Assets | 705 | 1,328 |
Liabilities | ||
Notional amount, Liabilities | 2,292 | 2,605 |
Fair Value, Liabilities | 647 | 648 |
Ares Management L.P | ||
Assets | ||
Notional amount, Assets | 37,667 | 33,026 |
Fair Value, Assets | 1,890 | 1,066 |
Liabilities | ||
Notional amount, Liabilities | 75,252 | 27,140 |
Fair Value, Liabilities | 610 | 869 |
Derivative liability, amount not offset | (600) | (900) |
Ares Management L.P | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 37,667 | 33,026 |
Fair Value, Assets | 1,890 | 1,066 |
Liabilities | ||
Notional amount, Liabilities | 75,252 | 27,140 |
Fair Value, Liabilities | $ 610 | $ 869 |
DEBT (Debt Obligations) (Detail
DEBT (Debt Obligations) (Details) - Ares Management L.P - USD ($) | 1 Months Ended | 6 Months Ended | |
Oct. 31, 2014 | Jun. 30, 2019 | Dec. 31, 2018 | |
DEBT | |||
Carrying Value | $ 566,277,000 | $ 480,952,000 | |
Credit Facility | |||
DEBT | |||
Carrying Value | $ 320,000,000 | $ 235,000,000 | |
Interest Rate | 3.69% | 4.00% | |
Maximum borrowing capacity | $ 1,065,000,000 | ||
Unused commitment fees | 0.15% | ||
Interest rate | 0.00% | ||
Credit Facility | Base rate | |||
DEBT | |||
Interest rate spread | 0.25% | ||
Credit Facility | LIBOR | |||
DEBT | |||
Interest rate spread | 1.25% | ||
Senior Notes | |||
DEBT | |||
Original Borrowing Amount | $ 250,000,000 | ||
Carrying Value | $ 246,277,000 | $ 245,952,000 | |
Interest Rate | 4.21% | 4.21% | |
AFC Notes | |||
DEBT | |||
Debt issuance rate | 98.268% |
DEBT (Debt Issuance Costs) (Det
DEBT (Debt Issuance Costs) (Details) - Ares Management L.P $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Credit Facility | |
Debt Issuance Costs | |
Unamortized debt issuance costs as of December 31, 2018 | $ 4,972 |
Debt issuance costs incurred | 1,521 |
Amortization of debt issuance costs | (677) |
Unamortized debt issuance costs as of June 30, 2019 | 5,816 |
Senior Notes | |
Debt Issuance Costs | |
Unamortized debt issuance costs as of December 31, 2018 | 1,334 |
Debt issuance costs incurred | 0 |
Amortization of debt issuance costs | (116) |
Unamortized debt issuance costs as of June 30, 2019 | $ 1,218 |
DEBT (Loan Obligations of the C
DEBT (Loan Obligations of the Consolidated CLOs) (Details) - Consolidated Funds - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
DEBT | ||
Fair Value of Loan Obligations | $ 7,030,841 | $ 6,678,091 |
Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 7,262,850 | 7,097,949 |
Fair Value of Loan Obligations | 7,030,841 | 6,678,091 |
Senior secured notes | Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 6,879,407 | 6,642,616 |
Fair Value of Loan Obligations | $ 6,789,415 | $ 6,391,643 |
Weighted Average Remaining Maturity In Years | 11 years 1 month 20 days | 10 years 11 months 8 days |
Debt instrument face amount | $ 6,900,000 | |
Weighted average interest rate (as a percent) | 3.56% | |
Subordinated notes / preferred shares | Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | $ 383,443 | $ 455,333 |
Fair Value of Loan Obligations | $ 241,426 | $ 286,448 |
Weighted Average Remaining Maturity In Years | 11 years 2 months 12 days | 11 years 2 months 15 days |
Debt instrument face amount | $ 383,400 |
DEBT (Credit Facilities of the
DEBT (Credit Facilities of the Consolidated Funds) (Details) - Consolidated Funds $ in Thousands, € in Millions | Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Jun. 27, 2019EUR (€) | Dec. 31, 2018USD ($) |
DEBT | ||||
Total borrowings of Consolidated Funds | $ 126,110 | $ 209,284 | ||
Credit Facility Maturing 1/1/2023 | ||||
DEBT | ||||
Total Capacity | 18,000 | |||
Outstanding Loan | $ 16,153 | $ 14,953 | ||
Effective Rate | 4.00% | 4.00% | 3.98% | |
Credit Facility Maturing 6/29/2019 | ||||
DEBT | ||||
Total Capacity | $ 28,033 | € 24.6 | € 40 | |
Outstanding Loan | $ 28,033 | $ 43,624 | ||
Effective Rate | 1.55% | 1.55% | 1.55% | |
Interest rate | 0.00% | 0.00% | 0.00% | |
Credit Facility Maturing 3/7/2019 | ||||
DEBT | ||||
Total Capacity | $ 71,500 | |||
Outstanding Loan | $ 71,500 | $ 71,500 | ||
Effective Rate | 3.47% | 3.47% | 3.47% | |
Credit Facility Maturing 6/30/2021 | ||||
DEBT | ||||
Total Capacity | $ 200,375 | |||
Outstanding Loan | 0 | $ 38,844 | ||
Effective Rate | 1.00% | |||
Credit Facility Maturing 7/15/2028 | ||||
DEBT | ||||
Total Capacity | 75,000 | |||
Outstanding Loan | $ 9,000 | $ 39,000 | ||
Effective Rate | 4.75% | 4.75% | 4.75% | |
Revolving Term Loan | ||||
DEBT | ||||
Total Capacity | $ 1,900 | |||
Outstanding Loan | $ 1,424 | $ 1,363 | ||
Effective Rate | 8.07% | 8.07% | 8.07% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2017 | Jun. 30, 2019 | Dec. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | ||||
Unfunded capital commitments | $ 304,100,000 | $ 304,100,000 | $ 267,600,000 | |
Performance Income | ||||
Performance Income | ||||
Performance income subject to potential clawback provision | 401,000,000 | 401,000,000 | 469,000,000 | |
Performance income subject to potential claw back provision that are reimbursable by professionals | 297,500,000 | 297,500,000 | 351,900,000 | |
Performance income subject to potential claw back provision, repayment obligation | 600,000 | $ 600,000 | $ 400,000 | |
ARCC | American Capital Ltd | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Maximum fees waived | 10,000,000 | $ 10,000,000 | ||
Term of fee waiver | 30 months | |||
Maximum amount shortfall that will not carryover, less than | 10,000,000 | |||
Remaining term | 3 months | |||
Remaining fees waived | $ 10,000,000 | $ 10,000,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Leases: Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities | $ 179,192 | |
Finance lease obligations | 1,009 | |
Accumulated amortization | (400) | |
Ares Management L.P | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | 152,579 | $ 0 |
Finance lease assets | 1,313 | |
Total lease assets | 153,892 | |
Operating lease liabilities | 179,192 | $ 0 |
Finance lease obligations | 1,009 | |
Total lease liabilities | $ 180,201 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Leases: Lease Expense) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 7,211 | $ 14,149 |
Amortization of finance lease assets | 78 | 105 |
Interest on finance lease liabilities | 8 | 21 |
Total lease expense | $ 7,297 | $ 14,275 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 1 year | 1 year |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 11 years | 11 years |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Leases: Maturity of Lease Liabilities) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 16,006 |
2020 | 29,516 |
2021 | 28,627 |
2022 | 30,067 |
2023 | 26,923 |
After 2023 | 74,530 |
Total future payments | 205,669 |
Less: interest | 26,477 |
Operating lease liabilities | 179,192 |
Finance Leases | |
2019 | 32 |
2020 | 356 |
2021 | 356 |
2022 | 321 |
2023 | 0 |
After 2023 | 0 |
Total future payments | 1,065 |
Less: interest | 56 |
Finance lease obligations | $ 1,009 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Leases: Lease Term and Discount Rate) (Details) | Jun. 30, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted-average remaining lease terms, operating lease | 6 years 10 months 24 days |
Weighted-average remaining lease terms, finance lease | 2 years 9 months 18 days |
Weighted-average discount rate, operating lease | 4.00% |
Weighted-average discount rate, finance lease | 3.43% |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES (Leases: Other Information) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating cash flows from operating leases | $ 15,313 |
Operating cash flows from finance leases | 52 |
Financing cash flows from finance leases | 264 |
Leased assets obtained in exchange for new finance lease liabilities | 114 |
Leased assets obtained in exchange for new operating lease liabilities | $ 47,866 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 21, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Funds | ||||||||
Due from affiliates: | ||||||||
Due from affiliates | $ 15,888 | $ 17,609 | ||||||
Due to affiliates: | ||||||||
Due to affiliates | 0 | 0 | ||||||
Consolidated Funds | Affiliated entity | ||||||||
Due from affiliates: | ||||||||
Due from affiliates | 15,888 | 17,609 | ||||||
Ares Management L.P | ||||||||
Due from affiliates: | ||||||||
Due from affiliates | 234,081 | 199,377 | ||||||
Due to affiliates: | ||||||||
Due to affiliates | 65,527 | 82,411 | ||||||
Ares Management L.P | Affiliated entity | ||||||||
Due from affiliates: | ||||||||
Management fees receivable from non-consolidated funds | 174,668 | 151,455 | ||||||
Payments made on behalf of and amounts due from non-consolidated funds and employees | 59,413 | 47,922 | ||||||
Due to affiliates: | ||||||||
Management fee rebate payable to non-consolidated funds | 2,125 | 2,105 | ||||||
Management fees received in advance | 3,724 | 5,491 | ||||||
Tax receivable agreement liability | 24,927 | 24,927 | ||||||
Undistributed carried interest and incentive fees | 25,700 | 31,162 | ||||||
Payments made by non-consolidated funds on behalf of and payable by the Company | $ 9,051 | 18,726 | ||||||
Ares Management L.P | Affiliated entity | ARCC | ||||||||
Due to affiliates: | ||||||||
Asset coverage percentage | 200.00% | 150.00% | ||||||
Annual base management fee percentage | 1.50% | 1.00% | ||||||
Debt to equity ratio | 1 | |||||||
Ares Management L.P | Affiliated entity | ARCC | Rent and other occupancy expenses | ||||||||
Due to affiliates: | ||||||||
Due to affiliates | $ 11,800 | $ 11,800 | $ 600 | $ 2,200 | $ 3,000 | $ 3,200 | $ 2,900 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 9,505 | $ 36,903 | $ 23,889 | $ 24,528 | |
Deferred tax asset, net | $ 42,400 | $ 42,400 | $ 42,100 |
EARNINGS PER SHARE (Antidilutiv
EARNINGS PER SHARE (Antidilutive) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
AOG | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 116,831,583 | 120,231,237 | 116,913,353 | 124,211,007 |
Options | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 9,841,385 | 19,111,390 | 10,788,784 | 19,471,589 |
Restricted units | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 9,172,641 | 15,271,381 | 10,036,334 | 15,811,964 |
EARNINGS PER SHARE (Computation
EARNINGS PER SHARE (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 14, 2019 | Mar. 15, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Basic | |||||||
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | $ 26,714 | $ (17,200) | $ 66,238 | $ 18,323 | |||
Distributions on participating unvested restricted units | (1,886) | (1,970) | (3,693) | (3,877) | |||
Net income (loss) available to Class A common stockholders | $ 24,828 | $ (19,170) | $ 62,545 | $ 14,446 | |||
Basic weighted-average shares of Class A common stock (in shares) | [1] | 105,188,966 | 98,037,252 | 104,054,035 | 91,861,946 | ||
Basic earnings per share of Class A common stock (in dollars per share) | $ 0.24 | $ (0.20) | $ 0.60 | $ 0.16 | |||
Distributions on unvested restricted units | $ 0 | $ (1,970) | $ 0 | $ (3,877) | |||
Net income (loss) available to Class A common stockholders | $ 26,714 | $ (19,170) | $ 66,238 | $ 14,446 | |||
Diluted | |||||||
Diluted weighted-average shares of Class A common stock (in shares) | [1] | 116,603,887 | 98,037,252 | 113,657,864 | 91,861,946 | ||
Diluted earnings per share of Class A common stock (in dollars per share) | $ 0.23 | $ (0.20) | $ 0.58 | $ 0.16 | |||
Dividend declared and paid per Class A common stock (in dollar per share) | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.37 | $ 0.64 | $ 0.77 | |
Restricted units | |||||||
Diluted | |||||||
Effect of dilutive shares (in shares) | 7,212,754 | 0 | 6,349,061 | 0 | |||
Options | |||||||
Diluted | |||||||
Effect of dilutive shares (in shares) | 4,202,167 | 0 | 3,254,768 | 0 | |||
[1] | Three and six months ended June 30, 2018 represents common units. |
EQUITY COMPENSATION (Equity Inc
EQUITY COMPENSATION (Equity Incentive Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2018 | |
Equity compensation | |||||
Equity compensation expenses | $ 24,029 | $ 22,507 | $ 51,581 | $ 43,594 | |
Restricted units | |||||
Equity compensation | |||||
Equity compensation expenses | 21,783 | 18,516 | 44,796 | 36,547 | |
Restricted units with a market condition | |||||
Equity compensation | |||||
Equity compensation expenses | 901 | 0 | 1,791 | 0 | |
Options | |||||
Equity compensation | |||||
Equity compensation expenses | 1,157 | 3,630 | 4,258 | 6,293 | |
Phantom shares | |||||
Equity compensation | |||||
Equity compensation expenses | $ 188 | $ 361 | $ 736 | $ 754 | |
Ares Management L.P | |||||
Equity compensation | |||||
Total number of shares available for grant under the Equity Incentive Plan (in shares) | 29,536,100 | 29,536,100 | 32,792,005 |
EQUITY COMPENSATION (Restricted
EQUITY COMPENSATION (Restricted Units) (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 14, 2019 | Mar. 15, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Equity compensation | ||||||
Dividend declared and paid per share of Class A common stock (in dollar per share) | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.37 | $ 0.64 | $ 0.77 |
Distribution equivalents made to holders | $ 10.8 | |||||
Weighted Average Grant Date Fair Value | ||||||
Unrecognized compensation expenses | $ 78.8 | $ 78.8 | ||||
Restricted units | ||||||
Equity compensation | ||||||
Units granted (in units) | 3,881,203 | |||||
Distribution equivalents made to holders | $ 5.2 | |||||
Units | ||||||
Balance at the beginning of the period (in units or shares) | 16,255,475 | |||||
Granted (in units) | 3,881,203 | |||||
Vested (in units) | (3,534,621) | |||||
Forfeited (in units) | (216,662) | |||||
Balance at the end of the period (in units or shares) | 16,385,395 | 16,385,395 | ||||
Weighted Average Grant Date Fair Value | ||||||
Balance at the beginning of the period (in dollars per share) | $ 19.21 | |||||
Granted (in dollars per share) | 20.01 | |||||
Vested (in dollars per share) | 17.92 | |||||
Forfeited (in dollars per share) | 19.21 | |||||
Balance at the end of the period (in dollars per share) | $ 19.68 | $ 19.68 | ||||
Unrecognized compensation expenses | $ 229 | $ 229 | ||||
Weighted average period of compensation expense expected to be recognized | 3 years 29 days | |||||
Restricted units with a market condition | ||||||
Equity compensation | ||||||
Units granted (in units) | 0 | |||||
Units | ||||||
Balance at the beginning of the period (in units or shares) | 1,333,334 | |||||
Granted (in units) | 0 | |||||
Vested (in units) | 0 | |||||
Forfeited (in units) | 0 | |||||
Balance at the end of the period (in units or shares) | 1,333,334 | 1,333,334 | ||||
Weighted Average Grant Date Fair Value | ||||||
Balance at the beginning of the period (in dollars per share) | $ 9.30 | |||||
Granted (in dollars per share) | 0 | |||||
Vested (in dollars per share) | 0 | |||||
Forfeited (in dollars per share) | 0 | |||||
Balance at the end of the period (in dollars per share) | $ 9.30 | $ 9.30 | ||||
Unrecognized compensation expenses | $ 9.1 | $ 9.1 | ||||
Weighted average period of compensation expense expected to be recognized | 2 years 7 months 27 days | |||||
Third Anniversary of Grant Date | Restricted units | ||||||
Equity compensation | ||||||
Annual award vesting percentage | 33.33% | |||||
First Anniversary of Grant Date | Restricted units | ||||||
Equity compensation | ||||||
Annual award vesting percentage | 25.00% |
EQUITY COMPENSATION (Restrict_2
EQUITY COMPENSATION (Restricted Units Awards with a Market Condition) (Details) $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Weighted Average Grant Date Fair Value | |
Unrecognized compensation expenses | $ | $ 78.8 |
Restricted units with a market condition | |
Units | |
Balance at the beginning of the period (in units or shares) | shares | 1,333,334 |
Granted (in units) | shares | 0 |
Vested (in units) | shares | 0 |
Forfeited (in units) | shares | 0 |
Balance at the end of the period (in units or shares) | shares | 1,333,334 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 9.30 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 9.30 |
Unrecognized compensation expenses | $ | $ 9.1 |
Weighted average period of compensation expense expected to be recognized | 2 years 7 months 27 days |
EQUITY COMPENSATION (Options) (
EQUITY COMPENSATION (Options) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Options | ||
Exercised (in units) | (4,168,449) | |
Aggregate Intrinsic Value | ||
Unrecognized compensation expenses | $ 78,800 | |
Stock Options | ||
Options | ||
Balance at the beginning of the period (in units) | 18,741,504 | |
Exercised (in units) | (4,289,316) | |
Expired (in units) | (366,366) | |
Forfeited (in units) | (42,270) | |
Balance at the end of the period (in units) | 14,043,552 | 18,741,504 |
Exercisable at the end of the period (in units) | 13,933,735 | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period (in dollars per unit) | $ 18.99 | |
Exercised (in dollars per unit) | 19 | |
Expired (in dollars per unit) | 19 | |
Forfeited (in dollars per unit) | 19 | |
Balance at the end of the period (in dollars per unit) | 18.99 | $ 18.99 |
Exercisable at the end of the period (in dollars per unit) | $ 18.99 | |
Weighted Average Remaining Life | ||
Weighted average remaining life | 4 years 10 months 17 days | |
Expected to vest at the end of the period | 4 years 9 months | |
Exercisable at the end of the period | 4 years 8 months 26 days | |
Aggregate Intrinsic Value | ||
Beginning balance | $ 0 | |
Exercised | 0 | |
Ending balance | 100,858 | $ 0 |
Exercisable | 100,015 | |
Tax benefits of exercises | $ 3,300 |
EQUITY COMPENSATION (Phantom Sh
EQUITY COMPENSATION (Phantom Shares) (Details) $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Weighted Average Grant Date Fair Value | |
Unrecognized compensation expenses | $ | $ 78.8 |
Phantom Shares | |
Units | |
Balance at the beginning of the period (in units or shares) | shares | 66,287 |
Vested (in units) | shares | (61,502) |
Forfeited (in units) | shares | (4,785) |
Balance at the end of the period (in units or shares) | shares | 0 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 19 |
Vested (in dollars per share) | $ / shares | 19 |
Forfeited (in dollars per share) | $ / shares | 19 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 0 |
Settle vested phantom shares | $ | $ 1.5 |
EQUITY (Common Stock) (Details)
EQUITY (Common Stock) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Feb. 28, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | ||||
Repurchase program cost | $ 10,449,000 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Balance - January 1, 2019 | 101,595,096 | |||
Stock option exercises | 4,168,449 | |||
Repurchases of stock | (400,000) | |||
Vesting of restricted stock awards | 1,998,272 | |||
Balance outstanding - June 30, 2019 | 107,459,310 | 107,459,310 | ||
AOG | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG Units | 97,493 | |||
Class A common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares issued (in shares) | 107,458,309 | 107,458,309 | 101,594,095 | |
Authorized amount | $ 150,000,000 | |||
Repurchase program cost | $ 10,400,000 | |||
Remaining available for repurchases of common stock | $ 139,600,000 | $ 139,600,000 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Balance - January 1, 2019 | 101,594,095 | |||
Stock option exercises | 4,168,449 | |||
Repurchases of stock | (400,000) | (400,000) | ||
Vesting of restricted stock awards | 1,998,272 | |||
Balance outstanding - June 30, 2019 | 107,458,309 | 107,458,309 | ||
Class A common stock | AOG | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG Units | 97,493 | |||
Class B common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares issued (in shares) | 1,000 | 1,000 | 1,000 | |
Increase (Decrease) in Stockholders' Equity | ||||
Balance - January 1, 2019 | 1,000 | |||
Stock option exercises | 0 | |||
Repurchases of stock | 0 | |||
Vesting of restricted stock awards | 0 | |||
Balance outstanding - June 30, 2019 | 1,000 | 1,000 | ||
Class B common stock | AOG | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG Units | 0 | |||
Class C common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares issued (in shares) | 1 | 1 | 1 | |
Increase (Decrease) in Stockholders' Equity | ||||
Balance - January 1, 2019 | 1 | |||
Stock option exercises | 0 | |||
Repurchases of stock | 0 | |||
Vesting of restricted stock awards | 0 | |||
Balance outstanding - June 30, 2019 | 1 | 1 | ||
Class C common stock | AOG | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG Units | 0 |
EQUITY (Preferred Stock) (Detai
EQUITY (Preferred Stock) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2019 | |
Class of Stock [Line Items] | ||
Dividend rate, percentage | 7.00% | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Redemption price (in dollars per share) | $ 25 | |
Preferred Equity | ||
Class of Stock [Line Items] | ||
Partners' capital (in shares) | 12,400,000 | 12,400,000 |
EQUITY (Common Share Offering)
EQUITY (Common Share Offering) (Details) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||||
AOG Units (in units) | 224,166,158 | 224,166,158 | 218,613,369 | ||
Direct Ownership Interest | 100.00% | 100.00% | 100.00% | ||
Ares Owners Holdings, L.P. | |||||
Class of Stock [Line Items] | |||||
AOG Units (in units) | 116,707,849 | 116,707,849 | 117,019,274 | ||
Direct Ownership Interest | 52.06% | 52.06% | 53.53% | ||
Daily Average Ownership | 52.62% | 53.82% | 52.91% | 54.40% | |
Affiliate of Alleghany Corporation | |||||
Class of Stock [Line Items] | |||||
AOG Units (in units) | 0 | 0 | 0 | ||
Direct Ownership Interest | 0.00% | 0.00% | 0.00% | ||
Daily Average Ownership | 0.00% | 1.26% | 0.00% | 3.09% | |
AOG | |||||
Class of Stock [Line Items] | |||||
AOG Units (in units) | 107,458,309 | 107,458,309 | 101,594,095 | ||
Direct Ownership Interest | 47.94% | 47.94% | 46.47% | ||
Daily Average Ownership | 47.38% | 44.92% | 47.09% | 42.51% |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) $ in Billions | 6 Months Ended |
Jun. 30, 2019USD ($)segmentfund | |
Segment reporting | |
Number operating segments | segment | 3 |
Credit Group | Ares Management L.P | |
Segment reporting | |
Assets under management | $ | $ 105.5 |
Number of funds managed | 170 |
Private Equity | Ares Management L.P | |
Segment reporting | |
Assets under management | $ | $ 24.7 |
Number of private equity commingled funds focus North America and Europe | 5 |
Number of commingled funds | 5 |
Number of co-investment vehicles focused on U.S. energy and power assets | 6 |
Number of special situation funds | 3 |
Private Equity | Greater China | Ares Management L.P | |
Segment reporting | |
Number of commingled funds | 3 |
Real Estate | Ares Management L.P | |
Segment reporting | |
Assets under management | $ | $ 11.9 |
Number of funds managed | 45 |
SEGMENT REPORTING (Operating Se
SEGMENT REPORTING (Operating Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating segment | ||||
Segment reporting | ||||
Fee related earnings | $ 130,890 | $ 111,954 | $ 255,455 | $ 220,994 |
Performance income—realized | 35,994 | 122,608 | 104,567 | 145,715 |
Performance related compensation—realized | (25,229) | (87,881) | (74,446) | (102,750) |
Realized net investment income (loss) | 6,940 | 10,495 | 21,325 | 12,431 |
Realized income | (148,595) | (157,176) | (306,901) | (276,390) |
OMG | ||||
Segment reporting | ||||
Compensation and benefits | (33,994) | (30,680) | (66,655) | (60,872) |
General, administrative and other expenses | (19,874) | (19,236) | (40,506) | (37,627) |
Fee related earnings | (53,868) | (49,916) | (107,161) | (98,499) |
Performance income—realized | 0 | 0 | 0 | 0 |
Performance related compensation—realized | 0 | 0 | 0 | 0 |
Realized net performance income | 0 | 0 | 0 | 0 |
Investment income—realized | 0 | 798 | 0 | 1,636 |
Interest and other investment income (expense) —realized | (17) | 584 | (2) | 1,736 |
Interest expense | (399) | (588) | (795) | (1,136) |
Realized net investment income (loss) | (416) | 794 | (797) | 2,236 |
Realized income | (54,284) | (49,122) | (107,958) | (96,263) |
Total | ||||
Segment reporting | ||||
Compensation and benefits | (132,178) | (110,391) | (255,667) | (218,115) |
General, administrative and other expenses | (41,690) | (37,096) | (83,016) | (71,814) |
Fee related earnings | 77,022 | 62,038 | 148,294 | 122,495 |
Performance income—realized | 35,994 | 122,608 | 104,567 | 145,715 |
Performance related compensation—realized | (25,229) | (87,881) | (74,446) | (102,750) |
Realized net performance income | 10,765 | 34,727 | 30,121 | 42,965 |
Investment income—realized | 2,266 | 10,159 | 17,540 | 15,789 |
Interest and other investment income (expense) —realized | 10,051 | 7,206 | 14,370 | 11,823 |
Interest expense | (5,793) | (6,076) | (11,382) | (12,945) |
Realized net investment income (loss) | 6,524 | 11,289 | 20,528 | 14,667 |
Realized income | 94,311 | 108,054 | 198,943 | 180,127 |
Ares Management L.P | ||||
Segment reporting | ||||
Total revenues | 384,822 | 204,163 | 862,019 | 470,252 |
Compensation and benefits | (162,170) | (138,992) | (319,016) | (273,631) |
General, administrative and other expenses | (65,416) | (59,918) | (116,603) | (104,368) |
Ares Management L.P | Affiliated entity | ARCC | ||||
Segment reporting | ||||
Management fees, part I fees | 39,157 | 29,866 | 77,550 | 58,283 |
Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Compensation and benefits | (98,184) | (79,711) | (189,012) | (157,243) |
General, administrative and other expenses | (21,816) | (17,860) | (42,510) | (34,187) |
Fee related earnings | 130,890 | 111,954 | 255,455 | 220,994 |
Performance income—realized | 35,994 | 122,608 | 104,567 | 145,715 |
Performance related compensation—realized | (25,229) | (87,881) | (74,446) | (102,750) |
Realized net performance income | 10,765 | 34,727 | 30,121 | 42,965 |
Investment income—realized | 2,266 | 9,361 | 17,540 | 14,153 |
Interest and other investment income (expense) —realized | 10,068 | 6,622 | 14,372 | 10,087 |
Interest expense | (5,394) | (5,488) | (10,587) | (11,809) |
Realized net investment income (loss) | 6,940 | 10,495 | 21,325 | 12,431 |
Realized income | 148,595 | 157,176 | 306,901 | 276,390 |
Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Compensation and benefits | (64,965) | (52,271) | (125,313) | (102,965) |
General, administrative and other expenses | (13,381) | (11,294) | (26,886) | (21,148) |
Fee related earnings | 97,940 | 79,160 | 190,119 | 156,108 |
Performance income—realized | 15,959 | 41,672 | 37,884 | 46,743 |
Performance related compensation—realized | (9,564) | (23,577) | (22,227) | (26,665) |
Realized net performance income | 6,395 | 18,095 | 15,657 | 20,078 |
Investment income—realized | (310) | 595 | 548 | 1,366 |
Interest and other investment income (expense) —realized | 4,631 | 3,035 | 7,536 | 6,224 |
Interest expense | (1,908) | (3,596) | (3,807) | (8,269) |
Realized net investment income (loss) | 2,413 | 34 | 4,277 | (679) |
Realized income | 106,748 | 97,289 | 210,053 | 175,507 |
Ares Management L.P | Operating segment | Private Equity | ||||
Segment reporting | ||||
Compensation and benefits | (21,291) | (18,672) | (42,487) | (37,871) |
General, administrative and other expenses | (4,912) | (4,175) | (8,969) | (8,216) |
Fee related earnings | 25,959 | 26,808 | 52,102 | 53,795 |
Performance income—realized | 18,369 | 80,415 | 62,492 | 84,813 |
Performance related compensation—realized | (14,696) | (64,311) | (49,993) | (67,871) |
Realized net performance income | 3,673 | 16,104 | 12,499 | 16,942 |
Investment income—realized | 1,030 | 9,016 | 11,966 | 9,687 |
Interest and other investment income (expense) —realized | 3,318 | 2,920 | 3,612 | 2,979 |
Interest expense | (2,436) | (1,440) | (4,611) | (2,668) |
Realized net investment income (loss) | 1,912 | 10,496 | 10,967 | 9,998 |
Realized income | 31,544 | 53,408 | 75,568 | 80,735 |
Ares Management L.P | Operating segment | Real Estate | ||||
Segment reporting | ||||
Compensation and benefits | (11,928) | (8,768) | (21,212) | (16,407) |
General, administrative and other expenses | (3,523) | (2,391) | (6,655) | (4,823) |
Fee related earnings | 6,991 | 5,986 | 13,234 | 11,091 |
Performance income—realized | 1,666 | 521 | 4,191 | 14,159 |
Performance related compensation—realized | (969) | 7 | (2,226) | (8,214) |
Realized net performance income | 697 | 528 | 1,965 | 5,945 |
Investment income—realized | 1,546 | (250) | 5,026 | 3,100 |
Interest and other investment income (expense) —realized | 2,119 | 667 | 3,224 | 884 |
Interest expense | (1,050) | (452) | (2,169) | (872) |
Realized net investment income (loss) | 2,615 | (35) | 6,081 | 3,112 |
Realized income | 10,303 | 6,479 | 21,280 | 20,148 |
Management fees | OMG | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Management fees | Total | ||||
Segment reporting | ||||
Total revenues | 246,279 | 202,304 | 479,291 | 399,130 |
Management fees | Ares Management L.P | ||||
Segment reporting | ||||
Total revenues | 237,846 | 194,032 | 462,505 | 383,547 |
Management fees | Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Total revenues | 246,279 | 202,304 | 479,291 | 399,130 |
Management fees | Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Total revenues | 172,347 | 135,848 | 335,313 | 267,614 |
Management fees | Ares Management L.P | Operating segment | Private Equity | ||||
Segment reporting | ||||
Total revenues | 52,162 | 49,318 | 103,558 | 99,205 |
Management fees | Ares Management L.P | Operating segment | Real Estate | ||||
Segment reporting | ||||
Total revenues | 21,770 | 17,138 | 40,420 | 32,311 |
Other fees | OMG | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other fees | Total | ||||
Segment reporting | ||||
Total revenues | 4,611 | 7,221 | 7,686 | 13,294 |
Other fees | Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Total revenues | 4,611 | 7,221 | 7,686 | 13,294 |
Other fees | Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Total revenues | 3,939 | 6,877 | 7,005 | 12,607 |
Other fees | Ares Management L.P | Operating segment | Private Equity | ||||
Segment reporting | ||||
Total revenues | 0 | 337 | 0 | 677 |
Other fees | Ares Management L.P | Operating segment | Real Estate | ||||
Segment reporting | ||||
Total revenues | $ 672 | $ 7 | $ 681 | $ 10 |
SEGMENT REPORTING (Revenue, Exp
SEGMENT REPORTING (Revenue, Expenses and Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment revenues | ||||
Total segment revenues | $ 286,884 | $ 332,133 | $ 591,544 | $ 558,139 |
Segment expenses | ||||
Total expenses | 335,701 | 221,017 | 704,808 | 427,300 |
Segment other income | ||||
Total other income | 35,262 | 67,926 | 63,132 | 70,166 |
Operating segment | ||||
Segment revenues | ||||
Performance income—realized | 35,994 | 122,608 | 104,567 | 145,715 |
Segment expenses | ||||
Total performance related compensation - realized | 25,229 | 87,881 | 74,446 | 102,750 |
Ares Management L.P | ||||
Segment revenues | ||||
Total revenues | 384,822 | 204,163 | 862,019 | 470,252 |
Segment expenses | ||||
Compensation and benefits | 162,170 | 138,992 | 319,016 | 273,631 |
General, administrative and other expenses | 65,416 | 59,918 | 116,603 | 104,368 |
Ares Management L.P | Management fees | ||||
Segment revenues | ||||
Total revenues | 237,846 | 194,032 | 462,505 | 383,547 |
Ares Management L.P | Operating segment | ||||
Segment revenues | ||||
Performance income—realized | 35,994 | 122,608 | 104,567 | 145,715 |
Total segment revenues | 286,884 | 332,133 | 591,544 | 558,139 |
Segment expenses | ||||
Compensation and benefits | 98,184 | 79,711 | 189,012 | 157,243 |
General, administrative and other expenses | 21,816 | 17,860 | 42,510 | 34,187 |
Total performance related compensation - realized | 25,229 | 87,881 | 74,446 | 102,750 |
Total expenses | 145,229 | 185,452 | 305,968 | 294,180 |
Segment other income | ||||
Investment income—realized | 2,266 | 9,361 | 17,540 | 14,153 |
Interest and other investment income—realized | 10,068 | 6,622 | 14,372 | 10,087 |
Interest expense | (5,394) | (5,488) | (10,587) | (11,809) |
Total other income | 6,940 | 10,495 | 21,325 | 12,431 |
Ares Management L.P | Operating segment | Management fees | ||||
Segment revenues | ||||
Total revenues | 246,279 | 202,304 | 479,291 | 399,130 |
Ares Management L.P | Operating segment | Other fees | ||||
Segment revenues | ||||
Total revenues | $ 4,611 | $ 7,221 | $ 7,686 | $ 13,294 |
SEGMENT REPORTING (Revenue Reco
SEGMENT REPORTING (Revenue Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue adjustment | ||||
Total segment revenue | $ 286,884 | $ 332,133 | $ 591,544 | $ 558,139 |
Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 384,822 | 204,163 | 862,019 | 470,252 |
Operating segment | Ares Management L.P | ||||
Revenue adjustment | ||||
Performance income-unrealized | (98,662) | 124,343 | (245,237) | 89,225 |
Total segment revenue | 286,884 | 332,133 | 591,544 | 558,139 |
Reconciling items | ||||
Revenue adjustment | ||||
Principal investment income | (1,579) | (14,722) | (31,471) | (17,430) |
Total segment revenue | (97,938) | 127,970 | (270,475) | 87,887 |
Reconciling items | Non-Controlling interest | Subsidiaries | ||||
Revenue adjustment | ||||
Total segment revenue | (289) | 27 | (343) | 47 |
Reconciling items | Performance income reclass | ||||
Revenue adjustment | ||||
Performance fee reclass | (26) | (31) | 580 | (1,006) |
Management fees | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 237,846 | 194,032 | 462,505 | 383,547 |
Management fees | Operating segment | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 246,279 | 202,304 | 479,291 | 399,130 |
Management fees | Consolidated Funds | Eliminations | ||||
Revenue adjustment | ||||
Total segment revenue | 8,735 | 8,272 | 17,148 | 15,583 |
Incentive fees | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 10,220 | 7,740 | 27,035 | 12,811 |
Incentive fees | Consolidated Funds | Eliminations | ||||
Revenue adjustment | ||||
Total revenues | 4,750 | 4,000 | 5,184 | 4,000 |
Principal investment income | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 5,844 | 1,871 | 34,603 | 6,780 |
Principal investment income | Consolidated Funds | Eliminations | ||||
Revenue adjustment | ||||
Total revenues | (4,265) | 12,851 | (3,132) | 10,650 |
Administrative, transaction and other fees | ||||
Revenue adjustment | ||||
Total revenues | 0 | 0 | 0 | 0 |
Administrative, transaction and other fees | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 11,200 | 13,964 | 20,871 | 26,429 |
Administrative, transaction and other fees | Reconciling items | ||||
Revenue adjustment | ||||
Total revenues | $ (6,602) | $ (6,770) | $ (13,204) | $ (13,182) |
SEGMENT REPORTING (Expenses) (D
SEGMENT REPORTING (Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Expenses | $ 335,701 | $ 221,017 | $ 704,808 | $ 427,300 | |||||
Equity compensation expense | 24,029 | 22,507 | 51,581 | 43,594 | |||||
Depreciation and amortization expense | 2,400 | 6,600 | |||||||
Ares Management L.P | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Due to affiliates | 65,527 | 65,527 | $ 82,411 | ||||||
Ares Management L.P | Affiliated entity | Rent and other occupancy expenses | ARCC | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Due to affiliates | 11,800 | 600 | 11,800 | 600 | 11,800 | $ 2,200 | $ 3,000 | $ 3,200 | $ 2,900 |
Consolidated Funds | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Due to affiliates | 0 | 0 | $ 0 | ||||||
Operating segment | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Acquisition and merger-related expense | 4,207 | 47 | 5,980 | (272) | |||||
Equity compensation expense | 24,029 | 22,507 | 51,581 | 43,594 | |||||
Unamortized placement fees | 12,432 | 1,852 | 12,953 | 3,516 | |||||
Depreciation and amortization expense | 5,221 | 7,711 | 11,045 | 14,887 | |||||
Operating segment | Ares Management L.P | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Expenses | 145,229 | 185,452 | 305,968 | 294,180 | |||||
Performance related compensation-unrealized | (67,459) | 100,886 | (174,762) | 89,877 | |||||
Operating segment | Consolidated Funds | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Expenses | 335,701 | 221,017 | 704,808 | 427,300 | |||||
Reconciling items | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Expenses | (190,472) | (35,565) | (398,840) | (133,120) | |||||
Administrative fees | (6,602) | (6,770) | (13,204) | (13,182) | |||||
Acquisition and merger-related expense | (4,207) | (47) | (5,980) | 272 | |||||
Equity compensation expense | (24,029) | (22,507) | (51,581) | (43,594) | |||||
Unamortized placement fees | (12,432) | (1,852) | (12,953) | (3,516) | |||||
Depreciation and amortization expense | (5,221) | (7,711) | (11,045) | (14,887) | |||||
Other expenses | 0 | (11,836) | 0 | (11,836) | |||||
Reconciling items | Non-Controlling interest | Subsidiaries | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Expenses | (1,227) | (700) | (2,173) | (1,327) | |||||
Reconciling items | Consolidated Funds | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Expenses of Consolidated Funds added in consolidation | (28,912) | (47,382) | (42,313) | (56,011) | |||||
Expenses of Consolidated Funds eliminated in consolidation | 13,485 | 12,270 | 22,332 | 19,583 | |||||
OMG | |||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||
Expenses | $ 53,868 | $ 49,916 | $ 107,161 | $ 98,499 |
SEGMENT REPORTING (Other Income
SEGMENT REPORTING (Other Income (Expense)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total segment realized net investment income | $ 35,262 | $ 67,926 | $ 63,132 | $ 70,166 |
Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Other (income) expense from Consolidated Funds eliminated in consolidation, net | 4,797 | (1,987) | 300 | (2,298) |
Operating segment | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Investment (income) loss - unrealized | (2,990) | 9 | 8,215 | (5,565) |
Other expense, net | (2) | (13,554) | (1) | (13,561) |
Operating segment | Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total segment realized net investment income | 6,940 | 10,495 | 21,325 | 12,431 |
Investment (income) loss - unrealized | 7,618 | (1,382) | (8,565) | 4,269 |
Interest and other investment (income) loss - unrealized | (4,628) | 1,373 | 350 | 1,296 |
Operating segment | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total segment realized net investment income | 35,262 | 67,926 | 63,132 | 70,166 |
Reconciling items | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total segment realized net investment income | (28,322) | (57,431) | (41,807) | (57,735) |
Principal investment income | (1,579) | (14,722) | (31,471) | (17,430) |
Other expense, net | 2 | 1,718 | 1 | 1,725 |
Reconciling items | Subsidiaries | Non-Controlling interest | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total segment realized net investment income | (5) | (8) | (21) | (15) |
Reconciling items | Performance income reclass | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Performance fee reclass | 26 | 31 | (580) | 1,006 |
Reconciling items | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Other expense from Consolidated Funds added in consolidation, net | (33,008) | (69,193) | (64,215) | (76,445) |
Eliminations | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Other (income) expense from Consolidated Funds eliminated in consolidation, net | 282 | (993) | (90) | (534) |
OMG | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total segment realized net investment income | $ (188) | $ (3,699) | $ (158) | $ (6,467) |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation of Income Before Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Economic net income | |||||||||
Income before taxes | $ 84,383 | $ 51,072 | $ 220,343 | $ 113,118 | |||||
Adjustments: | |||||||||
Depreciation and amortization expense | 2,400 | 6,600 | |||||||
Equity compensation expense | 24,029 | 22,507 | 51,581 | 43,594 | |||||
Consolidated Funds | |||||||||
Adjustments: | |||||||||
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 8,346 | 9,882 | 25,970 | 10,249 | |||||
Total investment income - realized | (102,206) | (92,633) | (195,390) | (157,055) | |||||
Due to affiliates | 0 | 0 | $ 0 | ||||||
Operating segment | |||||||||
Economic net income | |||||||||
Income before taxes | 84,383 | 51,072 | 220,343 | 113,118 | |||||
Adjustments: | |||||||||
Depreciation and amortization expense | 5,221 | 7,711 | 11,045 | 14,887 | |||||
Equity compensation expense | 24,029 | 22,507 | 51,581 | 43,594 | |||||
Acquisition and merger-related expense | 4,207 | 47 | 5,980 | (272) | |||||
Unamortized placement fees | 12,432 | 1,852 | 12,953 | 3,516 | |||||
Other expense | 2 | 13,554 | 1 | 13,561 | |||||
Total performance income - unrealized | (98,662) | 124,343 | (245,237) | 89,225 | |||||
Total performance related compensation - unrealized | 67,459 | (100,886) | 174,762 | (89,877) | |||||
Total investment (income) loss - unrealized | 2,990 | (9) | (8,215) | 5,565 | |||||
Realized income | 148,595 | 157,176 | 306,901 | 276,390 | |||||
Total performance income - realized | (35,994) | (122,608) | (104,567) | (145,715) | |||||
Total performance related compensation - realized | 25,229 | 87,881 | 74,446 | 102,750 | |||||
Total investment income - realized | (6,940) | (10,495) | (21,325) | (12,431) | |||||
Fee related earnings | 130,890 | 111,954 | 255,455 | 220,994 | |||||
Operating segment | Consolidated Funds | |||||||||
Adjustments: | |||||||||
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (8,079) | (9,951) | (25,124) | (10,318) | |||||
OMG | |||||||||
Adjustments: | |||||||||
OMG expense, net | 53,680 | 46,217 | 107,003 | 92,032 | |||||
Realized income | 54,284 | 49,122 | 107,958 | 96,263 | |||||
Total performance income - realized | 0 | 0 | 0 | 0 | |||||
Total performance related compensation - realized | 0 | 0 | 0 | 0 | |||||
Total investment income - realized | 416 | (794) | 797 | (2,236) | |||||
Fee related earnings | (53,868) | (49,916) | (107,161) | (98,499) | |||||
Subsidiaries | Operating segment | |||||||||
Adjustments: | |||||||||
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 933 | 719 | 1,809 | 1,359 | |||||
Ares Management L.P | |||||||||
Adjustments: | |||||||||
Due to affiliates | 65,527 | 65,527 | 82,411 | ||||||
Ares Management L.P | Rent and other occupancy expenses | Affiliated entity | ARCC | |||||||||
Adjustments: | |||||||||
Due to affiliates | 11,800 | 600 | 11,800 | 600 | $ 11,800 | $ 2,200 | $ 3,000 | $ 3,200 | $ 2,900 |
Ares Management L.P | Operating segment | |||||||||
Adjustments: | |||||||||
Total investment (income) loss - unrealized | (7,618) | 1,382 | 8,565 | (4,269) | |||||
Realized income | (148,595) | (157,176) | (306,901) | (276,390) | |||||
Total performance income - realized | (35,994) | (122,608) | (104,567) | (145,715) | |||||
Total performance related compensation - realized | 25,229 | 87,881 | 74,446 | 102,750 | |||||
Total investment income - realized | (6,940) | (10,495) | (21,325) | (12,431) | |||||
Fee related earnings | $ 130,890 | $ 111,954 | $ 255,455 | $ 220,994 |
CONSOLIDATION (Variable Interes
CONSOLIDATION (Variable Interest Entities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | |||||
Assets of consolidated VIEs | $ 10,979,749 | $ 10,979,749 | $ 10,154,692 | ||
Liabilities of consolidated VIEs | 9,377,425 | 9,377,425 | 8,760,351 | ||
Consolidated Funds | |||||
Variable Interest Entity [Line Items] | |||||
Net income attributable to non-controlling interests related to consolidated VIEs | 8,346 | $ 9,882 | 25,970 | $ 10,249 | |
Non-Consolidated Variable Interest Entities | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss attributable to the Company's investment in VIEs | 224,154 | 224,154 | 222,477 | ||
Consolidated VIEs | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss attributable to the Company's investment in VIEs | 197,296 | 197,296 | 186,455 | ||
Consolidated VIEs | Consolidated Funds | |||||
Variable Interest Entity [Line Items] | |||||
Assets of consolidated VIEs | 8,421,736 | 8,421,736 | 8,141,280 | ||
Liabilities of consolidated VIEs | $ 7,634,429 | $ 7,634,429 | $ 7,479,383 |
CONSOLIDATION (Balance Sheet) (
CONSOLIDATION (Balance Sheet) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | |||||||
Total assets | $ 10,979,749 | $ 10,154,692 | |||||
Liabilities | |||||||
Right-of-use operating lease liabilities | 179,192 | ||||||
Total liabilities | 9,377,425 | 8,760,351 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at June 30, 2019 and December 31, 2018) | 298,761 | 298,761 | |||||
Additional paid-in-capital | 379,789 | 326,007 | |||||
Retained earnings | (35,247) | (29,336) | |||||
Accumulated other comprehensive loss, net of tax | (8,879) | (8,524) | |||||
Total stockholders' equity | 635,499 | 587,924 | |||||
Total equity | 1,602,324 | $ 1,479,824 | 1,394,341 | $ 1,491,319 | $ 1,535,249 | $ 1,565,195 | $ 1,460,292 |
Total liabilities, non-controlling interests and equity | $ 10,979,749 | $ 10,154,692 | |||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Preferred stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |||||
Preferred stock, shares issued (in shares) | 12,400,000 | 12,400,000 | |||||
Preferred stock, shares outstanding (in shares) | 12,400,000 | 12,400,000 | |||||
Common stock, shares outstanding (in shares) | 107,459,310 | 101,595,096 | |||||
Class A common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | $ 1,075 | $ 1,016 | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 | |||||
Common stock, shares issued (in shares) | 107,458,309 | 101,594,095 | |||||
Common stock, shares outstanding (in shares) | 107,458,309 | 101,594,095 | |||||
Class B common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | $ 0 | $ 0 | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized (in shares) | 1,000 | 1,000 | |||||
Common stock, shares issued (in shares) | 1,000 | 1,000 | |||||
Common stock, shares outstanding (in shares) | 1,000 | 1,000 | |||||
Class C common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | $ 0 | $ 0 | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized (in shares) | 499,999,000 | 499,999,000 | |||||
Common stock, shares issued (in shares) | 1 | 1 | |||||
Common stock, shares outstanding (in shares) | 1 | 1 | |||||
Reportable legal entity | |||||||
Liabilities | |||||||
Right-of-use operating lease liabilities | $ 179,192 | ||||||
Stockholders' Equity | |||||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at June 30, 2019 and December 31, 2018) | 298,761 | $ 298,761 | |||||
Eliminations | |||||||
Assets | |||||||
Total assets | (205,730) | (195,002) | |||||
Liabilities | |||||||
Total liabilities | (32,366) | (36,742) | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at June 30, 2019 and December 31, 2018) | 0 | 0 | |||||
Total equity | (173,364) | (158,260) | |||||
Total liabilities, non-controlling interests and equity | (205,730) | (195,002) | |||||
Consolidated Funds | |||||||
Assets | |||||||
Cash and cash equivalents | 376,328 | 384,644 | |||||
Investments, at fair value | 7,926,615 | 7,673,165 | |||||
Due from affiliates | 15,888 | 17,609 | |||||
Other assets | 25,912 | 23,786 | |||||
Receivable for securities sold | 76,993 | 42,076 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 75,647 | 83,876 | |||||
Due to affiliates | 0 | 0 | |||||
Payable for securities purchased | 369,465 | 471,390 | |||||
CLO loan obligations, at fair value | 7,030,841 | 6,678,091 | |||||
Fund borrowings | 126,110 | 209,284 | |||||
Non-controlling interest in Consolidated Funds | 613,943 | 503,637 | |||||
Consolidated Funds | Reportable legal entity | |||||||
Assets | |||||||
Cash and cash equivalents | 376,328 | 384,644 | |||||
Investments, at fair value | 7,926,615 | 7,673,165 | |||||
Due from affiliates | 15,888 | 17,609 | |||||
Other assets | 25,912 | 23,786 | |||||
Receivable for securities sold | 76,993 | 42,076 | |||||
Total assets | 8,421,736 | 8,141,280 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 75,647 | 83,876 | |||||
Due to affiliates | 8,434 | 8,547 | |||||
Payable for securities purchased | 369,465 | 471,390 | |||||
CLO loan obligations, at fair value | 7,054,773 | 6,706,286 | |||||
Fund borrowings | 126,110 | 209,284 | |||||
Total liabilities | 7,634,429 | 7,479,383 | |||||
Commitments and contingencies | |||||||
Non-controlling interest in Consolidated Funds | 787,307 | 661,897 | |||||
Stockholders' Equity | |||||||
Total equity | 787,307 | 661,897 | |||||
Total liabilities, non-controlling interests and equity | 8,421,736 | 8,141,280 | |||||
Consolidated Funds | Eliminations | |||||||
Assets | |||||||
Cash and cash equivalents | 0 | 0 | |||||
Investments, at fair value | 0 | 0 | |||||
Due from affiliates | 0 | 0 | |||||
Other assets | 0 | 0 | |||||
Receivable for securities sold | 0 | 0 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 0 | 0 | |||||
Due to affiliates | (8,434) | (8,547) | |||||
Payable for securities purchased | 0 | 0 | |||||
CLO loan obligations, at fair value | (23,932) | (28,195) | |||||
Fund borrowings | 0 | 0 | |||||
Non-controlling interest in Consolidated Funds | (173,364) | (158,260) | |||||
AOG | |||||||
Liabilities | |||||||
Non-controlling interest in Ares Operating Group entities | 352,882 | 302,780 | |||||
AOG | Reportable legal entity | |||||||
Liabilities | |||||||
Non-controlling interest in Ares Operating Group entities | 352,882 | 302,780 | |||||
AOG | Eliminations | |||||||
Liabilities | |||||||
Non-controlling interest in Ares Operating Group entities | 0 | 0 | |||||
Ares Management L.P | |||||||
Assets | |||||||
Cash and cash equivalents | 247,220 | 110,247 | $ 125,448 | $ 118,929 | |||
Investments, at fair value | 1,566,042 | 1,326,137 | |||||
Due from affiliates | 234,081 | 199,377 | |||||
Other assets | 358,091 | 377,651 | |||||
Right-of-use operating lease assets | 152,579 | 0 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 76,838 | 83,221 | |||||
Accrued compensation | 114,936 | 29,389 | |||||
Due to affiliates | 65,527 | 82,411 | |||||
Performance related compensation payable | 772,592 | 641,737 | |||||
Debt obligations | 566,277 | 480,952 | |||||
Right-of-use operating lease liabilities | 179,192 | 0 | |||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 379,789 | 326,007 | |||||
Retained earnings | (35,247) | (29,336) | |||||
Accumulated other comprehensive loss, net of tax | (8,879) | (8,524) | |||||
Total stockholders' equity | 635,499 | 587,924 | |||||
Ares Management L.P | Class A common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 1,075 | 1,016 | |||||
Ares Management L.P | Class B common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 0 | 0 | |||||
Ares Management L.P | Class C common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 0 | 0 | |||||
Ares Management L.P | Accrued Interest | |||||||
Assets | |||||||
Investments, at fair value | 1,071,954 | 841,079 | |||||
Ares Management L.P | Reportable legal entity | |||||||
Assets | |||||||
Cash and cash equivalents | 247,220 | 110,247 | |||||
Investments, at fair value | 1,763,338 | 1,512,592 | |||||
Due from affiliates | 242,515 | 207,924 | |||||
Other assets | 358,091 | 377,651 | |||||
Right-of-use operating lease assets | 152,579 | ||||||
Total assets | 2,763,743 | 2,208,414 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 76,838 | 83,221 | |||||
Accrued compensation | 114,936 | 29,389 | |||||
Due to affiliates | 65,527 | 82,411 | |||||
Performance related compensation payable | 772,592 | 641,737 | |||||
Debt obligations | 566,277 | 480,952 | |||||
Total liabilities | 1,775,362 | 1,317,710 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 379,789 | 326,007 | |||||
Retained earnings | (35,247) | (29,336) | |||||
Accumulated other comprehensive loss, net of tax | (8,879) | (8,524) | |||||
Total stockholders' equity | 635,499 | 587,924 | |||||
Total equity | 988,381 | 890,704 | |||||
Total liabilities, non-controlling interests and equity | 2,763,743 | 2,208,414 | |||||
Ares Management L.P | Reportable legal entity | Class A common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 1,075 | 1,016 | |||||
Ares Management L.P | Reportable legal entity | Class B common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 0 | ||||||
Ares Management L.P | Reportable legal entity | Class C common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | 0 | ||||||
Ares Management L.P | Eliminations | |||||||
Assets | |||||||
Cash and cash equivalents | 0 | 0 | |||||
Investments, at fair value | (197,296) | (186,455) | |||||
Due from affiliates | (8,434) | (8,547) | |||||
Other assets | 0 | 0 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 0 | 0 | |||||
Accrued compensation | 0 | 0 | |||||
Due to affiliates | 0 | 0 | |||||
Performance related compensation payable | 0 | 0 | |||||
Debt obligations | 0 | 0 | |||||
Stockholders' Equity | |||||||
Accumulated other comprehensive loss, net of tax | 0 | 0 | |||||
Total stockholders' equity | 0 | 0 | |||||
Ares Management L.P | Eliminations | Class A common stock | |||||||
Stockholders' Equity | |||||||
Class common stock | $ 0 | $ 0 |
CONSOLIDATION (Income Statement
CONSOLIDATION (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Expenses | ||||||||
Total expenses | $ 335,701 | $ 221,017 | $ 704,808 | $ 427,300 | ||||
Other income (expense) | ||||||||
Total other income | 35,262 | 67,926 | 63,132 | 70,166 | ||||
Income before taxes | 84,383 | 51,072 | 220,343 | 113,118 | ||||
Income tax expense (benefit) | 9,505 | 36,903 | 23,889 | 24,528 | ||||
Net income | 74,878 | $ 121,576 | $ 16,337 | $ 47,212 | 14,169 | $ 74,421 | 196,454 | 88,590 |
Net income (loss) attributable to Ares Management Corporation | 32,139 | (11,775) | 77,088 | 29,173 | ||||
Less: Series A Preferred Stock dividends paid | 5,425 | 5,425 | 10,850 | 10,850 | ||||
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | 26,714 | (17,200) | 66,238 | 18,323 | ||||
Eliminations | ||||||||
Revenues | ||||||||
Total revenues | (9,220) | (25,123) | (19,200) | (30,233) | ||||
Expenses | ||||||||
Compensation and benefits | 0 | 0 | 0 | 0 | ||||
Performance related compensation | 0 | 0 | 0 | 0 | ||||
General, administrative and other expenses | 0 | 0 | 0 | 0 | ||||
Total expenses | (13,485) | (12,270) | (22,332) | (19,583) | ||||
Other income (expense) | ||||||||
Net realized and unrealized gain on investments | (406) | (1,171) | (1,354) | (832) | ||||
Interest and dividend income | (672) | 0 | (1,152) | 0 | ||||
Interest expense | 0 | |||||||
Other income (expense), net | (281) | 991 | 90 | 533 | ||||
Total other income | (282) | 993 | 90 | 534 | ||||
Income before taxes | 3,983 | (11,860) | 3,222 | (10,116) | ||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||
Net income | 3,983 | (11,860) | 3,222 | (10,116) | ||||
Net income (loss) attributable to Ares Management Corporation | 0 | |||||||
Less: Series A Preferred Stock dividends paid | 0 | 0 | 0 | 0 | ||||
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | 0 | 0 | 0 | 0 | ||||
Consolidated Funds | ||||||||
Expenses | ||||||||
Expenses of Consolidated Funds | 15,427 | 35,112 | 19,981 | 36,428 | ||||
Other income (expense) | ||||||||
Net realized and unrealized gain on investments | (116) | 34,487 | 4,248 | 21,402 | ||||
Interest expense | (68,005) | (56,754) | (132,917) | (101,179) | ||||
Interest and other income of Consolidated Funds | 102,206 | 92,633 | 195,390 | 157,055 | ||||
Net income attributable to non-controlling interests related to consolidated VIEs | 8,346 | 9,882 | 25,970 | 10,249 | ||||
Consolidated Funds | Reportable legal entity | ||||||||
Expenses | ||||||||
Expenses of Consolidated Funds | 28,912 | 47,382 | 42,313 | 56,011 | ||||
Total expenses | 28,912 | 47,382 | 42,313 | 56,011 | ||||
Other income (expense) | ||||||||
Net realized and unrealized gain on investments | (486) | 33,819 | 3,262 | 21,367 | ||||
Interest expense | (68,712) | (57,259) | (134,437) | (101,977) | ||||
Interest and other income of Consolidated Funds | 102,206 | 92,633 | 195,390 | 157,055 | ||||
Total other income | 33,008 | 69,193 | 64,215 | 76,445 | ||||
Income before taxes | 4,096 | 21,811 | 21,902 | 20,434 | ||||
Income tax expense (benefit) | (267) | 69 | (846) | 69 | ||||
Net income | 4,363 | 21,742 | 22,748 | 20,365 | ||||
Net income attributable to non-controlling interests related to consolidated VIEs | 4,363 | 21,742 | 22,748 | 20,365 | ||||
Consolidated Funds | Eliminations | ||||||||
Expenses | ||||||||
Expenses of Consolidated Funds | (13,485) | (12,270) | (22,332) | (19,583) | ||||
Other income (expense) | ||||||||
Net realized and unrealized gain on investments | 370 | 668 | 986 | 35 | ||||
Interest expense | 707 | 505 | 1,520 | 798 | ||||
Interest and other income of Consolidated Funds | 0 | 0 | 0 | 0 | ||||
Net income attributable to non-controlling interests related to consolidated VIEs | 3,983 | (11,860) | 3,222 | (10,116) | ||||
AOG | ||||||||
Other income (expense) | ||||||||
Net income attributable to non-controlling interests related to consolidated VIEs | 34,393 | 16,062 | 93,396 | 49,168 | ||||
AOG | Reportable legal entity | ||||||||
Other income (expense) | ||||||||
Net income attributable to non-controlling interests related to consolidated VIEs | 34,393 | 16,062 | 93,396 | 49,168 | ||||
AOG | Eliminations | ||||||||
Other income (expense) | ||||||||
Net income attributable to non-controlling interests related to consolidated VIEs | 0 | 0 | 0 | 0 | ||||
Ares Management L.P | ||||||||
Revenues | ||||||||
Total revenues | 384,822 | 204,163 | 862,019 | 470,252 | ||||
Expenses | ||||||||
Compensation and benefits | 162,170 | 138,992 | 319,016 | 273,631 | ||||
Performance related compensation | 92,688 | (13,005) | 249,208 | 12,873 | ||||
General, administrative and other expenses | 65,416 | 59,918 | 116,603 | 104,368 | ||||
Other income (expense) | ||||||||
Net realized and unrealized gain on investments | 521 | 3,267 | 3,997 | 2,428 | ||||
Interest and dividend income | 1,652 | 2,356 | 3,496 | 5,703 | ||||
Interest expense | (5,793) | (6,076) | (11,382) | (12,945) | ||||
Other income (expense), net | 4,797 | (1,987) | 300 | (2,298) | ||||
Ares Management L.P | Affiliated entity | ARCC | ||||||||
Other income (expense) | ||||||||
Management fees, part I fees | 39,157 | 29,866 | 77,550 | 58,283 | ||||
Ares Management L.P | Reportable legal entity | ||||||||
Revenues | ||||||||
Total revenues | 394,042 | 229,286 | 881,219 | 500,485 | ||||
Expenses | ||||||||
Compensation and benefits | 162,170 | 138,992 | 319,016 | 273,631 | ||||
Performance related compensation | 92,688 | (13,005) | 249,208 | 12,873 | ||||
General, administrative and other expenses | 65,416 | 59,918 | 116,603 | 104,368 | ||||
Total expenses | 320,274 | 185,905 | 684,827 | 390,872 | ||||
Other income (expense) | ||||||||
Net realized and unrealized gain on investments | 927 | 4,438 | 5,351 | 3,260 | ||||
Interest and dividend income | 2,324 | 2,356 | 4,648 | 5,703 | ||||
Interest expense | (5,793) | (6,076) | (11,382) | (12,945) | ||||
Other income (expense), net | 5,078 | (2,978) | 210 | (2,831) | ||||
Total other income | 2,536 | (2,260) | (1,173) | (6,813) | ||||
Income before taxes | 76,304 | 41,121 | 195,219 | 102,800 | ||||
Income tax expense (benefit) | 9,772 | 36,834 | 24,735 | 24,459 | ||||
Net income | 66,532 | 4,287 | 170,484 | 78,341 | ||||
Net income (loss) attributable to Ares Management Corporation | 32,139 | (11,775) | 77,088 | 29,173 | ||||
Less: Series A Preferred Stock dividends paid | 5,425 | 5,425 | 10,850 | 10,850 | ||||
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | 26,714 | (17,200) | 66,238 | 18,323 | ||||
Management fees | Eliminations | ||||||||
Revenues | ||||||||
Total revenues | (8,735) | (8,272) | (17,148) | (15,583) | ||||
Management fees | Ares Management L.P | ||||||||
Revenues | ||||||||
Total revenues | 237,846 | 194,032 | 462,505 | 383,547 | ||||
Management fees | Ares Management L.P | Reportable legal entity | ||||||||
Revenues | ||||||||
Total revenues | 246,581 | 202,304 | 479,653 | 399,130 | ||||
Carried interest allocation | ||||||||
Revenues | ||||||||
Total revenues | 317,005 | |||||||
Carried interest allocation | Eliminations | ||||||||
Revenues | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Carried interest allocation | Ares Management L.P | ||||||||
Revenues | ||||||||
Total revenues | 119,712 | (13,444) | 317,005 | 40,685 | ||||
Carried interest allocation | Ares Management L.P | Reportable legal entity | ||||||||
Revenues | ||||||||
Total revenues | 119,712 | (13,444) | 317,005 | 40,685 | ||||
Incentive fees | Eliminations | ||||||||
Revenues | ||||||||
Total revenues | (4,750) | (4,000) | (5,184) | (4,000) | ||||
Incentive fees | Ares Management L.P | ||||||||
Revenues | ||||||||
Total revenues | 10,220 | 7,740 | 27,035 | 12,811 | ||||
Incentive fees | Ares Management L.P | Reportable legal entity | ||||||||
Revenues | ||||||||
Total revenues | 14,970 | 11,740 | 32,219 | 16,811 | ||||
Principal investment income | Eliminations | ||||||||
Revenues | ||||||||
Total revenues | 4,265 | (12,851) | 3,132 | (10,650) | ||||
Principal investment income | Ares Management L.P | ||||||||
Revenues | ||||||||
Total revenues | 5,844 | 1,871 | 34,603 | 6,780 | ||||
Principal investment income | Ares Management L.P | Reportable legal entity | ||||||||
Revenues | ||||||||
Total revenues | 1,579 | 14,722 | 31,471 | 17,430 | ||||
Administrative, transaction and other fees | ||||||||
Revenues | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Administrative, transaction and other fees | Eliminations | ||||||||
Revenues | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Administrative, transaction and other fees | Ares Management L.P | ||||||||
Revenues | ||||||||
Total revenues | 11,200 | 13,964 | 20,871 | 26,429 | ||||
Administrative, transaction and other fees | Ares Management L.P | Reportable legal entity | ||||||||
Revenues | ||||||||
Total revenues | $ 11,200 | $ 13,964 | $ 20,871 | $ 26,429 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event | 1 Months Ended |
Jul. 31, 2019$ / shares | |
Subsequent events | |
Quarterly distribution declared (in dollars per unit) | $ 0.32 |
Preferred equity quarterly distribution (in dollars per unit) | $ 0.4375 |
Uncategorized Items - aresmanag
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (22,611,000) |
Noncontrolling Interest [Member] | Consolidated Funds [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 5,333,000 |
Noncontrolling Interest [Member] | Ares Operating Group [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (17,117,000) |
Parent Company [Member] | Partners Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (10,827,000) |
Accounting Standards Update 2018-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2018-02 [Member] | Parent Company [Member] | Partners Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,202,000 |
Accounting Standards Update 2018-02 [Member] | Parent Company [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,202,000) |