Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
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 | 2021 | |
Document Fiscal Period Focus | Q1 | |
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 | 162,282,379 | |
Series A Preferred Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 7.00% Series A Preferred Stock, par value $0.01 per share | |
Trading Symbol | ARES.PRA | |
Security Exchange Name | NYSE | |
Nonvoting Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,489,911 | |
Class B common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,000 | |
Class C common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 112,163,894 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||||||
Total assets | $ 16,535,929 | $ 15,168,992 | ||||
Liabilities | ||||||
Operating lease liabilities | 186,594 | |||||
Total liabilities | 13,084,629 | 12,596,852 | ||||
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 March 31, 2021 and December 31, 2020, respectively) | 298,761 | 298,761 | ||||
Additional paid-in-capital | 1,033,735 | 1,043,669 | ||||
Retained earnings | (173,555) | (151,824) | ||||
Accumulated other comprehensive income (loss), net of tax | (62) | 483 | ||||
Total stockholders' equity | 1,161,499 | 1,193,685 | ||||
Total equity | 2,420,568 | 2,471,774 | $ 2,370,881 | $ 2,003,748 | $ 1,975,596 | $ 1,858,598 |
Total liabilities, redeemable interest, non-controlling interests and equity | 16,535,929 | 15,168,992 | ||||
Class A common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 1,498 | 1,472 | ||||
Class B common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 0 | 0 | ||||
Class C common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 1,122 | 1,124 | ||||
Consolidated Funds | ||||||
Assets | ||||||
Cash and cash equivalents | 557,271 | 522,377 | ||||
U.S. Treasury securities, at fair value | 1,000,040 | 0 | ||||
Investments, at fair value | 10,948,173 | 10,877,097 | ||||
Due from affiliates | 16,240 | 17,172 | ||||
Other assets | 32,096 | 35,502 | ||||
Receivable for securities sold | 166,960 | 121,225 | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | 98,473 | 46,824 | ||||
Due to affiliates | 622 | 0 | ||||
Payable for securities purchased | 781,845 | 514,946 | ||||
CLO loan obligations, at fair value | 9,839,639 | 9,958,076 | ||||
Fund borrowings | 110,409 | 121,909 | ||||
Redeemable interest in Ares Operating Group entities | 930,924 | 0 | ||||
Non-controlling interests in Consolidated Funds | 552,688 | 539,720 | ||||
AOG | ||||||
Liabilities | ||||||
Redeemable interest in Ares Operating Group entities | 99,808 | 100,366 | ||||
Non-controlling interests in Ares Operating Group entities | 706,381 | 738,369 | ||||
Ares Management L.P | ||||||
Assets | ||||||
Cash and cash equivalents | 609,872 | 539,812 | ||||
Total investments | 1,931,978 | 1,682,759 | ||||
U.S. Treasury securities, at fair value | 1,000,040 | |||||
Due from affiliates | 335,450 | 405,887 | ||||
Other assets | 779,941 | 812,419 | ||||
Right-of-use operating lease assets | 157,908 | 154,742 | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | 119,578 | 115,289 | ||||
Accrued compensation | 89,791 | 103,010 | ||||
Due to affiliates | 77,817 | 100,186 | ||||
Performance related compensation payable | 968,582 | 813,378 | ||||
Debt obligations | 811,279 | 642,998 | ||||
Operating lease liabilities | 186,594 | 180,236 | ||||
Stockholders' Equity | ||||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively) | 298,761 | 298,761 | ||||
Additional paid-in-capital | 1,033,735 | 1,043,669 | ||||
Retained earnings | (173,555) | (151,824) | ||||
Accumulated other comprehensive income (loss), net of tax | (62) | 483 | ||||
Total stockholders' equity | 1,161,499 | 1,193,685 | ||||
Ares Management L.P | Class A common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 1,498 | 1,472 | ||||
Ares Management L.P | Class B common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 0 | 0 | ||||
Ares Management L.P | Class C common stock | ||||||
Stockholders' Equity | ||||||
Common stock | $ 1,122 | $ 1,124 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
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) | 262,005,872 | 259,631,180 |
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) | 149,840,978 | 147,182,562 |
Common stock, shares outstanding (in shares) | 149,840,978 | 147,182,562 |
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) | 112,163,894 | 112,447,618 |
Common stock, shares outstanding (in shares) | 112,163,894 | 112,447,618 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Total revenues | $ 658,388 | $ 13,409 |
Expenses | ||
Total expenses | 525,109 | 81,959 |
Other income (expense) | ||
Total other income (expense) | 56,785 | (227,863) |
Income (loss) before taxes | 190,064 | (296,413) |
Income tax expense (benefit) | 25,754 | (20,616) |
Net income (loss) | 164,310 | (275,797) |
Net income (loss) attributable to Ares Management Corporation | 58,378 | (31,036) |
Less: Series A Preferred Stock dividends paid | 5,425 | 5,425 |
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | $ 52,953 | $ (36,461) |
Class A common stock | ||
Net income (loss) per share of Class A common stock: | ||
Basic (in dollars per share) | $ 0.33 | $ (0.33) |
Diluted (in dollars per share) | $ 0.32 | $ (0.33) |
Weighted-average shares of Class A common stock: | ||
Basic (in shares) | 149,271,822 | 118,366,539 |
Diluted (in shares) | 163,664,384 | 118,366,539 |
Consolidated Funds | ||
Expenses | ||
Expenses of Consolidated Funds | $ 4,171 | $ 7,443 |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | 16,422 | (254,761) |
Interest expense | (71,025) | (80,241) |
Interest and other income of Consolidated Funds | 115,839 | 113,225 |
Net income (loss) attributable to non-controlling interests | 49,858 | |
AOG | ||
Other income (expense) | ||
Net income (loss) | 114,452 | (109,391) |
Less: Net income attributable to redeemable interest in Ares Operating Group entities | 32 | 0 |
Net income (loss) attributable to non-controlling interests | 56,042 | (78,355) |
Ares Management L.P | ||
Revenues | ||
Total revenues | 658,388 | 13,409 |
Expenses | ||
Compensation and benefits | 231,850 | 180,084 |
Performance related compensation | 221,432 | (167,899) |
General, administrative and other expenses | 67,656 | 62,331 |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | 5,433 | (8,034) |
Interest and dividend income | 960 | 1,790 |
Interest expense | (6,695) | (5,306) |
Other income (expense), net | (4,149) | 5,464 |
Management fees | Ares Management L.P | ||
Revenues | ||
Total revenues | 320,273 | 263,849 |
Carried interest allocation | ||
Revenues | ||
Total revenues | 297,535 | |
Carried interest allocation | Ares Management L.P | ||
Revenues | ||
Total revenues | 297,535 | (230,876) |
Incentive fees | Ares Management L.P | ||
Revenues | ||
Total revenues | 2,820 | (3,249) |
Principal investment income (loss) | Ares Management L.P | ||
Revenues | ||
Total revenues | 25,100 | (26,723) |
Administrative, transaction and other fees | Ares Management L.P | ||
Revenues | ||
Total revenues | $ 12,660 | $ 10,408 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net income (loss) | $ 164,310 | $ (275,797) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments, net of tax | (10,573) | (14,208) |
Total comprehensive income (loss) | 153,737 | (290,005) |
Consolidated Funds | ||
Other comprehensive income (loss): | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | 40,786 | (171,093) |
AOG | ||
Net income (loss) | 114,452 | (109,391) |
Other comprehensive income (loss): | ||
Less: Comprehensive income attributable to redeemable interest | (558) | 0 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 55,676 | (83,074) |
Ares Management L.P | ||
Other comprehensive income (loss): | ||
Comprehensive income (loss) attributable to Ares Management Corporation | $ 57,833 | $ (35,838) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-Controlling interestAOG | Non-Controlling interestConsolidated Funds | Preferred Class A | Class A common stockCommon Stock | Class C common stockCommon Stock |
Beginning balance at Dec. 31, 2019 | $ 1,858,598 | $ 525,244 | $ (50,820) | $ (6,047) | $ 472,288 | $ 618,020 | $ 298,761 | $ 1,152 | $ 0 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Consolidation and deconsolidation of funds, net | (3,882) | (3,882) | |||||||
Changes in ownership interests and related tax benefits | (74,079) | (196,670) | 122,551 | 40 | |||||
Issuances of common stock | 383,334 | 382,061 | 121 | 1,152 | |||||
Capital contributions | 175,277 | 42,012 | 133,265 | ||||||
Dividends/Distributions | (125,755) | (51,090) | (55,748) | (13,492) | (5,425) | ||||
Net income (loss) | (275,797) | (36,461) | (78,355) | (166,406) | 5,425 | ||||
Currency translation adjustment, net of tax | (14,208) | (4,802) | (4,719) | (4,687) | |||||
Equity compensation | 32,557 | 16,420 | 16,137 | ||||||
Stock option exercises | 19,551 | 19,540 | 11 | ||||||
Ending balance at Mar. 31, 2020 | 1,975,596 | 746,595 | (138,371) | (10,849) | 514,166 | 562,818 | 298,761 | 1,324 | 1,152 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Consolidation and deconsolidation of funds, net | 1,475 | 1,475 | |||||||
Changes in ownership interests and related tax benefits | 94 | (9,702) | 9,796 | 4 | (4) | ||||
Expenses incurred upon issuance of common stock | (181) | (181) | |||||||
Capital contributions | (9,341) | 229 | (9,570) | ||||||
Dividends/Distributions | (259,831) | (57,620) | (59,949) | (136,837) | (5,425) | ||||
Net income (loss) | 216,676 | 50,946 | 75,119 | 85,186 | 5,425 | ||||
Currency translation adjustment, net of tax | 2,687 | (388) | (54) | 3,129 | |||||
Equity compensation | 28,683 | 15,500 | 13,183 | ||||||
Stock option exercises | 47,890 | 47,865 | 25 | ||||||
Ending balance at Jun. 30, 2020 | 2,003,748 | 800,077 | (145,045) | (11,237) | 552,490 | 506,201 | 298,761 | 1,353 | 1,148 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Changes in ownership interests and related tax benefits | (3,751) | (122,555) | 118,804 | 2 | (2) | ||||
Issuances of common stock | 305,338 | 305,261 | 77 | 0 | |||||
Capital contributions | 499 | 481 | 0 | 18 | |||||
Dividends/Distributions | (135,393) | (61,159) | (49,391) | (19,418) | (5,425) | ||||
Net income (loss) | 142,334 | 42,120 | 52,162 | 42,627 | 5,425 | ||||
Currency translation adjustment, net of tax | 16,251 | 4,450 | 4,128 | 7,673 | |||||
Equity compensation | 30,337 | 16,921 | 13,416 | ||||||
Stock option exercises | 11,518 | 11,512 | 6 | ||||||
Ending balance at Sep. 30, 2020 | 2,370,881 | 1,011,697 | (164,084) | (6,787) | 691,609 | 537,101 | 298,761 | 1,438 | 1,146 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Changes in ownership interests and related tax benefits | (21,409) | 508 | (21,922) | 27 | (22) | ||||
Issuances of common stock | 1 | 1 | 0 | 0 | |||||
Capital contributions | 11,275 | 2,558 | 8,717 | ||||||
Dividends/Distributions | (199,008) | (61,577) | (50,246) | (81,760) | (5,425) | ||||
Net income (loss) | 242,248 | 73,837 | 96,308 | 66,678 | 5,425 | ||||
Currency translation adjustment, net of tax | 22,460 | 7,270 | 6,206 | 8,984 | |||||
Equity compensation | 31,409 | 17,553 | 13,856 | ||||||
Stock option exercises | 13,917 | 13,910 | 7 | ||||||
Ending balance at Dec. 31, 2020 | 2,471,774 | 1,043,669 | (151,824) | 483 | 738,369 | 539,720 | 298,761 | 1,472 | 1,124 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Changes in ownership interests and related tax benefits | (86,139) | (41,686) | (44,477) | 26 | (2) | ||||
Capital contributions | 11,011 | 0 | 11,011 | ||||||
Dividends/Distributions | (186,022) | (74,684) | (67,084) | (38,829) | (5,425) | ||||
Net income (loss) | 164,278 | 52,953 | 56,042 | 49,858 | 5,425 | ||||
Currency translation adjustment, net of tax | (9,983) | (545) | (366) | (9,072) | |||||
Equity compensation | 55,649 | 31,752 | 23,897 | ||||||
Ending balance at Mar. 31, 2021 | $ 2,420,568 | $ 1,033,735 | $ (173,555) | $ (62) | $ 706,381 | $ 552,688 | $ 298,761 | $ 1,498 | $ 1,122 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 164,310 | $ (275,797) |
Net cash used in operating activities | (741,118) | (363,237) |
Cash flows from investing activities: | ||
Net cash used in investing activities | (3,284) | (38,906) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Net cash provided by financing activities | 817,211 | 1,445,552 |
Effect of exchange rate changes | (2,749) | (14,120) |
Net change in cash and cash equivalents | 70,060 | 1,029,289 |
Cash and cash equivalents, beginning of period | 539,812 | |
Cash and cash equivalents, end of period | 609,872 | 1,167,673 |
Consolidated Funds | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | (1,208,180) | (453,015) |
Cash flows due to changes in operating assets and liabilities | 265,512 | 188,510 |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 941,935 | 133,265 |
Distributions to non-controlling interests in Consolidated Funds | (38,829) | (13,492) |
Borrowings under loan obligations by Consolidated Funds | 7,000 | 454,391 |
Repayments under loan obligations by Consolidated Funds | (29,453) | (73,609) |
Ares Management L.P | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | 44,284 | 125,070 |
Cash flows due to changes in operating assets and liabilities | (7,044) | 51,995 |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (3,284) | (3,062) |
Acquisitions, net of cash acquired | 0 | (35,844) |
Cash flows from financing activities: | ||
Net proceeds from issuance of Class A common stock | 0 | 383,334 |
Proceeds from Credit Facility | 168,000 | 790,000 |
Repayments of Credit Facility | 0 | (60,000) |
Dividends and distributions | (141,768) | (106,838) |
Series A Preferred Stock dividends | (5,425) | (5,425) |
Stock option exercises | 0 | 19,551 |
Taxes paid related to net share settlement of equity awards | (84,590) | (73,500) |
Other financing activities | 341 | (2,125) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Cash and cash equivalents, beginning of period | 539,812 | 138,384 |
Cash and cash equivalents, end of period | $ 609,872 | $ 1,167,673 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | 1. ORGANIZATION Ares Management Corporation (the “Company”), a Delaware corporation, together with its subsidiaries, is a leading global alternative investment manager operating integrated groups across Credit, Private Equity, Real Estate and Strategic Initiatives. 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”). These subsidiaries provide investment advisory services to the Ares Funds in exchange for management fees. 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 assets include equity interests in Ares Holdings Inc., 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” or “AOG”: 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. In addition, the Company and its wholly owned subsidiaries manages or controls certain entities that have been consolidated in the accompanying financials statements as described in “Note 2. Summary of Significant Accounting Policies”. These entities include Ares funds, co-investment entities, collateralized loan obligations (“CLOs”) and a special purpose acquisition company (“SPAC”) (collectively, the “Consolidated Funds”). In February 2021, the Company’s first sponsored SPAC, Ares Acquisition Corporation (NYSE: AAC) (“AAC”), consummated its initial public offering that generated gross proceeds of $1.0 billion. Prior to the completion of a business combination, the sponsor, a wholly owned subsidiary of the Company, owns the majority of the Class B ordinary shares outstanding of AAC, and consolidates AAC under the voting interest model. Including the results of the Consolidated Funds significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows in the accompanying consolidated financial statements; however, the Consolidated Funds results included herein have no direct effect on the net income attributable to Ares Management Corporation or to Stockholders' Equity. Instead, economic ownership interests of the investors in the Consolidated Funds are reflected as redeemable and non-controlling interests in Consolidated Funds. Further, cash flows allocable to redeemable and non-controlling interest in Consolidated Funds are specifically identifiable in the Consolidated Statements of Cash Flows. Redeemable Interest and Non-Controlling Interests in Ares Operating Group Entities The non-controlling interests in AOG entities represent a component of equity and net income attributable to the owners of the Ares Operating Group Units (“AOG Units”) that are not held directly or indirectly by the Company. These owners consist predominantly of Ares Owners Holdings L.P. but also include other strategic distribution partnerships with whom the Company has established joint ventures. Non-controlling interests in AOG entities are adjusted for contributions to and distributions from AOG during the reporting period and are allocated income from the AOG entities based on their historical ownership percentage for the proportional number of days in the reporting period. On February 21, 2020, the Company completed its acquisition (“Crestline Acquisition”) of the Class A membership interests (the “Class A membership interests”) in Crestline Denali Capital LLC (“Crestline Denali”). The Class A membership interests entitle the Company to the fees associated with managing seven collateral management contracts. The Class B membership interests of Crestline Denali (the “Class B membership interests”) were retained by the former owners of Crestline Denali and represent the financial interests in the subordinated notes of the collateralized loan obligations. In connection with the Company's control over Crestline Denali, the Company also consolidates investments and financial results that are attributable to the Class B membership interests to which the Company has no economic rights or obligations. Equity and income (loss) attributable to the Class B membership interests is included within non-controlling interests in AOG entities. On July 1, 2020, the Company completed its acquisition of a majority interest in SSG Capital Holdings Limited and its operating subsidiaries (“SSG”) in accordance with the purchase agreement entered into on January 21, 2020 (“SSG Acquisition”). Following the acquisition, SSG began operating under the Ares SSG brand. Ares SSG is an alternative investment manager in the Asia Pacific that is focused on leveraging its broad Pan-Asian presence, extensive infrastructure and local origination network to make credit, private equity and special situation investments across Asia and Australia. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. 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, 2020 filed with the Securities and Exchange Commission (“SEC”). As of March 31, 2021, the impact of the outbreak of the coronavirus pandemic (“COVID-19”) continues to unfold. As a result, management's estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period. 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. U.S. Treasury Securities, at Fair Value U.S. Treasury securities, at fair value represents U.S Treasury bills that were purchased with funds raised through the initial public offering of AAC, a consolidated SPAC that is presented within Consolidated Funds. The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in the trust agreement. The U.S. Treasury bills have original maturities greater than three months when purchased and therefore is recorded at fair value. Interest income received on such securities is separately presented from the overall change in fair value and is recognized within interest and other income of Consolidated Funds in the Condensed Consolidated Statements of Operations. Any remaining change in fair value of such securities, that is not recognized as interest income, is recognized in net realized and unrealized gains (losses) on investments of Consolidated Funds in the Condensed Consolidated Statements of Operations. Redeemable Interest in Consolidated Funds Redeemable interest in Consolidated Funds represent the shares issued by AAC that are redeemable for cash by the public shareholders in connection with AAC’s failure to complete a business combination or tender offer associated with stockholder approval provisions. Although AAC has not specified a maximum redemption threshold, its amended and restated memorandum and articles of association provide that in no event will it redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount. The Company recognizes changes in the redemption amount with corresponding adjustments against additional paid-in-capital that is reflected within non-controlling interest in Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. At March 31, 2021, approximately 93,092,438 of the 100,000,000 Class A ordinary shares of AAC were classified outside of permanent equity. Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). 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 March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) , to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. An entity may elect to adopt the amendments in ASU 2020-04 and ASU 2021-01 at any time after March 12, 2020 but no later than December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 3. GOODWILL AND INTANGIBLE ASSETS Finite Lived Intangible Assets, Net The following table summarizes the carrying value, net of accumulated amortization, of the Company's intangible assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition: Weighted Average Amortization Period as of March 31, 2021 As of March 31, As of December 31, 2021 2020 Management contracts 5.2 years $ 210,857 $ 210,857 Client relationships 8.8 years 25,141 25,141 Trade name 9.1 years 11,079 11,079 Intangible assets 247,077 247,077 Foreign currency translation 1,873 3,093 Total intangible assets 248,950 250,170 Less: accumulated amortization (38,539) (28,082) Intangible assets, net $ 210,411 $ 222,088 Amortization expense associated with intangible assets was $10.6 million and $1.0 million for the three months ended March 31, 2021 and 2020, respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. Goodwill The following table summarizes the carrying value of the Company's goodwill assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition: Credit Group Private Real Strategic Initiatives Total Balance as of December 31, 2020 $ 32,196 $ 58,600 $ 53,120 $ 227,131 $ 371,047 Foreign currency translation — — 16 (1,043) (1,027) Balance as of March 31, 2021 $ 32,196 $ 58,600 $ 53,136 $ 226,088 $ 370,020 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Investments in and Advances to Affiliates [Abstract] | |
INVESTMENTS | 4. INVESTMENTS The Company’s investments are comprised of the following: Percentage of total investments March 31, December 31, March 31, December 31, 2021 2020 2021 2020 Equity method investments: Equity method private investment partnership interests - principal (1) $ 388,820 $ 366,471 20.1 % 21.8 % Equity method - carried interest (1) 1,369,684 1,145,853 70.9 68.1 Equity method private investment partnership interests and other (held at fair value) (1) 93,017 92,196 4.8 5.5 Equity method private investment partnership interests and other (1) 25,917 23,883 1.3 1.4 Total equity method investments 1,877,438 1,628,403 97.1 96.8 Collateralized loan obligations (2) 31,947 31,766 1.7 1.9 Other fixed income 21,583 21,583 1.1 1.3 Collateralized loan obligations and other fixed income, at fair value 53,530 53,349 2.8 3.2 Common stock, at fair value 1,010 1,007 0.1 0.1 Total investments $ 1,931,978 $ 1,682,759 (1) Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date. (2) As of March 31, 2021 and December 31, 2020, includes $3.5 million and $3.4 million, respectively, of collateralized loan obligations that are attributable to the Class B Membership Interests. 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 months ended March 31, 2021 and 2020, no individual equity method investment held by the Company met the significance criteria. The Company recognized net gains of $26.6 million for the three months ended March 31, 2021 and net losses of $28.8 million for the three months ended March 31, 2020 related to its equity method investments. The net gains and losses were included within principal investment income, net realized and unrealized gains (losses) 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 Percentage of total investments as of March 31, December 31, March 31, December 31, 2021 2020 2021 2020 Fixed income investments: Bonds $ 396,455 $ 397,494 3.3 % 3.6% Loans 10,037,808 10,012,948 84.0 92.1 U.S. Treasury securities 1,000,040 — 8.4 — Investments in CLO warehouse 25,350 — 0.2 — Total fixed income investments 11,459,653 10,410,442 95.9 95.7 Equity securities 236,953 227,031 2.0 2.1 Partnership interests 251,607 239,624 2.1 2.2 Total investments, at fair value $ 11,948,213 $ 10,877,097 At March 31, 2021, the SPAC’s investment in U.S. Treasury bills exceeded 5% of the Company’s total assets. The U.S. Treasury bills mature in May 2021 and have an interest yield of approximately 0.3%. At December 31, 2020, no single issuer or investment, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5.0% of the Company’s total assets. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 5. FAIR VALUE Fair Value Measurements GAAP establishes a hierarchical 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 following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of March 31, 2021: 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 $ — $ — $ 53,530 $ — $ 53,530 Common stock and other equity securities — 1,010 89,233 — 90,243 Partnership interests — — 2,575 1,209 3,784 Total investments, at fair value — 1,010 145,338 1,209 147,557 Derivatives-foreign exchange contracts — 2,897 — — 2,897 Total assets, at fair value $ — $ 3,907 $ 145,338 $ 1,209 $ 150,454 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (746) $ — $ — $ (746) Total liabilities, at fair value $ — $ (746) $ — $ — $ (746) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 395,834 $ 621 $ — $ 396,455 Loans — 9,478,049 559,759 — 10,037,808 U.S. Treasury securities 1,000,040 — — — 1,000,040 Investments in CLO warehouse — 25,350 — — 25,350 Total fixed income investments 1,000,040 9,899,233 560,380 — 11,459,653 Equity securities 5,008 1,311 230,634 — 236,953 Partnership interests — — 243,452 8,155 251,607 Total investments, at fair value 1,005,048 9,900,544 1,034,466 8,155 11,948,213 Total assets, at fair value $ 1,005,048 $ 9,900,544 $ 1,034,466 $ 8,155 $ 11,948,213 Liabilities, at fair value Derivatives: Warrants $ (17,500) $ — $ — $ — $ (17,500) Asset swaps-other — — (2,101) $ — (2,101) Loan obligations of CLOs — (9,839,639) — — (9,839,639) Total liabilities, at fair value $ (17,500) $ (9,839,639) $ (2,101) $ — $ (9,859,240) The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2020: 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 $ — $ — $ 53,349 $ — $ 53,349 Common stock and other equity securities — 1,007 88,412 — 89,419 Partnership interests — — 2,575 1,209 3,784 Total investments, at fair value — 1,007 144,336 1,209 146,552 Derivatives-foreign exchange contracts — 1,440 — — 1,440 Total assets, at fair value $ — $ 2,447 $ 144,336 $ 1,209 $ 147,992 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (1,565) $ — $ — $ (1,565) Total liabilities, at fair value $ — $ (1,565) $ — $ — $ (1,565) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Measured Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 397,485 $ 9 $ — $ 397,494 Loans — 9,470,651 542,297 — 10,012,948 Total fixed income investments — 9,868,136 542,306 — 10,410,442 Equity securities 5,749 239 221,043 — 227,031 Partnership interests — — 231,857 7,767 239,624 Total investments, at fair value 5,749 9,868,375 995,206 7,767 10,877,097 Derivatives: Asset swaps-other — — 1,104 — 1,104 Total assets, at fair value $ 5,749 $ 9,868,375 $ 996,310 $ 7,767 $ 10,878,201 Liabilities, at fair value Derivatives: Asset swaps-other $ — $ — $ (44) $ — $ (44) Loan obligations of CLOs — (9,958,076) — — (9,958,076) Total liabilities, at fair value $ — $ (9,958,076) $ (44) $ — $ (9,958,120) The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2021: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ 144,336 Sales/settlements (2) — (1,539) — (1,539) Realized and unrealized appreciation, net 821 1,720 — 2,541 Balance, end of period $ 89,233 $ 53,530 $ 2,575 $ 145,338 Change in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ 821 $ 1,720 $ — $ 2,541 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,305 $ 231,857 $ 1,060 $ 996,265 Transfer in 2,289 221,555 — — 223,844 Transfer out (33) (209,002) — — (209,035) Purchases (1) 8,308 137,655 1,000 — 146,963 Sales/settlements (2) (424) (127,350) — 185 (127,589) Amortized discounts/premiums — 770 — — 770 Realized and unrealized appreciation (depreciation), net (549) (5,553) 10,595 (3,346) 1,147 Balance, end of period $ 230,634 $ 560,380 $ 243,452 $ (2,101) $ 1,032,365 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (582) $ (863) $ 10,594 $ (2,705) $ 6,444 (1) Purchases include paid-in-kind interest and securities received in connection with restructuring. (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 March 31, 2020: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 14,704 $ 69,183 $ 35,192 $ 119,079 Transfer in due to changes in consolidation — 3,686 — 3,686 Purchases (1) — 643 — 643 Sales/settlements (2) — (402) (32,430) (32,832) Realized and unrealized depreciation, net — (7,766) (187) (7,953) Balance, end of period $ 14,704 $ 65,344 $ 2,575 $ 82,623 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ — $ (6,731) $ 5,511 $ (1,220) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 85,988 $ 339,136 $ 296,012 $ (4,106) $ 717,030 Transfer in (out) due to changes in consolidation (635) 392,672 — — 392,037 Transfer in — 607,588 — — 607,588 Transfer out — (61,774) — — (61,774) Purchases (1) 249 355,592 8,000 — 363,841 Sales/settlements (2) (351) (178,159) — (1,278) (179,788) Amortized discounts/premiums — 499 — 48 547 Realized and unrealized appreciation (depreciation), net (42,499) (175,998) 3,013 5,356 (210,128) Balance, end of period $ 42,752 $ 1,279,556 $ 307,025 $ 20 $ 1,629,353 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (42,500) $ (170,496) $ 3,012 $ 2,874 $ (207,110) (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. 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 tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of March 31, 2021: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 14,704 Transaction price (1) N/A N/A N/A 32,120 Discounted Cash Flow Discount Rates 14.0% - 20.0% 14.4% 42,409 Market Approach Multiple of Book Value 1.5x N/A Partnership interests 2,575 Other N/A N/A N/A Collateralized loan obligations 31,947 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 21,583 Other N/A N/A N/A Total $ 145,338 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 236 Market approach EBITDA multiple (2) 1.6x - 22.2x 16.3x 775 Broker quotes and/or 3rd party pricing services N/A N/A N/A 229,623 Transaction price (1) N/A N/A N/A Partnership interest 243,452 Discounted cash flow Discount rate 23.8% 23.8% Fixed income securities 433,803 Broker quotes and/or 3rd party pricing services N/A N/A N/A 3,929 Market approach EBITDA multiple (2) 6.5x - 7.8x 7.2x 96,092 Income approach Yield 2.7% - 37.2% 7.6% 26,556 Other N/A N/A N/A Total assets $ 1,034,466 Liabilities Derivative instruments $ (2,101) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (2,101) (1) Transaction price consists of securities 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 tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2020: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 14,704 Transaction price (1) N/A N/A 32,905 Discounted Cash Flow Discount Rates 14.0% - 20.0% 40,803 Market Approach Multiple of Book Value 1.6x Partnership interests 2,575 Other N/A N/A Collateralized loan obligations 31,766 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 21,583 Other N/A N/A Total $ 144,336 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 438 Market approach EBITDA multiple (2) 2.9x - 19.5x 13.4x 32,528 Other Net income multiple 30.0x 30.0x Illiquidity discount 25.0% 25.0% 33 Broker quotes and/or 3rd party pricing services N/A N/A N/A 188,044 Transaction price (1) N/A N/A N/A Partnership interests 231,857 Discounted cash flow Discount rate 23.8% 23.8% Fixed income securities 384,419 Broker quotes and/or 3rd party pricing services N/A N/A N/A 6,605 Market approach EBITDA multiple (2) 6.5x - 7.8x 6.9x 122,962 Income approach Yield 2.7% - 48.1% 7.9% 28,320 Other N/A N/A N/A Derivative instruments 1,104 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 996,310 Liabilities Derivative instruments $ (44) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (44) (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 INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 6. 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 March 31, 2021 As of December 31, 2020 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 $ 49,594 $ 2,897 $ 23,039 $ 746 $ 30,040 $ 1,440 $ 39,362 $ 1,565 Total derivatives, at fair value (2) $ 49,594 $ 2,897 $ 23,039 $ 746 $ 30,040 $ 1,440 $ 39,362 $ 1,565 As of March 31, 2021 As of December 31, 2020 Assets Liabilities Assets Liabilities Consolidated Funds Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Warrants $ — $ — $ 230,000 $ 17,500 $ — $ — $ — $ — Asset swap - other 47,775 — 42,688 2,101 7,600 1,104 540 44 Total derivatives, at fair value (3) $ 47,775 $ — $ 272,688 $ 19,601 $ 7,600 $ 1,104 $ 540 $ 44 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of March 31, 2021 and December 31, 2020, the Company had the right to, but elected not to, offset $0.7 million and $1.6 million of its derivative liabilities. (3) As of March 31, 2021 and December 31, 2020, the Consolidated Funds offset $0.2 million and $0.4 million of their derivative assets and liabilities, respectively. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | 7. DEBT The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of March 31, 2021 As of December 31, 2020 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolver 3/31/2026 N/A $ 168,000 3.38% $ — —% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 247,455 4.21 247,285 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 395,824 3.28 395,713 3.28 Total debt obligations $ 811,279 $ 642,998 (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 31, 2021, the Company amended the Credit Facility to, among other things, extend the maturity date from March 2025 to March 2026. As of March 31, 2021, base rate loans bear interest calculated based on the base rate plus 0.125% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.125%. The unused commitment fee is 0.10% per annum. There is a base rate and LIBOR floor of zero. (2) The 2024 Senior Notes were issued in October 2014 by Ares Finance Co. LLC, an indirect subsidiary of the Company, at 98.27% of the face amount with interest paid semi-annually. The Company may redeem the 2024 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2024 Notes. (3) The 2030 Senior Notes were issued in June 2020 by Ares Finance Co. II LLC, an indirect subsidiary of the Company, at 99.77% of the face amount with interest paid semi-annually. The Company may redeem the 2030 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2030 Notes. As of March 31, 2021, 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 2024 and 2030 Senior Notes (the “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 into interest expense in the Condensed Consolidated Statements of Operations. 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, 2020 $ 5,232 $ 4,283 Debt issuance costs incurred 1,189 — Amortization of debt issuance costs (310) (149) Unamortized debt issuance costs as of March 31, 2021 $ 6,111 $ 4,134 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. The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of March 31, 2021 As of December 31, 2020 Loan Fair Value of Weighted Loan Fair Value of Loan Obligations Weighted Senior secured notes (1) $ 9,614,038 $ 9,553,375 9.9 $ 9,796,442 $ 9,665,804 10.1 Subordinated notes (2) 469,415 286,264 10.0 482,391 292,272 10.2 Total loan obligations of Consolidated CLOs $ 10,083,453 $ 9,839,639 $ 10,278,833 $ 9,958,076 (1) Original borrowings under the senior secured notes totaled $9.6 billion, with various maturity dates ranging from July 2028 to October 2033. The weighted average interest rate as of March 31, 2021 was 1.89%. (2) Original borrowings under the subordinated notes totaled $469.4 million, with various maturity dates ranging from July 2028 to October 2033. 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. As of March 31, 2021 and December 31, 2020, 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 March 31, 2021 As of December 31, 2020 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate Credit Facilities: 3/4/2022 $ 71,500 $ 71,500 1.59% $ 71,500 1.59% 1/1/2023 18,000 17,909 1.69 17,909 1.75 10/14/2021 75,000 21,000 2.70 32,500 2.75 Total borrowings of Consolidated Funds $ 110,409 $ 121,909 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 8. 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 March 31, 2021, 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 March 31, 2021 and December 31, 2020, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $759.7 million and $784.2 million, respectively. Performance Income Performance income is affected by changes in the fair values of the underlying investments in the funds that we advise. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, public equity market volatility, industry trading multiples and interest rates. 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. Senior professionals of the Company who have received carried interest distributions are responsible for funding their proportionate share of any contingent repayment obligations. However, the governing agreements of certain of the Company's funds provide that if a current or former professional does not fund his or her respective share for such fund, then the Company may have to fund additional amounts beyond what was received in carried interest, although the Company will generally retain the right to pursue any remedies under such governing agreements against those carried interest recipients who fail to fund their obligations. Additionally, at the end of the life of the funds there could be a payment due to a fund by the Company if the Company has recognized more performance income than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund. At March 31, 2021 and December 31, 2020, if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $303.2 million and $326.4 million, respectively, of which approximately $235.9 million and $252.4 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 March 31, 2021 and December 31, 2020, if the funds were liquidated at their fair values, there would be no contingent repayment obligation or liability. 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 As of March 31, As of December 31, Classification 2021 2020 Operating lease assets Right-of-use operating lease assets $ 157,908 $ 154,742 Finance lease assets Other assets (1) 1,260 1,386 Total lease assets $ 159,168 $ 156,128 Operating lease liabilities Operating lease liabilities $ 186,594 $ 180,236 Finance lease obligations Accounts payable, accrued expenses and other liabilities 912 1,273 Total lease liabilities $ 187,506 $ 181,509 (1) Finance lease assets are recorded net of accumulated amortization of $1.1 million and $1.0 million as of March 31, 2021 and December 31, 2020, respectively. Maturity of lease liabilities Operating Leases Finance Leases 2021 $ 27,311 $ 150 2022 39,825 485 2023 35,795 158 2024 32,844 156 2025 31,717 6 After 2025 38,665 — Total future payments 206,157 955 Less: interest 19,563 43 Total lease liabilities $ 186,594 $ 912 Three months ended March 31, Classification 2021 2020 Operating lease expense General, administrative and other expenses $ 8,493 $ 7,632 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 126 94 Interest on finance lease liabilities Interest expense 10 11 Total lease expense $ 8,629 $ 7,737 Three months ended March 31, Other information 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,419 $ 8,178 Operating cash flows for finance leases 25 6 Financing cash flows for finance leases 341 36 Leased assets obtained in exchange for new operating lease liabilities 13,374 8,744 As of March 31, As of December 31, Lease term and discount rate 2021 2020 Weighted-average remaining lease terms (in years): Operating leases 5.7 6.0 Finance leases 2.7 2.6 Weighted-average discount rate: Operating leases 3.43 % 3.59 % Finance leases 3.21 % 3.26 % |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 9. 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, which is predominantly due from affiliated funds, is presented separately within investments in the Condensed Consolidated Statements of Financial Condition. The Company has investment management agreements with the 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 AAC, 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 from the funds can be distributed to professionals or their related entities on a current basis, subject, in the case of carried interest programs, 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 March 31, As of December 31, 2021 2020 Due from affiliates: Management fees receivable from non-consolidated funds $ 244,018 $ 308,581 Incentive fee receivable from non-consolidated funds 17,214 21,495 Payments made on behalf of and amounts due from non-consolidated funds and employees 74,218 75,811 Due from affiliates—Company $ 335,450 $ 405,887 Amounts due from portfolio companies and non-consolidated funds $ 16,240 $ 17,172 Due from affiliates—Consolidated Funds $ 16,240 $ 17,172 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 3,280 $ 4,808 Tax receivable agreement liability 61,125 62,505 Undistributed carried interest and incentive fees 7,933 27,322 Payments made by non-consolidated funds on behalf of and payable by the Company 5,479 5,551 Due to affiliates—Company $ 77,817 $ 100,186 Amounts due to portfolio companies and non-consolidated funds $ 622 $ — Due to affiliates—Consolidated Funds $ 622 $ — 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. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES 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 months ended March 31, 2021,the Company recorded income tax expense of $25.8 million. For the three months ended March 31, 2020, the Company recorded income tax benefit of $20.6 million, respectively. 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 months ended March 31, 2021 and 2020, the Company recorded its interim income tax provision utilizing the estimated annual effective tax rate. 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 March 31, 2021 and December 31, 2020, the Company recorded a net deferred tax asset of $46.0 million and $70.0 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 2017. 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 | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 11. 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 months ended March 31, 2021, the treasury stock method was the more dilutive method. For the three months ended March 31, 2020, the two-class method was the more dilutive method. The computation of diluted earnings per share for the three months ended March 31, 2021 excludes the following AOG Units, as their effect would have been anti-dilutive. For the three months ended March 31, 2020, the following options, restricted units and AOG Units represent the securities not included in the two-class method: Three months ended March 31, 2021 2020 Options — 12,859,532 Restricted units — 16,377,716 AOG Units 112,353,043 116,328,089 The following table presents the computation of basic and diluted earnings per common share: Three months ended March 31, 2021 2020 Basic earnings per share of Class A common stock: Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 52,953 $ (36,461) Distributions on unvested restricted units (3,255) (2,290) Net income (loss) available to Class A common stockholders $ 49,698 $ (38,751) Basic weighted-average shares of Class A common stock 149,271,822 118,366,539 Basic earnings (loss) per share of Class A common stock $ 0.33 $ (0.33) Diluted earnings per share of Class A common stock: Net income (loss) available to Class A common stockholders $ 52,953 $ (36,461) Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 52,953 $ (36,461) Effect of dilutive shares: Restricted units 9,218,424 — Options 5,174,138 — Diluted weighted-average shares of Class A common stock 163,664,384 118,366,539 Diluted earnings (loss) per share of Class A common stock $ 0.32 $ (0.33) Dividend declared and paid per Class A common stock $ 0.47 $ 0.40 |
EQUITY COMPENSATION
EQUITY COMPENSATION | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY COMPENSATION | 12. EQUITY COMPENSATION Equity Incentive Plan Equity-based compensation is granted under the Company's 2014 Equity Incentive Plan (as amended, the "Equity Incentive Plan"). The total number of shares available to be issued under the Equity Incentive Plan resets based on a formula defined in the Equity Incentive Plan and may increase on January 1 of each year. On January 1, 2021, the total number of shares available for issuance under the Equity Incentive Plan reset to 44,510,451 shares, and as of March 31, 2021, 40,639,397 shares remain available for issuance. Generally, unvested 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, recorded by the Company is included in the following table: Three months ended March 31, 2021 2020 Restricted units $ 44,087 $ 28,381 Restricted units with a market condition 11,562 4,133 Options — 43 Equity-based compensation expense $ 55,649 $ 32,557 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 the 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 or retirement eligibility provisions). Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award. Restricted units are delivered net of the holder's payroll related taxes upon vesting. For the three months ended March 31, 2021, 4.2 million restricted units vested and 2.4 million shares of Class A common stock were delivered to the holders. For the three months ended March 31, 2020, 4.6 million restricted units vested and 2.6 million shares of Class A common stock were delivered to the holders. The holders of restricted units, other than awards that have not yet been issued as described in the subsequent sections, 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 three months ended March 31, 2021, the Company declared dividends of $0.47 per share to Class A common stockholders at the close of business on March 17, 2021. For the three months ended March 31, 2021, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $7.5 million, 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. During the first quarter of 2021, in addition to grants awarded in 2021, the Company approved the future grant of restricted units to certain senior executives in each of 2022, 2023 and 2024, subject to the holder’s continued employment and acceleration in certain instances. The vesting period of these awards are at a rate of 25% per year, beginning on the second anniversary of the grant date. Given that these future restricted units have been communicated to the recipient, the Company accounts for these awards as if they have been granted and recognizes the compensation expense on a straight-line basis over the service period. The restricted units that have been approved and communicated but not yet granted are not eligible to receive a Dividend Equivalent until the grant date. The following table presents unvested restricted units' activity: Restricted Units Weighted Average Balance - January 1, 2021 16,299,664 $ 24.30 Granted 9,012,823 45.63 Vested (4,191,773) 21.85 Forfeited (4,269) 50.75 Balance - March 31, 2021 21,116,445 $ 33.80 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $593.8 million as of March 31, 2021 and is expected to be recognized over the remaining weighted average period of 4.3 years. Performance-Based Restricted Unit Awards with a Market Condition During the first quarter of 2021, the Company granted certain restricted units with a vesting condition contingent upon the volume-weighted, average closing price of the Company’s Class A common stock meeting or exceeding a stated price for 30 consecutive calendar days on or prior to January 22, 2029, referred to as the market condition. 537,500 restricted units with a market condition of $55.00 per share (“Tranche I”), 537,500 restricted units with a market condition of $60.00 per share (“Tranche II”), 537,500 restricted units with a market condition of $65.00 per share (“Tranche III”) and 537,500 restricted units with a market condition of $75.00 per share (“Tranche IV”) were granted. Vesting is also generally subject to continued employment at the time such market condition is achieved, subject to certain exceptions upon certain qualifying terminations of employment. Under the terms of the awards, if the target price of the applicable market condition is not achieved by the close of business on January 22, 2029, the unvested market condition awards will be automatically canceled and forfeited for no consideration. Restricted units subject to a market condition are not eligible to receive a Dividend Equivalent. The grant date fair values for Tranche I, Tranche II, Tranche III and Tranche IV awards were $37.28, $34.47, $31.92 and $27.75 per unit, respectively, based on a probability distributed Monte-Carlo simulation. Due to the existence of the market condition, the vesting period for the awards is not explicit, and as such, compensation expense is recognized on a straight-line basis over the median vesting period derived from the positive iterations of the Monte Carlo simulation where the market condition was achieved. The median vesting period is 0.7 years, 1.2 years, 1.6 years and 2.3 years for Tranche I, Tranche II, Tranche III and Tranche IV, respectively. Below is a summary of the significant assumptions used to estimate the grant date fair value of market condition awards: Closing price of the Company's common shares as of valuation date $45.76 Risk-free interest rate 0.88% Volatility 35.0% Dividend yield 3.5% Cost of equity 10.0% The following table presents the unvested market condition awards' activity: Market Condition Awards Units Weighted Average Balance - January 1, 2021 — $ — Granted 2,150,000 32.86 Vested — — Forfeited — — Balance - March 31, 2021 2,150,000 $ 32.86 The total compensation expense expected to be recognized in all future periods associated with the market condition awards is approximately $59.1 million as of March 31, 2021 and is expected to be recognized over the remaining weighted average period of 7.81 years. Options A summary of options activity during the three months ended March 31, 2021 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - January 1, 2021 8,312,203 $ 18.99 3.4 $ 233,251 Granted — — — — Exercised — — — — Expired — — — — Forfeited — — — — Balance - March 31, 2021 8,312,203 18.99 3.1 $ 307,895 Exercisable at March 31, 2021 8,312,203 $ 18.99 3.1 $ 307,895 |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
EQUITY AND REDEEMABLE INTEREST | 13. EQUITY AND REDEEMABLE INTEREST Common Stock The Company's common stock consists of Class A, Class B, Class C and non-voting common stock, each $0.01 par value per share. The Class B common stock and Class C common stock are non-economic and holders are not entitled to dividends from the Company or to 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 (“Ares Voting”) is the sole holder of the Class C common stock. In February 2021, the Company's board of directors authorized the renewal of the stock repurchase program that allows for the repurchase of up to $150 million of shares of Class A common stock. Under the 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 2022. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the three months ended March 31, 2021 and 2020, the Company did not repurchase any shares as part of the stock repurchase program. The following table presents the changes in each class of common stock: Class A Common Stock Class B Common Stock Class C Common Stock Total Balance - January 1, 2021 147,182,562 1,000 112,447,618 259,631,180 Exchanges of AOG Units 283,724 — (283,724) — Vesting of restricted stock awards, net of shares withheld for tax 2,374,692 — — 2,374,692 Balance - March 31, 2021 149,840,978 1,000 112,163,894 262,005,872 The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities, as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities: Daily Average Ownership As of March 31, 2021 As of December 31, 2020 Three months ended March 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2021 2020 Ares Management Corporation 149,840,978 57.19 % 147,182,562 56.69 % 57.06 % 50.43 % Ares Owners Holding L.P. 112,163,894 42.81 112,447,618 43.31 42.94 49.57 Total 262,004,872 100.00 % 259,630,180 100.00 % Preferred Stock As of March 31, 2021 and December 31, 2020, 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. Redeemable Interest The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities: Total Balance - January 1, 2021 $ 100,366 Net income 32 Currency translation adjustment, net of tax (590) Balance - March 31, 2021 $ 99,808 The following table summarizes the activities associated with the redeemable interest in Consolidated Funds: Total Balance - January 1, 2021 $ — Redemption value 930,924 Balance - March 31, 2021 $ 930,924 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 14. SEGMENT REPORTING The Company operates through its distinct operating segments that are summarized below: Credit Group: The Credit Group manages credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, multi-asset credit, alternative credit investments and direct lending. The syndicated loans strategy focuses on evaluating individual credit opportunities related primarily to non-investment grade senior secured loans and primarily targets first lien secured debt, with a secondary focus on second lien secured loans and subordinated and other unsecured loans. 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. Multi-asset credit is a “go anywhere” strategy designed to offer investors a flexible solution to global credit investing by allowing us to tactically allocate between multiple asset classes in various market conditions. The alternative credit strategy seeks to capitalize on asset-focused investment opportunities that fall outside of traditional, well-defined markets such as corporate debt, real estate and private equity. The alternative credit strategy emphasizes downside protection and capital preservation through a focus on investments that tend to share the following key attributes: asset security, covenants, structural protections and cash flow velocity. The direct lending strategy is one of the largest self-originating direct lenders to the U.S. and European markets and has a multi-channel origination strategy designed to address a broad set of investment opportunities in the middle market. The direct lending team maintains a flexible investment strategy with the capability to invest in first lien senior secured loans (including “unitranche” loans which are loans that combine senior and mezzanine debt, generally in a first lien position), second lien senior secured loans, subordinated debt, preferred equity and non-control equity co-investments in private middle market companies. U.S. direct lending activities are managed through a publicly traded business development company, ARCC, as well as through private commingled funds and SMAs. Private Equity Group: The Private Equity Group manages investment strategies broadly categorizes its investment activities into three strategies: Corporate Private Equity, Special Opportunities and Infrastructure and Power. In the Corporate Private Equity strategy, the Company targets four principal transactions types: prudently leveraged control buyouts, growth equity, rescue/deleveraging capital and distressed buyouts/discounted debt accumulation together with the broad resources of potential investment opportunities. This flexible capital approach, together with the broad resources of the Ares platform, widens our universe of potential investment opportunities and allows us to remain active in different markets and to be highly selective in making investments across various market environments. In Special Opportunities strategy, the Company employs a flexible capital strategy to target non-control positions across a broad spectrum of stressed, distressed and opportunistic situations. The Infrastructure and Power strategy targets value-added approach that seeks to source and structure essential infrastructure assets with strong downside protection and potential for capital appreciation throughout the climate infrastructure, natural gas generation, and energy transportation sectors. Real Estate Group: The Real Estate Group manages comprehensive real estate equity and debt strategies. 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 investment activities focus on the acquisition of underperforming, income-producing, institutional-quality assets that can be improved through select value-creation initiatives across the U.S. and Europe. The opportunistic strategy focuses on capitalizing on distressed and special situations, repositioning underperforming assets and undertaking select development and redevelopment projects 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 invest in a wide range of financing opportunities in the U.S. In addition to managing private commingled funds and SMAs, the Real Estate Group makes debt investments through ACRE, a publicly traded commercial mortgage REIT. Strategic Initiatives: The Company began reflecting the Strategic Initiatives category beginning in the third quarter of 2020. It represents an all other category that includes operating segments and strategic investments that seek to expand the Company’s reach and its scale in new and existing global markets including Ares SSG, Ares Insurance Solutions (“AIS”) and AAC. The OMG 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 reportable segments but the Company does consider the cost structure of the OMG when evaluating its financial performance. Segment Profit Measures: These measures supplement and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with GAAP. Fee related earnings (“FRE”) 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”) 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 income before taxes by excluding (a) operating results of the Consolidated Funds, (b) depreciation and amortization expense, (c) the effects of changes arising from corporate actions, (d) unrealized gains and losses related to performance income and investment performance and (e) 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. 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 tables present the financial results for the Company’s operating segments, as well as the OMG: Three months ended March 31, 2021 Credit Group Private Equity Group Real Strategic Initiatives Total OMG Total Management fees $ 232,877 $ 49,331 $ 29,632 $ 15,623 $ 327,463 $ — $ 327,463 Other fees 5,969 108 648 79 6,804 — 6,804 Compensation and benefits (80,365) (20,685) (15,941) (4,740) (121,731) (44,407) (166,138) General, administrative and other expenses (10,809) (4,868) (3,295) (2,035) (21,007) (18,656) (39,663) Fee related earnings 147,672 23,886 11,044 8,927 191,529 (63,063) 128,466 Performance income—realized 3,816 71,218 1,947 — 76,981 — 76,981 Performance related compensation—realized (2,893) (57,026) (1,177) — (61,096) — (61,096) Realized net performance income 923 14,192 770 — 15,885 — 15,885 Investment loss—realized — (7,170) (222) — (7,392) — (7,392) Interest and other investment income—realized 3,669 444 2,028 33 6,174 355 6,529 Interest expense (1,515) (1,663) (1,125) (2,302) (6,605) (90) (6,695) Realized net investment income (loss) 2,154 (8,389) 681 (2,269) (7,823) 265 (7,558) Realized income $ 150,749 $ 29,689 $ 12,495 $ 6,658 $ 199,591 $ (62,798) $ 136,793 Three months ended March 31, 2020 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total OMG Total Management fees $ 197,437 $ 52,157 $ 24,184 $ — $ 273,778 $ — $ 273,778 Other fees 3,058 110 704 — 3,872 — 3,872 Compensation and benefits (70,925) (19,596) (12,413) — (102,934) (36,426) (139,360) General, administrative and other expenses (15,313) (5,633) (2,935) — (23,881) (21,305) (45,186) Fee related earnings 114,257 27,038 9,540 — 150,835 (57,731) 93,104 Performance income—realized 9,016 116,154 26,600 — 151,770 — 151,770 Performance related compensation—realized (7,899) (92,924) (17,170) — (117,993) — (117,993) Realized net performance income 1,117 23,230 9,430 — 33,777 — 33,777 Investment income (loss)—realized (843) 11,470 1,290 — 11,917 (5,698) 6,219 Interest and other investment income—realized 4,575 812 796 — 6,183 168 6,351 Interest expense (1,715) (1,643) (971) — (4,329) (977) (5,306) Realized net investment income (loss) 2,017 10,639 1,115 — 13,771 (6,507) 7,264 Realized income $ 117,391 $ 60,907 $ 20,085 $ — $ 198,383 $ (64,238) $ 134,145 The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: Three months ended March 31, 2021 2020 Segment revenues Management fees $ 327,463 $ 273,778 Other fees 6,804 3,872 Performance income—realized 76,981 151,770 Total segment revenues $ 411,248 $ 429,420 Segment expenses Compensation and benefits $ 121,731 $ 102,934 General, administrative and other expenses 21,007 23,881 Performance related compensation—realized 61,096 117,993 Total segment expenses $ 203,834 $ 244,808 Segment realized net investment income (expense) Investment income (loss)—realized $ (7,392) $ 11,917 Interest and other investment income —realized 6,174 6,183 Interest expense (6,605) (4,329) Total segment realized net investment income (expense) $ (7,823) $ 13,771 The following table reconciles the Company's consolidated revenues to segment revenue: Three months ended March 31, 2021 2020 Total consolidated revenue $ 658,388 $ 13,409 Performance (income) loss—unrealized (224,954) 387,657 Management fees of Consolidated Funds eliminated in consolidation 11,706 10,502 Incentive fees of Consolidated Funds eliminated in consolidation 1,525 (45) Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 4,145 3,317 Administrative fees (1) (9,808) (9,661) Performance income (loss) reclass (2) 55 (1,717) Principal investment (income) loss, net of eliminations (25,100) 26,723 Net income of non-controlling interests in consolidated subsidiaries (4,709) (765) Total consolidation adjustments and reconciling items (247,140) 416,011 Total segment revenue $ 411,248 $ 429,420 (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 gains (losses) on investments in the Company’s Condensed Consolidated Statements of Operations. The following table reconciles the Company's consolidated expenses to segment expenses: Three months ended March 31, 2021 2020 Total consolidated expenses $ 525,109 $ 81,959 Performance related compensation-unrealized (160,337) 285,892 Expenses of Consolidated Funds added in consolidation (17,436) (17,899) Expenses of Consolidated Funds eliminated in consolidation 13,265 10,456 Administrative fees (1) (9,808) (9,661) OMG expenses (63,063) (57,731) Acquisition and merger-related expense (8,590) (3,115) Equity compensation expense (55,649) (32,557) Deferred placement fees (297) (5,415) Depreciation and amortization expense (14,100) (5,542) Expense of non-controlling interests in consolidated subsidiaries (5,260) (1,579) Total consolidation adjustments and reconciling items (321,275) 162,849 Total segment expenses $ 203,834 $ 244,808 (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. The following table reconciles the Company's consolidated other income to segment realized net investment income: Three months ended March 31, 2021 2020 Total consolidated other income (expense) $ 56,785 $ (227,863) Investment (income) loss—unrealized (22,168) 105,594 Interest and other investment (income) loss—unrealized 3,950 (4,961) Other (income) loss from Consolidated Funds added in consolidation, net (67,316) 198,245 Other expense from Consolidated Funds eliminated in consolidation, net (4,112) (3,819) OMG other expense 333 1,141 Performance (income) loss reclass (1) (55) 1,717 Principal investment income (loss) 25,095 (75,988) Other (income) expense, net (473) 22 Other loss of non-controlling interests in consolidated subsidiaries 138 19,683 Total consolidation adjustments and reconciling items (64,608) 241,634 Total segment realized net investment income (expense) $ (7,823) $ 13,771 (1) Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed 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: Three months ended March 31, 2021 2020 Income (loss) before taxes $ 190,064 $ (296,413) Adjustments: Depreciation and amortization expense 14,100 5,542 Equity compensation expense 55,649 32,557 Acquisition and merger-related expense 8,590 3,137 Deferred placement fees 297 5,415 OMG expense, net 63,396 58,872 Other income, net (473) — Net expense of non-controlling interests in consolidated subsidiaries 689 20,497 (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations (49,886) 166,378 Total performance (income) loss—unrealized (224,954) 387,657 Total performance related compensation—unrealized 160,337 (285,892) Total investment (income) loss—unrealized (18,218) 100,633 Realized income 199,591 198,383 Total performance income—realized (76,981) (151,770) Total performance related compensation—realized 61,096 117,993 Total investment income—realized 7,823 (13,771) Fee related earnings $ 191,529 $ 150,835 |
CONSOLIDATION
CONSOLIDATION | 3 Months Ended |
Mar. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
CONSOLIDATION | 15. 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 March 31, As of December 31, 2021 2020 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs (1) $ 199,819 $ 224,203 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs (1) 387,934 391,963 Assets of consolidated VIEs 11,724,262 11,580,003 Liabilities of consolidated VIEs 10,851,579 10,716,438 (1) As of March 31, 2021 and December 31, 2020, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $106.6 million and $107.7 million, respectively. Three months ended March 31, 2021 2020 Net income (loss) attributable to non-controlling interests related to consolidated VIEs $ 27,816 $ (166,406) Consolidating Schedules The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows: As of March 31, 2021 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 609,872 $ — $ — $ 609,872 Investments (includes $1,369,684 of accrued carried interest) 2,323,728 — (391,750) 1,931,978 Due from affiliates 358,106 — (22,656) 335,450 Other assets 781,464 — (1,523) 779,941 Right-of-use operating lease assets 157,908 — — 157,908 Assets of Consolidated Funds Cash and cash equivalents — 557,271 — 557,271 U.S. Treasury securities, at fair value — 1,000,040 — 1,000,040 Investments, at fair value — 10,944,061 4,112 10,948,173 Due from affiliates — 25,990 (9,750) 16,240 Receivable for securities sold — 166,960 — 166,960 Other assets — 32,096 — 32,096 Total assets $ 4,231,078 $ 12,726,418 $ (421,567) $ 16,535,929 Liabilities Accounts payable, accrued expenses and other liabilities $ 129,327 $ — $ (9,749) $ 119,578 Accrued compensation 89,791 — — 89,791 Due to affiliates 77,817 — — 77,817 Performance related compensation payable 968,582 — — 968,582 Debt obligations 811,279 — — 811,279 Operating lease liabilities 186,594 — — 186,594 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 112,014 (13,541) 98,473 Due to affiliates — 20,690 (20,068) 622 Payable for securities purchased — 781,845 — 781,845 CLO loan obligations, at fair value — 9,892,853 (53,214) 9,839,639 Fund borrowings — 110,409 — 110,409 Total liabilities 2,263,390 10,917,811 (96,572) 13,084,629 Commitments and contingencies Redeemable interest in Consolidated Funds — 930,924 — 930,924 Redeemable interest in Ares Operating Group entities 99,808 — — 99,808 Non-controlling interest in Consolidated Funds — 877,683 (324,995) 552,688 Non-controlling interest in Ares Operating Group entities 706,381 — — 706,381 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 (149,840,978 shares issued and outstanding) 1,498 — — 1,498 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 (112,163,894 shares issued and outstanding) 1,122 — — 1,122 Additional paid-in-capital 1,033,735 — — 1,033,735 Retained earnings (173,555) — — (173,555) Accumulated other comprehensive loss, net of tax (62) — — (62) Total stockholders' equity 1,161,499 — — 1,161,499 Total equity 1,867,880 877,683 (324,995) 2,420,568 Total liabilities, redeemable interest, non-controlling interests and equity $ 4,231,078 $ 12,726,418 $ (421,567) $ 16,535,929 As of December 31, 2020 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 539,812 $ — $ — $ 539,812 Investments (includes $1,145,853 of accrued carried interest) 2,064,517 — (381,758) 1,682,759 Due from affiliates 426,021 — (20,134) 405,887 Other assets 812,630 — (211) 812,419 Right-of-use operating lease assets 154,742 — — 154,742 Assets of Consolidated Funds Cash and cash equivalents — 522,377 — 522,377 Investments, at fair value — 10,873,522 3,575 10,877,097 Due from affiliates — 27,377 (10,205) 17,172 Receivable for securities sold — 121,225 — 121,225 Other assets — 35,502 — 35,502 Total assets $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 Liabilities Accounts payable, accrued expenses and other liabilities $ 125,494 $ — $ (10,205) $ 115,289 Accrued compensation 103,010 — — 103,010 Due to affiliates 100,186 — — 100,186 Performance related compensation payable 813,378 — — 813,378 Debt obligations 642,998 — — 642,998 Operating lease liabilities 180,236 — — 180,236 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 46,824 — 46,824 Due to affiliates — 16,770 (16,770) — Payable for securities purchased — 514,946 — 514,946 CLO loan obligations — 10,015,989 (57,913) 9,958,076 Fund borrowings — 121,909 — 121,909 Total liabilities 1,965,302 10,716,438 (84,888) 12,596,852 Commitments and contingencies Redeemable interest in Ares Operating Group entities 100,366 — — 100,366 Non-controlling interest in Consolidated Funds — 863,565 (323,845) 539,720 Non-controlling interest in Ares Operating Group entities 738,369 — — 738,369 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 (147,182,562 shares issued and outstanding) 1,472 — — 1,472 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 (112,447,618 share issued and outstanding) 1,124 — — 1,124 Additional paid-in-capital 1,043,669 — — 1,043,669 Retained earnings (151,824) — — (151,824) Accumulated other comprehensive income, net of tax 483 — — 483 Total stockholders' equity 1,193,685 — — 1,193,685 Total equity 1,932,054 863,565 (323,845) 2,471,774 Total liabilities, redeemable interest, non-controlling interests and equity $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 Three months ended March 31, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 331,979 $ — $ (11,706) $ 320,273 Carried interest allocation 297,535 — — 297,535 Incentive fees 4,345 — (1,525) 2,820 Principal investment income 25,095 — 5 25,100 Administrative, transaction and other fees 16,805 — (4,145) 12,660 Total revenues 675,759 — (17,371) 658,388 Expenses Compensation and benefits 231,850 — — 231,850 Performance related compensation 221,432 — — 221,432 General, administrative and other expense 67,656 — — 67,656 Expenses of the Consolidated Funds — 17,436 (13,265) 4,171 Total expenses 520,938 17,436 (13,265) 525,109 Other income (expense) Net realized and unrealized gains (losses) on investments (6,118) — 11,551 5,433 Interest and dividend income 1,863 — (903) 960 Interest expense (6,695) — — (6,695) Other expense, net (3,693) — (456) (4,149) Net realized and unrealized gains on investments of the Consolidated Funds — 26,468 (10,046) 16,422 Interest and other income of the Consolidated Funds — 115,383 456 115,839 Interest expense of the Consolidated Funds — (74,535) 3,510 (71,025) Total other income (expense) (14,643) 67,316 4,112 56,785 Income before taxes 140,178 49,880 6 190,064 Income tax expense 25,726 28 — 25,754 Net income 114,452 49,852 6 164,310 Less: Net income attributable to non-controlling interests in Consolidated Funds — 49,852 6 49,858 Net income attributable to Ares Operating Group entities 114,452 — — 114,452 Less: Net income attributable to redeemable interest in Ares Operating Group entities 32 — — 32 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 56,042 — — 56,042 Net income attributable to Ares Management Corporation 58,378 — — 58,378 Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Net income attributable to Ares Management Corporation Class A common stockholders $ 52,953 $ — $ — $ 52,953 Three months ended March 31, 2020 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 274,351 $ — $ (10,502) $ 263,849 Carried interest allocation (230,876) — — (230,876) Incentive fees (3,294) — 45 (3,249) Principal investment loss (75,988) — 49,265 (26,723) Administrative, transaction and other fees 13,725 — (3,317) 10,408 Total revenues (22,082) — 35,491 13,409 Expenses Compensation and benefits 180,084 — — 180,084 Performance related compensation (167,899) — — (167,899) General, administrative and other expense 62,331 — — 62,331 Expenses of the Consolidated Funds — 17,899 (10,456) 7,443 Total expenses 74,516 17,899 (10,456) 81,959 Other income (expense) Net realized and unrealized losses on investments (35,695) — 27,661 (8,034) Interest and dividend income 2,602 — (812) 1,790 Interest expense (5,306) — — (5,306) Other income, net 4,962 — 502 5,464 Net realized and unrealized losses on investments of the Consolidated Funds — (230,173) (24,588) (254,761) Interest and other income of the Consolidated Funds — 113,225 — 113,225 Interest expense of the Consolidated Funds — (81,297) 1,056 (80,241) Total other expense (33,437) (198,245) 3,819 (227,863) Loss before taxes (130,035) (216,144) 49,766 (296,413) Income tax expense (benefit) (20,644) 28 — (20,616) Net loss (109,391) (216,172) 49,766 (275,797) Less: Net loss attributable to non-controlling interests in Consolidated Funds — (216,172) 49,766 (166,406) Net loss attributable to Ares Operating Group entities (109,391) — — (109,391) Less: Net loss attributable to non-controlling interests in in Ares Operating Group entities (78,355) — — (78,355) Net loss attributable to Ares Management Corporation (31,036) — — (31,036) Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Net loss attributable to Ares Management Corporation Class A common stockholders $ (36,461) $ — $ — $ (36,461) Three months ended March 31, 2021 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 114,452 $ 49,852 $ 6 $ 164,310 Adjustments to reconcile net income to net cash provided by (used in) operating activities 34,292 — 9,992 44,284 Adjustments to reconcile net income to net cash used in operating activities allocable to redeemable and non-controlling interests in Consolidated Funds — (1,208,767) 587 (1,208,180) Cash flows due to changes in operating assets and liabilities (11,336) — 4,292 (7,044) Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds — 314,126 (48,614) 265,512 Net cash provided by (used in) operating activities 137,408 (844,789) (33,737) (741,118) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (3,284) — — (3,284) Net cash used in investing activities (3,284) — — (3,284) Cash flows from financing activities: Proceeds from Credit Facility 168,000 — — 168,000 Dividends and distributions (141,768) — — (141,768) Series A Preferred Stock dividends (5,425) — — (5,425) Taxes paid related to net share settlement of equity awards (84,590) — — (84,590) Other financing activities 341 — — 341 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 955,083 (13,148) 941,935 Distributions to non-controlling interests in Consolidated Funds — (50,822) 11,993 (38,829) Borrowings under loan obligations by Consolidated Funds — 7,000 — 7,000 Repayments under loan obligations by Consolidated Funds — (29,453) — (29,453) Net cash provided by (used in) financing activities (63,442) 881,808 (1,155) 817,211 Effect of exchange rate changes (622) (2,127) — (2,749) Net change in cash and cash equivalents 70,060 34,892 (34,892) 70,060 Cash and cash equivalents, beginning of period 539,812 522,377 (522,377) 539,812 Cash and cash equivalents, end of period $ 609,872 $ 557,269 $ (557,269) $ 609,872 Three months ended March 31, 2020 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net loss $ (109,391) $ (216,172) $ 49,766 $ (275,797) Adjustments to reconcile net loss to net cash provided by (used in) operating activities 190,761 — (65,691) 125,070 Adjustments to reconcile net loss to net cash provided by (used in) operating activities allocable to non-controlling interests in Consolidated Funds — (478,695) 25,680 (453,015) Cash flows due to changes in operating assets and liabilities 45,995 — 6,000 51,995 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds — 99,272 89,238 188,510 Net cash provided by (used in) operating activities 127,365 (595,595) 104,993 (363,237) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (3,062) — — (3,062) Cash paid for asset acquisition (35,844) — — (35,844) Net cash used in investing activities (38,906) — — (38,906) Cash flows from financing activities: Proceeds from issuance of Class A common stock 383,334 — — 383,334 Proceeds from Credit Facility 790,000 — — 790,000 Repayments of Credit Facility (60,000) — — (60,000) Dividends and distributions (106,838) — — (106,838) Series A Preferred Stock dividends (5,425) — — (5,425) Stock option exercises 19,551 — — 19,551 Taxes paid related to net share settlement of equity awards (73,500) — — (73,500) Other financing activities (2,125) — — (2,125) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 148,270 (15,005) 133,265 Distributions to non-controlling interests in Consolidated Funds — (15,426) 1,934 (13,492) Borrowings under loan obligations by Consolidated Funds — 454,391 — 454,391 Repayments under loan obligations by Consolidated Funds — (73,609) — (73,609) Net cash provided by financing activities 944,997 513,626 (13,071) 1,445,552 Effect of exchange rate changes (4,167) (9,953) — (14,120) Net change in cash and cash equivalents 1,029,289 (91,922) 91,922 1,029,289 Cash and cash equivalents, beginning of period 138,384 606,321 (606,321) 138,384 Cash and cash equivalents, end of period $ 1,167,673 $ 514,399 $ (514,399) $ 1,167,673 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 16. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after March 31, 2021 through the date the condensed consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure: On April 5, 2021, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Sumitomo Mitsui Banking Corporation (“SMBC”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell to SMBC approximately $250.0 million of the Company’s common stock (consisting of 3,489,911 shares of non-voting common stock and 1,234,200 shares of Class A common stock) at a price per share equal to the public offering price of Class A common stock being offered pursuant to the Offering (as defined below), less underwriting discounts and commissions (the “Private Placement”). The Private Placement closed on April 8, 2021 and resulted in gross proceeds to the Company of approximately $250.0 million before deducting offering expenses. On April 6, 2021, the Company entered into an underwriting agreement pursuant to which the Company agreed to issue and sell 10,925,000 shares of the Class A common stock (including 1,425,000 shares of Class A common stock sold pursuant to the exercise of the underwriters' option to purchase up to 1,425,000 additional shares of Class A common stock) (collectively, the “Offering”). The Offering closed on April 8, 2021 and resulted in gross proceeds to the Company of approximately $578.2 million before deducting offering expenses. In April 2021, the Company's board of directors declared a quarterly dividend of $0.47 per share of Class A common stock payable on June 30, 2021 to common stockholders of record at the close of business on June 16, 2021. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2020 filed with the Securities and Exchange Commission (“SEC”). As of March 31, 2021, the impact of the outbreak of the coronavirus pandemic (“COVID-19”) continues to unfold. As a result, management's estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period. 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. |
U.S. Treasury Securities, at Fair Value | U.S. Treasury Securities, at Fair Value U.S. Treasury securities, at fair value represents U.S Treasury bills that were purchased with funds raised through the initial public offering of AAC, a consolidated SPAC that is presented within Consolidated Funds. The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in the trust agreement. The U.S. Treasury bills have original maturities greater than three months when purchased and therefore is recorded at fair value. Interest income received on such securities is separately presented from the overall change in fair value and is recognized within interest and other income of Consolidated Funds in the Condensed Consolidated Statements of Operations. Any remaining change in fair value of such securities, that is not recognized as interest income, is recognized in net realized and unrealized gains (losses) on investments of Consolidated Funds in the Condensed Consolidated Statements of Operations. |
Redeemable Interest in Consolidated Funds | Redeemable Interest in Consolidated FundsRedeemable interest in Consolidated Funds represent the shares issued by AAC that are redeemable for cash by the public shareholders in connection with AAC’s failure to complete a business combination or tender offer associated with stockholder approval provisions. Although AAC has not specified a maximum redemption threshold, its amended and restated memorandum and articles of association provide that in no event will it redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount. The Company recognizes changes in the redemption amount with corresponding adjustments against additional paid-in-capital that is reflected within non-controlling interest in Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). 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 March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) , to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. An entity may elect to adopt the amendments in ASU 2020-04 and ASU 2021-01 at any time after March 12, 2020 but no later than December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, of the Company's intangible assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition: Weighted Average Amortization Period as of March 31, 2021 As of March 31, As of December 31, 2021 2020 Management contracts 5.2 years $ 210,857 $ 210,857 Client relationships 8.8 years 25,141 25,141 Trade name 9.1 years 11,079 11,079 Intangible assets 247,077 247,077 Foreign currency translation 1,873 3,093 Total intangible assets 248,950 250,170 Less: accumulated amortization (38,539) (28,082) Intangible assets, net $ 210,411 $ 222,088 |
Schedule of goodwill rollforward | The following table summarizes the carrying value of the Company's goodwill assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition: Credit Group Private Real Strategic Initiatives Total Balance as of December 31, 2020 $ 32,196 $ 58,600 $ 53,120 $ 227,131 $ 371,047 Foreign currency translation — — 16 (1,043) (1,027) Balance as of March 31, 2021 $ 32,196 $ 58,600 $ 53,136 $ 226,088 $ 370,020 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments in and Advances to Affiliates [Abstract] | |
Summary of investments held | The Company’s investments are comprised of the following: Percentage of total investments March 31, December 31, March 31, December 31, 2021 2020 2021 2020 Equity method investments: Equity method private investment partnership interests - principal (1) $ 388,820 $ 366,471 20.1 % 21.8 % Equity method - carried interest (1) 1,369,684 1,145,853 70.9 68.1 Equity method private investment partnership interests and other (held at fair value) (1) 93,017 92,196 4.8 5.5 Equity method private investment partnership interests and other (1) 25,917 23,883 1.3 1.4 Total equity method investments 1,877,438 1,628,403 97.1 96.8 Collateralized loan obligations (2) 31,947 31,766 1.7 1.9 Other fixed income 21,583 21,583 1.1 1.3 Collateralized loan obligations and other fixed income, at fair value 53,530 53,349 2.8 3.2 Common stock, at fair value 1,010 1,007 0.1 0.1 Total investments $ 1,931,978 $ 1,682,759 (1) Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date. (2) As of March 31, 2021 and December 31, 2020, includes $3.5 million and $3.4 million, respectively, of collateralized loan obligations that are attributable to the Class B Membership Interests. Investments held in the Consolidated Funds are summarized below: Fair Value at Percentage of total investments as of March 31, December 31, March 31, December 31, 2021 2020 2021 2020 Fixed income investments: Bonds $ 396,455 $ 397,494 3.3 % 3.6% Loans 10,037,808 10,012,948 84.0 92.1 U.S. Treasury securities 1,000,040 — 8.4 — Investments in CLO warehouse 25,350 — 0.2 — Total fixed income investments 11,459,653 10,410,442 95.9 95.7 Equity securities 236,953 227,031 2.0 2.1 Partnership interests 251,607 239,624 2.1 2.2 Total investments, at fair value $ 11,948,213 $ 10,877,097 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of valuation of investments and other financial instruments by fair value hierarchy levels | The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of March 31, 2021: 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 $ — $ — $ 53,530 $ — $ 53,530 Common stock and other equity securities — 1,010 89,233 — 90,243 Partnership interests — — 2,575 1,209 3,784 Total investments, at fair value — 1,010 145,338 1,209 147,557 Derivatives-foreign exchange contracts — 2,897 — — 2,897 Total assets, at fair value $ — $ 3,907 $ 145,338 $ 1,209 $ 150,454 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (746) $ — $ — $ (746) Total liabilities, at fair value $ — $ (746) $ — $ — $ (746) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 395,834 $ 621 $ — $ 396,455 Loans — 9,478,049 559,759 — 10,037,808 U.S. Treasury securities 1,000,040 — — — 1,000,040 Investments in CLO warehouse — 25,350 — — 25,350 Total fixed income investments 1,000,040 9,899,233 560,380 — 11,459,653 Equity securities 5,008 1,311 230,634 — 236,953 Partnership interests — — 243,452 8,155 251,607 Total investments, at fair value 1,005,048 9,900,544 1,034,466 8,155 11,948,213 Total assets, at fair value $ 1,005,048 $ 9,900,544 $ 1,034,466 $ 8,155 $ 11,948,213 Liabilities, at fair value Derivatives: Warrants $ (17,500) $ — $ — $ — $ (17,500) Asset swaps-other — — (2,101) $ — (2,101) Loan obligations of CLOs — (9,839,639) — — (9,839,639) Total liabilities, at fair value $ (17,500) $ (9,839,639) $ (2,101) $ — $ (9,859,240) The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2020: 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 $ — $ — $ 53,349 $ — $ 53,349 Common stock and other equity securities — 1,007 88,412 — 89,419 Partnership interests — — 2,575 1,209 3,784 Total investments, at fair value — 1,007 144,336 1,209 146,552 Derivatives-foreign exchange contracts — 1,440 — — 1,440 Total assets, at fair value $ — $ 2,447 $ 144,336 $ 1,209 $ 147,992 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (1,565) $ — $ — $ (1,565) Total liabilities, at fair value $ — $ (1,565) $ — $ — $ (1,565) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Measured Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 397,485 $ 9 $ — $ 397,494 Loans — 9,470,651 542,297 — 10,012,948 Total fixed income investments — 9,868,136 542,306 — 10,410,442 Equity securities 5,749 239 221,043 — 227,031 Partnership interests — — 231,857 7,767 239,624 Total investments, at fair value 5,749 9,868,375 995,206 7,767 10,877,097 Derivatives: Asset swaps-other — — 1,104 — 1,104 Total assets, at fair value $ 5,749 $ 9,868,375 $ 996,310 $ 7,767 $ 10,878,201 Liabilities, at fair value Derivatives: Asset swaps-other $ — $ — $ (44) $ — $ (44) Loan obligations of CLOs — (9,958,076) — — (9,958,076) Total liabilities, at fair value $ — $ (9,958,076) $ (44) $ — $ (9,958,120) |
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 March 31, 2021: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ 144,336 Sales/settlements (2) — (1,539) — (1,539) Realized and unrealized appreciation, net 821 1,720 — 2,541 Balance, end of period $ 89,233 $ 53,530 $ 2,575 $ 145,338 Change in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ 821 $ 1,720 $ — $ 2,541 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,305 $ 231,857 $ 1,060 $ 996,265 Transfer in 2,289 221,555 — — 223,844 Transfer out (33) (209,002) — — (209,035) Purchases (1) 8,308 137,655 1,000 — 146,963 Sales/settlements (2) (424) (127,350) — 185 (127,589) Amortized discounts/premiums — 770 — — 770 Realized and unrealized appreciation (depreciation), net (549) (5,553) 10,595 (3,346) 1,147 Balance, end of period $ 230,634 $ 560,380 $ 243,452 $ (2,101) $ 1,032,365 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (582) $ (863) $ 10,594 $ (2,705) $ 6,444 (1) Purchases include paid-in-kind interest and securities received in connection with restructuring. (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 March 31, 2020: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 14,704 $ 69,183 $ 35,192 $ 119,079 Transfer in due to changes in consolidation — 3,686 — 3,686 Purchases (1) — 643 — 643 Sales/settlements (2) — (402) (32,430) (32,832) Realized and unrealized depreciation, net — (7,766) (187) (7,953) Balance, end of period $ 14,704 $ 65,344 $ 2,575 $ 82,623 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ — $ (6,731) $ 5,511 $ (1,220) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 85,988 $ 339,136 $ 296,012 $ (4,106) $ 717,030 Transfer in (out) due to changes in consolidation (635) 392,672 — — 392,037 Transfer in — 607,588 — — 607,588 Transfer out — (61,774) — — (61,774) Purchases (1) 249 355,592 8,000 — 363,841 Sales/settlements (2) (351) (178,159) — (1,278) (179,788) Amortized discounts/premiums — 499 — 48 547 Realized and unrealized appreciation (depreciation), net (42,499) (175,998) 3,013 5,356 (210,128) Balance, end of period $ 42,752 $ 1,279,556 $ 307,025 $ 20 $ 1,629,353 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (42,500) $ (170,496) $ 3,012 $ 2,874 $ (207,110) (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 tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of March 31, 2021: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 14,704 Transaction price (1) N/A N/A N/A 32,120 Discounted Cash Flow Discount Rates 14.0% - 20.0% 14.4% 42,409 Market Approach Multiple of Book Value 1.5x N/A Partnership interests 2,575 Other N/A N/A N/A Collateralized loan obligations 31,947 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 21,583 Other N/A N/A N/A Total $ 145,338 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 236 Market approach EBITDA multiple (2) 1.6x - 22.2x 16.3x 775 Broker quotes and/or 3rd party pricing services N/A N/A N/A 229,623 Transaction price (1) N/A N/A N/A Partnership interest 243,452 Discounted cash flow Discount rate 23.8% 23.8% Fixed income securities 433,803 Broker quotes and/or 3rd party pricing services N/A N/A N/A 3,929 Market approach EBITDA multiple (2) 6.5x - 7.8x 7.2x 96,092 Income approach Yield 2.7% - 37.2% 7.6% 26,556 Other N/A N/A N/A Total assets $ 1,034,466 Liabilities Derivative instruments $ (2,101) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (2,101) (1) Transaction price consists of securities 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 tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2020: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 14,704 Transaction price (1) N/A N/A 32,905 Discounted Cash Flow Discount Rates 14.0% - 20.0% 40,803 Market Approach Multiple of Book Value 1.6x Partnership interests 2,575 Other N/A N/A Collateralized loan obligations 31,766 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 21,583 Other N/A N/A Total $ 144,336 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 438 Market approach EBITDA multiple (2) 2.9x - 19.5x 13.4x 32,528 Other Net income multiple 30.0x 30.0x Illiquidity discount 25.0% 25.0% 33 Broker quotes and/or 3rd party pricing services N/A N/A N/A 188,044 Transaction price (1) N/A N/A N/A Partnership interests 231,857 Discounted cash flow Discount rate 23.8% 23.8% Fixed income securities 384,419 Broker quotes and/or 3rd party pricing services N/A N/A N/A 6,605 Market approach EBITDA multiple (2) 6.5x - 7.8x 6.9x 122,962 Income approach Yield 2.7% - 48.1% 7.9% 28,320 Other N/A N/A N/A Derivative instruments 1,104 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 996,310 Liabilities Derivative instruments $ (44) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (44) (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) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 As of December 31, 2020 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 $ 49,594 $ 2,897 $ 23,039 $ 746 $ 30,040 $ 1,440 $ 39,362 $ 1,565 Total derivatives, at fair value (2) $ 49,594 $ 2,897 $ 23,039 $ 746 $ 30,040 $ 1,440 $ 39,362 $ 1,565 As of March 31, 2021 As of December 31, 2020 Assets Liabilities Assets Liabilities Consolidated Funds Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Warrants $ — $ — $ 230,000 $ 17,500 $ — $ — $ — $ — Asset swap - other 47,775 — 42,688 2,101 7,600 1,104 540 44 Total derivatives, at fair value (3) $ 47,775 $ — $ 272,688 $ 19,601 $ 7,600 $ 1,104 $ 540 $ 44 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of March 31, 2021 and December 31, 2020, the Company had the right to, but elected not to, offset $0.7 million and $1.6 million of its derivative liabilities. (3) As of March 31, 2021 and December 31, 2020, the Consolidated Funds offset $0.2 million and $0.4 million of their derivative assets and liabilities, respectively. |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings outstanding | The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of March 31, 2021 As of December 31, 2020 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolver 3/31/2026 N/A $ 168,000 3.38% $ — —% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 247,455 4.21 247,285 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 395,824 3.28 395,713 3.28 Total debt obligations $ 811,279 $ 642,998 (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 31, 2021, the Company amended the Credit Facility to, among other things, extend the maturity date from March 2025 to March 2026. As of March 31, 2021, base rate loans bear interest calculated based on the base rate plus 0.125% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.125%. The unused commitment fee is 0.10% per annum. There is a base rate and LIBOR floor of zero. (2) The 2024 Senior Notes were issued in October 2014 by Ares Finance Co. LLC, an indirect subsidiary of the Company, at 98.27% of the face amount with interest paid semi-annually. The Company may redeem the 2024 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2024 Notes. (3) The 2030 Senior Notes were issued in June 2020 by Ares Finance Co. II LLC, an indirect subsidiary of the Company, at 99.77% of the face amount with interest paid semi-annually. The Company may redeem the 2030 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2030 Notes. 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, 2020 $ 5,232 $ 4,283 Debt issuance costs incurred 1,189 — Amortization of debt issuance costs (310) (149) Unamortized debt issuance costs as of March 31, 2021 $ 6,111 $ 4,134 The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of March 31, 2021 As of December 31, 2020 Loan Fair Value of Weighted Loan Fair Value of Loan Obligations Weighted Senior secured notes (1) $ 9,614,038 $ 9,553,375 9.9 $ 9,796,442 $ 9,665,804 10.1 Subordinated notes (2) 469,415 286,264 10.0 482,391 292,272 10.2 Total loan obligations of Consolidated CLOs $ 10,083,453 $ 9,839,639 $ 10,278,833 $ 9,958,076 (1) Original borrowings under the senior secured notes totaled $9.6 billion, with various maturity dates ranging from July 2028 to October 2033. The weighted average interest rate as of March 31, 2021 was 1.89%. (2) Original borrowings under the subordinated notes totaled $469.4 million, with various maturity dates ranging from July 2028 to October 2033. 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 Consolidated Funds had the following revolving bank credit facilities and term loan outstanding: As of March 31, 2021 As of December 31, 2020 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate Credit Facilities: 3/4/2022 $ 71,500 $ 71,500 1.59% $ 71,500 1.59% 1/1/2023 18,000 17,909 1.69 17,909 1.75 10/14/2021 75,000 21,000 2.70 32,500 2.75 Total borrowings of Consolidated Funds $ 110,409 $ 121,909 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease | The tables below present certain supplemental quantitative disclosures regarding the Company's leases: As of March 31, As of December 31, Classification 2021 2020 Operating lease assets Right-of-use operating lease assets $ 157,908 $ 154,742 Finance lease assets Other assets (1) 1,260 1,386 Total lease assets $ 159,168 $ 156,128 Operating lease liabilities Operating lease liabilities $ 186,594 $ 180,236 Finance lease obligations Accounts payable, accrued expenses and other liabilities 912 1,273 Total lease liabilities $ 187,506 $ 181,509 (1) Finance lease assets are recorded net of accumulated amortization of $1.1 million and $1.0 million as of March 31, 2021 and December 31, 2020, respectively. Three months ended March 31, Classification 2021 2020 Operating lease expense General, administrative and other expenses $ 8,493 $ 7,632 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 126 94 Interest on finance lease liabilities Interest expense 10 11 Total lease expense $ 8,629 $ 7,737 Three months ended March 31, Other information 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,419 $ 8,178 Operating cash flows for finance leases 25 6 Financing cash flows for finance leases 341 36 Leased assets obtained in exchange for new operating lease liabilities 13,374 8,744 As of March 31, As of December 31, Lease term and discount rate 2021 2020 Weighted-average remaining lease terms (in years): Operating leases 5.7 6.0 Finance leases 2.7 2.6 Weighted-average discount rate: Operating leases 3.43 % 3.59 % Finance leases 3.21 % 3.26 % |
Operating Lease, Liability, Maturity | Maturity of lease liabilities Operating Leases Finance Leases 2021 $ 27,311 $ 150 2022 39,825 485 2023 35,795 158 2024 32,844 156 2025 31,717 6 After 2025 38,665 — Total future payments 206,157 955 Less: interest 19,563 43 Total lease liabilities $ 186,594 $ 912 |
Finance Lease, Liability, Maturity | Maturity of lease liabilities Operating Leases Finance Leases 2021 $ 27,311 $ 150 2022 39,825 485 2023 35,795 158 2024 32,844 156 2025 31,717 6 After 2025 38,665 — Total future payments 206,157 955 Less: interest 19,563 43 Total lease liabilities $ 186,594 $ 912 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, As of December 31, 2021 2020 Due from affiliates: Management fees receivable from non-consolidated funds $ 244,018 $ 308,581 Incentive fee receivable from non-consolidated funds 17,214 21,495 Payments made on behalf of and amounts due from non-consolidated funds and employees 74,218 75,811 Due from affiliates—Company $ 335,450 $ 405,887 Amounts due from portfolio companies and non-consolidated funds $ 16,240 $ 17,172 Due from affiliates—Consolidated Funds $ 16,240 $ 17,172 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 3,280 $ 4,808 Tax receivable agreement liability 61,125 62,505 Undistributed carried interest and incentive fees 7,933 27,322 Payments made by non-consolidated funds on behalf of and payable by the Company 5,479 5,551 Due to affiliates—Company $ 77,817 $ 100,186 Amounts due to portfolio companies and non-consolidated funds $ 622 $ — Due to affiliates—Consolidated Funds $ 622 $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from earnings per common unit | The computation of diluted earnings per share for the three months ended March 31, 2021 excludes the following AOG Units, as their effect would have been anti-dilutive. For the three months ended March 31, 2020, the following options, restricted units and AOG Units represent the securities not included in the two-class method: Three months ended March 31, 2021 2020 Options — 12,859,532 Restricted units — 16,377,716 AOG Units 112,353,043 116,328,089 |
Schedule of the computation of basic and diluted earnings per common unit | The following table presents the computation of basic and diluted earnings per common share: Three months ended March 31, 2021 2020 Basic earnings per share of Class A common stock: Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 52,953 $ (36,461) Distributions on unvested restricted units (3,255) (2,290) Net income (loss) available to Class A common stockholders $ 49,698 $ (38,751) Basic weighted-average shares of Class A common stock 149,271,822 118,366,539 Basic earnings (loss) per share of Class A common stock $ 0.33 $ (0.33) Diluted earnings per share of Class A common stock: Net income (loss) available to Class A common stockholders $ 52,953 $ (36,461) Net income (loss) attributable to Ares Management Corporation Class A common stockholders $ 52,953 $ (36,461) Effect of dilutive shares: Restricted units 9,218,424 — Options 5,174,138 — Diluted weighted-average shares of Class A common stock 163,664,384 118,366,539 Diluted earnings (loss) per share of Class A common stock $ 0.32 $ (0.33) Dividend declared and paid per Class A common stock $ 0.47 $ 0.40 |
EQUITY COMPENSATION (Tables)
EQUITY COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of equity-based compensation expense, net of assumed forfeitures | Equity-based compensation expense, net of forfeitures, recorded by the Company is included in the following table: Three months ended March 31, 2021 2020 Restricted units $ 44,087 $ 28,381 Restricted units with a market condition 11,562 4,133 Options — 43 Equity-based compensation expense $ 55,649 $ 32,557 |
Summary of unvested restricted units' activity | The following table presents unvested restricted units' activity: Restricted Units Weighted Average Balance - January 1, 2021 16,299,664 $ 24.30 Granted 9,012,823 45.63 Vested (4,191,773) 21.85 Forfeited (4,269) 50.75 Balance - March 31, 2021 21,116,445 $ 33.80 The following table presents the unvested market condition awards' activity: Market Condition Awards Units Weighted Average Balance - January 1, 2021 — $ — Granted 2,150,000 32.86 Vested — — Forfeited — — Balance - March 31, 2021 2,150,000 $ 32.86 |
Schedule of weighted average assumptions used for fair value | Below is a summary of the significant assumptions used to estimate the grant date fair value of market condition awards: Closing price of the Company's common shares as of valuation date $45.76 Risk-free interest rate 0.88% Volatility 35.0% Dividend yield 3.5% Cost of equity 10.0% |
Summary of unvested options activity | A summary of options activity during the three months ended March 31, 2021 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - January 1, 2021 8,312,203 $ 18.99 3.4 $ 233,251 Granted — — — — Exercised — — — — Expired — — — — Forfeited — — — — Balance - March 31, 2021 8,312,203 18.99 3.1 $ 307,895 Exercisable at March 31, 2021 8,312,203 $ 18.99 3.1 $ 307,895 |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock by Class | The following table presents the changes in each class of common stock: Class A Common Stock Class B Common Stock Class C Common Stock Total Balance - January 1, 2021 147,182,562 1,000 112,447,618 259,631,180 Exchanges of AOG Units 283,724 — (283,724) — Vesting of restricted stock awards, net of shares withheld for tax 2,374,692 — — 2,374,692 Balance - March 31, 2021 149,840,978 1,000 112,163,894 262,005,872 |
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 well as its daily average ownership of AOG Units in each of the Ares Operating Group entities: Daily Average Ownership As of March 31, 2021 As of December 31, 2020 Three months ended March 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2021 2020 Ares Management Corporation 149,840,978 57.19 % 147,182,562 56.69 % 57.06 % 50.43 % Ares Owners Holding L.P. 112,163,894 42.81 112,447,618 43.31 42.94 49.57 Total 262,004,872 100.00 % 259,630,180 100.00 % |
Schedule of Redeemable Interests | Redeemable Interest The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities: Total Balance - January 1, 2021 $ 100,366 Net income 32 Currency translation adjustment, net of tax (590) Balance - March 31, 2021 $ 99,808 The following table summarizes the activities associated with the redeemable interest in Consolidated Funds: Total Balance - January 1, 2021 $ — Redemption value 930,924 Balance - March 31, 2021 $ 930,924 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of financial results for Company's operating segments, as well as the OMG | The following tables present the financial results for the Company’s operating segments, as well as the OMG: Three months ended March 31, 2021 Credit Group Private Equity Group Real Strategic Initiatives Total OMG Total Management fees $ 232,877 $ 49,331 $ 29,632 $ 15,623 $ 327,463 $ — $ 327,463 Other fees 5,969 108 648 79 6,804 — 6,804 Compensation and benefits (80,365) (20,685) (15,941) (4,740) (121,731) (44,407) (166,138) General, administrative and other expenses (10,809) (4,868) (3,295) (2,035) (21,007) (18,656) (39,663) Fee related earnings 147,672 23,886 11,044 8,927 191,529 (63,063) 128,466 Performance income—realized 3,816 71,218 1,947 — 76,981 — 76,981 Performance related compensation—realized (2,893) (57,026) (1,177) — (61,096) — (61,096) Realized net performance income 923 14,192 770 — 15,885 — 15,885 Investment loss—realized — (7,170) (222) — (7,392) — (7,392) Interest and other investment income—realized 3,669 444 2,028 33 6,174 355 6,529 Interest expense (1,515) (1,663) (1,125) (2,302) (6,605) (90) (6,695) Realized net investment income (loss) 2,154 (8,389) 681 (2,269) (7,823) 265 (7,558) Realized income $ 150,749 $ 29,689 $ 12,495 $ 6,658 $ 199,591 $ (62,798) $ 136,793 Three months ended March 31, 2020 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total OMG Total Management fees $ 197,437 $ 52,157 $ 24,184 $ — $ 273,778 $ — $ 273,778 Other fees 3,058 110 704 — 3,872 — 3,872 Compensation and benefits (70,925) (19,596) (12,413) — (102,934) (36,426) (139,360) General, administrative and other expenses (15,313) (5,633) (2,935) — (23,881) (21,305) (45,186) Fee related earnings 114,257 27,038 9,540 — 150,835 (57,731) 93,104 Performance income—realized 9,016 116,154 26,600 — 151,770 — 151,770 Performance related compensation—realized (7,899) (92,924) (17,170) — (117,993) — (117,993) Realized net performance income 1,117 23,230 9,430 — 33,777 — 33,777 Investment income (loss)—realized (843) 11,470 1,290 — 11,917 (5,698) 6,219 Interest and other investment income—realized 4,575 812 796 — 6,183 168 6,351 Interest expense (1,715) (1,643) (971) — (4,329) (977) (5,306) Realized net investment income (loss) 2,017 10,639 1,115 — 13,771 (6,507) 7,264 Realized income $ 117,391 $ 60,907 $ 20,085 $ — $ 198,383 $ (64,238) $ 134,145 |
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: Three months ended March 31, 2021 2020 Segment revenues Management fees $ 327,463 $ 273,778 Other fees 6,804 3,872 Performance income—realized 76,981 151,770 Total segment revenues $ 411,248 $ 429,420 Segment expenses Compensation and benefits $ 121,731 $ 102,934 General, administrative and other expenses 21,007 23,881 Performance related compensation—realized 61,096 117,993 Total segment expenses $ 203,834 $ 244,808 Segment realized net investment income (expense) Investment income (loss)—realized $ (7,392) $ 11,917 Interest and other investment income —realized 6,174 6,183 Interest expense (6,605) (4,329) Total segment realized net investment income (expense) $ (7,823) $ 13,771 |
Schedule of segment revenues components | The following table reconciles the Company's consolidated revenues to segment revenue: Three months ended March 31, 2021 2020 Total consolidated revenue $ 658,388 $ 13,409 Performance (income) loss—unrealized (224,954) 387,657 Management fees of Consolidated Funds eliminated in consolidation 11,706 10,502 Incentive fees of Consolidated Funds eliminated in consolidation 1,525 (45) Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 4,145 3,317 Administrative fees (1) (9,808) (9,661) Performance income (loss) reclass (2) 55 (1,717) Principal investment (income) loss, net of eliminations (25,100) 26,723 Net income of non-controlling interests in consolidated subsidiaries (4,709) (765) Total consolidation adjustments and reconciling items (247,140) 416,011 Total segment revenue $ 411,248 $ 429,420 (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 gains (losses) 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: Three months ended March 31, 2021 2020 Total consolidated expenses $ 525,109 $ 81,959 Performance related compensation-unrealized (160,337) 285,892 Expenses of Consolidated Funds added in consolidation (17,436) (17,899) Expenses of Consolidated Funds eliminated in consolidation 13,265 10,456 Administrative fees (1) (9,808) (9,661) OMG expenses (63,063) (57,731) Acquisition and merger-related expense (8,590) (3,115) Equity compensation expense (55,649) (32,557) Deferred placement fees (297) (5,415) Depreciation and amortization expense (14,100) (5,542) Expense of non-controlling interests in consolidated subsidiaries (5,260) (1,579) Total consolidation adjustments and reconciling items (321,275) 162,849 Total segment expenses $ 203,834 $ 244,808 (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. |
Schedule of segment other income (expense) components | The following table reconciles the Company's consolidated other income to segment realized net investment income: Three months ended March 31, 2021 2020 Total consolidated other income (expense) $ 56,785 $ (227,863) Investment (income) loss—unrealized (22,168) 105,594 Interest and other investment (income) loss—unrealized 3,950 (4,961) Other (income) loss from Consolidated Funds added in consolidation, net (67,316) 198,245 Other expense from Consolidated Funds eliminated in consolidation, net (4,112) (3,819) OMG other expense 333 1,141 Performance (income) loss reclass (1) (55) 1,717 Principal investment income (loss) 25,095 (75,988) Other (income) expense, net (473) 22 Other loss of non-controlling interests in consolidated subsidiaries 138 19,683 Total consolidation adjustments and reconciling items (64,608) 241,634 Total segment realized net investment income (expense) $ (7,823) $ 13,771 (1) Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed 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: Three months ended March 31, 2021 2020 Income (loss) before taxes $ 190,064 $ (296,413) Adjustments: Depreciation and amortization expense 14,100 5,542 Equity compensation expense 55,649 32,557 Acquisition and merger-related expense 8,590 3,137 Deferred placement fees 297 5,415 OMG expense, net 63,396 58,872 Other income, net (473) — Net expense of non-controlling interests in consolidated subsidiaries 689 20,497 (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations (49,886) 166,378 Total performance (income) loss—unrealized (224,954) 387,657 Total performance related compensation—unrealized 160,337 (285,892) Total investment (income) loss—unrealized (18,218) 100,633 Realized income 199,591 198,383 Total performance income—realized (76,981) (151,770) Total performance related compensation—realized 61,096 117,993 Total investment income—realized 7,823 (13,771) Fee related earnings $ 191,529 $ 150,835 |
CONSOLIDATION (Tables)
CONSOLIDATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, As of December 31, 2021 2020 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs (1) $ 199,819 $ 224,203 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs (1) 387,934 391,963 Assets of consolidated VIEs 11,724,262 11,580,003 Liabilities of consolidated VIEs 10,851,579 10,716,438 (1) As of March 31, 2021 and December 31, 2020, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $106.6 million and $107.7 million, respectively. Three months ended March 31, 2021 2020 Net income (loss) attributable to non-controlling interests related to consolidated VIEs $ 27,816 $ (166,406) |
Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition | Consolidating Schedules The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows: As of March 31, 2021 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 609,872 $ — $ — $ 609,872 Investments (includes $1,369,684 of accrued carried interest) 2,323,728 — (391,750) 1,931,978 Due from affiliates 358,106 — (22,656) 335,450 Other assets 781,464 — (1,523) 779,941 Right-of-use operating lease assets 157,908 — — 157,908 Assets of Consolidated Funds Cash and cash equivalents — 557,271 — 557,271 U.S. Treasury securities, at fair value — 1,000,040 — 1,000,040 Investments, at fair value — 10,944,061 4,112 10,948,173 Due from affiliates — 25,990 (9,750) 16,240 Receivable for securities sold — 166,960 — 166,960 Other assets — 32,096 — 32,096 Total assets $ 4,231,078 $ 12,726,418 $ (421,567) $ 16,535,929 Liabilities Accounts payable, accrued expenses and other liabilities $ 129,327 $ — $ (9,749) $ 119,578 Accrued compensation 89,791 — — 89,791 Due to affiliates 77,817 — — 77,817 Performance related compensation payable 968,582 — — 968,582 Debt obligations 811,279 — — 811,279 Operating lease liabilities 186,594 — — 186,594 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 112,014 (13,541) 98,473 Due to affiliates — 20,690 (20,068) 622 Payable for securities purchased — 781,845 — 781,845 CLO loan obligations, at fair value — 9,892,853 (53,214) 9,839,639 Fund borrowings — 110,409 — 110,409 Total liabilities 2,263,390 10,917,811 (96,572) 13,084,629 Commitments and contingencies Redeemable interest in Consolidated Funds — 930,924 — 930,924 Redeemable interest in Ares Operating Group entities 99,808 — — 99,808 Non-controlling interest in Consolidated Funds — 877,683 (324,995) 552,688 Non-controlling interest in Ares Operating Group entities 706,381 — — 706,381 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 (149,840,978 shares issued and outstanding) 1,498 — — 1,498 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 (112,163,894 shares issued and outstanding) 1,122 — — 1,122 Additional paid-in-capital 1,033,735 — — 1,033,735 Retained earnings (173,555) — — (173,555) Accumulated other comprehensive loss, net of tax (62) — — (62) Total stockholders' equity 1,161,499 — — 1,161,499 Total equity 1,867,880 877,683 (324,995) 2,420,568 Total liabilities, redeemable interest, non-controlling interests and equity $ 4,231,078 $ 12,726,418 $ (421,567) $ 16,535,929 As of December 31, 2020 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 539,812 $ — $ — $ 539,812 Investments (includes $1,145,853 of accrued carried interest) 2,064,517 — (381,758) 1,682,759 Due from affiliates 426,021 — (20,134) 405,887 Other assets 812,630 — (211) 812,419 Right-of-use operating lease assets 154,742 — — 154,742 Assets of Consolidated Funds Cash and cash equivalents — 522,377 — 522,377 Investments, at fair value — 10,873,522 3,575 10,877,097 Due from affiliates — 27,377 (10,205) 17,172 Receivable for securities sold — 121,225 — 121,225 Other assets — 35,502 — 35,502 Total assets $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 Liabilities Accounts payable, accrued expenses and other liabilities $ 125,494 $ — $ (10,205) $ 115,289 Accrued compensation 103,010 — — 103,010 Due to affiliates 100,186 — — 100,186 Performance related compensation payable 813,378 — — 813,378 Debt obligations 642,998 — — 642,998 Operating lease liabilities 180,236 — — 180,236 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 46,824 — 46,824 Due to affiliates — 16,770 (16,770) — Payable for securities purchased — 514,946 — 514,946 CLO loan obligations — 10,015,989 (57,913) 9,958,076 Fund borrowings — 121,909 — 121,909 Total liabilities 1,965,302 10,716,438 (84,888) 12,596,852 Commitments and contingencies Redeemable interest in Ares Operating Group entities 100,366 — — 100,366 Non-controlling interest in Consolidated Funds — 863,565 (323,845) 539,720 Non-controlling interest in Ares Operating Group entities 738,369 — — 738,369 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 (147,182,562 shares issued and outstanding) 1,472 — — 1,472 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 (112,447,618 share issued and outstanding) 1,124 — — 1,124 Additional paid-in-capital 1,043,669 — — 1,043,669 Retained earnings (151,824) — — (151,824) Accumulated other comprehensive income, net of tax 483 — — 483 Total stockholders' equity 1,193,685 — — 1,193,685 Total equity 1,932,054 863,565 (323,845) 2,471,774 Total liabilities, redeemable interest, non-controlling interests and equity $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 |
Schedule of results from operations | Three months ended March 31, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 331,979 $ — $ (11,706) $ 320,273 Carried interest allocation 297,535 — — 297,535 Incentive fees 4,345 — (1,525) 2,820 Principal investment income 25,095 — 5 25,100 Administrative, transaction and other fees 16,805 — (4,145) 12,660 Total revenues 675,759 — (17,371) 658,388 Expenses Compensation and benefits 231,850 — — 231,850 Performance related compensation 221,432 — — 221,432 General, administrative and other expense 67,656 — — 67,656 Expenses of the Consolidated Funds — 17,436 (13,265) 4,171 Total expenses 520,938 17,436 (13,265) 525,109 Other income (expense) Net realized and unrealized gains (losses) on investments (6,118) — 11,551 5,433 Interest and dividend income 1,863 — (903) 960 Interest expense (6,695) — — (6,695) Other expense, net (3,693) — (456) (4,149) Net realized and unrealized gains on investments of the Consolidated Funds — 26,468 (10,046) 16,422 Interest and other income of the Consolidated Funds — 115,383 456 115,839 Interest expense of the Consolidated Funds — (74,535) 3,510 (71,025) Total other income (expense) (14,643) 67,316 4,112 56,785 Income before taxes 140,178 49,880 6 190,064 Income tax expense 25,726 28 — 25,754 Net income 114,452 49,852 6 164,310 Less: Net income attributable to non-controlling interests in Consolidated Funds — 49,852 6 49,858 Net income attributable to Ares Operating Group entities 114,452 — — 114,452 Less: Net income attributable to redeemable interest in Ares Operating Group entities 32 — — 32 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 56,042 — — 56,042 Net income attributable to Ares Management Corporation 58,378 — — 58,378 Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Net income attributable to Ares Management Corporation Class A common stockholders $ 52,953 $ — $ — $ 52,953 Three months ended March 31, 2020 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 274,351 $ — $ (10,502) $ 263,849 Carried interest allocation (230,876) — — (230,876) Incentive fees (3,294) — 45 (3,249) Principal investment loss (75,988) — 49,265 (26,723) Administrative, transaction and other fees 13,725 — (3,317) 10,408 Total revenues (22,082) — 35,491 13,409 Expenses Compensation and benefits 180,084 — — 180,084 Performance related compensation (167,899) — — (167,899) General, administrative and other expense 62,331 — — 62,331 Expenses of the Consolidated Funds — 17,899 (10,456) 7,443 Total expenses 74,516 17,899 (10,456) 81,959 Other income (expense) Net realized and unrealized losses on investments (35,695) — 27,661 (8,034) Interest and dividend income 2,602 — (812) 1,790 Interest expense (5,306) — — (5,306) Other income, net 4,962 — 502 5,464 Net realized and unrealized losses on investments of the Consolidated Funds — (230,173) (24,588) (254,761) Interest and other income of the Consolidated Funds — 113,225 — 113,225 Interest expense of the Consolidated Funds — (81,297) 1,056 (80,241) Total other expense (33,437) (198,245) 3,819 (227,863) Loss before taxes (130,035) (216,144) 49,766 (296,413) Income tax expense (benefit) (20,644) 28 — (20,616) Net loss (109,391) (216,172) 49,766 (275,797) Less: Net loss attributable to non-controlling interests in Consolidated Funds — (216,172) 49,766 (166,406) Net loss attributable to Ares Operating Group entities (109,391) — — (109,391) Less: Net loss attributable to non-controlling interests in in Ares Operating Group entities (78,355) — — (78,355) Net loss attributable to Ares Management Corporation (31,036) — — (31,036) Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Net loss attributable to Ares Management Corporation Class A common stockholders $ (36,461) $ — $ — $ (36,461) |
Schedule of cash flows | Three months ended March 31, 2021 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 114,452 $ 49,852 $ 6 $ 164,310 Adjustments to reconcile net income to net cash provided by (used in) operating activities 34,292 — 9,992 44,284 Adjustments to reconcile net income to net cash used in operating activities allocable to redeemable and non-controlling interests in Consolidated Funds — (1,208,767) 587 (1,208,180) Cash flows due to changes in operating assets and liabilities (11,336) — 4,292 (7,044) Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds — 314,126 (48,614) 265,512 Net cash provided by (used in) operating activities 137,408 (844,789) (33,737) (741,118) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (3,284) — — (3,284) Net cash used in investing activities (3,284) — — (3,284) Cash flows from financing activities: Proceeds from Credit Facility 168,000 — — 168,000 Dividends and distributions (141,768) — — (141,768) Series A Preferred Stock dividends (5,425) — — (5,425) Taxes paid related to net share settlement of equity awards (84,590) — — (84,590) Other financing activities 341 — — 341 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 955,083 (13,148) 941,935 Distributions to non-controlling interests in Consolidated Funds — (50,822) 11,993 (38,829) Borrowings under loan obligations by Consolidated Funds — 7,000 — 7,000 Repayments under loan obligations by Consolidated Funds — (29,453) — (29,453) Net cash provided by (used in) financing activities (63,442) 881,808 (1,155) 817,211 Effect of exchange rate changes (622) (2,127) — (2,749) Net change in cash and cash equivalents 70,060 34,892 (34,892) 70,060 Cash and cash equivalents, beginning of period 539,812 522,377 (522,377) 539,812 Cash and cash equivalents, end of period $ 609,872 $ 557,269 $ (557,269) $ 609,872 Three months ended March 31, 2020 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net loss $ (109,391) $ (216,172) $ 49,766 $ (275,797) Adjustments to reconcile net loss to net cash provided by (used in) operating activities 190,761 — (65,691) 125,070 Adjustments to reconcile net loss to net cash provided by (used in) operating activities allocable to non-controlling interests in Consolidated Funds — (478,695) 25,680 (453,015) Cash flows due to changes in operating assets and liabilities 45,995 — 6,000 51,995 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds — 99,272 89,238 188,510 Net cash provided by (used in) operating activities 127,365 (595,595) 104,993 (363,237) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (3,062) — — (3,062) Cash paid for asset acquisition (35,844) — — (35,844) Net cash used in investing activities (38,906) — — (38,906) Cash flows from financing activities: Proceeds from issuance of Class A common stock 383,334 — — 383,334 Proceeds from Credit Facility 790,000 — — 790,000 Repayments of Credit Facility (60,000) — — (60,000) Dividends and distributions (106,838) — — (106,838) Series A Preferred Stock dividends (5,425) — — (5,425) Stock option exercises 19,551 — — 19,551 Taxes paid related to net share settlement of equity awards (73,500) — — (73,500) Other financing activities (2,125) — — (2,125) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 148,270 (15,005) 133,265 Distributions to non-controlling interests in Consolidated Funds — (15,426) 1,934 (13,492) Borrowings under loan obligations by Consolidated Funds — 454,391 — 454,391 Repayments under loan obligations by Consolidated Funds — (73,609) — (73,609) Net cash provided by financing activities 944,997 513,626 (13,071) 1,445,552 Effect of exchange rate changes (4,167) (9,953) — (14,120) Net change in cash and cash equivalents 1,029,289 (91,922) 91,922 1,029,289 Cash and cash equivalents, beginning of period 138,384 606,321 (606,321) 138,384 Cash and cash equivalents, end of period $ 1,167,673 $ 514,399 $ (514,399) $ 1,167,673 |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Billions | 1 Months Ended | |
Feb. 28, 2021USD ($) | Feb. 21, 2020contract | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Proceeds from IPO | $ | $ 1 | |
Number of collateral management contracts acquired | contract | 7 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- (Details) - shares | Mar. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Common stock, shares outstanding (in shares) | 262,005,872 | 259,631,180 |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common stock, shares outstanding (in shares) | 149,840,978 | 147,182,562 |
Class A common stock | Ares Acquisition Corporation | ||
Class of Stock [Line Items] | ||
Temporary equity, shares outstanding (in shares) | 93,092,438 | |
Common stock, shares outstanding (in shares) | 100,000,000 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Carrying Value of Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Finite-lived intangible assets, net | ||
Intangible assets | $ 247,077 | $ 247,077 |
Foreign currency translation | 1,873 | 3,093 |
Total intangible assets | 248,950 | 250,170 |
Less: accumulated amortization | (38,539) | (28,082) |
Intangible assets, net | $ 210,411 | 222,088 |
Management contracts | ||
Finite-lived intangible assets, net | ||
Estimated useful lives, intangible assets | 5 years 2 months 12 days | |
Intangible assets | $ 210,857 | 210,857 |
Client relationships | ||
Finite-lived intangible assets, net | ||
Estimated useful lives, intangible assets | 8 years 9 months 18 days | |
Intangible assets | $ 25,141 | 25,141 |
Trade name | ||
Finite-lived intangible assets, net | ||
Estimated useful lives, intangible assets | 9 years 1 month 6 days | |
Intangible assets | $ 11,079 | $ 11,079 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill impairment | $ 0 | $ 0 |
General, administrative and other expense | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 10,600,000 | $ 1,000,000 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 371,047 |
Foreign currency translation | (1,027) |
Goodwill, ending balance | 370,020 |
Credit Group | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 32,196 |
Foreign currency translation | 0 |
Goodwill, ending balance | 32,196 |
Private Equity Group | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 58,600 |
Foreign currency translation | 0 |
Goodwill, ending balance | 58,600 |
Real Estate Group | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 53,120 |
Foreign currency translation | 16 |
Goodwill, ending balance | 53,136 |
Strategic Initiatives | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 227,131 |
Foreign currency translation | (1,043) |
Goodwill, ending balance | $ 226,088 |
INVESTMENTS (Fair Value Investm
INVESTMENTS (Fair Value Investments, excluding Equity Method Investments Held at Fair Value) (Details) - Ares Management L.P - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Investments | ||
Partnership interests | $ 3,784 | $ 3,784 |
Other fixed income | 147,557 | 146,552 |
Collateralized loan obligations | 31,947 | 31,766 |
Equity securities | $ 90,243 | $ 89,419 |
Percentage of total investments | 1.70% | 1.90% |
Total investments | $ 1,931,978 | $ 1,682,759 |
Crestline Denali Class B Interests | ||
Investments | ||
Collateralized loan obligations | 3,500 | 3,400 |
Partnership interests | ||
Investments | ||
Equity method investments | $ 1,877,438 | $ 1,628,403 |
Percentage of total investments | 97.10% | 96.80% |
Other fixed income | ||
Investments | ||
Other fixed income | $ 21,583 | $ 21,583 |
Percentage of total investments | 1.10% | 1.30% |
Collateralized loan obligations | ||
Investments | ||
Collateralized loan obligations | $ 53,530 | $ 53,349 |
Percentage of total investments | 2.80% | 3.20% |
Common Stock | ||
Investments | ||
Equity securities | $ 1,010 | $ 1,007 |
Percentage of total investments | 0.10% | 0.10% |
Partnership interests | ||
Investments | ||
Equity method investments | $ 388,820 | $ 366,471 |
Percentage of total investments | 20.10% | 21.80% |
Carried interest allocation | ||
Investments | ||
Equity method investments | $ 1,369,684 | $ 1,145,853 |
Percentage of total investments | 70.90% | 68.10% |
Equity method private investment partnership interests and other (held at fair value)(1) | ||
Investments | ||
Equity method investments | $ 93,017 | $ 92,196 |
Percentage of total investments | 4.80% | 5.50% |
Equity method private investment partnership interests and other(1) | ||
Investments | ||
Partnership interests | $ 25,917 | $ 23,883 |
Percentage of total investments | 1.30% | 1.40% |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Investments in and Advances to Affiliates [Abstract] | ||
Equity method investments gain (loss) | $ 26.6 | $ (28.8) |
INVESTMENTS (Investments of the
INVESTMENTS (Investments of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Investments | ||
Total investments | $ 11,948,213 | $ 10,877,097 |
Percent of total assets | 5.00% | |
U.S. Treasury securities | ||
Investments | ||
Percent of total assets | 5.00% | |
Percentage of interest yield | 0.30% | |
Fixed Income Securities | ||
Investments | ||
Total investments | $ 11,459,653 | $ 10,410,442 |
Percentage of total investments as of | 95.90% | 95.70% |
Fixed Income Securities | Bonds | ||
Investments | ||
Total investments | $ 396,455 | $ 397,494 |
Percentage of total investments as of | 3.30% | 3.60% |
Fixed Income Securities | Loans | ||
Investments | ||
Total investments | $ 10,037,808 | $ 10,012,948 |
Percentage of total investments as of | 84.00% | 92.10% |
Fixed Income Securities | U.S. Treasury securities | ||
Investments | ||
Total investments | $ 1,000,040 | $ 0 |
Percentage of total investments as of | 8.40% | 0.00% |
Fixed Income Securities | Collateralized loan obligations | ||
Investments | ||
Total investments | $ 25,350 | $ 0 |
Percentage of total investments as of | 0.20% | 0.00% |
Equity Securities | ||
Investments | ||
Total investments | $ 236,953 | $ 227,031 |
Percentage of total investments as of | 2.00% | 2.10% |
Partnership Interests | ||
Investments | ||
Total investments | $ 251,607 | $ 239,624 |
Percentage of total investments as of | 2.10% | 2.20% |
FAIR VALUE (Assets and Liabilit
FAIR VALUE (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | $ 11,459,653 | $ 10,410,442 |
Common stock and other equity securities | 236,953 | 227,031 |
Partnership interests | 251,607 | 239,624 |
Total investments, at fair value | 11,948,213 | 10,877,097 |
Total derivative assets, at fair value | 11,948,213 | 10,878,201 |
Liabilities, at fair value | ||
Loan obligations of CLOs | (9,839,639) | (9,958,076) |
Total liabilities, at fair value | (9,859,240) | (9,958,120) |
Consolidated Funds | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | (17,500) | |
Consolidated Funds | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivative instruments | 1,104 | |
Liabilities, at fair value | ||
Derivative liabilities | (2,101) | (44) |
Consolidated Funds | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 25,350 | |
Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 396,455 | 397,494 |
Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 10,037,808 | 10,012,948 |
Consolidated Funds | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,000,040 | |
Consolidated Funds | Level I | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,000,040 | 0 |
Common stock and other equity securities | 5,008 | 5,749 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 1,005,048 | 5,749 |
Total derivative assets, at fair value | 1,005,048 | 5,749 |
Liabilities, at fair value | ||
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (17,500) | 0 |
Consolidated Funds | Level I | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | (17,500) | |
Consolidated Funds | Level I | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivative instruments | 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 I | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,000,040 | |
Consolidated Funds | Level II | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9,899,233 | 9,868,136 |
Common stock and other equity securities | 1,311 | 239 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 9,900,544 | 9,868,375 |
Total derivative assets, at fair value | 9,900,544 | 9,868,375 |
Liabilities, at fair value | ||
Loan obligations of CLOs | (9,839,639) | (9,958,076) |
Total liabilities, at fair value | (9,839,639) | (9,958,076) |
Consolidated Funds | Level II | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level II | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivative instruments | 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 | 25,350 | |
Consolidated Funds | Level II | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 395,834 | 397,485 |
Consolidated Funds | Level II | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9,478,049 | 9,470,651 |
Consolidated Funds | Level II | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | |
Consolidated Funds | Level III | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 560,380 | 542,306 |
Common stock and other equity securities | 230,634 | 221,043 |
Partnership interests | 243,452 | 231,857 |
Total investments, at fair value | 1,034,466 | 995,206 |
Total derivative assets, at fair value | 1,034,466 | 996,310 |
Liabilities, at fair value | ||
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (2,101) | (44) |
Consolidated Funds | Level III | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level III | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivative instruments | 1,104 | |
Liabilities, at fair value | ||
Derivative liabilities | (2,101) | (44) |
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 | 621 | 9 |
Consolidated Funds | Level III | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 559,759 | 542,297 |
Consolidated Funds | Level III | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | |
Consolidated Funds | Investments Measured at NAV | ||
Assets, at fair value | ||
Partnership interests | 8,155 | 7,767 |
Total investments, at fair value | 8,155 | 7,767 |
Total derivative assets, at fair value | 8,155 | 7,767 |
Ares Management L.P | ||
Assets, at fair value | ||
Common stock and other equity securities | 90,243 | 89,419 |
Partnership interests | 3,784 | 3,784 |
Total investments, at fair value | 147,557 | 146,552 |
Total derivative assets, at fair value | 150,454 | 147,992 |
Liabilities, at fair value | ||
Derivative liabilities | (1,565) | |
Total liabilities, at fair value | (746) | (1,565) |
Ares Management L.P | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivative instruments | 2,897 | 1,440 |
Liabilities, at fair value | ||
Derivative liabilities | (746) | |
Ares Management L.P | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 53,530 | 53,349 |
Ares Management L.P | Level I | ||
Assets, at fair value | ||
Common stock and other equity securities | 0 | 0 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 0 | 0 |
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level I | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivative instruments | 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 | 1,010 | 1,007 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 1,010 | 1,007 |
Total derivative assets, at fair value | 3,907 | 2,447 |
Liabilities, at fair value | ||
Derivative liabilities | (1,565) | |
Total liabilities, at fair value | (746) | (1,565) |
Ares Management L.P | Level II | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivative instruments | 2,897 | 1,440 |
Liabilities, at fair value | ||
Derivative liabilities | (746) | |
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 | 89,233 | 88,412 |
Partnership interests | 2,575 | 2,575 |
Total investments, at fair value | 145,338 | 144,336 |
Total derivative assets, at fair value | 145,338 | 144,336 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivative instruments | 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 | 53,530 | 53,349 |
Ares Management L.P | Investments Measured at NAV | ||
Assets, at fair value | ||
Partnership interests | 1,209 | 1,209 |
Total investments, at fair value | 1,209 | 1,209 |
Total derivative assets, at fair value | $ 1,209 | $ 1,209 |
FAIR VALUE (Changes in Fair Val
FAIR VALUE (Changes in Fair Value of Level III Measurements) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Consolidated Funds | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | $ 996,265 | $ 717,030 |
Transfer in (out) due to changes in consolidation | 392,037 | |
Transfer in | 223,844 | 607,588 |
Transfer out | (209,035) | (61,774) |
Purchases | 146,963 | 363,841 |
Sales/settlements | (127,589) | (179,788) |
Amortized discounts/premiums | 770 | 547 |
Realized and unrealized appreciation (depreciation), net | 1,147 | (210,128) |
Balance, end of period | 1,032,365 | 1,629,353 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 6,444 | (207,110) |
Consolidated Funds | Equity Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 221,043 | 85,988 |
Transfer in (out) due to changes in consolidation | (635) | |
Transfer in | 2,289 | 0 |
Transfer out | (33) | 0 |
Purchases | 8,308 | 249 |
Sales/settlements | (424) | (351) |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | (549) | (42,499) |
Balance, end of period | 230,634 | 42,752 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (582) | (42,500) |
Consolidated Funds | Fixed Income Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 542,305 | 339,136 |
Transfer in (out) due to changes in consolidation | 392,672 | |
Transfer in | 221,555 | 607,588 |
Transfer out | (209,002) | (61,774) |
Purchases | 137,655 | 355,592 |
Sales/settlements | (127,350) | (178,159) |
Amortized discounts/premiums | 770 | 499 |
Realized and unrealized appreciation (depreciation), net | (5,553) | (175,998) |
Balance, end of period | 560,380 | 1,279,556 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (863) | (170,496) |
Consolidated Funds | Partnership interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 231,857 | 296,012 |
Transfer in (out) due to changes in consolidation | 0 | |
Transfer in | 0 | 0 |
Transfer out | 0 | 0 |
Purchases | 1,000 | 8,000 |
Sales/settlements | 0 | 0 |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 10,595 | 3,013 |
Balance, end of period | 243,452 | 307,025 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 10,594 | 3,012 |
Consolidated Funds | Derivatives, Net | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 1,060 | (4,106) |
Transfer in (out) due to changes in consolidation | 0 | |
Transfer in | 0 | 0 |
Transfer out | 0 | 0 |
Purchases | 0 | 0 |
Sales/settlements | 185 | (1,278) |
Amortized discounts/premiums | 0 | 48 |
Realized and unrealized appreciation (depreciation), net | (3,346) | 5,356 |
Balance, end of period | (2,101) | 20 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (2,705) | 2,874 |
Ares Management L.P | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 144,336 | 119,079 |
Transfer in (out) due to changes in consolidation | 3,686 | |
Purchases | 643 | |
Sales/settlements | (1,539) | (32,832) |
Realized and unrealized appreciation (depreciation), net | 2,541 | (7,953) |
Balance, end of period | 145,338 | 82,623 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 2,541 | (1,220) |
Ares Management L.P | Equity Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 88,412 | 14,704 |
Transfer in (out) due to changes in consolidation | 0 | |
Purchases | 0 | |
Sales/settlements | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 821 | 0 |
Balance, end of period | 89,233 | 14,704 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 821 | 0 |
Ares Management L.P | Fixed Income Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 53,349 | 69,183 |
Transfer in (out) due to changes in consolidation | 3,686 | |
Purchases | 643 | |
Sales/settlements | (1,539) | (402) |
Realized and unrealized appreciation (depreciation), net | 1,720 | (7,766) |
Balance, end of period | 53,530 | 65,344 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 1,720 | (6,731) |
Ares Management L.P | Partnership interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 2,575 | 35,192 |
Transfer in (out) due to changes in consolidation | 0 | |
Purchases | 0 | |
Sales/settlements | 0 | (32,430) |
Realized and unrealized appreciation (depreciation), net | 0 | (187) |
Balance, end of period | 2,575 | 2,575 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | $ 0 | $ 5,511 |
FAIR VALUE (Valuation Technique
FAIR VALUE (Valuation Techniques) (Details) $ in Thousands | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Consolidated Funds | ||
Assets | ||
Equity securities | $ 236,953 | $ 227,031 |
Partnership interests | 251,607 | 239,624 |
Collateralized loan obligations | 9,839,639 | 9,958,076 |
Other fixed income | 11,459,653 | 10,410,442 |
Total derivative assets, at fair value | 11,948,213 | 10,878,201 |
Liabilities | ||
Total liabilities, at fair value | (9,859,240) | (9,958,120) |
Consolidated Funds | Level III | ||
Assets | ||
Equity securities | 230,634 | 221,043 |
Partnership interests | 243,452 | 231,857 |
Collateralized loan obligations | 0 | 0 |
Other fixed income | 560,380 | 542,306 |
Total derivative assets, at fair value | 1,034,466 | 996,310 |
Liabilities | ||
Total liabilities, at fair value | (2,101) | (44) |
Consolidated Funds | Level III | Transaction price | ||
Assets | ||
Equity securities | 229,623 | 188,044 |
Consolidated Funds | Level III | Discounted Cash Flow | ||
Assets | ||
Partnership interests | $ 243,452 | $ 231,857 |
Unobservable Input | ||
Partnership interest | 0.238 | |
Consolidated Funds | Level III | Discounted Cash Flow | Weighted Average | ||
Unobservable Input | ||
Partnership interest | 0.238 | |
Consolidated Funds | Level III | Discounted Cash Flow | Discount Rates | ||
Unobservable Input | ||
Partnership interest | 0.238 | |
Consolidated Funds | Level III | Discounted Cash Flow | Discount Rates | Weighted Average | ||
Unobservable Input | ||
Partnership interest | 0.238 | |
Consolidated Funds | Level III | Market Approach | ||
Assets | ||
Equity securities | $ 236 | $ 438 |
Other fixed income | $ 3,929 | $ 6,605 |
Consolidated Funds | Level III | Market Approach | EBITDA multiple | Minimum | ||
Unobservable Input | ||
Equity securities | 1.6 | 2.9 |
Fixed income securities | 6.5 | 6.5 |
Consolidated Funds | Level III | Market Approach | EBITDA multiple | Maximum | ||
Unobservable Input | ||
Equity securities | 22.2 | 19.5 |
Fixed income securities | 7.8 | 7.8 |
Consolidated Funds | Level III | Market Approach | EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
Equity securities | 16.3 | 13.4 |
Fixed income securities | 7.2 | 6.9 |
Consolidated Funds | Level III | Other | ||
Assets | ||
Equity securities | $ 32,528 | |
Other fixed income | $ 26,556 | $ 28,320 |
Consolidated Funds | Level III | Other | Net income multiple | ||
Unobservable Input | ||
Equity securities | 30 | |
Consolidated Funds | Level III | Other | Net income multiple | Weighted Average | ||
Unobservable Input | ||
Equity securities | 30 | |
Consolidated Funds | Level III | Other | Illiquidity discount | ||
Unobservable Input | ||
Equity securities | 0.250 | |
Consolidated Funds | Level III | Other | Illiquidity discount | Weighted Average | ||
Unobservable Input | ||
Equity securities | 0.250 | |
Consolidated Funds | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Equity securities | 775 | $ 33 |
Other fixed income | 433,803 | 384,419 |
Derivative instruments | 1,104 | |
Liabilities | ||
Derivative instruments | (2,101) | (44) |
Consolidated Funds | Level III | Income approach | ||
Assets | ||
Other fixed income | $ 96,092 | $ 122,962 |
Consolidated Funds | Level III | Income approach | Yield | Minimum | ||
Unobservable Input | ||
Fixed income securities | 0.027 | 0.027 |
Consolidated Funds | Level III | Income approach | Yield | Maximum | ||
Unobservable Input | ||
Fixed income securities | 0.372 | 0.481 |
Consolidated Funds | Level III | Income approach | Yield | Weighted Average | ||
Unobservable Input | ||
Fixed income securities | 0.076 | 0.079 |
Ares Management L.P | ||
Assets | ||
Equity securities | $ 90,243 | $ 89,419 |
Partnership interests | 3,784 | 3,784 |
Total derivative assets, at fair value | 150,454 | 147,992 |
Liabilities | ||
Derivative instruments | (1,565) | |
Total liabilities, at fair value | (746) | (1,565) |
Ares Management L.P | Level III | ||
Assets | ||
Equity securities | 89,233 | 88,412 |
Partnership interests | 2,575 | 2,575 |
Total derivative assets, at fair value | 145,338 | 144,336 |
Liabilities | ||
Derivative instruments | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Transaction price | ||
Assets | ||
Equity securities | 14,704 | 14,704 |
Ares Management L.P | Level III | Discounted Cash Flow | ||
Assets | ||
Equity securities | $ 32,120 | $ 32,905 |
Ares Management L.P | Level III | Discounted Cash Flow | Discount Rates | Minimum | ||
Unobservable Input | ||
Equity securities | 0.140 | 0.140 |
Ares Management L.P | Level III | Discounted Cash Flow | Discount Rates | Maximum | ||
Unobservable Input | ||
Equity securities | 0.200 | 0.200 |
Ares Management L.P | Level III | Discounted Cash Flow | Discount Rates | Weighted Average | ||
Unobservable Input | ||
Equity securities | 0.144 | |
Ares Management L.P | Level III | Market Approach | ||
Assets | ||
Equity securities | $ 42,409 | $ 40,803 |
Ares Management L.P | Level III | Market Approach | Multiple of Book Value | ||
Unobservable Input | ||
Equity securities | 0.015 | |
Ares Management L.P | Level III | Market Approach | Multiple of Book Value | Weighted Average | ||
Unobservable Input | ||
Equity securities | 1.6 | |
Ares Management L.P | Level III | Other | ||
Assets | ||
Partnership interests | $ 2,575 | 2,575 |
Other fixed income | 21,583 | 21,583 |
Ares Management L.P | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Collateralized loan obligations | $ 31,947 | $ 31,766 |
FAIR VALUE (Investments Using N
FAIR VALUE (Investments Using NAV per Share) (Details) - Investments Measured at NAV - Non-core investments - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 |
FAIR VALUE | |||
Fair Value | $ 1,200,000 | $ 1,200,000 | |
Unfunded commitments | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Consolidated Funds | ||
Assets | ||
Notional amount, Assets | $ 47,775 | $ 7,600 |
Fair Value, Assets | 0 | 1,104 |
Liabilities | ||
Notional amount, Liabilities | 272,688 | 540 |
Fair Value, Liabilities | 19,601 | 44 |
Derivative liability, amount offset | (200) | (400) |
Derivative asset, amount offset | 200 | 400 |
Consolidated Funds | Warrants | ||
Assets | ||
Notional amount, Assets | 0 | 0 |
Fair Value, Assets | 0 | 0 |
Liabilities | ||
Notional amount, Liabilities | 230,000 | 0 |
Fair Value, Liabilities | 17,500 | 0 |
Consolidated Funds | Asset swap - other | ||
Assets | ||
Notional amount, Assets | 47,775 | 7,600 |
Fair Value, Assets | 0 | 1,104 |
Liabilities | ||
Notional amount, Liabilities | 42,688 | 540 |
Fair Value, Liabilities | 2,101 | 44 |
Ares Management L.P | ||
Assets | ||
Notional amount, Assets | 49,594 | 30,040 |
Fair Value, Assets | 2,897 | 1,440 |
Liabilities | ||
Notional amount, Liabilities | 23,039 | 39,362 |
Fair Value, Liabilities | 746 | 1,565 |
Derivative liability, amount offset | (700) | (1,600) |
Ares Management L.P | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 49,594 | 30,040 |
Fair Value, Assets | 2,897 | 1,440 |
Liabilities | ||
Notional amount, Liabilities | 23,039 | 39,362 |
Fair Value, Liabilities | $ 746 | $ 1,565 |
DEBT (Debt Obligations) (Detail
DEBT (Debt Obligations) (Details) - Ares Management L.P - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2020 | Oct. 31, 2014 | Mar. 31, 2021 | Dec. 31, 2020 | |
DEBT | ||||
Carrying Value | $ 811,279,000 | $ 642,998,000 | ||
Credit Facility | ||||
DEBT | ||||
Carrying Value | $ 168,000,000 | $ 0 | ||
Interest Rate | 3.38% | 0.00% | ||
Maximum borrowing capacity | $ 1,065,000,000 | |||
Unused commitment fees | 0.10% | |||
Interest rate | 0.00% | |||
Credit Facility | Base rate | ||||
DEBT | ||||
Interest rate spread | 0.125% | |||
Credit Facility | LIBOR | ||||
DEBT | ||||
Interest rate spread | 1.125% | |||
Senior Notes 2024 | ||||
DEBT | ||||
Original Borrowing Amount | $ 250,000,000 | |||
Carrying Value | $ 247,455,000 | $ 247,285,000 | ||
Interest Rate | 4.21% | 4.21% | ||
Debt issuance rate | 98.27% | |||
Senior Notes 2030 | ||||
DEBT | ||||
Original Borrowing Amount | $ 400,000,000 | |||
Carrying Value | $ 395,824,000 | $ 395,713,000 | ||
Interest Rate | 3.28% | 3.28% | ||
Debt issuance rate | 99.77% |
DEBT (Debt Issuance Costs) (Det
DEBT (Debt Issuance Costs) (Details) - Ares Management L.P $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Credit Facility | |
Debt Issuance Costs | |
Unamortized debt issuance costs | $ 5,232 |
Debt issuance costs incurred | 1,189 |
Amortization of debt issuance costs | (310) |
Unamortized debt issuance costs | 6,111 |
Senior Notes | |
Debt Issuance Costs | |
Unamortized debt issuance costs | 4,283 |
Debt issuance costs incurred | 0 |
Amortization of debt issuance costs | (149) |
Unamortized debt issuance costs | $ 4,134 |
DEBT (Loan Obligations of the C
DEBT (Loan Obligations of the Consolidated CLOs) (Details) - Consolidated Funds - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
DEBT | ||
Fair Value of Loan Obligations | $ 9,839,639 | $ 9,958,076 |
Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 10,083,453 | 10,278,833 |
Fair Value of Loan Obligations | 9,839,639 | 9,958,076 |
Senior secured notes | Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 9,614,038 | 9,796,442 |
Fair Value of Loan Obligations | $ 9,553,375 | $ 9,665,804 |
Weighted Average Remaining Maturity In Years | 9 years 10 months 24 days | 10 years 1 month 6 days |
Debt instrument face amount | $ 9,600,000 | |
Weighted average interest rate (as a percent) | 1.89% | |
Subordinated notes | Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | $ 469,415 | $ 482,391 |
Fair Value of Loan Obligations | $ 286,264 | $ 292,272 |
Weighted Average Remaining Maturity In Years | 10 years | 10 years 2 months 12 days |
Debt instrument face amount | $ 469,400 |
DEBT (Credit Facilities of the
DEBT (Credit Facilities of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
DEBT | ||
Total borrowings of Consolidated Funds | $ 110,409,000 | $ 121,909,000 |
Credit Facility Maturing 3/5/2021 | ||
DEBT | ||
Maximum borrowing capacity | 71,500,000 | |
Outstanding Loan | $ 71,500,000 | $ 71,500,000 |
Effective Rate | 1.59% | 1.59% |
Credit Facility Maturing 1/1/2023 | ||
DEBT | ||
Maximum borrowing capacity | $ 18,000,000 | |
Outstanding Loan | $ 17,909,000 | $ 17,909,000 |
Effective Rate | 1.69% | 1.75% |
Credit Facility Maturing 7/15/2028 | ||
DEBT | ||
Maximum borrowing capacity | $ 75,000,000 | |
Outstanding Loan | $ 21,000,000 | $ 32,500,000 |
Effective Rate | 2.70% | 2.75% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
COMMITMENTS AND CONTINGENCIES | ||
Unfunded capital commitments | $ 759,700,000 | $ 784,200,000 |
Performance Income | ||
Carried interest, contingent repayment obligations | 0 | 0 |
Performance Income | ||
Performance Income | ||
Performance income subject to potential clawback provision | 303,200,000 | 326,400,000 |
Performance income subject to potential claw back provision that are reimbursable by professionals | $ 235,900,000 | $ 252,400,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Leases: Assets and Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities | $ 186,594 | |
Finance lease obligations | 912 | |
Accumulated amortization | $ (1,100) | $ (1,000) |
Finance lease assets, extensible list | Other assets | |
Finance lease, liability, extensible list | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | |
Ares Management L.P | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | $ 157,908 | 154,742 |
Finance lease assets | 1,260 | 1,386 |
Total lease assets | 159,168 | 156,128 |
Operating lease liabilities | 186,594 | 180,236 |
Finance lease obligations | 912 | 1,273 |
Total lease liabilities | $ 187,506 | $ 181,509 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 9 years |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Leases: Maturity of Lease Liabilities) (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Operating Leases | |
2021 | $ 27,311 |
2022 | 39,825 |
2023 | 35,795 |
2024 | 32,844 |
2025 | 31,717 |
After 2025 | 38,665 |
Total future payments | 206,157 |
Less: interest | 19,563 |
Operating lease liabilities | 186,594 |
Finance Leases | |
2021 | 150 |
2022 | 485 |
2023 | 158 |
2024 | 156 |
2025 | 6 |
After 2025 | 0 |
Total future payments | 955 |
Less: interest | 43 |
Total lease liabilities | $ 912 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Leases: Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease expense | $ 8,493 | $ 7,632 |
Amortization of finance lease assets | 126 | 94 |
Interest on finance lease liabilities | 10 | 11 |
Total lease expense | $ 8,629 | $ 7,737 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Leases: Other Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows for operating leases | $ 8,419 | $ 8,178 |
Operating cash flows for finance leases | 25 | 6 |
Financing cash flows for finance leases | 341 | 36 |
Leased assets obtained in exchange for new operating lease liabilities | $ 13,374 | $ 8,744 |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES (Leases: Lease Term and Discount Rate) (Details) | Mar. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted-average remaining lease terms, operating lease | 5 years 8 months 12 days | 6 years |
Weighted-average remaining lease terms, finance lease | 2 years 8 months 12 days | 2 years 7 months 6 days |
Weighted-average discount rate, operating lease | 3.43% | 3.59% |
Weighted-average discount rate, finance lease | 3.21% | 3.26% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Consolidated Funds | ||
Due from affiliates: | ||
Due from affiliates | $ 16,240 | $ 17,172 |
Due to affiliates: | ||
Due to affiliates | 622 | 0 |
Consolidated Funds | Affiliated entity | ||
Due from affiliates: | ||
Due from affiliates | 16,240 | 17,172 |
Due to affiliates: | ||
Due to affiliates | 622 | 0 |
Ares Management L.P | ||
Due from affiliates: | ||
Due from affiliates | 335,450 | 405,887 |
Due to affiliates: | ||
Due to affiliates | 77,817 | 100,186 |
Ares Management L.P | Affiliated entity | ||
Due from affiliates: | ||
Management fees receivable from non-consolidated funds | 244,018 | 308,581 |
Incentive fee receivable from non-consolidated funds | 17,214 | 21,495 |
Payments made on behalf of and amounts due from non-consolidated funds and employees | 74,218 | 75,811 |
Due to affiliates: | ||
Management fee received in advance and rebates payable to non-consolidated funds | 3,280 | 4,808 |
Tax receivable agreement liability | 61,125 | 62,505 |
Undistributed carried interest and incentive fees | 7,933 | 27,322 |
Payments made by non-consolidated funds on behalf of and payable by the Company | $ 5,479 | $ 5,551 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) | $ 25,754 | $ (20,616) | |
Deferred tax asset | $ 46,000 | $ 70,000 |
EARNINGS PER SHARE (Antidilutiv
EARNINGS PER SHARE (Antidilutive) (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Options | ||
Earnings per common unit | ||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 0 | 12,859,532 |
Restricted units | ||
Earnings per common unit | ||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 0 | 16,377,716 |
AOG | ||
Earnings per common unit | ||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 112,353,043 | 116,328,089 |
EARNINGS PER SHARE (Computation
EARNINGS PER SHARE (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Basic | |||
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | $ 52,953 | $ (36,461) | |
Distributions on unvested restricted units | (3,255) | (2,290) | |
Net income (loss) available to Class A common stockholders | 49,698 | (38,751) | |
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | $ 52,953 | $ (36,461) | |
Diluted | |||
Dividend declared and paid per Class A common stock (in dollar per share) | $ 0.47 | ||
Class A common stock | |||
Basic | |||
Basic weighted-average shares of Class A common stock (in shares) | 149,271,822 | 118,366,539 | |
Basic earnings per share of Class A common stock (in dollars per share) | $ 0.33 | $ (0.33) | |
Diluted | |||
Diluted weighted-average shares of Class A common stock (in shares) | 163,664,384 | 118,366,539 | |
Diluted earnings per share of Class A common stock (in dollars per share) | $ 0.32 | $ (0.33) | |
Dividend declared and paid per Class A common stock (in dollar per share) | $ 0.47 | $ 0.40 | |
Restricted units | |||
Diluted | |||
Effect of dilutive shares (in shares) | 9,218,424 | 0 | |
Options | |||
Diluted | |||
Effect of dilutive shares (in shares) | 5,174,138 | 0 |
EQUITY COMPENSATION (Equity Inc
EQUITY COMPENSATION (Equity Incentive Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Jan. 01, 2021 | |
Equity compensation | |||
Equity compensation expenses | $ 55,649 | $ 32,557 | |
Restricted units | |||
Equity compensation | |||
Equity compensation expenses | 44,087 | 28,381 | |
Restricted units with a market condition | |||
Equity compensation | |||
Equity compensation expenses | 11,562 | 4,133 | |
Options | |||
Equity compensation | |||
Equity compensation expenses | $ 0 | $ 43 | |
Ares Management L.P | |||
Equity compensation | |||
Total number of shares available for grant under the Equity Incentive Plan (in shares) | 40,639,397 | 44,510,451 |
EQUITY COMPENSATION (Restricted
EQUITY COMPENSATION (Restricted Units) (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 17, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Equity compensation | |||
Dividend declared and paid per share of Class A common stock (in dollar per share) | $ 0.47 | ||
Distribution equivalents made to holders | $ 7.5 | ||
Class A common stock | |||
Equity compensation | |||
Shares delivered in period | 2,400,000 | 2,600,000 | |
Dividend declared and paid per share of Class A common stock (in dollar per share) | $ 0.47 | $ 0.40 | |
Restricted units | |||
Equity compensation | |||
Shares delivered in period | 4,200,000 | 4,600,000 | |
Units | |||
Balance at the beginning of the period (in units or shares) | 16,299,664 | ||
Granted (in units) | 9,012,823 | ||
Vested (in units) | (4,191,773) | ||
Forfeited (in units) | (4,269) | ||
Balance at the end of the period (in units or shares) | 21,116,445 | ||
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 24.30 | ||
Granted (in dollars per share) | 45.63 | ||
Vested (in dollars per share) | 21.85 | ||
Forfeited (in dollars per share) | 50.75 | ||
Balance at the end of the period (in dollars per share) | $ 33.80 | ||
Unrecognized compensation expenses | $ 593.8 | ||
Weighted average period of compensation expense expected to be recognized | 4 years 3 months 18 days | ||
Restricted units | Senior executives | |||
Equity compensation | |||
Annual award vesting percentage | 25.00% | ||
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% | ||
First Anniversary | Restricted units | |||
Equity compensation | |||
Annual award vesting percentage | 33.33% |
EQUITY COMPENSATION (Performanc
EQUITY COMPENSATION (Performance-Based Restricted Unit Awards with a Market Condition) (Details) - Restricted units with a market condition - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value | |||
Closing price of the Company's common shares as of valuation date (USD per share) | $ 45.76 | ||
Risk-free interest rate | 0.88% | ||
Volatility | 35.00% | ||
Dividend yield | 3.50% | ||
Cost of equity | 10.00% | ||
Units | |||
Balance at the beginning of the period (in units or shares) | 0 | 0 | |
Granted (in units) | 2,150,000 | ||
Vested (in units) | 0 | ||
Forfeited (in units) | 0 | ||
Balance at the end of the period (in units or shares) | 2,150,000 | ||
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value (USD per share) | $ 32.86 | $ 0 | |
Granted (in dollars per share) | 32.86 | ||
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | $ 0 | ||
Unrecognized compensation expenses | $ 59.1 | ||
Weighted average period of compensation expense expected to be recognized | 7 years 9 months 21 days | ||
Tranche I | |||
Equity compensation | |||
Weighted average price of shares purchased (USD per share) | $ 55 | ||
Vesting period | 8 months 12 days | ||
Units | |||
Granted (in units) | 537,500 | ||
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value (USD per share) | $ 37.28 | ||
Tranche II | |||
Equity compensation | |||
Weighted average price of shares purchased (USD per share) | $ 60 | ||
Vesting period | 1 year 2 months 12 days | ||
Units | |||
Granted (in units) | 537,500 | ||
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value (USD per share) | $ 34.47 | ||
Tranche III | |||
Equity compensation | |||
Weighted average price of shares purchased (USD per share) | $ 65 | ||
Vesting period | 1 year 7 months 6 days | ||
Units | |||
Granted (in units) | 537,500 | ||
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value (USD per share) | $ 31.92 | ||
Tranche IV | |||
Equity compensation | |||
Weighted average price of shares purchased (USD per share) | $ 75 | ||
Vesting period | 2 years 3 months 18 days | ||
Units | |||
Granted (in units) | 537,500 | ||
Weighted Average Grant Date Fair Value | |||
Weighted average grant date fair value (USD per share) | $ 27.75 |
EQUITY COMPENSATION (Options) (
EQUITY COMPENSATION (Options) (Details) - Options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Options | ||
Balance at the beginning of the period (in units) | 8,312,203 | |
Granted (in units) | 0 | |
Exercised (in units) | 0 | |
Expired (in units) | 0 | |
Forfeited (in units) | 0 | |
Balance at the end of the period (in units) | 8,312,203 | 8,312,203 |
Exercisable at the end of the period (in units) | 8,312,203 | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period (in dollars per unit) | $ 18.99 | |
Granted (in dollars per unit) | 0 | |
Exercised (in dollars per unit) | 0 | |
Expired (in dollars per unit) | 0 | |
Forfeited (in dollars per unit) | 0 | |
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 | 3 years 4 months 24 days | |
Expected to vest at the end of the period | 3 years 1 month 6 days | |
Exercisable at the end of the period | 3 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Beginning balance | $ 307,895 | $ 233,251 |
Ending balance | 307,895 | $ 233,251 |
Exercisable | $ 307,895 |
EQUITY AND REDEEMABLE INTERES_2
EQUITY AND REDEEMABLE INTEREST (Common Stock) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Feb. 28, 2021 | Dec. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity | |||
Balance (in shares) | 259,631,180 | ||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 2,374,692 | ||
Balance (in shares) | 262,005,872 | ||
AOG | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG Units (in shares) | 0 | ||
Class A common stock | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Authorized amount | $ 150,000,000 | ||
Increase (Decrease) in Stockholders' Equity | |||
Balance (in shares) | 147,182,562 | ||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 2,374,692 | ||
Balance (in shares) | 149,840,978 | ||
Class A common stock | AOG | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG Units (in shares) | 283,724 | ||
Class B common stock | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | 0.01 | |
Increase (Decrease) in Stockholders' Equity | |||
Balance (in shares) | 1,000 | ||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 0 | ||
Balance (in shares) | 1,000 | ||
Class B common stock | AOG | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG Units (in shares) | 0 | ||
Class C common stock | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Increase (Decrease) in Stockholders' Equity | |||
Balance (in shares) | 112,447,618 | ||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 0 | ||
Balance (in shares) | 112,163,894 | ||
Class C common stock | AOG | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG Units (in shares) | (283,724) |
EQUITY AND REDEEMABLE INTERES_3
EQUITY AND REDEEMABLE INTEREST (Common Stock Offering) (Details) - shares | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
AOG Units (in units) | 262,004,872 | 259,630,180 | |
AOG | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 100.00% | 100.00% | |
Ares Owners Holdings, L.P. | |||
Class of Stock [Line Items] | |||
AOG Units (in units) | 112,163,894 | 112,447,618 | |
Daily Average Ownership | 42.94% | 49.57% | |
Ares Owners Holdings, L.P. | AOG | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 42.81% | 43.31% | |
AOG | |||
Class of Stock [Line Items] | |||
AOG Units (in units) | 149,840,978 | 147,182,562 | |
Daily Average Ownership | 57.06% | 50.43% | |
AOG | AOG | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 57.19% | 56.69% |
EQUITY AND REDEEMABLE INTERES_4
EQUITY AND REDEEMABLE INTEREST (Preferred Stock) (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
Dividend rate, percentage | 7.00% | ||
Forecast | |||
Class of Stock [Line Items] | |||
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 AND REDEEMABLE INTERES_5
EQUITY AND REDEEMABLE INTEREST (Redeemable Interests) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
AOG | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance - January 1, 2021 | $ 100,366 |
Net income | 32 |
Currency translation adjustment, net of tax | (590) |
Balance - March 31, 2021 | 99,808 |
Consolidated Funds | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance - January 1, 2021 | 0 |
Redemption value | 930,924 |
Balance - March 31, 2021 | $ 930,924 |
SEGMENT REPORTING (Operating Se
SEGMENT REPORTING (Operating Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment reporting | ||
Total revenues | $ 658,388 | $ 13,409 |
Operating segment | ||
Segment reporting | ||
Fee related earnings | 191,529 | 150,835 |
Performance income—realized | 76,981 | 151,770 |
Performance related compensation—realized | (61,096) | (117,993) |
Realized net investment income (loss) | (7,823) | 13,771 |
Realized Income (Loss) | (199,591) | (198,383) |
OMG | ||
Segment reporting | ||
Compensation and benefits | (44,407) | (36,426) |
General, administrative and other expenses | (18,656) | (21,305) |
Fee related earnings | (63,063) | (57,731) |
Performance income—realized | 0 | 0 |
Performance related compensation—realized | 0 | 0 |
Realized net performance income | 0 | 0 |
Investment loss—realized | 0 | (5,698) |
Interest and other investment income—realized | 355 | 168 |
Interest expense | (90) | (977) |
Realized net investment income (loss) | 265 | (6,507) |
Realized Income (Loss) | (62,798) | (64,238) |
Total | ||
Segment reporting | ||
Compensation and benefits | (166,138) | (139,360) |
General, administrative and other expenses | (39,663) | (45,186) |
Fee related earnings | 128,466 | 93,104 |
Performance income—realized | 76,981 | 151,770 |
Performance related compensation—realized | (61,096) | (117,993) |
Realized net performance income | 15,885 | 33,777 |
Investment loss—realized | (7,392) | 6,219 |
Interest and other investment income—realized | 6,529 | 6,351 |
Interest expense | (6,695) | (5,306) |
Realized net investment income (loss) | (7,558) | 7,264 |
Realized Income (Loss) | 136,793 | 134,145 |
Ares Management L.P | ||
Segment reporting | ||
Total revenues | 658,388 | 13,409 |
Compensation and benefits | (231,850) | (180,084) |
General, administrative and other expenses | (67,656) | (62,331) |
Ares Management L.P | Operating segment | ||
Segment reporting | ||
Compensation and benefits | (121,731) | (102,934) |
General, administrative and other expenses | (21,007) | (23,881) |
Fee related earnings | 191,529 | 150,835 |
Performance income—realized | 76,981 | 151,770 |
Performance related compensation—realized | (61,096) | (117,993) |
Realized net performance income | 15,885 | 33,777 |
Investment loss—realized | (7,392) | 11,917 |
Interest and other investment income—realized | 6,174 | 6,183 |
Interest expense | (6,605) | (4,329) |
Realized net investment income (loss) | (7,823) | 13,771 |
Realized Income (Loss) | 199,591 | 198,383 |
Ares Management L.P | Operating segment | Credit Group | ||
Segment reporting | ||
Compensation and benefits | (80,365) | (70,925) |
General, administrative and other expenses | (10,809) | (15,313) |
Fee related earnings | 147,672 | 114,257 |
Performance income—realized | 3,816 | 9,016 |
Performance related compensation—realized | (2,893) | (7,899) |
Realized net performance income | 923 | 1,117 |
Investment loss—realized | 0 | (843) |
Interest and other investment income—realized | 3,669 | 4,575 |
Interest expense | (1,515) | (1,715) |
Realized net investment income (loss) | 2,154 | 2,017 |
Realized Income (Loss) | 150,749 | 117,391 |
Ares Management L.P | Operating segment | Private Equity Group | ||
Segment reporting | ||
Compensation and benefits | (20,685) | (19,596) |
General, administrative and other expenses | (4,868) | (5,633) |
Fee related earnings | 23,886 | 27,038 |
Performance income—realized | 71,218 | 116,154 |
Performance related compensation—realized | (57,026) | (92,924) |
Realized net performance income | 14,192 | 23,230 |
Investment loss—realized | (7,170) | 11,470 |
Interest and other investment income—realized | 444 | 812 |
Interest expense | (1,663) | (1,643) |
Realized net investment income (loss) | (8,389) | 10,639 |
Realized Income (Loss) | 29,689 | 60,907 |
Ares Management L.P | Operating segment | Real Estate Group | ||
Segment reporting | ||
Compensation and benefits | (15,941) | (12,413) |
General, administrative and other expenses | (3,295) | (2,935) |
Fee related earnings | 11,044 | 9,540 |
Performance income—realized | 1,947 | 26,600 |
Performance related compensation—realized | (1,177) | (17,170) |
Realized net performance income | 770 | 9,430 |
Investment loss—realized | (222) | 1,290 |
Interest and other investment income—realized | 2,028 | 796 |
Interest expense | (1,125) | (971) |
Realized net investment income (loss) | 681 | 1,115 |
Realized Income (Loss) | 12,495 | 20,085 |
Ares Management L.P | Operating segment | Strategic Initiatives | ||
Segment reporting | ||
Compensation and benefits | (4,740) | 0 |
General, administrative and other expenses | (2,035) | 0 |
Fee related earnings | 8,927 | 0 |
Performance income—realized | 0 | 0 |
Performance related compensation—realized | 0 | 0 |
Realized net performance income | 0 | 0 |
Investment loss—realized | 0 | 0 |
Interest and other investment income—realized | 33 | 0 |
Interest expense | (2,302) | 0 |
Realized net investment income (loss) | (2,269) | 0 |
Realized Income (Loss) | 6,658 | 0 |
Management fees | OMG | ||
Segment reporting | ||
Total revenues | 0 | 0 |
Management fees | Total | ||
Segment reporting | ||
Total revenues | 327,463 | 273,778 |
Management fees | Ares Management L.P | ||
Segment reporting | ||
Total revenues | 320,273 | 263,849 |
Management fees | Ares Management L.P | Operating segment | ||
Segment reporting | ||
Total revenues | 327,463 | 273,778 |
Management fees | Ares Management L.P | Operating segment | Credit Group | ||
Segment reporting | ||
Total revenues | 232,877 | 197,437 |
Management fees | Ares Management L.P | Operating segment | Private Equity Group | ||
Segment reporting | ||
Total revenues | 49,331 | 52,157 |
Management fees | Ares Management L.P | Operating segment | Real Estate Group | ||
Segment reporting | ||
Total revenues | 29,632 | 24,184 |
Management fees | Ares Management L.P | Operating segment | Strategic Initiatives | ||
Segment reporting | ||
Total revenues | 15,623 | 0 |
Other fees | OMG | ||
Segment reporting | ||
Total revenues | 0 | 0 |
Other fees | Total | ||
Segment reporting | ||
Total revenues | 6,804 | 3,872 |
Other fees | Ares Management L.P | Operating segment | ||
Segment reporting | ||
Total revenues | 6,804 | 3,872 |
Other fees | Ares Management L.P | Operating segment | Credit Group | ||
Segment reporting | ||
Total revenues | 5,969 | 3,058 |
Other fees | Ares Management L.P | Operating segment | Private Equity Group | ||
Segment reporting | ||
Total revenues | 108 | 110 |
Other fees | Ares Management L.P | Operating segment | Real Estate Group | ||
Segment reporting | ||
Total revenues | 648 | 704 |
Other fees | Ares Management L.P | Operating segment | Strategic Initiatives | ||
Segment reporting | ||
Total revenues | $ 79 | $ 0 |
SEGMENT REPORTING (Revenue, Exp
SEGMENT REPORTING (Revenue, Expenses and Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment revenues | ||
Total revenues | $ 658,388 | $ 13,409 |
Total segment revenues | 411,248 | 429,420 |
Segment expenses | ||
Total expenses | 525,109 | 81,959 |
Segment other income | ||
Total other income (expense) | 56,785 | (227,863) |
Operating segment | ||
Segment revenues | ||
Performance income—realized | 76,981 | 151,770 |
Segment expenses | ||
Total performance related compensation—realized | 61,096 | 117,993 |
Ares Management L.P | ||
Segment revenues | ||
Total revenues | 658,388 | 13,409 |
Segment expenses | ||
Compensation and benefits | 231,850 | 180,084 |
General, administrative and other expenses | 67,656 | 62,331 |
Ares Management L.P | Management fees | ||
Segment revenues | ||
Total revenues | 320,273 | 263,849 |
Ares Management L.P | Operating segment | ||
Segment revenues | ||
Performance income—realized | 76,981 | 151,770 |
Total segment revenues | 411,248 | 429,420 |
Segment expenses | ||
Compensation and benefits | 121,731 | 102,934 |
General, administrative and other expenses | 21,007 | 23,881 |
Total performance related compensation—realized | 61,096 | 117,993 |
Total expenses | 203,834 | 244,808 |
Segment other income | ||
Investment income (loss)—realized | (7,392) | 11,917 |
Interest and other investment income—realized | 6,174 | 6,183 |
Interest expense | (6,605) | (4,329) |
Total other income (expense) | (7,823) | 13,771 |
Ares Management L.P | Operating segment | Management fees | ||
Segment revenues | ||
Total revenues | 327,463 | 273,778 |
Ares Management L.P | Operating segment | Other fees | ||
Segment revenues | ||
Total revenues | $ 6,804 | $ 3,872 |
SEGMENT REPORTING (Revenue Reco
SEGMENT REPORTING (Revenue Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue adjustment | ||
Total revenues | $ 658,388 | $ 13,409 |
Principal investment income | 7,823 | (13,771) |
Total segment revenue | 411,248 | 429,420 |
Ares Management L.P | ||
Revenue adjustment | ||
Total revenues | 658,388 | 13,409 |
Operating segment | Ares Management L.P | ||
Revenue adjustment | ||
Performance (income) loss—unrealized | (224,954) | 387,657 |
Total segment revenue | 411,248 | 429,420 |
Reconciling items | ||
Revenue adjustment | ||
Principal investment income | (25,095) | 75,988 |
Total segment revenue | (247,140) | 416,011 |
Reconciling items | Non-Controlling interest | Subsidiaries | ||
Revenue adjustment | ||
Total segment revenue | (4,709) | (765) |
Reconciling items | Performance income reclass | ||
Revenue adjustment | ||
Performance fee reclass | 55 | (1,717) |
Management fees | Ares Management L.P | ||
Revenue adjustment | ||
Total revenues | 320,273 | 263,849 |
Management fees | Operating segment | Ares Management L.P | ||
Revenue adjustment | ||
Total revenues | 327,463 | 273,778 |
Management fees | Consolidated Funds | Eliminations | ||
Revenue adjustment | ||
Total segment revenue | 11,706 | 10,502 |
Incentive fees | Ares Management L.P | ||
Revenue adjustment | ||
Total revenues | 2,820 | (3,249) |
Incentive fees | Consolidated Funds | Eliminations | ||
Revenue adjustment | ||
Total revenues | 1,525 | (45) |
Administrative, transaction and other fees | Ares Management L.P | ||
Revenue adjustment | ||
Total revenues | 12,660 | 10,408 |
Administrative, transaction and other fees | Reconciling items | ||
Revenue adjustment | ||
Total revenues | (9,808) | (9,661) |
Administrative, transaction and other fees | Consolidated Funds | Reconciling items | ||
Revenue adjustment | ||
Total revenues | 4,145 | 3,317 |
Principal investment income (loss) | Ares Management L.P | ||
Revenue adjustment | ||
Total revenues | 25,100 | (26,723) |
Principal investment income (loss) | Reconciling items | ||
Revenue adjustment | ||
Principal investment income | $ (25,100) | $ 26,723 |
SEGMENT REPORTING (Expenses) (D
SEGMENT REPORTING (Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | $ 525,109 | $ 81,959 |
Equity compensation expense | 55,649 | 32,557 |
Operating segment | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Acquisition and merger-related expense | 8,590 | 3,137 |
Equity compensation expense | 55,649 | 32,557 |
Deferred placement fees | 297 | 5,415 |
Depreciation and amortization expense | 14,100 | 5,542 |
Operating segment | Ares Management L.P | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | 203,834 | 244,808 |
Performance related compensation-unrealized | (160,337) | 285,892 |
Operating segment | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | 525,109 | 81,959 |
Reconciling items | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | (321,275) | 162,849 |
Administrative fees | (9,808) | (9,661) |
Acquisition and merger-related expense | (8,590) | (3,115) |
Equity compensation expense | (55,649) | (32,557) |
Deferred placement fees | (297) | (5,415) |
Depreciation and amortization expense | (14,100) | (5,542) |
Reconciling items | Non-Controlling interest | Subsidiaries | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | (5,260) | (1,579) |
Reconciling items | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses of Consolidated Funds added in consolidation | (17,436) | (17,899) |
Expenses of Consolidated Funds eliminated in consolidation | 13,265 | 10,456 |
OMG | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | $ 63,063 | $ 57,731 |
SEGMENT REPORTING (Other Income
SEGMENT REPORTING (Other Income (Expense)) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total segment realized net investment income (expense) | $ 56,785 | $ (227,863) |
Principal investment income (loss) | (7,823) | 13,771 |
Ares Management L.P | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Other income (expense), net | (4,149) | 5,464 |
Operating segment | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Investment (income) loss—unrealized | 18,218 | (100,633) |
Other (income) expense, net | 473 | 0 |
Operating segment | Ares Management L.P | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total segment realized net investment income (expense) | (7,823) | 13,771 |
Investment (income) loss—unrealized | (22,168) | 105,594 |
Interest and other investment (income) loss—unrealized | 3,950 | (4,961) |
Operating segment | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total segment realized net investment income (expense) | 56,785 | (227,863) |
Reconciling items | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total segment realized net investment income (expense) | (64,608) | 241,634 |
Principal investment income (loss) | 25,095 | (75,988) |
Other (income) expense, net | (473) | 22 |
Reconciling items | Subsidiaries | Non-Controlling interest | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total segment realized net investment income (expense) | 138 | 19,683 |
Reconciling items | Performance income reclass | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Performance fee reclass | (55) | 1,717 |
Reconciling items | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Other (income) loss from Consolidated Funds added in consolidation, net | (67,316) | 198,245 |
Eliminations | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Other income (expense), net | (4,112) | (3,819) |
OMG | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total segment realized net investment income (expense) | $ 333 | $ 1,141 |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation of Income Before Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Economic net income | ||
Income (loss) before taxes | $ 190,064 | $ (296,413) |
Adjustments: | ||
Equity compensation expense | 55,649 | 32,557 |
Consolidated Funds | ||
Adjustments: | ||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 49,858 | |
Total investment income—realized | (115,839) | (113,225) |
Operating segment | ||
Economic net income | ||
Income (loss) before taxes | 190,064 | (296,413) |
Adjustments: | ||
Depreciation and amortization expense | 14,100 | 5,542 |
Equity compensation expense | 55,649 | 32,557 |
Transaction support expense | 8,590 | 3,137 |
Deferred placement fees | 297 | 5,415 |
Other income, net | (473) | 0 |
Total performance (income) loss—unrealized | (224,954) | 387,657 |
Total performance related compensation—unrealized | 160,337 | (285,892) |
Total investment (income) loss—unrealized | (18,218) | 100,633 |
Realized Income (Loss) | (199,591) | (198,383) |
Total performance income—realized | (76,981) | (151,770) |
Total performance related compensation—realized | 61,096 | 117,993 |
Total investment income—realized | 7,823 | (13,771) |
Fee related earnings | 191,529 | 150,835 |
Operating segment | Consolidated Funds | ||
Adjustments: | ||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (49,886) | 166,378 |
OMG | ||
Adjustments: | ||
OMG expense, net | 63,396 | 58,872 |
Realized Income (Loss) | (62,798) | (64,238) |
Total performance income—realized | 0 | 0 |
Total performance related compensation—realized | 0 | 0 |
Total investment income—realized | (265) | 6,507 |
Fee related earnings | (63,063) | (57,731) |
Subsidiaries | Operating segment | ||
Adjustments: | ||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | $ 689 | $ 20,497 |
CONSOLIDATION (Variable Interes
CONSOLIDATION (Variable Interest Entities) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Assets of consolidated VIEs | $ 16,535,929 | $ 15,168,992 | |
Liabilities of consolidated VIEs | 13,084,629 | 12,596,852 | |
Collateralized loan obligations | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 106,600 | 107,700 | |
Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Net income (loss) attributable to non-controlling interests | 49,858 | ||
Non-Consolidated Variable Interest Entities | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 199,819 | 224,203 | |
Consolidated VIEs | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 387,934 | 391,963 | |
Consolidated VIEs | Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated VIEs | 11,724,262 | 11,580,003 | |
Liabilities of consolidated VIEs | 10,851,579 | $ 10,716,438 | |
Net income (loss) attributable to non-controlling interests | $ 27,816 | $ (166,406) |
CONSOLIDATION (Balance Sheet) (
CONSOLIDATION (Balance Sheet) (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||||||
Total assets | $ 16,535,929 | $ 15,168,992 | ||||
Liabilities | ||||||
Operating lease liabilities | 186,594 | |||||
Total liabilities | 13,084,629 | 12,596,852 | ||||
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 March 31, 2021 and December 31, 2020, respectively) | 298,761 | 298,761 | ||||
Additional paid-in-capital | 1,033,735 | 1,043,669 | ||||
Retained earnings | (173,555) | (151,824) | ||||
Accumulated other comprehensive loss, net of tax | (62) | 483 | ||||
Total stockholders' equity | 1,161,499 | 1,193,685 | ||||
Total equity | 2,420,568 | 2,471,774 | $ 2,370,881 | $ 2,003,748 | $ 1,975,596 | $ 1,858,598 |
Total liabilities, redeemable interest, non-controlling interests and equity | $ 16,535,929 | $ 15,168,992 | ||||
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) | 262,005,872 | 259,631,180 | ||||
Class A common stock | ||||||
Stockholders' Equity | ||||||
Common stock | $ 1,498 | $ 1,472 | ||||
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) | 149,840,978 | 147,182,562 | ||||
Common stock, shares outstanding (in shares) | 149,840,978 | 147,182,562 | ||||
Class B common stock | ||||||
Stockholders' Equity | ||||||
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 | ||||||
Common stock | $ 1,122 | $ 1,124 | ||||
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) | 112,163,894 | 112,447,618 | ||||
Common stock, shares outstanding (in shares) | 112,163,894 | 112,447,618 | ||||
Eliminations | ||||||
Assets | ||||||
Total assets | $ (421,567) | $ (408,733) | ||||
Liabilities | ||||||
Total liabilities | (96,572) | (84,888) | ||||
Commitments and contingencies | ||||||
Stockholders' Equity | ||||||
Total equity | (324,995) | (323,845) | ||||
Total liabilities, redeemable interest, non-controlling interests and equity | (421,567) | (408,733) | ||||
Consolidated Funds | ||||||
Assets | ||||||
Cash and cash equivalents | 557,271 | 522,377 | ||||
Investments, at fair value | 10,948,173 | 10,877,097 | ||||
U.S. Treasury securities, at fair value | 1,000,040 | 0 | ||||
Due from affiliates | 16,240 | 17,172 | ||||
Other assets | 32,096 | 35,502 | ||||
Receivable for securities sold | 166,960 | 121,225 | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | 98,473 | 46,824 | ||||
Due to affiliates | 622 | 0 | ||||
Payable for securities purchased | 781,845 | 514,946 | ||||
CLO loan obligations, at fair value | 9,839,639 | 9,958,076 | ||||
Fund borrowings | 110,409 | 121,909 | ||||
Redeemable interest in Ares Operating Group entities | 930,924 | 0 | ||||
Non-controlling interests in Consolidated Funds | 552,688 | 539,720 | ||||
Consolidated Funds | Reportable legal entity | ||||||
Assets | ||||||
Cash and cash equivalents | 557,271 | 522,377 | ||||
Investments, at fair value | 10,944,061 | 10,873,522 | ||||
U.S. Treasury securities, at fair value | 1,000,040 | |||||
Due from affiliates | 25,990 | 27,377 | ||||
Other assets | 32,096 | 35,502 | ||||
Receivable for securities sold | 166,960 | 121,225 | ||||
Total assets | 12,726,418 | 11,580,003 | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | 112,014 | 46,824 | ||||
Due to affiliates | 20,690 | 16,770 | ||||
Payable for securities purchased | 781,845 | 514,946 | ||||
CLO loan obligations, at fair value | 9,892,853 | 10,015,989 | ||||
Fund borrowings | 110,409 | 121,909 | ||||
Total liabilities | 10,917,811 | 10,716,438 | ||||
Commitments and contingencies | ||||||
Redeemable interest in Ares Operating Group entities | 930,924 | |||||
Non-controlling interests in Consolidated Funds | 877,683 | 863,565 | ||||
Stockholders' Equity | ||||||
Total equity | 877,683 | 863,565 | ||||
Total liabilities, redeemable interest, non-controlling interests and equity | 12,726,418 | 11,580,003 | ||||
Consolidated Funds | Eliminations | ||||||
Assets | ||||||
Investments, at fair value | 4,112 | 3,575 | ||||
Due from affiliates | (9,750) | (10,205) | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | (13,541) | |||||
Due to affiliates | (20,068) | (16,770) | ||||
CLO loan obligations, at fair value | (53,214) | (57,913) | ||||
Non-controlling interests in Consolidated Funds | (324,995) | (323,845) | ||||
AOG | ||||||
Liabilities | ||||||
Redeemable interest in Ares Operating Group entities | 99,808 | 100,366 | ||||
Non-controlling interests in Ares Operating Group entities | 706,381 | 738,369 | ||||
AOG | Reportable legal entity | ||||||
Liabilities | ||||||
Non-controlling interests in Ares Operating Group entities | 706,381 | 738,369 | ||||
Ares Management L.P | ||||||
Assets | ||||||
Cash and cash equivalents | 609,872 | 539,812 | ||||
U.S. Treasury securities, at fair value | 1,000,040 | |||||
Total investments | 1,931,978 | 1,682,759 | ||||
Due from affiliates | 335,450 | 405,887 | ||||
Other assets | 779,941 | 812,419 | ||||
Right-of-use operating lease assets | 157,908 | 154,742 | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | 119,578 | 115,289 | ||||
Accrued compensation | 89,791 | 103,010 | ||||
Due to affiliates | 77,817 | 100,186 | ||||
Performance related compensation payable | 968,582 | 813,378 | ||||
Debt obligations | 811,279 | 642,998 | ||||
Operating lease liabilities | 186,594 | 180,236 | ||||
Stockholders' Equity | ||||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively) | 298,761 | 298,761 | ||||
Additional paid-in-capital | 1,033,735 | 1,043,669 | ||||
Retained earnings | (173,555) | (151,824) | ||||
Accumulated other comprehensive loss, net of tax | (62) | 483 | ||||
Total stockholders' equity | 1,161,499 | 1,193,685 | ||||
Ares Management L.P | Class A common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 1,498 | 1,472 | ||||
Ares Management L.P | Class B common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 0 | 0 | ||||
Ares Management L.P | Class C common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 1,122 | 1,124 | ||||
Ares Management L.P | Reportable legal entity | ||||||
Assets | ||||||
Cash and cash equivalents | 609,872 | 539,812 | ||||
Total investments | 2,323,728 | 2,064,517 | ||||
Due from affiliates | 358,106 | 426,021 | ||||
Other assets | 781,464 | 812,630 | ||||
Right-of-use operating lease assets | 157,908 | 154,742 | ||||
Total assets | 4,231,078 | 3,997,722 | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | 129,327 | 125,494 | ||||
Accrued compensation | 89,791 | 103,010 | ||||
Due to affiliates | 77,817 | 100,186 | ||||
Performance related compensation payable | 968,582 | 813,378 | ||||
Debt obligations | 811,279 | 642,998 | ||||
Operating lease liabilities | 186,594 | 180,236 | ||||
Total liabilities | 2,263,390 | 1,965,302 | ||||
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 March 31, 2021 and December 31, 2020, respectively) | 298,761 | 298,761 | ||||
Additional paid-in-capital | 1,033,735 | 1,043,669 | ||||
Retained earnings | (173,555) | (151,824) | ||||
Accumulated other comprehensive loss, net of tax | (62) | 483 | ||||
Total stockholders' equity | 1,161,499 | 1,193,685 | ||||
Total equity | 1,867,880 | 1,932,054 | ||||
Total liabilities, redeemable interest, non-controlling interests and equity | 4,231,078 | 3,997,722 | ||||
Ares Management L.P | Reportable legal entity | Class A common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 1,498 | 1,472 | ||||
Ares Management L.P | Reportable legal entity | Class B common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 0 | |||||
Ares Management L.P | Reportable legal entity | Class C common stock | ||||||
Stockholders' Equity | ||||||
Common stock | 1,122 | 1,124 | ||||
Ares Management L.P | Eliminations | ||||||
Assets | ||||||
Total investments | (391,750) | (381,758) | ||||
Due from affiliates | (22,656) | (20,134) | ||||
Other assets | (1,523) | (211) | ||||
Liabilities | ||||||
Accounts payable, accrued expenses and other liabilities | (9,749) | (10,205) | ||||
Ares Management L.P | AOG | Reportable legal entity | ||||||
Liabilities | ||||||
Redeemable interest in Ares Operating Group entities | $ 99,808 | $ 100,366 |
CONSOLIDATION (Income Statement
CONSOLIDATION (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Total revenues | $ 658,388 | $ 13,409 |
Expenses | ||
Total expenses | 525,109 | 81,959 |
Other income (expense) | ||
Total other income (expense) | 56,785 | (227,863) |
Income (loss) before taxes | 190,064 | (296,413) |
Income tax expense (benefit) | 25,754 | (20,616) |
Net income (loss) | 164,310 | (275,797) |
Net income (loss) attributable to Ares Management Corporation | 58,378 | (31,036) |
Less: Series A Preferred Stock dividends paid | 5,425 | 5,425 |
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | 52,953 | (36,461) |
Eliminations | ||
Revenues | ||
Total revenues | (17,371) | 35,491 |
Expenses | ||
Total expenses | (13,265) | (10,456) |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | 11,551 | 27,661 |
Interest and dividend income | (903) | (812) |
Other income (expense), net | (456) | 502 |
Total other income (expense) | 4,112 | 3,819 |
Income (loss) before taxes | 6 | 49,766 |
Net income (loss) | 6 | 49,766 |
Consolidated Funds | ||
Expenses | ||
Expenses of Consolidated Funds | 4,171 | 7,443 |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | 16,422 | (254,761) |
Interest expense | (71,025) | (80,241) |
Interest and other income of Consolidated Funds | 115,839 | 113,225 |
Net income (loss) attributable to non-controlling interests | 49,858 | |
Consolidated Funds | Reportable legal entity | ||
Expenses | ||
Expenses of Consolidated Funds | 17,436 | 17,899 |
Total expenses | 17,436 | 17,899 |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | 26,468 | (230,173) |
Interest expense | (74,535) | (81,297) |
Interest and other income of Consolidated Funds | 115,383 | 113,225 |
Total other income (expense) | 67,316 | (198,245) |
Income (loss) before taxes | 49,880 | (216,144) |
Income tax expense (benefit) | 28 | 28 |
Net income (loss) | 49,852 | (216,172) |
Net income (loss) attributable to non-controlling interests | 49,852 | (216,172) |
Consolidated Funds | Eliminations | ||
Expenses | ||
Expenses of Consolidated Funds | (13,265) | (10,456) |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | (10,046) | (24,588) |
Interest expense | 3,510 | 1,056 |
Interest and other income of Consolidated Funds | 456 | |
Net income (loss) attributable to non-controlling interests | 6 | 49,766 |
AOG | ||
Other income (expense) | ||
Net income (loss) | 114,452 | (109,391) |
Less: Net income attributable to redeemable interest in Ares Operating Group entities | 32 | 0 |
Net income (loss) attributable to non-controlling interests | 56,042 | (78,355) |
AOG | Reportable legal entity | ||
Other income (expense) | ||
Net income (loss) attributable to non-controlling interests | 56,042 | (78,355) |
Ares Management L.P | ||
Revenues | ||
Total revenues | 658,388 | 13,409 |
Expenses | ||
Compensation and benefits | 231,850 | 180,084 |
Performance related compensation | 221,432 | (167,899) |
General, administrative and other expenses | 67,656 | 62,331 |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | 5,433 | (8,034) |
Interest and dividend income | 960 | 1,790 |
Interest expense | (6,695) | (5,306) |
Other income (expense), net | (4,149) | 5,464 |
Ares Management L.P | Reportable legal entity | ||
Revenues | ||
Total revenues | 675,759 | (22,082) |
Expenses | ||
Compensation and benefits | 231,850 | 180,084 |
Performance related compensation | 221,432 | (167,899) |
General, administrative and other expenses | 67,656 | 62,331 |
Total expenses | 520,938 | 74,516 |
Other income (expense) | ||
Net realized and unrealized gains (losses) on investments | (6,118) | (35,695) |
Interest and dividend income | 1,863 | 2,602 |
Interest expense | (6,695) | (5,306) |
Other income (expense), net | (3,693) | 4,962 |
Total other income (expense) | (14,643) | (33,437) |
Income (loss) before taxes | 140,178 | (130,035) |
Income tax expense (benefit) | 25,726 | (20,644) |
Net income (loss) | 114,452 | (109,391) |
Net income (loss) attributable to Ares Management Corporation | 58,378 | (31,036) |
Less: Series A Preferred Stock dividends paid | 5,425 | 5,425 |
Net income (loss) attributable to Ares Management Corporation Class A common stockholders | 52,953 | (36,461) |
Ares Management L.P | AOG | Reportable legal entity | ||
Other income (expense) | ||
Net income (loss) | 114,452 | (109,391) |
Less: Net income attributable to redeemable interest in Ares Operating Group entities | 32 | |
Management fees | Eliminations | ||
Revenues | ||
Total revenues | (11,706) | (10,502) |
Management fees | Ares Management L.P | ||
Revenues | ||
Total revenues | 320,273 | 263,849 |
Management fees | Ares Management L.P | Reportable legal entity | ||
Revenues | ||
Total revenues | 331,979 | 274,351 |
Carried interest allocation | ||
Revenues | ||
Total revenues | 297,535 | |
Carried interest allocation | Ares Management L.P | ||
Revenues | ||
Total revenues | 297,535 | (230,876) |
Carried interest allocation | Ares Management L.P | Reportable legal entity | ||
Revenues | ||
Total revenues | 297,535 | (230,876) |
Incentive fees | Eliminations | ||
Revenues | ||
Total revenues | (1,525) | 45 |
Incentive fees | Ares Management L.P | ||
Revenues | ||
Total revenues | 2,820 | (3,249) |
Incentive fees | Ares Management L.P | Reportable legal entity | ||
Revenues | ||
Total revenues | 4,345 | (3,294) |
Principal investment income (loss) | Eliminations | ||
Revenues | ||
Total revenues | 5 | 49,265 |
Principal investment income (loss) | Ares Management L.P | ||
Revenues | ||
Total revenues | 25,100 | (26,723) |
Principal investment income (loss) | Ares Management L.P | Reportable legal entity | ||
Revenues | ||
Total revenues | 25,095 | (75,988) |
Administrative, transaction and other fees | Eliminations | ||
Revenues | ||
Total revenues | (4,145) | (3,317) |
Administrative, transaction and other fees | Ares Management L.P | ||
Revenues | ||
Total revenues | 12,660 | 10,408 |
Administrative, transaction and other fees | Ares Management L.P | Reportable legal entity | ||
Revenues | ||
Total revenues | $ 16,805 | $ 13,725 |
CONSOLIDATION (Cash Flow Statem
CONSOLIDATION (Cash Flow Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 164,310 | $ (275,797) |
Net cash used in operating activities | (741,118) | (363,237) |
Cash flows from investing activities: | ||
Net cash used in investing activities | (3,284) | (38,906) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Net cash provided by financing activities | 817,211 | 1,445,552 |
Effect of exchange rate changes | (2,749) | (14,120) |
Net change in cash and cash equivalents | 70,060 | 1,029,289 |
Cash and cash equivalents, beginning of period | 539,812 | |
Cash and cash equivalents, end of period | 609,872 | 1,167,673 |
Eliminations | ||
Cash flows from operating activities: | ||
Net income (loss) | 6 | 49,766 |
Net cash used in operating activities | (33,737) | |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Net cash provided by financing activities | (1,155) | (13,071) |
Effect of exchange rate changes | 0 | 0 |
Net change in cash and cash equivalents | (34,892) | 91,922 |
Cash and cash equivalents, beginning of period | (522,377) | (606,321) |
Cash and cash equivalents, end of period | (557,269) | (514,399) |
Consolidated Funds | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | (1,208,180) | (453,015) |
Cash flows due to changes in operating assets and liabilities | 265,512 | 188,510 |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 941,935 | 133,265 |
Distributions to non-controlling interests in Consolidated Funds | (38,829) | (13,492) |
Borrowings under loan obligations by Consolidated Funds | 7,000 | 454,391 |
Repayments under loan obligations by Consolidated Funds | (29,453) | (73,609) |
Consolidated Funds | Reportable legal entity | ||
Cash flows from operating activities: | ||
Net income (loss) | 49,852 | (216,172) |
Adjustments to reconcile net income (loss) to net cash used in operating activities | (1,208,767) | (478,695) |
Cash flows due to changes in operating assets and liabilities | 314,126 | 99,272 |
Net cash used in operating activities | (844,789) | (595,595) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 955,083 | 148,270 |
Distributions to non-controlling interests in Consolidated Funds | (50,822) | (15,426) |
Borrowings under loan obligations by Consolidated Funds | 7,000 | 454,391 |
Repayments under loan obligations by Consolidated Funds | (29,453) | (73,609) |
Net cash provided by financing activities | 881,808 | 513,626 |
Effect of exchange rate changes | (2,127) | (9,953) |
Net change in cash and cash equivalents | 34,892 | (91,922) |
Cash and cash equivalents, beginning of period | 522,377 | 606,321 |
Cash and cash equivalents, end of period | 557,269 | 514,399 |
Consolidated Funds | Eliminations | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | 587 | 25,680 |
Cash flows due to changes in operating assets and liabilities | (48,614) | 89,238 |
Net cash used in operating activities | 104,993 | |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Contributions from redeemable and non-controlling interests in Consolidated Funds | (13,148) | (15,005) |
Distributions to non-controlling interests in Consolidated Funds | 11,993 | 1,934 |
Borrowings under loan obligations by Consolidated Funds | 0 | |
Repayments under loan obligations by Consolidated Funds | 0 | |
Ares Management L.P | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | 44,284 | 125,070 |
Cash flows due to changes in operating assets and liabilities | (7,044) | 51,995 |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (3,284) | (3,062) |
Acquisitions, net of cash acquired | 0 | (35,844) |
Cash flows from financing activities: | ||
Net proceeds from issuance of Class A common stock | 0 | 383,334 |
Proceeds from Credit Facility | 168,000 | 790,000 |
Repayments of Credit Facility | 0 | (60,000) |
Dividends and distributions | (141,768) | (106,838) |
Series A Preferred Stock dividends | (5,425) | (5,425) |
Stock option exercises | 0 | 19,551 |
Taxes paid related to net share settlement of equity awards | (84,590) | (73,500) |
Other financing activities | 341 | (2,125) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Cash and cash equivalents, beginning of period | 539,812 | 138,384 |
Cash and cash equivalents, end of period | 609,872 | 1,167,673 |
Ares Management L.P | Reportable legal entity | ||
Cash flows from operating activities: | ||
Net income (loss) | 114,452 | (109,391) |
Adjustments to reconcile net income (loss) to net cash used in operating activities | 34,292 | 190,761 |
Cash flows due to changes in operating assets and liabilities | (11,336) | 45,995 |
Net cash used in operating activities | 137,408 | 127,365 |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (3,284) | (3,062) |
Acquisitions, net of cash acquired | (35,844) | |
Net cash used in investing activities | (3,284) | (38,906) |
Cash flows from financing activities: | ||
Net proceeds from issuance of Class A common stock | 383,334 | |
Proceeds from Credit Facility | 168,000 | 790,000 |
Repayments of Credit Facility | (60,000) | |
Dividends and distributions | (141,768) | (106,838) |
Series A Preferred Stock dividends | (5,425) | (5,425) |
Stock option exercises | 19,551 | |
Taxes paid related to net share settlement of equity awards | (84,590) | (73,500) |
Other financing activities | 341 | (2,125) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Net cash provided by financing activities | (63,442) | 944,997 |
Effect of exchange rate changes | (622) | (4,167) |
Net change in cash and cash equivalents | 70,060 | 1,029,289 |
Cash and cash equivalents, beginning of period | 539,812 | 138,384 |
Cash and cash equivalents, end of period | 609,872 | 1,167,673 |
Ares Management L.P | Eliminations | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | 9,992 | (65,691) |
Cash flows due to changes in operating assets and liabilities | $ 4,292 | $ 6,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event - USD ($) $ / shares in Units, $ in Millions | Apr. 08, 2021 | Apr. 06, 2021 | Apr. 05, 2021 | Apr. 28, 2021 |
Subsequent events | ||||
Quarterly distribution declared (in dollars per unit) | $ 0.47 | |||
Preferred equity quarterly distribution (in dollars per unit) | $ 0.4375 | |||
Private Placement | ||||
Subsequent events | ||||
Proceeds from sale of shares | $ 250 | |||
Proceeds from issuance of stock | $ 250 | |||
Private Placement | Nonvoting Common Stock | ||||
Subsequent events | ||||
Number of shares sold (in shares) | 3,489,911 | |||
Private Placement | Class A common stock | ||||
Subsequent events | ||||
Number of shares sold (in shares) | 1,234,200 | |||
Underwritten | ||||
Subsequent events | ||||
Proceeds from issuance of stock | $ 578.2 | |||
Underwritten | Class A common stock | ||||
Subsequent events | ||||
Number of shares sold (in shares) | 10,925,000 | |||
Number of shares sold to underwriters (in shares) | 1,425,000 | |||
Underwriters option to purchase shares (in shares) | 1,425,000 |