Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 01, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
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 | |
Title of 12(b) Security | Class A common stock, par value $0.01 per share | |
Trading Symbol | ARES | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001176948 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 171,976,260 | |
Non-voting Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 3,489,911 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 1,000 | |
Class C Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 118,448,147 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | |||||||
Intangible assets, net | $ 799,678 | $ 768,818 | |||||
Goodwill | 998,444 | 787,972 | |||||
Total assets | 21,226,215 | 21,605,164 | |||||
Liabilities | |||||||
Operating lease liabilities | 189,175 | ||||||
Total liabilities | 16,464,550 | 16,694,730 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 1,880,321 | 1,913,559 | |||||
Accumulated deficit | (226,700) | (89,382) | |||||
Accumulated other comprehensive loss, net of tax | (17,192) | (1,855) | |||||
Total stockholders' equity | 1,639,366 | 1,825,227 | |||||
Total equity | 3,668,147 | $ 3,667,621 | 3,814,426 | $ 3,540,526 | $ 3,441,115 | $ 2,420,568 | $ 2,471,774 |
Total liabilities, redeemable interest, non-controlling interests and equity | 21,226,215 | 21,605,164 | |||||
Class A Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 1,718 | 1,684 | |||||
Non-voting Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 35 | 35 | |||||
Class B Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 0 | 0 | |||||
Class C Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 1,184 | 1,186 | |||||
Consolidated Funds | |||||||
Assets | |||||||
Cash and cash equivalents | 824,110 | 1,049,191 | |||||
Due from affiliates | 7,159 | 7,234 | |||||
Other assets | 43,416 | 39,430 | |||||
U.S. Treasury securities, at fair value | 1,000,490 | 1,000,285 | |||||
Investments, at fair value | 11,551,482 | 11,816,393 | |||||
Receivable for securities sold | 195,831 | 281,132 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 99,542 | 103,258 | |||||
Due to affiliates | 0 | 0 | |||||
Payable for securities purchased | 667,375 | 1,118,456 | |||||
CLO loan obligations, at fair value | 10,309,475 | 10,657,661 | |||||
Fund borrowings | 155,367 | 127,771 | |||||
Redeemable interest | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Non-controlling interests in Consolidated Funds | 798,476 | 591,452 | |||||
Ares Operating Group | |||||||
Liabilities | |||||||
Redeemable interest | 93,518 | $ 96,347 | 96,008 | ||||
Non-controlling interests in Ares Operating Group entities | 1,230,305 | 1,397,747 | |||||
Ares Management L.P | |||||||
Assets | |||||||
Cash and cash equivalents | 252,867 | 343,655 | |||||
Investments (includes accrued carried interest of $3,120,192 and $2,998,421 at June 30, 2022 and December 31, 2021, respectively) | 3,927,506 | 3,684,264 | |||||
Due from affiliates | 552,137 | 670,383 | |||||
Other assets | 265,166 | 334,755 | |||||
Right-of-use operating lease assets | 153,929 | 167,652 | |||||
Intangible assets, net | 1,453,678 | 1,422,818 | |||||
Goodwill | 998,444 | 787,972 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 256,620 | 279,673 | |||||
Accrued compensation | 404,821 | 310,222 | |||||
Due to affiliates | 133,422 | 198,553 | |||||
Performance related compensation payable | 2,280,764 | 2,190,352 | |||||
Debt obligations | 1,967,989 | 1,503,709 | |||||
Operating lease liabilities | 189,175 | 205,075 | |||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 1,880,321 | 1,913,559 | |||||
Accumulated deficit | (226,700) | (89,382) | |||||
Accumulated other comprehensive loss, net of tax | (17,192) | (1,855) | |||||
Total stockholders' equity | 1,639,366 | 1,825,227 | |||||
Ares Management L.P | Class A Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 1,718 | 1,684 | |||||
Ares Management L.P | Non-voting Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 35 | 35 | |||||
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 | $ 1,184 | $ 1,186 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities |
Common stock, shares outstanding (in shares) | 293,776,408 | 290,451,548 |
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) | 171,837,350 | 168,351,305 |
Common stock, shares outstanding (in shares) | 171,837,350 | 168,351,305 |
Non-voting Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 3,489,911 | 3,489,911 |
Common stock, shares outstanding (in shares) | 3,489,911 | 3,489,911 |
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) | 118,448,147 | 118,609,332 |
Common stock, shares outstanding (in shares) | 118,448,147 | 118,609,332 |
Ares Management L.P | Carried interest | ||
Equity method investments: | $ 3,120,192 | $ 2,998,421 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | ||||
Total revenues | $ 601,430 | $ 1,294,819 | $ 1,316,429 | $ 1,953,207 |
Expenses | ||||
Compensation and benefits | 375,775 | 269,689 | 729,612 | 501,539 |
Performance related compensation | 41,073 | 656,381 | 173,884 | 877,813 |
General, administrative and other expenses | 122,566 | 83,362 | 243,089 | 151,018 |
Total expenses | 552,868 | 1,024,732 | 1,164,552 | 1,549,841 |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (1,775) | 4,977 | 6,334 | 10,410 |
Interest and dividend income | 1,476 | 4,482 | 2,978 | 5,442 |
Interest expense | (17,221) | (6,907) | (32,867) | (13,602) |
Other income (expense), net | 5,809 | (1,819) | 7,593 | (5,968) |
Total other income (expense) | 18,504 | 49,690 | 76,498 | 106,475 |
Income before taxes | 67,066 | 319,777 | 228,375 | 509,841 |
Income tax expense | 13,460 | 48,458 | 33,871 | 74,212 |
Net income | 53,606 | 271,319 | 194,504 | 435,629 |
Net income attributable to Ares Management Corporation | 39,731 | 141,644 | 85,594 | 200,022 |
Less: Series A Preferred Stock dividends paid | 0 | 5,425 | 0 | 10,850 |
Less: Series A Preferred Stock redemption premium | 0 | 11,239 | 0 | 11,239 |
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | $ 39,731 | $ 124,980 | $ 85,594 | $ 177,933 |
Class A Common Stock | ||||
Net income per share of Class A and non-voting common stock: | ||||
Basic (in dollars per share) | $ 0.21 | $ 0.70 | $ 0.45 | $ 1.07 |
Diluted (in dollars per share) | $ 0.21 | $ 0.69 | $ 0.45 | $ 1.03 |
Weighted-average shares of Class A and non-voting common stock: | ||||
Basic (in shares) | 175,157,558 | 164,793,968 | 174,694,645 | 157,075,774 |
Diluted (in shares) | 175,157,558 | 181,027,734 | 174,694,645 | 172,388,938 |
Non-voting Common Stock | ||||
Net income per share of Class A and non-voting common stock: | ||||
Basic (in dollars per share) | $ 0.21 | $ 0.70 | $ 0.45 | $ 1.07 |
Diluted (in dollars per share) | $ 0.21 | $ 0.69 | $ 0.45 | $ 1.03 |
Weighted-average shares of Class A and non-voting common stock: | ||||
Basic (in shares) | 175,157,558 | 164,793,968 | 174,694,645 | 157,075,774 |
Diluted (in shares) | 175,157,558 | 181,027,734 | 174,694,645 | 172,388,938 |
Consolidated Funds | ||||
Expenses | ||||
Expenses of Consolidated Funds | $ 13,454 | $ 15,300 | $ 17,967 | $ 19,471 |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (7,907) | (5,947) | 8,061 | 10,475 |
Interest expense | (79,253) | (58,974) | (153,266) | (129,999) |
Interest and other income of Consolidated Funds | 117,375 | 113,878 | 237,665 | 229,717 |
Less: Net income (loss) attributable to non-controlling interests | (15,022) | 5,027 | 32,360 | 54,885 |
Ares Operating Group | ||||
Other income (expense) | ||||
Net income | 68,628 | 266,292 | 162,144 | 380,744 |
Less: Net income (loss) attributable to non-controlling interests | 29,354 | 124,311 | 76,608 | 180,353 |
Less: Net income (loss) attributable to redeemable interest in Ares Operating Group entities | (457) | 337 | (58) | 369 |
Ares Management L.P | ||||
Revenues | ||||
Total revenues | 601,430 | 1,294,819 | 1,316,429 | 1,953,207 |
Expenses | ||||
Compensation and benefits | 375,775 | 729,612 | ||
Performance related compensation | 41,073 | 173,884 | ||
General, administrative and other expenses | 122,566 | 243,089 | ||
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (1,775) | 6,334 | ||
Interest and dividend income | 1,476 | 2,978 | ||
Interest expense | (17,221) | (32,867) | ||
Other income (expense), net | 5,809 | 7,593 | ||
Management fees | ||||
Revenues | ||||
Total revenues | 520,560 | 367,286 | 997,892 | 687,559 |
Management fees | Ares Management L.P | ||||
Revenues | ||||
Total revenues | 520,560 | 997,892 | ||
Carried interest allocation | ||||
Revenues | ||||
Total revenues | 47,304 | 852,521 | 225,593 | 1,150,056 |
Carried interest allocation | Ares Management L.P | ||||
Revenues | ||||
Total revenues | 47,304 | 225,593 | ||
Incentive fees | ||||
Revenues | ||||
Total revenues | 4,675 | 15,904 | 21,097 | 18,724 |
Incentive fees | Ares Management L.P | ||||
Revenues | ||||
Total revenues | 4,675 | 21,097 | ||
Principal investment income (loss) | ||||
Revenues | ||||
Total revenues | (4,387) | 47,127 | 3,939 | 72,227 |
Principal investment income (loss) | Ares Management L.P | ||||
Revenues | ||||
Total revenues | (4,387) | 3,939 | ||
Administrative, transaction and other fees | ||||
Revenues | ||||
Total revenues | 33,278 | $ 11,981 | 67,908 | $ 24,641 |
Administrative, transaction and other fees | Ares Management L.P | ||||
Revenues | ||||
Total revenues | $ 33,278 | $ 67,908 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Net income | $ 53,606 | $ 271,319 | $ 194,504 | $ 435,629 |
Other comprehensive income: | ||||
Foreign currency translation adjustments, net of tax | (29,644) | 3,458 | (42,037) | (7,115) |
Total comprehensive income | 23,962 | 274,777 | 152,467 | 428,514 |
Consolidated Funds | ||||
Other comprehensive income: | ||||
Less: Comprehensive income (loss) attributable to non-controlling interests | (24,922) | 6,983 | 17,365 | 47,769 |
Ares Operating Group | ||||
Net income | 68,628 | 266,292 | 162,144 | 380,744 |
Other comprehensive income: | ||||
Less: Comprehensive income (loss) attributable to non-controlling interests | 21,779 | 124,869 | 66,230 | 180,545 |
Less: Comprehensive income (loss) attributable to redeemable interest in Ares Operating Group entities | (1,453) | 523 | (1,385) | (35) |
Ares Management Corporation | Ares Management L.P | ||||
Other comprehensive income: | ||||
Comprehensive income attributable to Ares Management Corporation | $ 28,558 | $ 142,402 | $ 70,257 | $ 200,235 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Additional Paid-in-Capital | Accumulated deficit | Accumulated Other Comprehensive Income (loss) | Non-Controlling interest Ares Operating Group | Non-Controlling interest Consolidated Funds | Series A Preferred Stock Preferred Stock | Class A Common Stock Common Stock | Non-voting Common Stock Common Stock | Class C Common Stock Common Stock |
Beginning balance at Dec. 31, 2020 | $ 2,471,774 | $ 1,043,669 | $ (151,824) | $ 483 | $ 738,369 | $ 539,720 | $ 298,761 | $ 1,472 | $ 0 | $ 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 | 11,011 | ||||||||
Dividends/Distributions | (186,022) | (74,684) | (67,084) | (38,829) | (5,425) | |||||
Net income | 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 | 0 | 1,122 |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Changes in ownership interests and related tax benefits | (22,016) | (165,886) | 143,867 | 3 | ||||||
Issuances of common stock | 827,430 | 827,273 | 122 | 35 | ||||||
Capital contributions | 352,643 | 317,595 | 34,994 | 54 | ||||||
Redemption of preferred stock | (310,000) | (310,000) | ||||||||
Dividends/Distributions | (185,295) | (82,825) | (63,585) | (33,460) | (5,425) | |||||
Net income | 270,982 | 124,980 | 124,311 | 5,027 | 16,664 | |||||
Currency translation adjustment, net of tax | 3,272 | 758 | 558 | 1,956 | ||||||
Equity compensation | 69,504 | 41,003 | 28,501 | |||||||
Stock option exercises | 14,027 | 14,019 | 8 | |||||||
Ending balance at Jun. 30, 2021 | 3,441,115 | 1,750,144 | (131,400) | 696 | 1,257,628 | 561,205 | 0 | 1,631 | 35 | 1,176 |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Changes in ownership interests and related tax benefits | (107,650) | 79,787 | (187,454) | 38 | (21) | |||||
Capital contributions | 85,138 | 211,444 | (126,339) | 33 | ||||||
Dividends/Distributions | (162,871) | (82,307) | (68,083) | (12,481) | ||||||
Net income | 216,389 | 84,726 | 84,293 | 47,370 | ||||||
Currency translation adjustment, net of tax | (10,968) | (3,267) | (2,346) | (5,355) | ||||||
Equity compensation | 65,991 | 38,607 | 27,384 | |||||||
Stock option exercises | 13,382 | 13,375 | 7 | |||||||
Ending balance at Sep. 30, 2021 | 3,540,526 | 1,881,913 | (128,981) | (2,571) | 1,322,866 | 464,400 | 0 | 1,676 | 35 | 1,188 |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Changes in ownership interests and related tax benefits | (1,687) | (5,504) | (9,671) | 13,487 | 3 | (2) | ||||
Capital contributions | 123,959 | 9,981 | 113,978 | |||||||
Dividends/Distributions | (169,065) | (84,490) | (70,448) | (14,127) | ||||||
Net income | 267,997 | 124,089 | 125,794 | 18,114 | ||||||
Currency translation adjustment, net of tax | (3,158) | 716 | 526 | (4,400) | ||||||
Equity compensation | 46,047 | 27,348 | 18,699 | |||||||
Stock option exercises | 9,807 | 9,802 | 5 | |||||||
Ending balance at Dec. 31, 2021 | 3,814,426 | 1,913,559 | (89,382) | (1,855) | 1,397,747 | 591,452 | 0 | 1,684 | 35 | 1,186 |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Changes in ownership interests and related tax benefits | (182,191) | (110,577) | (90,843) | 19,202 | 28 | (1) | ||||
Issuances of common stock | 12,835 | 12,834 | 1 | 0 | ||||||
Capital contributions | 84,009 | 1,079 | 82,930 | |||||||
Dividends/Distributions | (246,844) | (111,406) | (100,480) | (34,958) | ||||||
Net income | 140,499 | 45,863 | 47,254 | 47,382 | ||||||
Currency translation adjustment, net of tax | (12,062) | (4,164) | (2,803) | (5,095) | ||||||
Equity compensation | 53,602 | 31,896 | 21,706 | |||||||
Stock option exercises | 3,347 | 3,345 | 2 | |||||||
Ending balance at Mar. 31, 2022 | 3,667,621 | 1,851,057 | (154,925) | (6,019) | 1,273,660 | 700,913 | $ 0 | 1,715 | 35 | 1,185 |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Changes in ownership interests and related tax benefits | (2,920) | (5,599) | (3,135) | 5,815 | 0 | (1) | ||||
Capital contributions | 136,319 | 969 | 135,350 | 0 | ||||||
Dividends/Distributions | (213,144) | (111,506) | (82,958) | (18,680) | ||||||
Net income | 54,063 | 39,731 | 29,354 | (15,022) | ||||||
Currency translation adjustment, net of tax | (28,648) | (11,173) | (7,575) | (9,900) | ||||||
Equity compensation | 49,559 | 29,569 | 19,990 | |||||||
Stock option exercises | 5,297 | 5,294 | 3 | |||||||
Ending balance at Jun. 30, 2022 | $ 3,668,147 | $ 1,880,321 | $ (226,700) | $ (17,192) | $ 1,230,305 | $ 798,476 | $ 1,718 | $ 35 | $ 1,184 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 194,504 | $ 435,629 |
Net cash used in operating activities | (568,198) | (1,069,043) |
Cash flows from investing activities: | ||
Net cash used in investing activities | (320,125) | (786,096) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Net cash provided by financing activities | 815,494 | 1,894,872 |
Effect of exchange rate changes | (17,959) | 3,361 |
Net change in cash and cash equivalents | (90,788) | 43,094 |
Cash and cash equivalents, beginning of period | 343,655 | |
Cash and cash equivalents, end of period | 252,867 | 582,906 |
Supplemental disclosure of non-cash financing activities: | ||
Issuance of AOG Units and Class A common stock in connection with acquisitions | 12,835 | 299,640 |
Consolidated Funds | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | (855,803) | (1,811,773) |
Cash flows due to changes in operating assets and liabilities | (125,132) | |
Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds | (125,132) | 414,530 |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 218,280 | 962,829 |
Distributions to non-controlling interests in Consolidated Funds | (53,638) | (72,289) |
Borrowings under loan obligations by Consolidated Funds | 814,183 | 492,887 |
Repayments under loan obligations by Consolidated Funds | (46,873) | (59,731) |
Ares Management L.P | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | 61,073 | 23,407 |
Cash flows due to changes in operating assets and liabilities | 157,160 | (130,836) |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (18,448) | (7,952) |
Acquisitions, net of cash acquired | (301,677) | (778,144) |
Cash flows from financing activities: | ||
Net proceeds from issuance of Class A and non-voting common stock | 0 | 827,430 |
Proceeds from Credit Facility | 700,000 | 318,000 |
Proceeds from issuance of senior and subordinated notes | 488,915 | 450,000 |
Repayments of Credit Facility | (720,000) | (318,000) |
Dividends and distributions | (406,366) | (288,178) |
Series A Preferred Stock dividends | 0 | (10,850) |
Redemption of Series A Preferred Stock | 0 | (310,000) |
Stock option exercises | 8,644 | 14,027 |
Taxes paid related to net share settlement of equity awards | (189,485) | (100,838) |
Other financing activities | 1,834 | (10,415) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||
Cash and cash equivalents, beginning of period | 343,655 | 539,812 |
Cash and cash equivalents, end of period | $ 252,867 | $ 582,906 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2022 | |
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 Assets, Secondary Solutions and Strategic Initiatives. Information about segments should be read together with “Note 15. 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. In this Quarterly Report, Ares Holdings L.P. (“Ares Holdings”) is a subsidiary that is referred to as the “Ares Operating Group” or “AOG”. The Company, indirectly through its wholly owned subsidiary, Ares Holdco LLC, is the general partner of the Ares Operating Group entity. 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. The Company and its wholly owned subsidiaries manages or controls certain entities that have been consolidated in the accompanying financial statements as described in “Note 2. Summary of Significant Accounting Policies.” These entities include Ares funds, co-investment entities, collateralized loan obligations or funds (collectively “CLOs”) and a special purpose acquisition company (“SPAC”) (collectively, the “Consolidated Funds”). 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, except where a reallocation of ownership occurs based on specific terms of a profit sharing agreement, such as a redemption or liquidation preference. 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 Condensed 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 and other non-controlling strategic investors. 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 either based on their historical ownership percentage for the proportional number of days in the reporting period or based on the activity associated with certain membership interests. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
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 unaudited 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, 2021 filed with the Securities and Exchange Commission (“SEC”). The unaudited 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. 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 unaudited 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 unaudited condensed consolidated financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | 3. BUSINESS COMBINATIONS Acquisition of Landmark Partners, LLC (collectively with its subsidiaries, “Landmark”) On June 2, 2021, a subsidiary of the Company completed the acquisition of 100% of the equity interests of Landmark, a subsidiary of BrightSphere Investment Group Inc. (NYSE: BSIG) and Landmark Investment Holdings L.P., in accordance with the purchase agreement entered into on March 30, 2021 (the “Landmark Acquisition”). As a result of the Landmark Acquisition, the Company expanded into the secondaries market with Landmark’s focus of managing private equity, real estate and infrastructure secondaries funds. Following the completion of the Landmark Acquisition, the results of Landmark are included in a newly created Secondary Solutions Group segment. The acquisition date fair value of the consideration transferred totaled $1.1 billion, which consisted of the following: Cash $ 803,309 Equity (1) 299,420 Total $ 1,102,729 (1) 5,415,278 AOG Units were issued in connection with the Landmark Acquisition and increased Ares Owners Holdings L.P.’s ownership interest in the AOG entities. The following is a summary of the fair values of assets acquired and liabilities assumed for the Landmark Acquisition as of June 2, 2021, based upon third party valuations of certain intangible assets. The fair value of assets acquired and liabilities assumed are estimated to be: Cash $ 25,645 Other tangible assets 23,403 Intangible assets: Management contracts 425,880 Client relationships 197,160 Trade name 86,200 Total intangible assets 709,240 Total identifiable assets acquired 758,288 Accounts payable, accrued expenses and other liabilities 73,216 Net identifiable assets acquired 685,072 Goodwill 417,657 Net assets acquired $ 1,102,729 The carrying value of goodwill associated with Landmark was $417.7 million as of the acquisition date and is entirely allocated to the Secondary Solutions Group segment. The goodwill is attributable primarily to expected synergies and the assembled workforce of Landmark. In connection with the Landmark Acquisition, the Company allocated $425.9 million, $197.2 million and $86.2 million of the purchase price to the fair value of the management contracts, client relationships and trade name, respectively. The acquired management contracts and client relationships had a weighted average amortization period as of the acquisition date of 7.4 years and 11.8 years, respectively. The trade name was determined to have an indefinite useful life at the time of the Landmark Acquisition and is not subject to amortization as the Company intended to operate under its brand name into perpetuity. Supplemental information of the Company’s consolidated results on an unaudited pro forma basis, as if the Landmark Acquisition had been consummated as of January 1, 2020, is as follows: Three months ended June 30, Six months ended June 30, 2021 2021 Total revenues $ 1,335,642 $ 2,030,718 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 140,669 $ 193,926 The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable. These results are not necessarily indicative of the Company’s consolidated financial condition or statements of operations in future periods or the results that actually would have been realized had the Company and Landmark been a combined entity during the periods presented. These pro forma amounts have been calculated after applying the following adjustments that were directly attributable to the Landmark Acquisition: • adjustments to include the impact of the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied on January 1, 2020, together with the consequential tax effects; • adjustments to include the AOG Units issued as consideration for the Landmark Acquisition, as if they were issued on January 1, 2020, and the resulting change in ownership attributable to Ares Management Corporation; • adjustments to reflect the pro-rata economic ownership attributable to Ares Management Corporation; • adjustments to reflect the tax effects of the Landmark Acquisition and the related adjustments as if Landmark had been included in the Company’s results as of January 1, 2020; and • adjustments to include Landmark Acquisition related transaction costs in earnings in 2020. Acquisition of Black Creek Group On July 1, 2021, a subsidiary of the Company completed the acquisition of 100% of the equity interests of Black Creek Group’s U.S. real estate investment advisory and distribution business (“Black Creek”) in accordance with the purchase agreement entered into on May 20, 2021 (the “Black Creek Acquisition”). Black Creek is a leading real estate investment management firm that operates in core and core-plus real estate strategies across two non-traded Real Estate Investment Trusts (“REITs”) and various institutional fund vehicles. Following the completion of the Black Creek Acquisition, the results of Black Creek are included within the Real Assets Group segment. Acquisition of AMP Capital’s Infrastructure Debt Platform (“Infrastructure Debt Acquisition”) On February 10, 2022, a subsidiary of the Company completed the acquisition of AMP Capital’s Infrastructure Debt platform in accordance with the purchase agreement entered into on December 23, 2021 (the “Infrastructure Debt Acquisition”). The Infrastructure Debt Acquisition adds complementary investment capabilities to Ares’ current activities in the rapidly growing infrastructure asset class. Following the completion of the Infrastructure Debt Acquisition, the results of the infrastructure debt platform are presented within the Real Assets Group. See “Note 15. Segment Reporting” for further discussion on the Company’s change in segment composition during the first quarter of 2022. The acquisition date fair value of the consideration transferred totaled $328.6 million, consisting of $315.8 million in cash and $12.8 million of restricted units of Class A common stock that were granted and vested on the acquisition close date. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 4. GOODWILL AND INTANGIBLE ASSETS Intangible Assets, Net The following table summarizes the carrying value, net of accumulated amortization, of the Company's intangible assets: Weighted Average Amortization Period as of June 30, 2022 In Years As of June 30, As of December 31, 2022 2021 Management contracts 5.8 $ 707,073 $ 641,737 Client relationships 10.1 262,301 229,501 Trade name 8.0 11,079 11,079 Other 2.3 500 500 Finite-lived intangible assets 980,953 882,817 Foreign currency translation (1,010) 1,792 Total finite-lived intangible assets 979,943 884,609 Less: accumulated amortization (180,265) (115,791) Finite-lived intangible assets, net 799,678 768,818 Management contracts 567,800 567,800 Trade name 86,200 86,200 Indefinite-lived intangible assets 654,000 654,000 Intangible assets, net $ 1,453,678 $ 1,422,818 In connection with the Infrastructure Debt Acquisition, the Company allocated $68.7 million and $32.8 million of the purchase price to the fair value of the acquired management contracts and client relationships, respectively. The acquired management contracts and client relationships had a weighted average amortization period from the date of acquisition of 5.2 years and 8.4 years, respectively. Amortization expense associated with intangible assets was $35.6 million and $17.3 million for the three months ended June 30, 2022 and 2021, respectively, and $68.7 million and $27.9 million for the six months ended June 30, 2022 and 2021, respectively, and is presented within general, administrative and other expenses in the Condensed Consolidated Statements of Operations. During the first quarter of 2022, the Company removed $3.4 million of intangible assets that were fully amortized. Goodwill The following table summarizes the carrying value of the Company’s goodwill: Credit Group Private Real Secondary Solutions Group Strategic Initiatives Total Balance as of December 31, 2021 $ 32,196 $ 58,600 $ 53,339 $ 417,738 $ 226,099 $ 787,972 Acquisitions — — 213,424 (96) — 213,328 Reallocation — (10,530) 10,530 — — — Foreign currency translation — — — (21) (2,835) (2,856) Balance as of June 30, 2022 $ 32,196 $ 48,070 $ 277,293 $ 417,621 $ 223,264 $ 998,444 In connection with the Infrastructure Debt Acquisition, the Company allocated $213.4 million of the purchase price to goodwill. In connection with the establishment of the Real Assets Group described in “Note 15. Segment Reporting,” the Company had an associated change in its reporting units and reallocated goodwill of $10.5 million from the Private Equity Group to the Real Assets Group using a relative fair value allocation approach. The former Real Estate Group has been transferred in its entirety to the Real Assets Group and the total goodwill of $53.3 million has been reallocated from the former Real Estate Group to the Real Assets Group accordingly. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Investments in and Advances to Affiliates [Abstract] | |
INVESTMENTS | 5. INVESTMENTS The Company’s investments are comprised of the following: Percentage of total investments June 30, December 31, June 30, December 31, 2022 2021 2022 2021 Equity method investments: Equity method - carried interest $ 3,120,192 $ 2,998,421 79.4 % 81.4 % Equity method private investment partnership interests - principal 517,616 473,887 13.2 12.9 Equity method private investment partnership interests and other (held at fair value) 122,257 117,539 3.1 3.2 Equity method private investment partnership interests and other 119,616 40,580 3.0 1.1 Total equity method investments 3,879,681 3,630,427 98.7 98.6 Collateralized loan obligations 24,774 30,815 0.6 0.8 Other fixed income 21,582 21,582 0.4 0.5 Collateralized loan obligations and other fixed income, at fair value 46,356 52,397 1.0 1.3 Common stock, at fair value 1,469 1,440 0.1 0.1 Total investments $ 3,927,506 $ 3,684,264 Equity Method Investments The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant as defined by guidance from the SEC. As of and for the three and six months ended June 30, 2022 and 2021, no individual equity method investment held by the Company met the significance criteria. The Company recognized a net loss and a net gain related to its equity method investments of $6.4 million and $53.8 million for the three months ended June 30, 2022 and 2021, respectively, and net gains of $8.8 million and $80.4 million for the six months ended June 30, 2022 and 2021, respectively. The net gains and net losses were included within principal investment income, net realized and unrealized gains (losses) on investments, and interest and dividend income in 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 June 30, December 31, June 30, December 31, 2022 2021 2022 2021 Fixed income investments: Bonds $ 785,085 $ 857,125 6.3 % 6.7% Loans 9,253,491 9,910,689 73.7 77.3 U.S. Treasury securities 1,000,902 1,000,285 8.0 7.8 Total fixed income investments 11,039,478 11,768,099 88.0 91.8 Equity securities 480,914 340,272 3.8 2.7 Partnership interests 1,031,580 708,307 8.2 5.5 Total investments, at fair value $ 12,551,972 $ 12,816,678 As of June 30, 2022 and December 31, 2021 , no |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 6. 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 rate, yield curve, volatility, prepayment risk, loss severity, credit risk and default rate. • 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 June 30, 2022: 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 $ — $ — $ 46,356 $ — $ 46,356 Common stock and other equity securities — 1,469 113,881 — 115,350 Partnership interests — — 2,575 5,800 8,375 Total investments, at fair value — 1,469 162,812 5,800 170,081 Derivatives-foreign currency forward contracts — 8,030 — — 8,030 Total assets, at fair value $ — $ 9,499 $ 162,812 $ 5,800 $ 178,111 Liabilities, at fair value Derivatives-foreign currency forward contracts $ — $ (70) $ — $ — $ (70) Contingent consideration — — (10,748) — (10,748) Total liabilities, at fair value $ — $ (70) $ (10,748) $ — $ (10,818) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 496,798 $ 288,287 $ — $ 785,085 Loans 136 8,465,388 787,967 — 9,253,491 U.S. Treasury securities 1,000,902 — — — 1,000,902 Total fixed income investments 1,001,038 8,962,186 1,076,254 — 11,039,478 Equity securities — — 480,914 — 480,914 Partnership interests — — 250,123 781,457 1,031,580 Total assets, at fair value $ 1,001,038 $ 8,962,186 $ 1,807,291 $ 781,457 $ 12,551,972 Liabilities, at fair value Derivatives: Warrants $ (4,000) $ — $ — $ — $ (4,000) Asset swaps — — (3,035) — (3,035) Total derivative liabilities, at fair value (4,000) — (3,035) — (7,035) Loan obligations of CLOs — (10,309,475) — — (10,309,475) Total liabilities, at fair value $ (4,000) $ (10,309,475) $ (3,035) $ — $ (10,316,510) 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, 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 $ — $ — $ 52,397 $ — $ 52,397 Common stock and other equity securities — 1,440 108,949 — 110,389 Partnership interests — — 2,575 6,016 8,591 Total investments, at fair value — 1,440 163,921 6,016 171,377 Derivatives-foreign currency forward contracts — 5,682 — — 5,682 Total assets, at fair value $ — $ 7,122 $ 163,921 $ 6,016 $ 177,059 Liabilities, at fair value Derivatives-foreign currency forward contracts $ — $ (328) $ — $ — $ (328) Contingent consideration — — (57,435) — (57,435) Total liabilities, at fair value $ — $ (328) $ (57,435) $ — $ (57,763) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Measured Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 525,393 $ 331,732 $ — $ 857,125 Loans — 9,499,469 411,220 — 9,910,689 U. S. Treasury Securities 1,000,285 — — — 1,000,285 Total fixed income investments 1,000,285 10,024,862 742,952 — 11,768,099 Equity securities 956 133 339,183 — 340,272 Partnership interests — — 238,673 469,634 708,307 Total assets, at fair value $ 1,001,241 $ 10,024,995 $ 1,320,808 $ 469,634 $ 12,816,678 Liabilities, at fair value Derivatives: Derivatives-foreign exchange contracts $ (17,822) $ — $ — $ — $ (17,822) Asset swaps — — (3,105) — (3,105) Total derivative liabilities, at fair value (17,822) — (3,105) — (20,927) Loan obligations of CLOs — (10,657,661) — — (10,657,661) Total liabilities, at fair value $ (17,822) $ (10,657,661) $ (3,105) $ — $ (10,678,588) The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2022: Level III Assets and Liabilities of the Company Equity Securities Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 114,499 $ 51,458 $ 2,575 $ (10,550) $ 157,982 Change in fair value — — — (198) (198) Sales/settlements (1) (934) (993) — — (1,927) Realized and unrealized appreciation(depreciation), net 316 (4,109) — — (3,793) Balance, end of period $ 113,881 $ 46,356 $ 2,575 $ (10,748) $ 152,064 Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 316 $ (4,109) $ — $ (198) $ (3,991) Level III Net Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 351,140 $ 859,301 $ 241,123 $ (3,162) $ 1,448,402 Transfer in — 358,779 — — 358,779 Transfer out — (152,750) — — (152,750) Purchases (2) 110,322 201,882 3,000 — 315,204 Sales/settlements (1) (18,422) (140,607) (9,000) — (168,029) Amortized discounts/premiums — 177 — — 177 Realized and unrealized appreciation(depreciation), net 37,874 (50,528) 15,000 127 2,473 Balance, end of period $ 480,914 $ 1,076,254 $ 250,123 $ (3,035) $ 1,804,256 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 25,622 $ (37,145) $ 15,000 $ (64) $ 3,413 (1) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. (2) Purchases include paid-in-kind interest and securities in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2021: Level III Assets of the Company Equity Securities Fixed Income Partnership Interests Total Balance, beginning of period $ 89,233 $ 53,530 $ 2,575 $ 145,338 Transfer in due to changes in consolidation — 7,623 — 7,623 Purchases (1) 19,278 981 — 20,259 Sales/settlements (2) — (7,678) — (7,678) Realized and unrealized appreciation (depreciation), net (1,271) 1,384 — 113 Balance, end of period $ 107,240 $ 55,840 $ 2,575 $ 165,655 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (1,271) $ 852 $ — $ (419) Level III Net Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 230,634 $ 560,380 $ 243,452 $ (2,101) $ 1,032,365 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in — 92,025 — — 92,025 Transfer out — (231,320) — — (231,320) Purchases (1) 789 255,197 12,000 — 267,986 Sales/settlements (2) (731) (176,951) (2,000) (503) (180,185) Amortized discounts/premiums 1 397 — — 398 Realized and unrealized appreciation (depreciation), net (1,236) 5,024 1,826 946 6,560 Balance, end of period $ 229,300 $ 455,426 $ 255,278 $ (1,658) $ 938,346 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (1,199) $ 1,503 $ 1,826 $ (1,073) $ 1,057 (1) Purchases include paid-in-kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2022: Level III Assets and Liabilities of the Company Equity Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 108,949 $ 52,397 $ 2,575 $ (57,435) $ 106,486 Transfer in due to changes in consolidation 1,491 — — — 1,491 Sales/settlements (1) (1,147) (1,878) — 47,873 44,848 Change in fair value — — — (1,186) (1,186) Realized and unrealized appreciation (depreciation), net 4,588 (4,163) — — 425 Balance, end of period $ 113,881 $ 46,356 $ 2,575 $ (10,748) $ 152,064 Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date $ 4,588 $ (4,163) $ — $ (1,186) $ (761) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Derivatives, Net Total Balance, beginning of period $ 339,183 $ 742,952 $ 238,673 $ (3,105) $ 1,317,703 Transfer in — 338,080 — — 338,080 Transfer out — (80,261) — — (80,261) Purchases (2) 117,642 367,274 27,000 — 511,916 Sales/settlements (1) (28,611) (226,660) (30,500) (2) (285,773) Amortized discounts/premiums — 679 — — 679 Realized and unrealized appreciation (depreciation), net 52,700 (65,810) 14,950 72 1,912 Balance, end of period $ 480,914 $ 1,076,254 $ 250,123 $ (3,035) $ 1,804,256 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 26,150 $ (61,044) $ 14,445 $ (175) $ (20,624) (1) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. (2) Purchases include paid-in-kind interest and securities received in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2021: Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ 144,336 Transfer in due to changes in consolidation — 7,623 — 7,623 Purchases (1) 19,278 981 — 20,259 Sales/settlements (2) — (9,216) — (9,216) Realized and unrealized appreciation (depreciation), net (450) 3,103 — 2,653 Balance, end of period $ 107,240 $ 55,840 $ 2,575 $ 165,655 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (450) $ 1,617 $ — $ 1,167 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,305 $ 231,857 $ 1,060 $ 996,265 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in 2,195 123,431 — — 125,626 Transfer out (33) (232,019) — — (232,052) Purchases (1) 8,855 349,478 13,000 — 371,333 Sales/settlements (2) (563) (285,642) (2,000) (384) (288,589) Amortized discounts/premiums 1 1,157 — — 1,158 Realized and unrealized appreciation (depreciation), net (2,041) 6,042 12,421 (2,334) 14,088 Balance, end of period $ 229,300 $ 455,426 $ 255,278 $ (1,658) $ 938,346 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (2,116) $ 2,678 $ 12,421 $ (1,727) $ 11,256 (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 June 30, 2022: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 14,610 Transaction price (1) N/A N/A N/A 52,400 Discounted cash flow Discount rates 14.0% - 20.0% 14.3% 46,871 Market approach Multiple of book value 1.4x 1.4x Partnership interests 2,575 Other N/A N/A N/A Collateralized loan obligations 24,774 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 21,582 Other N/A N/A N/A Total assets $ 162,812 Liabilities Contingent consideration $ (10,748) Monte Carlo simulation Discount rate 8.5% 8.5% Volatility 18.0% 18.0% Total liabilities $ (10,748) Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 1,076 Market approach EBITDA multiples (2) 7.5x - 63.4x 17.8x 162,414 Market approach Multiple of book values 1.0x - 1.2x 1.1x 198,778 Discounted cash flow Discount rate 20.0% 20.0% 332 Other N/A N/A N/A 74 Broker quotes and/or 3rd party pricing services N/A N/A N/A 118,240 Transaction price (1) N/A N/A N/A Partnership interest 250,123 Discounted cash flow Discount rate 22.6% 22.6% Fixed income securities 893,063 Broker quotes and/or 3rd party pricing services N/A N/A N/A 174,346 Income approach Yields 5.5% -22.0% 7.9% 6,441 Transaction price (1) N/A N/A N/A 2,404 Other N/A N/A N/A Total assets $ 1,807,291 Liabilities Derivative instruments $ (3,035) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (3,035) (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, 2021: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 14,610 Transaction price (1) N/A N/A N/A 50,690 Discounted cash flow Discount rates 14.0% - 20.0% 14.3% 43,649 Market approach Multiple of book value 1.4x 1.4x Partnership interests 2,575 Other N/A N/A N/A Collateralized loan obligations 30,815 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 21,582 Other N/A N/A N/A Total assets $ 163,921 Liabilities Contingent Consideration $ (9,562) Monte Carlo simulation Discount rate 8.5% 8.5% Volatility 18% 18% (47,873) Other N/A N/A N/A Total liabilities $ (57,435) Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 1,261 Market approach EBITDA multiples (2) 1.0x - 64.4x 17.5x 140,185 Market approach Multiple of book values 1.0x- 1.2x 1.1x 123,685 Discounted cash flow Discount rate 20.0% 20.0% 11 Broker quotes and/or 3rd party pricing services N/A N/A N/A 74,041 Transaction price (1) N/A N/A N/A Partnership interests 238,673 Discounted cash flow Discount rate 23.4% 23.4% Fixed income securities 614,754 Broker quotes and/or 3rd party pricing services N/A N/A N/A 128,198 Income approach Yields 3.5% - 16.2% 6.7% Total assets $ 1,320,808 Liabilities Derivative instruments $ (3,105) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (3,105) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The Company has an insurance-related investment in a private fund managed by a third party that is valued using NAV per share. The terms and conditions of this fund do not allow for redemptions without certain events or approvals that are outside the Company's control. This investment had a fair value of $5.8 million and $6.0 million as of June 30, 2022 and December 31, 2021, respectively. The Company has no unfunded commitments for this investment. The Consolidated Funds have limited partnership interests in private equity funds managed by the Company that are valued using NAV per share. The terms and conditions of these funds do not allow for redemptions without certain events or approvals that are outside the Company's control. As of June 30, 2022, these investments had a fair value of $781.5 million and unfunded commitments of $903.9 million. As of December 31, 2021, these investments had a fair value of $469.6 million and unfunded commitments of $1,200.0 million. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 7. 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 interest rate and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management. The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds: As of June 30, 2022 As of December 31, 2021 Assets Liabilities Assets Liabilities The Company Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Foreign currency forward contracts $ 77,103 $ 8,030 $ 5,041 $ 70 $ 409,018 $ 5,682 $ 11,011 $ 328 Total derivatives, at fair value (2) $ 77,103 $ 8,030 $ 5,041 $ 70 $ 409,018 $ 5,682 $ 11,011 $ 328 As of June 30, 2022 As of December 31, 2021 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 $ 4,000 $ — $ — $ 230,000 $ 17,822 Asset swaps 55,975 — 49,489 3,035 56,000 — 49,516 3,105 Total derivatives, at fair value (3) $ 55,975 $ — $ 279,489 $ 7,035 $ 56,000 $ — $ 279,516 $ 20,927 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of June 30, 2022 and December 31, 2021, the Company had the right to, but elected not to, offset $0.1 million and $0.3 million of its derivative liabilities. (3) As of June 30, 2022 and December 31, 2021, the Consolidated Funds offset an immaterial amount of their derivative assets and liabilities. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | 8. DEBT The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of June 30, 2022 As of December 31, 2021 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolving 3/31/2027 N/A $ 395,000 1.63% $ 415,000 1.25% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 248,331 4.21 247,979 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 396,379 3.28 396,156 3.28 2052 Senior Notes (4) 1/21/2022 2/1/2052 500,000 483,614 3.77 — — 2051 Subordinated Notes (5) 6/30/2021 6/30/2051 450,000 444,665 4.13 444,574 4.13 Total debt obligations $ 1,967,989 $ 1,503,709 (1) On March 31, 2022, the Company amended the Credit Facility to, among other things, increase the revolver commitments from $1.090 billion to $1.275 billion with an accordion feature of $375.0 million, replace the LIBOR rate with a Secured Overnight Financing Rate-based rate (“SOFR”) plus an applicable credit spread adjustment and extend the maturity date from March 2026 to March 2027. The AOG entities are borrowers under the Credit Facility. The Credit Facility has a variable interest rate based on SOFR or a base rate plus an applicable margin, which is subject to adjustment based on the achievement of certain environmental, social and governance-related targets, with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of June 30, 2022, base rate loans bear interest calculated based on the base rate and the SOFR loans bear interest calculated based on SOFR plus 1.00%. The unused commitment fee is 0.10% per annum. There is a base rate and SOFR 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. (4) The 2052 Senior Notes were issued in January 2022 by Ares Finance Co. IV LLC, an indirect subsidiary of the Company, at 97.78% of the face amount with interest paid semi-annually. The Company may redeem the 2052 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2052 Notes. (5) The 2051 Subordinated Notes were issued in June 2021 by Ares Finance Co. III LLC, an indirect subsidiary of the Company with interest paid semi-annually at a fixed-rate of 4.125%. Beginning June 30, 2026, the interest rate will reset on every fifth year based on the five-year U.S. Treasury Rate plus 3.237%. The Company may redeem the 2051 Subordinated Notes prior to maturity or defer interest payments up to five As of June 30, 2022, 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, 2030 and 2052 Senior Notes (the “Senior Notes”) and 2051 Subordinated 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 Subordinated Notes Unamortized debt issuance costs as of December 31, 2021 $ 5,274 $ 3,689 $ 5,426 Debt issuance costs incurred 1,476 5,482 — Amortization of debt issuance costs (632) (390) (91) Unamortized debt issuance costs as of June 30, 2022 $ 6,118 $ 8,781 $ 5,335 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 June 30, 2022 As of December 31, 2021 Loan Fair Value of Weighted Loan Fair Value of Loan Obligations Weighted Senior secured notes (1) $ 10,416,048 $ 9,756,862 9.2 $ 10,031,419 $ 10,016,638 9.4 Subordinated notes (2) 814,603 552,613 7.7 792,575 641,023 8.1 Total loan obligations of Consolidated CLOs $ 11,230,651 $ 10,309,475 $ 10,823,994 $ 10,657,661 (1) As of June 30, 2022 and December 31, 2021, original borrowings under the senior secured notes totaled $10.4 billion with various maturity dates ranging from September 2026 to July 2034 and $10.0 billion with various maturity dates ranging from September 2026 to July 2034, respectively. The weighted average interest rate as of June 30, 2022 and December 31, 2021, were 2.47% and 1.93%, respectively. (2) As of June 30, 2022 and December 31, 2021, original borrowings under the subordinated notes totaled $814.6 million, with various maturity dates ranging from September 2026 to July 2034 and $792.6 million with various maturity dates ranging from September 2026 to July 2034, respectively. 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 June 30, 2022 and December 31, 2021, the Consolidated Funds were in compliance with all covenants under such credit facilities. The Consolidated Funds had the following revolving bank credit facilities outstanding: As of June 30, 2022 As of December 31, 2021 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate 10/13/2022 $ 112,817 $ 112,817 3.24% $ 71,500 1.59% 7/1/2023 18,000 15,550 3.19 16,271 1.73 7/23/2024 75,000 27,000 5.15 40,000 3.09 9/24/2026 150,000 — N/A — N/A Total borrowings of Consolidated Funds $ 155,367 $ 127,771 (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 | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES Indemnification Arrangements Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the Condensed Consolidated Statements of Financial Condition. As of June 30, 2022, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. Commitments As of June 30, 2022 and December 31, 2021, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $649.6 million and $677.3 million, respectively. Guarantees The Company has entered into agreements with financial institutions to guarantee credit facilities held by certain funds. In the ordinary course of business, the guarantee of credit facilities held by funds may indicate control and result in consolidation of the fund. As of June 30, 2022 and December 31, 2021, the Company’s maximum exposure to losses from guarantees was $16.6 million and $209.7 million, respectively. Contingent Liabilities In connection with the Landmark Acquisition, the Company established a management incentive program (the “Landmark MIP”) with certain professionals of Landmark. The Landmark MIP represents a contingent liability not to exceed $300.0 million and is based on the achievement of revenue targets from the fundraising of certain Landmark funds during a measurement period. The Company expects to settle this liability with a combination of 15% cash and 85% equity awards. Expense associated with the cash component is recognized ratably over the measurement period, which will end on the earlier of the final fundraising date or December 31, 2022. Expense associated with the equity component is recognized ratably over the service period, which will continue for four years beyond the measurement period end date. The Landmark MIP is remeasured each period with incremental changes in fair value included within compensation and benefits expense in the Condensed Consolidated Statements of Operations. At the measurement period end date, the cash component will be paid and restricted units for the balance of the Landmark MIP will be granted at fair value. The unpaid liability at the measurement period end date will be reclassified from liability to additional paid-in-capital and any difference between the fair value of the Landmark MIP at the measurement period end date and the previously recorded compensation expense will be recognized over the remaining four The purchase agreement with Black Creek contains provisions obligating the Company to make payments in an aggregate amount not to exceed $275.0 million to certain senior professionals and advisors upon the achievement of certain revenue targets through a measurement period no later than December 31, 2024. Of the total contingent liability, 96% requires continued service through the measurement period and is accounted for as compensation expense instead of as a component of purchase consideration. The fair value of this contingent liability is remeasured at each reporting date with compensation expense recorded ratably over the service period, which is the Black Creek Acquisition date through the earlier of the measurement period end date or the achievement date. As of June 30, 2022 and December 31, 2021, the fair value of the contingent liability was $257.9 million and $229.5 million, respectively. As of June 30, 2022 and December 31, 2021, the Company has recorded $133.4 million and $45.9 million, respectively, within accrued compensation in the Condensed Consolidated Statements of Financial Condition. Compensation expense of $49.8 million and $87.5 million for the three and six months ended June 30, 2022, respectively, is presented within compensation and benefits in the Condensed Consolidated Statements of Operations. The remaining 4% portion of the contingent liability does not require continued service through the measurement period and is accounted for as contingent consideration that is a component of purchase consideration. The fair value of this contingent liability is remeasured at each reporting date with changes in fair value recorded within other expense over the service period. As of June 30, 2022 and December 31, 2021, the fair value of the contingent liability was $10.7 million and $9.6 million, respectively. Other expense of $0.2 million and $1.2 million for the three and six months ended June 30, 2022, respectively, is presented within other income (expense), net in the Condensed Consolidated Statements of Operations. In connection with the Infrastructure Debt Acquisition, the Company established a management incentive program (the “Infrastructure Debt MIP”) with certain professionals. The Infrastructure Debt MIP represents a contingent liability not to exceed $48.5 million and is based on the achievement of revenue targets from the fundraising of certain infrastructure debt funds during the measurement periods. The Company expects to settle each portion of the liability with a combination of 15% cash and 85% equity awards. Expense associated with the cash components are recognized ratably over the respective measurement periods, which will end on the final fundraising date for each of the infrastructure debt funds included in the Infrastructure Debt MIP agreement. Expense associated with the equity component is recognized ratably over the service periods, which will continue for four years beyond each of the measurement period end dates. The Infrastructure Debt MIP is remeasured each period with incremental changes in fair value included within compensation and benefits expense in the Condensed Consolidated Statements of Operations. At each of the measurement period end dates, the cash component will be paid and restricted units for the portion of the Infrastructure Debt MIP award earned will be granted at fair value. The unpaid liability at the respective measurement period end dates will be reclassified from liability to additional paid-in-capital and any difference between the fair value of the Infrastructure Debt MIP award earned at the respective measurement period end date and the previously recorded compensation expense will be recognized over the remaining four Carried Interest Carried interest is affected by changes in the fair values of the underlying investments in the funds that are advised by the Company. 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 carried interest 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 June 30, 2022 and December 31, 2021, if the Company assumed all existing investments were worthless, the amount of carried interest subject to potential repayment, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $185.9 million and $194.6 million, respectively, of which approximately $146.6 million and $153.3 million, respectively, is reimbursable to the Company by certain professionals who are the recipients of such carried interest. Management believes the possibility of all of the investments becoming worthless is remote. As of June 30, 2022 and December 31, 2021, 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 June 30, As of December 31, Classification 2022 2021 Operating lease assets Right-of-use operating lease assets $ 153,929 $ 167,652 Finance lease assets Other assets (1) 689 1,011 Total lease assets $ 154,618 $ 168,663 Operating lease liabilities Operating lease liabilities $ 189,175 $ 205,075 Finance lease obligations Accounts payable, accrued expenses and other liabilities 470 936 Total lease liabilities $ 189,645 $ 206,011 (1) Finance lease assets are recorded net of accumulated amortization of $1.9 million and $1.6 million as of June 30, 2022 and December 31, 2021, respectively. Maturity of lease liabilities Operating Leases Finance Leases 2022 $ 21,557 $ 142 2023 38,826 166 2024 38,180 162 2025 36,821 15 2026 28,011 — After 2026 39,605 — Total future payments 203,000 485 Less: interest 13,825 15 Total lease liabilities $ 189,175 $ 470 Three months ended June 30, Six months ended June 30, Classification 2022 2021 2022 2021 Operating lease expense General, administrative and other expenses $ 10,071 $ 9,013 $ 20,134 $ 17,506 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 182 128 344 254 Interest on finance lease liabilities Interest expense 3 7 9 17 Total lease expense $ 10,256 $ 9,148 $ 20,487 $ 17,777 Six months ended June 30, Other information 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 22,170 $ 16,733 Operating cash flows for finance leases 16 30 Financing cash flows for finance leases 457 390 Leased assets obtained in exchange for new finance lease liabilities 13 28 Leased assets obtained in exchange for new operating lease liabilities 5,066 30,378 As of June 30, As of December 31, Lease term and discount rate 2022 2021 Weighted-average remaining lease terms (in years): Operating leases 5.6 6.0 Finance leases 2.3 1.8 Weighted-average discount rate: Operating leases 2.81 % 1.81 % Finance leases 2.80 % 2.94 % |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS Substantially all of the Company’s revenue is earned from its affiliates. The related accounts receivable are included within due from affiliates in 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 has also entered into agreements to be reimbursed for its expenses incurred in providing administrative services to certain related parties, including our public vehicles. The Company is also party to agreements with certain private funds that pay administrative fees based on invested capital and with certain real estate funds to provide various services, such as administration, acquisition, development, property management, fees from the distribution of shares in our non-traded REITs, among others. 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 fees, carried interest or incentive fees. The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of June 30, As of December 31, 2022 2021 Due from affiliates: Management fees receivable from non-consolidated funds $ 430,712 $ 372,249 Incentive fee receivable from non-consolidated funds 11,069 211,243 Payments made on behalf of and amounts due from non-consolidated funds and employees 110,356 86,891 Due from affiliates—Company $ 552,137 $ 670,383 Amounts due from non-consolidated funds $ 7,159 $ 7,234 Due from affiliates—Consolidated Funds $ 7,159 $ 7,234 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 7,102 $ 10,160 Tax receivable agreement liability 98,975 100,542 Undistributed carried interest and incentive fees 10,648 66,494 Payments made by non-consolidated funds on behalf of and payable by the Company 16,697 21,357 Due to affiliates—Company $ 133,422 $ 198,553 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 | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. 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 and six months ended June 30, 2022, the Company recorded income tax expense of $13.5 million and $33.9 million, respectively. For the three and six months ended June 30, 2021, the Company recorded income tax expense of $48.5 million and $74.2 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 and six months ended June 30, 2022 and 2021, 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 June 30, 2022 and December 31, 2021, the Company recorded a net deferred tax asset of $37.7 million and $39.4 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 2018. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed consolidated financial statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 12. EARNINGS PER SHARE For the six months ended June 30, 2022, the Company had Class A and non-voting common stock outstanding. The non-voting common stock has the same economic rights as the Class A common stock; therefore, earnings per share is presented on a combined basis. Income of the Company has been allocated on a proportionate basis to the two common stock classes. Basic earnings per share of Class A and non-voting common stock is computed by using the two-class method. Diluted earnings per share of Class A and non-voting common stock is computed using the more dilutive method of either the two-class method or the treasury stock method. For the three and six months ended June 30, 2022, the two-class method was the more dilutive method. For the three and six months ended June 30, 2021, the treasury stock method was the more dilutive method. The computation of diluted earnings per share excludes the following AOG Units as their effect would have been anti-dilutive: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Restricted units — 49 — 25 AOG Units — 113,890,960 — 113,126,250 The following table presents the computation of basic and diluted earnings per common share: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Basic earnings per share of Class A and non-voting common stock: Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 39,731 $ 124,980 $ 85,594 $ 177,933 Distributions on unvested restricted units (3,461) (3,452) (7,046) (6,693) Undistributed earnings allocable to participating unvested restricted units — (4,967) — (2,701) Net income available to Class A and non-voting common stockholders $ 36,270 $ 116,561 $ 78,548 $ 168,539 Basic weighted-average shares of Class A and non-voting common stock 175,157,558 164,793,968 174,694,645 157,075,774 Basic earnings per share of Class A and non-voting common stock $ 0.21 $ 0.70 $ 0.45 $ 1.07 Diluted earnings per share of Class A and non-voting common stock: Net income available to Class A and non-voting common stockholders $ 39,731 $ 124,980 $ 85,594 $ 177,933 Distributions on unvested restricted units (3,461) — (7,046) — Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 36,270 $ 124,980 $ 78,548 $ 177,933 Effect of dilutive shares: Restricted units — 10,930,236 — 10,074,330 Options — 5,303,530 — 5,238,834 Diluted weighted-average shares of Class A and non-voting common stock 175,157,558 181,027,734 174,694,645 172,388,938 Diluted earnings per share of Class A and non-voting common stock $ 0.21 $ 0.69 $ 0.45 $ 1.03 Dividend declared and paid per Class A and non-voting common stock $ 0.61 $ 0.47 $ 1.22 $ 0.94 |
EQUITY COMPENSATION
EQUITY COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY COMPENSATION | 13. 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, 2022, the total number of shares available for issuance under the Equity Incentive Plan reset to 49,293,000 shares and as of June 30, 2022, 44,596,953 shares remained available for issuance. Generally, unvested restricted units 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 presented in the following table: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Restricted units $ 49,635 $ 46,742 $ 103,286 $ 90,829 Restricted units with a market condition — 22,762 — 34,324 Equity-based compensation expense $ 49,635 $ 69,504 $ 103,286 $ 125,153 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) 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 (iii) 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 six months ended June 30, 2022, 5.3 million restricted units vested and 2.9 million shares of Class A common stock were delivered to the holders. For the six months ended June 30, 2021, 4.8 million restricted units vested and 2.7 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 six months ended June 30, 2022, the Company declared dividends of $0.61 per share to Class A common stockholders at the close of business on March 17, 2022 and June 16, 2022. For the three and six months ended June 30, 2022, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $8.0 million and $16.0 million, respectively, which are presented as dividends in 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 2022, the Company approved the future grant of restricted units to certain senior executives in each of 2023, 2024 and 2025, 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, 2022 18,323,036 $ 36.43 Granted 3,948,993 74.69 Vested (5,156,186) 26.72 Forfeited (192,946) 52.34 Balance - June 30, 2022 16,922,897 $ 48.14 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $632.6 million as of June 30, 2022 and is expected to be recognized over the remaining weighted average period of 3.8 years. Options Upon exercise, each option entitles the holders to purchase from the Company one share of Class A common stock at the stated exercise price. The term of the options is generally ten years, beginning on the grant date. A summary of options activity during the six months ended June 30, 2022 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - January 1, 2022 6,306,282 $ 19.00 2.3 $ 392,692 Granted — — — Exercised (454,912) 19.00 — — Expired — — — — Forfeited — — — — Balance - June 30, 2022 5,851,370 $ 19.00 1.8 $ 221,533 Exercisable at June 30, 2022 5,851,370 $ 19.00 1.8 $ 221,533 |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
EQUITY AND REDEEMABLE INTEREST | 14. 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 non-voting common stock has the same economic rights as the Class A common stock. Sumitomo Mitsui Banking Corporation (“SMBC”) is the sole holder of the non-voting common stock. 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 2022, 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 March 2023. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the six months ended June 30, 2022 and 2021, 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 Non-Voting Common Stock Class B Common Stock Class C Common Stock Total Balance - December 31, 2021 168,351,305 3,489,911 1,000 118,609,332 290,451,548 Exchanges of AOG Units 157,050 — — (157,050) — Stock option exercises, net of shares withheld for tax 454,912 — — — 454,912 Vesting of restricted stock awards, net of shares withheld for tax 2,874,083 — — — 2,874,083 Cancellation of AOG Units — — — (4,135) (4,135) Balance - June 30, 2022 171,837,350 3,489,911 1,000 118,448,147 293,776,408 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 June 30, 2022 As of December 31, 2021 Three months ended June 30, Six months ended June 30, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2022 2021 2022 2021 Ares Management Corporation 175,327,261 59.68 % 171,841,216 59.16 % 59.66 % 59.13 % 59.58 % 58.13 % Ares Owners Holdings, L.P. 118,448,147 40.32 118,609,332 40.84 40.34 40.87 40.42 41.87 Total 293,775,408 100.00 % 290,450,548 100.00 % Redeemable Interest The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities: Total Balance - December 31, 2021 $ 96,008 Changes in ownership interests and related tax benefits 231 Net income 399 Currency translation adjustment, net of tax (331) Equity compensation 48 Distributions (8) Balance - March 31, 2022 96,347 Changes in ownership interests and related tax benefits (1,445) Net loss (457) Currency translation adjustment, net of tax (996) Equity compensation 77 Distributions (8) Balance- June 30, 2022 $ 93,518 The following table summarizes the activities associated with the redeemable interest in Consolidated Funds: Total Balance - December 31, 2021 $ 1,000,000 Change in redemption value — Balance - March 31, 2022 $ 1,000,000 Change in redemption value — Balance - June 30, 2022 $ 1,000,000 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 15. SEGMENT REPORTING The Company operates through its distinct operating segments. On January 1, 2022, the Company changed its segment composition and established the Real Assets Group. The Real Assets Group consists of the activities of the former Real Estate Group and the infrastructure and power strategy, now referred to as infrastructure opportunities, that was formerly presented within the Private Equity Group. The Real Assets Group also includes infrastructure debt following the Infrastructure Debt Acquisition. The Company reclassified activities from the infrastructure opportunities strategy in the Private Equity Group and from the former Real Estate Group to the Real Assets Group to better align the segment presentation with how the asset classes within the investment strategies are managed. The Company has modified historical results to conform with its current presentation. The Company operating segments 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 subordinated 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 separately managed accounts (“SMAs”). Private Equity Group: The Private Equity Group broadly categorizes its investment strategies as corporate private equity and special opportunities. In the corporate private equity strategy, the Company targets four principal transactions types: (i) prudently leveraged control buyouts; (ii) growth equity; (iii) rescue capital; and (iv) distressed-for-control. This differentiated strategy, together with the broad resources of the Ares platform, widens our universe of potential investment opportunities and allows us to remain active across various market environments and to be highly selective in making investments by identifying the most attractive relative value opportunities. The corporate private equity strategy also includes our energy opportunities fund which serves as a companion fund and employs our flexible capital strategy to provide creative capital solutions across the energy industry. In the special opportunities strategy, the Company employs an “all weather” flexible capital strategy to finance debt and non-control equity solutions in middle market companies undergoing transformational change or stress. The strategy seeks to consistently invest in a range of private, special-situation opportunities and flex into distressed public market debt when attractive. Real Assets Group : The Real Assets Group manages comprehensive equity and debt strategies across real estate and infrastructure investments. The real estate strategy focuses on activities categorized as core/core-plus, value-add, opportunistic and debt. Real estate equity strategies involve high-quality properties and locations and de-risked developments with an opportunity to create value through repositioning, lease-up, re-tenanting, redevelopment, and/or complex recapitalizations. The U.S. core/core-plus investment activities focuses on the acquisition of assets with strong long-term cash flow potential and durable tenancy diversified across end-user industries and geographies. The value-add investment activities focus on acquiring underperforming, income-producing, institutional-quality assets that can be improved through select value-creation initiatives across the U.S. and Europe. The opportunistic activities focus on capitalizing on distressed and special situations, repositioning underperforming assets and undertaking select development and redevelopment projects across the U.S. and Europe. The real estate debt strategy primarily focuses on directly originating a wide range of financing opportunities in the U.S. and Europe leveraging the Real Asset Group’s diverse sources of capital. In addition to managing private commingled funds and SMAs investing in equity and debt strategies, the real estate strategy also makes investments through Ares Real Estate Income Trust, Inc. (“AREIT”) and Ares Industrial Real Estate Income Trust, Inc. (“AIREIT”), its non-traded REITs, and ACRE, a publicly traded commercial mortgage REIT. The infrastructure strategy focuses on investment strategies broadly categorized as infrastructure opportunities and infrastructure debt. Infrastructure opportunities is a market leader in infrastructure and power investing with a focus on climate infrastructure, natural gas generation and energy transportation sectors. The infrastructure opportunities strategy targets essential infrastructure assets and companies with stable cash flow profiles through long-term contracts and high-barriers to entry. The infrastructure debt strategy was formed during the first quarter of 2022 in connection with the Infrastructure Debt Acquisition. The infrastructure debt strategy targets global assets and businesses with defensive characteristics across the digital, transport, energy and utility sectors. Leveraging the established long standing relationships, the strategy seeks to generate exclusive deal flow and high-quality investment opportunities. Secondary Solutions Group : The Secondary Solutions Group was formed during the second quarter of 2021 in connection with the Landmark Acquisition. The Secondary Solutions Group invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate and infrastructure. The Company acquires interests across a range of partnership vehicles, including funds, multi-asset portfolios and single asset joint ventures. Activities within each strategy include recapitalizing and restructuring the funds, including transactions that can address pending fund maturity, strategy change or the need for additional equity capital. The private equity secondaries strategy targets opportunities in non-competitive channels and makes investments in durable, performing assets with attractive capital structures. In the real estate secondaries strategy, the Company seeks broad diversification by property sector and geography and to drive investment results through underwriting, transaction structuring and portfolio construction. In the infrastructure secondaries strategy, the Company focuses on achieving diversification through a portfolio that provides inflation protection and exposure to uncorrelated assets. Strategic Initiatives: Strategic Initiatives 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. Strategic Initiatives includes activities from (i) Ares SSG, the Asia-Pacific platform that makes credit and special situations investments through its local originating presence on behalf of its institutional client base, (ii) Ares Insurance Solutions (“AIS”), the Company’s insurance platform that provides solutions to insurance clients including asset management, capital solutions and corporate development and (iii) Ares Acquisition Corporation (NYSE: AAC) (“AAC”), the Company’s first sponsored SPAC, among others. 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, legal, compliance, human resources, strategy, relationship management and distribution. The OMG includes Ares Wealth Management Solutions, LLC (“AWMS”) that facilitates the product development, distribution, marketing and client management activities for investment offerings in the global wealth management channel. Additionally, the OMG provides services to certain of the Company’s managed funds and vehicles, which reimburse the OMG for expenses equal to the costs of services provided. The OMG’s revenues and expenses are not allocated to the Company’s reportable segments but the Company does consider the financial results 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 and fee related performance revenues, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes net performance income, 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. Fee related performance revenues, together with fee related performance compensation, is presented within FRE because it represents incentive fees from perpetual capital vehicles that is measured and received on a recurring basis and not dependent on realization events from the underlying investments. Fee related performance revenues and fee related performance compensation were previously presented within realized net performance income. Historical periods have been modified to conform to the current period presentation. 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 (i) operating results of the Consolidated Funds, (ii) depreciation and amortization expense, (iii) the effects of changes arising from corporate actions, (iv) unrealized gains and losses related to carried interest, incentive fees and investment performance and (v) 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 activities, underwriting costs and expenses incurred in connection with corporate reorganization. RI is reduced by deferred placement fees, which represent the portion of placement fees that have been deferred and amortized over the expected life of each fund's life for segment purposes but have been expensed up front in accordance with GAAP. For periods in which the amortization of placement fees for segment purposes is higher than the GAAP expense, a placement fee adjustment is presented as a reduction to RI. 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. Total assets by segments is not disclosed because such information is not used by the Company’s chief operating decision maker in evaluating the segments. The following tables present the financial results for the Company’s operating segments, as well as the OMG: Three months ended June 30, 2022 Credit Group Private Equity Group Real Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 323,171 $ 47,396 $ 90,733 $ 46,201 $ 17,380 $ 524,881 $ — $ 524,881 Fee related performance revenues 275 — 965 — — 1,240 — 1,240 Other fees 6,619 408 8,565 — 64 15,656 6,298 21,954 Compensation and benefits (93,287) (24,293) (40,599) (15,133) (6,799) (180,111) (71,341) (251,452) General, administrative and other expenses (17,780) (7,880) (10,639) (2,957) (2,363) (41,619) (35,225) (76,844) Fee related earnings 218,998 15,631 49,025 28,111 8,282 320,047 (100,268) 219,779 Performance income—realized 48,533 — 17,405 4,156 — 70,094 — 70,094 Performance related compensation—realized (29,358) — (11,186) (3,514) — (44,058) — (44,058) Realized net performance income 19,175 — 6,219 642 — 26,036 — 26,036 Investment income (loss)—realized 1,609 672 432 — (3) 2,710 — 2,710 Interest and other investment income (expense)—realized 6,387 195 2,640 2,200 5,514 16,936 (995) 15,941 Interest expense (3,538) (3,629) (2,713) (1,557) (5,605) (17,042) (179) (17,221) Realized net investment income (loss) 4,458 (2,762) 359 643 (94) 2,604 (1,174) 1,430 Realized income $ 242,631 $ 12,869 $ 55,603 $ 29,396 $ 8,188 $ 348,687 $ (101,442) $ 247,245 Three months ended June 30, 2021 Credit Group Private Equity Group Real Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 260,234 $ 39,975 $ 42,932 $ 12,898 $ 16,796 $ 372,835 $ — $ 372,835 Fee related performance revenues (39) — 693 — — 654 — 654 Other fees 6,727 248 275 — 1 7,251 — 7,251 Compensation and benefits (85,892) (21,979) (20,189) (4,289) (5,384) (137,733) (48,429) (186,162) General, administrative and other expenses (11,977) (5,881) (3,861) (859) (1,771) (24,349) (23,074) (47,423) Fee related earnings 169,053 12,363 19,850 7,750 9,642 218,658 (71,503) 147,155 Performance income—realized 68,146 53,945 4,922 — — 127,013 — 127,013 Performance related compensation—realized (43,485) (43,197) (3,398) — — (90,080) — (90,080) Realized net performance income 24,661 10,748 1,524 — — 36,933 — 36,933 Investment income—realized 1,240 2,633 10,530 — 322 14,725 — 14,725 Interest and other investment income—realized 5,969 4,846 1,511 2 2,628 14,956 85 15,041 Interest expense (1,465) (1,476) (1,289) (5) (2,525) (6,760) (147) (6,907) Realized net investment income (loss) 5,744 6,003 10,752 (3) 425 22,921 (62) 22,859 Realized income $ 199,458 $ 29,114 $ 32,126 $ 7,747 $ 10,067 $ 278,512 $ (71,565) $ 206,947 Six months ended June 30, 2022 Credit Group Private Equity Group Real Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 626,330 $ 93,353 $ 163,220 $ 90,705 $ 34,194 $ 1,007,802 $ — $ 1,007,802 Fee related performance revenues 12,628 — 1,323 — — 13,951 — 13,951 Other fees 12,385 705 16,431 — 114 29,635 12,174 41,809 Compensation and benefits (198,983) (43,859) (74,236) (26,773) (14,200) (358,051) (135,408) (493,459) General, administrative and other expenses (34,477) (14,168) (18,276) (6,035) (4,089) (77,045) (67,609) (144,654) Fee related earnings 417,883 36,031 88,462 57,897 16,019 616,292 (190,843) 425,449 Performance income—realized 55,896 2,212 51,698 4,156 — 113,962 — 113,962 Performance related compensation—realized (33,938) (1,786) (33,395) (3,514) — (72,633) — (72,633) Realized net performance income 21,958 426 18,303 642 — 41,329 — 41,329 Investment income—realized 2,024 2,275 3,885 — 858 9,042 — 9,042 Interest and other investment income (expense)—realized 12,113 1,697 5,417 2,844 5,517 27,588 (1,279) 26,309 Interest expense (6,952) (7,002) (5,102) (2,022) (11,443) (32,521) (346) (32,867) Realized net investment income (loss) 7,185 (3,030) 4,200 822 (5,068) 4,109 (1,625) 2,484 Realized income $ 447,026 $ 33,427 $ 110,965 $ 59,361 $ 10,951 $ 661,730 $ (192,468) $ 469,262 Six months ended June 30, 2021 Credit Group Private Equity Group Real Assets Group Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 493,111 $ 79,113 $ 82,757 $ 12,898 $ 32,419 $ 700,298 $ — $ 700,298 Fee related performance revenues 1,331 — 1,359 — — 2,690 — 2,690 Other fees 12,696 356 923 — 80 14,055 — 14,055 Compensation and benefits (167,095) (38,827) (40,368) (4,289) (10,124) (260,703) (92,836) (353,539) General, administrative and other expenses (22,786) (10,367) (7,538) (859) (3,806) (45,356) (41,730) (87,086) Fee related earnings 317,257 30,275 37,133 7,750 18,569 410,984 (134,566) 276,418 Performance income—realized 70,592 125,163 6,203 — — 201,958 — 201,958 Performance related compensation—realized (45,540) (100,223) (4,174) — — (149,937) — (149,937) Realized net performance income 25,052 24,940 2,029 — — 52,021 — 52,021 Investment income (loss)—realized 1,240 (6,265) 12,036 — 322 7,333 — 7,333 Interest and other investment income—realized 9,638 4,964 3,865 2 2,661 21,130 440 21,570 Interest expense (2,980) (2,929) (2,624) (5) (4,827) (13,365) (237) (13,602) Realized net investment income (loss) 7,898 (4,230) 13,277 (3) (1,844) 15,098 203 15,301 Realized income $ 350,207 $ 50,985 $ 52,439 $ 7,747 $ 16,725 $ 478,103 $ (134,363) $ 343,740 The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Segment revenues Management fees $ 524,881 $ 372,835 $ 1,007,802 $ 700,298 Fee related performance revenues 1,240 654 13,951 2,690 Other fees 15,656 7,251 29,635 14,055 Performance income—realized 70,094 127,013 113,962 201,958 Total segment revenues $ 611,871 $ 507,753 $ 1,165,350 $ 919,001 Segment expenses Compensation and benefits $ 180,111 $ 137,733 $ 358,051 $ 260,703 General, administrative and other expenses 41,619 24,349 77,045 45,356 Performance related compensation—realized 44,058 90,080 72,633 149,937 Total segment expenses $ 265,788 $ 252,162 $ 507,729 $ 455,996 Segment realized net investment income Investment income—realized $ 2,710 $ 14,725 $ 9,042 $ 7,333 Interest and other investment income —realized 16,936 14,956 27,588 21,130 Interest expense (17,042) (6,760) (32,521) (13,365) Total segment realized net investment income $ 2,604 $ 22,921 $ 4,109 $ 15,098 The following table reconciles the Company's consolidated revenues to segment revenue: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Total consolidated revenue $ 601,430 $ 1,294,819 $ 1,316,429 $ 1,953,207 Performance (income) loss—unrealized 24,149 (741,426) (109,383) (966,380) Management fees of Consolidated Funds eliminated in consolidation 11,362 10,659 22,841 22,365 Incentive fees of Consolidated Funds eliminated in consolidation — 3 34 1,528 Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 4,315 4,748 9,084 8,893 Administrative fees (1) (15,373) (9,314) (34,848) (19,122) OMG revenue (6,417) — (12,293) — Performance income (loss) reclass (2) — 550 (14) 605 Principal investment (income) loss, net of eliminations 4,387 (47,127) (3,939) (72,227) Net income of non-controlling interests in consolidated subsidiaries (11,982) (5,159) (22,561) (9,868) Total consolidation adjustments and reconciling items 10,441 (787,066) (151,079) (1,034,206) Total segment revenue $ 611,871 $ 507,753 $ 1,165,350 $ 919,001 (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 June 30, Six months ended June 30, 2022 2021 2022 2021 Total consolidated expenses $ 552,868 $ 1,024,732 $ 1,164,552 $ 1,549,841 Performance related compensation-unrealized 8,549 (566,012) (82,649) (726,349) Expenses of Consolidated Funds added in consolidation (24,865) (26,011) (40,942) (43,447) Expenses of Consolidated Funds eliminated in consolidation 11,638 10,711 23,202 23,976 Administrative fees (1) (15,958) (9,314) (34,848) (19,122) OMG expenses (106,566) (71,503) (203,017) (134,566) Acquisition and merger-related expense (1,152) (9,020) (10,194) (17,610) Equity compensation expense (49,559) (69,504) (103,161) (125,153) Acquisition-related compensation expense (2) (59,491) (4,630) (107,492) (4,630) Placement fees 1,425 (1,030) 2,118 (1,327) Depreciation and amortization expense (40,330) (20,974) (78,456) (35,074) Expense of non-controlling interests in consolidated subsidiaries (10,771) (5,283) (21,384) (10,543) Total consolidation adjustments and reconciling items (287,080) (772,570) (656,823) (1,093,845) Total segment expenses $ 265,788 $ 252,162 $ 507,729 $ 455,996 (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) Represents contingent obligations resulting from the Landmark Acquisition, the Black Creek Acquisition and the Infrastructure Debt Acquisition that are recorded as compensation expense and are presented within compensation and benefits in the Company’s Condensed Consolidated Statements of Operations. The following table reconciles the Company's consolidated other income to segment realized net investment income: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Total consolidated other income $ 18,504 $ 49,690 $ 76,498 $ 106,475 Investment (income) loss—unrealized 2,084 (34,811) 9,938 (56,979) Interest and other investment (income) loss—unrealized (6,029) 512 (12,061) 4,462 Other income from Consolidated Funds added in consolidation, net (27,570) (34,592) (94,418) (101,908) Other expense from Consolidated Funds eliminated in consolidation, net (4,215) (4,698) (11,733) (8,810) OMG other expense 1,091 276 5,684 609 Performance (income) loss reclass (1) — (550) 14 (605) Principal investment income 13,493 50,634 27,983 75,729 Other expense, net 13 619 1,994 146 Other (income) loss of non-controlling interests in consolidated subsidiaries 5,233 (4,159) 210 (4,021) Total consolidation adjustments and reconciling items (15,900) (26,769) (72,389) (91,377) Total segment realized net investment income $ 2,604 $ 22,921 $ 4,109 $ 15,098 (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 June 30, Six months ended June 30, 2022 2021 2022 2021 Income before taxes $ 67,066 $ 319,777 $ 228,375 $ 509,841 Adjustments: Depreciation and amortization expense 40,330 20,974 78,456 35,074 Equity compensation expense 50,144 69,504 103,161 125,153 Acquisition-related compensation expense (1) 59,491 4,630 107,492 4,630 Acquisition and merger-related expense 1,152 9,020 10,194 17,610 Placement fees (1,425) 1,030 (2,118) 1,327 OMG expense, net 101,241 71,779 196,409 135,175 Other expense, net 12 619 1,993 146 Net (income) expense of non-controlling interests in consolidated subsidiaries 4,022 (4,035) (967) (3,346) (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations 14,999 (5,073) (32,408) (54,959) Total performance (income) loss—unrealized 24,149 (741,426) (109,383) (966,380) Total performance related compensation—unrealized (8,549) 566,012 82,649 726,349 Total investment income—unrealized (3,945) (34,299) (2,123) (52,517) Realized income 348,687 278,512 661,730 478,103 Total performance income—realized (70,094) (127,013) (113,962) (201,958) Total performance related compensation—realized 44,058 90,080 72,633 149,937 Total investment income—realized (2,604) (22,921) (4,109) (15,098) Fee related earnings $ 320,047 $ 218,658 $ 616,292 $ 410,984 (1) Represents contingent obligations resulting from the Landmark Acquisition, the Black Creek Acquisition and the Infrastructure Debt Acquisition that are recorded as compensation expense and are presented within compensation and benefits in the Company’s Condensed Consolidated Statements of Operations. |
CONSOLIDATION
CONSOLIDATION | 6 Months Ended |
Jun. 30, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
CONSOLIDATION | 16. CONSOLIDATION Investments in Consolidated Variable Interest Entities The Company consolidates entities in which the Company has a variable interest and as the general partner or investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at fair value and represent the Company’s maximum exposure to loss. Investments in Non-Consolidated Variable Interest Entities The Company holds interests in certain VIEs that are not consolidated as the Company is not the primary beneficiary. The Company's interest in such entities generally is in the form of direct equity interests, fixed fee arrangements or both. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. Investments in the non-consolidated VIEs are carried at fair value. The Company's interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of June 30, As of December 31, 2022 2021 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs (1) $ 387,860 $ 353,768 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs (1) 508,060 583,192 Assets of consolidated VIEs 12,622,718 13,197,321 Liabilities of consolidated VIEs 11,350,132 12,018,655 (1) As of June 30, 2022 and December 31, 2021, 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 $85.5 million and $103.8 million, respectively. Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Net income (loss) attributable to non-controlling interests related to consolidated VIEs $ (18,725) $ 17,872 $ 19,737 $ 45,688 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 June 30, 2022 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 252,867 $ — $ — $ 252,867 Investments (includes $3,120,192 of accrued carried interest) 4,428,324 — (500,818) 3,927,506 Due from affiliates 692,408 — (140,271) 552,137 Other assets 265,166 — — 265,166 Right-of-use operating lease assets 153,929 — — 153,929 Intangible assets, net 1,453,678 — — 1,453,678 Goodwill 998,444 — — 998,444 Assets of Consolidated Funds Cash and cash equivalents — 824,110 — 824,110 U.S. Treasury securities, at fair value — 1,000,490 — 1,000,490 Investments, at fair value — 11,542,498 8,984 11,551,482 Due from affiliates — 17,491 (10,332) 7,159 Receivable for securities sold — 195,831 — 195,831 Other assets — 43,416 — 43,416 Total assets $ 8,244,816 $ 13,623,836 $ (642,437) $ 21,226,215 Liabilities Accounts payable, accrued expenses and other liabilities $ 266,952 $ — $ (10,332) $ 256,620 Accrued compensation 404,821 — — 404,821 Due to affiliates 133,422 — — 133,422 Performance related compensation payable 2,280,764 — — 2,280,764 Debt obligations 1,967,989 — — 1,967,989 Operating lease liabilities 189,175 — — 189,175 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 102,607 (3,065) 99,542 Due to affiliates — 131,287 (131,287) — Payable for securities purchased — 667,375 — 667,375 CLO loan obligations, at fair value — 10,339,193 (29,718) 10,309,475 Fund borrowings — 155,367 — 155,367 Total liabilities 5,243,123 11,395,829 (174,402) 16,464,550 Commitments and contingencies Redeemable interest in Consolidated Funds — 1,000,000 — 1,000,000 Redeemable interest in Ares Operating Group entities 93,518 — — 93,518 Non-controlling interest in Consolidated Funds — 1,228,007 (429,531) 798,476 Non-controlling interest in Ares Operating Group entities 1,245,899 — (15,594) 1,230,305 Stockholders' Equity Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (171,837,350 shares issued and outstanding) 1,718 — — 1,718 Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 shares issued and outstanding) 35 — — 35 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 (118,448,147 shares issued and outstanding) 1,184 — — 1,184 Additional paid-in-capital 1,903,231 — (22,910) 1,880,321 Accumulated deficit (226,700) — — (226,700) Accumulated other comprehensive loss, net of tax (17,192) — — (17,192) Total stockholders' equity 1,662,276 — (22,910) 1,639,366 Total equity 2,908,175 1,228,007 (468,035) 3,668,147 Total liabilities, redeemable interest, non-controlling interests and equity $ 8,244,816 $ 13,623,836 $ (642,437) $ 21,226,215 As of December 31, 2021 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 343,655 $ — $ — $ 343,655 Investments (includes $2,998,421 of accrued carried interest) 4,271,836 — (587,572) 3,684,264 Due from affiliates 696,963 — (26,580) 670,383 Other assets 338,685 — (3,930) 334,755 Right-of-use operating lease assets 167,652 — — 167,652 Intangible assets, net 1,422,818 — — 1,422,818 Goodwill 787,972 — — 787,972 Assets of Consolidated Funds Cash and cash equivalents — 1,049,191 — 1,049,191 U.S. Treasury securities, at fair value — 1,000,285 — 1,000,285 Investments, at fair value — 11,812,093 4,300 11,816,393 Due from affiliates — 16,761 (9,527) 7,234 Receivable for securities sold — 281,132 — 281,132 Other assets — 39,430 — 39,430 Total assets $ 8,029,581 $ 14,198,892 $ (623,309) $ 21,605,164 Liabilities Accounts payable, accrued expenses and other liabilities $ 289,200 $ — $ (9,527) $ 279,673 Accrued compensation 310,222 — — 310,222 Due to affiliates 198,553 — — 198,553 Performance related compensation payable 2,190,352 — — 2,190,352 Debt obligations 1,503,709 — — 1,503,709 Operating lease liabilities 205,075 — — 205,075 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 117,139 (13,881) 103,258 Due to affiliates — 26,210 (26,210) — Payable for securities purchased — 1,118,456 — 1,118,456 CLO loan obligations, at fair value — 10,698,681 (41,020) 10,657,661 Fund borrowings — 127,771 — 127,771 Total liabilities 4,697,111 12,088,257 (90,638) 16,694,730 Commitments and contingencies Redeemable interest in Consolidated Funds — 1,000,000 — 1,000,000 Redeemable interest in Ares Operating Group entities 96,008 — — 96,008 Non-controlling interest in Consolidated Funds — 1,110,635 (519,183) 591,452 Non-controlling interest in Ares Operating Group entities 1,403,255 — (5,508) 1,397,747 Stockholders' Equity Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (168,351,305 shares issued and outstanding) 1,684 — — 1,684 Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 shares issued and outstanding) 35 — — 35 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 (118,609,332 shares issued and outstanding) 1,186 — — 1,186 Additional paid-in-capital 1,921,539 — (7,980) 1,913,559 Accumulated deficit (89,382) — — (89,382) Accumulated other comprehensive income, net of tax (1,855) — — (1,855) Total stockholders' equity 1,833,207 — (7,980) 1,825,227 Total equity 3,236,462 1,110,635 (532,671) 3,814,426 Total liabilities, redeemable interest, non-controlling interests and equity $ 8,029,581 $ 14,198,892 $ (623,309) $ 21,605,164 Three months ended June 30, 2022 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 531,922 $ — $ (11,362) $ 520,560 Carried interest allocation 47,304 — — 47,304 Incentive fees 4,675 — — 4,675 Principal investment income (loss) 13,493 — (17,880) (4,387) Administrative, transaction and other fees 37,593 — (4,315) 33,278 Total revenues 634,987 — (33,557) 601,430 Expenses Compensation and benefits 375,775 — — 375,775 Performance related compensation 41,073 — — 41,073 General, administrative and other expense 122,793 — (227) 122,566 Expenses of the Consolidated Funds — 24,865 (11,411) 13,454 Total expenses 539,641 24,865 (11,638) 552,868 Other income (expense) Net realized and unrealized losses on investments (10,433) — 8,658 (1,775) Interest and dividend income 8,375 — (6,899) 1,476 Interest expense (17,221) — — (17,221) Other income, net 5,998 — (189) 5,809 Net realized and unrealized losses on investments of the Consolidated Funds — (6,806) (1,101) (7,907) Interest and other income of the Consolidated Funds — 117,186 189 117,375 Interest expense of the Consolidated Funds — (82,810) 3,557 (79,253) Total other income (expense), net (13,281) 27,570 4,215 18,504 Income before taxes 82,065 2,705 (17,704) 67,066 Income tax expense 13,437 23 — 13,460 Net income 68,628 2,682 (17,704) 53,606 Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds — 2,682 (17,704) (15,022) Net income attributable to Ares Operating Group entities 68,628 — — 68,628 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (457) — — (457) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 29,354 — — 29,354 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 39,731 $ — $ — $ 39,731 Three months ended June 30, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 377,945 $ — $ (10,659) $ 367,286 Carried interest allocation 852,521 — — 852,521 Incentive fees 15,907 — (3) 15,904 Principal investment income 50,634 — (3,507) 47,127 Administrative, transaction and other fees 16,729 — (4,748) 11,981 Total revenues 1,313,736 — (18,917) 1,294,819 Expenses Compensation and benefits 269,689 — — 269,689 Performance related compensation 656,381 — — 656,381 General, administrative and other expense 83,362 — — 83,362 Expenses of the Consolidated Funds — 26,011 (10,711) 15,300 Total expenses 1,009,432 26,011 (10,711) 1,024,732 Other income (expense) Net realized and unrealized gains on investments 13,961 — (8,984) 4,977 Interest and dividend income 5,130 — (648) 4,482 Interest expense (6,907) — — (6,907) Other expense, net (1,784) — (35) (1,819) Net realized and unrealized losses on investments of the Consolidated Funds — (16,622) 10,675 (5,947) Interest and other income of the Consolidated Funds — 113,843 35 113,878 Interest expense of the Consolidated Funds — (62,629) 3,655 (58,974) Total other income, net 10,400 34,592 4,698 49,690 Income before taxes 314,704 8,581 (3,508) 319,777 Income tax expense 48,412 46 — 48,458 Net income 266,292 8,535 (3,508) 271,319 Less: Net income attributable to non-controlling interests in Consolidated Funds — 8,535 (3,508) 5,027 Net income attributable to Ares Operating Group entities 266,292 — — 266,292 Less: Net income attributable to redeemable interest in Ares Operating Group entities 337 — — 337 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 124,311 — — 124,311 Net income attributable to Ares Management Corporation 141,644 — — 141,644 Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Less: Series A Preferred Stock redemption premium 11,239 — — 11,239 Net income attributable to Ares Management Corporation Class A common stockholders $ 124,980 $ — $ — $ 124,980 Six months ended June 30, 2022 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 1,020,733 $ — $ (22,841) $ 997,892 Carried interest allocation 225,593 — — 225,593 Incentive fees 21,131 — (34) 21,097 Principal investment income 27,983 — (24,044) 3,939 Administrative, transaction and other fees 76,992 — (9,084) 67,908 Total revenues 1,372,432 — (56,003) 1,316,429 Expenses Compensation and benefits 729,612 — — 729,612 Performance related compensation 173,884 — — 173,884 General, administrative and other expense 243,316 — (227) 243,089 Expenses of the Consolidated Funds — 40,942 (22,975) 17,967 Total expenses 1,146,812 40,942 (23,202) 1,164,552 Other income (expense) Net realized and unrealized gains (losses) on investments (15,359) — 21,693 6,334 Interest and dividend income 11,785 — (8,807) 2,978 Interest expense (32,867) — — (32,867) Other income, net 6,788 — 805 7,593 Net realized and unrealized gains on investments of the Consolidated Funds — 16,205 (8,144) 8,061 Interest and other income of the Consolidated Funds — 238,470 (805) 237,665 Interest expense of the Consolidated Funds — (160,257) 6,991 (153,266) Total other income (expense) (29,653) 94,418 11,733 76,498 Income before taxes 195,967 53,476 (21,068) 228,375 Income tax expense 33,823 48 — 33,871 Net income 162,144 53,428 (21,068) 194,504 Less: Net income attributable to non-controlling interests in Consolidated Funds — 53,428 (21,068) 32,360 Net income attributable to Ares Operating Group entities 162,144 — — 162,144 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (58) — — (58) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 76,608 — — 76,608 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 85,594 $ — $ — $ 85,594 Six months ended June 30, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 709,924 $ — $ (22,365) $ 687,559 Carried interest allocation 1,150,056 — — 1,150,056 Incentive fees 20,252 — (1,528) 18,724 Principal investment income 75,729 — (3,502) 72,227 Administrative, transaction and other fees 33,534 — (8,893) 24,641 Total revenues 1,989,495 — (36,288) 1,953,207 Expenses Compensation and benefits 501,539 — — 501,539 Performance related compensation 877,813 — — 877,813 General, administrative and other expense 151,018 — — 151,018 Expenses of the Consolidated Funds — 43,447 (23,976) 19,471 Total expenses 1,530,370 43,447 (23,976) 1,549,841 Other income (expense) Net realized and unrealized gains on investments 7,843 — 2,567 10,410 Interest and dividend income 6,993 — (1,551) 5,442 Interest expense (13,602) — — (13,602) Other expense, net (5,477) — (491) (5,968) Net realized and unrealized gains on investments of the Consolidated Funds — 9,846 629 10,475 Interest and other income of the Consolidated Funds — 229,226 491 229,717 Interest expense of the Consolidated Funds — (137,164) 7,165 (129,999) Total other income (expense) (4,243) 101,908 8,810 106,475 Income before taxes 454,882 58,461 (3,502) 509,841 Income tax expense 74,138 74 — 74,212 Net income 380,744 58,387 (3,502) 435,629 Less: Net income attributable to non-controlling interests in Consolidated Funds — 58,387 (3,502) 54,885 Net income attributable to Ares Operating Group entities 380,744 — — 380,744 Less: Net income attributable to redeemable interest in Ares Operating Group entities 369 — — 369 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 180,353 — — 180,353 Net income attributable to Ares Management Corporation 200,022 — — 200,022 Less: Series A Preferred Stock dividends paid 10,850 — — 10,850 Less: Series A Preferred Stock redemption premium 11,239 — — 11,239 Net income attributable to Ares Management Corporation Class A common stockholders $ 177,933 $ — $ — $ 177,933 Six months ended June 30, 2022 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 162,144 $ 53,428 $ (21,068) $ 194,504 Adjustments to reconcile net income to net cash provided by (used in) operating activities 147,828 — (86,755) 61,073 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds — (863,947) 8,144 (855,803) Cash flows due to changes in operating assets and liabilities 48,203 — 108,957 157,160 Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds — (255,233) 130,101 (125,132) Net cash provided by (used in) operating activities 358,175 (1,065,752) 139,379 (568,198) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (18,448) — — (18,448) Acquisitions, net of cash acquired (301,677) — — (301,677) Net cash used in investing activities (320,125) — — (320,125) Cash flows from financing activities: Proceeds from Credit Facility 700,000 — — 700,000 Proceeds from senior notes 488,915 — — 488,915 Repayments of Credit Facility (720,000) — — (720,000) Dividends and distributions (406,366) — — (406,366) Stock option exercises 8,644 — — 8,644 Taxes paid related to net share settlement of equity awards (189,485) — — (189,485) Other financing activities 1,834 — — 1,834 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 242,975 (24,695) 218,280 Distributions to non-controlling interests in Consolidated Funds — (164,035) 110,397 (53,638) Borrowings under loan obligations by Consolidated Funds — 814,183 — 814,183 Repayments under loan obligations by Consolidated Funds — (46,873) — (46,873) Net cash provided by (used in) financing activities (116,458) 846,250 85,702 815,494 Effect of exchange rate changes (12,380) (5,579) — (17,959) Net change in cash and cash equivalents (90,788) (225,081) 225,081 (90,788) Cash and cash equivalents, beginning of period 343,655 1,049,191 (1,049,191) 343,655 Cash and cash equivalents, end of period $ 252,867 $ 824,110 $ (824,110) $ 252,867 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisitions $ 12,835 $ — $ — $ 12,835 Six months ended June 30, 2021 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 380,744 $ 58,387 $ (3,502) $ 435,629 Adjustments to reconcile net income to net cash provided by (used in) operating activities 6,925 — 16,482 23,407 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds — (1,818,767) 6,994 (1,811,773) Cash flows due to changes in operating assets and liabilities (133,573) — 2,737 (130,836) Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds — 757,955 (343,425) 414,530 Net cash provided by (used in) operating activities 254,096 (1,002,425) (320,714) (1,069,043) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (7,952) — — (7,952) Acquisitions, net of cash acquired (778,144) — — (778,144) Net cash used in investing activities (786,096) — — (786,096) Cash flows from financing activities: Net proceeds from issuance of Class A common stock 827,430 — — 827,430 Proceeds from Credit Facility 318,000 — — 318,000 Proceeds from subordinated notes 450,000 — — 450,000 Repayments of Credit Facility (318,000) — — (318,000) Dividends and distributions (288,178) — — (288,178) Series A Preferred Stock dividends (10,850) — — (10,850) Redemption of Series A Preferred Stock (310,000) — — (310,000) Stock option exercises 14,027 — — 14,027 Taxes paid related to net share settlement of equity awards (100,838) — — (100,838) Other financing activities (10,415) — — (10,415) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 984,954 (22,125) 962,829 Distributions to non-controlling interests in Consolidated Funds — (88,630) 16,341 (72,289) Borrowings under loan obligations by Consolidated Funds — 492,887 — 492,887 Repayments under loan obligations by Consolidated Funds — (59,731) — (59,731) Net cash provided by financing activities 571,176 1,329,480 (5,784) 1,894,872 Effect of exchange rate changes 3,918 (557) — 3,361 Net change in cash and cash equivalents 43,094 326,498 (326,498) 43,094 Cash and cash equivalents, beginning of period 539,812 522,377 (522,377) 539,812 Cash and cash equivalents, end of period $ 582,906 $ 848,875 $ (848,875) $ 582,906 Supplemental disclosure of non-cash financing activities Issuance of AOG Units in connection with acquisitions $ 299,640 $ — $ — $ 299,640 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after June 30, 2022 through the date the unaudited condensed consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure: |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
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 unaudited 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, 2021 filed with the Securities and Exchange Commission (“SEC”). The unaudited 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. |
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 unaudited 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 unaudited condensed consolidated financial statements. |
Fair Value Measurements | 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 rate, yield curve, volatility, prepayment risk, loss severity, credit risk and default rate. • 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. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions Fair Value Consideration Transferred | The acquisition date fair value of the consideration transferred totaled $1.1 billion, which consisted of the following: Cash $ 803,309 Equity (1) 299,420 Total $ 1,102,729 (1) 5,415,278 AOG Units were issued in connection with the Landmark Acquisition and increased Ares Owners Holdings L.P.’s ownership interest in the AOG entities. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair value of assets acquired and liabilities assumed are estimated to be: Cash $ 25,645 Other tangible assets 23,403 Intangible assets: Management contracts 425,880 Client relationships 197,160 Trade name 86,200 Total intangible assets 709,240 Total identifiable assets acquired 758,288 Accounts payable, accrued expenses and other liabilities 73,216 Net identifiable assets acquired 685,072 Goodwill 417,657 Net assets acquired $ 1,102,729 |
Schedule of Business Acquisition, Pro Forma Information | Supplemental information of the Company’s consolidated results on an unaudited pro forma basis, as if the Landmark Acquisition had been consummated as of January 1, 2020, is as follows: Three months ended June 30, Six months ended June 30, 2021 2021 Total revenues $ 1,335,642 $ 2,030,718 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 140,669 $ 193,926 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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: Weighted Average Amortization Period as of June 30, 2022 In Years As of June 30, As of December 31, 2022 2021 Management contracts 5.8 $ 707,073 $ 641,737 Client relationships 10.1 262,301 229,501 Trade name 8.0 11,079 11,079 Other 2.3 500 500 Finite-lived intangible assets 980,953 882,817 Foreign currency translation (1,010) 1,792 Total finite-lived intangible assets 979,943 884,609 Less: accumulated amortization (180,265) (115,791) Finite-lived intangible assets, net 799,678 768,818 Management contracts 567,800 567,800 Trade name 86,200 86,200 Indefinite-lived intangible assets 654,000 654,000 Intangible assets, net $ 1,453,678 $ 1,422,818 |
Schedule of Goodwill Rollforward | The following table summarizes the carrying value of the Company’s goodwill: Credit Group Private Real Secondary Solutions Group Strategic Initiatives Total Balance as of December 31, 2021 $ 32,196 $ 58,600 $ 53,339 $ 417,738 $ 226,099 $ 787,972 Acquisitions — — 213,424 (96) — 213,328 Reallocation — (10,530) 10,530 — — — Foreign currency translation — — — (21) (2,835) (2,856) Balance as of June 30, 2022 $ 32,196 $ 48,070 $ 277,293 $ 417,621 $ 223,264 $ 998,444 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments in and Advances to Affiliates [Abstract] | |
Summary of Investments Held | The Company’s investments are comprised of the following: Percentage of total investments June 30, December 31, June 30, December 31, 2022 2021 2022 2021 Equity method investments: Equity method - carried interest $ 3,120,192 $ 2,998,421 79.4 % 81.4 % Equity method private investment partnership interests - principal 517,616 473,887 13.2 12.9 Equity method private investment partnership interests and other (held at fair value) 122,257 117,539 3.1 3.2 Equity method private investment partnership interests and other 119,616 40,580 3.0 1.1 Total equity method investments 3,879,681 3,630,427 98.7 98.6 Collateralized loan obligations 24,774 30,815 0.6 0.8 Other fixed income 21,582 21,582 0.4 0.5 Collateralized loan obligations and other fixed income, at fair value 46,356 52,397 1.0 1.3 Common stock, at fair value 1,469 1,440 0.1 0.1 Total investments $ 3,927,506 $ 3,684,264 Investments held in the Consolidated Funds are summarized below: Fair Value at Percentage of total investments as of June 30, December 31, June 30, December 31, 2022 2021 2022 2021 Fixed income investments: Bonds $ 785,085 $ 857,125 6.3 % 6.7% Loans 9,253,491 9,910,689 73.7 77.3 U.S. Treasury securities 1,000,902 1,000,285 8.0 7.8 Total fixed income investments 11,039,478 11,768,099 88.0 91.8 Equity securities 480,914 340,272 3.8 2.7 Partnership interests 1,031,580 708,307 8.2 5.5 Total investments, at fair value $ 12,551,972 $ 12,816,678 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022: 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 $ — $ — $ 46,356 $ — $ 46,356 Common stock and other equity securities — 1,469 113,881 — 115,350 Partnership interests — — 2,575 5,800 8,375 Total investments, at fair value — 1,469 162,812 5,800 170,081 Derivatives-foreign currency forward contracts — 8,030 — — 8,030 Total assets, at fair value $ — $ 9,499 $ 162,812 $ 5,800 $ 178,111 Liabilities, at fair value Derivatives-foreign currency forward contracts $ — $ (70) $ — $ — $ (70) Contingent consideration — — (10,748) — (10,748) Total liabilities, at fair value $ — $ (70) $ (10,748) $ — $ (10,818) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 496,798 $ 288,287 $ — $ 785,085 Loans 136 8,465,388 787,967 — 9,253,491 U.S. Treasury securities 1,000,902 — — — 1,000,902 Total fixed income investments 1,001,038 8,962,186 1,076,254 — 11,039,478 Equity securities — — 480,914 — 480,914 Partnership interests — — 250,123 781,457 1,031,580 Total assets, at fair value $ 1,001,038 $ 8,962,186 $ 1,807,291 $ 781,457 $ 12,551,972 Liabilities, at fair value Derivatives: Warrants $ (4,000) $ — $ — $ — $ (4,000) Asset swaps — — (3,035) — (3,035) Total derivative liabilities, at fair value (4,000) — (3,035) — (7,035) Loan obligations of CLOs — (10,309,475) — — (10,309,475) Total liabilities, at fair value $ (4,000) $ (10,309,475) $ (3,035) $ — $ (10,316,510) 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, 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 $ — $ — $ 52,397 $ — $ 52,397 Common stock and other equity securities — 1,440 108,949 — 110,389 Partnership interests — — 2,575 6,016 8,591 Total investments, at fair value — 1,440 163,921 6,016 171,377 Derivatives-foreign currency forward contracts — 5,682 — — 5,682 Total assets, at fair value $ — $ 7,122 $ 163,921 $ 6,016 $ 177,059 Liabilities, at fair value Derivatives-foreign currency forward contracts $ — $ (328) $ — $ — $ (328) Contingent consideration — — (57,435) — (57,435) Total liabilities, at fair value $ — $ (328) $ (57,435) $ — $ (57,763) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Measured Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 525,393 $ 331,732 $ — $ 857,125 Loans — 9,499,469 411,220 — 9,910,689 U. S. Treasury Securities 1,000,285 — — — 1,000,285 Total fixed income investments 1,000,285 10,024,862 742,952 — 11,768,099 Equity securities 956 133 339,183 — 340,272 Partnership interests — — 238,673 469,634 708,307 Total assets, at fair value $ 1,001,241 $ 10,024,995 $ 1,320,808 $ 469,634 $ 12,816,678 Liabilities, at fair value Derivatives: Derivatives-foreign exchange contracts $ (17,822) $ — $ — $ — $ (17,822) Asset swaps — — (3,105) — (3,105) Total derivative liabilities, at fair value (17,822) — (3,105) — (20,927) Loan obligations of CLOs — (10,657,661) — — (10,657,661) Total liabilities, at fair value $ (17,822) $ (10,657,661) $ (3,105) $ — $ (10,678,588) The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2022: Level III Assets and Liabilities of the Company Equity Securities Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 114,499 $ 51,458 $ 2,575 $ (10,550) $ 157,982 Change in fair value — — — (198) (198) Sales/settlements (1) (934) (993) — — (1,927) Realized and unrealized appreciation(depreciation), net 316 (4,109) — — (3,793) Balance, end of period $ 113,881 $ 46,356 $ 2,575 $ (10,748) $ 152,064 Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 316 $ (4,109) $ — $ (198) $ (3,991) Level III Net Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 351,140 $ 859,301 $ 241,123 $ (3,162) $ 1,448,402 Transfer in — 358,779 — — 358,779 Transfer out — (152,750) — — (152,750) Purchases (2) 110,322 201,882 3,000 — 315,204 Sales/settlements (1) (18,422) (140,607) (9,000) — (168,029) Amortized discounts/premiums — 177 — — 177 Realized and unrealized appreciation(depreciation), net 37,874 (50,528) 15,000 127 2,473 Balance, end of period $ 480,914 $ 1,076,254 $ 250,123 $ (3,035) $ 1,804,256 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 25,622 $ (37,145) $ 15,000 $ (64) $ 3,413 (1) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. (2) Purchases include paid-in-kind interest and securities in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2021: Level III Assets of the Company Equity Securities Fixed Income Partnership Interests Total Balance, beginning of period $ 89,233 $ 53,530 $ 2,575 $ 145,338 Transfer in due to changes in consolidation — 7,623 — 7,623 Purchases (1) 19,278 981 — 20,259 Sales/settlements (2) — (7,678) — (7,678) Realized and unrealized appreciation (depreciation), net (1,271) 1,384 — 113 Balance, end of period $ 107,240 $ 55,840 $ 2,575 $ 165,655 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (1,271) $ 852 $ — $ (419) Level III Net Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 230,634 $ 560,380 $ 243,452 $ (2,101) $ 1,032,365 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in — 92,025 — — 92,025 Transfer out — (231,320) — — (231,320) Purchases (1) 789 255,197 12,000 — 267,986 Sales/settlements (2) (731) (176,951) (2,000) (503) (180,185) Amortized discounts/premiums 1 397 — — 398 Realized and unrealized appreciation (depreciation), net (1,236) 5,024 1,826 946 6,560 Balance, end of period $ 229,300 $ 455,426 $ 255,278 $ (1,658) $ 938,346 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (1,199) $ 1,503 $ 1,826 $ (1,073) $ 1,057 (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 Changes in the Fair Value of the Level III Investments, Assets | The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2022: Level III Assets and Liabilities of the Company Equity Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 108,949 $ 52,397 $ 2,575 $ (57,435) $ 106,486 Transfer in due to changes in consolidation 1,491 — — — 1,491 Sales/settlements (1) (1,147) (1,878) — 47,873 44,848 Change in fair value — — — (1,186) (1,186) Realized and unrealized appreciation (depreciation), net 4,588 (4,163) — — 425 Balance, end of period $ 113,881 $ 46,356 $ 2,575 $ (10,748) $ 152,064 Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date $ 4,588 $ (4,163) $ — $ (1,186) $ (761) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Derivatives, Net Total Balance, beginning of period $ 339,183 $ 742,952 $ 238,673 $ (3,105) $ 1,317,703 Transfer in — 338,080 — — 338,080 Transfer out — (80,261) — — (80,261) Purchases (2) 117,642 367,274 27,000 — 511,916 Sales/settlements (1) (28,611) (226,660) (30,500) (2) (285,773) Amortized discounts/premiums — 679 — — 679 Realized and unrealized appreciation (depreciation), net 52,700 (65,810) 14,950 72 1,912 Balance, end of period $ 480,914 $ 1,076,254 $ 250,123 $ (3,035) $ 1,804,256 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 26,150 $ (61,044) $ 14,445 $ (175) $ (20,624) (1) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. (2) Purchases include paid-in-kind interest and securities received in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2021: Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ 144,336 Transfer in due to changes in consolidation — 7,623 — 7,623 Purchases (1) 19,278 981 — 20,259 Sales/settlements (2) — (9,216) — (9,216) Realized and unrealized appreciation (depreciation), net (450) 3,103 — 2,653 Balance, end of period $ 107,240 $ 55,840 $ 2,575 $ 165,655 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (450) $ 1,617 $ — $ 1,167 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,305 $ 231,857 $ 1,060 $ 996,265 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in 2,195 123,431 — — 125,626 Transfer out (33) (232,019) — — (232,052) Purchases (1) 8,855 349,478 13,000 — 371,333 Sales/settlements (2) (563) (285,642) (2,000) (384) (288,589) Amortized discounts/premiums 1 1,157 — — 1,158 Realized and unrealized appreciation (depreciation), net (2,041) 6,042 12,421 (2,334) 14,088 Balance, end of period $ 229,300 $ 455,426 $ 255,278 $ (1,658) $ 938,346 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (2,116) $ 2,678 $ 12,421 $ (1,727) $ 11,256 (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 Changes in the Fair Value of the Level III Investments, Liabilities | The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2022: Level III Assets and Liabilities of the Company Equity Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 108,949 $ 52,397 $ 2,575 $ (57,435) $ 106,486 Transfer in due to changes in consolidation 1,491 — — — 1,491 Sales/settlements (1) (1,147) (1,878) — 47,873 44,848 Change in fair value — — — (1,186) (1,186) Realized and unrealized appreciation (depreciation), net 4,588 (4,163) — — 425 Balance, end of period $ 113,881 $ 46,356 $ 2,575 $ (10,748) $ 152,064 Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date $ 4,588 $ (4,163) $ — $ (1,186) $ (761) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Derivatives, Net Total Balance, beginning of period $ 339,183 $ 742,952 $ 238,673 $ (3,105) $ 1,317,703 Transfer in — 338,080 — — 338,080 Transfer out — (80,261) — — (80,261) Purchases (2) 117,642 367,274 27,000 — 511,916 Sales/settlements (1) (28,611) (226,660) (30,500) (2) (285,773) Amortized discounts/premiums — 679 — — 679 Realized and unrealized appreciation (depreciation), net 52,700 (65,810) 14,950 72 1,912 Balance, end of period $ 480,914 $ 1,076,254 $ 250,123 $ (3,035) $ 1,804,256 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 26,150 $ (61,044) $ 14,445 $ (175) $ (20,624) (1) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. (2) Purchases include paid-in-kind interest and securities received in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2021: Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ 144,336 Transfer in due to changes in consolidation — 7,623 — 7,623 Purchases (1) 19,278 981 — 20,259 Sales/settlements (2) — (9,216) — (9,216) Realized and unrealized appreciation (depreciation), net (450) 3,103 — 2,653 Balance, end of period $ 107,240 $ 55,840 $ 2,575 $ 165,655 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (450) $ 1,617 $ — $ 1,167 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,305 $ 231,857 $ 1,060 $ 996,265 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in 2,195 123,431 — — 125,626 Transfer out (33) (232,019) — — (232,052) Purchases (1) 8,855 349,478 13,000 — 371,333 Sales/settlements (2) (563) (285,642) (2,000) (384) (288,589) Amortized discounts/premiums 1 1,157 — — 1,158 Realized and unrealized appreciation (depreciation), net (2,041) 6,042 12,421 (2,334) 14,088 Balance, end of period $ 229,300 $ 455,426 $ 255,278 $ (1,658) $ 938,346 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (2,116) $ 2,678 $ 12,421 $ (1,727) $ 11,256 (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 June 30, 2022: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 14,610 Transaction price (1) N/A N/A N/A 52,400 Discounted cash flow Discount rates 14.0% - 20.0% 14.3% 46,871 Market approach Multiple of book value 1.4x 1.4x Partnership interests 2,575 Other N/A N/A N/A Collateralized loan obligations 24,774 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 21,582 Other N/A N/A N/A Total assets $ 162,812 Liabilities Contingent consideration $ (10,748) Monte Carlo simulation Discount rate 8.5% 8.5% Volatility 18.0% 18.0% Total liabilities $ (10,748) Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 1,076 Market approach EBITDA multiples (2) 7.5x - 63.4x 17.8x 162,414 Market approach Multiple of book values 1.0x - 1.2x 1.1x 198,778 Discounted cash flow Discount rate 20.0% 20.0% 332 Other N/A N/A N/A 74 Broker quotes and/or 3rd party pricing services N/A N/A N/A 118,240 Transaction price (1) N/A N/A N/A Partnership interest 250,123 Discounted cash flow Discount rate 22.6% 22.6% Fixed income securities 893,063 Broker quotes and/or 3rd party pricing services N/A N/A N/A 174,346 Income approach Yields 5.5% -22.0% 7.9% 6,441 Transaction price (1) N/A N/A N/A 2,404 Other N/A N/A N/A Total assets $ 1,807,291 Liabilities Derivative instruments $ (3,035) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (3,035) (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, 2021: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 14,610 Transaction price (1) N/A N/A N/A 50,690 Discounted cash flow Discount rates 14.0% - 20.0% 14.3% 43,649 Market approach Multiple of book value 1.4x 1.4x Partnership interests 2,575 Other N/A N/A N/A Collateralized loan obligations 30,815 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 21,582 Other N/A N/A N/A Total assets $ 163,921 Liabilities Contingent Consideration $ (9,562) Monte Carlo simulation Discount rate 8.5% 8.5% Volatility 18% 18% (47,873) Other N/A N/A N/A Total liabilities $ (57,435) Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 1,261 Market approach EBITDA multiples (2) 1.0x - 64.4x 17.5x 140,185 Market approach Multiple of book values 1.0x- 1.2x 1.1x 123,685 Discounted cash flow Discount rate 20.0% 20.0% 11 Broker quotes and/or 3rd party pricing services N/A N/A N/A 74,041 Transaction price (1) N/A N/A N/A Partnership interests 238,673 Discounted cash flow Discount rate 23.4% 23.4% Fixed income securities 614,754 Broker quotes and/or 3rd party pricing services N/A N/A N/A 128,198 Income approach Yields 3.5% - 16.2% 6.7% Total assets $ 1,320,808 Liabilities Derivative instruments $ (3,105) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (3,105) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Quantitative Disclosures of Derivative Financial Instruments | The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds: As of June 30, 2022 As of December 31, 2021 Assets Liabilities Assets Liabilities The Company Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Foreign currency forward contracts $ 77,103 $ 8,030 $ 5,041 $ 70 $ 409,018 $ 5,682 $ 11,011 $ 328 Total derivatives, at fair value (2) $ 77,103 $ 8,030 $ 5,041 $ 70 $ 409,018 $ 5,682 $ 11,011 $ 328 As of June 30, 2022 As of December 31, 2021 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 $ 4,000 $ — $ — $ 230,000 $ 17,822 Asset swaps 55,975 — 49,489 3,035 56,000 — 49,516 3,105 Total derivatives, at fair value (3) $ 55,975 $ — $ 279,489 $ 7,035 $ 56,000 $ — $ 279,516 $ 20,927 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of June 30, 2022 and December 31, 2021, the Company had the right to, but elected not to, offset $0.1 million and $0.3 million of its derivative liabilities. (3) As of June 30, 2022 and December 31, 2021, the Consolidated Funds offset an immaterial amount of their derivative assets and liabilities. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Outstanding | The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of June 30, 2022 As of December 31, 2021 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolving 3/31/2027 N/A $ 395,000 1.63% $ 415,000 1.25% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 248,331 4.21 247,979 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 396,379 3.28 396,156 3.28 2052 Senior Notes (4) 1/21/2022 2/1/2052 500,000 483,614 3.77 — — 2051 Subordinated Notes (5) 6/30/2021 6/30/2051 450,000 444,665 4.13 444,574 4.13 Total debt obligations $ 1,967,989 $ 1,503,709 (1) On March 31, 2022, the Company amended the Credit Facility to, among other things, increase the revolver commitments from $1.090 billion to $1.275 billion with an accordion feature of $375.0 million, replace the LIBOR rate with a Secured Overnight Financing Rate-based rate (“SOFR”) plus an applicable credit spread adjustment and extend the maturity date from March 2026 to March 2027. The AOG entities are borrowers under the Credit Facility. The Credit Facility has a variable interest rate based on SOFR or a base rate plus an applicable margin, which is subject to adjustment based on the achievement of certain environmental, social and governance-related targets, with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of June 30, 2022, base rate loans bear interest calculated based on the base rate and the SOFR loans bear interest calculated based on SOFR plus 1.00%. The unused commitment fee is 0.10% per annum. There is a base rate and SOFR 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. (4) The 2052 Senior Notes were issued in January 2022 by Ares Finance Co. IV LLC, an indirect subsidiary of the Company, at 97.78% of the face amount with interest paid semi-annually. The Company may redeem the 2052 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2052 Notes. (5) The 2051 Subordinated Notes were issued in June 2021 by Ares Finance Co. III LLC, an indirect subsidiary of the Company with interest paid semi-annually at a fixed-rate of 4.125%. Beginning June 30, 2026, the interest rate will reset on every fifth year based on the five-year U.S. Treasury Rate plus 3.237%. The Company may redeem the 2051 Subordinated Notes prior to maturity or defer interest payments up to five The following table presents the activity of the Company's debt issuance costs: Credit Facility Senior Subordinated Notes Unamortized debt issuance costs as of December 31, 2021 $ 5,274 $ 3,689 $ 5,426 Debt issuance costs incurred 1,476 5,482 — Amortization of debt issuance costs (632) (390) (91) Unamortized debt issuance costs as of June 30, 2022 $ 6,118 $ 8,781 $ 5,335 The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of June 30, 2022 As of December 31, 2021 Loan Fair Value of Weighted Loan Fair Value of Loan Obligations Weighted Senior secured notes (1) $ 10,416,048 $ 9,756,862 9.2 $ 10,031,419 $ 10,016,638 9.4 Subordinated notes (2) 814,603 552,613 7.7 792,575 641,023 8.1 Total loan obligations of Consolidated CLOs $ 11,230,651 $ 10,309,475 $ 10,823,994 $ 10,657,661 (1) As of June 30, 2022 and December 31, 2021, original borrowings under the senior secured notes totaled $10.4 billion with various maturity dates ranging from September 2026 to July 2034 and $10.0 billion with various maturity dates ranging from September 2026 to July 2034, respectively. The weighted average interest rate as of June 30, 2022 and December 31, 2021, were 2.47% and 1.93%, respectively. (2) As of June 30, 2022 and December 31, 2021, original borrowings under the subordinated notes totaled $814.6 million, with various maturity dates ranging from September 2026 to July 2034 and $792.6 million with various maturity dates ranging from September 2026 to July 2034, respectively. 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 outstanding: As of June 30, 2022 As of December 31, 2021 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate 10/13/2022 $ 112,817 $ 112,817 3.24% $ 71,500 1.59% 7/1/2023 18,000 15,550 3.19 16,271 1.73 7/23/2024 75,000 27,000 5.15 40,000 3.09 9/24/2026 150,000 — N/A — N/A Total borrowings of Consolidated Funds $ 155,367 $ 127,771 (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) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Supplemental Quantitative Disclosures | The tables below present certain supplemental quantitative disclosures regarding the Company's leases: As of June 30, As of December 31, Classification 2022 2021 Operating lease assets Right-of-use operating lease assets $ 153,929 $ 167,652 Finance lease assets Other assets (1) 689 1,011 Total lease assets $ 154,618 $ 168,663 Operating lease liabilities Operating lease liabilities $ 189,175 $ 205,075 Finance lease obligations Accounts payable, accrued expenses and other liabilities 470 936 Total lease liabilities $ 189,645 $ 206,011 (1) Finance lease assets are recorded net of accumulated amortization of $1.9 million and $1.6 million as of June 30, 2022 and December 31, 2021, respectively. Three months ended June 30, Six months ended June 30, Classification 2022 2021 2022 2021 Operating lease expense General, administrative and other expenses $ 10,071 $ 9,013 $ 20,134 $ 17,506 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 182 128 344 254 Interest on finance lease liabilities Interest expense 3 7 9 17 Total lease expense $ 10,256 $ 9,148 $ 20,487 $ 17,777 Six months ended June 30, Other information 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 22,170 $ 16,733 Operating cash flows for finance leases 16 30 Financing cash flows for finance leases 457 390 Leased assets obtained in exchange for new finance lease liabilities 13 28 Leased assets obtained in exchange for new operating lease liabilities 5,066 30,378 As of June 30, As of December 31, Lease term and discount rate 2022 2021 Weighted-average remaining lease terms (in years): Operating leases 5.6 6.0 Finance leases 2.3 1.8 Weighted-average discount rate: Operating leases 2.81 % 1.81 % Finance leases 2.80 % 2.94 % |
Schedule of Operating Lease Maturities | Maturity of lease liabilities Operating Leases Finance Leases 2022 $ 21,557 $ 142 2023 38,826 166 2024 38,180 162 2025 36,821 15 2026 28,011 — After 2026 39,605 — Total future payments 203,000 485 Less: interest 13,825 15 Total lease liabilities $ 189,175 $ 470 |
Schedule of Finance Lease Maturities | Maturity of lease liabilities Operating Leases Finance Leases 2022 $ 21,557 $ 142 2023 38,826 166 2024 38,180 162 2025 36,821 15 2026 28,011 — After 2026 39,605 — Total future payments 203,000 485 Less: interest 13,825 15 Total lease liabilities $ 189,175 $ 470 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Amounts Due from and to Affiliates | The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of June 30, As of December 31, 2022 2021 Due from affiliates: Management fees receivable from non-consolidated funds $ 430,712 $ 372,249 Incentive fee receivable from non-consolidated funds 11,069 211,243 Payments made on behalf of and amounts due from non-consolidated funds and employees 110,356 86,891 Due from affiliates—Company $ 552,137 $ 670,383 Amounts due from non-consolidated funds $ 7,159 $ 7,234 Due from affiliates—Consolidated Funds $ 7,159 $ 7,234 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 7,102 $ 10,160 Tax receivable agreement liability 98,975 100,542 Undistributed carried interest and incentive fees 10,648 66,494 Payments made by non-consolidated funds on behalf of and payable by the Company 16,697 21,357 Due to affiliates—Company $ 133,422 $ 198,553 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Earnings per Common Unit | The computation of diluted earnings per share excludes the following AOG Units as their effect would have been anti-dilutive: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Restricted units — 49 — 25 AOG Units — 113,890,960 — 113,126,250 |
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 June 30, Six months ended June 30, 2022 2021 2022 2021 Basic earnings per share of Class A and non-voting common stock: Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 39,731 $ 124,980 $ 85,594 $ 177,933 Distributions on unvested restricted units (3,461) (3,452) (7,046) (6,693) Undistributed earnings allocable to participating unvested restricted units — (4,967) — (2,701) Net income available to Class A and non-voting common stockholders $ 36,270 $ 116,561 $ 78,548 $ 168,539 Basic weighted-average shares of Class A and non-voting common stock 175,157,558 164,793,968 174,694,645 157,075,774 Basic earnings per share of Class A and non-voting common stock $ 0.21 $ 0.70 $ 0.45 $ 1.07 Diluted earnings per share of Class A and non-voting common stock: Net income available to Class A and non-voting common stockholders $ 39,731 $ 124,980 $ 85,594 $ 177,933 Distributions on unvested restricted units (3,461) — (7,046) — Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 36,270 $ 124,980 $ 78,548 $ 177,933 Effect of dilutive shares: Restricted units — 10,930,236 — 10,074,330 Options — 5,303,530 — 5,238,834 Diluted weighted-average shares of Class A and non-voting common stock 175,157,558 181,027,734 174,694,645 172,388,938 Diluted earnings per share of Class A and non-voting common stock $ 0.21 $ 0.69 $ 0.45 $ 1.03 Dividend declared and paid per Class A and non-voting common stock $ 0.61 $ 0.47 $ 1.22 $ 0.94 |
EQUITY COMPENSATION (Tables)
EQUITY COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 presented in the following table: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Restricted units $ 49,635 $ 46,742 $ 103,286 $ 90,829 Restricted units with a market condition — 22,762 — 34,324 Equity-based compensation expense $ 49,635 $ 69,504 $ 103,286 $ 125,153 |
Summary of Unvested Restricted Units' Activity | The following table presents unvested restricted units' activity: Restricted Units Weighted Average Balance - January 1, 2022 18,323,036 $ 36.43 Granted 3,948,993 74.69 Vested (5,156,186) 26.72 Forfeited (192,946) 52.34 Balance - June 30, 2022 16,922,897 $ 48.14 |
Summary of Unvested Options Activity | A summary of options activity during the six months ended June 30, 2022 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - January 1, 2022 6,306,282 $ 19.00 2.3 $ 392,692 Granted — — — Exercised (454,912) 19.00 — — Expired — — — — Forfeited — — — — Balance - June 30, 2022 5,851,370 $ 19.00 1.8 $ 221,533 Exercisable at June 30, 2022 5,851,370 $ 19.00 1.8 $ 221,533 |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 Non-Voting Common Stock Class B Common Stock Class C Common Stock Total Balance - December 31, 2021 168,351,305 3,489,911 1,000 118,609,332 290,451,548 Exchanges of AOG Units 157,050 — — (157,050) — Stock option exercises, net of shares withheld for tax 454,912 — — — 454,912 Vesting of restricted stock awards, net of shares withheld for tax 2,874,083 — — — 2,874,083 Cancellation of AOG Units — — — (4,135) (4,135) Balance - June 30, 2022 171,837,350 3,489,911 1,000 118,448,147 293,776,408 |
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 June 30, 2022 As of December 31, 2021 Three months ended June 30, Six months ended June 30, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2022 2021 2022 2021 Ares Management Corporation 175,327,261 59.68 % 171,841,216 59.16 % 59.66 % 59.13 % 59.58 % 58.13 % Ares Owners Holdings, L.P. 118,448,147 40.32 118,609,332 40.84 40.34 40.87 40.42 41.87 Total 293,775,408 100.00 % 290,450,548 100.00 % |
Schedule of Redeemable Interests | The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities: Total Balance - December 31, 2021 $ 96,008 Changes in ownership interests and related tax benefits 231 Net income 399 Currency translation adjustment, net of tax (331) Equity compensation 48 Distributions (8) Balance - March 31, 2022 96,347 Changes in ownership interests and related tax benefits (1,445) Net loss (457) Currency translation adjustment, net of tax (996) Equity compensation 77 Distributions (8) Balance- June 30, 2022 $ 93,518 The following table summarizes the activities associated with the redeemable interest in Consolidated Funds: Total Balance - December 31, 2021 $ 1,000,000 Change in redemption value — Balance - March 31, 2022 $ 1,000,000 Change in redemption value — Balance - June 30, 2022 $ 1,000,000 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 Credit Group Private Equity Group Real Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 323,171 $ 47,396 $ 90,733 $ 46,201 $ 17,380 $ 524,881 $ — $ 524,881 Fee related performance revenues 275 — 965 — — 1,240 — 1,240 Other fees 6,619 408 8,565 — 64 15,656 6,298 21,954 Compensation and benefits (93,287) (24,293) (40,599) (15,133) (6,799) (180,111) (71,341) (251,452) General, administrative and other expenses (17,780) (7,880) (10,639) (2,957) (2,363) (41,619) (35,225) (76,844) Fee related earnings 218,998 15,631 49,025 28,111 8,282 320,047 (100,268) 219,779 Performance income—realized 48,533 — 17,405 4,156 — 70,094 — 70,094 Performance related compensation—realized (29,358) — (11,186) (3,514) — (44,058) — (44,058) Realized net performance income 19,175 — 6,219 642 — 26,036 — 26,036 Investment income (loss)—realized 1,609 672 432 — (3) 2,710 — 2,710 Interest and other investment income (expense)—realized 6,387 195 2,640 2,200 5,514 16,936 (995) 15,941 Interest expense (3,538) (3,629) (2,713) (1,557) (5,605) (17,042) (179) (17,221) Realized net investment income (loss) 4,458 (2,762) 359 643 (94) 2,604 (1,174) 1,430 Realized income $ 242,631 $ 12,869 $ 55,603 $ 29,396 $ 8,188 $ 348,687 $ (101,442) $ 247,245 Three months ended June 30, 2021 Credit Group Private Equity Group Real Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 260,234 $ 39,975 $ 42,932 $ 12,898 $ 16,796 $ 372,835 $ — $ 372,835 Fee related performance revenues (39) — 693 — — 654 — 654 Other fees 6,727 248 275 — 1 7,251 — 7,251 Compensation and benefits (85,892) (21,979) (20,189) (4,289) (5,384) (137,733) (48,429) (186,162) General, administrative and other expenses (11,977) (5,881) (3,861) (859) (1,771) (24,349) (23,074) (47,423) Fee related earnings 169,053 12,363 19,850 7,750 9,642 218,658 (71,503) 147,155 Performance income—realized 68,146 53,945 4,922 — — 127,013 — 127,013 Performance related compensation—realized (43,485) (43,197) (3,398) — — (90,080) — (90,080) Realized net performance income 24,661 10,748 1,524 — — 36,933 — 36,933 Investment income—realized 1,240 2,633 10,530 — 322 14,725 — 14,725 Interest and other investment income—realized 5,969 4,846 1,511 2 2,628 14,956 85 15,041 Interest expense (1,465) (1,476) (1,289) (5) (2,525) (6,760) (147) (6,907) Realized net investment income (loss) 5,744 6,003 10,752 (3) 425 22,921 (62) 22,859 Realized income $ 199,458 $ 29,114 $ 32,126 $ 7,747 $ 10,067 $ 278,512 $ (71,565) $ 206,947 Six months ended June 30, 2022 Credit Group Private Equity Group Real Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 626,330 $ 93,353 $ 163,220 $ 90,705 $ 34,194 $ 1,007,802 $ — $ 1,007,802 Fee related performance revenues 12,628 — 1,323 — — 13,951 — 13,951 Other fees 12,385 705 16,431 — 114 29,635 12,174 41,809 Compensation and benefits (198,983) (43,859) (74,236) (26,773) (14,200) (358,051) (135,408) (493,459) General, administrative and other expenses (34,477) (14,168) (18,276) (6,035) (4,089) (77,045) (67,609) (144,654) Fee related earnings 417,883 36,031 88,462 57,897 16,019 616,292 (190,843) 425,449 Performance income—realized 55,896 2,212 51,698 4,156 — 113,962 — 113,962 Performance related compensation—realized (33,938) (1,786) (33,395) (3,514) — (72,633) — (72,633) Realized net performance income 21,958 426 18,303 642 — 41,329 — 41,329 Investment income—realized 2,024 2,275 3,885 — 858 9,042 — 9,042 Interest and other investment income (expense)—realized 12,113 1,697 5,417 2,844 5,517 27,588 (1,279) 26,309 Interest expense (6,952) (7,002) (5,102) (2,022) (11,443) (32,521) (346) (32,867) Realized net investment income (loss) 7,185 (3,030) 4,200 822 (5,068) 4,109 (1,625) 2,484 Realized income $ 447,026 $ 33,427 $ 110,965 $ 59,361 $ 10,951 $ 661,730 $ (192,468) $ 469,262 Six months ended June 30, 2021 Credit Group Private Equity Group Real Assets Group Secondary Solutions Group Strategic Initiatives Total OMG Total Management fees $ 493,111 $ 79,113 $ 82,757 $ 12,898 $ 32,419 $ 700,298 $ — $ 700,298 Fee related performance revenues 1,331 — 1,359 — — 2,690 — 2,690 Other fees 12,696 356 923 — 80 14,055 — 14,055 Compensation and benefits (167,095) (38,827) (40,368) (4,289) (10,124) (260,703) (92,836) (353,539) General, administrative and other expenses (22,786) (10,367) (7,538) (859) (3,806) (45,356) (41,730) (87,086) Fee related earnings 317,257 30,275 37,133 7,750 18,569 410,984 (134,566) 276,418 Performance income—realized 70,592 125,163 6,203 — — 201,958 — 201,958 Performance related compensation—realized (45,540) (100,223) (4,174) — — (149,937) — (149,937) Realized net performance income 25,052 24,940 2,029 — — 52,021 — 52,021 Investment income (loss)—realized 1,240 (6,265) 12,036 — 322 7,333 — 7,333 Interest and other investment income—realized 9,638 4,964 3,865 2 2,661 21,130 440 21,570 Interest expense (2,980) (2,929) (2,624) (5) (4,827) (13,365) (237) (13,602) Realized net investment income (loss) 7,898 (4,230) 13,277 (3) (1,844) 15,098 203 15,301 Realized income $ 350,207 $ 50,985 $ 52,439 $ 7,747 $ 16,725 $ 478,103 $ (134,363) $ 343,740 |
Schedule of Segment Revenue, Expenses and Realized Net Investment Income | The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Segment revenues Management fees $ 524,881 $ 372,835 $ 1,007,802 $ 700,298 Fee related performance revenues 1,240 654 13,951 2,690 Other fees 15,656 7,251 29,635 14,055 Performance income—realized 70,094 127,013 113,962 201,958 Total segment revenues $ 611,871 $ 507,753 $ 1,165,350 $ 919,001 Segment expenses Compensation and benefits $ 180,111 $ 137,733 $ 358,051 $ 260,703 General, administrative and other expenses 41,619 24,349 77,045 45,356 Performance related compensation—realized 44,058 90,080 72,633 149,937 Total segment expenses $ 265,788 $ 252,162 $ 507,729 $ 455,996 Segment realized net investment income Investment income—realized $ 2,710 $ 14,725 $ 9,042 $ 7,333 Interest and other investment income —realized 16,936 14,956 27,588 21,130 Interest expense (17,042) (6,760) (32,521) (13,365) Total segment realized net investment income $ 2,604 $ 22,921 $ 4,109 $ 15,098 |
Schedule of Segment Revenues Components | The following table reconciles the Company's consolidated revenues to segment revenue: Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Total consolidated revenue $ 601,430 $ 1,294,819 $ 1,316,429 $ 1,953,207 Performance (income) loss—unrealized 24,149 (741,426) (109,383) (966,380) Management fees of Consolidated Funds eliminated in consolidation 11,362 10,659 22,841 22,365 Incentive fees of Consolidated Funds eliminated in consolidation — 3 34 1,528 Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 4,315 4,748 9,084 8,893 Administrative fees (1) (15,373) (9,314) (34,848) (19,122) OMG revenue (6,417) — (12,293) — Performance income (loss) reclass (2) — 550 (14) 605 Principal investment (income) loss, net of eliminations 4,387 (47,127) (3,939) (72,227) Net income of non-controlling interests in consolidated subsidiaries (11,982) (5,159) (22,561) (9,868) Total consolidation adjustments and reconciling items 10,441 (787,066) (151,079) (1,034,206) Total segment revenue $ 611,871 $ 507,753 $ 1,165,350 $ 919,001 (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 June 30, Six months ended June 30, 2022 2021 2022 2021 Total consolidated expenses $ 552,868 $ 1,024,732 $ 1,164,552 $ 1,549,841 Performance related compensation-unrealized 8,549 (566,012) (82,649) (726,349) Expenses of Consolidated Funds added in consolidation (24,865) (26,011) (40,942) (43,447) Expenses of Consolidated Funds eliminated in consolidation 11,638 10,711 23,202 23,976 Administrative fees (1) (15,958) (9,314) (34,848) (19,122) OMG expenses (106,566) (71,503) (203,017) (134,566) Acquisition and merger-related expense (1,152) (9,020) (10,194) (17,610) Equity compensation expense (49,559) (69,504) (103,161) (125,153) Acquisition-related compensation expense (2) (59,491) (4,630) (107,492) (4,630) Placement fees 1,425 (1,030) 2,118 (1,327) Depreciation and amortization expense (40,330) (20,974) (78,456) (35,074) Expense of non-controlling interests in consolidated subsidiaries (10,771) (5,283) (21,384) (10,543) Total consolidation adjustments and reconciling items (287,080) (772,570) (656,823) (1,093,845) Total segment expenses $ 265,788 $ 252,162 $ 507,729 $ 455,996 (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) Represents contingent obligations resulting from the Landmark Acquisition, the Black Creek Acquisition and the Infrastructure Debt Acquisition that are recorded as compensation expense and are presented within compensation and benefits in the Company’s Condensed Consolidated Statements of Operations. |
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 June 30, Six months ended June 30, 2022 2021 2022 2021 Total consolidated other income $ 18,504 $ 49,690 $ 76,498 $ 106,475 Investment (income) loss—unrealized 2,084 (34,811) 9,938 (56,979) Interest and other investment (income) loss—unrealized (6,029) 512 (12,061) 4,462 Other income from Consolidated Funds added in consolidation, net (27,570) (34,592) (94,418) (101,908) Other expense from Consolidated Funds eliminated in consolidation, net (4,215) (4,698) (11,733) (8,810) OMG other expense 1,091 276 5,684 609 Performance (income) loss reclass (1) — (550) 14 (605) Principal investment income 13,493 50,634 27,983 75,729 Other expense, net 13 619 1,994 146 Other (income) loss of non-controlling interests in consolidated subsidiaries 5,233 (4,159) 210 (4,021) Total consolidation adjustments and reconciling items (15,900) (26,769) (72,389) (91,377) Total segment realized net investment income $ 2,604 $ 22,921 $ 4,109 $ 15,098 (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 June 30, Six months ended June 30, 2022 2021 2022 2021 Income before taxes $ 67,066 $ 319,777 $ 228,375 $ 509,841 Adjustments: Depreciation and amortization expense 40,330 20,974 78,456 35,074 Equity compensation expense 50,144 69,504 103,161 125,153 Acquisition-related compensation expense (1) 59,491 4,630 107,492 4,630 Acquisition and merger-related expense 1,152 9,020 10,194 17,610 Placement fees (1,425) 1,030 (2,118) 1,327 OMG expense, net 101,241 71,779 196,409 135,175 Other expense, net 12 619 1,993 146 Net (income) expense of non-controlling interests in consolidated subsidiaries 4,022 (4,035) (967) (3,346) (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations 14,999 (5,073) (32,408) (54,959) Total performance (income) loss—unrealized 24,149 (741,426) (109,383) (966,380) Total performance related compensation—unrealized (8,549) 566,012 82,649 726,349 Total investment income—unrealized (3,945) (34,299) (2,123) (52,517) Realized income 348,687 278,512 661,730 478,103 Total performance income—realized (70,094) (127,013) (113,962) (201,958) Total performance related compensation—realized 44,058 90,080 72,633 149,937 Total investment income—realized (2,604) (22,921) (4,109) (15,098) Fee related earnings $ 320,047 $ 218,658 $ 616,292 $ 410,984 (1) Represents contingent obligations resulting from the Landmark Acquisition, the Black Creek Acquisition and the Infrastructure Debt Acquisition that are recorded as compensation expense and are presented within compensation and benefits in the Company’s Condensed Consolidated Statements of Operations. |
CONSOLIDATION (Tables)
CONSOLIDATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Interest in VIEs | The Company's interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of June 30, As of December 31, 2022 2021 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs (1) $ 387,860 $ 353,768 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs (1) 508,060 583,192 Assets of consolidated VIEs 12,622,718 13,197,321 Liabilities of consolidated VIEs 11,350,132 12,018,655 (1) As of June 30, 2022 and December 31, 2021, 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 $85.5 million and $103.8 million, respectively. Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Net income (loss) attributable to non-controlling interests related to consolidated VIEs $ (18,725) $ 17,872 $ 19,737 $ 45,688 |
Schedule of Consolidating Effects of the Consolidated Funds on the Company's Financial Condition | The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows: As of June 30, 2022 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 252,867 $ — $ — $ 252,867 Investments (includes $3,120,192 of accrued carried interest) 4,428,324 — (500,818) 3,927,506 Due from affiliates 692,408 — (140,271) 552,137 Other assets 265,166 — — 265,166 Right-of-use operating lease assets 153,929 — — 153,929 Intangible assets, net 1,453,678 — — 1,453,678 Goodwill 998,444 — — 998,444 Assets of Consolidated Funds Cash and cash equivalents — 824,110 — 824,110 U.S. Treasury securities, at fair value — 1,000,490 — 1,000,490 Investments, at fair value — 11,542,498 8,984 11,551,482 Due from affiliates — 17,491 (10,332) 7,159 Receivable for securities sold — 195,831 — 195,831 Other assets — 43,416 — 43,416 Total assets $ 8,244,816 $ 13,623,836 $ (642,437) $ 21,226,215 Liabilities Accounts payable, accrued expenses and other liabilities $ 266,952 $ — $ (10,332) $ 256,620 Accrued compensation 404,821 — — 404,821 Due to affiliates 133,422 — — 133,422 Performance related compensation payable 2,280,764 — — 2,280,764 Debt obligations 1,967,989 — — 1,967,989 Operating lease liabilities 189,175 — — 189,175 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 102,607 (3,065) 99,542 Due to affiliates — 131,287 (131,287) — Payable for securities purchased — 667,375 — 667,375 CLO loan obligations, at fair value — 10,339,193 (29,718) 10,309,475 Fund borrowings — 155,367 — 155,367 Total liabilities 5,243,123 11,395,829 (174,402) 16,464,550 Commitments and contingencies Redeemable interest in Consolidated Funds — 1,000,000 — 1,000,000 Redeemable interest in Ares Operating Group entities 93,518 — — 93,518 Non-controlling interest in Consolidated Funds — 1,228,007 (429,531) 798,476 Non-controlling interest in Ares Operating Group entities 1,245,899 — (15,594) 1,230,305 Stockholders' Equity Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (171,837,350 shares issued and outstanding) 1,718 — — 1,718 Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 shares issued and outstanding) 35 — — 35 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 (118,448,147 shares issued and outstanding) 1,184 — — 1,184 Additional paid-in-capital 1,903,231 — (22,910) 1,880,321 Accumulated deficit (226,700) — — (226,700) Accumulated other comprehensive loss, net of tax (17,192) — — (17,192) Total stockholders' equity 1,662,276 — (22,910) 1,639,366 Total equity 2,908,175 1,228,007 (468,035) 3,668,147 Total liabilities, redeemable interest, non-controlling interests and equity $ 8,244,816 $ 13,623,836 $ (642,437) $ 21,226,215 As of December 31, 2021 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 343,655 $ — $ — $ 343,655 Investments (includes $2,998,421 of accrued carried interest) 4,271,836 — (587,572) 3,684,264 Due from affiliates 696,963 — (26,580) 670,383 Other assets 338,685 — (3,930) 334,755 Right-of-use operating lease assets 167,652 — — 167,652 Intangible assets, net 1,422,818 — — 1,422,818 Goodwill 787,972 — — 787,972 Assets of Consolidated Funds Cash and cash equivalents — 1,049,191 — 1,049,191 U.S. Treasury securities, at fair value — 1,000,285 — 1,000,285 Investments, at fair value — 11,812,093 4,300 11,816,393 Due from affiliates — 16,761 (9,527) 7,234 Receivable for securities sold — 281,132 — 281,132 Other assets — 39,430 — 39,430 Total assets $ 8,029,581 $ 14,198,892 $ (623,309) $ 21,605,164 Liabilities Accounts payable, accrued expenses and other liabilities $ 289,200 $ — $ (9,527) $ 279,673 Accrued compensation 310,222 — — 310,222 Due to affiliates 198,553 — — 198,553 Performance related compensation payable 2,190,352 — — 2,190,352 Debt obligations 1,503,709 — — 1,503,709 Operating lease liabilities 205,075 — — 205,075 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 117,139 (13,881) 103,258 Due to affiliates — 26,210 (26,210) — Payable for securities purchased — 1,118,456 — 1,118,456 CLO loan obligations, at fair value — 10,698,681 (41,020) 10,657,661 Fund borrowings — 127,771 — 127,771 Total liabilities 4,697,111 12,088,257 (90,638) 16,694,730 Commitments and contingencies Redeemable interest in Consolidated Funds — 1,000,000 — 1,000,000 Redeemable interest in Ares Operating Group entities 96,008 — — 96,008 Non-controlling interest in Consolidated Funds — 1,110,635 (519,183) 591,452 Non-controlling interest in Ares Operating Group entities 1,403,255 — (5,508) 1,397,747 Stockholders' Equity Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (168,351,305 shares issued and outstanding) 1,684 — — 1,684 Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 shares issued and outstanding) 35 — — 35 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 (118,609,332 shares issued and outstanding) 1,186 — — 1,186 Additional paid-in-capital 1,921,539 — (7,980) 1,913,559 Accumulated deficit (89,382) — — (89,382) Accumulated other comprehensive income, net of tax (1,855) — — (1,855) Total stockholders' equity 1,833,207 — (7,980) 1,825,227 Total equity 3,236,462 1,110,635 (532,671) 3,814,426 Total liabilities, redeemable interest, non-controlling interests and equity $ 8,029,581 $ 14,198,892 $ (623,309) $ 21,605,164 |
Schedule of Results from Operations | Three months ended June 30, 2022 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 531,922 $ — $ (11,362) $ 520,560 Carried interest allocation 47,304 — — 47,304 Incentive fees 4,675 — — 4,675 Principal investment income (loss) 13,493 — (17,880) (4,387) Administrative, transaction and other fees 37,593 — (4,315) 33,278 Total revenues 634,987 — (33,557) 601,430 Expenses Compensation and benefits 375,775 — — 375,775 Performance related compensation 41,073 — — 41,073 General, administrative and other expense 122,793 — (227) 122,566 Expenses of the Consolidated Funds — 24,865 (11,411) 13,454 Total expenses 539,641 24,865 (11,638) 552,868 Other income (expense) Net realized and unrealized losses on investments (10,433) — 8,658 (1,775) Interest and dividend income 8,375 — (6,899) 1,476 Interest expense (17,221) — — (17,221) Other income, net 5,998 — (189) 5,809 Net realized and unrealized losses on investments of the Consolidated Funds — (6,806) (1,101) (7,907) Interest and other income of the Consolidated Funds — 117,186 189 117,375 Interest expense of the Consolidated Funds — (82,810) 3,557 (79,253) Total other income (expense), net (13,281) 27,570 4,215 18,504 Income before taxes 82,065 2,705 (17,704) 67,066 Income tax expense 13,437 23 — 13,460 Net income 68,628 2,682 (17,704) 53,606 Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds — 2,682 (17,704) (15,022) Net income attributable to Ares Operating Group entities 68,628 — — 68,628 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (457) — — (457) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 29,354 — — 29,354 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 39,731 $ — $ — $ 39,731 Three months ended June 30, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 377,945 $ — $ (10,659) $ 367,286 Carried interest allocation 852,521 — — 852,521 Incentive fees 15,907 — (3) 15,904 Principal investment income 50,634 — (3,507) 47,127 Administrative, transaction and other fees 16,729 — (4,748) 11,981 Total revenues 1,313,736 — (18,917) 1,294,819 Expenses Compensation and benefits 269,689 — — 269,689 Performance related compensation 656,381 — — 656,381 General, administrative and other expense 83,362 — — 83,362 Expenses of the Consolidated Funds — 26,011 (10,711) 15,300 Total expenses 1,009,432 26,011 (10,711) 1,024,732 Other income (expense) Net realized and unrealized gains on investments 13,961 — (8,984) 4,977 Interest and dividend income 5,130 — (648) 4,482 Interest expense (6,907) — — (6,907) Other expense, net (1,784) — (35) (1,819) Net realized and unrealized losses on investments of the Consolidated Funds — (16,622) 10,675 (5,947) Interest and other income of the Consolidated Funds — 113,843 35 113,878 Interest expense of the Consolidated Funds — (62,629) 3,655 (58,974) Total other income, net 10,400 34,592 4,698 49,690 Income before taxes 314,704 8,581 (3,508) 319,777 Income tax expense 48,412 46 — 48,458 Net income 266,292 8,535 (3,508) 271,319 Less: Net income attributable to non-controlling interests in Consolidated Funds — 8,535 (3,508) 5,027 Net income attributable to Ares Operating Group entities 266,292 — — 266,292 Less: Net income attributable to redeemable interest in Ares Operating Group entities 337 — — 337 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 124,311 — — 124,311 Net income attributable to Ares Management Corporation 141,644 — — 141,644 Less: Series A Preferred Stock dividends paid 5,425 — — 5,425 Less: Series A Preferred Stock redemption premium 11,239 — — 11,239 Net income attributable to Ares Management Corporation Class A common stockholders $ 124,980 $ — $ — $ 124,980 Six months ended June 30, 2022 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 1,020,733 $ — $ (22,841) $ 997,892 Carried interest allocation 225,593 — — 225,593 Incentive fees 21,131 — (34) 21,097 Principal investment income 27,983 — (24,044) 3,939 Administrative, transaction and other fees 76,992 — (9,084) 67,908 Total revenues 1,372,432 — (56,003) 1,316,429 Expenses Compensation and benefits 729,612 — — 729,612 Performance related compensation 173,884 — — 173,884 General, administrative and other expense 243,316 — (227) 243,089 Expenses of the Consolidated Funds — 40,942 (22,975) 17,967 Total expenses 1,146,812 40,942 (23,202) 1,164,552 Other income (expense) Net realized and unrealized gains (losses) on investments (15,359) — 21,693 6,334 Interest and dividend income 11,785 — (8,807) 2,978 Interest expense (32,867) — — (32,867) Other income, net 6,788 — 805 7,593 Net realized and unrealized gains on investments of the Consolidated Funds — 16,205 (8,144) 8,061 Interest and other income of the Consolidated Funds — 238,470 (805) 237,665 Interest expense of the Consolidated Funds — (160,257) 6,991 (153,266) Total other income (expense) (29,653) 94,418 11,733 76,498 Income before taxes 195,967 53,476 (21,068) 228,375 Income tax expense 33,823 48 — 33,871 Net income 162,144 53,428 (21,068) 194,504 Less: Net income attributable to non-controlling interests in Consolidated Funds — 53,428 (21,068) 32,360 Net income attributable to Ares Operating Group entities 162,144 — — 162,144 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (58) — — (58) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 76,608 — — 76,608 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 85,594 $ — $ — $ 85,594 Six months ended June 30, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 709,924 $ — $ (22,365) $ 687,559 Carried interest allocation 1,150,056 — — 1,150,056 Incentive fees 20,252 — (1,528) 18,724 Principal investment income 75,729 — (3,502) 72,227 Administrative, transaction and other fees 33,534 — (8,893) 24,641 Total revenues 1,989,495 — (36,288) 1,953,207 Expenses Compensation and benefits 501,539 — — 501,539 Performance related compensation 877,813 — — 877,813 General, administrative and other expense 151,018 — — 151,018 Expenses of the Consolidated Funds — 43,447 (23,976) 19,471 Total expenses 1,530,370 43,447 (23,976) 1,549,841 Other income (expense) Net realized and unrealized gains on investments 7,843 — 2,567 10,410 Interest and dividend income 6,993 — (1,551) 5,442 Interest expense (13,602) — — (13,602) Other expense, net (5,477) — (491) (5,968) Net realized and unrealized gains on investments of the Consolidated Funds — 9,846 629 10,475 Interest and other income of the Consolidated Funds — 229,226 491 229,717 Interest expense of the Consolidated Funds — (137,164) 7,165 (129,999) Total other income (expense) (4,243) 101,908 8,810 106,475 Income before taxes 454,882 58,461 (3,502) 509,841 Income tax expense 74,138 74 — 74,212 Net income 380,744 58,387 (3,502) 435,629 Less: Net income attributable to non-controlling interests in Consolidated Funds — 58,387 (3,502) 54,885 Net income attributable to Ares Operating Group entities 380,744 — — 380,744 Less: Net income attributable to redeemable interest in Ares Operating Group entities 369 — — 369 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 180,353 — — 180,353 Net income attributable to Ares Management Corporation 200,022 — — 200,022 Less: Series A Preferred Stock dividends paid 10,850 — — 10,850 Less: Series A Preferred Stock redemption premium 11,239 — — 11,239 Net income attributable to Ares Management Corporation Class A common stockholders $ 177,933 $ — $ — $ 177,933 |
Schedule of Cash Flows | Six months ended June 30, 2022 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 162,144 $ 53,428 $ (21,068) $ 194,504 Adjustments to reconcile net income to net cash provided by (used in) operating activities 147,828 — (86,755) 61,073 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds — (863,947) 8,144 (855,803) Cash flows due to changes in operating assets and liabilities 48,203 — 108,957 157,160 Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds — (255,233) 130,101 (125,132) Net cash provided by (used in) operating activities 358,175 (1,065,752) 139,379 (568,198) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (18,448) — — (18,448) Acquisitions, net of cash acquired (301,677) — — (301,677) Net cash used in investing activities (320,125) — — (320,125) Cash flows from financing activities: Proceeds from Credit Facility 700,000 — — 700,000 Proceeds from senior notes 488,915 — — 488,915 Repayments of Credit Facility (720,000) — — (720,000) Dividends and distributions (406,366) — — (406,366) Stock option exercises 8,644 — — 8,644 Taxes paid related to net share settlement of equity awards (189,485) — — (189,485) Other financing activities 1,834 — — 1,834 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 242,975 (24,695) 218,280 Distributions to non-controlling interests in Consolidated Funds — (164,035) 110,397 (53,638) Borrowings under loan obligations by Consolidated Funds — 814,183 — 814,183 Repayments under loan obligations by Consolidated Funds — (46,873) — (46,873) Net cash provided by (used in) financing activities (116,458) 846,250 85,702 815,494 Effect of exchange rate changes (12,380) (5,579) — (17,959) Net change in cash and cash equivalents (90,788) (225,081) 225,081 (90,788) Cash and cash equivalents, beginning of period 343,655 1,049,191 (1,049,191) 343,655 Cash and cash equivalents, end of period $ 252,867 $ 824,110 $ (824,110) $ 252,867 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisitions $ 12,835 $ — $ — $ 12,835 Six months ended June 30, 2021 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 380,744 $ 58,387 $ (3,502) $ 435,629 Adjustments to reconcile net income to net cash provided by (used in) operating activities 6,925 — 16,482 23,407 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds — (1,818,767) 6,994 (1,811,773) Cash flows due to changes in operating assets and liabilities (133,573) — 2,737 (130,836) Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds — 757,955 (343,425) 414,530 Net cash provided by (used in) operating activities 254,096 (1,002,425) (320,714) (1,069,043) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (7,952) — — (7,952) Acquisitions, net of cash acquired (778,144) — — (778,144) Net cash used in investing activities (786,096) — — (786,096) Cash flows from financing activities: Net proceeds from issuance of Class A common stock 827,430 — — 827,430 Proceeds from Credit Facility 318,000 — — 318,000 Proceeds from subordinated notes 450,000 — — 450,000 Repayments of Credit Facility (318,000) — — (318,000) Dividends and distributions (288,178) — — (288,178) Series A Preferred Stock dividends (10,850) — — (10,850) Redemption of Series A Preferred Stock (310,000) — — (310,000) Stock option exercises 14,027 — — 14,027 Taxes paid related to net share settlement of equity awards (100,838) — — (100,838) Other financing activities (10,415) — — (10,415) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 984,954 (22,125) 962,829 Distributions to non-controlling interests in Consolidated Funds — (88,630) 16,341 (72,289) Borrowings under loan obligations by Consolidated Funds — 492,887 — 492,887 Repayments under loan obligations by Consolidated Funds — (59,731) — (59,731) Net cash provided by financing activities 571,176 1,329,480 (5,784) 1,894,872 Effect of exchange rate changes 3,918 (557) — 3,361 Net change in cash and cash equivalents 43,094 326,498 (326,498) 43,094 Cash and cash equivalents, beginning of period 539,812 522,377 (522,377) 539,812 Cash and cash equivalents, end of period $ 582,906 $ 848,875 $ (848,875) $ 582,906 Supplemental disclosure of non-cash financing activities Issuance of AOG Units in connection with acquisitions $ 299,640 $ — $ — $ 299,640 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Feb. 10, 2022 | Jun. 02, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Jul. 01, 2021 | |
Asset Acquisition [Line Items] | |||||
Goodwill | $ 998,444 | $ 787,972 | |||
Landmark Acquisition | |||||
Asset Acquisition [Line Items] | |||||
Business combination equity interest in acquiree, percentage | 100% | ||||
Business combination, consideration transferred | $ 1,102,729 | ||||
Goodwill | 417,657 | ||||
Cash | 803,309 | ||||
Equity consideration transferred | 299,420 | ||||
Landmark Acquisition | Management contracts | |||||
Asset Acquisition [Line Items] | |||||
Acquisition and merger-related expense | $ 425,900 | ||||
Acquired finite lived intangible assets useful life | 7 years 4 months 24 days | ||||
Landmark Acquisition | Client relationships | |||||
Asset Acquisition [Line Items] | |||||
Acquisition and merger-related expense | $ 197,200 | ||||
Acquired finite lived intangible assets useful life | 11 years 9 months 18 days | ||||
Landmark Acquisition | Trade name | |||||
Asset Acquisition [Line Items] | |||||
Acquisition and merger-related expense | $ 86,200 | ||||
Black Creek Acquisition | |||||
Asset Acquisition [Line Items] | |||||
Business combination equity interest in acquiree, percentage | 100% | ||||
Infrastructure Debt Acquisition | |||||
Asset Acquisition [Line Items] | |||||
Business combination, consideration transferred | $ 328,600 | ||||
Cash | 315,800 | ||||
Equity consideration transferred | $ 12,800 | ||||
Infrastructure Debt Acquisition | Management contracts | |||||
Asset Acquisition [Line Items] | |||||
Acquisition and merger-related expense | 68,700 | ||||
Infrastructure Debt Acquisition | Client relationships | |||||
Asset Acquisition [Line Items] | |||||
Acquisition and merger-related expense | $ 32,800 |
BUSINESS COMBINATIONS - Acquisi
BUSINESS COMBINATIONS - Acquisition Date Fair Value (Details) - Landmark Acquisition $ in Thousands | Jun. 02, 2021 USD ($) shares |
Asset Acquisition [Line Items] | |
Cash | $ 803,309 |
Equity | 299,420 |
Total | $ 1,102,729 |
Ares Operating Group | |
Asset Acquisition [Line Items] | |
Equity interest issued or issuable (in shares) | shares | 5,415,278 |
BUSINESS COMBINATIONS - Fair Va
BUSINESS COMBINATIONS - Fair Value of Assets Acquired and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 02, 2021 |
Intangible assets: | |||
Goodwill | $ 998,444 | $ 787,972 | |
Landmark Acquisition | |||
Asset Acquisition [Line Items] | |||
Cash | $ 25,645 | ||
Other tangible assets | 23,403 | ||
Intangible assets: | |||
Total intangible assets | 709,240 | ||
Total identifiable assets acquired | 758,288 | ||
Accounts payable, accrued expenses and other liabilities | 73,216 | ||
Net identifiable assets acquired | 685,072 | ||
Goodwill | 417,657 | ||
Net assets acquired | 1,102,729 | ||
Landmark Acquisition | Management contracts | |||
Intangible assets: | |||
Total intangible assets | 425,880 | ||
Landmark Acquisition | Client relationships | |||
Intangible assets: | |||
Total intangible assets | 197,160 | ||
Landmark Acquisition | Trade name | |||
Intangible assets: | |||
Total intangible assets | $ 86,200 |
BUSINESS COMBINATIONS - Supplem
BUSINESS COMBINATIONS - Supplemental Information on Unaudited Pro Forma (Details) - Landmark Acquisition - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Total revenues | $ 1,335,642 | $ 2,030,718 |
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | $ 140,669 | $ 193,926 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Finite-lived intangible assets, net | ||
Finite-lived intangible assets | $ 980,953 | $ 882,817 |
Foreign currency translation | (1,010) | 1,792 |
Total finite-lived intangible assets | 979,943 | 884,609 |
Less: accumulated amortization | (180,265) | (115,791) |
Finite-lived intangible assets, net | 799,678 | 768,818 |
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 654,000 | 654,000 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible assets, net | 1,453,678 | 1,422,818 |
Management contracts | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 567,800 | 567,800 |
Trade name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 86,200 | 86,200 |
Management contracts | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 5 years 9 months 18 days | |
Finite-lived intangible assets | $ 707,073 | 641,737 |
Client relationships | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 10 years 1 month 6 days | |
Finite-lived intangible assets | $ 262,301 | 229,501 |
Trade name | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 8 years | |
Finite-lived intangible assets | $ 11,079 | 11,079 |
Other | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 2 years 3 months 18 days | |
Finite-lived intangible assets | $ 500 | $ 500 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Purchase price to goodwill | $ 213,328,000 | ||||
Reallocation | 0 | ||||
Goodwill impairment | 0 | $ 0 | |||
Fully-amortized intangibles, amount removed during the period | $ 3,400,000 | ||||
Real Assets Group | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Purchase price to goodwill | 213,424,000 | ||||
Reallocation | 10,530,000 | ||||
From Private Equity Group To Real Assets Group | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Reallocation | 10,500,000 | ||||
From Real Estate Group To Real Assets Group | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Reallocation | 53,300,000 | ||||
General, administrative and other expense | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 35,600,000 | $ 17,300,000 | 68,700,000 | $ 27,900,000 | |
Infrastructure Debt Acquisition | Real Assets Group | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Purchase price to goodwill | 213,400,000 | ||||
Infrastructure Debt Acquisition | Management contracts | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquisition and merger-related expense | $ 68,700,000 | ||||
Estimated useful lives, intangible assets | 5 years 2 months 12 days | ||||
Infrastructure Debt Acquisition | Client relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquisition and merger-related expense | $ 32,800,000 | ||||
Estimated useful lives, intangible assets | 8 years 4 months 24 days |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 787,972 |
Acquisitions | 213,328 |
Reallocation | 0 |
Foreign currency translation | (2,856) |
Goodwill, ending balance | 998,444 |
Credit Group | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 32,196 |
Acquisitions | 0 |
Reallocation | 0 |
Foreign currency translation | 0 |
Goodwill, ending balance | 32,196 |
Private Equity Group | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 58,600 |
Acquisitions | 0 |
Reallocation | (10,530) |
Foreign currency translation | 0 |
Goodwill, ending balance | 48,070 |
Real Assets Group | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 53,339 |
Acquisitions | 213,424 |
Reallocation | 10,530 |
Foreign currency translation | 0 |
Goodwill, ending balance | 277,293 |
Secondary Solutions Group | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 417,738 |
Acquisitions | (96) |
Reallocation | 0 |
Foreign currency translation | (21) |
Goodwill, ending balance | 417,621 |
Strategic Initiatives | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 226,099 |
Acquisitions | 0 |
Reallocation | 0 |
Foreign currency translation | (2,835) |
Goodwill, ending balance | $ 223,264 |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments (Details) - Ares Management L.P - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investments | ||
Equity method private investment partnership interests and other | $ 8,375 | $ 8,591 |
Other fixed income | 170,081 | 171,377 |
Common stock, at fair value | 115,350 | 110,389 |
Total investments | 3,927,506 | 3,684,264 |
Partnership Interests | ||
Investments | ||
Equity method investments: | $ 3,879,681 | $ 3,630,427 |
Percentage of total investments | 98.70% | 98.60% |
Collateralized loan obligations and other fixed income | ||
Investments | ||
Collateralized loan obligations | $ 46,356 | $ 52,397 |
Percentage of total investments | 1% | 1.30% |
Other fixed income | ||
Investments | ||
Other fixed income | $ 21,582 | $ 21,582 |
Percentage of total investments | 0.40% | 0.50% |
Collateralized loan obligations | ||
Investments | ||
Collateralized loan obligations | $ 24,774 | $ 30,815 |
Percentage of total investments | 0.60% | 0.80% |
Common stock, at fair value | ||
Investments | ||
Common stock, at fair value | $ 1,469 | $ 1,440 |
Percentage of total investments | 0.10% | 0.10% |
Equity method - carried interest | ||
Investments | ||
Equity method investments: | $ 3,120,192 | $ 2,998,421 |
Percentage of total investments | 79.40% | 81.40% |
Partnership Interests | ||
Investments | ||
Equity method investments: | $ 517,616 | $ 473,887 |
Percentage of total investments | 13.20% | 12.90% |
Equity method private investment partnership interests and other (held at fair value) | ||
Investments | ||
Equity method investments: | $ 122,257 | $ 117,539 |
Percentage of total investments | 3.10% | 3.20% |
Equity method private investment partnership interests and other | ||
Investments | ||
Equity method private investment partnership interests and other | $ 119,616 | $ 40,580 |
Percentage of total investments | 3% | 1.10% |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Summary of Investment Holdings [Line Items] | |||||
Equity method investments net loss and net gains | $ (6.4) | $ 53.8 | $ 8.8 | $ 80.4 | |
Consolidated Funds | |||||
Summary of Investment Holdings [Line Items] | |||||
Percent of total assets | 5% | 5% | 5% |
INVESTMENTS - Investments of th
INVESTMENTS - Investments of the Consolidated Funds (Details) - Consolidated Funds - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investments | ||
Total investments, at fair value | $ 12,551,972 | $ 12,816,678 |
Fixed income investments: | ||
Investments | ||
Total investments, at fair value | $ 11,039,478 | $ 11,768,099 |
Percentage of total investments | 88% | 91.80% |
Fixed income investments: | Bonds | ||
Investments | ||
Total investments, at fair value | $ 785,085 | $ 857,125 |
Percentage of total investments | 6.30% | 6.70% |
Fixed income investments: | Loans | ||
Investments | ||
Total investments, at fair value | $ 9,253,491 | $ 9,910,689 |
Percentage of total investments | 73.70% | 77.30% |
Fixed income investments: | U.S. Treasury securities | ||
Investments | ||
Total investments, at fair value | $ 1,000,902 | $ 1,000,285 |
Percentage of total investments | 8% | 7.80% |
Equity securities | ||
Investments | ||
Total investments, at fair value | $ 480,914 | $ 340,272 |
Percentage of total investments | 3.80% | 2.70% |
Partnership interests | ||
Investments | ||
Total investments, at fair value | $ 1,031,580 | $ 708,307 |
Percentage of total investments | 8.20% | 5.50% |
FAIR VALUE - Assets and Liabili
FAIR VALUE - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | $ 11,039,478 | $ 11,768,099 |
Common stock and other equity securities | 480,914 | 340,272 |
Partnership interests | 1,031,580 | 708,307 |
Total investments, at fair value | 12,551,972 | 12,816,678 |
Total assets, at fair value | 12,551,972 | 12,816,678 |
Liabilities, at fair value | ||
Derivative liabilities | (7,035) | (20,927) |
Loan obligations of CLOs | (10,309,475) | (10,657,661) |
Total liabilities, at fair value | (10,316,510) | (10,678,588) |
Consolidated Funds | Derivatives-foreign currency forward contracts | ||
Liabilities, at fair value | ||
Derivative liabilities | (17,822) | |
Consolidated Funds | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | (4,000) | |
Consolidated Funds | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | (3,035) | (3,105) |
Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 785,085 | 857,125 |
Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9,253,491 | 9,910,689 |
Consolidated Funds | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,000,902 | 1,000,285 |
Consolidated Funds | Level I | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,001,038 | 1,000,285 |
Common stock and other equity securities | 0 | 956 |
Partnership interests | 0 | 0 |
Total assets, at fair value | 1,001,038 | 1,001,241 |
Liabilities, at fair value | ||
Derivative liabilities | (4,000) | (17,822) |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (4,000) | (17,822) |
Consolidated Funds | Level I | Derivatives-foreign currency forward contracts | ||
Liabilities, at fair value | ||
Derivative liabilities | (17,822) | |
Consolidated Funds | Level I | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | (4,000) | |
Consolidated Funds | Level I | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 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 | 136 | 0 |
Consolidated Funds | Level I | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,000,902 | 1,000,285 |
Consolidated Funds | Level II | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 8,962,186 | 10,024,862 |
Common stock and other equity securities | 0 | 133 |
Partnership interests | 0 | 0 |
Total assets, at fair value | 8,962,186 | 10,024,995 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Loan obligations of CLOs | (10,309,475) | (10,657,661) |
Total liabilities, at fair value | (10,309,475) | (10,657,661) |
Consolidated Funds | Level II | Derivatives-foreign currency forward contracts | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level II | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level II | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Level II | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 496,798 | 525,393 |
Consolidated Funds | Level II | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 8,465,388 | 9,499,469 |
Consolidated Funds | Level II | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Level III | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,076,254 | 742,952 |
Common stock and other equity securities | 480,914 | 339,183 |
Partnership interests | 250,123 | 238,673 |
Total assets, at fair value | 1,807,291 | 1,320,808 |
Liabilities, at fair value | ||
Derivative liabilities | (3,035) | (3,105) |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (3,035) | (3,105) |
Consolidated Funds | Level III | Derivatives-foreign currency forward contracts | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level III | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level III | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | (3,035) | (3,105) |
Consolidated Funds | Level III | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 288,287 | 331,732 |
Consolidated Funds | Level III | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 787,967 | 411,220 |
Consolidated Funds | Level III | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Investments Measured at NAV | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Common stock and other equity securities | 0 | 0 |
Partnership interests | 781,457 | 469,634 |
Total assets, at fair value | 781,457 | 469,634 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Consolidated Funds | Investments Measured at NAV | Derivatives-foreign currency forward contracts | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Investments Measured at NAV | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Investments Measured at NAV | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Investments Measured at NAV | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Investments Measured at NAV | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Investments Measured at NAV | U.S. Treasury securities | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Ares Management L.P | ||
Assets, at fair value | ||
Common stock and other equity securities | 115,350 | 110,389 |
Partnership interests | 8,375 | 8,591 |
Total investments, at fair value | 170,081 | 171,377 |
Total assets, at fair value | 178,111 | 177,059 |
Liabilities, at fair value | ||
Derivative liabilities | (328) | |
Contingent consideration | (10,748) | (57,435) |
Total liabilities, at fair value | (10,818) | (57,763) |
Ares Management L.P | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 8,030 | |
Ares Management L.P | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 5,682 | |
Liabilities, at fair value | ||
Derivative liabilities | (70) | |
Ares Management L.P | Collateralized loan obligations and other fixed income | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 46,356 | 52,397 |
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 assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Contingent consideration | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level I | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Ares Management L.P | Level I | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level I | Collateralized loan obligations and other fixed income | ||
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 | 1,469 | 1,440 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 1,469 | 1,440 |
Total assets, at fair value | 9,499 | 7,122 |
Liabilities, at fair value | ||
Derivative liabilities | (328) | |
Contingent consideration | 0 | 0 |
Total liabilities, at fair value | (70) | (328) |
Ares Management L.P | Level II | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 8,030 | |
Ares Management L.P | Level II | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 5,682 | |
Liabilities, at fair value | ||
Derivative liabilities | (70) | |
Ares Management L.P | Level II | Collateralized loan obligations and other fixed income | ||
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 | 113,881 | 108,949 |
Partnership interests | 2,575 | 2,575 |
Total investments, at fair value | 162,812 | 163,921 |
Total assets, at fair value | 162,812 | 163,921 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Contingent consideration | (10,748) | (57,435) |
Total liabilities, at fair value | (10,748) | (57,435) |
Ares Management L.P | Level III | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Ares Management L.P | Level III | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level III | Collateralized loan obligations and other fixed income | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 46,356 | 52,397 |
Ares Management L.P | Investments Measured at NAV | ||
Assets, at fair value | ||
Common stock and other equity securities | 0 | 0 |
Partnership interests | 5,800 | 6,016 |
Total investments, at fair value | 5,800 | 6,016 |
Total assets, at fair value | 5,800 | 6,016 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Contingent consideration | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Investments Measured at NAV | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Ares Management L.P | Investments Measured at NAV | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Investments Measured at NAV | Collateralized loan obligations and other fixed income | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | $ 0 | $ 0 |
FAIR VALUE - Changes in Fair Va
FAIR VALUE - Changes in Fair Value of Level III Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Consolidated Funds | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | $ 1,448,402 | $ 1,032,365 | $ 1,317,703 | $ 996,265 |
Transfer in due to changes in consolidation | 49,483 | |||
Transfer in | 358,779 | 92,025 | 338,080 | 125,626 |
Transfer out | (152,750) | (231,320) | (80,261) | (232,052) |
Purchases | 315,204 | 267,986 | 511,916 | 371,333 |
Sales/settlements | (168,029) | (180,185) | (285,773) | (288,589) |
Realized and unrealized appreciation (depreciation), net | 2,473 | 6,560 | 1,912 | 14,088 |
Amortized discounts/premiums | 177 | 398 | 679 | 1,158 |
Balance, end of period | 1,804,256 | 938,346 | 1,804,256 | 938,346 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 3,413 | 1,057 | (20,624) | 11,256 |
Level III Liabilities of the Company | ||||
Transfer in due to changes in consolidation | (49,483) | |||
Consolidated Funds | Equity securities | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | 351,140 | 230,634 | 339,183 | 221,043 |
Transfer in due to changes in consolidation | (157) | |||
Transfer in | 0 | 0 | 0 | 2,195 |
Transfer out | 0 | 0 | 0 | (33) |
Purchases | 110,322 | 789 | 117,642 | 8,855 |
Sales/settlements | (18,422) | (731) | (28,611) | (563) |
Realized and unrealized appreciation (depreciation), net | 37,874 | (1,236) | 52,700 | (2,041) |
Amortized discounts/premiums | 0 | 1 | 0 | 1 |
Balance, end of period | 480,914 | 229,300 | 480,914 | 229,300 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 25,622 | (1,199) | 26,150 | (2,116) |
Level III Liabilities of the Company | ||||
Transfer in due to changes in consolidation | 157 | |||
Consolidated Funds | Fixed Income | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | 859,301 | 560,380 | 742,952 | 542,305 |
Transfer in due to changes in consolidation | 49,326 | |||
Transfer in | 358,779 | 92,025 | 338,080 | 123,431 |
Transfer out | (152,750) | (231,320) | (80,261) | (232,019) |
Purchases | 201,882 | 255,197 | 367,274 | 349,478 |
Sales/settlements | (140,607) | (176,951) | (226,660) | (285,642) |
Realized and unrealized appreciation (depreciation), net | (50,528) | 5,024 | (65,810) | 6,042 |
Amortized discounts/premiums | 177 | 397 | 679 | 1,157 |
Balance, end of period | 1,076,254 | 455,426 | 1,076,254 | 455,426 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (37,145) | 1,503 | (61,044) | 2,678 |
Level III Liabilities of the Company | ||||
Transfer in due to changes in consolidation | 49,326 | |||
Consolidated Funds | Partnership Interests | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | 241,123 | 243,452 | 238,673 | 231,857 |
Transfer in due to changes in consolidation | 0 | |||
Transfer in | 0 | 0 | 0 | 0 |
Transfer out | 0 | 0 | 0 | 0 |
Purchases | 3,000 | 12,000 | 27,000 | 13,000 |
Sales/settlements | (9,000) | (2,000) | (30,500) | (2,000) |
Realized and unrealized appreciation (depreciation), net | 15,000 | 1,826 | 14,950 | 12,421 |
Amortized discounts/premiums | 0 | 0 | 0 | 0 |
Balance, end of period | 250,123 | 255,278 | 250,123 | 255,278 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 15,000 | 1,826 | 14,445 | 12,421 |
Level III Liabilities of the Company | ||||
Transfer in due to changes in consolidation | 0 | |||
Consolidated Funds | Derivatives, Net | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | (3,162) | (2,101) | (3,105) | 1,060 |
Transfer in due to changes in consolidation | 0 | |||
Transfer in | 0 | 0 | 0 | 0 |
Transfer out | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales/settlements | 0 | (503) | (2) | (384) |
Realized and unrealized appreciation (depreciation), net | 127 | 946 | 72 | (2,334) |
Amortized discounts/premiums | 0 | 0 | 0 | 0 |
Balance, end of period | (3,035) | (1,658) | (3,035) | (1,658) |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (64) | (1,073) | (175) | (1,727) |
Level III Liabilities of the Company | ||||
Transfer in due to changes in consolidation | 0 | |||
Ares Management L.P | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | 157,982 | 145,338 | 106,486 | 144,336 |
Transfer in due to changes in consolidation | (7,623) | (1,491) | (7,623) | |
Purchases | 20,259 | 20,259 | ||
Change in fair value | (198) | (1,186) | ||
Sales/settlements | (1,927) | (7,678) | 44,848 | (9,216) |
Realized and unrealized appreciation (depreciation), net | (3,793) | 113 | 425 | 2,653 |
Balance, end of period | 152,064 | 165,655 | 152,064 | 165,655 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (3,991) | (419) | (761) | 1,167 |
Ares Management L.P | Equity securities | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | 114,499 | 89,233 | 108,949 | 88,412 |
Transfer in due to changes in consolidation | 0 | (1,491) | 0 | |
Purchases | 19,278 | 19,278 | ||
Change in fair value | 0 | 0 | ||
Sales/settlements | (934) | 0 | (1,147) | 0 |
Realized and unrealized appreciation (depreciation), net | 316 | (1,271) | 4,588 | (450) |
Balance, end of period | 113,881 | 107,240 | 113,881 | 107,240 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 316 | (1,271) | 4,588 | (450) |
Ares Management L.P | Fixed Income | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | 51,458 | 53,530 | 52,397 | 53,349 |
Transfer in due to changes in consolidation | (7,623) | 0 | (7,623) | |
Purchases | 981 | 981 | ||
Change in fair value | 0 | 0 | ||
Sales/settlements | (993) | (7,678) | (1,878) | (9,216) |
Realized and unrealized appreciation (depreciation), net | (4,109) | 1,384 | (4,163) | 3,103 |
Balance, end of period | 46,356 | 55,840 | 46,356 | 55,840 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (4,109) | 852 | (4,163) | 1,617 |
Ares Management L.P | Partnership Interests | ||||
Level III Net Assets of Consolidated Funds | ||||
Balance, beginning of period | 2,575 | 2,575 | 2,575 | 2,575 |
Transfer in due to changes in consolidation | 0 | 0 | 0 | |
Purchases | 0 | 0 | ||
Change in fair value | 0 | 0 | ||
Sales/settlements | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 0 | 0 | 0 | 0 |
Balance, end of period | 2,575 | 2,575 | 2,575 | 2,575 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 0 | $ 0 | 0 | $ 0 |
Ares Management L.P | Contingent Consideration | ||||
Level III Liabilities of the Company | ||||
Balance, beginning of period | (10,550) | (57,435) | ||
Transfer in due to changes in consolidation | 0 | |||
Change in fair value | (198) | (1,186) | ||
Sales/settlements | 0 | 47,873 | ||
Realized and unrealized appreciation (depreciation), net | 0 | 0 | ||
Balance, end of period | (10,748) | (10,748) | ||
Change in net unrealized appreciation and fair value included in earnings related to financial liabilities still held at the reporting date | $ (198) | $ (1,186) |
FAIR VALUE - Valuation Techniqu
FAIR VALUE - Valuation Techniques (Details) $ in Thousands | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Consolidated Funds | ||
Assets | ||
Equity securities | $ 480,914 | $ 340,272 |
Partnership interests | 1,031,580 | 708,307 |
Collateralized loan obligations | 10,309,475 | 10,657,661 |
Other fixed income | 11,039,478 | 11,768,099 |
Total assets, at fair value | 12,551,972 | 12,816,678 |
Liabilities | ||
Derivative instruments | (7,035) | (20,927) |
Total liabilities, at fair value | (10,316,510) | (10,678,588) |
Consolidated Funds | Level III | ||
Assets | ||
Equity securities | 480,914 | 339,183 |
Partnership interests | 250,123 | 238,673 |
Collateralized loan obligations | 0 | 0 |
Other fixed income | 1,076,254 | 742,952 |
Total assets, at fair value | 1,807,291 | 1,320,808 |
Liabilities | ||
Derivative instruments | (3,035) | (3,105) |
Total liabilities, at fair value | (3,035) | (3,105) |
Consolidated Funds | Level III | Transaction price | ||
Assets | ||
Equity securities | 118,240 | 74,041 |
Other fixed income | 6,441 | |
Consolidated Funds | Level III | Discounted cash flow | ||
Assets | ||
Equity securities | 198,778 | 123,685 |
Partnership interests | $ 250,123 | $ 238,673 |
Consolidated Funds | Level III | Discounted cash flow | Discount rates | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.200 | 0.200 |
Partnership interests | 0.226 | 0.234 |
Consolidated Funds | Level III | Discounted cash flow | Discount rates | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 20 | 0.200 |
Partnership interests | 0.226 | 0.234 |
Consolidated Funds | Level III | Market approach | ||
Assets | ||
Equity securities | $ 1,261 | |
Consolidated Funds | Level III | Market approach | EBITDA multiple | ||
Assets | ||
Equity securities | $ 1,076 | |
Consolidated Funds | Level III | Market approach | EBITDA multiple | Minimum | ||
Significant Unobservable Input(s) | ||
Equity securities | 7.5 | 1 |
Consolidated Funds | Level III | Market approach | EBITDA multiple | Maximum | ||
Significant Unobservable Input(s) | ||
Equity securities | 63.4 | 64.4 |
Consolidated Funds | Level III | Market approach | EBITDA multiple | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 17.8 | 17.5 |
Consolidated Funds | Level III | Market approach | Multiple of book value | ||
Assets | ||
Equity securities | $ 162,414 | $ 140,185 |
Consolidated Funds | Level III | Market approach | Multiple of book value | Minimum | ||
Significant Unobservable Input(s) | ||
Equity securities | 1 | 1 |
Consolidated Funds | Level III | Market approach | Multiple of book value | Maximum | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.2 | 1.2 |
Consolidated Funds | Level III | Market approach | Multiple of book value | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.1 | |
Consolidated Funds | Level III | Other | ||
Assets | ||
Equity securities | $ 332 | |
Other fixed income | 2,404 | |
Consolidated Funds | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Equity securities | 74 | $ 11 |
Other fixed income | 893,063 | 614,754 |
Liabilities | ||
Derivative instruments | (3,035) | |
Consolidated Funds | Level III | Income approach | ||
Assets | ||
Other fixed income | $ 174,346 | $ 128,198 |
Consolidated Funds | Level III | Income approach | Yields | Minimum | ||
Significant Unobservable Input(s) | ||
Fixed income securities | 5.5 | 3.5 |
Consolidated Funds | Level III | Income approach | Yields | Maximum | ||
Significant Unobservable Input(s) | ||
Fixed income securities | 22 | 16.2 |
Consolidated Funds | Level III | Income approach | Yields | Weighted Average | ||
Significant Unobservable Input(s) | ||
Fixed income securities | 0.079 | 6.7 |
Ares Management L.P | ||
Assets | ||
Equity securities | $ 115,350 | $ 110,389 |
Partnership interests | 8,375 | 8,591 |
Total assets, at fair value | 178,111 | 177,059 |
Liabilities | ||
Contingent consideration | (10,748) | (57,435) |
Derivative instruments | (328) | |
Total liabilities, at fair value | (10,818) | (57,763) |
Ares Management L.P | Level III | ||
Assets | ||
Equity securities | 113,881 | 108,949 |
Partnership interests | 2,575 | 2,575 |
Total assets, at fair value | 162,812 | 163,921 |
Liabilities | ||
Contingent consideration | (10,748) | (57,435) |
Derivative instruments | 0 | |
Total liabilities, at fair value | (10,748) | (57,435) |
Ares Management L.P | Level III | Transaction price | ||
Assets | ||
Equity securities | 14,610 | 14,610 |
Ares Management L.P | Level III | Discounted cash flow | ||
Assets | ||
Equity securities | $ 52,400 | $ 50,690 |
Ares Management L.P | Level III | Discounted cash flow | Discount rates | Minimum | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.140 | 0.140 |
Ares Management L.P | Level III | Discounted cash flow | Discount rates | Maximum | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.200 | 0.200 |
Ares Management L.P | Level III | Discounted cash flow | Discount rates | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.143 | 0.143 |
Ares Management L.P | Level III | Market approach | ||
Assets | ||
Equity securities | $ 46,871 | $ 43,649 |
Ares Management L.P | Level III | Market approach | Multiple of book value | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.4 | 1.4 |
Ares Management L.P | Level III | Market approach | Multiple of book value | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.4 | 1.4 |
Ares Management L.P | Level III | Other | ||
Assets | ||
Partnership interests | $ 2,575 | $ 2,575 |
Other fixed income | 21,582 | 21,582 |
Liabilities | ||
Contingent consideration | (47,873) | |
Ares Management L.P | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Collateralized loan obligations | 24,774 | 30,815 |
Ares Management L.P | Level III | Monte Carlo simulation | ||
Liabilities | ||
Contingent consideration | $ (10,748) | $ (9,562) |
Ares Management L.P | Level III | Monte Carlo simulation | Discount rates | ||
Significant Unobservable Input(s) | ||
Contingent consideration | 0.085 | 8.5 |
Ares Management L.P | Level III | Monte Carlo simulation | Discount rates | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.085 | |
Contingent consideration | 0.085 | |
Ares Management L.P | Level III | Monte Carlo simulation | Volatility | ||
Significant Unobservable Input(s) | ||
Contingent consideration | 0.180 | 0.18 |
Ares Management L.P | Level III | Monte Carlo simulation | Volatility | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.180 | |
Contingent consideration | 0.18 |
FAIR VALUE - Investments Using
FAIR VALUE - Investments Using NAV per Share (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Consolidated Funds | ||
FAIR VALUE | ||
Fair value | $ 1,031,580,000 | $ 708,307,000 |
Investments Measured at NAV | Consolidated Funds | ||
FAIR VALUE | ||
Fair value | 781,457,000 | 469,634,000 |
Investments Measured at NAV | Non-core investments | ||
FAIR VALUE | ||
Fair value | 5,800,000 | 6,000,000 |
Unfunded commitments | 0 | 0 |
Investments Measured at NAV | Non-core investments | Consolidated Funds | ||
FAIR VALUE | ||
Fair value | 781,500,000 | 469,600,000 |
Unfunded commitments | $ 903,900,000 | $ 1,200,000,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Fair Value and Notional Amounts of Derivative Contracts by Major Product Type on a Gross Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Consolidated Funds | ||
Assets | ||
Notional amount, assets | $ 55,975 | $ 56,000 |
Fair Value | 0 | 0 |
Liabilities | ||
Notional amount, liabilities | 279,489 | 279,516 |
Fair Value | 7,035 | 20,927 |
Derivative liability, amount offset | 0 | 0 |
Derivative asset, amount offset | 0 | 0 |
Consolidated Funds | Warrants | ||
Assets | ||
Notional amount, assets | 0 | 0 |
Fair Value | 0 | 0 |
Liabilities | ||
Notional amount, liabilities | 230,000 | 230,000 |
Fair Value | 4,000 | 17,822 |
Consolidated Funds | Asset swaps | ||
Assets | ||
Notional amount, assets | 55,975 | 56,000 |
Fair Value | 0 | 0 |
Liabilities | ||
Notional amount, liabilities | 49,489 | 49,516 |
Fair Value | 3,035 | 3,105 |
Ares Management L.P | ||
Assets | ||
Notional amount, assets | 77,103 | 409,018 |
Fair Value | 8,030 | 5,682 |
Liabilities | ||
Notional amount, liabilities | 5,041 | 11,011 |
Fair Value | 70 | 328 |
Ares Management L.P | Foreign currency forward contracts | ||
Assets | ||
Notional amount, assets | 77,103 | 409,018 |
Fair Value | 8,030 | 5,682 |
Liabilities | ||
Notional amount, liabilities | 5,041 | 11,011 |
Fair Value | $ 70 | $ 328 |
DEBT - Debt Obligations (Detail
DEBT - Debt Obligations (Details) - Ares Management L.P - USD ($) | 1 Months Ended | 6 Months Ended | ||||||
Jan. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Oct. 31, 2014 | Jun. 30, 2022 | Mar. 31, 2022 | Mar. 30, 2022 | Dec. 31, 2021 | |
DEBT | ||||||||
Carrying Value | $ 1,967,989,000 | $ 1,503,709,000 | ||||||
Credit Facility | ||||||||
DEBT | ||||||||
Carrying Value | $ 395,000,000 | $ 415,000,000 | ||||||
Interest Rate | 1.63% | 1.25% | ||||||
Maximum borrowing capacity | $ 1,275,000,000 | $ 1,090,000,000 | ||||||
Accordion feature | $ 375,000,000 | |||||||
Unused commitment fees | 0.10% | |||||||
Interest rate | 0% | |||||||
Credit Facility | SOFR | ||||||||
DEBT | ||||||||
Interest rate spread | 1% | |||||||
Senior Notes 2024 | ||||||||
DEBT | ||||||||
Original Borrowing Amount | $ 250,000,000 | |||||||
Carrying Value | $ 248,331,000 | $ 247,979,000 | ||||||
Interest Rate | 4.21% | 4.21% | ||||||
Debt issuance rate | 98.27% | |||||||
Senior Notes 2030 | ||||||||
DEBT | ||||||||
Original Borrowing Amount | $ 400,000,000 | |||||||
Carrying Value | $ 396,379,000 | $ 396,156,000 | ||||||
Interest Rate | 3.28% | 3.28% | ||||||
Debt issuance rate | 99.77% | |||||||
Senior Notes 2052 | ||||||||
DEBT | ||||||||
Original Borrowing Amount | $ 500,000,000 | |||||||
Carrying Value | $ 483,614,000 | $ 0 | ||||||
Interest Rate | 3.77% | 0% | ||||||
Debt issuance rate | 97.78% | |||||||
Subordinated Notes 2051 | ||||||||
DEBT | ||||||||
Original Borrowing Amount | $ 450,000,000 | |||||||
Carrying Value | $ 444,665,000 | $ 444,574,000 | ||||||
Interest Rate | 4.13% | 4.13% | ||||||
Interest rate | 4.125% | |||||||
Debt term | 5 years | |||||||
Subordinated Notes 2051 | US Treasury | ||||||||
DEBT | ||||||||
Interest rate | 3.237% |
DEBT - Debt Issuance Costs (Det
DEBT - Debt Issuance Costs (Details) - Ares Management L.P $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Credit Facility | |
Debt Issuance Costs | |
Unamortized debt issuance costs, beginning balance | $ 5,274 |
Debt issuance costs incurred | 1,476 |
Amortization of debt issuance costs | (632) |
Unamortized debt issuance costs, ending balance | 6,118 |
Senior Notes | |
Debt Issuance Costs | |
Unamortized debt issuance costs, beginning balance | 3,689 |
Debt issuance costs incurred | 5,482 |
Amortization of debt issuance costs | (390) |
Unamortized debt issuance costs, ending balance | 8,781 |
Subordinated Notes | |
Debt Issuance Costs | |
Unamortized debt issuance costs, beginning balance | 5,426 |
Debt issuance costs incurred | 0 |
Amortization of debt issuance costs | (91) |
Unamortized debt issuance costs, ending balance | $ 5,335 |
DEBT - Loan Obligations of the
DEBT - Loan Obligations of the Consolidated CLOs (Details) - Consolidated Funds - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
DEBT | ||
Fair Value of Loan Obligations | $ 10,309,475 | $ 10,657,661 |
Loan obligations of Consolidated CLOs | ||
DEBT | ||
Loan Obligations | 11,230,651 | 10,823,994 |
Fair Value of Loan Obligations | 10,309,475 | 10,657,661 |
Senior secured notes | Loan obligations of Consolidated CLOs | ||
DEBT | ||
Loan Obligations | 10,416,048 | 10,031,419 |
Fair Value of Loan Obligations | $ 9,756,862 | $ 10,016,638 |
Weighted Average Remaining Maturity In Years | 9 years 2 months 12 days | 9 years 4 months 24 days |
Debt instrument face amount | $ 10,400,000 | $ 10,000,000 |
Weighted average interest rate | 2.47% | 1.93% |
Subordinated notes | Loan obligations of Consolidated CLOs | ||
DEBT | ||
Loan Obligations | $ 814,603 | $ 792,575 |
Fair Value of Loan Obligations | $ 552,613 | $ 641,023 |
Weighted Average Remaining Maturity In Years | 7 years 8 months 12 days | 8 years 1 month 6 days |
Debt instrument face amount | $ 814,600 | $ 792,600 |
DEBT - Credit Facilities of the
DEBT - Credit Facilities of the Consolidated Funds (Details) - Consolidated Funds - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
DEBT | ||
Total borrowings of Consolidated Funds | $ 155,367,000 | $ 127,771,000 |
Credit Facility Maturing 10/13/2022 | ||
DEBT | ||
Total Capacity | 112,817,000 | |
Outstanding loan | $ 112,817,000 | $ 71,500,000 |
Effective Rate | 3.24% | 1.59% |
Credit Facility Maturing 7/1/2023 | ||
DEBT | ||
Total Capacity | $ 18,000,000 | |
Outstanding loan | $ 15,550,000 | $ 16,271,000 |
Effective Rate | 3.19% | 1.73% |
Credit Facility Maturing 7/23/2024 | ||
DEBT | ||
Total Capacity | $ 75,000,000 | |
Outstanding loan | $ 27,000,000 | $ 40,000,000 |
Effective Rate | 5.15% | 309% |
Credit Facility Maturing 9/24/2026 | ||
DEBT | ||
Total Capacity | $ 150,000,000 | |
Outstanding loan | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |||||
Unfunded capital commitments | $ 649,600,000 | $ 649,600,000 | $ 677,300,000 | ||
Maximum exposure from guarantees | $ 16,600,000 | $ 16,600,000 | 209,700,000 | ||
Percent of the contingent liability requiring continued service | 96% | 96% | |||
Percent Of The Contingent Liability Not Requiring Continued Service | 4% | 4% | |||
Performance Income | |||||
Carried interest, contingent repayment obligations | $ 0 | $ 0 | 0 | ||
Ares Management L.P | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Accrued compensation | 10,748,000 | 10,748,000 | 57,435,000 | ||
Ares Management L.P | Contingent Consideration | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Fair value of contingent liability | (10,748,000) | (10,748,000) | $ (10,550,000) | (57,435,000) | |
Other expense | 200,000 | 1,200,000 | |||
Performance income | |||||
Performance Income | |||||
Performance income subject to potential clawback provision | 185,900,000 | 185,900,000 | 194,600,000 | ||
Performance income subject to potential claw back provision that are reimbursable by professionals | 146,600,000 | 146,600,000 | 153,300,000 | ||
Landmark Acquisition | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Commitment, maximum amount | 300,000,000 | $ 300,000,000 | |||
Business combination, percentage | 15% | ||||
Business combination equity awards percentage | 85% | ||||
Vesting period | 4 years | ||||
Estimated fair value of the contingent consideration liability | 122,900,000 | $ 122,900,000 | 145,700,000 | ||
Accrued compensation | 36,700,000 | 36,700,000 | 21,000,000 | ||
Compensation expense | $ 4,600,000 | 6,800,000 | 15,700,000 | ||
Black Creek Acquisition | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Commitment, maximum amount | 275,000,000 | 275,000,000 | |||
Accrued compensation | 133,400,000 | 133,400,000 | 45,900,000 | ||
Compensation expense | 49,800,000 | 87,500,000 | |||
Black Creek Acquisition | Contingency Subject To Continued Service Requirement | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Fair value of contingent liability | 257,900,000 | 257,900,000 | 229,500,000 | ||
Black Creek Acquisition | Contingency Not Subject To Continued Service Requirement | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Fair value of contingent liability | $ 9,600,000 | ||||
Infrastructure Debt Acquisition | |||||
COMMITMENTS AND CONTINGENCIES | |||||
Commitment, maximum amount | 48,500,000 | $ 48,500,000 | |||
Business combination, percentage | 15% | ||||
Business combination equity awards percentage | 85% | ||||
Estimated fair value of the contingent consideration liability | 39,200,000 | $ 39,200,000 | |||
Compensation expense | $ 2,900,000 | $ 4,300,000 | |||
Recognition period | 4 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Leases: Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities | $ 189,175 | |
Finance lease obligations | 470 | |
Accumulated amortization | $ 1,900 | $ 1,600 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities |
Ares Management L.P | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | $ 153,929 | $ 167,652 |
Finance lease assets | 689 | 1,011 |
Total lease assets | 154,618 | 168,663 |
Operating lease liabilities | 189,175 | 205,075 |
Finance lease obligations | 470 | 936 |
Total lease liabilities | $ 189,645 | $ 206,011 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 11 years |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Leases: Maturity of Lease Liabilities (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Operating Leases | |
2022 | $ 21,557 |
2023 | 38,826 |
2024 | 38,180 |
2025 | 36,821 |
2026 | 28,011 |
After 2026 | 39,605 |
Total future payments | 203,000 |
Less: interest | 13,825 |
Operating lease liabilities | 189,175 |
Finance Leases | |
2022 | 142 |
2023 | 166 |
2024 | 162 |
2025 | 15 |
2026 | 0 |
After 2026 | 0 |
Total future payments | 485 |
Less: interest | 15 |
Total lease liabilities | $ 470 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Leases: Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease expense | $ 10,071 | $ 9,013 | $ 20,134 | $ 17,506 |
Amortization of finance lease assets | 182 | 128 | 344 | 254 |
Interest on finance lease liabilities | 3 | 7 | 9 | 17 |
Total lease expense | $ 10,256 | $ 9,148 | $ 20,487 | $ 17,777 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Leases: Other Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 22,170 | $ 16,733 |
Operating cash flows for finance leases | 16 | 30 |
Financing cash flows for finance leases | 457 | 390 |
Leased assets obtained in exchange for new finance lease liabilities | 13 | 28 |
Leased assets obtained in exchange for new operating lease liabilities | $ 5,066 | $ 30,378 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Leases: Lease Term and Discount Rate (Details) | Jun. 30, 2022 | Dec. 31, 2021 |
Weighted-average remaining lease terms (in years): | ||
Operating leases | 5 years 7 months 6 days | 6 years |
Finance leases | 2 years 3 months 18 days | 1 year 9 months 18 days |
Weighted-average discount rate: | ||
Operating leases | 2.81% | 1.81% |
Finance leases | 2.80% | 2.94% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Consolidated Funds | ||
Due from affiliates: | ||
Due from affiliates | $ 7,159 | $ 7,234 |
Due to affiliates: | ||
Due to affiliates—Company | 0 | 0 |
Consolidated Funds | Affiliated entity | ||
Due from affiliates: | ||
Due from affiliates | 7,159 | 7,234 |
Ares Management L.P | ||
Due from affiliates: | ||
Due from affiliates | 552,137 | 670,383 |
Due to affiliates: | ||
Due to affiliates—Company | 133,422 | 198,553 |
Ares Management L.P | Affiliated entity | ||
Due from affiliates: | ||
Management fees receivable from non-consolidated funds | 430,712 | 372,249 |
Incentive fee receivable from non-consolidated funds | 11,069 | 211,243 |
Payments made on behalf of and amounts due from non-consolidated funds and employees | 110,356 | 86,891 |
Due from affiliates | 552,137 | 670,383 |
Due to affiliates: | ||
Management fee received in advance and rebates payable to non-consolidated funds | 7,102 | 10,160 |
Tax receivable agreement liability | 98,975 | 100,542 |
Undistributed carried interest and incentive fees | 10,648 | 66,494 |
Payments made by non-consolidated funds on behalf of and payable by the Company | 16,697 | 21,357 |
Due to affiliates—Company | $ 133,422 | $ 198,553 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 13,460 | $ 48,458 | $ 33,871 | $ 74,212 | |
Deferred tax asset | $ 37,700 | $ 37,700 | $ 39,400 |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities Excluded (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Restricted units | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in shares) | 0 | 49 | 0 | 25 |
AOG Units | AOG Units | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in shares) | 0 | 113,890,960 | 0 | 113,126,250 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 16, 2022 | Mar. 17, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Basic earnings per share of Class A and non-voting common stock: | ||||||
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | $ 39,731 | $ 124,980 | $ 85,594 | $ 177,933 | ||
Distributions on unvested restricted units | (3,461) | (3,452) | (7,046) | (6,693) | ||
Undistributed earnings allocable to participating unvested restricted units | 0 | (4,967) | 0 | (2,701) | ||
Net income available to Class A and non-voting common stockholders | 36,270 | 116,561 | 78,548 | 168,539 | ||
Diluted earnings per share of Class A and non-voting common stock: | ||||||
Net income available to Class A and non-voting common stockholders | 39,731 | 124,980 | 85,594 | 177,933 | ||
Distributions on unvested restricted units | (3,461) | 0 | (7,046) | 0 | ||
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | $ 36,270 | $ 124,980 | $ 78,548 | $ 177,933 | ||
Dividend declared and paid per Class A and non-voting common stock (in dollars per share) | $ 0.61 | $ 0.61 | ||||
Restricted units | ||||||
Diluted earnings per share of Class A and non-voting common stock: | ||||||
Effect of dilutive shares (in shares) | 0 | 10,930,236 | 0 | 10,074,330 | ||
Options | ||||||
Diluted earnings per share of Class A and non-voting common stock: | ||||||
Effect of dilutive shares (in shares) | 0 | 5,303,530 | 0 | 5,238,834 | ||
Class A Common Stock | ||||||
Basic earnings per share of Class A and non-voting common stock: | ||||||
Basic weighted-average shares of Class A and non-voting common stock (in shares) | 175,157,558 | 164,793,968 | 174,694,645 | 157,075,774 | ||
Basic earnings per share of Class A and non-voting common stock (in dollars per share) | $ 0.21 | $ 0.70 | $ 0.45 | $ 1.07 | ||
Diluted earnings per share of Class A and non-voting common stock: | ||||||
Diluted weighted-average shares of Class A and non-voting common stock (in shares) | 175,157,558 | 181,027,734 | 174,694,645 | 172,388,938 | ||
Diluted earnings per share of Class A and non-voting common stock (in dollars per share) | $ 0.21 | $ 0.69 | $ 0.45 | $ 1.03 | ||
Dividend declared and paid per Class A and non-voting common stock (in dollars per share) | $ 0.61 | $ 0.47 | $ 1.22 | $ 0.94 | ||
Non-voting Common Stock | ||||||
Basic earnings per share of Class A and non-voting common stock: | ||||||
Basic weighted-average shares of Class A and non-voting common stock (in shares) | 175,157,558 | 164,793,968 | 174,694,645 | 157,075,774 | ||
Basic earnings per share of Class A and non-voting common stock (in dollars per share) | $ 0.21 | $ 0.70 | $ 0.45 | $ 1.07 | ||
Diluted earnings per share of Class A and non-voting common stock: | ||||||
Diluted weighted-average shares of Class A and non-voting common stock (in shares) | 175,157,558 | 181,027,734 | 174,694,645 | 172,388,938 | ||
Diluted earnings per share of Class A and non-voting common stock (in dollars per share) | $ 0.21 | $ 0.69 | $ 0.45 | $ 1.03 | ||
Dividend declared and paid per Class A and non-voting common stock (in dollars per share) | $ 0.61 | $ 0.47 | $ 1.22 | $ 0.94 |
EQUITY COMPENSATION - Equity In
EQUITY COMPENSATION - Equity Incentive Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jan. 01, 2022 | |
Equity compensation | |||||
Equity-based compensation expense | $ 49,635 | $ 69,504 | $ 103,286 | $ 125,153 | |
Restricted units | |||||
Equity compensation | |||||
Equity-based compensation expense | 49,635 | 46,742 | 103,286 | 90,829 | |
Restricted units with a market condition | |||||
Equity compensation | |||||
Equity-based compensation expense | $ 0 | $ 22,762 | $ 0 | $ 34,324 | |
Ares Management L.P | |||||
Equity compensation | |||||
Total number of shares available for grant under the equity incentive plan (in shares) | 44,596,953 | 44,596,953 | 49,293,000 |
EQUITY COMPENSATION - Restricte
EQUITY COMPENSATION - Restricted Units (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 16, 2022 | Mar. 17, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Equity compensation | |||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | $ 0.61 | |||||
Distribution equivalents made to holders | $ 8 | $ 16 | |||||
Class A Common Stock | |||||||
Equity compensation | |||||||
Shares delivered in period (in shares) | 2,900,000 | 2,700,000 | |||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | $ 0.47 | $ 1.22 | $ 0.94 | |||
Restricted units | |||||||
Equity compensation | |||||||
Shares delivered in period (in shares) | 5,300,000 | 4,800,000 | |||||
Restricted Units | |||||||
Balance at the beginning of the period (in shares) | 18,323,036 | 18,323,036 | |||||
Granted (in shares) | 3,948,993 | ||||||
Vested (in shares) | (5,156,186) | ||||||
Forfeited (in shares) | (192,946) | ||||||
Balance at the end of the period (in shares) | 16,922,897 | 16,922,897 | |||||
Weighted Average Grant Date Fair Value Per Unit | |||||||
Balance at the beginning of the period (in dollars per share) | $ 36.43 | $ 36.43 | |||||
Granted (in dollars per share) | 74.69 | ||||||
Vested (in dollars per share) | 26.72 | ||||||
Forfeited (in dollars per share) | 52.34 | ||||||
Balance at the end of the period (in dollars per share) | $ 48.14 | $ 48.14 | |||||
Unrecognized compensation expenses | $ 632.6 | $ 632.6 | |||||
Weighted average period of compensation expense expected to be recognized | 3 years 9 months 18 days | ||||||
Restricted units | Senior executives | |||||||
Equity compensation | |||||||
Annual award vesting percentage | 25% |
EQUITY COMPENSATION - Summary O
EQUITY COMPENSATION - Summary Of Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Options | ||
Exercised (in shares) | (454,912) | |
Aggregate Intrinsic Value | ||
Net cash proceeds from exercises of stock options | $ 8,600 | |
Options | ||
Equity compensation | ||
Shares purchased (in shares) | 1 | |
Term of option | ten years | |
Options | ||
Balance at the beginning of the period (in shares) | 6,306,282 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (454,912) | |
Expired (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Balance at the end of the period (in shares) | 5,851,370 | 6,306,282 |
Options, Exercisable at the end of the period (in shares) | 5,851,370 | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period (in dollars per shares) | $ 19 | |
Granted (in dollars per shares) | ||
Exercised (in dollars per shares) | 19 | |
Expired (in dollars per shares) | 0 | |
Forfeited (in dollars per shares) | 0 | |
Balance at the end of the period (in dollars per shares) | 19 | $ 19 |
Weighted average exercise price, Exercisable at the end of the period (in dollars per shares) | $ 19 | |
Weighted Average Remaining Life (in years) | ||
Weighted average remaining life | 1 year 9 months 18 days | 2 years 3 months 18 days |
Exercisable at the end of the period | 1 year 9 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding intrinsic value | $ 221,533 | $ 392,692 |
Exercisable | 221,533 | |
Tax benefits of exercises | $ 3,500 |
EQUITY AND REDEEMABLE INTERES_2
EQUITY AND REDEEMABLE INTEREST - Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Feb. 28, 2022 | Dec. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity | ||||
Beginning balance (in shares) | 290,451,548 | |||
Stock option exercises, net of shares withheld for tax (in shares) | 454,912 | |||
Vesting of restricted stock awards, net of shares withheld for tax (in shares) | 2,874,083 | |||
Ending balance (in shares) | 293,776,408 | |||
Ares Operating Group | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG units (in shares) | 0 | |||
Cancellation of AOG Units (in shares) | (4,135) | |||
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Authorized amount | $ 150 | |||
Shares repurchased (in shares) | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Beginning balance (in shares) | 168,351,305 | |||
Stock option exercises, net of shares withheld for tax (in shares) | 454,912 | |||
Vesting of restricted stock awards, net of shares withheld for tax (in shares) | 2,874,083 | |||
Ending balance (in shares) | 171,837,350 | |||
Class A Common Stock | Ares Operating Group | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG units (in shares) | 157,050 | |||
Cancellation of AOG Units (in shares) | 0 | |||
Non-voting Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | 0.01 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Beginning balance (in shares) | 3,489,911 | |||
Stock option exercises, net of shares withheld for tax (in shares) | 0 | |||
Vesting of restricted stock awards, net of shares withheld for tax (in shares) | 0 | |||
Ending balance (in shares) | 3,489,911 | |||
Non-voting Common Stock | Ares Operating Group | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG units (in shares) | 0 | |||
Cancellation of AOG Units (in shares) | 0 | |||
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 | ||||
Beginning balance (in shares) | 1,000 | |||
Stock option exercises, net of shares withheld for tax (in shares) | 0 | |||
Vesting of restricted stock awards, net of shares withheld for tax (in shares) | 0 | |||
Ending balance (in shares) | 1,000 | |||
Class B Common Stock | Ares Operating Group | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG units (in shares) | 0 | |||
Cancellation 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 | ||||
Beginning balance (in shares) | 118,609,332 | |||
Stock option exercises, net of shares withheld for tax (in shares) | 0 | |||
Vesting of restricted stock awards, net of shares withheld for tax (in shares) | 0 | |||
Ending balance (in shares) | 118,448,147 | |||
Class C Common Stock | Ares Operating Group | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Exchanges of AOG units (in shares) | (157,050) | |||
Cancellation of AOG Units (in shares) | (4,135) |
EQUITY AND REDEEMABLE INTERES_3
EQUITY AND REDEEMABLE INTEREST - Common Stock Offering (Details) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||
AOG units (in shares) | 293,775,408 | 293,775,408 | 290,450,548 | ||
Ares Operating Group | |||||
Class of Stock [Line Items] | |||||
Direct Ownership Interest | 100% | 100% | 100% | ||
Ares Owners Holdings, L.P. | |||||
Class of Stock [Line Items] | |||||
AOG units (in shares) | 118,448,147 | 118,448,147 | 118,609,332 | ||
Ares Owners Holdings, L.P. | Ares Operating Group | |||||
Class of Stock [Line Items] | |||||
Direct Ownership Interest | 40.32% | 40.32% | 40.84% | ||
Daily Average Ownership | 40.34% | 40.87% | 40.42% | 41.87% | |
Ares Operating Group | |||||
Class of Stock [Line Items] | |||||
AOG units (in shares) | 175,327,261 | 175,327,261 | 171,841,216 | ||
Ares Operating Group | Ares Operating Group | |||||
Class of Stock [Line Items] | |||||
Direct Ownership Interest | 59.68% | 59.68% | 59.16% | ||
Daily Average Ownership | 59.66% | 59.13% | 59.58% | 58.13% |
EQUITY AND REDEEMABLE INTERES_4
EQUITY AND REDEEMABLE INTEREST - Redeemable Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Ares Operating Group | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | $ 96,347 | $ 96,008 |
Changes in ownership interests and related tax benefits | (1,445) | 231 |
Net income (loss) | (457) | 399 |
Currency translation adjustment, net of tax | (996) | (331) |
Equity compensation | 77 | 48 |
Distributions | (8) | (8) |
Ending balance | 93,518 | 96,347 |
Consolidated Funds | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | 1,000,000 | 1,000,000 |
Change in redemption value | 0 | 0 |
Ending balance | $ 1,000,000 | $ 1,000,000 |
SEGMENT REPORTING - Operating S
SEGMENT REPORTING - Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment reporting | ||||
Total revenues | $ 601,430 | $ 1,294,819 | $ 1,316,429 | $ 1,953,207 |
Compensation and benefits | (375,775) | (269,689) | (729,612) | (501,539) |
General, administrative and other expenses | (122,566) | (83,362) | (243,089) | (151,018) |
Operating segment | ||||
Segment reporting | ||||
Fee related earnings | (320,047) | (218,658) | (616,292) | (410,984) |
Performance income—realized | 70,094 | 127,013 | 113,962 | 201,958 |
Performance related compensation—realized | (44,058) | (90,080) | (72,633) | (149,937) |
Realized net investment income (loss) | 2,604 | 22,921 | 4,109 | 15,098 |
Realized income | (348,687) | (278,512) | (661,730) | (478,103) |
OMG | ||||
Segment reporting | ||||
Total revenues | (6,417) | 0 | (12,293) | 0 |
Compensation and benefits | (71,341) | (48,429) | (135,408) | (92,836) |
General, administrative and other expenses | (35,225) | (23,074) | (67,609) | (41,730) |
Fee related earnings | (100,268) | (71,503) | (190,843) | (134,566) |
Performance income—realized | 0 | 0 | 0 | 0 |
Performance related compensation—realized | 0 | 0 | 0 | 0 |
Realized net performance income | 0 | 0 | 0 | 0 |
Investment income (loss)—realized | 0 | 0 | 0 | 0 |
Interest and other investment income (expense)—realized | (995) | 85 | (1,279) | 440 |
Interest expense | (179) | (147) | (346) | (237) |
Realized net investment income (loss) | (1,174) | (62) | (1,625) | 203 |
Realized income | (101,442) | (71,565) | (192,468) | (134,363) |
Total | ||||
Segment reporting | ||||
Compensation and benefits | (251,452) | (186,162) | (493,459) | (353,539) |
General, administrative and other expenses | (76,844) | (47,423) | (144,654) | (87,086) |
Fee related earnings | 219,779 | 147,155 | 425,449 | 276,418 |
Performance income—realized | 70,094 | 127,013 | 113,962 | 201,958 |
Performance related compensation—realized | (44,058) | (90,080) | (72,633) | (149,937) |
Realized net performance income | 26,036 | 36,933 | 41,329 | 52,021 |
Investment income (loss)—realized | 2,710 | 14,725 | 9,042 | 7,333 |
Interest and other investment income (expense)—realized | 15,941 | 15,041 | 26,309 | 21,570 |
Interest expense | (17,221) | (6,907) | (32,867) | (13,602) |
Realized net investment income (loss) | 1,430 | 22,859 | 2,484 | 15,301 |
Realized income | 247,245 | 206,947 | 469,262 | 343,740 |
Ares Management L.P | ||||
Segment reporting | ||||
Total revenues | 601,430 | 1,294,819 | 1,316,429 | 1,953,207 |
Compensation and benefits | (375,775) | (729,612) | ||
General, administrative and other expenses | (122,566) | (243,089) | ||
Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Compensation and benefits | (180,111) | (137,733) | (358,051) | (260,703) |
General, administrative and other expenses | (41,619) | (24,349) | (77,045) | (45,356) |
Fee related earnings | 320,047 | 218,658 | 616,292 | 410,984 |
Performance income—realized | 70,094 | 127,013 | 113,962 | 201,958 |
Performance related compensation—realized | (44,058) | (90,080) | (72,633) | (149,937) |
Realized net performance income | 26,036 | 36,933 | 41,329 | 52,021 |
Investment income (loss)—realized | 2,710 | 14,725 | 9,042 | 7,333 |
Interest and other investment income (expense)—realized | 16,936 | 14,956 | 27,588 | 21,130 |
Interest expense | (17,042) | (6,760) | (32,521) | (13,365) |
Realized net investment income (loss) | 2,604 | 22,921 | 4,109 | 15,098 |
Realized income | 348,687 | 278,512 | 661,730 | 478,103 |
Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Compensation and benefits | (93,287) | (85,892) | (198,983) | (167,095) |
General, administrative and other expenses | (17,780) | (11,977) | (34,477) | (22,786) |
Fee related earnings | 218,998 | 169,053 | 417,883 | 317,257 |
Performance income—realized | 48,533 | 68,146 | 55,896 | 70,592 |
Performance related compensation—realized | (29,358) | (43,485) | (33,938) | (45,540) |
Realized net performance income | 19,175 | 24,661 | 21,958 | 25,052 |
Investment income (loss)—realized | 1,609 | 1,240 | 2,024 | 1,240 |
Interest and other investment income (expense)—realized | 6,387 | 5,969 | 12,113 | 9,638 |
Interest expense | (3,538) | (1,465) | (6,952) | (2,980) |
Realized net investment income (loss) | 4,458 | 5,744 | 7,185 | 7,898 |
Realized income | 242,631 | 199,458 | 447,026 | 350,207 |
Ares Management L.P | Operating segment | Private Equity Group | ||||
Segment reporting | ||||
Compensation and benefits | (24,293) | (21,979) | (43,859) | (38,827) |
General, administrative and other expenses | (7,880) | (5,881) | (14,168) | (10,367) |
Fee related earnings | 15,631 | 12,363 | 36,031 | 30,275 |
Performance income—realized | 0 | 53,945 | 2,212 | 125,163 |
Performance related compensation—realized | 0 | (43,197) | (1,786) | (100,223) |
Realized net performance income | 0 | 10,748 | 426 | 24,940 |
Investment income (loss)—realized | 672 | 2,633 | 2,275 | (6,265) |
Interest and other investment income (expense)—realized | 195 | 4,846 | 1,697 | 4,964 |
Interest expense | (3,629) | (1,476) | (7,002) | (2,929) |
Realized net investment income (loss) | (2,762) | 6,003 | (3,030) | (4,230) |
Realized income | 12,869 | 29,114 | 33,427 | 50,985 |
Ares Management L.P | Operating segment | Real Assets Group | ||||
Segment reporting | ||||
Compensation and benefits | (40,599) | (20,189) | (74,236) | (40,368) |
General, administrative and other expenses | (10,639) | (3,861) | (18,276) | (7,538) |
Fee related earnings | 49,025 | 19,850 | 88,462 | 37,133 |
Performance income—realized | 17,405 | 4,922 | 51,698 | 6,203 |
Performance related compensation—realized | (11,186) | (3,398) | (33,395) | (4,174) |
Realized net performance income | 6,219 | 1,524 | 18,303 | 2,029 |
Investment income (loss)—realized | 432 | 10,530 | 3,885 | 12,036 |
Interest and other investment income (expense)—realized | 2,640 | 1,511 | 5,417 | 3,865 |
Interest expense | (2,713) | (1,289) | (5,102) | (2,624) |
Realized net investment income (loss) | 359 | 10,752 | 4,200 | 13,277 |
Realized income | 55,603 | 32,126 | 110,965 | 52,439 |
Ares Management L.P | Operating segment | Secondary Solutions Group | ||||
Segment reporting | ||||
Compensation and benefits | (15,133) | (4,289) | (26,773) | (4,289) |
General, administrative and other expenses | (2,957) | (859) | (6,035) | (859) |
Fee related earnings | 28,111 | 7,750 | 57,897 | 7,750 |
Performance income—realized | 4,156 | 0 | 4,156 | 0 |
Performance related compensation—realized | (3,514) | 0 | (3,514) | 0 |
Realized net performance income | 642 | 0 | 642 | 0 |
Investment income (loss)—realized | 0 | 0 | 0 | 0 |
Interest and other investment income (expense)—realized | 2,200 | 2 | 2,844 | 2 |
Interest expense | (1,557) | (5) | (2,022) | (5) |
Realized net investment income (loss) | 643 | (3) | 822 | (3) |
Realized income | 29,396 | 7,747 | 59,361 | 7,747 |
Ares Management L.P | Operating segment | Strategic Initiatives | ||||
Segment reporting | ||||
Compensation and benefits | (6,799) | (5,384) | (14,200) | (10,124) |
General, administrative and other expenses | (2,363) | (1,771) | (4,089) | (3,806) |
Fee related earnings | 8,282 | 9,642 | 16,019 | 18,569 |
Performance income—realized | 0 | 0 | 0 | 0 |
Performance related compensation—realized | 0 | 0 | 0 | 0 |
Realized net performance income | 0 | 0 | 0 | 0 |
Investment income (loss)—realized | (3) | 322 | 858 | 322 |
Interest and other investment income (expense)—realized | 5,514 | 2,628 | 5,517 | 2,661 |
Interest expense | (5,605) | (2,525) | (11,443) | (4,827) |
Realized net investment income (loss) | (94) | 425 | (5,068) | (1,844) |
Realized income | 8,188 | 10,067 | 10,951 | 16,725 |
Management fees | ||||
Segment reporting | ||||
Total revenues | 520,560 | 367,286 | 997,892 | 687,559 |
Management fees | OMG | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Management fees | Total | ||||
Segment reporting | ||||
Total revenues | 524,881 | 372,835 | 1,007,802 | 700,298 |
Management fees | Ares Management L.P | ||||
Segment reporting | ||||
Total revenues | 520,560 | 997,892 | ||
Management fees | Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Total revenues | 524,881 | 372,835 | 1,007,802 | 700,298 |
Management fees | Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Total revenues | 323,171 | 260,234 | 626,330 | 493,111 |
Management fees | Ares Management L.P | Operating segment | Private Equity Group | ||||
Segment reporting | ||||
Total revenues | 47,396 | 39,975 | 93,353 | 79,113 |
Management fees | Ares Management L.P | Operating segment | Real Assets Group | ||||
Segment reporting | ||||
Total revenues | 90,733 | 42,932 | 163,220 | 82,757 |
Management fees | Ares Management L.P | Operating segment | Secondary Solutions Group | ||||
Segment reporting | ||||
Total revenues | 46,201 | 12,898 | 90,705 | 12,898 |
Management fees | Ares Management L.P | Operating segment | Strategic Initiatives | ||||
Segment reporting | ||||
Total revenues | 17,380 | 16,796 | 34,194 | 32,419 |
Fee related performance revenues | ||||
Segment reporting | ||||
Total revenues | 1,240 | 654 | ||
Fee related performance revenues | OMG | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Fee related performance revenues | Total | ||||
Segment reporting | ||||
Total revenues | 13,951 | 2,690 | ||
Fee related performance revenues | Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Total revenues | 1,240 | 654 | 13,951 | 2,690 |
Fee related performance revenues | Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Total revenues | 275 | (39) | 12,628 | 1,331 |
Fee related performance revenues | Ares Management L.P | Operating segment | Private Equity Group | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Fee related performance revenues | Ares Management L.P | Operating segment | Real Assets Group | ||||
Segment reporting | ||||
Total revenues | 965 | 693 | 1,323 | 1,359 |
Fee related performance revenues | Ares Management L.P | Operating segment | Secondary Solutions Group | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Fee related performance revenues | Ares Management L.P | Operating segment | Strategic Initiatives | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other fees | OMG | ||||
Segment reporting | ||||
Total revenues | 6,298 | 0 | 12,174 | 0 |
Other fees | Total | ||||
Segment reporting | ||||
Total revenues | 21,954 | 7,251 | 41,809 | 14,055 |
Other fees | Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Total revenues | 15,656 | 7,251 | 29,635 | 14,055 |
Other fees | Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Total revenues | 6,619 | 6,727 | 12,385 | 12,696 |
Other fees | Ares Management L.P | Operating segment | Private Equity Group | ||||
Segment reporting | ||||
Total revenues | 408 | 248 | 705 | 356 |
Other fees | Ares Management L.P | Operating segment | Real Assets Group | ||||
Segment reporting | ||||
Total revenues | 8,565 | 275 | 16,431 | 923 |
Other fees | Ares Management L.P | Operating segment | Secondary Solutions Group | ||||
Segment reporting | ||||
Total revenues | 0 | 0 | 0 | 0 |
Other fees | Ares Management L.P | Operating segment | Strategic Initiatives | ||||
Segment reporting | ||||
Total revenues | $ 64 | $ 1 | $ 114 | $ 80 |
SEGMENT REPORTING - Revenue, Ex
SEGMENT REPORTING - Revenue, Expenses and Realized Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment revenues | ||||
Total revenues | $ 601,430 | $ 1,294,819 | $ 1,316,429 | $ 1,953,207 |
Total segment revenues | 611,871 | 507,753 | 1,165,350 | 919,001 |
Segment expenses | ||||
Compensation and benefits | 375,775 | 269,689 | 729,612 | 501,539 |
General, administrative and other expenses | 122,566 | 83,362 | 243,089 | 151,018 |
Total expenses | 552,868 | 1,024,732 | 1,164,552 | 1,549,841 |
Segment realized net investment income | ||||
Total other income (expense) | 18,504 | 49,690 | 76,498 | 106,475 |
Management fees | ||||
Segment revenues | ||||
Total revenues | 520,560 | 367,286 | 997,892 | 687,559 |
Fee related performance revenues | ||||
Segment revenues | ||||
Total revenues | 1,240 | 654 | ||
Operating segment | ||||
Segment revenues | ||||
Performance income—realized | 70,094 | 127,013 | 113,962 | 201,958 |
Segment expenses | ||||
Performance related compensation—realized | 44,058 | 90,080 | 72,633 | 149,937 |
Ares Management L.P | ||||
Segment revenues | ||||
Total revenues | 601,430 | 1,294,819 | 1,316,429 | 1,953,207 |
Segment expenses | ||||
Compensation and benefits | 375,775 | 729,612 | ||
General, administrative and other expenses | 122,566 | 243,089 | ||
Ares Management L.P | Management fees | ||||
Segment revenues | ||||
Total revenues | 520,560 | 997,892 | ||
Ares Management L.P | Operating segment | ||||
Segment revenues | ||||
Performance income—realized | 70,094 | 127,013 | 113,962 | 201,958 |
Total segment revenues | 611,871 | 507,753 | 1,165,350 | 919,001 |
Segment expenses | ||||
Compensation and benefits | 180,111 | 137,733 | 358,051 | 260,703 |
General, administrative and other expenses | 41,619 | 24,349 | 77,045 | 45,356 |
Performance related compensation—realized | 44,058 | 90,080 | 72,633 | 149,937 |
Total expenses | 265,788 | 252,162 | 507,729 | 455,996 |
Segment realized net investment income | ||||
Investment income—realized | 2,710 | 14,725 | 9,042 | 7,333 |
Interest and other investment income —realized | 16,936 | 14,956 | 27,588 | 21,130 |
Interest expense | (17,042) | (6,760) | (32,521) | (13,365) |
Total other income (expense) | 2,604 | 22,921 | 4,109 | 15,098 |
Ares Management L.P | Operating segment | Management fees | ||||
Segment revenues | ||||
Total revenues | 524,881 | 372,835 | 1,007,802 | 700,298 |
Ares Management L.P | Operating segment | Fee related performance revenues | ||||
Segment revenues | ||||
Total revenues | 1,240 | 654 | 13,951 | 2,690 |
Ares Management L.P | Operating segment | Other fees | ||||
Segment revenues | ||||
Total revenues | $ 15,656 | $ 7,251 | $ 29,635 | $ 14,055 |
SEGMENT REPORTING - Revenue Rec
SEGMENT REPORTING - Revenue Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue adjustment | ||||
Total revenues | $ 601,430 | $ 1,294,819 | $ 1,316,429 | $ 1,953,207 |
Total segment revenue | 611,871 | 507,753 | 1,165,350 | 919,001 |
Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 601,430 | 1,294,819 | 1,316,429 | 1,953,207 |
Operating segment | Ares Management L.P | ||||
Revenue adjustment | ||||
Performance (income) loss—unrealized | 24,149 | (741,426) | (109,383) | (966,380) |
Total segment revenue | 611,871 | 507,753 | 1,165,350 | 919,001 |
Reconciling items | ||||
Revenue adjustment | ||||
Principal investment (income) loss, net of eliminations | (13,493) | (50,634) | (27,983) | (75,729) |
Total segment revenue | 10,441 | (787,066) | (151,079) | (1,034,206) |
Reconciling items | Non-Controlling interest | Subsidiaries | ||||
Revenue adjustment | ||||
Total segment revenue | (11,982) | (5,159) | (22,561) | (9,868) |
Reconciling items | Performance income reclass | ||||
Revenue adjustment | ||||
Performance income (loss) reclass | 0 | 550 | (14) | 605 |
OMG | ||||
Revenue adjustment | ||||
Total revenues | (6,417) | 0 | (12,293) | 0 |
Management fees | ||||
Revenue adjustment | ||||
Total revenues | 520,560 | 367,286 | 997,892 | 687,559 |
Management fees | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 520,560 | 997,892 | ||
Management fees | Operating segment | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 524,881 | 372,835 | 1,007,802 | 700,298 |
Management fees | OMG | ||||
Revenue adjustment | ||||
Total revenues | 0 | 0 | 0 | 0 |
Management fees | Consolidated Funds | Eliminations | ||||
Revenue adjustment | ||||
Total segment revenue | 11,362 | 10,659 | 22,841 | 22,365 |
Incentive fees | ||||
Revenue adjustment | ||||
Total revenues | 4,675 | 15,904 | 21,097 | 18,724 |
Incentive fees | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 4,675 | 21,097 | ||
Incentive fees | Consolidated Funds | Eliminations | ||||
Revenue adjustment | ||||
Total revenues | 0 | 3 | 34 | 1,528 |
Administrative, transaction and other fees | ||||
Revenue adjustment | ||||
Total revenues | 33,278 | 11,981 | 67,908 | 24,641 |
Administrative, transaction and other fees | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | 33,278 | 67,908 | ||
Administrative, transaction and other fees | Reconciling items | ||||
Revenue adjustment | ||||
Total revenues | (15,373) | (9,314) | (34,848) | (19,122) |
Administrative, transaction and other fees | Consolidated Funds | Reconciling items | ||||
Revenue adjustment | ||||
Total revenues | 4,315 | 4,748 | 9,084 | 8,893 |
Principal investment income (loss) | ||||
Revenue adjustment | ||||
Total revenues | (4,387) | 47,127 | 3,939 | 72,227 |
Principal investment income (loss) | Ares Management L.P | ||||
Revenue adjustment | ||||
Total revenues | (4,387) | 3,939 | ||
Principal investment income (loss) | Reconciling items | ||||
Revenue adjustment | ||||
Principal investment (income) loss, net of eliminations | $ 4,387 | $ (47,127) | $ (3,939) | $ (72,227) |
SEGMENT REPORTING - Expenses (D
SEGMENT REPORTING - Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total expenses | $ 552,868 | $ 1,024,732 | $ 1,164,552 | $ 1,549,841 |
Equity compensation expense | 49,635 | 69,504 | 103,286 | 125,153 |
Operating segment | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Acquisition and merger-related expense | (1,152) | (9,020) | (10,194) | (17,610) |
Equity compensation expense | 50,144 | 69,504 | 103,161 | 125,153 |
Acquisition-related compensation expense | (59,491) | (4,630) | (107,492) | (4,630) |
Placement fees | (1,425) | 1,030 | (2,118) | 1,327 |
Depreciation and amortization expense | 40,330 | 20,974 | 78,456 | 35,074 |
Operating segment | Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total expenses | 265,788 | 252,162 | 507,729 | 455,996 |
Performance related compensation-unrealized | 8,549 | (566,012) | (82,649) | (726,349) |
Operating segment | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total expenses | 552,868 | 1,024,732 | 1,164,552 | 1,549,841 |
Reconciling items | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total expenses | (287,080) | (772,570) | (656,823) | (1,093,845) |
Administrative fees | (15,958) | (9,314) | (34,848) | (19,122) |
Acquisition and merger-related expense | (1,152) | (9,020) | (10,194) | (17,610) |
Equity compensation expense | (49,559) | (69,504) | (103,161) | (125,153) |
Acquisition-related compensation expense | (59,491) | (4,630) | (107,492) | (4,630) |
Placement fees | 1,425 | (1,030) | 2,118 | (1,327) |
Depreciation and amortization expense | (40,330) | (20,974) | (78,456) | (35,074) |
Reconciling items | Subsidiaries | Non-Controlling interest | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total expenses | (10,771) | (5,283) | (21,384) | (10,543) |
Reconciling items | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses of Consolidated Funds added in consolidation | (24,865) | (26,011) | (40,942) | (43,447) |
Expenses of Consolidated Funds eliminated in consolidation | 11,638 | 10,711 | 23,202 | 23,976 |
OMG | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total expenses | $ 106,566 | $ 71,503 | $ 203,017 | $ 134,566 |
SEGMENT REPORTING - Other Incom
SEGMENT REPORTING - Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | $ 18,504 | $ 49,690 | $ 76,498 | $ 106,475 |
Other income (expense), net | 5,809 | (1,819) | 7,593 | (5,968) |
Total segment realized net investment income | 2,604 | 22,921 | 4,109 | 15,098 |
Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Other income (expense), net | 5,809 | 7,593 | ||
Operating segment | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Investment (income) loss—unrealized | (3,945) | (34,299) | (2,123) | (52,517) |
Other expense, net | (12) | (619) | (1,993) | (146) |
Operating segment | Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | 2,604 | 22,921 | 4,109 | 15,098 |
Investment (income) loss—unrealized | 2,084 | (34,811) | 9,938 | (56,979) |
Interest and other investment (income) loss—unrealized | (6,029) | 512 | (12,061) | 4,462 |
Operating segment | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | 18,504 | 49,690 | 76,498 | 106,475 |
Reconciling items | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | (15,900) | (26,769) | (72,389) | (91,377) |
Principal investment income | 13,493 | 50,634 | 27,983 | 75,729 |
Other expense, net | 13 | 619 | 1,994 | 146 |
Reconciling items | Performance income reclass | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Performance (income) loss reclass | 0 | (550) | 14 | (605) |
Reconciling items | Subsidiaries | Non-Controlling interest | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | 5,233 | (4,159) | 210 | (4,021) |
Reconciling items | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Other income from Consolidated Funds added in consolidation, net | (27,570) | (34,592) | (94,418) | (101,908) |
Eliminations | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Other income (expense), net | (4,215) | (4,698) | (11,733) | (8,810) |
OMG | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | $ (1,091) | $ (276) | $ (5,684) | $ (609) |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Adjustments: | ||||
Equity compensation expense | $ 49,635 | $ 69,504 | $ 103,286 | $ 125,153 |
Consolidated Funds | ||||
Adjustments: | ||||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (15,022) | 5,027 | 32,360 | 54,885 |
Total investment income—realized | (117,375) | (113,878) | (237,665) | (229,717) |
Operating segment | ||||
Economic net income | ||||
Income before taxes | 67,066 | 319,777 | 228,375 | 509,841 |
Adjustments: | ||||
Depreciation and amortization expense | 40,330 | 20,974 | 78,456 | 35,074 |
Equity compensation expense | 50,144 | 69,504 | 103,161 | 125,153 |
Acquisition-related compensation expense | 59,491 | 4,630 | 107,492 | 4,630 |
Acquisition and merger-related expense | 1,152 | 9,020 | 10,194 | 17,610 |
Placement fees | (1,425) | 1,030 | (2,118) | 1,327 |
Other expense, net | 12 | 619 | 1,993 | 146 |
Total performance (income) loss—unrealized | 24,149 | (741,426) | (109,383) | (966,380) |
Total performance related compensation—unrealized | (8,549) | 566,012 | 82,649 | 726,349 |
Investment (income) loss—unrealized | (3,945) | (34,299) | (2,123) | (52,517) |
Realized income | 348,687 | 278,512 | 661,730 | 478,103 |
Total performance income—realized | (70,094) | (127,013) | (113,962) | (201,958) |
Total performance related compensation—realized | 44,058 | 90,080 | 72,633 | 149,937 |
Total investment income—realized | (2,604) | (22,921) | (4,109) | (15,098) |
Fee related earnings | 320,047 | 218,658 | 616,292 | 410,984 |
Operating segment | Consolidated Funds | ||||
Adjustments: | ||||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 14,999 | (5,073) | (32,408) | (54,959) |
Operating segment | Subsidiaries | ||||
Adjustments: | ||||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 4,022 | (4,035) | (967) | (3,346) |
OMG | ||||
Adjustments: | ||||
OMG expense, net | 101,241 | 71,779 | 196,409 | 135,175 |
Realized income | 101,442 | 71,565 | 192,468 | 134,363 |
Total performance income—realized | 0 | 0 | 0 | 0 |
Total performance related compensation—realized | 0 | 0 | 0 | 0 |
Total investment income—realized | 1,174 | 62 | 1,625 | (203) |
Fee related earnings | $ 100,268 | $ 71,503 | $ 190,843 | $ 134,566 |
CONSOLIDATION - Variable Intere
CONSOLIDATION - Variable Interest Entities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||||
Assets of consolidated VIEs | $ 21,226,215 | $ 21,226,215 | $ 21,605,164 | ||
Liabilities of consolidated VIEs | 16,464,550 | 16,464,550 | 16,694,730 | ||
Collateralized loan obligations | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss attributable to the company's investment in VIEs | 85,500 | 85,500 | 103,800 | ||
Consolidated Funds | |||||
Variable Interest Entity [Line Items] | |||||
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | (15,022) | $ 5,027 | 32,360 | $ 54,885 | |
Non-Consolidated Variable Interest Entities | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss attributable to the company's investment in VIEs | 387,860 | 387,860 | 353,768 | ||
Consolidated VIEs | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss attributable to the company's investment in VIEs | 508,060 | 508,060 | 583,192 | ||
Consolidated VIEs | Consolidated Funds | |||||
Variable Interest Entity [Line Items] | |||||
Assets of consolidated VIEs | 12,622,718 | 12,622,718 | 13,197,321 | ||
Liabilities of consolidated VIEs | 11,350,132 | 11,350,132 | $ 12,018,655 | ||
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | $ (18,725) | $ 17,872 | $ 19,737 | $ 45,688 |
CONSOLIDATION - Balance Sheet (
CONSOLIDATION - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | |||||||
Intangible assets, net | $ 799,678 | $ 768,818 | |||||
Goodwill | 998,444 | 787,972 | |||||
Total assets | 21,226,215 | 21,605,164 | |||||
Liabilities | |||||||
Operating lease liabilities | 189,175 | ||||||
Total liabilities | 16,464,550 | 16,694,730 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 1,880,321 | 1,913,559 | |||||
Accumulated deficit | (226,700) | (89,382) | |||||
Accumulated other comprehensive loss, net of tax | (17,192) | (1,855) | |||||
Total stockholders' equity | 1,639,366 | 1,825,227 | |||||
Total equity | 3,668,147 | $ 3,667,621 | 3,814,426 | $ 3,540,526 | $ 3,441,115 | $ 2,420,568 | $ 2,471,774 |
Total liabilities, redeemable interest, non-controlling interests and equity | $ 21,226,215 | $ 21,605,164 | |||||
Common stock, shares outstanding (in shares) | 293,776,408 | 290,451,548 | |||||
Class A Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | $ 1,718 | $ 1,684 | |||||
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) | 171,837,350 | 168,351,305 | |||||
Common stock, shares outstanding (in shares) | 171,837,350 | 168,351,305 | |||||
Non-voting Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | $ 35 | $ 35 | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | |||||
Common stock, shares issued (in shares) | 3,489,911 | 3,489,911 | |||||
Common stock, shares outstanding (in shares) | 3,489,911 | 3,489,911 | |||||
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 | $ 1,184 | $ 1,186 | |||||
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) | 118,448,147 | 118,609,332 | |||||
Common stock, shares outstanding (in shares) | 118,448,147 | 118,609,332 | |||||
Eliminations | |||||||
Assets | |||||||
Total assets | $ (642,437) | $ (623,309) | |||||
Liabilities | |||||||
Total liabilities | (174,402) | (90,638) | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Total equity | (468,035) | (532,671) | |||||
Total liabilities, redeemable interest, non-controlling interests and equity | (642,437) | (623,309) | |||||
Consolidated Funds | |||||||
Assets | |||||||
Cash and cash equivalents | 824,110 | 1,049,191 | |||||
Due from affiliates | 7,159 | 7,234 | |||||
Other assets | 43,416 | 39,430 | |||||
U.S. Treasury securities, at fair value | 1,000,490 | 1,000,285 | |||||
Investments, at fair value | 11,551,482 | 11,816,393 | |||||
Receivable for securities sold | 195,831 | 281,132 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 99,542 | 103,258 | |||||
Due to affiliates | 0 | 0 | |||||
Payable for securities purchased | 667,375 | 1,118,456 | |||||
CLO loan obligations, at fair value | 10,309,475 | 10,657,661 | |||||
Fund borrowings | 155,367 | 127,771 | |||||
Redeemable interest | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Non-controlling interests in Consolidated Funds | 798,476 | 591,452 | |||||
Consolidated Funds | Reportable legal entity | |||||||
Assets | |||||||
Cash and cash equivalents | 824,110 | 1,049,191 | |||||
Due from affiliates | 17,491 | 16,761 | |||||
Other assets | 43,416 | 39,430 | |||||
U.S. Treasury securities, at fair value | 1,000,490 | 1,000,285 | |||||
Investments, at fair value | 11,542,498 | 11,812,093 | |||||
Receivable for securities sold | 195,831 | 281,132 | |||||
Total assets | 13,623,836 | 14,198,892 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 102,607 | 117,139 | |||||
Due to affiliates | 131,287 | 26,210 | |||||
Payable for securities purchased | 667,375 | 1,118,456 | |||||
CLO loan obligations, at fair value | 10,339,193 | 10,698,681 | |||||
Fund borrowings | 155,367 | 127,771 | |||||
Total liabilities | 11,395,829 | 12,088,257 | |||||
Commitments and contingencies | |||||||
Redeemable interest | 1,000,000 | 1,000,000 | |||||
Non-controlling interests in Consolidated Funds | 1,228,007 | 1,110,635 | |||||
Stockholders' Equity | |||||||
Total equity | 1,228,007 | 1,110,635 | |||||
Total liabilities, redeemable interest, non-controlling interests and equity | 13,623,836 | 14,198,892 | |||||
Consolidated Funds | Eliminations | |||||||
Assets | |||||||
Due from affiliates | (10,332) | (9,527) | |||||
Investments, at fair value | 8,984 | 4,300 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | (3,065) | (13,881) | |||||
Due to affiliates | (131,287) | (26,210) | |||||
CLO loan obligations, at fair value | (29,718) | (41,020) | |||||
Non-controlling interests in Consolidated Funds | (429,531) | (519,183) | |||||
Ares Operating Group | |||||||
Liabilities | |||||||
Redeemable interest | 93,518 | $ 96,347 | 96,008 | ||||
Non-controlling interests in Ares Operating Group entities | 1,230,305 | 1,397,747 | |||||
Ares Operating Group | Reportable legal entity | |||||||
Liabilities | |||||||
Non-controlling interests in Ares Operating Group entities | 1,245,899 | 1,403,255 | |||||
Ares Operating Group | Eliminations | |||||||
Liabilities | |||||||
Non-controlling interests in Ares Operating Group entities | (15,594) | (5,508) | |||||
Ares Management L.P | |||||||
Assets | |||||||
Cash and cash equivalents | 252,867 | 343,655 | |||||
Investments | 3,927,506 | 3,684,264 | |||||
Due from affiliates | 552,137 | 670,383 | |||||
Other assets | 265,166 | 334,755 | |||||
Right-of-use operating lease assets | 153,929 | 167,652 | |||||
Intangible assets, net | 1,453,678 | 1,422,818 | |||||
Goodwill | 998,444 | 787,972 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 256,620 | 279,673 | |||||
Accrued compensation | 404,821 | 310,222 | |||||
Due to affiliates | 133,422 | 198,553 | |||||
Performance related compensation payable | 2,280,764 | 2,190,352 | |||||
Debt obligations | 1,967,989 | 1,503,709 | |||||
Operating lease liabilities | 189,175 | 205,075 | |||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 1,880,321 | 1,913,559 | |||||
Accumulated deficit | (226,700) | (89,382) | |||||
Accumulated other comprehensive loss, net of tax | (17,192) | (1,855) | |||||
Total stockholders' equity | 1,639,366 | 1,825,227 | |||||
Ares Management L.P | Carried interest | |||||||
Stockholders' Equity | |||||||
Equity method investments: | 3,120,192 | 2,998,421 | |||||
Ares Management L.P | Class A Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 1,718 | 1,684 | |||||
Ares Management L.P | Non-voting Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 35 | 35 | |||||
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 | 1,184 | 1,186 | |||||
Ares Management L.P | Reportable legal entity | |||||||
Assets | |||||||
Cash and cash equivalents | 252,867 | 343,655 | |||||
Investments | 4,428,324 | 4,271,836 | |||||
Due from affiliates | 692,408 | 696,963 | |||||
Other assets | 265,166 | 338,685 | |||||
Right-of-use operating lease assets | 153,929 | 167,652 | |||||
Intangible assets, net | 1,453,678 | 1,422,818 | |||||
Goodwill | 998,444 | 787,972 | |||||
Total assets | 8,244,816 | 8,029,581 | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | 266,952 | 289,200 | |||||
Accrued compensation | 404,821 | 310,222 | |||||
Due to affiliates | 133,422 | 198,553 | |||||
Performance related compensation payable | 2,280,764 | 2,190,352 | |||||
Debt obligations | 1,967,989 | 1,503,709 | |||||
Operating lease liabilities | 189,175 | 205,075 | |||||
Total liabilities | 5,243,123 | 4,697,111 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Additional paid-in-capital | 1,903,231 | 1,921,539 | |||||
Accumulated deficit | (226,700) | (89,382) | |||||
Accumulated other comprehensive loss, net of tax | (17,192) | (1,855) | |||||
Total stockholders' equity | 1,662,276 | 1,833,207 | |||||
Total equity | 2,908,175 | 3,236,462 | |||||
Total liabilities, redeemable interest, non-controlling interests and equity | 8,244,816 | 8,029,581 | |||||
Ares Management L.P | Reportable legal entity | Class A Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 1,718 | 1,684 | |||||
Ares Management L.P | Reportable legal entity | Non-voting Common Stock | |||||||
Stockholders' Equity | |||||||
Common stock | 35 | 35 | |||||
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 | 1,184 | 1,186 | |||||
Ares Management L.P | Eliminations | |||||||
Assets | |||||||
Investments | (500,818) | (587,572) | |||||
Due from affiliates | (140,271) | (26,580) | |||||
Other assets | 0 | (3,930) | |||||
Liabilities | |||||||
Accounts payable, accrued expenses and other liabilities | (10,332) | (9,527) | |||||
Stockholders' Equity | |||||||
Additional paid-in-capital | (22,910) | (7,980) | |||||
Total stockholders' equity | (22,910) | (7,980) | |||||
Ares Management L.P | Ares Operating Group | Reportable legal entity | |||||||
Liabilities | |||||||
Redeemable interest | $ 93,518 | $ 96,008 |
CONSOLIDATION - Income Statemen
CONSOLIDATION - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | ||||
Total revenues | $ 601,430 | $ 1,294,819 | $ 1,316,429 | $ 1,953,207 |
Expenses | ||||
Compensation and benefits | 375,775 | 269,689 | 729,612 | 501,539 |
Performance related compensation | 41,073 | 656,381 | 173,884 | 877,813 |
General, administrative and other expenses | 122,566 | 83,362 | 243,089 | 151,018 |
Total expenses | 552,868 | 1,024,732 | 1,164,552 | 1,549,841 |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (1,775) | 4,977 | 6,334 | 10,410 |
Interest and dividend income | 1,476 | 4,482 | 2,978 | 5,442 |
Interest expense | (17,221) | (6,907) | (32,867) | (13,602) |
Other income (expense), net | 5,809 | (1,819) | 7,593 | (5,968) |
Total other income (expense) | 18,504 | 49,690 | 76,498 | 106,475 |
Income before taxes | 67,066 | 319,777 | 228,375 | 509,841 |
Income tax expense | 13,460 | 48,458 | 33,871 | 74,212 |
Net income | 53,606 | 271,319 | 194,504 | 435,629 |
Net income attributable to Ares Management Corporation | 39,731 | 141,644 | 85,594 | 200,022 |
Less: Series A Preferred Stock dividends paid | 0 | 5,425 | 0 | 10,850 |
Less: Series A Preferred Stock redemption premium | 0 | 11,239 | 0 | 11,239 |
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | 39,731 | 124,980 | 85,594 | 177,933 |
Eliminations | ||||
Revenues | ||||
Total revenues | (33,557) | (18,917) | (56,003) | (36,288) |
Expenses | ||||
Compensation and benefits | 0 | 0 | ||
Performance related compensation | 0 | 0 | ||
General, administrative and other expenses | (227) | 0 | (227) | |
Total expenses | (11,638) | (10,711) | (23,202) | (23,976) |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | 8,658 | (8,984) | 21,693 | 2,567 |
Interest and dividend income | (6,899) | (648) | (8,807) | (1,551) |
Other income (expense), net | (189) | (35) | 805 | (491) |
Total other income (expense) | 4,215 | 4,698 | 11,733 | 8,810 |
Income before taxes | (17,704) | (3,508) | (21,068) | (3,502) |
Income tax expense | 0 | 0 | ||
Net income | (17,704) | (3,508) | (21,068) | (3,502) |
Less: Series A Preferred Stock dividends paid | 0 | |||
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | 0 | 0 | 0 | |
Consolidated Funds | ||||
Expenses | ||||
Expenses of Consolidated Funds | 13,454 | 15,300 | 17,967 | 19,471 |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (7,907) | (5,947) | 8,061 | 10,475 |
Interest expense | (79,253) | (58,974) | (153,266) | (129,999) |
Interest and other income of Consolidated Funds | 117,375 | 113,878 | 237,665 | 229,717 |
Less: Net income (loss) attributable to non-controlling interests | (15,022) | 5,027 | 32,360 | 54,885 |
Consolidated Funds | Reportable legal entity | ||||
Revenues | ||||
Total revenues | 0 | 0 | 0 | 0 |
Expenses | ||||
Expenses of Consolidated Funds | 24,865 | 26,011 | 40,942 | 43,447 |
Total expenses | 24,865 | 26,011 | 40,942 | 43,447 |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (6,806) | (16,622) | 16,205 | 9,846 |
Interest expense | (82,810) | (62,629) | (160,257) | (137,164) |
Interest and other income of Consolidated Funds | 117,186 | 113,843 | 238,470 | 229,226 |
Total other income (expense) | 27,570 | 34,592 | 94,418 | 101,908 |
Income before taxes | 2,705 | 8,581 | 53,476 | 58,461 |
Income tax expense | 23 | 46 | 48 | 74 |
Net income | 2,682 | 8,535 | 53,428 | 58,387 |
Less: Net income (loss) attributable to non-controlling interests | 2,682 | 8,535 | 53,428 | 58,387 |
Consolidated Funds | Eliminations | ||||
Expenses | ||||
Expenses of Consolidated Funds | (11,411) | (10,711) | (22,975) | (23,976) |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (1,101) | 10,675 | (8,144) | 629 |
Interest expense | 3,557 | 3,655 | 6,991 | 7,165 |
Interest and other income of Consolidated Funds | 189 | 35 | (805) | 491 |
Less: Net income (loss) attributable to non-controlling interests | (17,704) | (3,508) | (21,068) | (3,502) |
Ares Operating Group | ||||
Other income (expense) | ||||
Net income | 68,628 | 266,292 | 162,144 | 380,744 |
Less: Net income (loss) attributable to redeemable interest | (457) | 337 | (58) | 369 |
Less: Net income (loss) attributable to non-controlling interests | 29,354 | 124,311 | 76,608 | 180,353 |
Ares Operating Group | Reportable legal entity | ||||
Other income (expense) | ||||
Less: Net income (loss) attributable to non-controlling interests | 180,353 | |||
Ares Operating Group | Eliminations | ||||
Other income (expense) | ||||
Less: Net income (loss) attributable to non-controlling interests | 0 | |||
Consolidated Company Entities | ||||
Revenues | ||||
Total revenues | 601,430 | 1,294,819 | 1,316,429 | 1,953,207 |
Expenses | ||||
Compensation and benefits | 375,775 | 729,612 | ||
Performance related compensation | 41,073 | 173,884 | ||
General, administrative and other expenses | 122,566 | 243,089 | ||
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (1,775) | 6,334 | ||
Interest and dividend income | 1,476 | 2,978 | ||
Interest expense | (17,221) | (32,867) | ||
Other income (expense), net | 5,809 | 7,593 | ||
Consolidated Company Entities | Reportable legal entity | ||||
Revenues | ||||
Total revenues | 634,987 | 1,313,736 | 1,372,432 | 1,989,495 |
Expenses | ||||
Compensation and benefits | 375,775 | 269,689 | 729,612 | 501,539 |
Performance related compensation | 41,073 | 656,381 | 173,884 | 877,813 |
General, administrative and other expenses | 122,793 | 83,362 | 243,316 | 151,018 |
Total expenses | 539,641 | 1,009,432 | 1,146,812 | 1,530,370 |
Other income (expense) | ||||
Net realized and unrealized gains (losses) on investments | (10,433) | 13,961 | (15,359) | 7,843 |
Interest and dividend income | 8,375 | 5,130 | 11,785 | 6,993 |
Interest expense | (17,221) | (6,907) | (32,867) | (13,602) |
Other income (expense), net | 5,998 | (1,784) | 6,788 | (5,477) |
Total other income (expense) | (13,281) | 10,400 | (29,653) | (4,243) |
Income before taxes | 82,065 | 314,704 | 195,967 | 454,882 |
Income tax expense | 13,437 | 48,412 | 33,823 | 74,138 |
Net income | 68,628 | 266,292 | 162,144 | 380,744 |
Net income attributable to Ares Management Corporation | 141,644 | 200,022 | ||
Less: Series A Preferred Stock dividends paid | 5,425 | 10,850 | ||
Less: Series A Preferred Stock redemption premium | 11,239 | 11,239 | ||
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | 39,731 | 124,980 | 85,594 | 177,933 |
Consolidated Company Entities | Consolidated Funds | Reportable legal entity | ||||
Other income (expense) | ||||
Less: Net income (loss) attributable to non-controlling interests | 0 | |||
Consolidated Company Entities | Ares Operating Group | Reportable legal entity | ||||
Other income (expense) | ||||
Net income | 68,628 | 266,292 | 162,144 | 380,744 |
Less: Net income (loss) attributable to redeemable interest | (457) | 337 | (58) | 369 |
Less: Net income (loss) attributable to non-controlling interests | 29,354 | 124,311 | 76,608 | |
Management fees | ||||
Revenues | ||||
Total revenues | 520,560 | 367,286 | 997,892 | 687,559 |
Management fees | Eliminations | ||||
Revenues | ||||
Total revenues | (11,362) | (10,659) | (22,841) | (22,365) |
Management fees | Consolidated Company Entities | ||||
Revenues | ||||
Total revenues | 520,560 | 997,892 | ||
Management fees | Consolidated Company Entities | Reportable legal entity | ||||
Revenues | ||||
Total revenues | 531,922 | 377,945 | 1,020,733 | 709,924 |
Carried interest allocation | ||||
Revenues | ||||
Total revenues | 47,304 | 852,521 | 225,593 | 1,150,056 |
Carried interest allocation | Eliminations | ||||
Revenues | ||||
Total revenues | 0 | 0 | ||
Carried interest allocation | Consolidated Company Entities | ||||
Revenues | ||||
Total revenues | 47,304 | 225,593 | ||
Carried interest allocation | Consolidated Company Entities | Reportable legal entity | ||||
Revenues | ||||
Total revenues | 47,304 | 852,521 | 225,593 | 1,150,056 |
Incentive fees | ||||
Revenues | ||||
Total revenues | 4,675 | 15,904 | 21,097 | 18,724 |
Incentive fees | Eliminations | ||||
Revenues | ||||
Total revenues | 0 | (3) | (34) | (1,528) |
Incentive fees | Consolidated Company Entities | ||||
Revenues | ||||
Total revenues | 4,675 | 21,097 | ||
Incentive fees | Consolidated Company Entities | Reportable legal entity | ||||
Revenues | ||||
Total revenues | 4,675 | 15,907 | 21,131 | 20,252 |
Principal investment income (loss) | ||||
Revenues | ||||
Total revenues | (4,387) | 47,127 | 3,939 | 72,227 |
Principal investment income (loss) | Eliminations | ||||
Revenues | ||||
Total revenues | (17,880) | (3,507) | (24,044) | (3,502) |
Principal investment income (loss) | Consolidated Company Entities | ||||
Revenues | ||||
Total revenues | (4,387) | 3,939 | ||
Principal investment income (loss) | Consolidated Company Entities | Reportable legal entity | ||||
Revenues | ||||
Total revenues | 13,493 | 50,634 | 27,983 | 75,729 |
Administrative, transaction and other fees | ||||
Revenues | ||||
Total revenues | 33,278 | 11,981 | 67,908 | 24,641 |
Administrative, transaction and other fees | Eliminations | ||||
Revenues | ||||
Total revenues | (4,315) | (4,748) | (9,084) | (8,893) |
Administrative, transaction and other fees | Consolidated Company Entities | ||||
Revenues | ||||
Total revenues | 33,278 | 67,908 | ||
Administrative, transaction and other fees | Consolidated Company Entities | Reportable legal entity | ||||
Revenues | ||||
Total revenues | $ 37,593 | $ 16,729 | $ 76,992 | $ 33,534 |
CONSOLIDATION - Cash Flow State
CONSOLIDATION - Cash Flow Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||||
Net income | $ 53,606 | $ 271,319 | $ 194,504 | $ 435,629 |
Net cash used in operating activities | (568,198) | (1,069,043) | ||
Cash flows from investing activities: | ||||
Net cash used in investing activities | (320,125) | (786,096) | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||||
Net cash provided by financing activities | 815,494 | 1,894,872 | ||
Effect of exchange rate changes | (17,959) | 3,361 | ||
Net change in cash and cash equivalents | (90,788) | 43,094 | ||
Cash and cash equivalents, beginning of period | 343,655 | |||
Cash and cash equivalents, end of period | 252,867 | 582,906 | 252,867 | 582,906 |
Supplemental disclosure of non-cash financing activities: | ||||
Issuance of AOG Units and Class A common stock in connection with acquisitions | 12,835 | 299,640 | ||
Reportable legal entity | ||||
Cash flows from financing activities: | ||||
Proceeds from issuance of senior and subordinated notes | 450,000 | |||
Eliminations | ||||
Cash flows from operating activities: | ||||
Net income | (17,704) | (3,508) | (21,068) | (3,502) |
Net cash used in operating activities | 139,379 | (320,714) | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||||
Net cash provided by financing activities | 85,702 | (5,784) | ||
Effect of exchange rate changes | 0 | |||
Net change in cash and cash equivalents | 225,081 | (326,498) | ||
Cash and cash equivalents, beginning of period | (1,049,191) | (522,377) | ||
Cash and cash equivalents, end of period | (824,110) | (848,875) | (824,110) | (848,875) |
Consolidated Funds | ||||
Cash flows from operating activities: | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | (855,803) | (1,811,773) | ||
Cash flows due to changes in operating assets and liabilities | (125,132) | |||
Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds | (125,132) | 414,530 | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 218,280 | 962,829 | ||
Distributions to non-controlling interests in Consolidated Funds | (53,638) | (72,289) | ||
Borrowings under loan obligations by Consolidated Funds | 814,183 | 492,887 | ||
Repayments under loan obligations by Consolidated Funds | (46,873) | (59,731) | ||
Consolidated Funds | Reportable legal entity | ||||
Cash flows from operating activities: | ||||
Net income | 2,682 | 8,535 | 53,428 | 58,387 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | (863,947) | (1,818,767) | ||
Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds | (255,233) | 757,955 | ||
Net cash used in operating activities | (1,065,752) | (1,002,425) | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 242,975 | 984,954 | ||
Distributions to non-controlling interests in Consolidated Funds | (164,035) | (88,630) | ||
Borrowings under loan obligations by Consolidated Funds | 814,183 | 492,887 | ||
Repayments under loan obligations by Consolidated Funds | (46,873) | (59,731) | ||
Net cash provided by financing activities | 846,250 | 1,329,480 | ||
Effect of exchange rate changes | (5,579) | (557) | ||
Net change in cash and cash equivalents | (225,081) | 326,498 | ||
Cash and cash equivalents, beginning of period | 1,049,191 | 522,377 | ||
Cash and cash equivalents, end of period | 824,110 | 848,875 | 824,110 | 848,875 |
Consolidated Funds | Eliminations | ||||
Cash flows from operating activities: | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | 8,144 | 6,994 | ||
Cash flows due to changes in operating assets and liabilities | 108,957 | |||
Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds | 130,101 | (343,425) | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||||
Contributions from redeemable and non-controlling interests in Consolidated Funds | (24,695) | (22,125) | ||
Distributions to non-controlling interests in Consolidated Funds | 110,397 | 16,341 | ||
Ares Management L.P | ||||
Cash flows from operating activities: | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | 61,073 | 23,407 | ||
Cash flows due to changes in operating assets and liabilities | 157,160 | (130,836) | ||
Cash flows from investing activities: | ||||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (18,448) | (7,952) | ||
Acquisitions, net of cash acquired | (301,677) | (778,144) | ||
Cash flows from financing activities: | ||||
Net proceeds from issuance of Class A and non-voting common stock | 0 | 827,430 | ||
Proceeds from Credit Facility | 700,000 | 318,000 | ||
Proceeds from issuance of senior and subordinated notes | 488,915 | 450,000 | ||
Repayments of Credit Facility | (720,000) | (318,000) | ||
Dividends and distributions | (406,366) | (288,178) | ||
Series A Preferred Stock dividends | 0 | (10,850) | ||
Redemption of Series A Preferred Stock | 0 | (310,000) | ||
Stock option exercises | 8,644 | 14,027 | ||
Taxes paid related to net share settlement of equity awards | (189,485) | (100,838) | ||
Other financing activities | 1,834 | (10,415) | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||||
Cash and cash equivalents, beginning of period | 343,655 | 539,812 | ||
Cash and cash equivalents, end of period | 252,867 | 582,906 | 252,867 | 582,906 |
Ares Management L.P | Reportable legal entity | ||||
Cash flows from operating activities: | ||||
Net income | 68,628 | 266,292 | 162,144 | 380,744 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | 147,828 | 6,925 | ||
Cash flows due to changes in operating assets and liabilities | (133,573) | |||
Net cash used in operating activities | 358,175 | 254,096 | ||
Cash flows from investing activities: | ||||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (18,448) | (7,952) | ||
Acquisitions, net of cash acquired | (301,677) | (778,144) | ||
Net cash used in investing activities | (320,125) | (786,096) | ||
Cash flows from financing activities: | ||||
Net proceeds from issuance of Class A and non-voting common stock | 827,430 | |||
Proceeds from Credit Facility | 700,000 | 318,000 | ||
Proceeds from issuance of senior and subordinated notes | 488,915 | |||
Repayments of Credit Facility | (720,000) | (318,000) | ||
Dividends and distributions | (406,366) | (288,178) | ||
Series A Preferred Stock dividends | (10,850) | |||
Redemption of Series A Preferred Stock | (310,000) | |||
Stock option exercises | 8,644 | 14,027 | ||
Taxes paid related to net share settlement of equity awards | (189,485) | (100,838) | ||
Other financing activities | 1,834 | (10,415) | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | ||||
Net cash provided by financing activities | (116,458) | 571,176 | ||
Effect of exchange rate changes | (12,380) | 3,918 | ||
Net change in cash and cash equivalents | (90,788) | 43,094 | ||
Cash and cash equivalents, beginning of period | 343,655 | 539,812 | ||
Cash and cash equivalents, end of period | $ 252,867 | $ 582,906 | 252,867 | 582,906 |
Supplemental disclosure of non-cash financing activities: | ||||
Issuance of AOG Units and Class A common stock in connection with acquisitions | 12,835 | 299,640 | ||
Ares Management L.P | Eliminations | ||||
Cash flows from operating activities: | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | (86,755) | 16,482 | ||
Cash flows due to changes in operating assets and liabilities | $ 2,737 | |||
Ares Management L.P | Consolidated Funds | Reportable legal entity | ||||
Cash flows from operating activities: | ||||
Cash flows due to changes in operating assets and liabilities | $ 48,203 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 16, 2022 | Mar. 17, 2022 | Jul. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Subsequent events | |||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | $ 0.61 | |||||
Class A Common Stock | |||||||
Subsequent events | |||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | $ 0.47 | $ 1.22 | $ 0.94 | |||
Non-voting Common Stock | |||||||
Subsequent events | |||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | $ 0.47 | $ 1.22 | $ 0.94 | |||
Subsequent event | Class A Common Stock | |||||||
Subsequent events | |||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | ||||||
Subsequent event | Non-voting Common Stock | |||||||
Subsequent events | |||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 |