Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 9,099,200,883 | ||
Documents Incorporated by Reference | Part III of this Form 10-K incorporates by reference information from the registrant’s definitive proxy statement related to the 2023 annual meeting of stockholders. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001176948 | ||
Class A Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 176,021,868 | ||
Non-voting Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 3,489,911 | ||
Class B Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 1,000 | ||
Class C Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 117,231,288 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Los Angeles, California |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | |||||
Intangible assets, net | $ 640,420 | $ 768,818 | |||
Goodwill | 999,656 | 787,972 | $ 371,047 | ||
Total assets | 22,002,839 | 21,605,164 | |||
Liabilities | |||||
Operating lease liabilities | 190,616 | ||||
Total liabilities | 17,097,810 | 16,694,730 | |||
Commitments and contingencies | |||||
Stockholders’ Equity | |||||
Additional paid-in-capital | 1,970,754 | 1,913,559 | |||
Accumulated deficit | (369,475) | (89,382) | |||
Accumulated other comprehensive loss, net of tax | (14,986) | (1,855) | |||
Total stockholders’ equity | 1,589,239 | 1,825,227 | |||
Total equity | 3,798,618 | 3,814,426 | 2,471,774 | $ 1,858,598 | |
Total liabilities, redeemable interest, non-controlling interests and equity | 22,002,839 | 21,605,164 | |||
Class A Common Stock | |||||
Stockholders’ Equity | |||||
Common stock | 1,739 | 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 | 1,172 | 1,186 | |||
Consolidated Funds | |||||
Assets | |||||
Cash and cash equivalents | 724,641 | 1,049,191 | |||
Due from affiliates | 15,789 | 7,234 | |||
Other assets | 65,570 | 39,430 | |||
Investments held in trust account | 1,013,382 | 1,000,285 | |||
Investments, at fair value | 12,191,251 | 11,816,393 | |||
Receivable for securities sold | 124,050 | 281,132 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 168,286 | 103,258 | |||
Due to affiliates | 4,037 | 0 | |||
Payable for securities purchased | 314,193 | 1,118,456 | |||
CLO loan obligations, at fair value | 10,701,720 | 10,657,661 | |||
Fund borrowings | 168,046 | 127,771 | |||
Redeemable interest | 1,013,282 | 1,000,000 | 0 | ||
Non-controlling interests in Consolidated Funds | 1,074,356 | 591,452 | |||
Ares Operating Group | |||||
Liabilities | |||||
Redeemable interest | 93,129 | 96,008 | $ 100,366 | $ 99,804 | |
Non-controlling interests in Ares Operating Group entities | 1,135,023 | 1,397,747 | |||
Ares Management L.P | |||||
Assets | |||||
Cash and cash equivalents | 389,987 | 343,655 | |||
Investments (includes accrued carried interest of $3,106,577 and $2,998,421 at December 31, 2022 and 2021, respectively) | 3,974,734 | 3,684,264 | |||
Due from affiliates | 758,472 | 670,383 | |||
Other assets | 381,137 | 334,755 | |||
Right-of-use operating lease assets | 155,950 | 167,652 | |||
Intangible assets, net | 1,208,220 | 1,422,818 | |||
Goodwill | 999,656 | 787,972 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 231,921 | 279,673 | |||
Accrued compensation | 510,130 | 310,222 | |||
Due to affiliates | 252,798 | 198,553 | |||
Performance related compensation payable | 2,282,209 | 2,190,352 | |||
Debt obligations | 2,273,854 | 1,503,709 | |||
Operating lease liabilities | 190,616 | 205,075 | |||
Stockholders’ Equity | |||||
Additional paid-in-capital | 1,970,754 | 1,913,559 | |||
Accumulated deficit | (369,475) | (89,382) | |||
Accumulated other comprehensive loss, net of tax | (14,986) | (1,855) | |||
Total stockholders’ equity | 1,589,239 | 1,825,227 | |||
Ares Management L.P | Class A Common Stock | |||||
Stockholders’ Equity | |||||
Common stock | 1,739 | 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 | $ 1,172 | $ 1,186 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 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) | 294,614,235 | 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) | 173,892,036 | 168,351,305 |
Common stock, shares outstanding (in shares) | 173,892,036 | 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) | 117,231,288 | 118,609,332 |
Common stock, shares outstanding (in shares) | 117,231,288 | 118,609,332 |
Ares Management L.P | Carried interest | ||
Equity method investments: | $ 3,106,577 | $ 2,998,421 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Total revenues | $ 3,055,443 | $ 4,212,091 | $ 1,764,046 |
Expenses | |||
Compensation and benefits | 1,498,590 | 1,162,633 | 767,252 |
Performance related compensation | 518,829 | 1,740,786 | 404,116 |
General, administrative and other expenses | 695,256 | 444,178 | 258,999 |
Total expenses | 2,749,085 | 3,410,083 | 1,450,486 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | 4,732 | 19,102 | (9,008) |
Interest and dividend income | 9,399 | 9,865 | 8,071 |
Interest expense | (71,356) | (36,760) | (24,908) |
Other income, net | 13,119 | 14,402 | 11,291 |
Total other income (expense), net | 204,448 | 263,682 | 65,918 |
Income before taxes | 510,806 | 1,065,690 | 379,478 |
Income tax expense | 71,891 | 147,385 | 54,993 |
Net income | 438,915 | 918,305 | 324,485 |
Net income attributable to Ares Management Corporation | 167,541 | 408,837 | 152,142 |
Less: Series A Preferred Stock dividends paid | 0 | 10,850 | 21,700 |
Less: Series A Preferred Stock redemption premium | 0 | 11,239 | 0 |
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | $ 167,541 | $ 386,748 | $ 130,442 |
Class A Common Stock | |||
Net income per share of Class A and non-voting common stock: | |||
Basic (in dollars per share) | $ 0.87 | $ 2.24 | $ 0.89 |
Diluted (in dollars per share) | $ 0.87 | $ 2.15 | $ 0.87 |
Weighted-average shares of Class A and non-voting common stock: | |||
Basic (in shares) | 175,510,798 | 163,703,626 | 135,065,436 |
Diluted (in shares) | 175,510,798 | 180,112,271 | 149,508,498 |
Non-voting Common Stock | |||
Net income per share of Class A and non-voting common stock: | |||
Basic (in dollars per share) | $ 0.87 | $ 2.24 | $ 0.89 |
Diluted (in dollars per share) | $ 0.87 | $ 2.15 | $ 0.87 |
Weighted-average shares of Class A and non-voting common stock: | |||
Basic (in shares) | 175,510,798 | 163,703,626 | 135,065,436 |
Diluted (in shares) | 175,510,798 | 180,112,271 | 149,508,498 |
Consolidated Funds | |||
Expenses | |||
Expenses of Consolidated Funds | $ 36,410 | $ 62,486 | $ 20,119 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | 73,386 | 77,303 | (96,864) |
Interest expense | (411,361) | (258,048) | (286,316) |
Interest and other income of Consolidated Funds | 586,529 | 437,818 | 463,652 |
Less: Net income (loss) attributable to non-controlling interests | 119,333 | 120,369 | 28,085 |
Ares Operating Group | |||
Other income (expense) | |||
Net income | 319,582 | 797,936 | 296,400 |
Less: Net income (loss) attributable to non-controlling interests | 152,892 | 390,440 | 145,234 |
Less: Net loss attributable to redeemable interest in Ares Operating Group entities | (851) | (1,341) | (976) |
Management fees | |||
Revenues | |||
Total revenues | 2,136,433 | 1,611,047 | 1,150,608 |
Carried interest allocation | |||
Revenues | |||
Total revenues | 458,012 | 2,073,551 | 505,608 |
Incentive fees | |||
Revenues | |||
Total revenues | 301,187 | 332,876 | 37,902 |
Principal investment income | |||
Revenues | |||
Total revenues | 12,279 | 99,433 | 28,552 |
Administrative, transaction and other fees | |||
Revenues | |||
Total revenues | $ 147,532 | $ 95,184 | $ 41,376 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net income | $ 438,915 | $ 918,305 | $ 324,485 |
Other comprehensive income: | |||
Foreign currency translation adjustments, net of tax | (33,911) | (21,464) | 28,728 |
Total comprehensive income | 405,004 | 896,841 | 353,213 |
Consolidated Funds | |||
Other comprehensive income: | |||
Less: Comprehensive income (loss) attributable to non-controlling interests | 107,793 | 103,498 | 43,184 |
Ares Operating Group | |||
Net income | 319,582 | 797,936 | 296,400 |
Other comprehensive income: | |||
Less: Comprehensive income (loss) attributable to non-controlling interests | 144,078 | 388,812 | 150,795 |
Less: Comprehensive income (loss) attributable to redeemable interest in Ares Operating Group entities | (1,277) | (1,968) | 562 |
Ares Management Corporation | Ares Management L.P | |||
Other comprehensive income: | |||
Comprehensive income attributable to Ares Management Corporation | $ 154,410 | $ 406,499 | $ 158,672 |
Consolidated Statements of Chan
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, 2019 | $ 1,858,598 | $ 525,244 | $ (50,820) | $ (6,047) | $ 472,288 | $ 618,020 | $ 298,761 | $ 1,152 | $ 0 | $ 0 |
Increase (Decrease) in Stockholders' Equity | ||||||||||
Consolidation and deconsolidation of funds, net | (2,407) | (2,407) | ||||||||
Changes in ownership interests and related tax benefits | (99,145) | (328,419) | 229,229 | 73 | (28) | |||||
Issuances of common stock | 688,492 | 687,142 | 198 | 1,152 | ||||||
Capital contributions | 177,710 | 481 | 44,799 | 132,430 | 0 | |||||
Dividends/Distributions | (719,987) | (231,446) | (215,334) | (251,507) | (21,700) | |||||
Net income | 325,461 | 130,442 | 145,234 | 28,085 | 21,700 | |||||
Currency translation adjustment, net of tax | 27,190 | 6,530 | 5,561 | 15,099 | ||||||
Equity compensation | 122,986 | 66,394 | 56,592 | |||||||
Stock option exercises | 92,876 | 92,827 | 49 | |||||||
Ending 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 | (217,492) | (133,289) | (97,735) | 13,487 | 70 | (25) | ||||
Issuances of common stock | 827,430 | 827,273 | 122 | 35 | ||||||
Capital contributions | 572,751 | 539,020 | 33,644 | 0 | 87 | |||||
Redemption of preferred stock | (310,000) | (310,000) | ||||||||
Dividends/Distributions | (703,253) | (324,306) | (269,200) | (98,897) | (10,850) | |||||
Net income | 919,646 | 386,748 | 390,440 | 120,369 | 22,089 | |||||
Currency translation adjustment, net of tax | (20,837) | (2,338) | (1,628) | (16,871) | ||||||
Equity compensation | 237,191 | 138,710 | 98,481 | |||||||
Stock option exercises | 37,216 | 37,196 | 20 | |||||||
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 | (198,058) | (96,413) | (105,680) | 4,006 | 43 | (14) | ||||
Issuances of common stock | 12,835 | 12,834 | 1 | |||||||
Capital contributions | 554,591 | 5,195 | 549,396 | |||||||
Dividends/Distributions | (1,012,768) | (447,634) | (386,843) | (178,291) | ||||||
Net income | 439,766 | 167,541 | 152,892 | 119,333 | ||||||
Currency translation adjustment, net of tax | (33,485) | (13,131) | (8,814) | (11,540) | ||||||
Equity compensation | 200,106 | 119,580 | 80,526 | |||||||
Stock option exercises | 21,205 | 21,194 | 11 | |||||||
Ending balance at Dec. 31, 2022 | $ 3,798,618 | $ 1,970,754 | $ (369,475) | $ (14,986) | $ 1,135,023 | $ 1,074,356 | $ 0 | $ 1,739 | $ 35 | $ 1,172 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 438,915 | $ 918,305 | $ 324,485 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net cash used in operating activities | (734,112) | (2,596,045) | (425,659) |
Cash flows from investing activities: | |||
Net cash used in investing activities | (337,379) | (1,084,633) | (136,764) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | 1,128,063 | 3,503,625 | 943,895 |
Effect of exchange rate changes | (10,240) | (19,104) | 19,956 |
Net change in cash and cash equivalents | 46,332 | (196,157) | 401,428 |
Cash and cash equivalents, beginning of period | 343,655 | 539,812 | 138,384 |
Cash and cash equivalents, end of period | 389,987 | 343,655 | 539,812 |
Supplemental disclosure of non-cash financing activities: | |||
Issuance of AOG Units and Class A common stock in connection with acquisitions | 12,835 | 510,848 | 305,338 |
Cash paid during the period for interest | 320,329 | 205,085 | 257,132 |
Cash paid during the period for income taxes | 104,864 | 22,788 | 38,174 |
Consolidated Funds | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized (gains) losses on investments | (73,386) | (77,303) | 96,864 |
Other (income) expense, net | (33,822) | (35,879) | (34,297) |
Investments purchased | (9,434,029) | (13,067,564) | (6,615,732) |
Proceeds from sale of investments | 8,198,812 | 9,970,609 | 5,502,325 |
Change in cash and cash equivalents held at Consolidated Funds | 324,550 | (526,815) | 83,945 |
Net cash acquired (relinquished) with consolidation/deconsolidation of Consolidated Funds | 0 | (39,539) | 60,895 |
Change in other assets and receivables held at Consolidated Funds | 151,895 | (180,953) | (33,298) |
Change in other liabilities and payables held at Consolidated Funds | (733,417) | 723,616 | 10,787 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 120,822 | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 549,396 | 1,033,644 | 132,430 |
Distributions to non-controlling interests in Consolidated Funds | (178,291) | (98,897) | (251,507) |
Borrowings under loan obligations by Consolidated Funds | 1,140,680 | 2,048,932 | 1,013,291 |
Repayments under loan obligations by Consolidated Funds | (145,222) | (80,752) | (190,055) |
Ares Management L.P | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Equity compensation expense | 200,391 | 237,191 | 122,986 |
Depreciation and amortization | 341,341 | 113,293 | 41,248 |
Net realized and unrealized (gains) losses on investments | 10,929 | (88,978) | (8,039) |
Other (income) expense, net | 0 | (31,070) | 0 |
Investments purchased | (371,124) | (340,199) | (90,851) |
Proceeds from sale of investments | 182,493 | 273,382 | 174,679 |
Net carried interest and incentive fees receivable | (20,612) | (745,021) | (17,687) |
Due to/from affiliates | 39,073 | (180,928) | (76,185) |
Other assets | (105,205) | 213,825 | (36,694) |
Accrued compensation and benefits | 200,769 | 142,815 | 47,875 |
Accounts payable, accrued expenses and other liabilities | (51,685) | 125,168 | 21,035 |
Cash flows from investing activities: | |||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (35,796) | (27,226) | (15,942) |
Acquisitions, net of cash acquired | (301,583) | (1,057,407) | (120,822) |
Cash flows from financing activities: | |||
Net proceeds from issuance of Class A and non-voting common stock | 0 | 827,430 | 383,154 |
Proceeds from Credit Facility | 1,380,000 | 883,000 | 790,000 |
Proceeds from issuance of senior and subordinated notes | 488,915 | 450,000 | 399,084 |
Repayments of Credit Facility | (1,095,000) | (468,000) | (860,000) |
Dividends and distributions | (836,364) | (593,506) | (446,780) |
Series A Preferred Stock dividends | 0 | (10,850) | (21,700) |
Redemption of Series A Preferred Stock | 0 | (310,000) | 0 |
Stock option exercises | 21,205 | 37,216 | 92,877 |
Taxes paid related to net share settlement of equity awards | (201,311) | (226,101) | (95,368) |
Other financing activities | 4,055 | 11,509 | (1,531) |
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 | $ 389,987 | $ 343,655 | $ 539,812 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 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, Secondaries 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 audited financial statements include the consolidated results of the Company and its subsidiaries. The Company is a holding company that operates and controls all of the businesses and affairs of and conducts all of its material business activities through Ares Holdings L.P. (“Ares Holdings”). Ares Holdings represents all the activities of the “Ares Operating Group” or “AOG” and may be referred to interchangeably. The Company, indirectly through its wholly owned subsidiary, Ares Holdco LLC, is the general partner of the Ares Operating Group entity. 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 vehicles, 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 within 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 its Stockholders’ Equity, except where accounting for a redemption or liquidation preference requires the reallocation of ownership based on specific terms of a profit sharing agreement. 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 within the Consolidated Statements of Cash Flows. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”). The Company’s Consolidated Funds are investment companies under GAAP based on the following characteristics: the Consolidated Funds obtain funds from one or more investors and provide investment management services and the Consolidated Funds’ business purpose and substantive activities are investing funds for returns from capital appreciation and/or investment income. Therefore, investments of Consolidated Funds are recorded at fair value and the unrealized appreciation (depreciation) in an investment’s fair value is recognized on a current basis within the Consolidated Statements of Operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the investment company accounting for the Consolidated Funds under GAAP. All of the investments held and CLO loan obligations issued by the Consolidated Funds are presented at their estimated fair values within the Company’s Consolidated Statements of Financial Condition. Net income attributable to holders of subordinated notes of the CLOs is presented within net income attributable to non-controlling interests in Consolidated Funds within the Consolidated Statements of Operations. The Company has reclassified certain prior period amounts to conform to the current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and other income (expense) during the reporting periods. Assumptions and estimates regarding the valuation of investments involve a high degree of judgment and complexity and may have a significant impact on net income. Actual results could differ from these estimates and such differences could be material to the consolidated financial statements. Principles of Consolidation The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either a variable interest model (“VIEs”) or voting interest model (“VOE”). As such, the Company consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that the Company concludes are variable interest entities in which the Company has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which the Company is deemed to be the primary beneficiary. The Company determines whether an entity should be consolidated by first evaluating whether it holds a variable interest in the entity. Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests, including proportionate interests through related parties, to determine if fees are considered a variable interest. As the Company’s interests in funds are primarily management fees, carried interest, incentive fees, and/or insignificant direct or indirect equity interests through related parties, the Company is not considered to have a variable interest in many of these entities. Entities that are not VIEs are further evaluated for consolidation under the voting interest model. Variable Interest Model The Company considers an entity to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. The Company consolidates all VIEs for which it is the primary beneficiary. The Company determines it is the primary beneficiary when it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders the conclusion. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. The consolidation analysis is generally performed qualitatively, however, if the primary beneficiary is not readily determinable, a quantitative analysis may also be performed. This analysis requires judgment. These judgments include: (1) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity, (3) determining whether two or more parties’ equity interests should be aggregated, (4) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity and (5) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary. Consolidated CLOs As of December 31, 2022 and 2021, the Company consolidated 25 and 23 CLOs, respectively. The Company has determined that the fair value of the financial assets of the consolidated CLOs, which are mostly Level II assets within the GAAP fair value hierarchy, are more observable than the fair value of the financial liabilities of its consolidated CLOs, which are mostly Level III liabilities within the GAAP fair value hierarchy. As a result, the financial assets of consolidated CLOs are measured at fair value and the financial liabilities of the consolidated CLOs are measured in consolidation as: (1) the sum of the fair value of the financial assets, and the carrying value of any nonfinancial assets held temporarily, less (2) the sum of the fair value of any beneficial interests retained by the Company (other than those that represent compensation for services), and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interests retained by the Company). The loan obligations issued by the CLOs are collateralized by diversified asset portfolios and by structured debt or equity. In exchange for managing the collateral for the CLOs, the Company typically earns a variety of management fees, including senior and subordinated management fees, and in some cases, contingent incentive fee income. In cases where the Company earns fees from a CLO that it consolidates, those fees have been eliminated as intercompany transactions. The Company’s holdings in these CLOs are generally subordinated to other interests in the entities and entitle the Company to receive a pro rata portion of the residual cash flows, if any, from the entities. Additionally, the Company may invest in other senior secured notes, which are repaid based on available cash flows subject to priority of payments under each consolidated CLO’s governing documents. Investors in the CLOs generally have no recourse against the Company for any losses sustained in the capital structure of each CLO. 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 (see “Note 6. Fair Value” for further detail). Cash and Cash Equivalents Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds. At December 31, 2022 and 2021, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions. Investments held in trust account Investments held in trust account represents funds raised through the initial public offering of Ares Acquisition Corporation (“AAC”), a consolidated SPAC that is presented within Consolidated Funds. The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in the trust agreement. AAC’s portfolio of investments is comprised of U.S. government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act that invest only in direct U.S. government treasury obligation. The U.S. Treasury bills typically have original maturities of three months or less when purchased and are recorded at fair value. Interest income received on such investments is separately presented from the overall change in fair value and is recognized within interest and other income of Consolidated Funds within the Consolidated Statements of Operations. Any remaining change in fair value of such investments, that is not recognized as interest income, is recognized within net realized and unrealized gains (losses) on investments of Consolidated Funds within the Consolidated Statements of Operations. Investments The investments of the Consolidated Funds are reflected within the Consolidated Statements of Financial Condition at fair value, with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net realized and unrealized gains (losses) on investments within the Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit price). Certain investments are denominated in foreign currency and are translated into U.S. dollars at each reporting date. Equity Method Investments The Company accounts for its investments in which it has or is otherwise presumed to have significant influence, including investments in unconsolidated funds, strategic investments and carried interest, using the equity method of accounting. The carrying amounts of equity method investments are reflected in investments within the Consolidated Statements of Financial Condition. The carrying value of investments accounted for using equity method accounting is determined based on amounts invested by the Company, adjusted for the equity in earnings or losses of the investee allocated based on the respective partnership agreements, less distributions received. In addition, certain of the Company's equity method investments are reported at fair value. Management's determination of fair value includes various valuation techniques. These techniques may include market approach, recent transaction price, net asset value approach, discounted cash flows, acreage valuation and may use one or more significant unobservable inputs such as EBITDA or revenue multiples, discount rates, weighted average cost of capital, exit multiples, terminal growth rates and other unobservable inputs. The Company evaluates the equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Except for carried interest, the Company’s share of the investee’s income and expenses for the Company’s equity method investments is presented within principal investment income or net realized and unrealized gains (losses) on investments within the Consolidated Statements of Operations. Carried interest allocation is presented separately as a revenue line item within the Consolidated Statements of Operations, and the accrued but unpaid carried interest as of the reporting date is presented within investments within the Consolidated Statements of Financial Condition. Derivative 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. These derivative instruments include foreign currency forward contracts, interest rate swaps, asset swaps and warrants. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities within the 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. By using derivatives, the Company and the Consolidated Funds are exposed to counterparty credit risk if counterparties to the derivative contracts do not perform as expected. If a counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset within the Consolidated Statements of Financial Condition. The Company minimizes counterparty credit risk through credit approvals, limits, monitoring procedures, executing master netting arrangements and obtaining collateral, where appropriate. To the extent the master netting arrangements and other criteria meet the applicable requirements, which includes determining the legal enforceability of the arrangements, the Company may choose to offset the derivative assets and liabilities in the same currency by specific derivative type, or in the event of default by the counterparty, offset derivative assets and liabilities with the same counterparty. The Company generally presents derivative and other financial instruments on a gross basis within the Consolidated Statements of Financial Condition with certain instruments subject to enforceable master netting arrangements that could allow for the derivative and other financial instruments to be offset. The Consolidated Funds generally present derivative and other financial instruments on a net basis. This election is determined at management’s discretion on a fund by fund basis. The Company has retained the Consolidated Fund’s election upon consolidation. Derivative instruments are marked-to-market daily based upon quotations from pricing services or by the Company and the change in value, if any, is recorded as an unrealized gain (loss). Upon settlement of the instrument, the Company records any realized gain (loss). Unrealized and realized gain (loss) are reflected within net realized and unrealized gains (losses) on investments within the Consolidated Statements of Operations. Business Combinations The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition, including the fair value of certain elements of contingent consideration, is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Contingent consideration obligations are recognized as of the acquisition date at fair value based on the probability that contingency will be realized. Any fair value of purchase consideration in excess of the fair value of the assets acquired less liabilities assumed is recorded as goodwill. Conversely, any excess of the fair value of the net assets acquired over the purchase consideration is recognized as a bargain purchase gain. Examples of critical estimates in valuing certain of the intangible assets acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life, discount rates and income tax rates. The acquisition method of accounting allows for a measurement period for up to one year after the acquisition date to make adjustments to the purchase price allocation as the Company obtains more information regarding asset valuations and liabilities assumed. Acquisition-related costs incurred in connection with a business combination are expensed as incurred. Intangible Assets The Company’s finite-lived intangible assets consists primarily of contractual rights to earn future management fees from the acquired management contracts. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from approximately 1.6 to 13.5 years. The purchase price of an acquired management contract is treated as an intangible asset and is amortized over the life of the contract. Amortization is included as part of general, administrative and other expenses within the Consolidated Statements of Operations. The Company tests finite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. The Company evaluates impairment by comparing the estimated undiscounted cash flows attributable to the intangible asset being evaluated with its carrying amount. If an impairment is determined to exist by management, the Company accelerates amortization expense so that the carrying amount represents fair value. The Company estimates fair value using a discounted future cash flow methodology. The Company tests indefinite-lived intangible assets annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of impairment as the excess of the carrying amount of the indefinite-lived intangible asset over its fair value. The Company also tests indefinite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable or that the useful lives of these assets are no longer appropriate. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s strategic plans with regard to the indefinite-lived intangible assets. Goodwill Goodwill represents the excess cost over identifiable net assets of an acquired business. The Company tests goodwill annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of goodwill impairment as the excess of the carrying amount of the reporting unit over its fair value. The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that is more likely than not to reduce the fair value of the reporting unit below its carrying amount. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and market valuations, and assumptions about the Company’s strategic plans with regard to its operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates . Fixed Assets Fixed assets, consisting of furniture, fixtures, computer hardware, equipment, internal-use software and leasehold improvements are recorded at cost, less accumulated depreciation and amortization. Fixed assets are presented within other assets within the Company’s Consolidated Statements of Financial Condition. Direct costs associated with developing, purchasing or otherwise acquiring software for internal use (“Internal-Use Software”) are capitalized and amortized on a straight-line basis over the expected useful life of the software, beginning when the software is ready for its intended purpose. Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Fixed assets are depreciated or amortized on a straight-line basis over an asset’s estimated useful life, with the corresponding depreciation and amortization expense presented within general, administrative and other expenses within the Company’s Consolidated Statements of Operations. The estimated useful life for leasehold improvements is the lesser of the lease term or the life of the asset while other fixed assets and internal-use software are generally depreciated between three Leases The Company has entered into operating and finance leases for corporate offices and certain equipment and makes the determination if an arrangement constitutes a lease at inception. Operating leases are presented within right-of-use operating lease assets and operating lease liabilities within the Company’s Consolidated Statements of Financial Condition. Finance leases are capitalized as a component of fixed assets and presented within accounts payable, accrued expenses and other liabilities within the Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded within the Consolidated Statements of Financial Condition. Right-of-use operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and corresponding lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses the its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The right-of-use operating lease asset also includes any lease prepayments and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Lease expense is primarily recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. However, for certain equipment leases where the non-lease components are not material, the Company accounts for the lease and non-lease components as a single lease component. Non-Controlling Interests 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. The non-controlling interests in Consolidated Funds represents a component of equity and net income attributable related to ownership interests that third parties hold in Consolidated Funds. Redeemable Interest On July 1, 2020, the Company completed its acquisition of a majority interest in SSG Capital Holdings Limited and its operating subsidiaries (“SSG”) (“SSG Acquisition”). In connection with the SSG Acquisition, the former owners of SSG retained an ownership interest in the operations acquired by the Company. In certain circumstances, the Company may acquire full ownership of SSG pursuant to a contractual arrangement that may be initiated by the Company or by the former owners of SSG. Since the acquisition of the remaining interest in SSG is not within the Company’s sole discretion, the ownership interest held by the former owners of SSG is classified as a redeemable interest in AOG and represents mezzanine equity. Redeemable interest in AOG entities was initially recorded at fair value on the date of acquisition within mezzanine equity within the Consolidated Statements of Financial Condition. Income (loss) is allocated based on the ownership percentage attributable to the redeemable interest. The Company determined that the redemption of the redeemable interest is probable as of the date of acquisition. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount, as defined in accordance with the terms of a contractual arrangement between the Company and the former owners of SSG, to the extent that the redemption amount exceeds the initial measurement on the date of acquisition. The Company recognizes changes in the redemption amount with corresponding adjustments against retained earnings, or additional paid-in-capital in the absence of retained earnings, within stockholders’ equity within the Consolidated Statements of Financial Condition. Redeemable interest in Consolidated Funds represent the Class A ordinary shares issued by AAC that are redeemable for cash by the public shareholders in the event that AAC does not complete a business combination or tender offer associated with stockholder approval provisions. The Class A ordinary shareholders have redemption rights that are considered to be outside of AAC’s control. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount. At December 31, 2022, all 100,000,000 Class A ordinary shares of AAC were classified outside of permanent equity. Revenue Recognition The Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenue is based on contracts with a determinable transaction price and distinct performance obligations with probable collectability. Revenues are not recognized until the performance obligation(s) are satisfied. Management Fees Management fees are generally based on a defined percentage of fair value of assets, total commitments, invested capital, net asset value (“NAV”), NAV plus unfunded commitments, total assets or par value of the investment portfolios managed by the Company. Principally all management fees are earned from affiliated funds of the Company. The contractual terms of management fees vary by fund structure and investment strategy. Management fees are recognized as revenue in the period advisory services are rendered, subject to the Company’s assessment of collectability. Management fees also include a quarterly fee on the net investment income (“Part I Fees”) of Ares Capital Corporation (NASDAQ: ARCC) (“ARCC”), a publicly-traded business development company registered under the Investment Company Act and managed by a subsidiary of the Company, and CION Ares Diversified Credit Fund (“CADC”). ARCC Part I Fees are equal to 20.0% of its net investment income (before ARCC Part I Fees and incentive fees payable based on capital gains), subject to a fixed hurdle rate of 1.75% per quarter, or 7.0% per annum. No fees are recognized until ARCC’s net investment income exceeds a 1.75% hurdle rate, with a catch-up provision to ensure that the Company receives 20.0% of the net investment income from the first dollar earned. CADC Part I Fees are equal to 15.0% of its net investment income (before CADC Part I Fees), subject to a fixed hurdle rate of 1.5% per quarter, or 6.0% per annum. No fees are recognized until CADC’s net investment income exceeds the hurdle rate, with a catch-up provision to ensure that the Company receives 15.0% of the net investment income from the first dollar earned. Carried Interest Allocation In certain fund structures, carried interest is allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund’s net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated, and may be subject to reversal to the extent that the amount allocated exceeds the amount due to the general partner or investment manager based on a fund’s cum |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 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 Secondaries 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 Secondaries 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. At the acquisition date, the trade name was determined to have an indefinite useful life and was not subject to amortization as the Company intended to operate under its brand name into perpetuity. During the year ended December 31, 2022, the Company recognized non-cash impairment charges on certain of the intangible assets from the Landmark Acquisition. See “Note 4. Goodwill and Intangible Assets” for further discussion. 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: Year ended December 31, 2021 2020 Total revenues $ 4,276,706 $ 1,910,792 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 380,169 $ 112,918 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 | 12 Months Ended |
Dec. 31, 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 (in years) as of December 31, 2022 As of December 31, 2022 2021 Management contracts 4.9 $ 586,077 $ 641,737 Client relationships 9.6 262,301 229,501 Trade name 7.5 11,079 11,079 Other 1.8 500 500 Finite-lived intangible assets 859,957 882,817 Foreign currency translation 935 1,792 Total finite-lived intangible assets 860,892 884,609 Less: accumulated amortization (220,472) (115,791) Finite-lived intangible assets, net 640,420 768,818 Management contracts 567,800 567,800 Trade name — 86,200 Indefinite-lived intangible assets 567,800 654,000 Intangible assets, net $ 1,208,220 $ 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. In connection with the Black Creek Acquisition during the third quarter of 2021, the Company allocated $576.2 million and $7.2 million of the purchase consideration to the fair value of management contracts and client relationships, respectively. Certain management contracts were determined to have indefinite useful lives at the time of the Black Creek Acquisition and are not subject to amortization. The remaining management contracts and client relationships had a weighted average amortization period as of the acquisition date of 6.1 years and 12.0 years, respectively. During the year ended December 31, 2022, the Company decided to rebrand its secondaries group as Ares Secondaries and to discontinue the ongoing use of the Landmark trade name. As a result, the Company recorded an impairment charge equal to the Landmark trade name’s carrying value of $86.2 million. Separately, in connection with lower than expected fundraising for an acquired Landmark private equity secondaries fund, the Company recorded a non-cash impairment charge of $88.4 million to the fair value of a management contract during the year ended December 31, 2022. The primary indicator of impairment was lower fee paying assets under management from the acquired Landmark private equity secondaries fund. Also connected to the lower fundraising projections associated with the acquired Landmark private equity secondaries fund, the Company reversed all previously recorded expenses associated with the Landmark management incentive plan. See “Note 9. Commitments and Contingencies” for further discussion. In addition, the Company recorded non-cash impairment charges of $3.7 million, $3.1 million, and $0.2 million to the fair value of management contracts acquired in connection with the Landmark Acquisition, the Black Creek Acquisition and the SSG Acquisition, respectively. The primary indicator of impairment was the shorter expected lives of certain funds as a result of returning capital to fund investors sooner than initially planned. The impairment charges for the intangible assets acquired in connection with the Landmark Acquisition, the Black Creek Acquisition and the SSG Acquisition are included within the Secondaries Group, the Real Assets Group and Strategic Initiatives, respectively. The non-cash impairment charges totaled $181.6 million for the year ended December 31, 2022. There was no impairment of intangible assets recorded during the years ended 2021 and 2020. Amortization expense associated with intangible assets, excluding the accelerated amortization from the non-cash impairment charges during 2022 described above, was $133.6 million, $91.3 million and $24.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization expense is presented within general, administrative and other expenses within the Consolidated Statements of Operations. During the year ended December 31, 2022, the Company removed $210.6 million of impaired and fully-amortized intangible assets. At December 31, 2022, future annual amortization of finite-lived intangible assets for the years 2023 through 2027 and thereafter is estimated to be: Year Amortization 2023 $ 125,873 2024 114,928 2025 106,684 2026 78,232 2027 65,285 Thereafter 149,418 Total $ 640,420 Goodwill The following table summarizes the carrying value of the Company’s goodwill: Credit Group Private Real Secondaries Group Strategic Initiatives Total Balance as of December 31, 2020 $ 32,196 $ 58,600 $ 53,120 $ — $ 227,131 $ 371,047 Acquisitions — — — 417,753 — 417,753 Foreign currency translation — — 219 (15) (1,032) (828) Balance as of December 31, 2021 32,196 58,600 53,339 417,738 226,099 787,972 Acquisitions — — 213,314 (96) — 213,218 Reallocation — (10,530) 10,530 — — — Foreign currency translation — — — (22) (1,512) (1,534) Balance as of December 31, 2022 $ 32,196 $ 48,070 $ 277,183 $ 417,620 $ 224,587 $ 999,656 In connection with the Infrastructure Debt Acquisition, the Company allocated $213.3 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. There was no impairment of goodwill recorded during the years ended December 31, 2022 and 2021. The impact of foreign currency translation is reflected within other comprehensive income. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Investments in and Advances to Affiliates [Abstract] | |
INVESTMENTS | 5. INVESTMENTS The Company’s investments are comprised of the following: Percentage of total investments December 31, December 31, 2022 2021 2022 2021 Equity method investments: Equity method - carried interest $ 3,106,577 $ 2,998,421 78.2% 81.4% Equity method private investment partnership interests - principal 543,592 473,887 13.7 12.9 Equity method private investment partnership interests and other (held at fair value) 123,170 117,539 3.1 3.2 Equity method private investment partnership interests and other 47,439 40,580 1.2 1.1 Total equity method investments 3,820,778 3,630,427 96.2 98.6 Collateralized loan obligations 25,163 30,815 0.6 0.8 Other fixed income 51,771 21,582 1.2 0.5 Collateralized loan obligations and other fixed income, at fair value 76,934 52,397 1.8 1.3 Common stock, at fair value 77,022 1,440 2.0 0.1 Total investments $ 3,974,734 $ 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 years ended December 31, 2022, 2021 and 2020, no individual equity method investment held by the Company met the significance criteria. The following tables present summarized financial information for the Company’s equity method investments, which are primarily funds managed by the Company: As of and Year Ended December 31, 2022 Credit Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total Statement of Financial Condition Investments $ 15,704,463 $ 9,376,032 $ 13,052,820 $ 12,719,333 $ 1,980,690 $ 52,833,338 Total assets 18,841,376 9,947,821 14,440,914 12,931,082 2,094,008 58,255,201 Total liabilities 4,848,872 937,326 5,007,250 3,716,111 927,813 15,437,372 Total equity 13,992,504 9,010,495 9,433,664 9,214,971 1,166,195 42,817,829 Statement of Operations Revenues $ 1,333,204 $ 271,873 $ 618,796 $ 2,874 $ 8,164 $ 2,234,911 Expenses (375,506) (153,372) (357,845) (289,741) (64,684) (1,241,148) Net realized and unrealized gains (losses) from investments (172,527) (482,260) 304,068 (11,173) 186,356 (175,536) Income tax benefit (expense) (4,723) 92 (36,501) — (11) (41,143) Net income (loss) $ 780,448 $ (363,667) $ 528,518 $ (298,040) $ 129,825 $ 777,084 As of and Year Ended December 31, 2021 Credit Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total Statement of Financial Condition Investments $ 16,919,068 $ 9,143,164 $ 9,555,266 $ 7,096,073 $ 484,969 $ 43,198,540 Total assets 18,316,775 9,548,551 10,146,133 7,220,604 490,246 45,722,309 Total liabilities 5,268,103 1,539,522 3,155,826 2,960,748 392,347 13,316,546 Total equity 13,048,672 8,009,029 6,990,307 4,259,856 97,899 32,405,763 Statement of Operations Revenues $ 1,318,517 $ 229,539 $ 326,507 $ 911 $ 23,910 $ 1,899,384 Expenses (316,134) (177,380) (170,008) (89,281) (11,927) (764,730) Net realized and unrealized gains (losses) from investments 457,943 2,161,730 1,179,698 1,399,009 (24,758) 5,173,622 Income tax expense (4,511) (19,125) (1,167) — — (24,803) Net income (loss) $ 1,455,815 $ 2,194,764 $ 1,335,030 $ 1,310,639 $ (12,775) $ 6,283,473 Year Ended December 31, 2020 Credit Group Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total Statement of Operations Revenues $ 940,450 $ 263,335 $ 191,543 $ — $ 2,656 $ 1,397,984 Expenses (221,083) (112,325) (81,071) — (5,585) (420,064) Net realized and unrealized gains (losses) from investments (210,881) 1,218,362 11,923 — 2,324 1,021,728 Income tax benefit (expense) (1,693) 57,935 346 — — 56,588 Net income (loss) $ 506,793 $ 1,427,307 $ 122,741 $ — $ (605) $ 2,056,236 The Company recognized net gains related to its equity method investments of $21.7 million, $114.9 million and $22.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. The net gains were included within principal investment income, net realized and unrealized gains (losses) on investments, and interest and dividend income within the 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 December 31, December 31, 2022 2021 2022 2021 Fixed income investments: Bonds $ 786,961 $ 857,125 6.0% 6.7% Loans 9,280,522 9,910,689 70.3 77.3 Investments held in trust account 1,013,382 1,000,285 7.7 7.8 Total fixed income investments 11,080,865 11,768,099 84.0 91.8 Equity securities 731,599 340,272 5.5 2.7 Partnership interests 1,392,169 708,307 10.5 5.5 Total investments, at fair value $ 13,204,633 $ 12,816,678 As of December 31, 2022 and 2021, no |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 6. FAIR VALUE Financial Instrument Valuations The valuation techniques used by the Company to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The valuation techniques applied to investments held by the Company and by the Consolidated Funds vary depending on the nature of the investment. CLOs and CLO loan obligations: The fair value of CLOs held by the Company are estimated based on either a third-party pricing service or broker quote and are classified as Level III. The Company measures its CLO loan obligations of the Consolidated Funds by first determining whether the fair values of the financial assets or financial liabilities of its consolidated CLOs are more observable. Contingent consideration: The Company generally determines the fair value of its contingent consideration liabilities by using a probability weighted expected return method, including the Monte Carlo simulation model. These models consider a range of assumptions including historical experience, prior period performance, current progress towards targets, probability-weighted scenarios, and management’s own assumptions. The discount rate used is determined based on the weighted average cost of capital for the Company. Once the associated targets are achieved, the contingent consideration is reported at the settlement amount. The fair value of the Company’s contingent consideration liabilities are classified as Level III. Liabilities recorded in connection with the Company’s contingent consideration are included within accounts payable, accrued expenses and other liabilities within the Consolidated Statements of Financial Condition and the associated changes in fair value are included within other income, net within the Consolidated Statements of Operations. Corporate debt, bonds, bank loans and derivative instruments: The fair value of corporate debt, bonds, bank loans and derivative instruments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs. These investments are generally classified as Level II. The Company obtains prices from independent pricing services that generally utilize broker quotes and may use various other pricing techniques, which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. If management is only able to obtain a single broker quote, or utilizes a pricing model, such securities will generally be classified as Level III. Equity and equity-related securities: Securities traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. Securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. Securities that have market prices are not readily available utilize valuation models of third-party pricing service or internal models to determine the fair value and are classified as Level III. Partnership interests: The Company generally values its investments using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value or estimates based on various valuation models of third-party pricing services, as well as internal models. The Company does not categorize within the fair value hierarchy investments where fair value is measured using the net asset value per share practical expedient. In limited circumstances, the Company may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Company will estimate the fair value in good faith and in a manner that it reasonably chooses. As of December 31, 2022 and 2021, NAV per share represents the fair value for each of the Company’s investments in partnership interests. Discounted cash flow model has been used to determine the fair value of an investment in a partnership interest held by the Consolidated Funds where NAV per share was not deemed to be representative of fair value. The substantial majority of the Company’s private commingled funds are closed-ended, and accordingly, do not permit investors to redeem their interests other than in limited circumstances that are beyond the control of the Company, such as instances in which retaining the interest could cause the investor to violate a law, regulation or rule. The Company also has open-ended and evergreen funds where investors have the right to withdraw their capital, subject to the terms of the respective constituent documents, over periods generally ranging from one month to three years. In addition, the Company has minority investments in vehicles that may only have a single other investor that may allow such investors to terminate the fund pursuant to the terms of the applicable constituent documents of such vehicle. 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 December 31, 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 $ — $ — $ 76,934 $ — $ 76,934 Common stock and other equity securities — 77,022 121,785 — 198,807 Partnership interests — — — 1,385 1,385 Total investments, at fair value — 77,022 198,719 1,385 277,126 Derivatives-foreign currency forward contracts — 4,173 — — 4,173 Total assets, at fair value $ — $ 81,195 $ 198,719 $ 1,385 $ 281,299 Liabilities, at fair value Derivatives-foreign currency forward contracts $ — $ (3,423) $ — $ — $ (3,423) Total liabilities, at fair value $ — $ (3,423) $ — $ — $ (3,423) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 534,137 $ 252,824 $ — $ 786,961 Loans — 8,663,678 616,844 — 9,280,522 Investments held in trust account 1,013,382 — — — 1,013,382 Total fixed income investments 1,013,382 9,197,815 869,668 11,080,865 Equity securities 719 — 730,880 — 731,599 Partnership interests — — 368,655 1,023,514 1,392,169 Total investments, at fair value 1,014,101 9,197,815 1,969,203 1,023,514 13,204,633 Derivatives-foreign currency forward contracts — 2,900 — — 2,900 Total assets, at fair value $ 1,014,101 $ 9,200,715 $ 1,969,203 $ 1,023,514 $ 13,207,533 Liabilities, at fair value Derivatives: Warrants $ (9,326) $ — $ — $ — $ (9,326) Foreign currency forward contracts — (2,942) — — (2,942) Asset swaps — — (3,556) — (3,556) Total derivative liabilities, at fair value (9,326) (2,942) (3,556) — (15,824) Loan obligations of CLOs — (10,701,720) — — (10,701,720) Total liabilities, at fair value $ (9,326) $ (10,704,662) $ (3,556) $ — $ (10,717,544) 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 and interest rate swaps — 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 Investments held in trust account 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: Warrants $ (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 year ended December 31, 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 Purchases (1) 894 32,392 — — 33,286 Sales/settlements (2) 68 (2,425) (2,538) 58,873 53,978 Change in fair value — — — (1,438) (1,438) Realized and unrealized appreciation (depreciation), net 10,383 (5,430) (37) — 4,916 Balance, end of period $ 121,785 $ 76,934 $ — $ — $ 198,719 Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date $ 12,448 $ (5,430) $ — $ — $ 7,018 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 — 184,037 94,386 — 278,423 Transfer out — (202,333) — — (202,333) Purchases (1) 323,699 732,477 59,258 — 1,115,434 Sales/settlements (2) (31,932) (536,125) (52,828) — (620,885) Amortized discounts/premiums 13 1,592 — — 1,605 Realized and unrealized appreciation (depreciation), net 99,917 (52,932) 29,166 (451) 75,700 Balance, end of period $ 730,880 $ 869,668 $ 368,655 $ (3,556) $ 1,965,647 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 70,591 $ (54,058) $ 29,166 $ (376) $ 45,323 (1) Purchases include paid-in-kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions, securities disposed of in connection with restructurings and contingent consideration payments. The following tables set forth a summary of changes in the fair value of the Level III measurements for the year ended December 31, 2021: Level III Assets of the Company Equity Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ — $ 144,336 Transfer in due to changes in consolidation — 7,623 — — 7,623 Established in connection with acquisition — — — (34,200) (34,200) Purchases (1) 19,278 1,689 — — 20,967 Sales/settlements (2) — (13,290) — — (13,290) Change in fair value — — — (23,235) (23,235) Realized and unrealized appreciation, net 1,259 3,026 — — 4,285 Balance, end of period $ 108,949 $ 52,397 $ 2,575 $ (57,435) $ 106,486 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 1,259 $ 1,575 $ — $ (23,235) $ (20,401) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,306 $ 231,857 $ 1,060 $ 996,266 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in 2,195 59,845 — — 62,040 Transfer out (33) (214,906) — — (214,939) Purchases (1) 118,963 904,497 15,000 — 1,038,460 Sales/settlements (2) (1,180) (512,505) (45,500) 301 (558,884) Amortized discounts/premiums — 1,683 — — 1,683 Realized and unrealized appreciation (depreciation), net (1,648) 11,358 37,316 (4,466) 42,560 Balance, end of period $ 339,183 $ 742,952 $ 238,673 $ (3,105) $ 1,317,703 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (848) $ 3,886 $ 37,316 $ (3,627) $ 36,727 (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 December 31, 2022: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 62,129 Market approach Multiple of book value 3.2x 3.2x 44,166 Market approach Multiple of book value 1.3x 1.3x 15,490 Transaction price (1) N/A N/A N/A Collateralized loan obligations 25,163 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 30,189 Transaction price (1) N/A N/A N/A 21,582 Other N/A N/A N/A Total assets $ 198,719 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 401,229 Discounted cash flow Discount rate 8.0% - 18.0% 12.0% 290,258 Market approach Multiple of book value 1.0x - 1.2x 1.2x 36,681 Market approach Net income multiple 30.0x 30.0x 2,064 Market approach EBITDA multiple (2) 6.3x - 31.0x 13.6x 648 Other N/A N/A N/A Partnership interest 368,655 Discounted cash flow Discount rate 10.3% - 22.0% 18.9% Fixed income investments 731,708 Broker quotes and/or 3rd party pricing services N/A N/A N/A 125,612 Market approach Yield 6.6% - 21.7% 12.8% 6,155 Transaction price N/A N/A N/A 4,479 Market approach EBITDA multiple 8.0x - 9.0x 8.5x 1,714 Other N/A N/A N/A Total assets $ 1,969,203 Liabilities Derivative instruments $ (3,556) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (3,556) (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 $ 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 14,610 Transaction price (1) N/A N/A N/A 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 $ (47,873) Other N/A N/A N/A (9,562) Monte Carlo simulation Discount rate 8.5% 8.5% Volatility 18.0% 18.0% 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 $ 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% 74,041 Transaction price (1) N/A N/A N/A 1,261 Market approach EBITDA multiples (2) 1.0x - 64.4x 17.5x 11 Broker quotes and/or 3rd party pricing services N/A N/A N/A Partnership interests 238,673 Discounted cash flow Discount rate 23.4% 23.4% Fixed income investments 614,754 Broker quotes and/or 3rd party pricing services N/A N/A N/A 128,198 Income approach Yield 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 $1.4 million and $6.0 million as of December 31, 2022 and 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 December 31, 2022, these investments had a fair value of $1,023.5 million and unfunded commitments of $869.0 million. As of December 31, 2021, these investments had a fair value of $469.6 million and unfunded commitments of $1,200.0 million. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | 7. DEBT The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of December 31, 2022 2021 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolving 3/31/2027 N/A $ 700,000 5.37% $ 415,000 1.25% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 248,693 4.21 247,979 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 396,602 3.28 396,156 3.28 2052 Senior Notes (4) 1/21/2022 2/1/2052 500,000 483,802 3.77 — — 2051 Subordinated Notes (5) 6/30/2021 6/30/2051 450,000 444,757 4.13 444,574 4.13 Total debt obligations $ 2,273,854 $ 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 based-rate with a Secured Overnight Financing Rate (“SOFR”) based-rate plus an applicable credit spread adjustment and extend the maturity date from March 2026 to March 2027. On July 6, 2022, the Company increased the revolver commitments from $1.275 billion to $1.325 billion via the accordion. 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 December 31, 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 December 31, 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 within other assets within the Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the remaining term of the related obligation into interest expense within the 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, 2020 $ 5,232 $ 4,283 $ — Debt issuance costs incurred 1,282 — 5,518 Amortization of debt issuance costs (1,240) (594) (92) Unamortized debt issuance costs as of December 31, 2021 5,274 3,689 5,426 Debt issuance costs incurred 1,516 5,482 — Amortization of debt issuance costs (1,280) (778) (183) Unamortized debt issuance costs as of December 31, 2022 $ 5,510 $ 8,393 $ 5,243 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 December 31, 2022 2021 Fair Value of Weighted Weighted Fair Value of Loan Obligations Weighted Weighted Senior secured notes $ 10,142,545 4.84% 8.8 $ 10,016,638 1.93% 9.4 Subordinated notes (1) 559,175 N/A 7.8 641,023 N/A 8.1 Total loan obligations of Consolidated CLOs $ 10,701,720 $ 10,657,661 (1) 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 December 31, 2022 and 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 December 31, 2022 2021 Consolidated Funds’ Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate Credit Facilities: 10/13/2023 $ 112,817 $ 77,496 5.89% $ 71,500 1.59% 7/1/2023 18,000 15,550 6.25 16,271 1.73 7/23/2024 100,000 75,000 7.28 40,000 3.09 9/24/2026 150,000 — N/A — N/A 9/12/2027 54,000 — N/A N/A N/A Total borrowings of Consolidated Funds $ 168,046 $ 127,771 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets [Abstract] | |
OTHER ASSETS | 8. OTHER ASSETS The components of other assets were as follows: As of December 31, 2022 2021 Other assets of the Company: Accounts and interest receivable $ 120,903 $ 159,757 Fixed assets, net 79,678 71,260 Deferred tax assets, net 68,933 39,398 Other assets 111,623 64,340 Total other assets of the Company $ 381,137 $ 334,755 Other assets of Consolidated Funds: Dividends and interest receivable $ 60,321 $ 36,350 Income tax and other receivables 5,249 3,080 Total other assets of Consolidated Funds $ 65,570 $ 39,430 Fixed Assets, Net The components of fixed assets were as follows: As of December 31, 2022 2021 Office and computer equipment $ 41,547 $ 31,963 Internal-use software 57,200 53,048 Leasehold improvements 84,820 74,677 Fixed assets, at cost 183,567 159,688 Less: accumulated depreciation (103,889) (88,428) Fixed assets, net $ 79,678 $ 71,260 For the years ended December 31, 2022, 2021 and 2020, depreciation expense was $26.2 million, $22.1 million and $19.0 million, respectively, and is included within general, administrative and other expenses within the Consolidated Statements of Operations. During 2022, the Company disposed of $10.0 million of fixed assets that were fully depreciated. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 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 within the Consolidated Statements of Financial Condition. As of December 31, 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 December 31, 2022 and 2021, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $677.9 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 December 31, 2022 and 2021, the Company’s maximum exposure to losses from guarantees was $31.5 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 Landmark MIP has been remeasured each period with incremental changes in fair value included within compensation and benefits expense within the Consolidated Statements of Operations. In connection with the fundraising for an acquired Landmark private equity secondaries fund, the revenue targets on which the Landmark MIP were contingent were not achieved so the Company reversed all previously recorded expenses of $36.7 million associated with the Landmark MIP during the year ended December 31, 2022. The reversal of expense was recorded within compensation and benefits expense within the Consolidated Statements of Operations. 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. The revenue targets were achieved and the maximum contingent payment was recorded during the year ended December 31, 2022. Of the total contingent liability, 96% required continued service through the measurement period and was accounted for as compensation expense instead of as a component of purchase consideration. The fair value of this contingent liability was remeasured at each reporting date with compensation expense recorded ratably over the service period, which was the Black Creek Acquisition date through the achievement date. As of December 31, 2022, the maximum contingent payment was achieved and the Company had $248.0 million recorded within accrued compensation within the Consolidated Statements of Financial Condition. As of December 31, 2021, the fair value of the contingent liability was $229.5 million and the Company recorded $45.9 million within accrued compensation within the Consolidated Statements of Financial Condition. Compensation expense of $218.1 million and $45.9 million for the years ended December 31, 2022 and 2021, respectively, is presented within compensation and benefits within the Consolidated Statements of Operations. The remaining 4% portion of the contingent liability did not require continued service through the measurement period and was accounted for as contingent consideration as a component of purchase consideration. The fair value of this contingent liability was remeasured at each reporting date with changes in fair value recorded within other expense over the service period. As of December 31, 2021, the fair value of the contingent liability was $9.6 million. Other expense of $1.4 million and $4.0 million for the years ended December 31, 2022 and 2021, respectively, is presented within other income, net within the 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 within the Consolidated Statements of Operations. Following 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 year service period as equity-based compensation expense. The revenue target was achieved for one of the infrastructure debt funds during the year ended December 31, 2022 with the fair value of the contingent liability of $21.8 million as of December 31, 2022. For the year ended December 31, 2022, compensation expense of $7.0 million is presented within compensation and benefits within the Consolidated Statements of Operations with an equal offset presented within accrued compensation within the Consolidated Statements of Financial Condition. As of December 31, 2022, the remaining contingent liability was estimated to be $13.5 million with the remaining maximum contingent liability not to exceed $15.0 million. Compensation expense associated with the remaining contingent liability of $2.2 million for the year ended December 31, 2022 is presented within compensation and benefits within the Consolidated Statements of Operations with an equal offset presented within accrued compensation within the Consolidated Statements of Financial Condition. 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 December 31, 2022 and 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 $128.4 million and $194.6 million, respectively, of which approximately $101.0 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 December 31, 2022 and 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 December 31, Classification 2022 2021 Operating lease assets Right-of-use operating lease assets $ 155,950 $ 167,652 Finance lease assets Other assets (1) 400 1,011 Total lease assets $ 156,350 $ 168,663 Operating lease liabilities Operating lease liabilities $ 190,616 $ 205,075 Finance lease obligations Accounts payable, accrued expenses and other liabilities 330 936 Total lease liabilities $ 190,946 $ 206,011 (1) Finance lease assets are recorded net of accumulated amortization of $2.1 million and $1.6 million as of December 31, 2022 and 2021, respectively. Maturity of lease liabilities Operating Leases Finance Leases 2023 $ 46,532 $ 167 2024 42,716 162 2025 37,242 11 2026 25,198 — 2027 15,864 — Thereafter 36,077 — Total future payments 203,629 340 Less: interest 13,013 10 Total lease liabilities $ 190,616 $ 330 Year ended December 31, Classification 2022 2021 2020 Operating lease expense General, administrative and other expenses $ 42,746 $ 38,135 $ 31,713 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 633 561 469 Interest on finance lease liabilities Interest expense 14 27 43 Total lease expense $ 43,393 $ 38,723 $ 32,225 Year ended December 31, Other information 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 46,558 $ 37,500 $ 32,121 Operating cash flows for finance leases 21 39 53 Financing cash flows for finance leases 593 535 460 Leased assets obtained in exchange for new finance lease liabilities 13 189 — Leased assets obtained in exchange for new operating lease liabilities 43,331 57,624 36,935 As of December 31, Lease term and discount rate 2022 2021 Weighted-average remaining lease terms (in years): Operating leases 5.5 6.0 Finance leases 2.1 1.8 Weighted-average discount rate: Operating leases 2.72% 1.81% Finance leases 2.99% 2.94% |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 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 within the Consolidated Statements of Financial Condition, except that accrued carried interest allocations, which is predominantly due from affiliated funds, is presented separately within investments within the 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 is reimbursed for expenses incurred in providing administrative services to certain related parties, including our public vehicles, and with certain private funds that pay administrative fees based on invested capital. The Company is also party to agreements with certain real estate funds which pay fees to the Company to provide various services, such as administration, acquisition, development, property management and the sale and distribution of fund shares in our non-traded vehicles, 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. Carried interest and incentive fees from the funds can be distributed to professionals or their related entities on a current basis, subject, in the case of carried interest programs, to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several, and not joint, and are limited to distributions received by the relevant recipient. The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of December 31, 2022 2021 Due from affiliates: Management fees receivable from non-consolidated funds $ 456,314 $ 372,249 Incentive fee receivable from non-consolidated funds 169,979 211,243 Payments made on behalf of and amounts due from non-consolidated funds and employees 132,179 86,891 Due from affiliates—Company $ 758,472 $ 670,383 Amounts due from non-consolidated funds $ 15,789 $ 7,234 Due from affiliates—Consolidated Funds $ 15,789 $ 7,234 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 8,701 $ 10,160 Tax receivable agreement liability 118,466 100,542 Undistributed carried interest and incentive fees 121,332 66,494 Payments made by non-consolidated funds on behalf of and payable by the Company 4,299 21,357 Due to affiliates—Company $ 252,798 $ 198,553 Amounts due to portfolio companies and non-consolidated funds $ 4,037 $ — Due to affiliates—Consolidated Funds $ 4,037 $ — Due from and Due to 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. Conversely, Consolidated Funds and non-consolidated funds may pay certain expenses that are reimbursed by the Company. 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 | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES The Company’s effective income tax rate is dependent on many factors, including the estimated nature and amounts of income and expenses allocated to the non-controlling interests without being subject to federal, state and local income taxes at the corporate level. Additionally, the Company’s effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment vehicles that are consolidated in the Company’s consolidated financial statements. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. With limited exceptions, the Company is no longer subject to income tax audits by taxing authorities for any years prior to 2017. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s consolidated financial statements. The provision for income taxes attributable to the Company and the Consolidated Funds, consisted of the following: Year ended December 31, Provision for Income Taxes 2022 2021 2020 The Company Current: U.S. federal income tax expense $ 42,452 $ 40,861 $ 23,845 State and local income tax expense 7,614 12,121 6,714 Foreign income tax expense 14,119 11,684 9,141 64,185 64,666 39,700 Deferred: U.S. federal income tax expense 10,660 68,201 12,451 State and local income tax expense 2,131 13,040 1,952 Foreign income tax expense (benefit) (5,416) 1,390 772 7,375 82,631 15,175 Total: U.S. federal income tax expense 53,112 109,062 36,296 State and local income tax expense 9,745 25,161 8,666 Foreign income tax expense 8,703 13,074 9,913 Income tax expense 71,560 147,297 54,875 Consolidated Funds Current: Foreign income tax expense 331 88 118 Income tax expense 331 88 118 Total Provision for Income Taxes Total current income tax expense 64,516 64,754 39,818 Total deferred income tax expense 7,375 82,631 15,175 Income tax expense $ 71,891 $ 147,385 $ 54,993 The effective income tax rate differed from the federal statutory rate for the following reasons: Year ended December 31, 2022 2021 2020 Income tax expense at federal statutory rate 21.0% 21.0% 21.0% Income passed through to non-controlling interests (8.9) (9.2) (8.2) State and local taxes, net of federal benefit 2.2 1.9 1.8 Foreign taxes (1.4) (0.1) 0.3 Permanent items 0.6 (0.3) (0.5) Disallowed executive compensation 0.1 0.7 — Other, net 0.3 (0.2) (0.2) Valuation allowance 0.2 — 0.3 Total effective rate 14.1% 13.8% 14.5% Deferred Taxes The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows as of December 31, 2022 and 2021. Deferred tax assets, net are included within other assets within the Consolidated Statements of Financial Condition. As of December 31, Deferred Tax Assets and Liabilities of the Company 2022 2021 Deferred tax assets Amortizable tax basis for AOG Unit exchanges $ 124,217 $ 108,644 Net operating losses and capital loss carryforwards 2,192 1,292 Other, net 6,089 6,101 Total gross deferred tax assets 132,498 116,037 Valuation allowance (2,155) (1,010) Total net deferred tax assets 130,343 115,027 Deferred tax liabilities Investment in partnerships (61,410) (75,629) Total deferred tax liabilities (61,410) (75,629) Deferred tax assets, net $ 68,933 $ 39,398 In assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred taxes are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. Valuation allowances are provided to reduce the amounts of deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. 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. As of December 31, 2022 and 2021, the valuation allowance for deferred tax assets is $2.2 million and $1.0 million, respectively. The deferred tax assets related to operating losses in foreign jurisdictions and certain capital loss carryforwards do not meet the more likely than not threshold and have a valuation allowance recorded for the net balance. As of, and for the years ended December 31, 2022, 2021 and 2020, the Company had no significant uncertain tax positions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 12. EARNINGS PER SHARE For the year ended December 31, 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 year ended December 31, 2022 the two-class stock method was the more dilutive method. For the years ended December 31, 2021 and 2020, the treasury stock method was the more dilutive method. The computation of diluted earnings per share excludes the following restricted units and AOG Units as their effect would have been anti-dilutive: Year ended December 31, 2022 2021 2020 Restricted units — 132 16,599 AOG Units — 116,226,798 115,126,565 The following table presents the computation of basic and diluted earnings per common share: Year ended December 31, 2022 2021 2020 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 $ 167,541 $ 386,748 $ 130,442 Distributions on unvested restricted units (14,096) (10,986) (10,454) Undistributed earnings allocable to participating unvested restricted units — (7,138) — Net income available to Class A and non-voting common stockholders $ 153,445 $ 368,624 $ 119,988 Basic weighted-average shares of Class A and non-voting common stock 175,510,798 163,703,626 135,065,436 Basic earnings per share of Class A and non-voting common stock $ 0.87 $ 2.24 $ 0.89 Diluted 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 $ 167,541 $ 386,748 $ 130,442 Distributions on unvested restricted units (14,096) — — Net income available to Class A and non-voting common stockholders $ 153,445 $ 386,748 $ 130,442 Effect of dilutive shares: Restricted units — 11,209,144 9,207,639 Options — 5,199,501 5,235,423 Diluted weighted-average shares of Class A and non-voting common stock 175,510,798 180,112,271 149,508,498 Diluted earnings per share of Class A and non-voting common stock $ 0.87 $ 2.15 $ 0.87 Dividend declared and paid per Class A and non-voting common stock $ 2.44 $ 1.88 $ 1.60 |
EQUITY COMPENSATION
EQUITY COMPENSATION | 12 Months Ended |
Dec. 31, 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 December 31, 2022, 44,488,640 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: Year ended December 31, 2022 2021 2020 Restricted units $ 200,391 $ 170,980 $ 115,680 Restricted units with a market condition — 66,211 7,263 Options — — 43 Equity-based compensation expense $ 200,391 $ 237,191 $ 122,986 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 year ended December 31, 2022, 5.5 million restricted units vested and 3.1 million shares of Class A common stock were delivered to the holders. For the year ended December 31, 2021, 8.3 million restricted units vested and 4.5 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 year ended December 31, 2022, the Company declared dividends of $0.61 per share to Class A common stockholders at the close of business on March 17, 2022, June 16, 2022, September 16, 2022 and December 16, 2022. For the year ended December 31, 2022, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $31.8 million, which are presented as dividends within the 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 within the 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 - December 31, 2021 18,323,036 $ 36.43 Granted 4,142,621 74.62 Vested (5,524,397) 27.16 Forfeited (278,261) 50.95 Balance - December 31, 2022 16,662,999 $ 48.76 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $545.4 million as of December 31, 2022 and is expected to be recognized over the remaining weighted average period of 3.4 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 10 years, beginning on the grant date. A summary of options activity during the year ended December 31, 2022 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - December 31, 2021 6,306,282 $ 19.00 2.3 $ 392,692 Granted — — — — Exercised (1,136,063) 19.00 — — Expired — — — — Forfeited — — — — Balance - December 31, 2022 5,170,219 $ 19.00 1.3 $ 255,616 Exercisable at December 31, 2022 5,170,219 $ 19.00 1.3 $ 255,616 Net cash proceeds from exercises of stock options were $21.2 million for the year ended December 31, 2022. The Company realized tax benefits of approximately $9.1 million from those exercises. Aggregate intrinsic value represents the value of the Company’s closing share price of Class A common stock on the last trading day of the period in excess of the weighted-average exercise price multiplied by the number of options exercisable or expected to vest. |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST | 12 Months Ended |
Dec. 31, 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. Except as otherwise expressly provided in the Company’s Certificate of Incorporation (the “Certificate of Incorporation”), the Company’s common stockholders are entitled to vote on all matters on which stockholders of a corporation are generally entitled to vote under the Delaware General Corporation Law (the “DGCL”), including the election of the Company’s board of directors. Holders of shares of the Company’s Class A common stock are entitled to one vote per share of the Company’s Class A common stock. On any date on which the Ares Ownership Condition (as defined in the Certificate of Incorporation) is satisfied, holders of shares of the Company’s Class B common stock are, in the aggregate, entitled to a number of votes equal to (x) four times the aggregate number of votes attributable to the Company’s Class A common stock minus (y) the aggregate number of votes attributable to the Company’s Class C common stock. On any date on which the Ares Ownership Condition is not satisfied, holders of shares of the Company’s Class B common stock are not entitled to vote on any matter submitted to a vote of the Company’s stockholders. The holder of shares of the Company’s Class C common stock is generally entitled to a number of votes equal to the number of Ares Operating Group Units (as defined in the Certificate of Incorporation) held of record by each Ares Operating Group Limited Partner (as defined in the Certificate of Incorporation) other than the Company and its subsidiaries. The Company has a stock repurchase program that allows for the repurchase of up to $150.0 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 renewal of the program is subject to authorization by the Company’s board of directors on an annual basis. As of December 31, 2022, the program was scheduled to expire in March 2023, and the renewal was subsequently authorized by the Company’s board of directors and will expire in March 2024. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the years ended December 31, 2022, 2021 and 2020, the Company did not repurchase any shares as part of the stock repurchase program. The following table presents the changes in each class of common stock: Class A Common Stock 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 1,348,909 — — (1,348,909) — Redemptions of AOG Units — — — (25,000) (25,000) Stock option exercises, net of shares withheld for tax 1,123,509 — — — 1,123,509 Vesting of restricted stock awards, net of shares withheld for tax 3,068,313 — — — 3,068,313 Cancellation of AOG Units — — — (4,135) (4,135) Balance - December 31, 2022 173,892,036 3,489,911 1,000 117,231,288 294,614,235 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 December 31, 2022 As of December 31, 2021 Year ended December 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2022 2021 2020 Ares Management Corporation 177,381,947 60.21% 171,841,216 59.16% 59.76% 58.48% 53.98% Ares Owners Holdings, L.P. 117,231,288 39.79 118,609,332 40.84 40.24 41.52 46.02 Total 294,613,235 100.00% 290,450,548 100.00% The Company’s ownership percentage of the AOG Units will continue to change upon: (i) the vesting of restricted units and exercise of options that were granted under the Equity Incentive Plan; (ii) the exchange of AOG Units for shares of Class A common stock; (iii) the cancellation of AOG Units in connection with certain individuals’ forfeiture of AOG Units upon termination of employment and (iv) the issuance of new AOG Units, including in connection with acquisitions, among other strategic reasons. Holders of the AOG Units, subject to any applicable transfer restrictions, may up to four times each year (subject to the terms of the exchange agreement) exchange their AOG Units for shares of Class A common stock on a one-for-one basis. Equity is reallocated among partners upon a change in ownership to ensure each partners’ capital account properly reflects their respective claim on the residual value of the Company. This change is reflected as either a reallocation of interest or as dilution within the Consolidated Statements of Changes in Equity. Redeemable Interest The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities: Total Opening balance at July 1, 2020 $ 99,804 Net loss (976) Currency translation adjustment, net of tax 1,538 Balance - December 31, 2020 100,366 Distribution (2,390) Net loss (1,341) Currency translation adjustment, net of tax (627) Balance - December 31, 2021 96,008 Distribution (1,887) Net loss (851) Currency translation adjustment, net of tax (426) Equity compensation 285 Balance - December 31, 2022 $ 93,129 The following table summarizes the activities associated with the redeemable interest in Consolidated Funds: Total Balance - January 1, 2021 $ — Change in redemption value 1,000,000 Balance - December 31, 2021 1,000,000 Change in redemption value 13,282 Balance - December 31, 2022 $ 1,013,282 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 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. During the third quarter of 2022, the Company renamed the Secondary Solutions Group segment to the Secondaries Group. The segment name change did not result in any change to the composition of the Company’s segments and therefore did not result in any change to historical results. 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. Private Equity Group: The Private Equity Group broadly categorizes its investment strategies as corporate private equity and special opportunities. Real Assets Group: The Real Assets Group manages comprehensive equity and debt strategies across real estate and infrastructure investments. Secondaries Group : The Secondaries Group invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate and infrastructure. 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. 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 operating 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 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. 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 a placement fee adjustment that represents the net portion of either expense deferral or amortization that is required to match the timing of expense recognition with the period over which management fees are expected to be earned from the associated fund 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, the 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. Many of the Ares Funds managed by the Company have mandates that allow for investing across different geographic regions, including North America, Europe and Asia-Pacific. The primary geographic region in which the Company invests in is North America and the majority of its revenues are generated in North America. The following tables present the financial results for the Company’s operating segments, as well as the OMG: Year ended December 31, 2022 Credit Group Private Equity Group Real Secondaries Group Strategic Initiatives Total OMG Total Management fees $ 1,355,975 $ 199,837 $ 347,808 $ 176,694 $ 72,214 $ 2,152,528 $ — $ 2,152,528 Fee related performance revenues 71,497 — 167,693 235 — 239,425 — 239,425 Other fees 31,945 1,888 35,879 — 321 70,033 24,529 94,562 Compensation and benefits (441,778) (86,561) (240,015) (53,743) (33,011) (855,108) (317,396) (1,172,504) General, administrative and other expenses (73,945) (30,697) (39,739) (12,685) (7,578) (164,644) (155,017) (319,661) Fee related earnings 943,694 84,467 271,626 110,501 31,946 1,442,234 (447,884) 994,350 Performance income—realized 156,784 123,806 133,130 4,156 145 418,021 — 418,021 Performance related compensation—realized (97,564) (90,300) (83,105) (3,515) (57) (274,541) — (274,541) Realized net performance income 59,220 33,506 50,025 641 88 143,480 — 143,480 Investment income (loss)—realized 7,071 3,432 3,115 — 868 14,486 (37) 14,449 Interest and other investment income (expense)—realized 26,567 2,546 9,045 3,683 9,851 51,692 (1,588) 50,104 Interest expense (15,395) (15,953) (11,346) (5,660) (22,318) (70,672) (684) (71,356) Realized net investment income (loss) 18,243 (9,975) 814 (1,977) (11,599) (4,494) (2,309) (6,803) Realized income $ 1,021,157 $ 107,998 $ 322,465 $ 109,165 $ 20,435 $ 1,581,220 $ (450,193) $ 1,131,027 Year ended December 31, 2021 Credit Group Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total OMG Total Management fees $ 1,070,608 $ 181,918 $ 218,202 $ 97,945 $ 66,604 $ 1,635,277 $ — $ 1,635,277 Fee related performance revenues 86,480 — 51,399 — — 137,879 — 137,879 Other fees 27,103 1,070 13,038 — 82 41,293 8,478 49,771 Compensation and benefits (410,394) (78,156) (127,679) (25,215) (26,673) (668,117) (226,725) (894,842) General, administrative and other expenses (54,686) (21,625) (24,181) (6,862) (7,778) (115,132) (100,645) (215,777) Fee related earnings 719,111 83,207 130,779 65,868 32,235 1,031,200 (318,892) 712,308 Performance income—realized 207,446 171,637 95,270 70 4 474,427 — 474,427 Performance related compensation—realized (131,900) (137,576) (59,056) (49) (2) (328,583) — (328,583) Realized net performance income 75,546 34,061 36,214 21 2 145,844 — 145,844 Investment income (loss)—realized 1,989 (3,754) 17,700 19 13 15,967 — 15,967 Interest and other investment income—realized 20,377 11,514 7,252 2,261 3,948 45,352 226 45,578 Interest expense (8,038) (7,925) (6,394) (836) (13,031) (36,224) (536) (36,760) Realized net investment income (loss) 14,328 (165) 18,558 1,444 (9,070) 25,095 (310) 24,785 Realized income $ 808,985 $ 117,103 $ 185,551 $ 67,333 $ 23,167 $ 1,202,139 $ (319,202) $ 882,937 Year ended December 31, 2020 Credit Group Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total OMG Total Management fees $ 841,138 $ 181,813 $ 137,027 $ — $ 26,587 $ 1,186,565 $ — $ 1,186,565 Fee related performance revenues 22,160 — 827 — — 22,987 — 22,987 Other fees 18,644 178 974 — 152 19,948 — 19,948 Compensation and benefits (320,111) (77,266) (66,374) — (6,442) (470,193) (155,979) (626,172) General, administrative and other expenses (53,997) (20,460) (13,936) — (2,926) (91,319) (80,778) (172,097) Fee related earnings 507,834 84,265 58,518 — 17,371 667,988 (236,757) 431,231 Performance income—realized 70,148 392,635 61,446 — — 524,229 — 524,229 Performance related compensation—realized (44,582) (315,905) (38,975) — — (399,462) — (399,462) Realized net performance income 25,566 76,730 22,471 — — 124,767 — 124,767 Investment income (loss)—realized (2,309) 25,018 7,228 — 13 29,950 (5,698) 24,252 Interest and other investment income (expense)—realized 16,314 4,027 6,016 — 996 27,353 (739) 26,614 Interest expense (8,722) (7,055) (6,331) — (1,465) (23,573) (1,335) (24,908) Realized net investment income (loss) 5,283 21,990 6,913 — (456) 33,730 (7,772) 25,958 Realized income $ 538,683 $ 182,985 $ 87,902 $ — $ 16,915 $ 826,485 $ (244,529) $ 581,956 The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: Year ended December 31, 2022 2021 2020 Segment revenues Management fees $ 2,152,528 $ 1,635,277 $ 1,186,565 Fee related performance revenues 239,425 137,879 22,987 Other fees 70,033 41,293 19,948 Performance income—realized 418,021 474,427 524,229 Total segment revenues $ 2,880,007 $ 2,288,876 $ 1,753,729 Segment expenses Compensation and benefits $ 855,108 $ 668,117 $ 470,193 General, administrative and other expenses 164,644 115,132 91,319 Performance related compensation—realized 274,541 328,583 399,462 Total segment expenses $ 1,294,293 $ 1,111,832 $ 960,974 Segment realized net investment income (expense) Investment income—realized $ 14,486 $ 15,967 $ 29,950 Interest and other investment income —realized 51,692 45,352 27,353 Interest expense (70,672) (36,224) (23,573) Total segment realized net investment income (expense) $ (4,494) $ 25,095 $ 33,730 The following table reconciles the Company’s consolidated revenues to segment revenue: Year ended December 31, 2022 2021 2020 Total consolidated revenue $ 3,055,443 $ 4,212,091 $ 1,764,046 Performance (income) loss—unrealized (107,153) (1,744,056) 7,554 Management fees of Consolidated Funds eliminated in consolidation 46,324 44,896 45,268 Carried interest allocation of Consolidated Funds eliminated in consolidation 7,549 — — Incentive fees of Consolidated Funds eliminated in consolidation 3,980 5,458 141 Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 17,013 4,483 15,824 Administrative fees (1) (69,414) (49,223) (36,512) OMG revenue (24,354) (8,478) — Performance income reclass (2) (14) 1,434 (3,726) Acquisition-related incentive fees (3) — (47,873) — Principal investment income, net of eliminations (12,278) (99,433) (28,552) Net revenue of non-controlling interests in consolidated subsidiaries (37,089) (30,423) (10,314) Total consolidation adjustments and reconciling items (175,436) (1,923,215) (10,317) Total segment revenue $ 2,880,007 $ 2,288,876 $ 1,753,729 (1) Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s 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 within the Company’s Consolidated Statements of Operations. (3) Represents a component of the purchase price from incentive fees associated with one-time contingent consideration recorded in connection with the Black Creek Acquisition. 100% of the fees recognized in 2021 is presented within incentive fees within the Company’s Consolidated Statements of Operations of which 50% is included on an unconsolidated basis for segment reporting purposes. The following table reconciles the Company’s consolidated expenses to segment expenses: Year ended December 31, 2022 2021 2020 Total consolidated expenses $ 2,749,085 $ 3,410,083 $ 1,450,486 Performance related compensation-unrealized (88,502) (1,316,205) 11,552 Expenses of Consolidated Funds added in consolidation (86,988) (113,024) (65,527) Expenses of Consolidated Funds eliminated in consolidation 50,833 50,538 45,408 Administrative fees (1) (68,255) (49,223) (36,512) OMG expenses (472,413) (327,370) (236,757) Acquisition and merger-related expense (15,197) (21,162) (11,124) Equity compensation expense (200,106) (237,191) (122,986) Acquisition-related compensation expense (2) (206,252) (66,893) — Placement fee adjustment (2,088) (78,883) (19,329) Depreciation and amortization expense (335,083) (106,705) (40,662) Expense of non-controlling interests in consolidated subsidiaries (30,741) (32,133) (13,575) Total consolidation adjustments and reconciling items (1,454,792) (2,298,251) (489,512) Total segment expenses $ 1,294,293 $ 1,111,832 $ 960,974 (1) Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s 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 within the Company’s Consolidated Statements of Operations. The following table reconciles the Company’s consolidated other income to segment realized net investment income: Year ended December 31, 2022 2021 2020 Total consolidated other income $ 204,448 $ 263,682 $ 65,918 Investment (income) loss—unrealized 12,769 (58,694) 47,317 Interest and other investment (income) loss—unrealized (25,603) 6,249 (12,134) Other income from Consolidated Funds added in consolidation, net (250,144) (256,375) (70,994) Other expense from Consolidated Funds eliminated in consolidation, net (16,484) (2,868) (14,053) OMG other (income) expense 14,419 (1,368) (927) Performance income reclass (1) 14 (1,434) 3,726 Principal investment income 48,223 120,896 4,044 Other (income) expense, net 1,873 (19,886) 10,277 Other (income) loss of non-controlling interests in consolidated subsidiaries 5,991 (25,107) 556 Total consolidation adjustments and reconciling items (208,942) (238,587) (32,188) Total segment realized net investment income (expense) $ (4,494) $ 25,095 $ 33,730 (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 within the Company’s Consolidated Statements of Operations. The following table presents the reconciliation of income before taxes as reported in the Consolidated Statements of Operations to segment results of RI and FRE: Year ended December 31, 2022 2021 2020 Income before taxes $ 510,806 $ 1,065,690 $ 379,478 Adjustments: Depreciation and amortization expense 335,083 106,705 40,662 Equity compensation expense 198,948 237,191 122,986 Acquisition-related compensation expense (1) 206,252 66,893 — Acquisition-related incentive fees (2) — (47,873) — Acquisition and merger-related expense 15,197 21,162 11,194 Placement fee adjustment 2,088 78,883 19,329 OMG expense, net 462,478 317,524 235,830 Other (income) expense, net 1,874 (19,886) 10,207 Net (income) expense of non-controlling interests in consolidated subsidiaries (357) (23,397) 3,817 Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (119,664) (120,457) (28,203) Total performance (income) loss—unrealized (107,153) (1,744,056) 7,554 Total performance related compensation—unrealized 88,502 1,316,205 (11,552) Total investment (income) loss—unrealized (12,834) (52,445) 35,183 Realized income 1,581,220 1,202,139 826,485 Total performance income—realized (418,021) (474,427) (524,229) Total performance related compensation—realized 274,541 328,583 399,462 Total investment income—realized 4,494 (25,095) (33,730) Fee related earnings $ 1,442,234 $ 1,031,200 $ 667,988 (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 within the Company’s Consolidated Statements of Operations. |
CONSOLIDATION
CONSOLIDATION | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
CONSOLIDATION | 16. CONSOLIDATION Deconsolidated Funds Certain funds that have historically been consolidated in the financial statements that are no longer consolidated because, as of the reporting period: (a) such funds have been liquidated or dissolved; or (b) the Company is no longer deemed to be the primary beneficiary of the VIEs as it no longer has a significant economic interest. During the year ended December 31, 2022, the Company did not deconsolidate any entity. During the year ended December 31, 2021, one CLO experienced a significant change in ownership that resulted in deconsolidation of the entity. During the year ended December 31, 2020, one entity was liquidated/dissolved and one CLO experienced a significant change in ownership that resulted in deconsolidation of the entity. 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 within the Consolidated Statements of Financial Condition, its respective maximum exposure to loss relating to non-consolidated VIEs, and its net income attributable to non-controlling interests related to consolidated VIEs, as presented within the Consolidated Statements of Operations, are as follows: As of December 31, 2022 2021 Maximum exposure to loss attributable to the Company’s investment in non-consolidated VIEs (1) $ 393,549 $ 353,768 Maximum exposure to loss attributable to the Company’s investment in consolidated VIEs (1) 537,239 583,192 Assets of consolidated VIEs 13,128,088 13,197,321 Liabilities of consolidated VIEs 11,593,867 12,018,655 (1) As of December 31, 2022 and 2021, the Company’s maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs and totaled $82.0 million and $103.8 million, respectively. Year ended December 31, 2022 2021 2020 Net income attributable to non-controlling interests related to consolidated VIEs $ 105,797 $ 115,217 $ 28,085 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 December 31, 2022 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 389,987 $ — $ — $ 389,987 Investments (includes $3,106,577 of accrued carried interest) 4,515,955 — (541,221) 3,974,734 Due from affiliates 949,532 — (191,060) 758,472 Other assets 381,137 — — 381,137 Right-of-use operating lease assets 155,950 — — 155,950 Intangible assets, net 1,208,220 — — 1,208,220 Goodwill 999,656 — — 999,656 Assets of Consolidated Funds Cash and cash equivalents — 724,641 — 724,641 Investments held in trust account — 1,013,382 — 1,013,382 Investments, at fair value — 12,187,392 3,859 12,191,251 Due from affiliates — 26,531 (10,742) 15,789 Receivable for securities sold — 124,050 — 124,050 Other assets — 65,570 — 65,570 Total assets $ 8,600,437 $ 14,141,566 $ (739,164) $ 22,002,839 Liabilities Accounts payable, accrued expenses and other liabilities $ 242,663 $ — $ (10,742) $ 231,921 Accrued compensation 510,130 — — 510,130 Due to affiliates 252,798 — — 252,798 Performance related compensation payable 2,282,209 — — 2,282,209 Debt obligations 2,273,854 — — 2,273,854 Operating lease liabilities 190,616 — — 190,616 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 175,435 (7,149) 168,286 Due to affiliates — 191,238 (187,201) 4,037 Payable for securities purchased — 314,193 — 314,193 CLO loan obligations, at fair value — 10,797,332 (95,612) 10,701,720 Fund borrowings — 168,046 — 168,046 Total liabilities 5,752,270 11,646,244 (300,704) 17,097,810 Commitments and contingencies Redeemable interest in Consolidated Funds — 1,013,282 — 1,013,282 Redeemable interest in Ares Operating Group entities 93,129 — — 93,129 Non-controlling interest in Consolidated Funds — 1,482,040 (407,684) 1,074,356 Non-controlling interest in Ares Operating Group entities 1,147,269 — (12,246) 1,135,023 Stockholders’ Equity Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (173,892,036 shares issued and outstanding) 1,739 — — 1,739 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 (117,231,288 shares issued and outstanding) 1,172 — — 1,172 Additional paid-in-capital 1,989,284 — (18,530) 1,970,754 Accumulated deficit (369,475) — — (369,475) Accumulated other comprehensive loss, net of tax (14,986) — — (14,986) Total stockholders’ equity 1,607,769 — (18,530) 1,589,239 Total equity 2,755,038 1,482,040 (438,460) 3,798,618 Total liabilities, redeemable interest, non-controlling interests and equity $ 8,600,437 $ 14,141,566 $ (739,164) $ 22,002,839 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 Investments held in trust account — 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 loss, 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 Year ended December 31, 2022 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 2,182,757 $ — $ (46,324) $ 2,136,433 Carried interest allocation 465,561 — (7,549) 458,012 Incentive fees 305,167 — (3,980) 301,187 Principal investment income 48,222 — (35,943) 12,279 Administrative, transaction and other fees 164,545 — (17,013) 147,532 Total revenues 3,166,252 — (110,809) 3,055,443 Expenses Compensation and benefits 1,498,590 — — 1,498,590 Performance related compensation 518,829 — — 518,829 General, administrative and other expense 695,511 — (255) 695,256 Expenses of the Consolidated Funds — 86,988 (50,578) 36,410 Total expenses 2,712,930 86,988 (50,833) 2,749,085 Other income (expense) Net realized and unrealized gains (losses) on investments (27,924) — 32,656 4,732 Interest and dividend income 25,196 — (15,797) 9,399 Interest expense (71,356) — — (71,356) Other income, net 11,904 — 1,215 13,119 Net realized and unrealized gains on investments of the Consolidated Funds — 87,287 (13,901) 73,386 Interest and other income of the Consolidated Funds — 587,744 (1,215) 586,529 Interest expense of the Consolidated Funds — (424,887) 13,526 (411,361) Total other income (expense), net (62,180) 250,144 16,484 204,448 Income before taxes 391,142 163,156 (43,492) 510,806 Income tax expense 71,560 331 — 71,891 Net income 319,582 162,825 (43,492) 438,915 Less: Net income attributable to non-controlling interests in Consolidated Funds — 162,825 (43,492) 119,333 Net income attributable to Ares Operating Group entities 319,582 — — 319,582 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (851) — — (851) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 152,892 — — 152,892 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 167,541 $ — $ — $ 167,541 Year ended December 31, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 1,655,943 $ — $ (44,896) $ 1,611,047 Carried interest allocation 2,073,551 — — 2,073,551 Incentive fees 338,334 — (5,458) 332,876 Principal investment income 120,896 — (21,463) 99,433 Administrative, transaction and other fees 99,667 — (4,483) 95,184 Total revenues 4,288,391 — (76,300) 4,212,091 Expenses Compensation and benefits 1,162,633 — — 1,162,633 Performance related compensation 1,740,786 — — 1,740,786 General, administrative and other expense 444,178 — — 444,178 Expenses of the Consolidated Funds — 113,024 (50,538) 62,486 Total expenses 3,347,597 113,024 (50,538) 3,410,083 Other income (expense) Net realized and unrealized gains on investments 11,920 — 7,182 19,102 Interest and dividend income 14,199 — (4,334) 9,865 Interest expense (36,760) — — (36,760) Other income, net 15,080 — (678) 14,402 Net realized and unrealized gains on investments of the Consolidated Funds — 91,390 (14,087) 77,303 Interest and other income of the Consolidated Funds — 437,140 678 437,818 Interest expense of the Consolidated Funds — (272,155) 14,107 (258,048) Total other income, net 4,439 256,375 2,868 263,682 Income before taxes 945,233 143,351 (22,894) 1,065,690 Income tax expense 147,297 88 — 147,385 Net income 797,936 143,263 (22,894) 918,305 Less: Net income attributable to non-controlling interests in Consolidated Funds — 143,263 (22,894) 120,369 Net income attributable to Ares Operating Group entities 797,936 — — 797,936 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (1,341) — — (1,341) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 390,440 — — 390,440 Net income attributable to Ares Management Corporation 408,837 — — 408,837 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 $ 386,748 $ — $ — $ 386,748 Year ended December 31, 2020 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 1,195,876 $ — $ (45,268) $ 1,150,608 Carried interest allocation 505,608 — — 505,608 Incentive fees 38,043 — (141) 37,902 Principal investment income 4,044 — 24,508 28,552 Administrative, transaction and other fees 57,200 — (15,824) 41,376 Total revenues 1,800,771 — (36,725) 1,764,046 Expenses Compensation and benefits 767,252 — — 767,252 Performance related compensation 404,116 — — 404,116 General, administrative and other expense 258,999 — — 258,999 Expenses of the Consolidated Funds — 65,527 (45,408) 20,119 Total expenses 1,430,367 65,527 (45,408) 1,450,486 Other income (expense) Net realized and unrealized losses on investments (8,720) — (288) (9,008) Interest and dividend income 11,641 — (3,570) 8,071 Interest expense (24,908) — — (24,908) Other income, net 2,858 — 8,433 11,291 Net realized and unrealized losses on investments of the Consolidated Funds — (109,387) 12,523 (96,864) Interest and other income of the Consolidated Funds — 473,857 (10,205) 463,652 Interest expense of the Consolidated Funds — (293,476) 7,160 (286,316) Total other income (expense), net (19,129) 70,994 14,053 65,918 Income before taxes 351,275 5,467 22,736 379,478 Income tax expense 54,875 118 — 54,993 Net income 296,400 5,349 22,736 324,485 Less: Net income attributable to non-controlling interests in Consolidated Funds — 5,349 22,736 28,085 Net income attributable to Ares Operating Group entities 296,400 — — 296,400 Less: Net loss attributable to redeemable interests in Ares Operating Group entities (976) — — (976) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 145,234 — — 145,234 Net income attributable to Ares Management Corporation 152,142 — — 152,142 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ — $ — $ 130,442 Year ended December 31, 2022 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 319,582 $ 162,825 $ (43,492) $ 438,915 Adjustments to reconcile net income to net cash provided by operating activities: Equity compensation expense 200,391 — — 200,391 Depreciation and amortization 341,341 — — 341,341 Net realized and unrealized losses on investments 15,717 — (4,788) 10,929 Investments purchased (443,505) — 72,381 (371,124) Proceeds from sale of investments 303,987 — (121,494) 182,493 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — (87,287) 13,901 (73,386) Other non-cash amounts — (33,822) — (33,822) Investments purchased — (9,408,078) (25,951) (9,434,029) Proceeds from sale of investments — 8,198,812 — 8,198,812 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable (28,161) — 7,549 (20,612) Due to/from affiliates (125,407) — 164,480 39,073 Other assets (101,275) — (3,930) (105,205) Accrued compensation and benefits 200,769 — — 200,769 Accounts payable, accrued expenses and other liabilities (50,471) — (1,214) (51,685) Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 324,550 324,550 Change in other assets and receivables held at Consolidated Funds — 286,895 (135,000) 151,895 Change in other liabilities and payables held at Consolidated Funds — (733,417) — (733,417) Net cash provided by (used in) operating activities 632,968 (1,614,072) 246,992 (734,112) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (35,796) — — (35,796) Acquisitions, net of cash acquired (301,583) — — (301,583) Net cash used in investing activities (337,379) — — (337,379) Cash flows from financing activities: Proceeds from Credit Facility 1,380,000 — — 1,380,000 Proceeds from senior notes 488,915 — — 488,915 Repayments of Credit Facility (1,095,000) — — (1,095,000) Dividends and distributions (836,364) — — (836,364) Stock option exercises 21,205 — — 21,205 Taxes paid related to net share settlement of equity awards (201,311) — — (201,311) Other financing activities 4,055 — — 4,055 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 596,777 (47,381) 549,396 Distributions to non-controlling interests in Consolidated Funds — (303,230) 124,939 (178,291) Borrowings under loan obligations by Consolidated Funds — 1,140,680 — 1,140,680 Repayments under loan obligations by Consolidated Funds — (145,222) — (145,222) Net cash provided by (used in) financing activities (238,500) 1,289,005 77,558 1,128,063 Effect of exchange rate changes (10,757) 517 — (10,240) Net change in cash and cash equivalents 46,332 (324,550) 324,550 46,332 Cash and cash equivalents, beginning of period 343,655 1,049,191 (1,049,191) 343,655 Cash and cash equivalents, end of period $ 389,987 $ 724,641 $ (724,641) $ 389,987 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisitions $ 12,835 $ — $ — $ 12,835 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 59,463 $ 260,866 $ — $ 320,329 Cash paid during the period for income taxes $ 104,544 $ 320 $ — $ 104,864 Year ended December 31, 2021 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 797,936 $ 143,263 $ (22,894) $ 918,305 Adjustments to reconcile net income to net cash provided by operating activities: Equity compensation expense 237,191 — — 237,191 Depreciation and amortization 113,293 — — 113,293 Net realized and unrealized gains on investments (96,331) — 7,353 (88,978) Other non-cash amounts (31,070) — — (31,070) Investments purchased (561,762) — 221,563 (340,199) Proceeds from sale of investments 296,483 — (23,101) 273,382 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — (91,390) 14,087 (77,303) Other non-cash amounts — (35,879) — (35,879) Investments purchased — (13,075,187) 7,623 (13,067,564) Proceeds from sale of investments — 9,970,609 — 9,970,609 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable (745,021) — — (745,021) Due to/from affiliates (187,374) — 6,446 (180,928) Other assets 210,106 — 3,719 213,825 Accrued compensation and benefits 142,815 — — 142,815 Accounts payable, accrued expenses and other liabilities 124,489 — 679 125,168 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — (526,815) (526,815) Net cash relinquished with consolidation/deconsolidation of Consolidated Funds — (39,539) — (39,539) Change in other assets and receivables held at Consolidated Funds — (174,409) (6,544) (180,953) Change in other liabilities and payables held at Consolidated Funds — 746,616 (23,000) 723,616 Net cash provided by (used in) operating activities 300,755 (2,555,916) (340,884) (2,596,045) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (27,226) — — (27,226) Acquisitions, net of cash acquired (1,057,407) — — (1,057,407) Net cash used in investing activities (1,084,633) — — (1,084,633) Cash flows from financing activities: Net proceeds from issuance of Class A and non-voting common stock 827,430 — — 827,430 Proceeds from Credit Facility 883,000 — — 883,000 Proceeds from subordinated notes 450,000 — — 450,000 Repayments of Credit Facility (468,000) — — (468,000) Dividends and distributions (593,506) — — (593,506) Series A Preferred Stock dividends (10,850) — — (10,850) Redemption of Series A Preferred Stock (310,000) — — (310,000) Stock option exercises 37,216 — — 37,216 Taxes paid related to net share settlement of equity awards (226,101) — — (226,101) Other financing activities 11,509 — — 11,509 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 1,239,831 (206,187) 1,033,644 Distributions to non-controlling interests in Consolidated Funds — (119,153) 20,256 (98,897) Borrowings under loan obligations by Consolidated Funds — 2,048,932 — 2,048,932 Repayments under loan obligations by Consolidated Funds — (80,752) — (80,752) Net cash provided by financing activities 600,698 3,088,858 (185,931) 3,503,625 Effect of exchange rate changes (12,977) (6,127) — (19,104) Net change in cash and cash equivalents (196,157) 526,815 (526,815) (196,157) Cash and cash equivalents, beginning of period 539,812 522,376 (522,376) 539,812 Cash and cash equivalents, end of period $ 343,655 $ 1,049,191 $ (1,049,191) $ 343,655 Supplemental disclosure of non-cash financing activities: Issuance of AOG Units in connection with acquisitions $ 510,848 $ — $ — $ 510,848 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 34,170 $ 170,915 $ — $ 205,085 Cash paid during the period for income taxes $ 22,603 $ 185 $ — $ 22,788 Year ended December 31, 2020 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 296,400 $ 5,349 $ 22,736 $ 324,485 Adjustments to reconcile net income to net cash provided by operating activities: Equity compensation expense 122,986 — — 122,986 Depreciation and amortization 41,248 — — 41,248 Net realized and unrealized (gains) losses on investments 20,651 — (28,690) (8,039) Investments purchased (352,750) — 261,899 (90,851) Proceeds from sale of investments 207,986 — (33,307) 174,679 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized losses on investments — 109,387 (12,523) 96,864 Other non-cash amounts — (34,297) — (34,297) Investments purchased — (6,580,784) (34,948) (6,615,732) Proceeds from sale of investments — 5,502,325 — 5,502,325 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable (17,687) — — (17,687) Due to/from affiliates (82,222) — 6,037 (76,185) Other assets (34,523) — (2,171) (36,694) Accrued compensation and benefits 47,875 — — 47,875 Accounts payable, accrued expenses and other liabilities 31,240 — (10,205) 21,035 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 83,945 83,945 Net cash acquired with consolidation/ deconsolidation of Consolidated Funds — 60,895 — 60,895 Change in other assets and receivables held at Consolidated Funds — (55,461) 22,163 (33,298) Change in other liabilities and payables held at Consolidated Funds — 10,787 — 10,787 Net cash provided by (used in) operating activities 281,204 (981,799) 274,936 (425,659) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (15,942) — — (15,942) Acquisitions, net of cash acquired (120,822) — — (120,822) Net cash used in investing activities (136,764) — — (136,764) Cash flows from financing activities: Net proceeds from issuance of Class A common stock 383,154 — — 383,154 Proceeds from Credit Facility 790,000 — — 790,000 Proceeds from Senior Notes 399,084 — — 399,084 Repayments of Credit Facility (860,000) — — (860,000) Dividends and distributions (446,780) — — (446,780) Series A Preferred Stock dividends (21,700) — — (21,700) Stock option exercises 92,877 — — 92,877 Taxes paid related to net share settlement of equity awards (95,368) — — (95,368) Other financing activities (1,531) — — (1,531) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 359,381 (226,951) 132,430 Distributions to non-controlling interests in Consolidated Funds — (287,467) 35,960 (251,507) Borrowings under loan obligations by Consolidated Funds — 1,013,291 — 1,013,291 Repayments under loan obligations by Consolidated Funds — (190,055) — (190,055) Net cash provided by financing activities 239,736 895,150 (190,991) 943,895 Effect of exchange rate changes 17,252 2,704 — 19,956 Net change in cash and cash equivalents 401,428 (83,945) 83,945 401,428 Cash and cash equivalents, beginning of period 138,384 606,321 (606,321) 138,384 Cash and cash equivalents, end of period $ 539,812 $ 522,376 $ (522,376) $ 539,812 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisitions $ 305,388 $ — $ — $ 305,338 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 22,127 $ 235,005 $ — $ 257,132 Cash paid during the period for income taxes $ 38,005 $ 169 $ — $ 38,174 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after December 31, 2022 through the date the 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) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”). The Company’s Consolidated Funds are investment companies under GAAP based on the following characteristics: the Consolidated Funds obtain funds from one or more investors and provide investment management services and the Consolidated Funds’ business purpose and substantive activities are investing funds for returns from capital appreciation and/or investment income. Therefore, investments of Consolidated Funds are recorded at fair value and the unrealized appreciation (depreciation) in an investment’s fair value is recognized on a current basis within the Consolidated Statements of Operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the investment company accounting for the Consolidated Funds under GAAP. All of the investments held and CLO loan obligations issued by the Consolidated Funds are presented at their estimated fair values within the Company’s Consolidated Statements of Financial Condition. Net income attributable to holders of subordinated notes of the CLOs is presented within net income attributable to non-controlling interests in Consolidated Funds within the Consolidated Statements of Operations. |
Reclassifications | The Company has reclassified certain prior period amounts to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and other income (expense) during the reporting periods. Assumptions and estimates regarding the valuation of investments involve a high degree of judgment and complexity and may have a significant impact on net income. Actual results could differ from these estimates and such differences could be material to the consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either a variable interest model (“VIEs”) or voting interest model (“VOE”). As such, the Company consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that the Company concludes are variable interest entities in which the Company has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which the Company is deemed to be the primary beneficiary. The Company determines whether an entity should be consolidated by first evaluating whether it holds a variable interest in the entity. Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests, including proportionate interests through related parties, to determine if fees are considered a variable interest. As the Company’s interests in funds are primarily management fees, carried interest, incentive fees, and/or insignificant direct or indirect equity interests through related parties, the Company is not considered to have a variable interest in many of these entities. Entities that are not VIEs are further evaluated for consolidation under the voting interest model. Variable Interest Model The Company considers an entity to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. The Company consolidates all VIEs for which it is the primary beneficiary. The Company determines it is the primary beneficiary when it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. |
Consolidated CLOs | Consolidated CLOs As of December 31, 2022 and 2021, the Company consolidated 25 and 23 CLOs, respectively. The Company has determined that the fair value of the financial assets of the consolidated CLOs, which are mostly Level II assets within the GAAP fair value hierarchy, are more observable than the fair value of the financial liabilities of its consolidated CLOs, which are mostly Level III liabilities within the GAAP fair value hierarchy. As a result, the financial assets of consolidated CLOs are measured at fair value and the financial liabilities of the consolidated CLOs are measured in consolidation as: (1) the sum of the fair value of the financial assets, and the carrying value of any nonfinancial assets held temporarily, less (2) the sum of the fair value of any beneficial interests retained by the Company (other than those that represent compensation for services), and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interests retained by the Company). The loan obligations issued by the CLOs are collateralized by diversified asset portfolios and by structured debt or equity. In exchange for managing the collateral for the CLOs, the Company typically earns a variety of management fees, including senior and subordinated management fees, and in some cases, contingent incentive fee income. In cases where the Company earns fees from a CLO that it consolidates, those fees have been eliminated as intercompany transactions. The Company’s holdings in these CLOs are generally subordinated to other interests in the entities and entitle the Company to receive a pro rata portion of the residual cash flows, if any, from the entities. Additionally, the Company may invest in other senior secured notes, which are repaid based on available cash flows subject to priority of payments under each consolidated CLO’s governing documents. Investors in the CLOs generally have no recourse against the Company for any losses sustained in the capital structure of each CLO. |
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 (see “Note 6. Fair Value” for further detail). Financial Instrument Valuations The valuation techniques used by the Company to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The valuation techniques applied to investments held by the Company and by the Consolidated Funds vary depending on the nature of the investment. CLOs and CLO loan obligations: The fair value of CLOs held by the Company are estimated based on either a third-party pricing service or broker quote and are classified as Level III. The Company measures its CLO loan obligations of the Consolidated Funds by first determining whether the fair values of the financial assets or financial liabilities of its consolidated CLOs are more observable. Contingent consideration: The Company generally determines the fair value of its contingent consideration liabilities by using a probability weighted expected return method, including the Monte Carlo simulation model. These models consider a range of assumptions including historical experience, prior period performance, current progress towards targets, probability-weighted scenarios, and management’s own assumptions. The discount rate used is determined based on the weighted average cost of capital for the Company. Once the associated targets are achieved, the contingent consideration is reported at the settlement amount. The fair value of the Company’s contingent consideration liabilities are classified as Level III. Liabilities recorded in connection with the Company’s contingent consideration are included within accounts payable, accrued expenses and other liabilities within the Consolidated Statements of Financial Condition and the associated changes in fair value are included within other income, net within the Consolidated Statements of Operations. Corporate debt, bonds, bank loans and derivative instruments: The fair value of corporate debt, bonds, bank loans and derivative instruments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs. These investments are generally classified as Level II. The Company obtains prices from independent pricing services that generally utilize broker quotes and may use various other pricing techniques, which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. If management is only able to obtain a single broker quote, or utilizes a pricing model, such securities will generally be classified as Level III. Equity and equity-related securities: Securities traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. Securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. Securities that have market prices are not readily available utilize valuation models of third-party pricing service or internal models to determine the fair value and are classified as Level III. Partnership interests: The Company generally values its investments using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value or estimates based on various valuation models of third-party pricing services, as well as internal models. The Company does not categorize within the fair value hierarchy investments where fair value is measured using the net asset value per share practical expedient. In limited circumstances, the Company may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Company will estimate the fair value in good faith and in a manner that it reasonably chooses. As of December 31, 2022 and 2021, NAV per share represents the fair value for each of the Company’s investments in partnership interests. Discounted cash flow model has been used to determine the fair value of an investment in a partnership interest held by the Consolidated Funds where NAV per share was not deemed to be representative of fair value. The substantial majority of the Company’s private commingled funds are closed-ended, and accordingly, do not permit investors to redeem their interests other than in limited circumstances that are beyond the control of the Company, such as instances in which retaining the interest could cause the investor to violate a law, regulation or rule. The Company also has open-ended and evergreen funds where investors have the right to withdraw their capital, subject to the terms of the respective constituent documents, over periods generally ranging from one month to three years. In addition, the Company has minority investments in vehicles that may only have a single other investor that may allow such investors to terminate the fund pursuant to the terms of the applicable constituent documents of such vehicle. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds. At December 31, 2022 and 2021, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions. |
Investments | Investments held in trust account Investments held in trust account represents funds raised through the initial public offering of Ares Acquisition Corporation (“AAC”), a consolidated SPAC that is presented within Consolidated Funds. The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in the trust agreement. AAC’s portfolio of investments is comprised of U.S. government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act that invest only in direct U.S. government treasury obligation. The U.S. Treasury bills typically have original maturities of three months or less when purchased and are recorded at fair value. Interest income received on such investments is separately presented from the overall change in fair value and is recognized within interest and other income of Consolidated Funds within the Consolidated Statements of Operations. Any remaining change in fair value of such investments, that is not recognized as interest income, is recognized within net realized and unrealized gains (losses) on investments of Consolidated Funds within the Consolidated Statements of Operations. Investments The investments of the Consolidated Funds are reflected within the Consolidated Statements of Financial Condition at fair value, with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net realized and unrealized gains (losses) on investments within the Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit price). Certain investments are denominated in foreign currency and are translated into U.S. dollars at each reporting date. |
Equity Method Investments | Equity Method Investments The Company accounts for its investments in which it has or is otherwise presumed to have significant influence, including investments in unconsolidated funds, strategic investments and carried interest, using the equity method of accounting. The carrying amounts of equity method investments are reflected in investments within the Consolidated Statements of Financial Condition. The carrying value of investments accounted for using equity method accounting is determined based on amounts invested by the Company, adjusted for the equity in earnings or losses of the investee allocated |
Derivative Instruments | Derivative 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. These derivative instruments include foreign currency forward contracts, interest rate swaps, asset swaps and warrants. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities within the 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. By using derivatives, the Company and the Consolidated Funds are exposed to counterparty credit risk if counterparties to the derivative contracts do not perform as expected. If a counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset within the Consolidated Statements of Financial Condition. The Company minimizes counterparty credit risk through credit approvals, limits, monitoring procedures, executing master netting arrangements and obtaining collateral, where appropriate. To the extent the master netting arrangements and other criteria meet the applicable requirements, which includes determining the legal enforceability of the arrangements, the Company may choose to offset the derivative assets and liabilities in the same currency by specific derivative type, or in the event of default by the counterparty, offset derivative assets and liabilities with the same counterparty. The Company generally presents derivative and other financial instruments on a gross basis within the Consolidated Statements of Financial Condition with certain instruments subject to enforceable master netting arrangements that could allow for the derivative and other financial instruments to be offset. The Consolidated Funds generally present derivative and other financial instruments on a net basis. This election is determined at management’s discretion on a fund by fund basis. The Company has retained the Consolidated Fund’s election upon consolidation. Derivative instruments are marked-to-market daily based upon quotations from pricing services or by the Company and the change in value, if any, is recorded as an unrealized gain (loss). Upon settlement of the instrument, the Company records any realized gain (loss). Unrealized and realized gain (loss) are reflected within net realized and unrealized gains (losses) on investments within the Consolidated Statements of Operations. |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition, including the fair value of certain elements of contingent consideration, is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Contingent consideration obligations are recognized as of the acquisition date at fair value based on the probability that contingency will be realized. Any fair value of purchase consideration in excess of the fair value of the assets acquired less liabilities assumed is recorded as goodwill. Conversely, any excess of the fair value of the net assets acquired over the purchase consideration is recognized as a bargain purchase gain. Examples of critical estimates in valuing certain of the intangible assets acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life, discount rates and income tax rates. The acquisition method of accounting allows for a measurement period for up to one year |
Goodwill and Intangible Assets | Intangible Assets The Company’s finite-lived intangible assets consists primarily of contractual rights to earn future management fees from the acquired management contracts. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from approximately 1.6 to 13.5 years. The purchase price of an acquired management contract is treated as an intangible asset and is amortized over the life of the contract. Amortization is included as part of general, administrative and other expenses within the Consolidated Statements of Operations. The Company tests finite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. The Company evaluates impairment by comparing the estimated undiscounted cash flows attributable to the intangible asset being evaluated with its carrying amount. If an impairment is determined to exist by management, the Company accelerates amortization expense so that the carrying amount represents fair value. The Company estimates fair value using a discounted future cash flow methodology. The Company tests indefinite-lived intangible assets annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of impairment as the excess of the carrying amount of the indefinite-lived intangible asset over its fair value. The Company also tests indefinite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable or that the useful lives of these assets are no longer appropriate. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s strategic plans with regard to the indefinite-lived intangible assets. Goodwill Goodwill represents the excess cost over identifiable net assets of an acquired business. The Company tests goodwill annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of goodwill impairment as the excess of the carrying amount of the reporting unit over its fair value. The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that is more likely than not to reduce the fair value of the reporting unit below its carrying amount. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and market valuations, and assumptions about the Company’s strategic plans with regard to its operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates . |
Fixed Assets | Fixed Assets Fixed assets, consisting of furniture, fixtures, computer hardware, equipment, internal-use software and leasehold improvements are recorded at cost, less accumulated depreciation and amortization. Fixed assets are presented within other assets within the Company’s Consolidated Statements of Financial Condition. Direct costs associated with developing, purchasing or otherwise acquiring software for internal use (“Internal-Use Software”) are capitalized and amortized on a straight-line basis over the expected useful life of the software, beginning when the software is ready for its intended purpose. Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. three |
Leases | Leases The Company has entered into operating and finance leases for corporate offices and certain equipment and makes the determination if an arrangement constitutes a lease at inception. Operating leases are presented within right-of-use operating lease assets and operating lease liabilities within the Company’s Consolidated Statements of Financial Condition. Finance leases are capitalized as a component of fixed assets and presented within accounts payable, accrued expenses and other liabilities within the Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded within the Consolidated Statements of Financial Condition. Right-of-use operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and corresponding lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses the its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The right-of-use operating lease asset also includes any lease prepayments and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Lease expense is primarily recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. However, for certain equipment leases where the non-lease components are not material, the Company accounts for the lease and non-lease components as a single lease component. |
Redeemable Interest | Redeemable Interest On July 1, 2020, the Company completed its acquisition of a majority interest in SSG Capital Holdings Limited and its operating subsidiaries (“SSG”) (“SSG Acquisition”). In connection with the SSG Acquisition, the former owners of SSG retained an ownership interest in the operations acquired by the Company. In certain circumstances, the Company may acquire full ownership of SSG pursuant to a contractual arrangement that may be initiated by the Company or by the former owners of SSG. Since the acquisition of the remaining interest in SSG is not within the Company’s sole discretion, the ownership interest held by the former owners of SSG is classified as a redeemable interest in AOG and represents mezzanine equity. Redeemable interest in AOG entities was initially recorded at fair value on the date of acquisition within mezzanine equity within the Consolidated Statements of Financial Condition. Income (loss) is allocated based on the ownership percentage attributable to the redeemable interest. The Company determined that the redemption of the redeemable interest is probable as of the date of acquisition. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount, as defined in accordance with the terms of a contractual arrangement between the Company and the former owners of SSG, to the extent that the redemption amount exceeds the initial measurement on the date of acquisition. The |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenue is based on contracts with a determinable transaction price and distinct performance obligations with probable collectability. Revenues are not recognized until the performance obligation(s) are satisfied. Management Fees Management fees are generally based on a defined percentage of fair value of assets, total commitments, invested capital, net asset value (“NAV”), NAV plus unfunded commitments, total assets or par value of the investment portfolios managed by the Company. Principally all management fees are earned from affiliated funds of the Company. The contractual terms of management fees vary by fund structure and investment strategy. Management fees are recognized as revenue in the period advisory services are rendered, subject to the Company’s assessment of collectability. Management fees also include a quarterly fee on the net investment income (“Part I Fees”) of Ares Capital Corporation (NASDAQ: ARCC) (“ARCC”), a publicly-traded business development company registered under the Investment Company Act and managed by a subsidiary of the Company, and CION Ares Diversified Credit Fund (“CADC”). ARCC Part I Fees are equal to 20.0% of its net investment income (before ARCC Part I Fees and incentive fees payable based on capital gains), subject to a fixed hurdle rate of 1.75% per quarter, or 7.0% per annum. No fees are recognized until ARCC’s net investment income exceeds a 1.75% hurdle rate, with a catch-up provision to ensure that the Company receives 20.0% of the net investment income from the first dollar earned. CADC Part I Fees are equal to 15.0% of its net investment income (before CADC Part I Fees), subject to a fixed hurdle rate of 1.5% per quarter, or 6.0% per annum. No fees are recognized until CADC’s net investment income exceeds the hurdle rate, with a catch-up provision to ensure that the Company receives 15.0% of the net investment income from the first dollar earned. Carried Interest Allocation In certain fund structures, carried interest is allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund’s net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated, and may be subject to reversal to the extent that the amount allocated exceeds the amount due to the general partner or investment manager based on a fund’s cumulative investment returns. As the fair value of underlying assets varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (i) positive performance resulting in an increase in the carried interest allocated to the Company or (ii) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a reversal of previously recognized carried interest allocated to the Company. Accrued but unpaid carried interest as of the reporting date is recorded within investments within the Consolidated Statements of Financial Condition. Carried interest is realized when an underlying investment is profitably disposed of, or upon the return of each limited partner’s capital plus a preferred return, and the fund’s cumulative returns are in excess of the specific hurdle rates as defined in the applicable investment management agreements or governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally does not become realized until the end of a fund’s life. The Company accounts for carried interest, which represents a performance-based capital allocation from an investment fund to the Company, as earnings from financial assets within the scope of ASC 323, Investments-Equity Method and Joint Ventures . The Company recognizes carried interest allocation as a separate revenue line item in the Consolidated Statements of Operations with uncollected carried interest as of the reporting date reported within investments within the Consolidated Statements of Financial Condition. Substantially all carried interest allocation is earned from affiliated funds of the Company. Incentive Fees Incentive fees earned on the performance of certain fund structures, typically in credit funds and certain real estate funds, are recognized based on the fund’s performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. Incentive fees are realized at the end of a measurement period, typically annually. Once realized, such fees are no longer subject to reversal. Substantially all incentive fees are earned from affiliated funds of the Company. Principal Investment Income Principal investment income consists of interest and dividend income and net realized and unrealized gain (loss) from the equity method investments that the Company manages. Administrative, Transaction and Other Fees |
Equity-Based Compensation | Equity-Based Compensation The Company recognizes expense related to equity-based compensation for which it receives employee services in exchange for (a) equity instruments of the Company, (b) derivatives based on the Company’s Class A common stock or (c) liabilities that are based on the fair value of the Company’s equity instruments. Equity-based compensation expense represents expenses associated with restricted units and options granted under 2014 Equity Incentive Plan, as amended and restated on April 1, 2021 (the “Equity Incentive Plan”). Equity-based compensation expense for restricted units is determined based on the fair value of the respective equity award on the grant date and is recognized on a straight-line basis over the requisite service period, with a corresponding increase in additional paid-in-capital. Grant date fair value of the restricted units is determined by the most recent closing price of shares of the Company’s Class A common stock. The Company has granted certain performance-based restricted unit awards with market conditions. These awards generally have vesting conditions based upon the volume-weighted, average closing price of Class A common stock meeting or exceeding a stated price over a period of time, referred to as the market condition. Vesting is also generally subject to continued employment at the time such market condition is achieved. The grant date fair values of these awards are based on a probability distributed Monte-Carlo simulation. Due to the existence of the market condition, the vesting period for the awards is not explicit, and as such, compensation expense is recognized on a straight-line basis over the median vesting period derived from the positive iterations of the Monte Carlo simulations where the market condition is achieved. The Company recognizes share-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. The reduction in compensation expense is determined based on the specific awards forfeited during that period. The Company records deferred tax assets or liabilities for equity compensation plan awards based on deductions for income tax purposes of equity-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company is expected to receive a tax deduction. In addition, differences between the deferred tax assets recognized in accordance with GAAP and the actual tax deduction reported in the Company’s income tax returns are presented within income tax expense within the Consolidated Statements of Operations before taking into consideration the tax effects of the investment in AOG. Equity-based compensation expense is presented within compensation and benefits within the Consolidated Statements of Operations. |
Performance Related Compensation | Performance Related Compensation The Company has agreed to pay a portion of the carried interest and incentive fees earned from certain funds, including income from Consolidated Funds that is eliminated in consolidation, to certain professionals. Depending on the nature of each fund, carried interest and incentive fees may be structured as a fixed percentage subject to vesting based on continued employment or service (generally over a period of five |
Net Realized and Unrealized Gains/(Losses) on Investments | Net Realized and Unrealized Gains/(Losses) on InvestmentsRealized gains (losses) occur when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized appreciation (depreciation) results from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as net realized and unrealized gains (losses) on investments within the Consolidated Statements of Operations. Also, the Company’s share of the investee’s income and expenses for the Company’s equity method investments is presented within net realized and unrealized gains (losses) on investments. |
Interest and Dividend Income | Interest and Dividend Income Interest, dividends and other investment income are included within interest and dividend income. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established . |
Foreign Currency | Foreign Currency The U.S. dollar is the Company’s functional currency; however, certain transactions of the Company may not be denominated in U.S. dollars. Foreign exchange revaluation arising from these transactions is recognized within other income, net within the Consolidated Statements of Operations. For the years ended December 31, 2022 and 2021, the Company recognized $13.5 million and $4.8 million, respectively, in transaction losses related to foreign currencies revaluation. For the year ended December 31, 2020, the Company recognized $13.1 million in transaction gains related to foreign currencies revaluation. In addition, the consolidated results include certain foreign subsidiaries that use functional currencies other than the U.S. dollar. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rates as of the reporting date. Income and expense and gain and loss transactions denominated in foreign currencies are generally translated into U.S. dollars monthly using the average exchange rates during the respective transaction period. Translation adjustments resulting from this process are recorded to currency translation adjustment in accumulated other comprehensive income. |
Income Taxes | Income Taxes The Company elects to be taxed as a corporation and all earnings allocated to the Company are subject to U.S. corporate income taxes. A provision for corporate level income taxes imposed on unrealized gains and income items as well as taxes imposed on certain subsidiaries’ earnings is included in the consolidated tax provision. Also included in the consolidated tax provision are entity level income taxes incurred by certain Consolidated Funds. The portion of consolidated earnings not allocated to the Company flows through to owners of the Ares Operating Group entities without being taxed at the corporate level. Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized as income, in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current and deferred tax liabilities are reported on a net basis and the deferred tax assets, net is presented within other assets within the Consolidated Statements of Financial Condition. The Company analyzes its tax filing positions in all U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns for all open tax years in these jurisdictions. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits (“UTBs”) is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. Both accrued interest and penalties related to UTBs, when incurred, are presented within general, administrative and other expenses within the Consolidated Statements of Operations. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. The Company reviews its tax positions quarterly and adjusts its tax balances as new legislation is passed or new information becomes available. |
Earnings Per Share | Earnings Per Share Basic earnings per share of Class A and non-voting common stock is computed by dividing income available to Class A and non-voting common stockholders by the weighted-average number shares of Class A and non-voting common stock outstanding during the period. Income available to Ares Management Corporation represents net income attributable to Class A and non-voting common stockholders. Basic earnings per share of Class A and non-voting common stock is computed by using the two-class method. The two-class method is an earnings allocation method under which earnings per share is calculated for shares of Class A and non-voting common stock and participating securities considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other appreciation (depreciation) affecting stockholders’ equity that, under GAAP, has been excluded from net income. The Company’s other comprehensive income includes foreign currency translation adjustments. |
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 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. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848) to defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2024, except for hedging transactions as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company has concluded this guidance will not have a material impact on its consolidated financial statements. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 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: Year ended December 31, 2021 2020 Total revenues $ 4,276,706 $ 1,910,792 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 380,169 $ 112,918 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 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 (in years) as of December 31, 2022 As of December 31, 2022 2021 Management contracts 4.9 $ 586,077 $ 641,737 Client relationships 9.6 262,301 229,501 Trade name 7.5 11,079 11,079 Other 1.8 500 500 Finite-lived intangible assets 859,957 882,817 Foreign currency translation 935 1,792 Total finite-lived intangible assets 860,892 884,609 Less: accumulated amortization (220,472) (115,791) Finite-lived intangible assets, net 640,420 768,818 Management contracts 567,800 567,800 Trade name — 86,200 Indefinite-lived intangible assets 567,800 654,000 Intangible assets, net $ 1,208,220 $ 1,422,818 |
Schedule of Estimated Future Annual Amortization of Finite-lived Intangible Assets | At December 31, 2022, future annual amortization of finite-lived intangible assets for the years 2023 through 2027 and thereafter is estimated to be: Year Amortization 2023 $ 125,873 2024 114,928 2025 106,684 2026 78,232 2027 65,285 Thereafter 149,418 Total $ 640,420 |
Schedule of Goodwill Rollforward | The following table summarizes the carrying value of the Company’s goodwill: Credit Group Private Real Secondaries Group Strategic Initiatives Total Balance as of December 31, 2020 $ 32,196 $ 58,600 $ 53,120 $ — $ 227,131 $ 371,047 Acquisitions — — — 417,753 — 417,753 Foreign currency translation — — 219 (15) (1,032) (828) Balance as of December 31, 2021 32,196 58,600 53,339 417,738 226,099 787,972 Acquisitions — — 213,314 (96) — 213,218 Reallocation — (10,530) 10,530 — — — Foreign currency translation — — — (22) (1,512) (1,534) Balance as of December 31, 2022 $ 32,196 $ 48,070 $ 277,183 $ 417,620 $ 224,587 $ 999,656 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, December 31, 2022 2021 2022 2021 Equity method investments: Equity method - carried interest $ 3,106,577 $ 2,998,421 78.2% 81.4% Equity method private investment partnership interests - principal 543,592 473,887 13.7 12.9 Equity method private investment partnership interests and other (held at fair value) 123,170 117,539 3.1 3.2 Equity method private investment partnership interests and other 47,439 40,580 1.2 1.1 Total equity method investments 3,820,778 3,630,427 96.2 98.6 Collateralized loan obligations 25,163 30,815 0.6 0.8 Other fixed income 51,771 21,582 1.2 0.5 Collateralized loan obligations and other fixed income, at fair value 76,934 52,397 1.8 1.3 Common stock, at fair value 77,022 1,440 2.0 0.1 Total investments $ 3,974,734 $ 3,684,264 Investments held in the Consolidated Funds are summarized below: Fair Value at Percentage of total investments as of December 31, December 31, 2022 2021 2022 2021 Fixed income investments: Bonds $ 786,961 $ 857,125 6.0% 6.7% Loans 9,280,522 9,910,689 70.3 77.3 Investments held in trust account 1,013,382 1,000,285 7.7 7.8 Total fixed income investments 11,080,865 11,768,099 84.0 91.8 Equity securities 731,599 340,272 5.5 2.7 Partnership interests 1,392,169 708,307 10.5 5.5 Total investments, at fair value $ 13,204,633 $ 12,816,678 |
Summary of Equity Method Investments | The following tables present summarized financial information for the Company’s equity method investments, which are primarily funds managed by the Company: As of and Year Ended December 31, 2022 Credit Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total Statement of Financial Condition Investments $ 15,704,463 $ 9,376,032 $ 13,052,820 $ 12,719,333 $ 1,980,690 $ 52,833,338 Total assets 18,841,376 9,947,821 14,440,914 12,931,082 2,094,008 58,255,201 Total liabilities 4,848,872 937,326 5,007,250 3,716,111 927,813 15,437,372 Total equity 13,992,504 9,010,495 9,433,664 9,214,971 1,166,195 42,817,829 Statement of Operations Revenues $ 1,333,204 $ 271,873 $ 618,796 $ 2,874 $ 8,164 $ 2,234,911 Expenses (375,506) (153,372) (357,845) (289,741) (64,684) (1,241,148) Net realized and unrealized gains (losses) from investments (172,527) (482,260) 304,068 (11,173) 186,356 (175,536) Income tax benefit (expense) (4,723) 92 (36,501) — (11) (41,143) Net income (loss) $ 780,448 $ (363,667) $ 528,518 $ (298,040) $ 129,825 $ 777,084 As of and Year Ended December 31, 2021 Credit Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total Statement of Financial Condition Investments $ 16,919,068 $ 9,143,164 $ 9,555,266 $ 7,096,073 $ 484,969 $ 43,198,540 Total assets 18,316,775 9,548,551 10,146,133 7,220,604 490,246 45,722,309 Total liabilities 5,268,103 1,539,522 3,155,826 2,960,748 392,347 13,316,546 Total equity 13,048,672 8,009,029 6,990,307 4,259,856 97,899 32,405,763 Statement of Operations Revenues $ 1,318,517 $ 229,539 $ 326,507 $ 911 $ 23,910 $ 1,899,384 Expenses (316,134) (177,380) (170,008) (89,281) (11,927) (764,730) Net realized and unrealized gains (losses) from investments 457,943 2,161,730 1,179,698 1,399,009 (24,758) 5,173,622 Income tax expense (4,511) (19,125) (1,167) — — (24,803) Net income (loss) $ 1,455,815 $ 2,194,764 $ 1,335,030 $ 1,310,639 $ (12,775) $ 6,283,473 Year Ended December 31, 2020 Credit Group Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total Statement of Operations Revenues $ 940,450 $ 263,335 $ 191,543 $ — $ 2,656 $ 1,397,984 Expenses (221,083) (112,325) (81,071) — (5,585) (420,064) Net realized and unrealized gains (losses) from investments (210,881) 1,218,362 11,923 — 2,324 1,021,728 Income tax benefit (expense) (1,693) 57,935 346 — — 56,588 Net income (loss) $ 506,793 $ 1,427,307 $ 122,741 $ — $ (605) $ 2,056,236 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 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 $ — $ — $ 76,934 $ — $ 76,934 Common stock and other equity securities — 77,022 121,785 — 198,807 Partnership interests — — — 1,385 1,385 Total investments, at fair value — 77,022 198,719 1,385 277,126 Derivatives-foreign currency forward contracts — 4,173 — — 4,173 Total assets, at fair value $ — $ 81,195 $ 198,719 $ 1,385 $ 281,299 Liabilities, at fair value Derivatives-foreign currency forward contracts $ — $ (3,423) $ — $ — $ (3,423) Total liabilities, at fair value $ — $ (3,423) $ — $ — $ (3,423) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 534,137 $ 252,824 $ — $ 786,961 Loans — 8,663,678 616,844 — 9,280,522 Investments held in trust account 1,013,382 — — — 1,013,382 Total fixed income investments 1,013,382 9,197,815 869,668 11,080,865 Equity securities 719 — 730,880 — 731,599 Partnership interests — — 368,655 1,023,514 1,392,169 Total investments, at fair value 1,014,101 9,197,815 1,969,203 1,023,514 13,204,633 Derivatives-foreign currency forward contracts — 2,900 — — 2,900 Total assets, at fair value $ 1,014,101 $ 9,200,715 $ 1,969,203 $ 1,023,514 $ 13,207,533 Liabilities, at fair value Derivatives: Warrants $ (9,326) $ — $ — $ — $ (9,326) Foreign currency forward contracts — (2,942) — — (2,942) Asset swaps — — (3,556) — (3,556) Total derivative liabilities, at fair value (9,326) (2,942) (3,556) — (15,824) Loan obligations of CLOs — (10,701,720) — — (10,701,720) Total liabilities, at fair value $ (9,326) $ (10,704,662) $ (3,556) $ — $ (10,717,544) 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 and interest rate swaps — 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 Investments held in trust account 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: Warrants $ (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) |
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 year ended December 31, 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 Purchases (1) 894 32,392 — — 33,286 Sales/settlements (2) 68 (2,425) (2,538) 58,873 53,978 Change in fair value — — — (1,438) (1,438) Realized and unrealized appreciation (depreciation), net 10,383 (5,430) (37) — 4,916 Balance, end of period $ 121,785 $ 76,934 $ — $ — $ 198,719 Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date $ 12,448 $ (5,430) $ — $ — $ 7,018 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 — 184,037 94,386 — 278,423 Transfer out — (202,333) — — (202,333) Purchases (1) 323,699 732,477 59,258 — 1,115,434 Sales/settlements (2) (31,932) (536,125) (52,828) — (620,885) Amortized discounts/premiums 13 1,592 — — 1,605 Realized and unrealized appreciation (depreciation), net 99,917 (52,932) 29,166 (451) 75,700 Balance, end of period $ 730,880 $ 869,668 $ 368,655 $ (3,556) $ 1,965,647 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 70,591 $ (54,058) $ 29,166 $ (376) $ 45,323 (1) Purchases include paid-in-kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions, securities disposed of in connection with restructurings and contingent consideration payments. The following tables set forth a summary of changes in the fair value of the Level III measurements for the year ended December 31, 2021: Level III Assets of the Company Equity Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ — $ 144,336 Transfer in due to changes in consolidation — 7,623 — — 7,623 Established in connection with acquisition — — — (34,200) (34,200) Purchases (1) 19,278 1,689 — — 20,967 Sales/settlements (2) — (13,290) — — (13,290) Change in fair value — — — (23,235) (23,235) Realized and unrealized appreciation, net 1,259 3,026 — — 4,285 Balance, end of period $ 108,949 $ 52,397 $ 2,575 $ (57,435) $ 106,486 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 1,259 $ 1,575 $ — $ (23,235) $ (20,401) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,306 $ 231,857 $ 1,060 $ 996,266 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in 2,195 59,845 — — 62,040 Transfer out (33) (214,906) — — (214,939) Purchases (1) 118,963 904,497 15,000 — 1,038,460 Sales/settlements (2) (1,180) (512,505) (45,500) 301 (558,884) Amortized discounts/premiums — 1,683 — — 1,683 Realized and unrealized appreciation (depreciation), net (1,648) 11,358 37,316 (4,466) 42,560 Balance, end of period $ 339,183 $ 742,952 $ 238,673 $ (3,105) $ 1,317,703 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (848) $ 3,886 $ 37,316 $ (3,627) $ 36,727 (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 year ended December 31, 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 Purchases (1) 894 32,392 — — 33,286 Sales/settlements (2) 68 (2,425) (2,538) 58,873 53,978 Change in fair value — — — (1,438) (1,438) Realized and unrealized appreciation (depreciation), net 10,383 (5,430) (37) — 4,916 Balance, end of period $ 121,785 $ 76,934 $ — $ — $ 198,719 Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets and liabilities still held at the reporting date $ 12,448 $ (5,430) $ — $ — $ 7,018 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 — 184,037 94,386 — 278,423 Transfer out — (202,333) — — (202,333) Purchases (1) 323,699 732,477 59,258 — 1,115,434 Sales/settlements (2) (31,932) (536,125) (52,828) — (620,885) Amortized discounts/premiums 13 1,592 — — 1,605 Realized and unrealized appreciation (depreciation), net 99,917 (52,932) 29,166 (451) 75,700 Balance, end of period $ 730,880 $ 869,668 $ 368,655 $ (3,556) $ 1,965,647 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 70,591 $ (54,058) $ 29,166 $ (376) $ 45,323 (1) Purchases include paid-in-kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions, securities disposed of in connection with restructurings and contingent consideration payments. The following tables set forth a summary of changes in the fair value of the Level III measurements for the year ended December 31, 2021: Level III Assets of the Company Equity Fixed Income Partnership Interests Contingent Consideration Total Balance, beginning of period $ 88,412 $ 53,349 $ 2,575 $ — $ 144,336 Transfer in due to changes in consolidation — 7,623 — — 7,623 Established in connection with acquisition — — — (34,200) (34,200) Purchases (1) 19,278 1,689 — — 20,967 Sales/settlements (2) — (13,290) — — (13,290) Change in fair value — — — (23,235) (23,235) Realized and unrealized appreciation, net 1,259 3,026 — — 4,285 Balance, end of period $ 108,949 $ 52,397 $ 2,575 $ (57,435) $ 106,486 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 1,259 $ 1,575 $ — $ (23,235) $ (20,401) Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 221,043 $ 542,306 $ 231,857 $ 1,060 $ 996,266 Transfer out due to changes in consolidation (157) (49,326) — — (49,483) Transfer in 2,195 59,845 — — 62,040 Transfer out (33) (214,906) — — (214,939) Purchases (1) 118,963 904,497 15,000 — 1,038,460 Sales/settlements (2) (1,180) (512,505) (45,500) 301 (558,884) Amortized discounts/premiums — 1,683 — — 1,683 Realized and unrealized appreciation (depreciation), net (1,648) 11,358 37,316 (4,466) 42,560 Balance, end of period $ 339,183 $ 742,952 $ 238,673 $ (3,105) $ 1,317,703 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (848) $ 3,886 $ 37,316 $ (3,627) $ 36,727 (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 December 31, 2022: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 62,129 Market approach Multiple of book value 3.2x 3.2x 44,166 Market approach Multiple of book value 1.3x 1.3x 15,490 Transaction price (1) N/A N/A N/A Collateralized loan obligations 25,163 Broker quotes and/or 3rd party pricing services N/A N/A N/A Other fixed income 30,189 Transaction price (1) N/A N/A N/A 21,582 Other N/A N/A N/A Total assets $ 198,719 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 401,229 Discounted cash flow Discount rate 8.0% - 18.0% 12.0% 290,258 Market approach Multiple of book value 1.0x - 1.2x 1.2x 36,681 Market approach Net income multiple 30.0x 30.0x 2,064 Market approach EBITDA multiple (2) 6.3x - 31.0x 13.6x 648 Other N/A N/A N/A Partnership interest 368,655 Discounted cash flow Discount rate 10.3% - 22.0% 18.9% Fixed income investments 731,708 Broker quotes and/or 3rd party pricing services N/A N/A N/A 125,612 Market approach Yield 6.6% - 21.7% 12.8% 6,155 Transaction price N/A N/A N/A 4,479 Market approach EBITDA multiple 8.0x - 9.0x 8.5x 1,714 Other N/A N/A N/A Total assets $ 1,969,203 Liabilities Derivative instruments $ (3,556) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (3,556) (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 $ 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 14,610 Transaction price (1) N/A N/A N/A 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 $ (47,873) Other N/A N/A N/A (9,562) Monte Carlo simulation Discount rate 8.5% 8.5% Volatility 18.0% 18.0% 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 $ 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% 74,041 Transaction price (1) N/A N/A N/A 1,261 Market approach EBITDA multiples (2) 1.0x - 64.4x 17.5x 11 Broker quotes and/or 3rd party pricing services N/A N/A N/A Partnership interests 238,673 Discounted cash flow Discount rate 23.4% 23.4% Fixed income investments 614,754 Broker quotes and/or 3rd party pricing services N/A N/A N/A 128,198 Income approach Yield 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. |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Outstanding | The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of December 31, 2022 2021 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolving 3/31/2027 N/A $ 700,000 5.37% $ 415,000 1.25% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 248,693 4.21 247,979 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 396,602 3.28 396,156 3.28 2052 Senior Notes (4) 1/21/2022 2/1/2052 500,000 483,802 3.77 — — 2051 Subordinated Notes (5) 6/30/2021 6/30/2051 450,000 444,757 4.13 444,574 4.13 Total debt obligations $ 2,273,854 $ 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 based-rate with a Secured Overnight Financing Rate (“SOFR”) based-rate plus an applicable credit spread adjustment and extend the maturity date from March 2026 to March 2027. On July 6, 2022, the Company increased the revolver commitments from $1.275 billion to $1.325 billion via the accordion. 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 December 31, 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, 2020 $ 5,232 $ 4,283 $ — Debt issuance costs incurred 1,282 — 5,518 Amortization of debt issuance costs (1,240) (594) (92) Unamortized debt issuance costs as of December 31, 2021 5,274 3,689 5,426 Debt issuance costs incurred 1,516 5,482 — Amortization of debt issuance costs (1,280) (778) (183) Unamortized debt issuance costs as of December 31, 2022 $ 5,510 $ 8,393 $ 5,243 The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of December 31, 2022 2021 Fair Value of Weighted Weighted Fair Value of Loan Obligations Weighted Weighted Senior secured notes $ 10,142,545 4.84% 8.8 $ 10,016,638 1.93% 9.4 Subordinated notes (1) 559,175 N/A 7.8 641,023 N/A 8.1 Total loan obligations of Consolidated CLOs $ 10,701,720 $ 10,657,661 (1) 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 December 31, 2022 2021 Consolidated Funds’ Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate Credit Facilities: 10/13/2023 $ 112,817 $ 77,496 5.89% $ 71,500 1.59% 7/1/2023 18,000 15,550 6.25 16,271 1.73 7/23/2024 100,000 75,000 7.28 40,000 3.09 9/24/2026 150,000 — N/A — N/A 9/12/2027 54,000 — N/A N/A N/A Total borrowings of Consolidated Funds $ 168,046 $ 127,771 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets [Abstract] | |
Schedule of Other Assets | The components of other assets were as follows: As of December 31, 2022 2021 Other assets of the Company: Accounts and interest receivable $ 120,903 $ 159,757 Fixed assets, net 79,678 71,260 Deferred tax assets, net 68,933 39,398 Other assets 111,623 64,340 Total other assets of the Company $ 381,137 $ 334,755 Other assets of Consolidated Funds: Dividends and interest receivable $ 60,321 $ 36,350 Income tax and other receivables 5,249 3,080 Total other assets of Consolidated Funds $ 65,570 $ 39,430 |
Schedule of Fixed Assets, Net | The components of fixed assets were as follows: As of December 31, 2022 2021 Office and computer equipment $ 41,547 $ 31,963 Internal-use software 57,200 53,048 Leasehold improvements 84,820 74,677 Fixed assets, at cost 183,567 159,688 Less: accumulated depreciation (103,889) (88,428) Fixed assets, net $ 79,678 $ 71,260 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, Classification 2022 2021 Operating lease assets Right-of-use operating lease assets $ 155,950 $ 167,652 Finance lease assets Other assets (1) 400 1,011 Total lease assets $ 156,350 $ 168,663 Operating lease liabilities Operating lease liabilities $ 190,616 $ 205,075 Finance lease obligations Accounts payable, accrued expenses and other liabilities 330 936 Total lease liabilities $ 190,946 $ 206,011 (1) Finance lease assets are recorded net of accumulated amortization of $2.1 million and $1.6 million as of December 31, 2022 and 2021, respectively. Year ended December 31, Classification 2022 2021 2020 Operating lease expense General, administrative and other expenses $ 42,746 $ 38,135 $ 31,713 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 633 561 469 Interest on finance lease liabilities Interest expense 14 27 43 Total lease expense $ 43,393 $ 38,723 $ 32,225 Year ended December 31, Other information 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 46,558 $ 37,500 $ 32,121 Operating cash flows for finance leases 21 39 53 Financing cash flows for finance leases 593 535 460 Leased assets obtained in exchange for new finance lease liabilities 13 189 — Leased assets obtained in exchange for new operating lease liabilities 43,331 57,624 36,935 As of December 31, Lease term and discount rate 2022 2021 Weighted-average remaining lease terms (in years): Operating leases 5.5 6.0 Finance leases 2.1 1.8 Weighted-average discount rate: Operating leases 2.72% 1.81% Finance leases 2.99% 2.94% |
Schedule of Operating Lease Maturities | Maturity of lease liabilities Operating Leases Finance Leases 2023 $ 46,532 $ 167 2024 42,716 162 2025 37,242 11 2026 25,198 — 2027 15,864 — Thereafter 36,077 — Total future payments 203,629 340 Less: interest 13,013 10 Total lease liabilities $ 190,616 $ 330 |
Schedule of Finance Lease Maturities | Maturity of lease liabilities Operating Leases Finance Leases 2023 $ 46,532 $ 167 2024 42,716 162 2025 37,242 11 2026 25,198 — 2027 15,864 — Thereafter 36,077 — Total future payments 203,629 340 Less: interest 13,013 10 Total lease liabilities $ 190,616 $ 330 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2022 2021 Due from affiliates: Management fees receivable from non-consolidated funds $ 456,314 $ 372,249 Incentive fee receivable from non-consolidated funds 169,979 211,243 Payments made on behalf of and amounts due from non-consolidated funds and employees 132,179 86,891 Due from affiliates—Company $ 758,472 $ 670,383 Amounts due from non-consolidated funds $ 15,789 $ 7,234 Due from affiliates—Consolidated Funds $ 15,789 $ 7,234 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 8,701 $ 10,160 Tax receivable agreement liability 118,466 100,542 Undistributed carried interest and incentive fees 121,332 66,494 Payments made by non-consolidated funds on behalf of and payable by the Company 4,299 21,357 Due to affiliates—Company $ 252,798 $ 198,553 Amounts due to portfolio companies and non-consolidated funds $ 4,037 $ — Due to affiliates—Consolidated Funds $ 4,037 $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes attributable to the Company and the Consolidated Funds, consisted of the following: Year ended December 31, Provision for Income Taxes 2022 2021 2020 The Company Current: U.S. federal income tax expense $ 42,452 $ 40,861 $ 23,845 State and local income tax expense 7,614 12,121 6,714 Foreign income tax expense 14,119 11,684 9,141 64,185 64,666 39,700 Deferred: U.S. federal income tax expense 10,660 68,201 12,451 State and local income tax expense 2,131 13,040 1,952 Foreign income tax expense (benefit) (5,416) 1,390 772 7,375 82,631 15,175 Total: U.S. federal income tax expense 53,112 109,062 36,296 State and local income tax expense 9,745 25,161 8,666 Foreign income tax expense 8,703 13,074 9,913 Income tax expense 71,560 147,297 54,875 Consolidated Funds Current: Foreign income tax expense 331 88 118 Income tax expense 331 88 118 Total Provision for Income Taxes Total current income tax expense 64,516 64,754 39,818 Total deferred income tax expense 7,375 82,631 15,175 Income tax expense $ 71,891 $ 147,385 $ 54,993 |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate differed from the federal statutory rate for the following reasons: Year ended December 31, 2022 2021 2020 Income tax expense at federal statutory rate 21.0% 21.0% 21.0% Income passed through to non-controlling interests (8.9) (9.2) (8.2) State and local taxes, net of federal benefit 2.2 1.9 1.8 Foreign taxes (1.4) (0.1) 0.3 Permanent items 0.6 (0.3) (0.5) Disallowed executive compensation 0.1 0.7 — Other, net 0.3 (0.2) (0.2) Valuation allowance 0.2 — 0.3 Total effective rate 14.1% 13.8% 14.5% |
Schedule of Deferred Tax Assets and Liabilities | The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows as of December 31, 2022 and 2021. Deferred tax assets, net are included within other assets within the Consolidated Statements of Financial Condition. As of December 31, Deferred Tax Assets and Liabilities of the Company 2022 2021 Deferred tax assets Amortizable tax basis for AOG Unit exchanges $ 124,217 $ 108,644 Net operating losses and capital loss carryforwards 2,192 1,292 Other, net 6,089 6,101 Total gross deferred tax assets 132,498 116,037 Valuation allowance (2,155) (1,010) Total net deferred tax assets 130,343 115,027 Deferred tax liabilities Investment in partnerships (61,410) (75,629) Total deferred tax liabilities (61,410) (75,629) Deferred tax assets, net $ 68,933 $ 39,398 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 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 restricted units and AOG Units as their effect would have been anti-dilutive: Year ended December 31, 2022 2021 2020 Restricted units — 132 16,599 AOG Units — 116,226,798 115,126,565 |
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: Year ended December 31, 2022 2021 2020 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 $ 167,541 $ 386,748 $ 130,442 Distributions on unvested restricted units (14,096) (10,986) (10,454) Undistributed earnings allocable to participating unvested restricted units — (7,138) — Net income available to Class A and non-voting common stockholders $ 153,445 $ 368,624 $ 119,988 Basic weighted-average shares of Class A and non-voting common stock 175,510,798 163,703,626 135,065,436 Basic earnings per share of Class A and non-voting common stock $ 0.87 $ 2.24 $ 0.89 Diluted 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 $ 167,541 $ 386,748 $ 130,442 Distributions on unvested restricted units (14,096) — — Net income available to Class A and non-voting common stockholders $ 153,445 $ 386,748 $ 130,442 Effect of dilutive shares: Restricted units — 11,209,144 9,207,639 Options — 5,199,501 5,235,423 Diluted weighted-average shares of Class A and non-voting common stock 175,510,798 180,112,271 149,508,498 Diluted earnings per share of Class A and non-voting common stock $ 0.87 $ 2.15 $ 0.87 Dividend declared and paid per Class A and non-voting common stock $ 2.44 $ 1.88 $ 1.60 |
EQUITY COMPENSATION (Tables)
EQUITY COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 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: Year ended December 31, 2022 2021 2020 Restricted units $ 200,391 $ 170,980 $ 115,680 Restricted units with a market condition — 66,211 7,263 Options — — 43 Equity-based compensation expense $ 200,391 $ 237,191 $ 122,986 |
Summary of Unvested Restricted Units' Activity | The following table presents unvested restricted units’ activity: Restricted Units Weighted Average Balance - December 31, 2021 18,323,036 $ 36.43 Granted 4,142,621 74.62 Vested (5,524,397) 27.16 Forfeited (278,261) 50.95 Balance - December 31, 2022 16,662,999 $ 48.76 |
Summary of Unvested Options Activity | A summary of options activity during the year ended December 31, 2022 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - December 31, 2021 6,306,282 $ 19.00 2.3 $ 392,692 Granted — — — — Exercised (1,136,063) 19.00 — — Expired — — — — Forfeited — — — — Balance - December 31, 2022 5,170,219 $ 19.00 1.3 $ 255,616 Exercisable at December 31, 2022 5,170,219 $ 19.00 1.3 $ 255,616 |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST (Tables) | 12 Months Ended |
Dec. 31, 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 1,348,909 — — (1,348,909) — Redemptions of AOG Units — — — (25,000) (25,000) Stock option exercises, net of shares withheld for tax 1,123,509 — — — 1,123,509 Vesting of restricted stock awards, net of shares withheld for tax 3,068,313 — — — 3,068,313 Cancellation of AOG Units — — — (4,135) (4,135) Balance - December 31, 2022 173,892,036 3,489,911 1,000 117,231,288 294,614,235 |
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 December 31, 2022 As of December 31, 2021 Year ended December 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2022 2021 2020 Ares Management Corporation 177,381,947 60.21% 171,841,216 59.16% 59.76% 58.48% 53.98% Ares Owners Holdings, L.P. 117,231,288 39.79 118,609,332 40.84 40.24 41.52 46.02 Total 294,613,235 100.00% 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 Opening balance at July 1, 2020 $ 99,804 Net loss (976) Currency translation adjustment, net of tax 1,538 Balance - December 31, 2020 100,366 Distribution (2,390) Net loss (1,341) Currency translation adjustment, net of tax (627) Balance - December 31, 2021 96,008 Distribution (1,887) Net loss (851) Currency translation adjustment, net of tax (426) Equity compensation 285 Balance - December 31, 2022 $ 93,129 The following table summarizes the activities associated with the redeemable interest in Consolidated Funds: Total Balance - January 1, 2021 $ — Change in redemption value 1,000,000 Balance - December 31, 2021 1,000,000 Change in redemption value 13,282 Balance - December 31, 2022 $ 1,013,282 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Financial Results for Company's Operating Segments and OMG | The following tables present the financial results for the Company’s operating segments, as well as the OMG: Year ended December 31, 2022 Credit Group Private Equity Group Real Secondaries Group Strategic Initiatives Total OMG Total Management fees $ 1,355,975 $ 199,837 $ 347,808 $ 176,694 $ 72,214 $ 2,152,528 $ — $ 2,152,528 Fee related performance revenues 71,497 — 167,693 235 — 239,425 — 239,425 Other fees 31,945 1,888 35,879 — 321 70,033 24,529 94,562 Compensation and benefits (441,778) (86,561) (240,015) (53,743) (33,011) (855,108) (317,396) (1,172,504) General, administrative and other expenses (73,945) (30,697) (39,739) (12,685) (7,578) (164,644) (155,017) (319,661) Fee related earnings 943,694 84,467 271,626 110,501 31,946 1,442,234 (447,884) 994,350 Performance income—realized 156,784 123,806 133,130 4,156 145 418,021 — 418,021 Performance related compensation—realized (97,564) (90,300) (83,105) (3,515) (57) (274,541) — (274,541) Realized net performance income 59,220 33,506 50,025 641 88 143,480 — 143,480 Investment income (loss)—realized 7,071 3,432 3,115 — 868 14,486 (37) 14,449 Interest and other investment income (expense)—realized 26,567 2,546 9,045 3,683 9,851 51,692 (1,588) 50,104 Interest expense (15,395) (15,953) (11,346) (5,660) (22,318) (70,672) (684) (71,356) Realized net investment income (loss) 18,243 (9,975) 814 (1,977) (11,599) (4,494) (2,309) (6,803) Realized income $ 1,021,157 $ 107,998 $ 322,465 $ 109,165 $ 20,435 $ 1,581,220 $ (450,193) $ 1,131,027 Year ended December 31, 2021 Credit Group Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total OMG Total Management fees $ 1,070,608 $ 181,918 $ 218,202 $ 97,945 $ 66,604 $ 1,635,277 $ — $ 1,635,277 Fee related performance revenues 86,480 — 51,399 — — 137,879 — 137,879 Other fees 27,103 1,070 13,038 — 82 41,293 8,478 49,771 Compensation and benefits (410,394) (78,156) (127,679) (25,215) (26,673) (668,117) (226,725) (894,842) General, administrative and other expenses (54,686) (21,625) (24,181) (6,862) (7,778) (115,132) (100,645) (215,777) Fee related earnings 719,111 83,207 130,779 65,868 32,235 1,031,200 (318,892) 712,308 Performance income—realized 207,446 171,637 95,270 70 4 474,427 — 474,427 Performance related compensation—realized (131,900) (137,576) (59,056) (49) (2) (328,583) — (328,583) Realized net performance income 75,546 34,061 36,214 21 2 145,844 — 145,844 Investment income (loss)—realized 1,989 (3,754) 17,700 19 13 15,967 — 15,967 Interest and other investment income—realized 20,377 11,514 7,252 2,261 3,948 45,352 226 45,578 Interest expense (8,038) (7,925) (6,394) (836) (13,031) (36,224) (536) (36,760) Realized net investment income (loss) 14,328 (165) 18,558 1,444 (9,070) 25,095 (310) 24,785 Realized income $ 808,985 $ 117,103 $ 185,551 $ 67,333 $ 23,167 $ 1,202,139 $ (319,202) $ 882,937 Year ended December 31, 2020 Credit Group Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Total OMG Total Management fees $ 841,138 $ 181,813 $ 137,027 $ — $ 26,587 $ 1,186,565 $ — $ 1,186,565 Fee related performance revenues 22,160 — 827 — — 22,987 — 22,987 Other fees 18,644 178 974 — 152 19,948 — 19,948 Compensation and benefits (320,111) (77,266) (66,374) — (6,442) (470,193) (155,979) (626,172) General, administrative and other expenses (53,997) (20,460) (13,936) — (2,926) (91,319) (80,778) (172,097) Fee related earnings 507,834 84,265 58,518 — 17,371 667,988 (236,757) 431,231 Performance income—realized 70,148 392,635 61,446 — — 524,229 — 524,229 Performance related compensation—realized (44,582) (315,905) (38,975) — — (399,462) — (399,462) Realized net performance income 25,566 76,730 22,471 — — 124,767 — 124,767 Investment income (loss)—realized (2,309) 25,018 7,228 — 13 29,950 (5,698) 24,252 Interest and other investment income (expense)—realized 16,314 4,027 6,016 — 996 27,353 (739) 26,614 Interest expense (8,722) (7,055) (6,331) — (1,465) (23,573) (1,335) (24,908) Realized net investment income (loss) 5,283 21,990 6,913 — (456) 33,730 (7,772) 25,958 Realized income $ 538,683 $ 182,985 $ 87,902 $ — $ 16,915 $ 826,485 $ (244,529) $ 581,956 |
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: Year ended December 31, 2022 2021 2020 Segment revenues Management fees $ 2,152,528 $ 1,635,277 $ 1,186,565 Fee related performance revenues 239,425 137,879 22,987 Other fees 70,033 41,293 19,948 Performance income—realized 418,021 474,427 524,229 Total segment revenues $ 2,880,007 $ 2,288,876 $ 1,753,729 Segment expenses Compensation and benefits $ 855,108 $ 668,117 $ 470,193 General, administrative and other expenses 164,644 115,132 91,319 Performance related compensation—realized 274,541 328,583 399,462 Total segment expenses $ 1,294,293 $ 1,111,832 $ 960,974 Segment realized net investment income (expense) Investment income—realized $ 14,486 $ 15,967 $ 29,950 Interest and other investment income —realized 51,692 45,352 27,353 Interest expense (70,672) (36,224) (23,573) Total segment realized net investment income (expense) $ (4,494) $ 25,095 $ 33,730 |
Schedule of Segment Revenues Components | The following table reconciles the Company’s consolidated revenues to segment revenue: Year ended December 31, 2022 2021 2020 Total consolidated revenue $ 3,055,443 $ 4,212,091 $ 1,764,046 Performance (income) loss—unrealized (107,153) (1,744,056) 7,554 Management fees of Consolidated Funds eliminated in consolidation 46,324 44,896 45,268 Carried interest allocation of Consolidated Funds eliminated in consolidation 7,549 — — Incentive fees of Consolidated Funds eliminated in consolidation 3,980 5,458 141 Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 17,013 4,483 15,824 Administrative fees (1) (69,414) (49,223) (36,512) OMG revenue (24,354) (8,478) — Performance income reclass (2) (14) 1,434 (3,726) Acquisition-related incentive fees (3) — (47,873) — Principal investment income, net of eliminations (12,278) (99,433) (28,552) Net revenue of non-controlling interests in consolidated subsidiaries (37,089) (30,423) (10,314) Total consolidation adjustments and reconciling items (175,436) (1,923,215) (10,317) Total segment revenue $ 2,880,007 $ 2,288,876 $ 1,753,729 (1) Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s 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 within the Company’s Consolidated Statements of Operations. |
Schedule of Segment Expenses Components | The following table reconciles the Company’s consolidated expenses to segment expenses: Year ended December 31, 2022 2021 2020 Total consolidated expenses $ 2,749,085 $ 3,410,083 $ 1,450,486 Performance related compensation-unrealized (88,502) (1,316,205) 11,552 Expenses of Consolidated Funds added in consolidation (86,988) (113,024) (65,527) Expenses of Consolidated Funds eliminated in consolidation 50,833 50,538 45,408 Administrative fees (1) (68,255) (49,223) (36,512) OMG expenses (472,413) (327,370) (236,757) Acquisition and merger-related expense (15,197) (21,162) (11,124) Equity compensation expense (200,106) (237,191) (122,986) Acquisition-related compensation expense (2) (206,252) (66,893) — Placement fee adjustment (2,088) (78,883) (19,329) Depreciation and amortization expense (335,083) (106,705) (40,662) Expense of non-controlling interests in consolidated subsidiaries (30,741) (32,133) (13,575) Total consolidation adjustments and reconciling items (1,454,792) (2,298,251) (489,512) Total segment expenses $ 1,294,293 $ 1,111,832 $ 960,974 (1) Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s 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 within the Company’s 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: Year ended December 31, 2022 2021 2020 Total consolidated other income $ 204,448 $ 263,682 $ 65,918 Investment (income) loss—unrealized 12,769 (58,694) 47,317 Interest and other investment (income) loss—unrealized (25,603) 6,249 (12,134) Other income from Consolidated Funds added in consolidation, net (250,144) (256,375) (70,994) Other expense from Consolidated Funds eliminated in consolidation, net (16,484) (2,868) (14,053) OMG other (income) expense 14,419 (1,368) (927) Performance income reclass (1) 14 (1,434) 3,726 Principal investment income 48,223 120,896 4,044 Other (income) expense, net 1,873 (19,886) 10,277 Other (income) loss of non-controlling interests in consolidated subsidiaries 5,991 (25,107) 556 Total consolidation adjustments and reconciling items (208,942) (238,587) (32,188) Total segment realized net investment income (expense) $ (4,494) $ 25,095 $ 33,730 (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 within the Company’s Consolidated Statements of Operations. |
Reconciliation of Segment Results to the Company's Income before Taxes and Total Assets | The following table presents the reconciliation of income before taxes as reported in the Consolidated Statements of Operations to segment results of RI and FRE: Year ended December 31, 2022 2021 2020 Income before taxes $ 510,806 $ 1,065,690 $ 379,478 Adjustments: Depreciation and amortization expense 335,083 106,705 40,662 Equity compensation expense 198,948 237,191 122,986 Acquisition-related compensation expense (1) 206,252 66,893 — Acquisition-related incentive fees (2) — (47,873) — Acquisition and merger-related expense 15,197 21,162 11,194 Placement fee adjustment 2,088 78,883 19,329 OMG expense, net 462,478 317,524 235,830 Other (income) expense, net 1,874 (19,886) 10,207 Net (income) expense of non-controlling interests in consolidated subsidiaries (357) (23,397) 3,817 Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (119,664) (120,457) (28,203) Total performance (income) loss—unrealized (107,153) (1,744,056) 7,554 Total performance related compensation—unrealized 88,502 1,316,205 (11,552) Total investment (income) loss—unrealized (12,834) (52,445) 35,183 Realized income 1,581,220 1,202,139 826,485 Total performance income—realized (418,021) (474,427) (524,229) Total performance related compensation—realized 274,541 328,583 399,462 Total investment income—realized 4,494 (25,095) (33,730) Fee related earnings $ 1,442,234 $ 1,031,200 $ 667,988 (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 within the Company’s Consolidated Statements of Operations. |
CONSOLIDATION (Tables)
CONSOLIDATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Interest in VIEs | The Company’s interests in consolidated and non-consolidated VIEs, as presented within the Consolidated Statements of Financial Condition, its respective maximum exposure to loss relating to non-consolidated VIEs, and its net income attributable to non-controlling interests related to consolidated VIEs, as presented within the Consolidated Statements of Operations, are as follows: As of December 31, 2022 2021 Maximum exposure to loss attributable to the Company’s investment in non-consolidated VIEs (1) $ 393,549 $ 353,768 Maximum exposure to loss attributable to the Company’s investment in consolidated VIEs (1) 537,239 583,192 Assets of consolidated VIEs 13,128,088 13,197,321 Liabilities of consolidated VIEs 11,593,867 12,018,655 (1) As of December 31, 2022 and 2021, the Company’s maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs and totaled $82.0 million and $103.8 million, respectively. Year ended December 31, 2022 2021 2020 Net income attributable to non-controlling interests related to consolidated VIEs $ 105,797 $ 115,217 $ 28,085 |
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 December 31, 2022 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 389,987 $ — $ — $ 389,987 Investments (includes $3,106,577 of accrued carried interest) 4,515,955 — (541,221) 3,974,734 Due from affiliates 949,532 — (191,060) 758,472 Other assets 381,137 — — 381,137 Right-of-use operating lease assets 155,950 — — 155,950 Intangible assets, net 1,208,220 — — 1,208,220 Goodwill 999,656 — — 999,656 Assets of Consolidated Funds Cash and cash equivalents — 724,641 — 724,641 Investments held in trust account — 1,013,382 — 1,013,382 Investments, at fair value — 12,187,392 3,859 12,191,251 Due from affiliates — 26,531 (10,742) 15,789 Receivable for securities sold — 124,050 — 124,050 Other assets — 65,570 — 65,570 Total assets $ 8,600,437 $ 14,141,566 $ (739,164) $ 22,002,839 Liabilities Accounts payable, accrued expenses and other liabilities $ 242,663 $ — $ (10,742) $ 231,921 Accrued compensation 510,130 — — 510,130 Due to affiliates 252,798 — — 252,798 Performance related compensation payable 2,282,209 — — 2,282,209 Debt obligations 2,273,854 — — 2,273,854 Operating lease liabilities 190,616 — — 190,616 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 175,435 (7,149) 168,286 Due to affiliates — 191,238 (187,201) 4,037 Payable for securities purchased — 314,193 — 314,193 CLO loan obligations, at fair value — 10,797,332 (95,612) 10,701,720 Fund borrowings — 168,046 — 168,046 Total liabilities 5,752,270 11,646,244 (300,704) 17,097,810 Commitments and contingencies Redeemable interest in Consolidated Funds — 1,013,282 — 1,013,282 Redeemable interest in Ares Operating Group entities 93,129 — — 93,129 Non-controlling interest in Consolidated Funds — 1,482,040 (407,684) 1,074,356 Non-controlling interest in Ares Operating Group entities 1,147,269 — (12,246) 1,135,023 Stockholders’ Equity Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (173,892,036 shares issued and outstanding) 1,739 — — 1,739 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 (117,231,288 shares issued and outstanding) 1,172 — — 1,172 Additional paid-in-capital 1,989,284 — (18,530) 1,970,754 Accumulated deficit (369,475) — — (369,475) Accumulated other comprehensive loss, net of tax (14,986) — — (14,986) Total stockholders’ equity 1,607,769 — (18,530) 1,589,239 Total equity 2,755,038 1,482,040 (438,460) 3,798,618 Total liabilities, redeemable interest, non-controlling interests and equity $ 8,600,437 $ 14,141,566 $ (739,164) $ 22,002,839 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 Investments held in trust account — 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 loss, 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 | Year ended December 31, 2022 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 2,182,757 $ — $ (46,324) $ 2,136,433 Carried interest allocation 465,561 — (7,549) 458,012 Incentive fees 305,167 — (3,980) 301,187 Principal investment income 48,222 — (35,943) 12,279 Administrative, transaction and other fees 164,545 — (17,013) 147,532 Total revenues 3,166,252 — (110,809) 3,055,443 Expenses Compensation and benefits 1,498,590 — — 1,498,590 Performance related compensation 518,829 — — 518,829 General, administrative and other expense 695,511 — (255) 695,256 Expenses of the Consolidated Funds — 86,988 (50,578) 36,410 Total expenses 2,712,930 86,988 (50,833) 2,749,085 Other income (expense) Net realized and unrealized gains (losses) on investments (27,924) — 32,656 4,732 Interest and dividend income 25,196 — (15,797) 9,399 Interest expense (71,356) — — (71,356) Other income, net 11,904 — 1,215 13,119 Net realized and unrealized gains on investments of the Consolidated Funds — 87,287 (13,901) 73,386 Interest and other income of the Consolidated Funds — 587,744 (1,215) 586,529 Interest expense of the Consolidated Funds — (424,887) 13,526 (411,361) Total other income (expense), net (62,180) 250,144 16,484 204,448 Income before taxes 391,142 163,156 (43,492) 510,806 Income tax expense 71,560 331 — 71,891 Net income 319,582 162,825 (43,492) 438,915 Less: Net income attributable to non-controlling interests in Consolidated Funds — 162,825 (43,492) 119,333 Net income attributable to Ares Operating Group entities 319,582 — — 319,582 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (851) — — (851) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 152,892 — — 152,892 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 167,541 $ — $ — $ 167,541 Year ended December 31, 2021 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 1,655,943 $ — $ (44,896) $ 1,611,047 Carried interest allocation 2,073,551 — — 2,073,551 Incentive fees 338,334 — (5,458) 332,876 Principal investment income 120,896 — (21,463) 99,433 Administrative, transaction and other fees 99,667 — (4,483) 95,184 Total revenues 4,288,391 — (76,300) 4,212,091 Expenses Compensation and benefits 1,162,633 — — 1,162,633 Performance related compensation 1,740,786 — — 1,740,786 General, administrative and other expense 444,178 — — 444,178 Expenses of the Consolidated Funds — 113,024 (50,538) 62,486 Total expenses 3,347,597 113,024 (50,538) 3,410,083 Other income (expense) Net realized and unrealized gains on investments 11,920 — 7,182 19,102 Interest and dividend income 14,199 — (4,334) 9,865 Interest expense (36,760) — — (36,760) Other income, net 15,080 — (678) 14,402 Net realized and unrealized gains on investments of the Consolidated Funds — 91,390 (14,087) 77,303 Interest and other income of the Consolidated Funds — 437,140 678 437,818 Interest expense of the Consolidated Funds — (272,155) 14,107 (258,048) Total other income, net 4,439 256,375 2,868 263,682 Income before taxes 945,233 143,351 (22,894) 1,065,690 Income tax expense 147,297 88 — 147,385 Net income 797,936 143,263 (22,894) 918,305 Less: Net income attributable to non-controlling interests in Consolidated Funds — 143,263 (22,894) 120,369 Net income attributable to Ares Operating Group entities 797,936 — — 797,936 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (1,341) — — (1,341) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 390,440 — — 390,440 Net income attributable to Ares Management Corporation 408,837 — — 408,837 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 $ 386,748 $ — $ — $ 386,748 Year ended December 31, 2020 Consolidated Consolidated Eliminations Consolidated Revenues Management fees $ 1,195,876 $ — $ (45,268) $ 1,150,608 Carried interest allocation 505,608 — — 505,608 Incentive fees 38,043 — (141) 37,902 Principal investment income 4,044 — 24,508 28,552 Administrative, transaction and other fees 57,200 — (15,824) 41,376 Total revenues 1,800,771 — (36,725) 1,764,046 Expenses Compensation and benefits 767,252 — — 767,252 Performance related compensation 404,116 — — 404,116 General, administrative and other expense 258,999 — — 258,999 Expenses of the Consolidated Funds — 65,527 (45,408) 20,119 Total expenses 1,430,367 65,527 (45,408) 1,450,486 Other income (expense) Net realized and unrealized losses on investments (8,720) — (288) (9,008) Interest and dividend income 11,641 — (3,570) 8,071 Interest expense (24,908) — — (24,908) Other income, net 2,858 — 8,433 11,291 Net realized and unrealized losses on investments of the Consolidated Funds — (109,387) 12,523 (96,864) Interest and other income of the Consolidated Funds — 473,857 (10,205) 463,652 Interest expense of the Consolidated Funds — (293,476) 7,160 (286,316) Total other income (expense), net (19,129) 70,994 14,053 65,918 Income before taxes 351,275 5,467 22,736 379,478 Income tax expense 54,875 118 — 54,993 Net income 296,400 5,349 22,736 324,485 Less: Net income attributable to non-controlling interests in Consolidated Funds — 5,349 22,736 28,085 Net income attributable to Ares Operating Group entities 296,400 — — 296,400 Less: Net loss attributable to redeemable interests in Ares Operating Group entities (976) — — (976) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 145,234 — — 145,234 Net income attributable to Ares Management Corporation 152,142 — — 152,142 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ — $ — $ 130,442 |
Schedule of Cash Flows | Year ended December 31, 2022 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 319,582 $ 162,825 $ (43,492) $ 438,915 Adjustments to reconcile net income to net cash provided by operating activities: Equity compensation expense 200,391 — — 200,391 Depreciation and amortization 341,341 — — 341,341 Net realized and unrealized losses on investments 15,717 — (4,788) 10,929 Investments purchased (443,505) — 72,381 (371,124) Proceeds from sale of investments 303,987 — (121,494) 182,493 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — (87,287) 13,901 (73,386) Other non-cash amounts — (33,822) — (33,822) Investments purchased — (9,408,078) (25,951) (9,434,029) Proceeds from sale of investments — 8,198,812 — 8,198,812 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable (28,161) — 7,549 (20,612) Due to/from affiliates (125,407) — 164,480 39,073 Other assets (101,275) — (3,930) (105,205) Accrued compensation and benefits 200,769 — — 200,769 Accounts payable, accrued expenses and other liabilities (50,471) — (1,214) (51,685) Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 324,550 324,550 Change in other assets and receivables held at Consolidated Funds — 286,895 (135,000) 151,895 Change in other liabilities and payables held at Consolidated Funds — (733,417) — (733,417) Net cash provided by (used in) operating activities 632,968 (1,614,072) 246,992 (734,112) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (35,796) — — (35,796) Acquisitions, net of cash acquired (301,583) — — (301,583) Net cash used in investing activities (337,379) — — (337,379) Cash flows from financing activities: Proceeds from Credit Facility 1,380,000 — — 1,380,000 Proceeds from senior notes 488,915 — — 488,915 Repayments of Credit Facility (1,095,000) — — (1,095,000) Dividends and distributions (836,364) — — (836,364) Stock option exercises 21,205 — — 21,205 Taxes paid related to net share settlement of equity awards (201,311) — — (201,311) Other financing activities 4,055 — — 4,055 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 596,777 (47,381) 549,396 Distributions to non-controlling interests in Consolidated Funds — (303,230) 124,939 (178,291) Borrowings under loan obligations by Consolidated Funds — 1,140,680 — 1,140,680 Repayments under loan obligations by Consolidated Funds — (145,222) — (145,222) Net cash provided by (used in) financing activities (238,500) 1,289,005 77,558 1,128,063 Effect of exchange rate changes (10,757) 517 — (10,240) Net change in cash and cash equivalents 46,332 (324,550) 324,550 46,332 Cash and cash equivalents, beginning of period 343,655 1,049,191 (1,049,191) 343,655 Cash and cash equivalents, end of period $ 389,987 $ 724,641 $ (724,641) $ 389,987 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisitions $ 12,835 $ — $ — $ 12,835 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 59,463 $ 260,866 $ — $ 320,329 Cash paid during the period for income taxes $ 104,544 $ 320 $ — $ 104,864 Year ended December 31, 2021 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 797,936 $ 143,263 $ (22,894) $ 918,305 Adjustments to reconcile net income to net cash provided by operating activities: Equity compensation expense 237,191 — — 237,191 Depreciation and amortization 113,293 — — 113,293 Net realized and unrealized gains on investments (96,331) — 7,353 (88,978) Other non-cash amounts (31,070) — — (31,070) Investments purchased (561,762) — 221,563 (340,199) Proceeds from sale of investments 296,483 — (23,101) 273,382 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — (91,390) 14,087 (77,303) Other non-cash amounts — (35,879) — (35,879) Investments purchased — (13,075,187) 7,623 (13,067,564) Proceeds from sale of investments — 9,970,609 — 9,970,609 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable (745,021) — — (745,021) Due to/from affiliates (187,374) — 6,446 (180,928) Other assets 210,106 — 3,719 213,825 Accrued compensation and benefits 142,815 — — 142,815 Accounts payable, accrued expenses and other liabilities 124,489 — 679 125,168 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — (526,815) (526,815) Net cash relinquished with consolidation/deconsolidation of Consolidated Funds — (39,539) — (39,539) Change in other assets and receivables held at Consolidated Funds — (174,409) (6,544) (180,953) Change in other liabilities and payables held at Consolidated Funds — 746,616 (23,000) 723,616 Net cash provided by (used in) operating activities 300,755 (2,555,916) (340,884) (2,596,045) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (27,226) — — (27,226) Acquisitions, net of cash acquired (1,057,407) — — (1,057,407) Net cash used in investing activities (1,084,633) — — (1,084,633) Cash flows from financing activities: Net proceeds from issuance of Class A and non-voting common stock 827,430 — — 827,430 Proceeds from Credit Facility 883,000 — — 883,000 Proceeds from subordinated notes 450,000 — — 450,000 Repayments of Credit Facility (468,000) — — (468,000) Dividends and distributions (593,506) — — (593,506) Series A Preferred Stock dividends (10,850) — — (10,850) Redemption of Series A Preferred Stock (310,000) — — (310,000) Stock option exercises 37,216 — — 37,216 Taxes paid related to net share settlement of equity awards (226,101) — — (226,101) Other financing activities 11,509 — — 11,509 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 1,239,831 (206,187) 1,033,644 Distributions to non-controlling interests in Consolidated Funds — (119,153) 20,256 (98,897) Borrowings under loan obligations by Consolidated Funds — 2,048,932 — 2,048,932 Repayments under loan obligations by Consolidated Funds — (80,752) — (80,752) Net cash provided by financing activities 600,698 3,088,858 (185,931) 3,503,625 Effect of exchange rate changes (12,977) (6,127) — (19,104) Net change in cash and cash equivalents (196,157) 526,815 (526,815) (196,157) Cash and cash equivalents, beginning of period 539,812 522,376 (522,376) 539,812 Cash and cash equivalents, end of period $ 343,655 $ 1,049,191 $ (1,049,191) $ 343,655 Supplemental disclosure of non-cash financing activities: Issuance of AOG Units in connection with acquisitions $ 510,848 $ — $ — $ 510,848 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 34,170 $ 170,915 $ — $ 205,085 Cash paid during the period for income taxes $ 22,603 $ 185 $ — $ 22,788 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) loan_obligation shares | Dec. 31, 2021 USD ($) loan_obligation | Dec. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||
Number of CLOs consolidated | loan_obligation | 25 | 23 | |
Foreign currency transaction gain (loss) | $ | $ (13.5) | $ (4.8) | $ 13.1 |
ARCC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Management fees as a percentage of net investment income | 20% | ||
Hurdle rate per quarter | 1.75% | ||
Hurdle rate per annum | 7% | ||
Percentage of net investment income received from first dollar earned | 20% | ||
CADC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Management fees as a percentage of net investment income | 15% | ||
Hurdle rate per quarter | 1.50% | ||
Hurdle rate per annum | 6% | ||
Percentage of net investment income received from first dollar earned | 15% | ||
Class A Common Stock | Ares Acquisition Corporation | |||
Summary of Significant Accounting Policies [Line Items] | |||
Temporary equity, shares outstanding (in shares) | shares | 100,000,000 | ||
Minimum | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives, intangible assets | 1 year 7 months 6 days | ||
Performance fee compensation, employment or service period | 5 years | ||
Minimum | Property Plant And Equipment Other Than Leasehold Improvements | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful life, fixed assets | 3 years | ||
Maximum | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives, intangible assets | 13 years 6 months | ||
Performance fee compensation, employment or service period | 6 years | ||
Maximum | Property Plant And Equipment Other Than Leasehold Improvements | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful life, fixed assets | 7 years |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Feb. 10, 2022 | Jun. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 01, 2021 | Dec. 31, 2020 | |
Asset Acquisition [Line Items] | |||||||
Goodwill | $ 999,656 | $ 787,972 | $ 371,047 | ||||
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% | ||||||
Black Creek Acquisition | Management contracts | |||||||
Asset Acquisition [Line Items] | |||||||
Acquisition and merger-related expense | $ 576,200 | ||||||
Acquired finite lived intangible assets useful life | 6 years 1 month 6 days | ||||||
Black Creek Acquisition | Client relationships | |||||||
Asset Acquisition [Line Items] | |||||||
Acquisition and merger-related expense | $ 7,200 | ||||||
Acquired finite lived intangible assets useful life | 12 years | ||||||
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 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 02, 2021 | Dec. 31, 2020 |
Intangible assets: | ||||
Goodwill | $ 999,656 | $ 787,972 | $ 371,047 | |
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 | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Total revenues | $ 4,276,706 | $ 1,910,792 |
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | $ 380,169 | $ 112,918 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-lived intangible assets, net | ||
Finite-lived intangible assets | $ 859,957 | $ 882,817 |
Foreign currency translation | 935 | 1,792 |
Total finite-lived intangible assets | 860,892 | 884,609 |
Less: accumulated amortization | (220,472) | (115,791) |
Finite-lived intangible assets, net | 640,420 | 768,818 |
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 567,800 | 654,000 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible assets, net | 1,208,220 | 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 | $ 0 | 86,200 |
Management contracts | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 4 years 10 months 24 days | |
Finite-lived intangible assets | $ 586,077 | 641,737 |
Client relationships | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 9 years 7 months 6 days | |
Finite-lived intangible assets | $ 262,301 | 229,501 |
Trade name | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 7 years 6 months | |
Finite-lived intangible assets | $ 11,079 | 11,079 |
Other | ||
Finite-lived intangible assets, net | ||
Weighted average amortization period | 1 year 9 months 18 days | |
Finite-lived intangible assets | $ 500 | $ 500 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | $ 181,600,000 | $ 0 | $ 0 | ||
Impaired and fully amortized intangibles, amount removed during the period | 210,600,000 | ||||
Purchase price to goodwill | 213,218,000 | 417,753,000 | |||
Reallocation | 0 | ||||
Trade name | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | 86,200,000 | ||||
Management Contract | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | 88,400,000 | ||||
Real Assets Group | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Purchase price to goodwill | 213,314,000 | 0 | |||
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 | 133,600,000 | $ 91,300,000 | $ 24,500,000 | ||
Infrastructure Debt Acquisition | Real Assets Group | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Purchase price to goodwill | 213,300,000 | ||||
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 | ||||
Landmark Acquisition | Management Contract | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | $ 3,700,000 | ||||
Landmark Acquisition | Management contracts | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquisition and merger-related expense | $ 425,900,000 | ||||
Acquired finite lived intangible assets useful life | 7 years 4 months 24 days | ||||
Landmark Acquisition | Client relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquisition and merger-related expense | $ 197,200,000 | ||||
Acquired finite lived intangible assets useful life | 11 years 9 months 18 days | ||||
Black Creek Acquisition | Management Contract | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | 3,100,000 | ||||
Black Creek Acquisition | Management contracts | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquisition and merger-related expense | $ 576,200,000 | ||||
Acquired finite lived intangible assets useful life | 6 years 1 month 6 days | ||||
Black Creek Acquisition | Client relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquisition and merger-related expense | $ 7,200,000 | ||||
Acquired finite lived intangible assets useful life | 12 years | ||||
SSG Acquisition | Management Contract | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | $ 200,000 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Future Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 125,873 | |
2024 | 114,928 | |
2025 | 106,684 | |
2026 | 78,232 | |
2027 | 65,285 | |
Thereafter | 149,418 | |
Finite-lived intangible assets, net | $ 640,420 | $ 768,818 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 787,972 | $ 371,047 |
Acquisitions | 213,218 | 417,753 |
Reallocation | 0 | |
Foreign currency translation | (1,534) | (828) |
Goodwill, ending balance | 999,656 | 787,972 |
Credit Group | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 32,196 | 32,196 |
Acquisitions | 0 | 0 |
Reallocation | 0 | |
Foreign currency translation | 0 | 0 |
Goodwill, ending balance | 32,196 | 32,196 |
Private Equity Group | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 58,600 | 58,600 |
Acquisitions | 0 | 0 |
Reallocation | (10,530) | |
Foreign currency translation | 0 | 0 |
Goodwill, ending balance | 48,070 | 58,600 |
Real Assets Group | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 53,339 | 53,120 |
Acquisitions | 213,314 | 0 |
Reallocation | 10,530 | |
Foreign currency translation | 0 | 219 |
Goodwill, ending balance | 277,183 | 53,339 |
Secondaries Group | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 417,738 | 0 |
Acquisitions | (96) | 417,753 |
Reallocation | 0 | |
Foreign currency translation | (22) | (15) |
Goodwill, ending balance | 417,620 | 417,738 |
Strategic Initiatives | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 226,099 | 227,131 |
Acquisitions | 0 | 0 |
Reallocation | 0 | |
Foreign currency translation | (1,512) | (1,032) |
Goodwill, ending balance | $ 224,587 | $ 226,099 |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments (Details) - Ares Management L.P - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments | ||
Equity method private investment partnership interests and other | $ 1,385 | $ 8,591 |
Other fixed income | 277,126 | 171,377 |
Common stock, at fair value | 198,807 | 110,389 |
Total investments | 3,974,734 | 3,684,264 |
Partnership Interests | ||
Investments | ||
Equity method investments: | $ 3,820,778 | $ 3,630,427 |
Percentage of total investments | 96.20% | 98.60% |
Collateralized loan obligations and other fixed income | ||
Investments | ||
Collateralized loan obligations | $ 76,934 | $ 52,397 |
Percentage of total investments | 1.80% | 1.30% |
Collateralized loan obligations | ||
Investments | ||
Collateralized loan obligations | $ 25,163 | $ 30,815 |
Percentage of total investments | 0.60% | 0.80% |
Other fixed income | ||
Investments | ||
Other fixed income | $ 51,771 | $ 21,582 |
Percentage of total investments | 1.20% | 0.50% |
Common stock, at fair value | ||
Investments | ||
Common stock, at fair value | $ 77,022 | $ 1,440 |
Percentage of total investments | 2% | 0.10% |
Equity method - carried interest | ||
Investments | ||
Equity method investments: | $ 3,106,577 | $ 2,998,421 |
Percentage of total investments | 78.20% | 81.40% |
Partnership Interests | ||
Investments | ||
Equity method investments: | $ 543,592 | $ 473,887 |
Percentage of total investments | 13.70% | 12.90% |
Equity method private investment partnership interests and other (held at fair value) | ||
Investments | ||
Equity method investments: | $ 123,170 | $ 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 | $ 47,439 | $ 40,580 |
Percentage of total investments | 1.20% | 1.10% |
INVESTMENTS - Equity Method Inv
INVESTMENTS - Equity Method Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Financial Condition | ||||
Assets | $ 22,002,839 | $ 21,605,164 | ||
Liabilities | 17,097,810 | 16,694,730 | ||
Total equity | 3,798,618 | 3,814,426 | $ 2,471,774 | $ 1,858,598 |
Statement of Operations | ||||
Total revenues | 3,055,443 | 4,212,091 | 1,764,046 | |
Expenses | (2,749,085) | (3,410,083) | (1,450,486) | |
Net realized and unrealized gains (losses) on investments | 4,732 | 19,102 | (9,008) | |
Income tax expense | (71,891) | (147,385) | (54,993) | |
Net income | 438,915 | 918,305 | 324,485 | |
Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Total investments | 52,833,338 | 43,198,540 | ||
Assets | 58,255,201 | 45,722,309 | ||
Liabilities | 15,437,372 | 13,316,546 | ||
Total equity | 42,817,829 | 32,405,763 | ||
Statement of Operations | ||||
Total revenues | 2,234,911 | 1,899,384 | 1,397,984 | |
Expenses | (1,241,148) | (764,730) | (420,064) | |
Net realized and unrealized gains (losses) on investments | (175,536) | 5,173,622 | 1,021,728 | |
Income tax expense | (41,143) | (24,803) | 56,588 | |
Net income | 777,084 | 6,283,473 | 2,056,236 | |
Credit Group | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Total investments | 15,704,463 | 16,919,068 | ||
Assets | 18,841,376 | 18,316,775 | ||
Liabilities | 4,848,872 | 5,268,103 | ||
Total equity | 13,992,504 | 13,048,672 | ||
Statement of Operations | ||||
Total revenues | 1,333,204 | 1,318,517 | 940,450 | |
Expenses | (375,506) | (316,134) | (221,083) | |
Net realized and unrealized gains (losses) on investments | (172,527) | 457,943 | (210,881) | |
Income tax expense | (4,723) | (4,511) | (1,693) | |
Net income | 780,448 | 1,455,815 | 506,793 | |
Private Equity Group | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Total investments | 9,376,032 | 9,143,164 | ||
Assets | 9,947,821 | 9,548,551 | ||
Liabilities | 937,326 | 1,539,522 | ||
Total equity | 9,010,495 | 8,009,029 | ||
Statement of Operations | ||||
Total revenues | 271,873 | 229,539 | 263,335 | |
Expenses | (153,372) | (177,380) | (112,325) | |
Net realized and unrealized gains (losses) on investments | (482,260) | 2,161,730 | 1,218,362 | |
Income tax expense | 92 | (19,125) | 57,935 | |
Net income | (363,667) | 2,194,764 | 1,427,307 | |
Real Assets Group | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Total investments | 13,052,820 | 9,555,266 | ||
Assets | 14,440,914 | 10,146,133 | ||
Liabilities | 5,007,250 | 3,155,826 | ||
Total equity | 9,433,664 | 6,990,307 | ||
Statement of Operations | ||||
Total revenues | 618,796 | 326,507 | 191,543 | |
Expenses | (357,845) | (170,008) | (81,071) | |
Net realized and unrealized gains (losses) on investments | 304,068 | 1,179,698 | 11,923 | |
Income tax expense | (36,501) | (1,167) | 346 | |
Net income | 528,518 | 1,335,030 | 122,741 | |
Secondaries Group | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Total investments | 12,719,333 | 7,096,073 | ||
Assets | 12,931,082 | 7,220,604 | ||
Liabilities | 3,716,111 | 2,960,748 | ||
Total equity | 9,214,971 | 4,259,856 | ||
Statement of Operations | ||||
Total revenues | 2,874 | 911 | 0 | |
Expenses | (289,741) | (89,281) | 0 | |
Net realized and unrealized gains (losses) on investments | (11,173) | 1,399,009 | 0 | |
Income tax expense | 0 | 0 | 0 | |
Net income | (298,040) | 1,310,639 | 0 | |
Strategic Initiatives | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Total investments | 1,980,690 | 484,969 | ||
Assets | 2,094,008 | 490,246 | ||
Liabilities | 927,813 | 392,347 | ||
Total equity | 1,166,195 | 97,899 | ||
Statement of Operations | ||||
Total revenues | 8,164 | 23,910 | 2,656 | |
Expenses | (64,684) | (11,927) | (5,585) | |
Net realized and unrealized gains (losses) on investments | 186,356 | (24,758) | 2,324 | |
Income tax expense | (11) | 0 | 0 | |
Net income | $ 129,825 | $ (12,775) | $ (605) |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Investment Holdings [Line Items] | |||
Equity method investments net gains | $ 21.7 | $ 114.9 | $ 22.5 |
Consolidated Funds | |||
Summary of Investment Holdings [Line Items] | |||
Percent of total assets | 5% | 5% |
INVESTMENTS - Investments of th
INVESTMENTS - Investments of the Consolidated Funds (Details) - Consolidated Funds - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments | ||
Total investments, at fair value | $ 13,204,633 | $ 12,816,678 |
Fixed income investments: | ||
Investments | ||
Total investments, at fair value | $ 11,080,865 | $ 11,768,099 |
Percentage of total investments | 84% | 91.80% |
Fixed income investments: | Bonds | ||
Investments | ||
Total investments, at fair value | $ 786,961 | $ 857,125 |
Percentage of total investments | 6% | 6.70% |
Fixed income investments: | Loans | ||
Investments | ||
Total investments, at fair value | $ 9,280,522 | $ 9,910,689 |
Percentage of total investments | 70.30% | 77.30% |
Fixed income investments: | Investments held in trust account | ||
Investments | ||
Total investments, at fair value | $ 1,013,382 | $ 1,000,285 |
Percentage of total investments | 7.70% | 7.80% |
Equity securities | ||
Investments | ||
Total investments, at fair value | $ 731,599 | $ 340,272 |
Percentage of total investments | 5.50% | 2.70% |
Partnership interests | ||
Investments | ||
Total investments, at fair value | $ 1,392,169 | $ 708,307 |
Percentage of total investments | 10.50% | 5.50% |
FAIR VALUE - Assets and Liabili
FAIR VALUE - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Minimum | ||
FAIR VALUE | ||
Right to withdraw period | 1 month | |
Maximum | ||
FAIR VALUE | ||
Right to withdraw period | 3 years | |
Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | $ 11,080,865 | $ 11,768,099 |
Common stock and other equity securities | 731,599 | 340,272 |
Partnership interests | 1,392,169 | 708,307 |
Total investments, at fair value | 13,204,633 | 12,816,678 |
Total assets, at fair value | 13,207,533 | 12,816,678 |
Liabilities, at fair value | ||
Derivative liabilities | (15,824) | (20,927) |
Loan obligations of CLOs | (10,701,720) | (10,657,661) |
Total liabilities, at fair value | $ (10,717,544) | (10,678,588) |
Derivative liability, statement of financial position | Liabilities | |
Consolidated Funds | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | $ 2,900 | |
Liabilities, at fair value | ||
Derivative liabilities | (2,942) | |
Consolidated Funds | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | (9,326) | (17,822) |
Consolidated Funds | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | (3,556) | (3,105) |
Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 786,961 | 857,125 |
Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9,280,522 | 9,910,689 |
Consolidated Funds | Investments held in trust account | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,013,382 | 1,000,285 |
Level I | Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,013,382 | 1,000,285 |
Common stock and other equity securities | 719 | 956 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 1,014,101 | |
Total assets, at fair value | 1,014,101 | 1,001,241 |
Liabilities, at fair value | ||
Derivative liabilities | (9,326) | (17,822) |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (9,326) | (17,822) |
Level I | Consolidated Funds | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Level I | Consolidated Funds | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | (9,326) | (17,822) |
Level I | Consolidated Funds | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Level I | Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Level I | Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Level I | Consolidated Funds | Investments held in trust account | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 1,013,382 | 1,000,285 |
Level II | Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9,197,815 | 10,024,862 |
Common stock and other equity securities | 0 | 133 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 9,197,815 | |
Total assets, at fair value | 9,200,715 | 10,024,995 |
Liabilities, at fair value | ||
Derivative liabilities | (2,942) | 0 |
Loan obligations of CLOs | (10,701,720) | (10,657,661) |
Total liabilities, at fair value | (10,704,662) | (10,657,661) |
Level II | Consolidated Funds | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 2,900 | |
Liabilities, at fair value | ||
Derivative liabilities | (2,942) | |
Level II | Consolidated Funds | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Level II | Consolidated Funds | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Level II | Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 534,137 | 525,393 |
Level II | Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 8,663,678 | 9,499,469 |
Level II | Consolidated Funds | Investments held in trust account | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Level III | Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 869,668 | 742,952 |
Common stock and other equity securities | 730,880 | 339,183 |
Partnership interests | 368,655 | 238,673 |
Total investments, at fair value | 1,969,203 | |
Total assets, at fair value | 1,969,203 | 1,320,808 |
Liabilities, at fair value | ||
Derivative liabilities | (3,556) | (3,105) |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (3,556) | (3,105) |
Level III | Consolidated Funds | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Level III | Consolidated Funds | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Level III | Consolidated Funds | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | (3,556) | (3,105) |
Level III | Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 252,824 | 331,732 |
Level III | Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 616,844 | 411,220 |
Level III | Consolidated Funds | Investments held in trust account | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Investments Measured at NAV | Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | |
Common stock and other equity securities | 0 | 0 |
Partnership interests | 1,023,514 | 469,634 |
Total investments, at fair value | 1,023,514 | |
Total assets, at fair value | 1,023,514 | 469,634 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Investments Measured at NAV | Consolidated Funds | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Investments Measured at NAV | Consolidated Funds | Warrants | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Investments Measured at NAV | Consolidated Funds | Asset swaps | ||
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Investments Measured at NAV | Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Investments Measured at NAV | Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Investments Measured at NAV | Consolidated Funds | Investments held in trust account | ||
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 | 198,807 | 110,389 |
Partnership interests | 1,385 | 8,591 |
Total investments, at fair value | 277,126 | 171,377 |
Total assets, at fair value | 281,299 | 177,059 |
Liabilities, at fair value | ||
Derivative liabilities | (328) | |
Contingent consideration | (57,435) | |
Total liabilities, at fair value | (3,423) | (57,763) |
Ares Management L.P | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 4,173 | |
Liabilities, at fair value | ||
Derivative liabilities | (3,423) | |
Ares Management L.P | Derivatives-foreign currency forward contracts and interest rate swaps | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 5,682 | |
Ares Management L.P | Collateralized loan obligations and other fixed income | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 76,934 | 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 | |
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 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level I | Derivatives-foreign currency forward contracts and interest rate swaps | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 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 | 77,022 | 1,440 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 77,022 | 1,440 |
Total assets, at fair value | 81,195 | 7,122 |
Liabilities, at fair value | ||
Derivative liabilities | (328) | |
Contingent consideration | 0 | |
Total liabilities, at fair value | (3,423) | (328) |
Ares Management L.P | Level II | Derivatives-foreign currency forward contracts | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 4,173 | |
Liabilities, at fair value | ||
Derivative liabilities | (3,423) | |
Ares Management L.P | Level II | Derivatives-foreign currency forward contracts and interest rate swaps | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 5,682 | |
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 | 121,785 | 108,949 |
Partnership interests | 0 | 2,575 |
Total investments, at fair value | 198,719 | 163,921 |
Total assets, at fair value | 198,719 | 163,921 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Contingent consideration | (57,435) | |
Total liabilities, at fair value | 0 | (57,435) |
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 | Derivatives-foreign currency forward contracts and interest rate swaps | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 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 | 76,934 | 52,397 |
Ares Management L.P | Investments Measured at NAV | ||
Assets, at fair value | ||
Common stock and other equity securities | 0 | 0 |
Partnership interests | 1,385 | 6,016 |
Total investments, at fair value | 1,385 | 6,016 |
Total assets, at fair value | 1,385 | 6,016 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Contingent consideration | 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 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Investments Measured at NAV | Derivatives-foreign currency forward contracts and interest rate swaps | ||
Assets, at fair value | ||
Derivatives-foreign currency forward contracts | 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 | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Funds | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | $ 1,317,703 | $ 996,266 |
Transfer in due to changes in consolidation | 49,483 | |
Transfer in | 278,423 | 62,040 |
Transfer out | (202,333) | (214,939) |
Purchases | 1,115,434 | 1,038,460 |
Sales/settlements | (620,885) | (558,884) |
Amortized discounts/premiums | 1,605 | 1,683 |
Realized and unrealized appreciation(depreciation), net | 75,700 | 42,560 |
Balance, end of period | 1,965,647 | 1,317,703 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | $ 45,323 | 36,727 |
Level III Liabilities of the Company | ||
Fair value recurring basis unobservable input reconciliation asset gain loss statement of other comprehensive income extensible list not disclosed | Net realized and unrealized gains (losses) on investments | |
Fair value, asset, recurring basis, unobservable input reconciliation, asset, gain (loss), statement of other comprehensive income or comprehensive income | Net realized and unrealized gains (losses) on investments | |
Consolidated Funds | Equity securities | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | $ 339,183 | 221,043 |
Transfer in due to changes in consolidation | 157 | |
Transfer in | 0 | 2,195 |
Transfer out | 0 | (33) |
Purchases | 323,699 | 118,963 |
Sales/settlements | (31,932) | (1,180) |
Amortized discounts/premiums | 13 | 0 |
Realized and unrealized appreciation(depreciation), net | 99,917 | (1,648) |
Balance, end of period | 730,880 | 339,183 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 70,591 | (848) |
Consolidated Funds | Fixed Income | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | 742,952 | 542,306 |
Transfer in due to changes in consolidation | 49,326 | |
Transfer in | 184,037 | 59,845 |
Transfer out | (202,333) | (214,906) |
Purchases | 732,477 | 904,497 |
Sales/settlements | (536,125) | (512,505) |
Amortized discounts/premiums | 1,592 | 1,683 |
Realized and unrealized appreciation(depreciation), net | (52,932) | 11,358 |
Balance, end of period | 869,668 | 742,952 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (54,058) | 3,886 |
Consolidated Funds | Partnership Interests | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | 238,673 | 231,857 |
Transfer in due to changes in consolidation | 0 | |
Transfer in | 94,386 | 0 |
Transfer out | 0 | 0 |
Purchases | 59,258 | 15,000 |
Sales/settlements | (52,828) | (45,500) |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation(depreciation), net | 29,166 | 37,316 |
Balance, end of period | 368,655 | 238,673 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 29,166 | 37,316 |
Consolidated Funds | Derivatives, Net | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | (3,105) | 1,060 |
Transfer in due to changes in consolidation | 0 | |
Transfer in | 0 | 0 |
Transfer out | 0 | 0 |
Purchases | 0 | 0 |
Sales/settlements | 0 | 301 |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation(depreciation), net | (451) | (4,466) |
Balance, end of period | (3,556) | (3,105) |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (376) | (3,627) |
Ares Management L.P | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | 106,486 | 144,336 |
Transfer in due to changes in consolidation | 1,491 | (7,623) |
Established in connection with acquisition | (34,200) | |
Purchases | 33,286 | 20,967 |
Sales/settlements | 53,978 | (13,290) |
Change in fair value | (1,438) | (23,235) |
Realized and unrealized appreciation(depreciation), net | 4,916 | 4,285 |
Balance, end of period | 198,719 | 106,486 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 7,018 | (20,401) |
Ares Management L.P | Equity securities | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | 108,949 | 88,412 |
Transfer in due to changes in consolidation | 1,491 | 0 |
Established in connection with acquisition | 0 | |
Purchases | 894 | 19,278 |
Sales/settlements | 68 | 0 |
Change in fair value | 0 | 0 |
Realized and unrealized appreciation(depreciation), net | 10,383 | 1,259 |
Balance, end of period | 121,785 | 108,949 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 12,448 | 1,259 |
Ares Management L.P | Fixed Income | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | 52,397 | 53,349 |
Transfer in due to changes in consolidation | 0 | (7,623) |
Established in connection with acquisition | 0 | |
Purchases | 32,392 | 1,689 |
Sales/settlements | (2,425) | (13,290) |
Change in fair value | 0 | 0 |
Realized and unrealized appreciation(depreciation), net | (5,430) | 3,026 |
Balance, end of period | 76,934 | 52,397 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (5,430) | 1,575 |
Ares Management L.P | Partnership Interests | ||
Level III Net Assets of Consolidated Funds | ||
Balance, beginning of period | 2,575 | 2,575 |
Transfer in due to changes in consolidation | 0 | 0 |
Established in connection with acquisition | 0 | |
Purchases | 0 | 0 |
Sales/settlements | (2,538) | 0 |
Change in fair value | 0 | 0 |
Realized and unrealized appreciation(depreciation), net | (37) | 0 |
Balance, end of period | 0 | 2,575 |
Change in net unrealized depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 0 | 0 |
Ares Management L.P | Contingent Consideration | ||
Level III Liabilities of the Company | ||
Balance, beginning of period | (57,435) | 0 |
Transfer in due to changes in consolidation | 0 | 0 |
Established in connection with acquisition | (34,200) | |
Purchases | 0 | 0 |
Sales/settlements | 58,873 | 0 |
Change in fair value | (1,438) | (23,235) |
Realized and unrealized appreciation (depreciation), net | 0 | 0 |
Balance, end of period | 0 | (57,435) |
Change in net unrealized appreciation and fair value included in earnings related to financial liabilities still held at the reporting date | $ 0 | $ (23,235) |
FAIR VALUE - Valuation Techniqu
FAIR VALUE - Valuation Techniques (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Consolidated Funds | ||
Assets | ||
Equity securities | $ 731,599 | $ 340,272 |
Partnership interests | 1,392,169 | 708,307 |
Collateralized loan obligations | 10,701,720 | 10,657,661 |
Other fixed income | 11,080,865 | 11,768,099 |
Total assets, at fair value | 13,207,533 | 12,816,678 |
Liabilities | ||
Derivative instruments | (15,824) | (20,927) |
Total liabilities, at fair value | (10,717,544) | (10,678,588) |
Consolidated Funds | Level III | ||
Assets | ||
Equity securities | 730,880 | 339,183 |
Partnership interests | 368,655 | 238,673 |
Collateralized loan obligations | 0 | 0 |
Other fixed income | 869,668 | 742,952 |
Total assets, at fair value | 1,969,203 | 1,320,808 |
Liabilities | ||
Derivative instruments | (3,556) | (3,105) |
Total liabilities, at fair value | (3,556) | (3,105) |
Consolidated Funds | Level III | Market approach | ||
Assets | ||
Equity securities | 1,261 | |
Other fixed income | 125,612 | |
Consolidated Funds | Level III | Market approach | Multiple of book value | ||
Assets | ||
Equity securities | $ 290,258 | $ 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 | 1.2 | 1.1 |
Consolidated Funds | Level III | Market approach | Net income multiple | ||
Significant Unobservable Input(s) | ||
Equity securities | 30 | |
Consolidated Funds | Level III | Market approach | Net income multiple | Equity Securities One | ||
Assets | ||
Equity securities | $ 36,681 | |
Consolidated Funds | Level III | Market approach | Net income multiple | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 30 | |
Consolidated Funds | Level III | Market approach | EBITDA multiple | ||
Assets | ||
Equity securities | $ 2,064 | |
Other fixed income | $ 4,479 | |
Consolidated Funds | Level III | Market approach | EBITDA multiple | Minimum | ||
Significant Unobservable Input(s) | ||
Equity securities | 6.3 | 1 |
Fixed income investments | 8 | |
Consolidated Funds | Level III | Market approach | EBITDA multiple | Maximum | ||
Significant Unobservable Input(s) | ||
Equity securities | 31 | 64.4 |
Fixed income investments | 9 | |
Consolidated Funds | Level III | Market approach | EBITDA multiple | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 13.6 | 17.5 |
Fixed income investments | 8.5 | |
Consolidated Funds | Level III | Market approach | Yield | Minimum | ||
Significant Unobservable Input(s) | ||
Fixed income investments | 0.066 | |
Consolidated Funds | Level III | Market approach | Yield | Maximum | ||
Significant Unobservable Input(s) | ||
Fixed income investments | 0.217 | |
Consolidated Funds | Level III | Market approach | Yield | Weighted Average | ||
Significant Unobservable Input(s) | ||
Fixed income investments | 0.128 | |
Consolidated Funds | Level III | Transaction price | ||
Assets | ||
Equity securities | $ 74,041 | |
Other fixed income | $ 6,155 | |
Consolidated Funds | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Equity securities | 11 | |
Other fixed income | 731,708 | 614,754 |
Liabilities | ||
Derivative instruments | (3,556) | |
Consolidated Funds | Level III | Other | ||
Assets | ||
Equity securities | 648 | |
Other fixed income | 1,714 | |
Consolidated Funds | Level III | Discounted cash flow | ||
Assets | ||
Equity securities | 401,229 | 123,685 |
Partnership interests | $ 368,655 | $ 238,673 |
Consolidated Funds | Level III | Discounted cash flow | Discount rates | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.200 | |
Partnership interest | 0.234 | |
Consolidated Funds | Level III | Discounted cash flow | Discount rates | Minimum | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.080 | |
Partnership interest | 0.103 | |
Consolidated Funds | Level III | Discounted cash flow | Discount rates | Maximum | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.180 | |
Partnership interest | 0.220 | |
Consolidated Funds | Level III | Discounted cash flow | Discount rates | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.120 | 0.200 |
Partnership interest | 0.189 | 0.234 |
Consolidated Funds | Level III | Income approach | ||
Assets | ||
Other fixed income | $ 128,198 | |
Consolidated Funds | Level III | Income approach | Yield | Minimum | ||
Significant Unobservable Input(s) | ||
Fixed income investments | 3.5 | |
Consolidated Funds | Level III | Income approach | Yield | Maximum | ||
Significant Unobservable Input(s) | ||
Fixed income investments | 16.2 | |
Consolidated Funds | Level III | Income approach | Yield | Weighted Average | ||
Significant Unobservable Input(s) | ||
Fixed income investments | 6.7 | |
Ares Management L.P | ||
Assets | ||
Equity securities | $ 198,807 | $ 110,389 |
Partnership interests | 1,385 | 8,591 |
Total assets, at fair value | 281,299 | 177,059 |
Liabilities | ||
Contingent consideration | (57,435) | |
Derivative instruments | (328) | |
Total liabilities, at fair value | (3,423) | (57,763) |
Ares Management L.P | Level III | ||
Assets | ||
Equity securities | 121,785 | 108,949 |
Partnership interests | 0 | 2,575 |
Total assets, at fair value | 198,719 | 163,921 |
Liabilities | ||
Contingent consideration | (57,435) | |
Derivative instruments | 0 | |
Total liabilities, at fair value | 0 | (57,435) |
Ares Management L.P | Level III | Market approach | ||
Assets | ||
Equity securities | $ 43,649 | |
Ares Management L.P | Level III | Market approach | Equity Securities One | ||
Assets | ||
Equity securities | 62,129 | |
Ares Management L.P | Level III | Market approach | Equity Securities Two | ||
Assets | ||
Equity securities | $ 44,166 | |
Ares Management L.P | Level III | Market approach | Multiple of book value | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.4 | |
Ares Management L.P | Level III | Market approach | Multiple of book value | Equity Securities One | ||
Significant Unobservable Input(s) | ||
Equity securities | 3.2 | |
Ares Management L.P | Level III | Market approach | Multiple of book value | Equity Securities Two | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.3 | |
Ares Management L.P | Level III | Market approach | Multiple of book value | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.4 | |
Ares Management L.P | Level III | Market approach | Multiple of book value | Weighted Average | Equity Securities One | ||
Significant Unobservable Input(s) | ||
Equity securities | 3.2 | |
Ares Management L.P | Level III | Market approach | Multiple of book value | Weighted Average | Equity Securities Two | ||
Significant Unobservable Input(s) | ||
Equity securities | 1.3 | |
Ares Management L.P | Level III | Transaction price | ||
Assets | ||
Equity securities | $ 15,490 | $ 14,610 |
Other fixed income | 30,189 | |
Ares Management L.P | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Collateralized loan obligations | 25,163 | 30,815 |
Ares Management L.P | Level III | Other | ||
Assets | ||
Partnership interests | 2,575 | |
Other fixed income | $ 21,582 | 21,582 |
Liabilities | ||
Contingent consideration | (47,873) | |
Ares Management L.P | Level III | Discounted cash flow | ||
Assets | ||
Equity securities | $ 50,690 | |
Ares Management L.P | Level III | Discounted cash flow | Discount rates | Minimum | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.140 | |
Ares Management L.P | Level III | Discounted cash flow | Discount rates | Maximum | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.200 | |
Ares Management L.P | Level III | Discounted cash flow | Discount rates | Weighted Average | ||
Significant Unobservable Input(s) | ||
Equity securities | 0.143 | |
Ares Management L.P | Level III | Monte Carlo simulation | ||
Liabilities | ||
Contingent consideration | $ (9,562) | |
Ares Management L.P | Level III | Monte Carlo simulation | Discount rates | ||
Significant Unobservable Input(s) | ||
Contingent consideration | 8.5 | |
Ares Management L.P | Level III | Monte Carlo simulation | Discount rates | Weighted Average | ||
Significant Unobservable Input(s) | ||
Contingent consideration | 0.085 | |
Ares Management L.P | Level III | Monte Carlo simulation | Volatility | ||
Significant Unobservable Input(s) | ||
Contingent consideration | 0.180 | |
Ares Management L.P | Level III | Monte Carlo simulation | Volatility | Weighted Average | ||
Significant Unobservable Input(s) | ||
Contingent consideration | 0.180 |
FAIR VALUE - Investments Using
FAIR VALUE - Investments Using NAV per Share (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Funds | ||
FAIR VALUE | ||
Fair value | $ 1,392,169,000 | $ 708,307,000 |
Investments Measured at NAV | Consolidated Funds | ||
FAIR VALUE | ||
Fair value | 1,023,514,000 | 469,634,000 |
Investments Measured at NAV | Non-core investments | ||
FAIR VALUE | ||
Fair value | 1,400,000 | 6,000,000 |
Unfunded commitments | 0 | 0 |
Investments Measured at NAV | Non-core investments | Consolidated Funds | ||
FAIR VALUE | ||
Fair value | 1,023,500,000 | 469,600,000 |
Unfunded commitments | $ 869,000,000 | $ 1,200,000,000 |
DEBT - Debt Obligations (Detail
DEBT - Debt Obligations (Details) - Ares Management L.P - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Oct. 31, 2014 | Dec. 31, 2022 | Jul. 06, 2022 | Mar. 31, 2022 | Mar. 30, 2022 | Dec. 31, 2021 | |
DEBT | |||||||||
Carrying Value | $ 2,273,854,000 | $ 1,503,709,000 | |||||||
Credit Facility | |||||||||
DEBT | |||||||||
Carrying Value | $ 700,000,000 | $ 415,000,000 | |||||||
Interest Rate | 5.37% | 1.25% | |||||||
Maximum borrowing capacity | $ 1,325,000,000 | $ 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 | $ 248,693,000 | $ 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 | $ 396,602,000 | $ 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 | $ 483,802,000 | $ 0 | |||||||
Interest Rate | 3.77% | 0% | |||||||
Debt issuance rate | 97.78% | ||||||||
Subordinated Notes 2051 | |||||||||
DEBT | |||||||||
Original Borrowing Amount | $ 450,000,000 | ||||||||
Carrying Value | $ 444,757,000 | $ 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 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Credit Facility | ||
Debt Issuance Costs | ||
Unamortized debt issuance costs, beginning balance | $ 5,274 | $ 5,232 |
Debt issuance costs incurred | 1,516 | 1,282 |
Amortization of debt issuance costs | (1,280) | (1,240) |
Unamortized debt issuance costs, ending balance | 5,510 | 5,274 |
Senior Notes | ||
Debt Issuance Costs | ||
Unamortized debt issuance costs, beginning balance | 3,689 | 4,283 |
Debt issuance costs incurred | 5,482 | 0 |
Amortization of debt issuance costs | (778) | (594) |
Unamortized debt issuance costs, ending balance | 8,393 | 3,689 |
Subordinated Notes | ||
Debt Issuance Costs | ||
Unamortized debt issuance costs, beginning balance | 5,426 | 0 |
Debt issuance costs incurred | 0 | 5,518 |
Amortization of debt issuance costs | (183) | (92) |
Unamortized debt issuance costs, ending balance | $ 5,243 | $ 5,426 |
DEBT - Loan Obligations of the
DEBT - Loan Obligations of the Consolidated CLOs (Details) - Consolidated Funds - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DEBT | ||
Fair Value of Loan Obligations | $ 10,701,720 | $ 10,657,661 |
Loan obligations of Consolidated CLOs | ||
DEBT | ||
Fair Value of Loan Obligations | 10,701,720 | 10,657,661 |
Senior secured notes | Loan obligations of Consolidated CLOs | ||
DEBT | ||
Fair Value of Loan Obligations | $ 10,142,545 | $ 10,016,638 |
Weighted Average Interest Rate | 4.84% | 1.93% |
Weighted Average Remaining Maturity (in years) | 8 years 9 months 18 days | 9 years 4 months 24 days |
Subordinated notes | Loan obligations of Consolidated CLOs | ||
DEBT | ||
Fair Value of Loan Obligations | $ 559,175 | $ 641,023 |
Weighted Average Remaining Maturity (in years) | 7 years 9 months 18 days | 8 years 1 month 6 days |
DEBT - Credit Facilities of the
DEBT - Credit Facilities of the Consolidated Funds (Details) - Consolidated Funds - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
DEBT | ||
Total borrowings of Consolidated Funds | $ 168,046,000 | $ 127,771,000 |
Credit Facility Maturing 10/13/2022 | ||
DEBT | ||
Total Capacity | 112,817,000 | |
Outstanding loan | $ 77,496,000 | $ 71,500,000 |
Effective Rate | 5.89% | 1.59% |
Credit Facility Maturing 7/1/2023 | ||
DEBT | ||
Total Capacity | $ 18,000,000 | |
Outstanding loan | $ 15,550,000 | $ 16,271,000 |
Effective Rate | 6.25% | 1.73% |
Credit Facility Maturing 7/23/2024 | ||
DEBT | ||
Total Capacity | $ 100,000,000 | |
Outstanding loan | $ 75,000,000 | $ 40,000,000 |
Effective Rate | 7.28% | 309% |
Credit Facility Maturing 9/24/2026 | ||
DEBT | ||
Total Capacity | $ 150,000,000 | |
Outstanding loan | 0 | $ 0 |
Credit Facility Maturing 9/12/2027 | ||
DEBT | ||
Total Capacity | 54,000,000 | |
Outstanding loan | $ 0 |
OTHER ASSETS - Components of Ot
OTHER ASSETS - Components of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Funds | ||
Other Assets [Line Items] | ||
Dividends and interest receivable | $ 60,321 | $ 36,350 |
Income tax and other receivables | 5,249 | 3,080 |
Total other assets | 65,570 | 39,430 |
Ares Management L.P | ||
Other Assets [Line Items] | ||
Accounts and interest receivable | 120,903 | 159,757 |
Fixed assets, net | 79,678 | 71,260 |
Deferred tax assets, net | 68,933 | 39,398 |
Other assets | 111,623 | 64,340 |
Total other assets | $ 381,137 | $ 334,755 |
OTHER ASSETS - Fixed Assets, Ne
OTHER ASSETS - Fixed Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 26,200 | $ 22,100 | $ 19,000 |
Fully depreciated fixed assets disposed | 10,000 | ||
Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 183,567 | 159,688 | |
Less: accumulated depreciation | (103,889) | (88,428) | |
Fixed assets, net | 79,678 | 71,260 | |
Office and computer equipment | Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 41,547 | 31,963 | |
Internal-use software | Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 57,200 | 53,048 | |
Leasehold improvements | Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | $ 84,820 | $ 74,677 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) infrastructureDebtFund | Dec. 31, 2021 USD ($) | Feb. 10, 2022 USD ($) | |
COMMITMENTS AND CONTINGENCIES | |||
Unfunded capital commitments | $ 677,900,000 | $ 677,300,000 | |
Maximum exposure from guarantees | $ 31,500,000 | 209,700,000 | |
Percent of the contingent liability requiring continued service | 96% | ||
Percent of the contingent liability not requiring continued service | 4% | ||
Recognition period | 4 years | ||
Performance Income | |||
Carried interest, contingent repayment obligations | $ 0 | 0 | |
Performance income | |||
Performance Income | |||
Performance income subject to potential clawback provision | 128,400,000 | 194,600,000 | |
Performance income subject to potential claw back provision that are reimbursable by professionals | 101,000,000 | 153,300,000 | |
Ares Management L.P | |||
COMMITMENTS AND CONTINGENCIES | |||
Accrued compensation | 57,435,000 | ||
Ares Management L.P | Contingent Consideration | |||
COMMITMENTS AND CONTINGENCIES | |||
Other expense | 1,400,000 | 4,000,000 | |
Landmark Acquisition | |||
COMMITMENTS AND CONTINGENCIES | |||
Commitment, maximum amount | 300,000,000 | ||
Compensation expense | 36,700,000 | ||
Black Creek Acquisition | |||
COMMITMENTS AND CONTINGENCIES | |||
Commitment, maximum amount | 275,000,000 | ||
Compensation expense | 218,100,000 | 45,900,000 | |
Accrued compensation | 248,000,000 | 45,900,000 | |
Black Creek Acquisition | Contingency Subject To Continued Service Requirement | |||
COMMITMENTS AND CONTINGENCIES | |||
Fair value of contingent liability | 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 | 15,000,000 | $ 48,500,000 | |
Compensation expense | $ 2,200,000 | ||
Business combination, percentage | 15% | ||
Business combination equity awards percentage | 85% | ||
Estimated fair value of the contingent consideration liability | $ 13,500,000 | ||
Infrastructure Debt Acquisition | Revenue Target | |||
COMMITMENTS AND CONTINGENCIES | |||
Compensation expense | $ 7,000,000 | ||
Number of infrastructure debt funds revenue targets achieved | infrastructureDebtFund | 1 | ||
Contingent liability recognized | $ 21,800,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Leases: Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities | $ 190,616 | |
Finance lease obligations | 330 | |
Accumulated amortization | $ 2,100 | $ 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 | $ 155,950 | $ 167,652 |
Finance lease assets | 400 | 1,011 |
Total lease assets | 156,350 | 168,663 |
Operating lease liabilities | 190,616 | 205,075 |
Finance lease obligations | 330 | 936 |
Total lease liabilities | $ 190,946 | $ 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 | Dec. 31, 2022 USD ($) |
Operating Leases | |
2023 | $ 46,532 |
2024 | 42,716 |
2025 | 37,242 |
2026 | 25,198 |
2027 | 15,864 |
Thereafter | 36,077 |
Total future payments | 203,629 |
Less: interest | 13,013 |
Operating lease liabilities | 190,616 |
Finance Leases | |
2023 | 167 |
2024 | 162 |
2025 | 11 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Total future payments | 340 |
Less: interest | 10 |
Total lease liabilities | $ 330 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Leases: Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expense | $ 42,746 | $ 38,135 | $ 31,713 |
Amortization of finance lease assets | 633 | 561 | 469 |
Interest on finance lease liabilities | 14 | 27 | 43 |
Total lease expense | $ 43,393 | $ 38,723 | $ 32,225 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Leases: Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows for operating leases | $ 46,558 | $ 37,500 | $ 32,121 |
Operating cash flows for finance leases | 21 | 39 | 53 |
Financing cash flows for finance leases | 593 | 535 | 460 |
Leased assets obtained in exchange for new finance lease liabilities | 13 | 189 | 0 |
Leased assets obtained in exchange for new operating lease liabilities | $ 43,331 | $ 57,624 | $ 36,935 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Leases: Lease Term and Discount Rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted-average remaining lease terms (in years): | ||
Operating leases | 5 years 6 months | 6 years |
Finance leases | 2 years 1 month 6 days | 1 year 9 months 18 days |
Weighted-average discount rate: | ||
Operating leases | 2.72% | 1.81% |
Finance leases | 2.99% | 2.94% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Funds | ||
Due from affiliates: | ||
Due from affiliates | $ 15,789 | $ 7,234 |
Due to affiliates: | ||
Due to affiliates | 4,037 | 0 |
Consolidated Funds | Affiliated entity | ||
Due from affiliates: | ||
Due from affiliates | 15,789 | 7,234 |
Due to affiliates: | ||
Due to affiliates | 4,037 | 0 |
Amounts due to portfolio companies and non-consolidated funds | 4,037 | 0 |
Ares Management L.P | ||
Due from affiliates: | ||
Due from affiliates | 758,472 | 670,383 |
Due to affiliates: | ||
Due to affiliates | 252,798 | 198,553 |
Ares Management L.P | Affiliated entity | ||
Due from affiliates: | ||
Management fees receivable from non-consolidated funds | 456,314 | 372,249 |
Incentive fee receivable from non-consolidated funds | 169,979 | 211,243 |
Payments made on behalf of and amounts due from non-consolidated funds and employees | 132,179 | 86,891 |
Due from affiliates | 758,472 | 670,383 |
Due to affiliates: | ||
Management fee received in advance and rebates payable to non-consolidated funds | 8,701 | 10,160 |
Tax receivable agreement liability | 118,466 | 100,542 |
Undistributed carried interest and incentive fees | 121,332 | 66,494 |
Payments made by non-consolidated funds on behalf of and payable by the Company | 4,299 | 21,357 |
Due to affiliates | $ 252,798 | $ 198,553 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Income tax expense | $ 64,516 | $ 64,754 | $ 39,818 |
Deferred: | |||
Total deferred income tax expense (benefit) | 7,375 | 82,631 | 15,175 |
Total: | |||
Income tax expense (benefit) | 71,891 | 147,385 | 54,993 |
Consolidated Funds | |||
Current: | |||
Foreign income tax expense | 331 | 88 | 118 |
Income tax expense | 331 | 88 | 118 |
Ares Management L.P | |||
Current: | |||
U.S. federal income tax expense | 42,452 | 40,861 | 23,845 |
State and local income tax expense | 7,614 | 12,121 | 6,714 |
Foreign income tax expense | 14,119 | 11,684 | 9,141 |
Income tax expense | 64,185 | 64,666 | 39,700 |
Deferred: | |||
U.S. federal income tax expense | 10,660 | 68,201 | 12,451 |
State and local income tax expense | 2,131 | 13,040 | 1,952 |
Foreign income tax expense (benefit) | (5,416) | 1,390 | 772 |
Total deferred income tax expense (benefit) | 7,375 | 82,631 | 15,175 |
Total: | |||
U.S. federal income tax expense | 53,112 | 109,062 | 36,296 |
State and local income tax expense | 9,745 | 25,161 | 8,666 |
Foreign income tax expense | 8,703 | 13,074 | 9,913 |
Income tax expense (benefit) | $ 71,560 | $ 147,297 | $ 54,875 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at federal statutory rate | 21% | 21% | 21% |
Income passed through to non-controlling interests | (8.90%) | (9.20%) | (8.20%) |
State and local taxes, net of federal benefit | 2.20% | 1.90% | 1.80% |
Foreign taxes | (1.40%) | (0.10%) | 0.30% |
Permanent items | 0.60% | (0.30%) | (0.50%) |
Disallowed executive compensation | 0.10% | 0.70% | 0% |
Other, net | 0.30% | (0.20%) | (0.20%) |
Valuation allowance | 0.20% | 0% | 0.30% |
Total effective rate | 14.10% | 13.80% | 14.50% |
INCOME TAXES - Deferred Taxes (
INCOME TAXES - Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Valuation allowance | $ (2,200) | $ (1,000) |
Ares Management L.P | ||
Deferred tax assets | ||
Amortizable tax basis for AOG Unit exchanges | 124,217 | 108,644 |
Net operating losses and capital loss carryforwards | 2,192 | 1,292 |
Other, net | 6,089 | 6,101 |
Total gross deferred tax assets | 132,498 | 116,037 |
Valuation allowance | (2,155) | (1,010) |
Total net deferred tax assets | 130,343 | 115,027 |
Deferred tax liabilities | ||
Investment in partnerships | (61,410) | (75,629) |
Total deferred tax liabilities | (61,410) | (75,629) |
Deferred tax assets, net | $ 68,933 | $ 39,398 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ 2,200,000 | $ 1,000,000 | |
Unrecognized tax | $ 0 | $ 0 | $ 0 |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities Excluded (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOG Units | |||
Earnings per common unit | |||
Antidilutive securities excluded from calculation of earnings per common unit (in shares) | 115,126,565 | ||
Restricted units | |||
Earnings per common unit | |||
Antidilutive securities excluded from calculation of earnings per common unit (in shares) | 0 | 132 | 16,599 |
AOG Units | AOG Units | |||
Earnings per common unit | |||
Antidilutive securities excluded from calculation of earnings per common unit (in shares) | 0 | 116,226,798 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Dec. 16, 2022 | Sep. 16, 2022 | Jun. 16, 2022 | Mar. 17, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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 | $ 167,541 | $ 386,748 | $ 130,442 | ||||
Distributions on unvested restricted units | (14,096) | (10,986) | (10,454) | ||||
Undistributed earnings allocable to participating unvested restricted units | 0 | (7,138) | 0 | ||||
Net income available to Class A and non-voting common stockholders | 153,445 | 368,624 | 119,988 | ||||
Diluted 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 | 167,541 | 386,748 | 130,442 | ||||
Distributions on unvested restricted units | (14,096) | 0 | 0 | ||||
Net income available to Class A and non-voting common stockholders | $ 153,445 | $ 386,748 | $ 130,442 | ||||
Dividend declared and paid per Class A and non-voting common stock (in dollars per share) | $ 0.61 | $ 0.61 | $ 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 | 11,209,144 | 9,207,639 | ||||
Options | |||||||
Diluted earnings per share of Class A and non-voting common stock: | |||||||
Effect of dilutive shares (in shares) | 0 | 5,199,501 | 5,235,423 | ||||
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) | 175,510,798 | 163,703,626 | 135,065,436 | ||||
Basic earnings per share of Class A and non-voting common stock (in dollars per share) | $ 0.87 | $ 2.24 | $ 0.89 | ||||
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) | 175,510,798 | 180,112,271 | 149,508,498 | ||||
Diluted earnings (loss) per share of Class A and non-voting common stock (in dollars per share) | $ 0.87 | $ 2.15 | $ 0.87 | ||||
Dividend declared and paid per Class A and non-voting common stock (in dollars per share) | $ 2.44 | $ 1.88 | $ 1.60 | ||||
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) | 175,510,798 | 163,703,626 | 135,065,436 | ||||
Basic earnings per share of Class A and non-voting common stock (in dollars per share) | $ 0.87 | $ 2.24 | $ 0.89 | ||||
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) | 175,510,798 | 180,112,271 | 149,508,498 | ||||
Diluted earnings (loss) per share of Class A and non-voting common stock (in dollars per share) | $ 0.87 | $ 2.15 | $ 0.87 | ||||
Dividend declared and paid per Class A and non-voting common stock (in dollars per share) | $ 2.44 | $ 1.88 | $ 1.60 |
EQUITY COMPENSATION - Equity In
EQUITY COMPENSATION - Equity Incentive Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2022 | |
Equity compensation | ||||
Equity-based compensation expense | $ 200,391 | $ 237,191 | $ 122,986 | |
Restricted units | ||||
Equity compensation | ||||
Equity-based compensation expense | 200,391 | 170,980 | 115,680 | |
Restricted units with a market condition | ||||
Equity compensation | ||||
Equity-based compensation expense | 0 | 66,211 | 7,263 | |
Options | ||||
Equity compensation | ||||
Equity-based compensation expense | $ 0 | $ 0 | $ 43 | |
Ares Management L.P | ||||
Equity compensation | ||||
Total number of shares available for grant under the equity incentive plan (in shares) | 44,488,640 | 49,293,000 |
EQUITY COMPENSATION - Restricte
EQUITY COMPENSATION - Restricted Units (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Dec. 16, 2022 | Sep. 16, 2022 | Jun. 16, 2022 | Mar. 17, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity compensation | ||||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | $ 0.61 | $ 0.61 | $ 0.61 | ||||
Distribution equivalents made to holders | $ 31.8 | |||||||
Class A Common Stock | ||||||||
Equity compensation | ||||||||
Shares delivered in period (in shares) | 3,100,000 | 4,500,000 | ||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 2.44 | $ 1.88 | $ 1.60 | |||||
Restricted units | ||||||||
Equity compensation | ||||||||
Shares delivered in period (in shares) | 5,500,000 | 8,300,000 | ||||||
Restricted Units | ||||||||
Balance at the beginning of the period (in shares) | 18,323,036 | 18,323,036 | ||||||
Granted (in shares) | 4,142,621 | |||||||
Vested (in shares) | (5,524,397) | |||||||
Forfeited (in shares) | (278,261) | |||||||
Balance at the end of the period (in shares) | 16,662,999 | 18,323,036 | ||||||
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) | 74.62 | |||||||
Vested (in dollars per share) | 27.16 | |||||||
Forfeited (in dollars per share) | 50.95 | |||||||
Balance at the end of the period (in dollars per share) | $ 48.76 | $ 36.43 | ||||||
Unrecognized compensation expenses | $ 545.4 | |||||||
Weighted average period of compensation expense expected to be recognized | 3 years 4 months 24 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 | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Options | ||
Exercised (in shares) | (1,123,509) | |
Aggregate Intrinsic Value | ||
Net cash proceeds from exercises of stock options | $ 21,200 | |
Options | ||
Equity compensation | ||
Shares purchased (in shares) | 1 | |
Term of option | 10 years | |
Options | ||
Balance at the beginning of the period (in shares) | 6,306,282 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (1,136,063) | |
Expired (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Balance at the end of the period (in shares) | 5,170,219 | 6,306,282 |
Options, Exercisable at the end of the period (in shares) | 5,170,219 | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period (in dollars per shares) | $ 19 | |
Granted (in dollars per shares) | 0 | |
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 3 months 18 days | 2 years 3 months 18 days |
Exercisable at the end of the period | 1 year 3 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding intrinsic value | $ 255,616 | $ 392,692 |
Exercisable | 255,616 | |
Tax benefits of exercises | $ 9,100 |
EQUITY AND REDEEMABLE INTERES_2
EQUITY AND REDEEMABLE INTEREST - Common Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 shares | |
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance (in shares) | 290,451,548 | ||
Stock option exercises, net of shares withheld for tax (in shares) | 1,123,509 | ||
Vesting of restricted stock awards, net of shares withheld for tax (in shares) | 3,068,313 | ||
Ending balance (in shares) | 294,614,235 | 290,451,548 | |
Ares Operating Group | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG units (in shares) | 0 | ||
Redemptions of AOG Units (in shares) | (25,000) | ||
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) | $ / shares | $ 0.01 | $ 0.01 | |
Number of votes per share | vote | 1 | ||
Authorized amount | $ | $ 150 | ||
Shares repurchased (in shares) | 0 | 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) | 1,123,509 | ||
Vesting of restricted stock awards, net of shares withheld for tax (in shares) | 3,068,313 | ||
Ending balance (in shares) | 173,892,036 | 168,351,305 | |
Class A Common Stock | Ares Operating Group | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG units (in shares) | 1,348,909 | ||
Redemptions of AOG Units (in shares) | 0 | ||
Cancellation of AOG Units (in shares) | 0 | ||
Non-voting Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ / shares | $ 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 | 3,489,911 | |
Non-voting Common Stock | Ares Operating Group | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG units (in shares) | 0 | ||
Redemptions 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) | $ / shares | $ 0.01 | $ 0.01 | |
Number votes per share, mulitplier | vote | 4 | ||
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 | 1,000 | |
Class B Common Stock | Ares Operating Group | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG units (in shares) | 0 | ||
Redemptions 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) | $ / shares | $ 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) | 117,231,288 | 118,609,332 | |
Class C Common Stock | Ares Operating Group | |||
Increase (Decrease) in Stockholders' Equity | |||
Exchanges of AOG units (in shares) | (1,348,909) | ||
Redemptions of AOG Units (in shares) | (25,000) | ||
Cancellation of AOG Units (in shares) | (4,135) |
EQUITY AND REDEEMABLE INTERES_3
EQUITY AND REDEEMABLE INTEREST - Common Stock Offering (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
AOG units (in shares) | 294,613,235 | 290,450,548 | |
Ares Operating Group | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 100% | 100% | |
Ares Owners Holdings, L.P. | |||
Class of Stock [Line Items] | |||
AOG units (in shares) | 117,231,288 | 118,609,332 | |
Ares Owners Holdings, L.P. | Ares Operating Group | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 39.79% | 40.84% | |
Daily Average Ownership | 40.24% | 41.52% | 46.02% |
Ares Operating Group | |||
Class of Stock [Line Items] | |||
AOG units (in shares) | 177,381,947 | 171,841,216 | |
Ares Operating Group | Ares Operating Group | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 60.21% | 59.16% | |
Daily Average Ownership | 59.76% | 58.48% | 53.98% |
EQUITY AND REDEEMABLE INTERES_4
EQUITY AND REDEEMABLE INTEREST - Redeemable Interests (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Ares Operating Group | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | $ 96,008 | $ 100,366 | |
Net loss | $ (976) | (851) | (1,341) |
Currency translation adjustment, net of tax | 1,538 | (426) | (627) |
Distribution | (1,887) | (2,390) | |
Equity compensation | 285 | ||
Ending balance | 93,129 | 93,129 | 96,008 |
Consolidated Funds | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | 1,000,000 | 0 | |
Change in redemption value | 13,282 | 1,000,000 | |
Ending balance | $ 1,013,282 | $ 1,013,282 | $ 1,000,000 |
SEGMENT REPORTING - Operating S
SEGMENT REPORTING - Operating Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment reporting | |||
Total revenues | $ 3,055,443 | $ 4,212,091 | $ 1,764,046 |
Compensation and benefits | (1,498,590) | (1,162,633) | (767,252) |
General, administrative and other expenses | (695,256) | (444,178) | (258,999) |
Total | |||
Segment reporting | |||
Compensation and benefits | (1,172,504) | (894,842) | (626,172) |
General, administrative and other expenses | (319,661) | (215,777) | (172,097) |
Fee related earnings | 994,350 | 712,308 | 431,231 |
Performance income—realized | 418,021 | 474,427 | 524,229 |
Performance related compensation—realized | (274,541) | (328,583) | (399,462) |
Realized net performance income | 143,480 | 145,844 | 124,767 |
Investment income (loss)—realized | 14,449 | 15,967 | 24,252 |
Interest and other investment income (expense)—realized | 50,104 | 45,578 | 26,614 |
Interest expense | (71,356) | (36,760) | (24,908) |
Realized net investment income (loss) | (6,803) | 24,785 | 25,958 |
Realized income | 1,131,027 | 882,937 | 581,956 |
Operating segment | |||
Segment reporting | |||
Fee related earnings | (1,442,234) | (1,031,200) | (667,988) |
Performance income—realized | 418,021 | 474,427 | 524,229 |
Performance related compensation—realized | (274,541) | (328,583) | (399,462) |
Realized net investment income (loss) | (4,494) | 25,095 | 33,730 |
Realized income | (1,581,220) | (1,202,139) | (826,485) |
OMG | |||
Segment reporting | |||
Total revenues | (24,354) | (8,478) | 0 |
Compensation and benefits | (317,396) | (226,725) | (155,979) |
General, administrative and other expenses | (155,017) | (100,645) | (80,778) |
Fee related earnings | (447,884) | (318,892) | (236,757) |
Performance income—realized | 0 | 0 | 0 |
Performance related compensation—realized | 0 | 0 | 0 |
Realized net performance income | 0 | 0 | 0 |
Investment income (loss)—realized | (37) | 0 | (5,698) |
Interest and other investment income (expense)—realized | (1,588) | 226 | (739) |
Interest expense | (684) | (536) | (1,335) |
Realized net investment income (loss) | (2,309) | (310) | (7,772) |
Realized income | (450,193) | (319,202) | (244,529) |
Ares Management L.P | |||
Segment reporting | |||
Total revenues | 3,055,443 | 4,212,091 | 1,764,046 |
Ares Management L.P | Operating segment | |||
Segment reporting | |||
Compensation and benefits | (855,108) | (668,117) | (470,193) |
General, administrative and other expenses | (164,644) | (115,132) | (91,319) |
Fee related earnings | 1,442,234 | 1,031,200 | 667,988 |
Performance income—realized | 418,021 | 474,427 | 524,229 |
Performance related compensation—realized | (274,541) | (328,583) | (399,462) |
Realized net performance income | 143,480 | 145,844 | 124,767 |
Investment income (loss)—realized | 14,486 | 15,967 | 29,950 |
Interest and other investment income (expense)—realized | 51,692 | 45,352 | 27,353 |
Interest expense | (70,672) | (36,224) | (23,573) |
Realized net investment income (loss) | (4,494) | 25,095 | 33,730 |
Realized income | 1,581,220 | 1,202,139 | 826,485 |
Ares Management L.P | Operating segment | Credit Group | |||
Segment reporting | |||
Compensation and benefits | (441,778) | (410,394) | (320,111) |
General, administrative and other expenses | (73,945) | (54,686) | (53,997) |
Fee related earnings | 943,694 | 719,111 | 507,834 |
Performance income—realized | 156,784 | 207,446 | 70,148 |
Performance related compensation—realized | (97,564) | (131,900) | (44,582) |
Realized net performance income | 59,220 | 75,546 | 25,566 |
Investment income (loss)—realized | 7,071 | 1,989 | (2,309) |
Interest and other investment income (expense)—realized | 26,567 | 20,377 | 16,314 |
Interest expense | (15,395) | (8,038) | (8,722) |
Realized net investment income (loss) | 18,243 | 14,328 | 5,283 |
Realized income | 1,021,157 | 808,985 | 538,683 |
Ares Management L.P | Operating segment | Private Equity Group | |||
Segment reporting | |||
Compensation and benefits | (86,561) | (78,156) | (77,266) |
General, administrative and other expenses | (30,697) | (21,625) | (20,460) |
Fee related earnings | 84,467 | 83,207 | 84,265 |
Performance income—realized | 123,806 | 171,637 | 392,635 |
Performance related compensation—realized | (90,300) | (137,576) | (315,905) |
Realized net performance income | 33,506 | 34,061 | 76,730 |
Investment income (loss)—realized | 3,432 | (3,754) | 25,018 |
Interest and other investment income (expense)—realized | 2,546 | 11,514 | 4,027 |
Interest expense | (15,953) | (7,925) | (7,055) |
Realized net investment income (loss) | (9,975) | (165) | 21,990 |
Realized income | 107,998 | 117,103 | 182,985 |
Ares Management L.P | Operating segment | Real Assets Group | |||
Segment reporting | |||
Compensation and benefits | (240,015) | (127,679) | (66,374) |
General, administrative and other expenses | (39,739) | (24,181) | (13,936) |
Fee related earnings | 271,626 | 130,779 | 58,518 |
Performance income—realized | 133,130 | 95,270 | 61,446 |
Performance related compensation—realized | (83,105) | (59,056) | (38,975) |
Realized net performance income | 50,025 | 36,214 | 22,471 |
Investment income (loss)—realized | 3,115 | 17,700 | 7,228 |
Interest and other investment income (expense)—realized | 9,045 | 7,252 | 6,016 |
Interest expense | (11,346) | (6,394) | (6,331) |
Realized net investment income (loss) | 814 | 18,558 | 6,913 |
Realized income | 322,465 | 185,551 | 87,902 |
Ares Management L.P | Operating segment | Secondaries Group | |||
Segment reporting | |||
Compensation and benefits | (53,743) | (25,215) | 0 |
General, administrative and other expenses | (12,685) | (6,862) | 0 |
Fee related earnings | 110,501 | 65,868 | 0 |
Performance income—realized | 4,156 | 70 | 0 |
Performance related compensation—realized | (3,515) | (49) | 0 |
Realized net performance income | 641 | 21 | 0 |
Investment income (loss)—realized | 0 | 19 | 0 |
Interest and other investment income (expense)—realized | 3,683 | 2,261 | 0 |
Interest expense | (5,660) | (836) | 0 |
Realized net investment income (loss) | (1,977) | 1,444 | 0 |
Realized income | 109,165 | 67,333 | 0 |
Ares Management L.P | Operating segment | Strategic Initiatives | |||
Segment reporting | |||
Compensation and benefits | (33,011) | (26,673) | (6,442) |
General, administrative and other expenses | (7,578) | (7,778) | (2,926) |
Fee related earnings | 31,946 | 32,235 | 17,371 |
Performance income—realized | 145 | 4 | 0 |
Performance related compensation—realized | (57) | (2) | 0 |
Realized net performance income | 88 | 2 | 0 |
Investment income (loss)—realized | 868 | 13 | 13 |
Interest and other investment income (expense)—realized | 9,851 | 3,948 | 996 |
Interest expense | (22,318) | (13,031) | (1,465) |
Realized net investment income (loss) | (11,599) | (9,070) | (456) |
Realized income | 20,435 | 23,167 | 16,915 |
Management fees | |||
Segment reporting | |||
Total revenues | 2,136,433 | 1,611,047 | 1,150,608 |
Management fees | Total | |||
Segment reporting | |||
Total revenues | 2,152,528 | 1,635,277 | 1,186,565 |
Management fees | OMG | |||
Segment reporting | |||
Total revenues | 0 | 0 | 0 |
Management fees | Ares Management L.P | Operating segment | |||
Segment reporting | |||
Total revenues | 2,152,528 | 1,635,277 | 1,186,565 |
Management fees | Ares Management L.P | Operating segment | Credit Group | |||
Segment reporting | |||
Total revenues | 1,355,975 | 1,070,608 | 841,138 |
Management fees | Ares Management L.P | Operating segment | Private Equity Group | |||
Segment reporting | |||
Total revenues | 199,837 | 181,918 | 181,813 |
Management fees | Ares Management L.P | Operating segment | Real Assets Group | |||
Segment reporting | |||
Total revenues | 347,808 | 218,202 | 137,027 |
Management fees | Ares Management L.P | Operating segment | Secondaries Group | |||
Segment reporting | |||
Total revenues | 176,694 | 97,945 | 0 |
Management fees | Ares Management L.P | Operating segment | Strategic Initiatives | |||
Segment reporting | |||
Total revenues | 72,214 | 66,604 | 26,587 |
Fee related performance revenues | Total | |||
Segment reporting | |||
Total revenues | 239,425 | 137,879 | 22,987 |
Fee related performance revenues | OMG | |||
Segment reporting | |||
Total revenues | 0 | 0 | 0 |
Fee related performance revenues | Ares Management L.P | Operating segment | |||
Segment reporting | |||
Total revenues | 239,425 | 137,879 | 22,987 |
Fee related performance revenues | Ares Management L.P | Operating segment | Credit Group | |||
Segment reporting | |||
Total revenues | 71,497 | 86,480 | 22,160 |
Fee related performance revenues | Ares Management L.P | Operating segment | Private Equity Group | |||
Segment reporting | |||
Total revenues | 0 | 0 | 0 |
Fee related performance revenues | Ares Management L.P | Operating segment | Real Assets Group | |||
Segment reporting | |||
Total revenues | 167,693 | 51,399 | 827 |
Fee related performance revenues | Ares Management L.P | Operating segment | Secondaries Group | |||
Segment reporting | |||
Total revenues | 235 | 0 | 0 |
Fee related performance revenues | Ares Management L.P | Operating segment | Strategic Initiatives | |||
Segment reporting | |||
Total revenues | 0 | 0 | 0 |
Other fees | Total | |||
Segment reporting | |||
Total revenues | 94,562 | 49,771 | 19,948 |
Other fees | OMG | |||
Segment reporting | |||
Total revenues | 24,529 | 8,478 | 0 |
Other fees | Ares Management L.P | Operating segment | |||
Segment reporting | |||
Total revenues | 70,033 | 41,293 | 19,948 |
Other fees | Ares Management L.P | Operating segment | Credit Group | |||
Segment reporting | |||
Total revenues | 31,945 | 27,103 | 18,644 |
Other fees | Ares Management L.P | Operating segment | Private Equity Group | |||
Segment reporting | |||
Total revenues | 1,888 | 1,070 | 178 |
Other fees | Ares Management L.P | Operating segment | Real Assets Group | |||
Segment reporting | |||
Total revenues | 35,879 | 13,038 | 974 |
Other fees | Ares Management L.P | Operating segment | Secondaries Group | |||
Segment reporting | |||
Total revenues | 0 | 0 | 0 |
Other fees | Ares Management L.P | Operating segment | Strategic Initiatives | |||
Segment reporting | |||
Total revenues | $ 321 | $ 82 | $ 152 |
SEGMENT REPORTING - Revenue, Ex
SEGMENT REPORTING - Revenue, Expenses and Realized Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment revenues | |||
Total revenues | $ 3,055,443 | $ 4,212,091 | $ 1,764,046 |
Total segment revenues | 2,880,007 | 2,288,876 | 1,753,729 |
Segment expenses | |||
Compensation and benefits | 1,498,590 | 1,162,633 | 767,252 |
General, administrative and other expenses | 695,256 | 444,178 | 258,999 |
Total expenses | 2,749,085 | 3,410,083 | 1,450,486 |
Segment realized net investment income (expense) | |||
Total other income (expense), net | 204,448 | 263,682 | 65,918 |
Management fees | |||
Segment revenues | |||
Total revenues | 2,136,433 | 1,611,047 | 1,150,608 |
Operating segment | |||
Segment revenues | |||
Performance income—realized | 418,021 | 474,427 | 524,229 |
Segment expenses | |||
Performance related compensation—realized | 274,541 | 328,583 | 399,462 |
Ares Management L.P | |||
Segment revenues | |||
Total revenues | 3,055,443 | 4,212,091 | 1,764,046 |
Ares Management L.P | Operating segment | |||
Segment revenues | |||
Performance income—realized | 418,021 | 474,427 | 524,229 |
Total segment revenues | 2,880,007 | 2,288,876 | 1,753,729 |
Segment expenses | |||
Compensation and benefits | 855,108 | 668,117 | 470,193 |
General, administrative and other expenses | 164,644 | 115,132 | 91,319 |
Performance related compensation—realized | 274,541 | 328,583 | 399,462 |
Total expenses | 1,294,293 | 1,111,832 | 960,974 |
Segment realized net investment income (expense) | |||
Investment income—realized | 14,486 | 15,967 | 29,950 |
Interest and other investment income —realized | 51,692 | 45,352 | 27,353 |
Interest expense | (70,672) | (36,224) | (23,573) |
Total other income (expense), net | (4,494) | 25,095 | 33,730 |
Ares Management L.P | Operating segment | Management fees | |||
Segment revenues | |||
Total revenues | 2,152,528 | 1,635,277 | 1,186,565 |
Ares Management L.P | Operating segment | Fee related performance revenues | |||
Segment revenues | |||
Total revenues | 239,425 | 137,879 | 22,987 |
Ares Management L.P | Operating segment | Other fees | |||
Segment revenues | |||
Total revenues | $ 70,033 | $ 41,293 | $ 19,948 |
SEGMENT REPORTING - Revenue Rec
SEGMENT REPORTING - Revenue Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue adjustment | |||
Total revenues | $ 3,055,443 | $ 4,212,091 | $ 1,764,046 |
Total segment revenue | 2,880,007 | 2,288,876 | 1,753,729 |
Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 3,055,443 | 4,212,091 | 1,764,046 |
Operating segment | |||
Revenue adjustment | |||
Acquisition-related incentive fees | 0 | (47,873) | 0 |
Operating segment | Ares Management L.P | |||
Revenue adjustment | |||
Performance (income) loss—unrealized | (107,153) | (1,744,056) | 7,554 |
Total segment revenue | 2,880,007 | 2,288,876 | 1,753,729 |
Reconciling items | |||
Revenue adjustment | |||
Acquisition-related incentive fees | 0 | (47,873) | 0 |
Principal investment income, net of eliminations | (48,223) | (120,896) | (4,044) |
Total segment revenue | (175,436) | (1,923,215) | (10,317) |
Reconciling items | Non-Controlling interest | Subsidiaries | |||
Revenue adjustment | |||
Total segment revenue | (37,089) | (30,423) | (10,314) |
Reconciling items | Performance income reclass | |||
Revenue adjustment | |||
Performance income reclass | (14) | 1,434 | (3,726) |
OMG | |||
Revenue adjustment | |||
Total revenues | (24,354) | (8,478) | 0 |
Management fees | |||
Revenue adjustment | |||
Total revenues | 2,136,433 | 1,611,047 | 1,150,608 |
Management fees | Operating segment | Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 2,152,528 | 1,635,277 | 1,186,565 |
Management fees | OMG | |||
Revenue adjustment | |||
Total revenues | 0 | 0 | 0 |
Management fees | Consolidated Funds | Eliminations | |||
Revenue adjustment | |||
Total segment revenue | 46,324 | 44,896 | 45,268 |
Incentive fees | |||
Revenue adjustment | |||
Total revenues | 301,187 | 332,876 | 37,902 |
Incentive fees | Consolidated Funds | Eliminations | |||
Revenue adjustment | |||
Total revenues | 3,980 | 5,458 | 141 |
Administrative, transaction and other fees | |||
Revenue adjustment | |||
Total revenues | 147,532 | 95,184 | 41,376 |
Administrative, transaction and other fees | Reconciling items | |||
Revenue adjustment | |||
Total revenues | (69,414) | (49,223) | (36,512) |
Administrative, transaction and other fees | Consolidated Funds | Reconciling items | |||
Revenue adjustment | |||
Total revenues | 17,013 | 4,483 | 15,824 |
Principal investment income | |||
Revenue adjustment | |||
Total revenues | 12,279 | 99,433 | 28,552 |
Principal investment income | Reconciling items | |||
Revenue adjustment | |||
Principal investment income, net of eliminations | (12,278) | (99,433) | (28,552) |
Carried interest | |||
Revenue adjustment | |||
Total revenues | 458,012 | 2,073,551 | 505,608 |
Carried interest | Consolidated Funds | Eliminations | |||
Revenue adjustment | |||
Total revenues | $ 7,549 | $ 0 | $ 0 |
SEGMENT REPORTING - Expenses (D
SEGMENT REPORTING - Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Operating expenses | $ 2,749,085 | $ 3,410,083 | $ 1,450,486 |
Equity compensation expense | 200,391 | 237,191 | 122,986 |
Operating segment | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Acquisition and merger-related expense | (15,197) | (21,162) | (11,194) |
Equity compensation expense | 198,948 | 237,191 | 122,986 |
Acquisition-related compensation expense | (206,252) | (66,893) | 0 |
Placement fee adjustment | 2,088 | 78,883 | 19,329 |
Depreciation and amortization expense | 335,083 | 106,705 | 40,662 |
Operating segment | Ares Management L.P | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Operating expenses | 1,294,293 | 1,111,832 | 960,974 |
Performance related compensation-unrealized | (88,502) | (1,316,205) | 11,552 |
Operating segment | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Operating expenses | 2,749,085 | 3,410,083 | 1,450,486 |
Reconciling items | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Operating expenses | (1,454,792) | (2,298,251) | (489,512) |
Administrative fees | (68,255) | (49,223) | (36,512) |
Acquisition and merger-related expense | (15,197) | (21,162) | (11,124) |
Equity compensation expense | (200,106) | (237,191) | (122,986) |
Acquisition-related compensation expense | (206,252) | (66,893) | 0 |
Placement fee adjustment | (2,088) | (78,883) | (19,329) |
Depreciation and amortization expense | (335,083) | (106,705) | (40,662) |
Reconciling items | Subsidiaries | Non-Controlling interest | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Operating expenses | (30,741) | (32,133) | (13,575) |
Reconciling items | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses of Consolidated Funds added in consolidation | (86,988) | (113,024) | (65,527) |
Expenses of Consolidated Funds eliminated in consolidation | 50,833 | 50,538 | 45,408 |
OMG | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Operating expenses | $ 472,413 | $ 327,370 | $ 236,757 |
SEGMENT REPORTING - Other Incom
SEGMENT REPORTING - Other Income (Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total consolidated other income | $ 204,448 | $ 263,682 | $ 65,918 |
Other income, net | 13,119 | 14,402 | 11,291 |
Total segment realized net investment income (expense) | (4,494) | 25,095 | 33,730 |
Ares Management L.P | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other (income) expense, net | 0 | 31,070 | 0 |
Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other (income) expense, net | 33,822 | 35,879 | 34,297 |
Operating segment | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Investment (income) loss—unrealized | (12,834) | (52,445) | 35,183 |
Other (income) expense, net | (1,874) | 19,886 | (10,207) |
Operating segment | Ares Management L.P | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total consolidated other income | (4,494) | 25,095 | 33,730 |
Investment (income) loss—unrealized | 12,769 | (58,694) | 47,317 |
Interest and other investment (income) loss—unrealized | (25,603) | 6,249 | (12,134) |
Operating segment | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total consolidated other income | 204,448 | 263,682 | 65,918 |
Reconciling items | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total consolidated other income | (208,942) | (238,587) | (32,188) |
Principal investment income | 48,223 | 120,896 | 4,044 |
Other (income) expense, net | 1,873 | (19,886) | 10,277 |
Reconciling items | Performance income reclass | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Performance income reclass | 14 | (1,434) | 3,726 |
Reconciling items | Subsidiaries | Non-Controlling interest | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total consolidated other income | 5,991 | (25,107) | 556 |
Reconciling items | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other income from Consolidated Funds added in consolidation, net | (250,144) | (256,375) | (70,994) |
Eliminations | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other income, net | (16,484) | (2,868) | (14,053) |
OMG | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total consolidated other income | $ (14,419) | $ 1,368 | $ 927 |
SEGMENT REPORTING - Reconciliat
SEGMENT REPORTING - Reconciliation of Income Before Taxes (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Adjustments: | |||
Equity compensation expense | $ 200,391 | $ 237,191 | $ 122,986 |
Black Creek Acquisition | |||
Adjustments: | |||
Performance income realized, percentage | 1 | ||
Performance income realized, unconsolidated basis, percentage | 0.50 | ||
Consolidated Funds | |||
Adjustments: | |||
Other (income) expense, net | (33,822) | $ (35,879) | (34,297) |
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 119,333 | 120,369 | 28,085 |
Total investment income—realized | (586,529) | (437,818) | (463,652) |
Operating segment | |||
Economic net income | |||
Income before taxes | 510,806 | 1,065,690 | 379,478 |
Adjustments: | |||
Depreciation and amortization expense | 335,083 | 106,705 | 40,662 |
Equity compensation expense | 198,948 | 237,191 | 122,986 |
Acquisition-related compensation expense | 206,252 | 66,893 | 0 |
Acquisition-related incentive fees | 0 | (47,873) | 0 |
Acquisition and merger-related expense | 15,197 | 21,162 | 11,194 |
Placement fee adjustment | 2,088 | 78,883 | 19,329 |
Other (income) expense, net | 1,874 | (19,886) | 10,207 |
Total performance (income) loss—unrealized | (107,153) | (1,744,056) | 7,554 |
Total performance related compensation—unrealized | 88,502 | 1,316,205 | (11,552) |
Investment (income) loss—unrealized | (12,834) | (52,445) | 35,183 |
Realized income | 1,581,220 | 1,202,139 | 826,485 |
Total performance income—realized | (418,021) | (474,427) | (524,229) |
Total performance related compensation—realized | 274,541 | 328,583 | 399,462 |
Total investment income—realized | 4,494 | (25,095) | (33,730) |
Fee related earnings | 1,442,234 | 1,031,200 | 667,988 |
Operating segment | Consolidated Funds | |||
Adjustments: | |||
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (119,664) | (120,457) | (28,203) |
Operating segment | Subsidiaries | |||
Adjustments: | |||
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (357) | (23,397) | 3,817 |
OMG | |||
Adjustments: | |||
OMG expense, net | 462,478 | 317,524 | 235,830 |
Realized income | 450,193 | 319,202 | 244,529 |
Total performance income—realized | 0 | 0 | 0 |
Total performance related compensation—realized | 0 | 0 | 0 |
Total investment income—realized | 2,309 | 310 | 7,772 |
Fee related earnings | $ 447,884 | $ 318,892 | $ 236,757 |
CONSOLIDATION - Narrative (Deta
CONSOLIDATION - Narrative (Details) - entity | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of entities liquidated or dissolved | 1 | |
Number of entities that experienced a significant change in ownership or control | 1 | 1 |
CONSOLIDATION - Variable Intere
CONSOLIDATION - Variable Interest Entities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||
Assets of consolidated VIEs | $ 22,002,839 | $ 21,605,164 | |
Liabilities of consolidated VIEs | 17,097,810 | 16,694,730 | |
Collateralized loan obligations | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the company's investment in VIEs | 82,000 | 103,800 | |
Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Net income attributable to non-controlling interests related to consolidated VIEs | 119,333 | 120,369 | $ 28,085 |
Non-Consolidated Variable Interest Entities | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the company's investment in VIEs | 393,549 | 353,768 | |
Consolidated VIEs | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the company's investment in VIEs | 537,239 | 583,192 | |
Consolidated VIEs | Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated VIEs | 13,128,088 | 13,197,321 | |
Liabilities of consolidated VIEs | 11,593,867 | 12,018,655 | |
Net income attributable to non-controlling interests related to consolidated VIEs | $ 105,797 | $ 115,217 |
CONSOLIDATION - Balance Sheet (
CONSOLIDATION - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | |||||
Intangible assets, net | $ 640,420 | $ 768,818 | |||
Goodwill | 999,656 | 787,972 | $ 371,047 | ||
Total assets | 22,002,839 | 21,605,164 | |||
Liabilities | |||||
Operating lease liabilities | 190,616 | ||||
Total liabilities | 17,097,810 | 16,694,730 | |||
Commitments and contingencies | |||||
Stockholders’ Equity | |||||
Additional paid-in-capital | 1,970,754 | 1,913,559 | |||
Accumulated deficit | (369,475) | (89,382) | |||
Accumulated other comprehensive loss, net of tax | (14,986) | (1,855) | |||
Total stockholders’ equity | 1,589,239 | 1,825,227 | |||
Total equity | 3,798,618 | 3,814,426 | 2,471,774 | $ 1,858,598 | |
Total liabilities, redeemable interest, non-controlling interests and equity | $ 22,002,839 | $ 21,605,164 | |||
Common stock, shares outstanding (in shares) | 294,614,235 | 290,451,548 | |||
Class A Common Stock | |||||
Stockholders’ Equity | |||||
Common stock | $ 1,739 | $ 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) | 173,892,036 | 168,351,305 | |||
Common stock, shares outstanding (in shares) | 173,892,036 | 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 | $ 1,172 | $ 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) | 117,231,288 | 118,609,332 | |||
Common stock, shares outstanding (in shares) | 117,231,288 | 118,609,332 | |||
Eliminations | |||||
Assets | |||||
Total assets | $ (739,164) | $ (623,309) | |||
Liabilities | |||||
Total liabilities | (300,704) | (90,638) | |||
Commitments and contingencies | |||||
Stockholders’ Equity | |||||
Total equity | (438,460) | (532,671) | |||
Total liabilities, redeemable interest, non-controlling interests and equity | (739,164) | (623,309) | |||
Consolidated Funds | |||||
Assets | |||||
Cash and cash equivalents | 724,641 | 1,049,191 | |||
Due from affiliates | 15,789 | 7,234 | |||
Other assets | 65,570 | 39,430 | |||
Investments held in trust account | 1,013,382 | 1,000,285 | |||
Investments, at fair value | 12,191,251 | 11,816,393 | |||
Receivable for securities sold | 124,050 | 281,132 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 168,286 | 103,258 | |||
Due to affiliates | 4,037 | 0 | |||
Payable for securities purchased | 314,193 | 1,118,456 | |||
CLO loan obligations, at fair value | 10,701,720 | 10,657,661 | |||
Fund borrowings | 168,046 | 127,771 | |||
Redeemable interest | 1,013,282 | 1,000,000 | 0 | ||
Non-controlling interests in Consolidated Funds | 1,074,356 | 591,452 | |||
Consolidated Funds | Reportable legal entity | |||||
Assets | |||||
Cash and cash equivalents | 724,641 | 1,049,191 | |||
Due from affiliates | 26,531 | 16,761 | |||
Other assets | 65,570 | 39,430 | |||
Investments held in trust account | 1,013,382 | 1,000,285 | |||
Investments, at fair value | 12,187,392 | 11,812,093 | |||
Receivable for securities sold | 124,050 | 281,132 | |||
Total assets | 14,141,566 | 14,198,892 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 175,435 | 117,139 | |||
Due to affiliates | 191,238 | 26,210 | |||
Payable for securities purchased | 314,193 | 1,118,456 | |||
CLO loan obligations, at fair value | 10,797,332 | 10,698,681 | |||
Fund borrowings | 168,046 | 127,771 | |||
Total liabilities | 11,646,244 | 12,088,257 | |||
Commitments and contingencies | |||||
Redeemable interest | 1,013,282 | 1,000,000 | |||
Non-controlling interests in Consolidated Funds | 1,482,040 | 1,110,635 | |||
Stockholders’ Equity | |||||
Total equity | 1,482,040 | 1,110,635 | |||
Total liabilities, redeemable interest, non-controlling interests and equity | 14,141,566 | 14,198,892 | |||
Consolidated Funds | Eliminations | |||||
Assets | |||||
Due from affiliates | (10,742) | (9,527) | |||
Investments, at fair value | 3,859 | 4,300 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | (7,149) | (13,881) | |||
Due to affiliates | (187,201) | (26,210) | |||
CLO loan obligations, at fair value | (95,612) | (41,020) | |||
Non-controlling interests in Consolidated Funds | (407,684) | (519,183) | |||
Ares Operating Group | |||||
Liabilities | |||||
Redeemable interest | 93,129 | 96,008 | $ 100,366 | $ 99,804 | |
Non-controlling interests in Ares Operating Group entities | 1,135,023 | 1,397,747 | |||
Ares Operating Group | Reportable legal entity | |||||
Liabilities | |||||
Non-controlling interests in Ares Operating Group entities | 1,147,269 | 1,403,255 | |||
Ares Operating Group | Eliminations | |||||
Liabilities | |||||
Non-controlling interests in Ares Operating Group entities | (12,246) | (5,508) | |||
Ares Management L.P | |||||
Assets | |||||
Cash and cash equivalents | 389,987 | 343,655 | |||
Investments (includes $3,106,577 of accrued carried interest) | 3,974,734 | 3,684,264 | |||
Due from affiliates | 758,472 | 670,383 | |||
Other assets | 381,137 | 334,755 | |||
Right-of-use operating lease assets | 155,950 | 167,652 | |||
Intangible assets, net | 1,208,220 | 1,422,818 | |||
Goodwill | 999,656 | 787,972 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 231,921 | 279,673 | |||
Accrued compensation | 510,130 | 310,222 | |||
Due to affiliates | 252,798 | 198,553 | |||
Performance related compensation payable | 2,282,209 | 2,190,352 | |||
Debt obligations | 2,273,854 | 1,503,709 | |||
Operating lease liabilities | 190,616 | 205,075 | |||
Stockholders’ Equity | |||||
Additional paid-in-capital | 1,970,754 | 1,913,559 | |||
Accumulated deficit | (369,475) | (89,382) | |||
Accumulated other comprehensive loss, net of tax | (14,986) | (1,855) | |||
Total stockholders’ equity | 1,589,239 | 1,825,227 | |||
Ares Management L.P | Carried interest | |||||
Stockholders’ Equity | |||||
Equity method investments: | 3,106,577 | 2,998,421 | |||
Ares Management L.P | Class A Common Stock | |||||
Stockholders’ Equity | |||||
Common stock | 1,739 | 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 | 1,172 | 1,186 | |||
Ares Management L.P | Reportable legal entity | |||||
Assets | |||||
Cash and cash equivalents | 389,987 | 343,655 | |||
Investments (includes $3,106,577 of accrued carried interest) | 4,515,955 | 4,271,836 | |||
Due from affiliates | 949,532 | 696,963 | |||
Other assets | 381,137 | 338,685 | |||
Right-of-use operating lease assets | 155,950 | 167,652 | |||
Intangible assets, net | 1,208,220 | 1,422,818 | |||
Goodwill | 999,656 | 787,972 | |||
Total assets | 8,600,437 | 8,029,581 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 242,663 | 289,200 | |||
Accrued compensation | 510,130 | 310,222 | |||
Due to affiliates | 252,798 | 198,553 | |||
Performance related compensation payable | 2,282,209 | 2,190,352 | |||
Debt obligations | 2,273,854 | 1,503,709 | |||
Operating lease liabilities | 190,616 | 205,075 | |||
Total liabilities | 5,752,270 | 4,697,111 | |||
Commitments and contingencies | |||||
Stockholders’ Equity | |||||
Additional paid-in-capital | 1,989,284 | 1,921,539 | |||
Accumulated deficit | (369,475) | (89,382) | |||
Accumulated other comprehensive loss, net of tax | (14,986) | (1,855) | |||
Total stockholders’ equity | 1,607,769 | 1,833,207 | |||
Total equity | 2,755,038 | 3,236,462 | |||
Total liabilities, redeemable interest, non-controlling interests and equity | 8,600,437 | 8,029,581 | |||
Ares Management L.P | Reportable legal entity | Class A Common Stock | |||||
Stockholders’ Equity | |||||
Common stock | 1,739 | 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 | 1,172 | 1,186 | |||
Ares Management L.P | Eliminations | |||||
Assets | |||||
Investments (includes $3,106,577 of accrued carried interest) | (541,221) | (587,572) | |||
Due from affiliates | (191,060) | (26,580) | |||
Other assets | 0 | (3,930) | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | (10,742) | (9,527) | |||
Stockholders’ Equity | |||||
Additional paid-in-capital | (18,530) | (7,980) | |||
Total stockholders’ equity | (18,530) | (7,980) | |||
Ares Management L.P | Ares Operating Group | Reportable legal entity | |||||
Liabilities | |||||
Redeemable interest | $ 93,129 | $ 96,008 |
CONSOLIDATION - Income Statemen
CONSOLIDATION - Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Total revenues | $ 3,055,443 | $ 4,212,091 | $ 1,764,046 |
Expenses | |||
Compensation and benefits | 1,498,590 | 1,162,633 | 767,252 |
Performance related compensation | 518,829 | 1,740,786 | 404,116 |
General, administrative and other expenses | 695,256 | 444,178 | 258,999 |
Total expenses | 2,749,085 | 3,410,083 | 1,450,486 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | 4,732 | 19,102 | (9,008) |
Interest and dividend income | 9,399 | 9,865 | 8,071 |
Interest expense | (71,356) | (36,760) | (24,908) |
Other income, net | 13,119 | 14,402 | 11,291 |
Total other income (expense), net | 204,448 | 263,682 | 65,918 |
Income before taxes | 510,806 | 1,065,690 | 379,478 |
Income tax expense | 71,891 | 147,385 | 54,993 |
Net income | 438,915 | 918,305 | 324,485 |
Net income attributable to Ares Management Corporation | 167,541 | 408,837 | 152,142 |
Less: Series A Preferred Stock dividends paid | 0 | 10,850 | 21,700 |
Less: Series A Preferred Stock redemption premium | 0 | 11,239 | 0 |
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | 167,541 | 386,748 | 130,442 |
Eliminations | |||
Revenues | |||
Total revenues | (110,809) | (76,300) | (36,725) |
Expenses | |||
Compensation and benefits | 0 | ||
Performance related compensation | 0 | ||
General, administrative and other expenses | (255) | 0 | |
Total expenses | (50,833) | (50,538) | (45,408) |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | 32,656 | 7,182 | (288) |
Interest and dividend income | (15,797) | (4,334) | (3,570) |
Other income, net | 1,215 | (678) | 8,433 |
Total other income (expense), net | 16,484 | 2,868 | 14,053 |
Income before taxes | (43,492) | (22,894) | 22,736 |
Income tax expense | 0 | ||
Net income | (43,492) | (22,894) | 22,736 |
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | 0 | 0 | |
Consolidated Funds | |||
Expenses | |||
Expenses of Consolidated Funds | 36,410 | 62,486 | 20,119 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | 73,386 | 77,303 | (96,864) |
Interest expense | (411,361) | (258,048) | (286,316) |
Interest and other income of Consolidated Funds | 586,529 | 437,818 | 463,652 |
Less: Net income (loss) attributable to non-controlling interests | 119,333 | 120,369 | 28,085 |
Consolidated Funds | Reportable legal entity | |||
Revenues | |||
Total revenues | 0 | 0 | 0 |
Expenses | |||
Expenses of Consolidated Funds | 86,988 | 113,024 | 65,527 |
Total expenses | 86,988 | 113,024 | 65,527 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | 87,287 | 91,390 | (109,387) |
Interest expense | (424,887) | (272,155) | (293,476) |
Interest and other income of Consolidated Funds | 587,744 | 437,140 | 473,857 |
Total other income (expense), net | 250,144 | 256,375 | 70,994 |
Income before taxes | 163,156 | 143,351 | 5,467 |
Income tax expense | 331 | 88 | 118 |
Net income | 162,825 | 143,263 | 5,349 |
Less: Net income (loss) attributable to non-controlling interests | 162,825 | 143,263 | 5,349 |
Consolidated Funds | Eliminations | |||
Expenses | |||
Expenses of Consolidated Funds | (50,578) | (50,538) | (45,408) |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (13,901) | (14,087) | 12,523 |
Interest expense | 13,526 | 14,107 | 7,160 |
Interest and other income of Consolidated Funds | (1,215) | 678 | (10,205) |
Less: Net income (loss) attributable to non-controlling interests | (43,492) | (22,894) | 22,736 |
Ares Operating Group | |||
Other income (expense) | |||
Net income | 319,582 | 797,936 | 296,400 |
Less: Net income (loss) attributable to redeemable interest | (851) | (1,341) | (976) |
Less: Net income (loss) attributable to non-controlling interests | 152,892 | 390,440 | 145,234 |
Ares Operating Group | Reportable legal entity | |||
Other income (expense) | |||
Less: Net income (loss) attributable to non-controlling interests | 390,440 | ||
Consolidated Company Entities | |||
Revenues | |||
Total revenues | 3,055,443 | 4,212,091 | 1,764,046 |
Other income (expense) | |||
Income tax expense | 71,560 | 147,297 | 54,875 |
Consolidated Company Entities | Reportable legal entity | |||
Revenues | |||
Total revenues | 3,166,252 | 4,288,391 | 1,800,771 |
Expenses | |||
Compensation and benefits | 1,498,590 | 1,162,633 | 767,252 |
Performance related compensation | 518,829 | 1,740,786 | 404,116 |
General, administrative and other expenses | 695,511 | 444,178 | 258,999 |
Total expenses | 2,712,930 | 3,347,597 | 1,430,367 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (27,924) | 11,920 | (8,720) |
Interest and dividend income | 25,196 | 14,199 | 11,641 |
Interest expense | (71,356) | (36,760) | (24,908) |
Other income, net | 11,904 | 15,080 | 2,858 |
Total other income (expense), net | (62,180) | 4,439 | (19,129) |
Income before taxes | 391,142 | 945,233 | 351,275 |
Income tax expense | 71,560 | 147,297 | 54,875 |
Net income | 319,582 | 797,936 | 296,400 |
Net income attributable to Ares Management Corporation | 408,837 | 152,142 | |
Less: Series A Preferred Stock dividends paid | 10,850 | 21,700 | |
Less: Series A Preferred Stock redemption premium | 11,239 | ||
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | 167,541 | 386,748 | 130,442 |
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 | 319,582 | 797,936 | 296,400 |
Less: Net income (loss) attributable to redeemable interest | (851) | (1,341) | (976) |
Less: Net income (loss) attributable to non-controlling interests | 152,892 | 145,234 | |
Management fees | |||
Revenues | |||
Total revenues | 2,136,433 | 1,611,047 | 1,150,608 |
Management fees | Eliminations | |||
Revenues | |||
Total revenues | (46,324) | (44,896) | (45,268) |
Management fees | Consolidated Company Entities | Reportable legal entity | |||
Revenues | |||
Total revenues | 2,182,757 | 1,655,943 | 1,195,876 |
Carried interest allocation | |||
Revenues | |||
Total revenues | 458,012 | 2,073,551 | 505,608 |
Carried interest allocation | Eliminations | |||
Revenues | |||
Total revenues | (7,549) | 0 | |
Carried interest allocation | Consolidated Company Entities | Reportable legal entity | |||
Revenues | |||
Total revenues | 465,561 | 2,073,551 | 505,608 |
Incentive fees | |||
Revenues | |||
Total revenues | 301,187 | 332,876 | 37,902 |
Incentive fees | Eliminations | |||
Revenues | |||
Total revenues | (3,980) | (5,458) | (141) |
Incentive fees | Consolidated Company Entities | Reportable legal entity | |||
Revenues | |||
Total revenues | 305,167 | 338,334 | 38,043 |
Principal investment income (loss) | |||
Revenues | |||
Total revenues | 12,279 | 99,433 | 28,552 |
Principal investment income (loss) | Eliminations | |||
Revenues | |||
Total revenues | (35,943) | (21,463) | 24,508 |
Principal investment income (loss) | Consolidated Company Entities | Reportable legal entity | |||
Revenues | |||
Total revenues | 48,222 | 120,896 | 4,044 |
Administrative, transaction and other fees | |||
Revenues | |||
Total revenues | 147,532 | 95,184 | 41,376 |
Administrative, transaction and other fees | Eliminations | |||
Revenues | |||
Total revenues | (17,013) | (4,483) | (15,824) |
Administrative, transaction and other fees | Consolidated Company Entities | Reportable legal entity | |||
Revenues | |||
Total revenues | $ 164,545 | $ 99,667 | $ 57,200 |
CONSOLIDATION - Cash Flow State
CONSOLIDATION - Cash Flow Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 438,915 | $ 918,305 | $ 324,485 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net cash used in operating activities | (734,112) | (2,596,045) | (425,659) |
Cash flows from investing activities: | |||
Net cash used in investing activities | (337,379) | (1,084,633) | (136,764) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | 1,128,063 | 3,503,625 | 943,895 |
Effect of exchange rate changes | (10,240) | (19,104) | 19,956 |
Net change in cash and cash equivalents | 46,332 | (196,157) | 401,428 |
Cash and cash equivalents, beginning of period | 343,655 | 539,812 | 138,384 |
Cash and cash equivalents, end of period | 389,987 | 343,655 | 539,812 |
Supplemental disclosure of non-cash financing activities: | |||
Issuance of AOG Units and Class A common stock in connection with acquisitions | 12,835 | 510,848 | 305,338 |
Cash paid during the period for interest | 320,329 | 205,085 | 257,132 |
Cash paid during the period for income taxes | 104,864 | 22,788 | 38,174 |
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 | (43,492) | (22,894) | 22,736 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized (gains) losses on investments | (4,788) | 7,353 | (28,690) |
Investments purchased | 72,381 | 221,563 | 261,899 |
Proceeds from sale of investments | (121,494) | (23,101) | (33,307) |
Net carried interest and incentive fees receivable | (7,549) | ||
Due to/from affiliates | 164,480 | 6,446 | 6,037 |
Other assets | (3,930) | 3,719 | (2,171) |
Accounts payable, accrued expenses and other liabilities | (1,214) | 679 | (10,205) |
Net cash used in operating activities | 246,992 | (340,884) | 274,936 |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | 77,558 | (185,931) | (190,991) |
Effect of exchange rate changes | 0 | ||
Net change in cash and cash equivalents | 324,550 | (526,815) | 83,945 |
Cash and cash equivalents, beginning of period | (1,049,191) | (522,376) | (606,321) |
Cash and cash equivalents, end of period | (724,641) | (1,049,191) | (522,376) |
Consolidated Funds | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized (gains) losses on investments | (73,386) | (77,303) | 96,864 |
Investments purchased | (9,434,029) | (13,067,564) | (6,615,732) |
Proceeds from sale of investments | 8,198,812 | 9,970,609 | 5,502,325 |
Other (income) expense, net | (33,822) | (35,879) | (34,297) |
Change in cash and cash equivalents held at Consolidated Funds | 324,550 | (526,815) | 83,945 |
Net cash acquired (relinquished) with consolidation/deconsolidation of Consolidated Funds | 0 | (39,539) | 60,895 |
Change in other assets and receivables held at Consolidated Funds | 151,895 | (180,953) | (33,298) |
Change in other liabilities and payables held at Consolidated Funds | (733,417) | 723,616 | 10,787 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 120,822 | ||
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 549,396 | 1,033,644 | 132,430 |
Distributions to non-controlling interests in Consolidated Funds | (178,291) | (98,897) | (251,507) |
Borrowings under loan obligations by Consolidated Funds | 1,140,680 | 2,048,932 | 1,013,291 |
Repayments under loan obligations by Consolidated Funds | (145,222) | (80,752) | (190,055) |
Consolidated Funds | Reportable legal entity | |||
Cash flows from operating activities: | |||
Net income | 162,825 | 143,263 | 5,349 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized (gains) losses on investments | (87,287) | (91,390) | 109,387 |
Investments purchased | (9,408,078) | (13,075,187) | (6,580,784) |
Proceeds from sale of investments | 8,198,812 | 9,970,609 | 5,502,325 |
Other (income) expense, net | (33,822) | (35,879) | (34,297) |
Net cash acquired (relinquished) with consolidation/deconsolidation of Consolidated Funds | (39,539) | 60,895 | |
Change in other assets and receivables held at Consolidated Funds | 286,895 | (174,409) | (55,461) |
Change in other liabilities and payables held at Consolidated Funds | (733,417) | 746,616 | 10,787 |
Net cash used in operating activities | (1,614,072) | (2,555,916) | (981,799) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Contributions from redeemable and non-controlling interests in Consolidated Funds | 596,777 | 1,239,831 | 359,381 |
Distributions to non-controlling interests in Consolidated Funds | (303,230) | (119,153) | (287,467) |
Borrowings under loan obligations by Consolidated Funds | 1,140,680 | 2,048,932 | 1,013,291 |
Repayments under loan obligations by Consolidated Funds | (145,222) | (80,752) | (190,055) |
Net cash provided by financing activities | 1,289,005 | 3,088,858 | 895,150 |
Effect of exchange rate changes | 517 | (6,127) | 2,704 |
Net change in cash and cash equivalents | (324,550) | 526,815 | (83,945) |
Cash and cash equivalents, beginning of period | 1,049,191 | 522,376 | 606,321 |
Cash and cash equivalents, end of period | 724,641 | 1,049,191 | 522,376 |
Supplemental disclosure of non-cash financing activities: | |||
Cash paid during the period for interest | 260,866 | 170,915 | 235,005 |
Cash paid during the period for income taxes | 320 | 185 | 169 |
Consolidated Funds | Eliminations | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized (gains) losses on investments | 13,901 | 14,087 | (12,523) |
Investments purchased | (25,951) | 7,623 | (34,948) |
Change in cash and cash equivalents held at Consolidated Funds | 324,550 | (526,815) | 83,945 |
Change in other assets and receivables held at Consolidated Funds | (135,000) | (6,544) | 22,163 |
Change in other liabilities and payables held at Consolidated Funds | 0 | (23,000) | |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Contributions from redeemable and non-controlling interests in Consolidated Funds | (47,381) | (206,187) | (226,951) |
Distributions to non-controlling interests in Consolidated Funds | 124,939 | 20,256 | 35,960 |
Borrowings under loan obligations by Consolidated Funds | 0 | ||
Repayments under loan obligations by Consolidated Funds | 0 | ||
Ares Management L.P | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Equity compensation expense | 200,391 | 237,191 | 122,986 |
Depreciation and amortization | 341,341 | 113,293 | 41,248 |
Net realized and unrealized (gains) losses on investments | 10,929 | (88,978) | (8,039) |
Investments purchased | (371,124) | (340,199) | (90,851) |
Proceeds from sale of investments | 182,493 | 273,382 | 174,679 |
Other (income) expense, net | 0 | (31,070) | 0 |
Net carried interest and incentive fees receivable | (20,612) | (745,021) | (17,687) |
Due to/from affiliates | 39,073 | (180,928) | (76,185) |
Other assets | (105,205) | 213,825 | (36,694) |
Accrued compensation and benefits | 200,769 | 142,815 | 47,875 |
Accounts payable, accrued expenses and other liabilities | (51,685) | 125,168 | 21,035 |
Cash flows from investing activities: | |||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (35,796) | (27,226) | (15,942) |
Acquisitions, net of cash acquired | (301,583) | (1,057,407) | (120,822) |
Cash flows from financing activities: | |||
Net proceeds from issuance of Class A and non-voting common stock | 0 | 827,430 | 383,154 |
Proceeds from Credit Facility | 1,380,000 | 883,000 | 790,000 |
Proceeds from Senior Notes | 399,084 | ||
Proceeds from issuance of senior and subordinated notes | 488,915 | 450,000 | 399,084 |
Repayments of Credit Facility | (1,095,000) | (468,000) | (860,000) |
Dividends and distributions | (836,364) | (593,506) | (446,780) |
Series A Preferred Stock dividends | 0 | (10,850) | (21,700) |
Redemption of Series A Preferred Stock | 0 | (310,000) | 0 |
Stock option exercises | 21,205 | 37,216 | 92,877 |
Taxes paid related to net share settlement of equity awards | (201,311) | (226,101) | (95,368) |
Other financing activities | 4,055 | 11,509 | (1,531) |
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 | 389,987 | 343,655 | 539,812 |
Ares Management L.P | Reportable legal entity | |||
Cash flows from operating activities: | |||
Net income | 319,582 | 797,936 | 296,400 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Equity compensation expense | 200,391 | 237,191 | 122,986 |
Depreciation and amortization | 341,341 | 113,293 | 41,248 |
Net realized and unrealized (gains) losses on investments | 15,717 | (96,331) | 20,651 |
Investments purchased | (443,505) | (561,762) | (352,750) |
Proceeds from sale of investments | 303,987 | 296,483 | 207,986 |
Other (income) expense, net | (31,070) | ||
Net carried interest and incentive fees receivable | (28,161) | (745,021) | (17,687) |
Due to/from affiliates | (125,407) | (187,374) | (82,222) |
Other assets | (101,275) | 210,106 | (34,523) |
Accrued compensation and benefits | 200,769 | 142,815 | 47,875 |
Accounts payable, accrued expenses and other liabilities | (50,471) | 124,489 | 31,240 |
Net cash used in operating activities | 632,968 | 300,755 | 281,204 |
Cash flows from investing activities: | |||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (35,796) | (27,226) | (15,942) |
Acquisitions, net of cash acquired | (301,583) | (1,057,407) | |
Net cash used in investing activities | (337,379) | (1,084,633) | (136,764) |
Cash flows from financing activities: | |||
Net proceeds from issuance of Class A and non-voting common stock | 827,430 | 383,154 | |
Proceeds from Credit Facility | 1,380,000 | 883,000 | 790,000 |
Proceeds from Senior Notes | 399,084 | ||
Proceeds from issuance of senior and subordinated notes | 488,915 | ||
Repayments of Credit Facility | (1,095,000) | (468,000) | (860,000) |
Dividends and distributions | (836,364) | (593,506) | (446,780) |
Series A Preferred Stock dividends | (10,850) | (21,700) | |
Redemption of Series A Preferred Stock | (310,000) | ||
Stock option exercises | 21,205 | 37,216 | 92,877 |
Taxes paid related to net share settlement of equity awards | (201,311) | (226,101) | (95,368) |
Other financing activities | 4,055 | 11,509 | (1,531) |
Allocable to redeemable and non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | (238,500) | 600,698 | 239,736 |
Effect of exchange rate changes | (10,757) | (12,977) | 17,252 |
Net change in cash and cash equivalents | 46,332 | (196,157) | 401,428 |
Cash and cash equivalents, beginning of period | 343,655 | 539,812 | 138,384 |
Cash and cash equivalents, end of period | 389,987 | 343,655 | 539,812 |
Supplemental disclosure of non-cash financing activities: | |||
Issuance of AOG Units and Class A common stock in connection with acquisitions | 12,835 | 510,848 | 305,388 |
Cash paid during the period for interest | 59,463 | 34,170 | 22,127 |
Cash paid during the period for income taxes | $ 104,544 | $ 22,603 | $ 38,005 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | 1 Months Ended | 12 Months Ended | ||||||
Dec. 16, 2022 | Sep. 16, 2022 | Jun. 16, 2022 | Mar. 17, 2022 | Feb. 28, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsequent events | ||||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.61 | $ 0.61 | $ 0.61 | $ 0.61 | ||||
Class A Common Stock | ||||||||
Subsequent events | ||||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 2.44 | $ 1.88 | $ 1.60 | |||||
Class A Common Stock | Subsequent event | ||||||||
Subsequent events | ||||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.77 | |||||||
Non-voting Common Stock | ||||||||
Subsequent events | ||||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 2.44 | $ 1.88 | $ 1.60 | |||||
Non-voting Common Stock | Subsequent event | ||||||||
Subsequent events | ||||||||
Dividend declared and paid per class A common stock (in dollars per share) | $ 0.77 |