Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 8-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | ARES MANAGEMENT LP | |
Entity Central Index Key | 1176948 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 80,667,664 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Consolidated_Statements_of_Fin
Consolidated Statements of Financial Condition (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Goodwill | $144,080 | $85,582 | ||
Total assets | 21,618,156 | 21,632,675 | 22,035,501 | |
Liabilities | ||||
Total liabilities | 14,815,137 | 14,873,302 | ||
Commitments and contingencies | ||||
Controlling interest in Ares Management L.P.: | ||||
Partners' Capital (80,667,664 units, issued and outstanding at March 31, 2015 and December 31, 2014, respectively) | 291,641 | 285,025 | ||
Accumulated other comprehensive income (loss) | -2,126 | -1,386 | ||
Total controlling interest in Ares Management L.P | 289,515 | 283,639 | ||
Total equity | 5,863,925 | 5,697,935 | ||
Total liabilities, redeemable interest, non-controlling interests and equity | 21,618,156 | 21,632,675 | ||
Predecessor | ||||
Controlling interest in Ares Management L.P.: | ||||
Total controlling interest in Ares Management L.P | 289,515 | 283,639 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 69,372 | 148,858 | ||
Restricted cash and cash equivalents | 32,734 | |||
Investments, at fair value | 198,630 | 174,052 | ||
Derivative assets, at fair value | 8,217 | 7,623 | ||
Performance fees receivable | 171,793 | 187,059 | ||
Due from affiliates | 129,870 | 146,534 | ||
Other assets | 55,690 | 58,716 | ||
Intangible assets, net | 120,268 | 40,948 | ||
Goodwill | 144,080 | 85,582 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 126,385 | 101,310 | ||
Accrued compensation | 55,307 | 129,433 | ||
Derivative liabilities, at fair value | 2,973 | 2,850 | ||
Due to affiliates | 7,426 | 19,030 | ||
Performance fee compensation payable | 420,187 | 380,268 | ||
Debt obligations | 298,614 | 243,491 | ||
Equity compensation put option liability | 20,000 | 20,000 | ||
Deferred tax liability, net | 21,026 | 19,861 | ||
Controlling interest in Ares Management L.P.: | ||||
Total equity | 5,863,925 | 5,697,935 | ||
Parent Company | Predecessor | ||||
Assets | ||||
Cash and cash equivalents | 36,634 | 89,802 | ||
Consolidated Funds | ||||
Assets | ||||
Cash and cash equivalents | 1,318,017 | 1,314,397 | ||
Investments, at fair value | 18,990,943 | 19,123,950 | ||
Derivative assets, at fair value | 3,696 | 3,126 | ||
Due from affiliates | 9,338 | 11,342 | ||
Other assets | 6,329 | 6,156 | ||
Loans held for investment, net | 85,214 | 77,514 | ||
Dividends and interest receivable | 71,761 | 81,331 | ||
Receivable for securities sold | 234,938 | 132,753 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 54,064 | 68,589 | ||
Derivative liabilities, at fair value | 59,483 | 42,332 | ||
Due to affiliates | 2,332 | 2,441 | ||
Payable for securities purchased | 475,380 | 618,902 | ||
Securities sold short, at fair value | 3,763 | 3,763 | ||
Deferred tax liability, net | 23,585 | 22,214 | ||
CLO loan obligations | 12,154,677 | 12,049,170 | ||
Fund borrowings | 683,564 | 771,283 | ||
Mezzanine debt | 406,371 | 378,365 | ||
Redeemable interest | 915,017 | 1,037,450 | ||
Non-controlling interest in Consolidated Funds: | ||||
Non-controlling interest in Consolidated Funds | 5,036,639 | 4,988,729 | ||
Equity appropriated for Consolidated Funds | 55,996 | -37,926 | ||
Non-controlling interest | 5,092,635 | 4,950,803 | ||
AOG | ||||
Liabilities | ||||
Redeemable interest | 24,077 | 23,988 | ||
Non-controlling interest in Consolidated Funds: | ||||
Non-controlling interest | $481,775 | $463,493 |
Consolidated_Statements_of_Fin1
Consolidated Statements of Financial Condition (Parenthetical) | Mar. 31, 2015 | Dec. 31, 2014 |
Condensed Consolidated Statements of Financial Condition | ||
Partners' Capital units issued (in units) | 80,667,664 | 80,667,664 |
Partners' Capital units outstanding (in units) | 80,667,664 | 80,667,664 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 |
Revenues | |
Total revenues | $181,728 |
Expenses | |
Total expenses | 238,862 |
Other income (expense) | |
Total other income (expense) | 463,699 |
Income before taxes | 406,565 |
Income tax expense (benefit) | 5,892 |
Net income | 400,673 |
Net income attributable to Ares Management, L.P. | 18,456 |
Net income attributable to Ares Management L.P. per common unit | |
Basic (in dollars per unit) | $0.23 |
Diluted (in dollars per unit) | $0.23 |
Weighted-average common units | |
Basic (in units) | 80,667,664 |
Diluted (in units) | 80,667,664 |
Distributions declared per common unit | $0.24 |
Parent Company | |
Revenues | |
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 135,389 |
Performance fees | 40,060 |
Other fees | 6,279 |
Expenses | |
Compensation and benefits | 101,851 |
Performance fee compensation | 76,392 |
General, administrative and other expenses | 45,547 |
Other income (expense) | |
Interest and other investment income | 342 |
Interest expense | -3,684 |
Other income (expense), net | -330 |
Net realized gain (loss) on investments | 6,764 |
Net change in unrealized appreciation (depreciation) on investments | 3,476 |
Consolidated Funds | |
Expenses | |
Consolidated Funds' expenses | 15,072 |
Other income (expense) | |
Interest and other investment income | 338,186 |
Interest expense | -118,711 |
Net realized gain (loss) on investments | -61,436 |
Net change in unrealized appreciation (depreciation) on investments | 299,092 |
Less: Net income attributable to redeemable interests | 15,859 |
Less: Net income attributable to non-controlling interests | 331,309 |
AOG | |
Other income (expense) | |
Less: Net income attributable to redeemable interests | 243 |
Less: Net income attributable to non-controlling interests | $34,806 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (Affiliated entity, ARCC, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Affiliated entity | ARCC | ||
Management fees, part I fees | $29,042 | $28,318 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net income | $400,673 | |
Predecessor | ||
Net income | 281,370 | |
Other comprehensive income: | ||
Comprehensive income | 43,124 | |
Parent Company | ||
Other comprehensive income: | ||
Foreign currency translation adjustments | -29,339 | |
Total comprehensive income | 371,334 | |
Comprehensive income | 17,716 | |
Parent Company | Predecessor | ||
Other comprehensive income: | ||
Foreign currency translation adjustments | 180 | |
Total comprehensive income | 281,550 | |
Consolidated Funds | ||
Other comprehensive income: | ||
Less: Comprehensive income attributable to redeemable interests | 15,859 | |
Less: Comprehensive income attributable to non-controlling interests | 303,889 | |
Consolidated Funds | Predecessor | ||
Other comprehensive income: | ||
Less: Comprehensive income attributable to redeemable interests | 37,048 | |
Less: Comprehensive income attributable to non-controlling interests | 187,954 | |
AOG | ||
Other comprehensive income: | ||
Less: Comprehensive income attributable to redeemable interests | 236 | |
Less: Comprehensive income attributable to non-controlling interests | 33,634 | |
AOG | Predecessor | ||
Other comprehensive income: | ||
Less: Comprehensive income attributable to redeemable interests | 409 | |
Less: Comprehensive income attributable to non-controlling interests | $13,015 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Parent Company | Parent Company | Parent Company | Parent Company | Consolidated Funds | Consolidated Funds | Total |
In Thousands, unless otherwise specified | Accumulated Other Comprehensive Income (Loss) | Non-Controlling interest | Partners' Capital | Non-Controlling interest | Equity Appropriated for Consolidated Funds | ||
Balance at Dec. 31, 2014 | ($1,386) | $463,493 | $285,025 | $5,697,935 | $4,988,729 | ($37,926) | $5,697,935 |
Increase (Decrease) in Stockholders' Equity | |||||||
Relinquished with deconsolidation of funds | -147 | -147 | |||||
Reallocation of Partners' capital for changes in ownership interests | -7,272 | 7,191 | -81 | ||||
Deferred tax liabilities arising from allocation of contributions and Partners' capital | -78 | -2,433 | -2,511 | ||||
Contributions | 25,553 | 102,922 | 77,369 | ||||
Distributions | -38,059 | -19,360 | -296,698 | -239,279 | |||
Net income | 34,806 | 18,456 | 384,571 | 236,639 | 94,670 | ||
Currency translation adjustment | -740 | -1,172 | -29,332 | -26,672 | -748 | ||
Equity compensation | 4,504 | 2,762 | 7,266 | ||||
Balance at Mar. 31, 2015 | ($2,126) | $481,775 | $291,641 | $5,863,925 | $5,036,639 | $55,996 | $5,863,925 |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Equity (Parenthetical) | 0 Months Ended |
7-May-14 | |
Condensed Consolidated Statements of Changes in Equity | |
Issuance of common units (in units) | 11,363,636 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income | $400,673 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Net cash provided by (used in) operating activities | -15,512 | |
Cash flows from investing activities: | ||
Net cash used in investing activities | -67,693 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Net cash provided by (used in) financing activities | 32,878 | |
Non-cash increase in assets and liabilities: | ||
Issuance of AOG Units to non-controlling interest holders | 25,468 | |
Predecessor | ||
Cash flows from operating activities: | ||
Net income | 281,370 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Net cash provided by (used in) operating activities | 1,009,615 | |
Cash flows from investing activities: | ||
Net cash used in investing activities | -4,290 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Net cash provided by (used in) financing activities | -1,059,049 | |
Parent Company | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Equity compensation expense | 7,921 | |
Depreciation and amortization | 12,618 | |
Net realized (gain) loss on investments | -6,764 | |
Net change in unrealized (appreciation) depreciation on investments | -3,476 | |
Investments purchased | -27,137 | |
Cash proceeds from sale or pay down of investments | 14,451 | |
Cash flows due to changes in operating assets and liabilities: | ||
Net change in restricted cash | 32,734 | |
Net change in net performance fees receivable | 55,185 | |
Net change in due to/from affiliates | 5,060 | |
Net change in other assets | -1,616 | |
Net change in accrued compensation and benefits | -74,738 | |
Net change in accounts payable, accrued expenses and other liabilities | -34,877 | |
Net change in deferred taxes | 165 | |
Cash flows from investing activities: | ||
Acquisitions, net of cash acquired | -64,437 | |
Purchase of furniture, equipment and leasehold improvements, net | -3,256 | |
Cash flows from financing activities: | ||
Proceeds from credit facility | 60,000 | |
Contributions, net | 85 | |
Distributions | -57,679 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Effect of exchange rate changes and translation | -29,159 | |
Net decrease in cash and cash equivalents | -79,486 | |
Cash and cash equivalents, beginning of period | 148,858 | |
Cash and cash equivalents, end of period | 69,372 | |
Supplemental information: | ||
Cash paid during the period for interest | 303 | |
Cash paid during the period for income taxes | 17 | |
Parent Company | Predecessor | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Equity compensation expense | 5,339 | |
Depreciation and amortization | 11,120 | |
Net realized (gain) loss on investments | 66 | |
Net change in unrealized (appreciation) depreciation on investments | -4,146 | |
Investments purchased | -21,600 | |
Cash proceeds from sale or pay down of investments | 3,964 | |
Cash flows due to changes in operating assets and liabilities: | ||
Net change in restricted cash | 5,687 | |
Net change in net performance fees receivable | 12,455 | |
Net change in due to/from affiliates | -19,788 | |
Net change in other assets | 1,142 | |
Net change in accrued compensation and benefits | -77,360 | |
Net change in accounts payable, accrued expenses and other liabilities | -4,209 | |
Net change in deferred taxes | -209 | |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net | -4,290 | |
Cash flows from financing activities: | ||
Proceeds from credit facility | 30,000 | |
Repayments of credit facility | -11,000 | |
Distributions | -30,648 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Effect of exchange rate changes and translation | 556 | |
Net decrease in cash and cash equivalents | -53,168 | |
Cash and cash equivalents, beginning of period | 89,802 | |
Cash and cash equivalents, end of period | 36,634 | |
Supplemental information: | ||
Cash paid during the period for interest | 1,072 | |
Cash paid during the period for income taxes | 4,892 | |
Consolidated Funds | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Net realized (gain) loss on investments | 61,436 | |
Net change in unrealized (appreciation) depreciation on investments | -299,092 | |
Investments purchased | -1,868,763 | |
Cash proceeds from sale or pay down of investments | 1,970,719 | |
Allocable to non-controlling interests in Consolidated Funds: | ||
Receipt of non-cash interest income and dividends from investments | -2,213 | |
Amortization on debt and investments | -5,188 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Change in cash and cash equivalents held at Consolidated Funds | -3,620 | |
Cash relinquished with deconsolidation of Consolidated Funds | -1,254 | |
Change in other assets and receivables held at Consolidated Funds | -92,506 | |
Change in other liabilities and payables held at Consolidated Funds | -155,230 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Contributions from non-controlling interest holders in Consolidated Funds | 77,491 | |
Distributions to non-controlling interest holders in Consolidated Funds | -377,693 | |
Borrowings under loan obligation by Consolidated Funds | 649,706 | |
Repayments under loan obligations by Consolidated Funds | -319,032 | |
Cash and cash equivalents, beginning of period | 1,314,397 | |
Cash and cash equivalents, end of period | 1,318,017 | |
Supplemental information: | ||
Cash paid during the period for interest | 57,731 | |
Cash paid during the period for income taxes | 1,261 | |
Consolidated Funds | Predecessor | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Net realized (gain) loss on investments | -54,965 | |
Net change in unrealized (appreciation) depreciation on investments | -67,344 | |
Investments purchased | -2,321,820 | |
Cash proceeds from sale or pay down of investments | 3,075,968 | |
Allocable to non-controlling interests in Consolidated Funds: | ||
Receipt of non-cash interest income and dividends from investments | -2,999 | |
Amortization on debt and investments | -4,672 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Change in cash and cash equivalents held at Consolidated Funds | 363,800 | |
Cash relinquished with deconsolidation of Consolidated Funds | -40,089 | |
Change in other assets and receivables held at Consolidated Funds | 129,596 | |
Change in other liabilities and payables held at Consolidated Funds | -261,691 | |
Allocable to non-controlling interest in Consolidated Funds: | ||
Contributions from non-controlling interest holders in Consolidated Funds | 158,613 | |
Distributions to non-controlling interest holders in Consolidated Funds | -459,507 | |
Borrowings under loan obligation by Consolidated Funds | 44,584 | |
Repayments under loan obligations by Consolidated Funds | -791,091 | |
Supplemental information: | ||
Cash paid during the period for interest | 53,807 | |
Cash paid during the period for income taxes | $1 |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2015 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
ORGANIZATION AND BASIS OF PRESENTATION | |
1. ORGANIZATION AND BASIS OF PRESENTATION | |
Ares Management, L.P. is a leading global alternative asset management firm that operates four distinct but complementary investment groups: the Tradable Credit Group, the Direct Lending Group, the Private Equity Group and the Real Estate Group. Information about segments should be read together with Note 16, "Segment Reporting." Subsidiaries of Ares Management LLC ("AM LLC"), a subsidiary 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"), which are generally organized as pass-through entities for income tax purposes. Such subsidiaries provide investment advisory services to the Ares Funds in exchange for management fees. Ares Management, L.P. is a Delaware limited partnership formed on November 15, 2013. Ares is managed and operated by its general partner, Ares Management GP LLC. Unless the context requires otherwise, references to "Ares" or the "Company" refer to Ares Management, L.P. together with its subsidiaries. | |
The accompanying condensed consolidated financial statements include (1) the results of the Company subsequent to the Reorganization (as described below) and (2) prior to the Reorganization, the condensed consolidated results of two affiliated entities, Ares Holdings Inc. ("AHI") and Ares Investments LLC ("AI"), which directly or indirectly hold controlling interests in AM LLC and Ares Investments Holdings LLC ("AIH LLC"), as well as their wholly owned subsidiaries (collectively, the "Predecessor"). Prior to the Reorganization, Ares Partners Management Company LLC ("APMC") directed the operations of AHI and AI through its controlling ownership interest of approximately 50.1% and 70.3%, respectively, in each entity. The remaining ownership of AHI and AI was shared among various minority, non-controlling strategic investment partners. | |
In addition, certain Ares-affiliated funds, related co-investment entities and collateralized loan obligations ("CLOs") (collectively, the "Consolidated Funds") managed by AM LLC and its wholly owned subsidiaries have been consolidated in the accompanying condensed consolidated financial statements for the periods presented pursuant to generally accepted accounting principles in the United States ("GAAP") as described in Note 2, "Summary of Significant Accounting Policies." Including the results of the Consolidated Funds significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows in the accompanying condensed consolidated financial statements; however, the Consolidated Funds results included herein have no direct effect on the net income attributable to controlling interests or on total equity attributable to controlling interests. Instead, economic ownership interests of the investors in the Consolidated Funds are reflected as non-controlling interests in Consolidated Funds and as equity appropriated for Consolidated Funds in the accompanying condensed consolidated financial statements. Further, cash flows allocable to non-controlling interest in Consolidated Funds are specifically identifiable in the Condensed Consolidated Statement of Cash Flows. | |
These statements and notes have not been audited, exclude some of the disclosures required for annual audited financial statements and should be read in conjunction with the audited condensed consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission. The operating results presented for interim periods are not indicative of the results that may be expected for any other interim period or for the entire year. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition and results of operations for the interim periods presented. | |
Reorganization and Initial Public Offering | |
Pursuant to a reorganization effectuated in connection with the initial public offering of the Company's common units ("IPO"), on May 1, 2014, the Company became a holding partnership, and the Company's sole assets became equity interests through wholly owned subsidiary entities in AHI, Ares Domestic Holdings, Inc. ("Domestic Holdings"), Ares Offshore Holdings, Ltd., AI and Ares Real Estate Holdings LLC. The Company, either directly or through direct subsidiaries, is the general partner of each of the Ares Operating Group (as defined below) entities, and operates and controls all of the businesses and affairs of the Ares Operating Group. | |
Additionally, on May 1, 2014, in connection with the IPO, Ares Holdings LLC was converted into a limited partnership, Ares Holdings L.P. ("Ares Holdings"), and AI was converted into a limited partnership, Ares Investments L.P. ("Ares Investments"). In addition, the Company formed Ares Domestic Holdings L.P. ("Ares Domestic"), Ares Offshore Holdings L.P. ("Ares Offshore") and Ares Real Estate Holdings L.P. ("Ares Real Estate"). Ares Holdings, Ares Domestic, Ares Offshore, Ares Investments and Ares Real Estate are collectively referred to as the "Ares Operating Group." | |
In exchange for its interest in the Company, prior to the consummation of the IPO, Ares Owners Holdings L.P. transferred to the Company its interests in each of AHI, Domestic Holdings, Ares Offshore Holdings, Ltd., Ares Real Estate Holdings LLC and a portion of its interest in Ares Investments. Similarly, Abu Dhabi Investment Authority ("ADIA") contributed its direct interest in AHI to its affiliate, AREC Holdings Ltd., a Cayman Islands exempted company ("AREC"). AREC then transferred to the Company its interest in each of AHI, Ares Domestic, Ares Offshore, Ares Investments and Ares Real Estate. | |
These actions are referred to herein collectively as the "Reorganization". | |
On May 7, 2014, the Company issued 11,363,636 common units in the IPO at a price of $19.00 per common unit. In addition, on June 4, 2014, the Company issued an additional 225,794 common units at $19.00 per common unit pursuant to the partial exercise by the underwriters of their overallotment option. | |
The Company conducts all of its material business activities through the Ares Operating Group. Following the IPO, the Company consolidates the financial results of the Ares Operating Group entities, their consolidated subsidiaries and certain Consolidated Funds. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
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 or a voting interest model. 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, including Ares affiliates and affiliated funds and co-investment entities for which the Company is the general partner and is presumed to have control and (b) entities that the Company concludes are variable interest entities ("VIEs"), including limited partnerships in which the Company has a nominal economic interest and CLOs for which the Company is deemed to be the primary beneficiary. | ||||||||
With respect to the Consolidated Funds, which typically represent limited partnerships and single member limited liability companies, the Company earns a fixed management fee based on invested capital or a derivation thereof, and a performance fee based upon the investment returns in excess of a stated benchmark or hurdle rate. The Company, as the general partner of various funds, generally has operational discretion and control, and limited partners have no substantive rights to impact ongoing governance and operating activities of the fund. Such a fund is required to be consolidated unless the Company has a less than significant level of equity at risk. The fund is typically considered a VIE, as described below, to the extent that the Company's equity at risk is less than significant in a given fund and it has no obligation to fund any future losses. In these cases, the fund investors are generally deemed to be the primary beneficiaries, and the Company does not consolidate the fund. In cases where the Company's equity at risk is deemed to be significant, the fund is generally not considered to be a VIE, and the Company will generally consolidate the fund unless the limited partners are granted substantive rights to remove the general partner or liquidate the fund. These rights are known as kick-out rights. | ||||||||
Variable Interest Model | ||||||||
The Company consolidates entities that are determined to be VIEs where the Company is deemed to be the primary beneficiary. An entity is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity's business and (b) 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 consolidation rules require an analysis to determine whether (i) an entity in which the Company holds a variable interest is a VIE and (ii) the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees), would give the Company a controlling financial interest. The consolidation rules may be deferred for VIEs if the VIE and the reporting entity's interest in VIE meet deferral conditions set forth in FASB Accounting Standards Codification ("ASC") 810-10-65-2. Certain limited partnerships meet the deferral conditions if: (a) the limited partnerships generally have all the attributes of an investment company, (b) the Company does not have the obligation to fund losses of the limited partnership and (c) the limited partnership is not a securitization, asset- backed financing entity or qualifying special purpose vehicle. Where a VIE qualifies for the deferral of the consolidation rules, the analysis is based on consolidation rules prior to January 1, 2010. These rules require an analysis to determine (i) whether an entity in which the Company holds a variable interest is a VIE and (ii) whether the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees) would be expected to absorb a majority of the variability of the entity. Under either guideline, the Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders the conclusion at each reporting date. 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 assessment 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, (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 (6) estimating cash flows in evaluating which member within the equity group absorbs a majority of the expected losses and hence would be deemed the primary beneficiary. | ||||||||
As of March 31, 2015 and December 31, 2014, assets of consolidated VIEs reflected in the Condensed Consolidated Statements of Financial Condition were $14.3 billion and $14.2 billion, respectively, and are presented within "Assets of Consolidated Funds." As of March 31, 2015 and December 31, 2014, liabilities of consolidated VIEs reflected in the Condensed Consolidated Statements of Financial Condition were $13.3 billion and $13.2 billion, respectively, and are presented within "Liabilities of Consolidated Funds." The holders of the consolidated VIEs' liabilities do not have recourse to the Company other than to the assets of the consolidated VIEs. The assets and liabilities of the consolidated VIEs are comprised primarily of investment securities and loan obligations, respectively. All significant intercompany transactions and balances have been eliminated in consolidation. | ||||||||
As of March 31, 2015 and December 31, 2014, the Company held $178.2 million and $193.0 million of investments in these consolidated VIEs, respectively, which represents its maximum exposure to loss. The maximum exposure to loss represents the Company's total investment in these entities. | ||||||||
Certain funds that have historically been consolidated in the financial statements are no longer consolidated because, as of the reporting period: (a) they were liquidated or dissolved, including one and three funds for the three months ended March 31, 2015 and 2014, respectively, (b) the Company no longer holds a majority voting interest, including none and four funds for the three months ended March 31, 2015 and 2014, respectively, or (c) the Company is no longer deemed to be the primary beneficiary of the VIEs as it has no economic interest, no obligation to absorb losses and no significant rights to receive benefits from the VIEs, including eight and eleven funds for the three months ended March 31, 2015 and 2014, respectively. For deconsolidated funds, the Company continues as the general partner and/or investment manager until such funds are fully liquidated. | ||||||||
Equity Appropriated for Consolidated Funds | ||||||||
As of March 31, 2015 and December 31, 2014, the Company consolidated 26 and 31 CLOs, respectively. CLOs are investment vehicles created for the sole purpose of issuing collateralized loan obligations. Upon consolidation, the Company elected the fair value option for eligible liabilities to mitigate accounting mismatches between the carrying value of the assets and liabilities. The Company accounts for the excess in fair value of assets over liabilities upon initial consolidation of funds as an increase in equity appropriated for Consolidated Funds. Net income (loss) of the CLOs is allocated to equity appropriated for Consolidated Funds. | ||||||||
The loan obligations issued by the CLOs are backed by diversified collateral asset portfolios and by structured debt or equity. In exchange for managing the collateral for the CLOs, the Company earns management fees, including, in some cases, senior and subordinated management fees and contingent performance fees. In cases where the Company earns fees from a fund that it consolidates with the CLOs, 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. | ||||||||
Investments in Non-Consolidated Variable Interest Entities | ||||||||
The Company holds interests in certain VIEs that are not consolidated because the Company has determined it is not the primary beneficiary. The Company's interest in such entities generally is in the form of direct equity interests and fixed fee arrangements. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. There is no difference between the carrying value and fair value as investments in the non-consolidated VIEs are carried at fair value. The Company's interests and the Consolidated Funds' interests in these non-consolidated VIEs and their respective maximum exposure to loss relating to non-consolidated VIEs are as follows: | ||||||||
As of March 31, | As of December 31, | |||||||
2015 | 2014 | |||||||
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs | $ | 16,741 | $ | 14,851 | ||||
Maximum exposure to loss attributable to Consolidated Funds' investments in non-consolidated VIEs | $ | 2,236 | $ | 2,519 | ||||
Basis of Accounting | ||||||||
The accompanying condensed consolidated financial statements are prepared in accordance with GAAP. Certain comparative amounts for prior periods have been reclassified to conform to the current year's presentation. Management has determined that the Company's Consolidated Funds are investment companies under GAAP for the purposes of financial reporting 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 in the Condensed 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 condensed consolidated financial statements, the Company has retained the specialized accounting guidance 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 in the Company's Condensed Consolidated Statements of Financial Condition. The excess of the CLO assets over the CLO liabilities upon consolidation is reflected in the Company's Condensed Consolidated Statements of Financial Condition as equity appropriated for Consolidated Funds. Net income attributable to the investors in the CLOs is included in net income (loss) attributable to non-controlling interests in Consolidated Funds in the Condensed Consolidated Statements of Operations and equity appropriated for Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. | ||||||||
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management's estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates require management to exercise judgment in the process of applying the Company's accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance fee revenue and performance fee compensation involve a high degree of judgment and complexity, and these assumptions and estimates may be significant to the condensed consolidated financial statements. Actual results could differ from these estimates and such differences could be material. | ||||||||
Non-Controlling Interests in Ares Operating Group Entities | ||||||||
Following the Reorganization, non-controlling interests in Ares Operating Group entities (collectively, the "Ares Operating Group Units" or "AOG Units") represent a component of equity and net income attributable to the owners of AOG Units that are not held directly or indirectly by Ares Management, L.P. These interests are adjusted for contributions to and distributions from Ares Operating Group entities during the reporting period and are allocated income from the Ares Operating Group entities based on their historical ownership percentage for the proportional number of days in the reporting period. | ||||||||
For the periods presented prior to the Reorganization, non-controlling interests in Ares Operating Group entities represent equity interests and net income attributable to various minority non-control oriented strategic investment partners, which were reflected as non-controlling interests in the Predecessor's historical results. | ||||||||
Redeemable Interest in Ares Operating Group Entities | ||||||||
Redeemable interests in Ares Operating Group entities represent a portion of the collective ownership interest in Ares Operating Group Units granted to professionals of the Company in connection with the Company's acquisition of Indicus Advisors, LLP ("Indicus") during 2011. This ownership interest may be redeemed for a cash payment of $20.0 million provided that a portion of such interests are subject to certain conditions relating to continued employment. Income is allocated in proportion to the redeemable interests' ownership percentage in Ares Operating Group Units. | ||||||||
Income Allocation | ||||||||
Income (loss) before taxes is allocated based on each partner's average daily ownership of the Ares Operating Group entities for each year presented. The net income attributable to Ares Management, L.P. for the three months ended March 31, 2015 represents its average daily ownership of 37.85%. | ||||||||
Equity-Method Investments | ||||||||
The Company accounts for its investments held by its operating subsidiary, and in which it has or is otherwise presumed to have significant influence, including investments in unconsolidated funds and strategic investments, using the equity-method of accounting or at fair value pursuant to the fair value option permitted by FASB ASC 825, Financial Instruments. | ||||||||
Unless the Company elects the fair value option, 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. 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. The Company's share of the investee's income and expenses for the Company's equity-method investments is included within net realized gain (loss) on investments on the Condensed Consolidated Statements of Operations. | ||||||||
The fair value option permits the irrevocable fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The Company elected the fair value option for certain of its equity-method investments. Unrealized appreciation (depreciation) and realized gains (losses) from the Company's equity-method investments at fair value are included within net change in unrealized appreciation (depreciation) on investments and net realized gain (loss) on investments, respectively, on the Condensed Consolidated Statements of Operations. | ||||||||
Recent Accounting Pronouncements | ||||||||
In February 2015, the FASB amended the consolidation standards for reporting entities that are required to evaluate whether they should consolidate certain legal entities. Under the new guidance, all legal entities are subject to reevaluation under the revised consolidation model. Specifically, the guidance (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities; (ii) eliminates the presumption that a general partner should consolidate a limited partnership; (iii) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (iv) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940, as amended for registered money market funds. The amendments are effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. | ||||||||
In April 2015, the FASB issued guidance simplifying the presentation of debt issuance costs. The amendments require that debt issuance costs related to recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the new guidance. The amendments are effective for annual reporting periods, including interim periods within those reporting periods, beginning after December 15, 2015, and early adoption is permitted. The guidance is to be applied on a retrospective basis and accounted for as a change in accounting principle. The Company has elected to adopt this guidance in this Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2015. Accordingly, unamortized debt issuance costs as of March 31, 2015 of $7.2 million for the Company and $5.9 million for the Consolidated Funds are reported as a reduction from the carrying amount of the respective debt obligations in the Condensed Consolidated Statements of Financial Condition. Unamortized debt issuance costs of $2.3 million as of December 31, 2014, which were previously reported in other assets in the Condensed Consolidated Statements of Financial Condition, have been reclassified as a deduction from the carrying amount of the respective debt. Unamortized debt issuance costs of $5.3 million related to the Company's Credit Facility (as defined in Note 8), continue to be included in other assets in the Condensed Consolidated Statements of Financial Condition as of December 31, 2014, as there was no balance outstanding under the Credit Facility as of December 31, 2014. Unamortized debt issuance costs of $6.3 million as of December 31, 2014, which were reported in other assets of the Consolidated Funds in the Condensed Consolidated Statements of Financial Condition, have been reclassified as a deduction from the carrying amount of the respective debt. The changes represent the change in accounting principle that has been applied to all periods presented for consistency. | ||||||||
In May 2015, the FASB issued guidance removing the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Removing these investments from the fair value hierarchy will eliminate diversity in current practice resulting from the way in which investments measured at net asset value per share with future redemption dates are classified and ensure that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share, but for which the practical expedient is not applied, will continue to be included in the fair value hierarchy. The amendments are effective for public entities for annual reporting periods beginning after December 15, 2015 and interim periods within those reporting periods and should be applied retrospectively to all periods presented. Early adoption of the amendments is permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. | ||||||||
BUSINESS_COMBINATIONS_GOODWILL
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS | ||||||||
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS | 3. BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS | |||||||
Acquisition of EIF Management, LLC | ||||||||
On January 1, 2015, the Company completed the acquisition of all of the outstanding membership interests of EIF Management, LLC ("EIF"), a Delaware limited liability company, in accordance with the membership interest purchase agreement entered into on October 30, 2014. EIF is an asset manager in the U.S. power and energy assets industry with approximately $4.4 billion of AUM across four commingled funds and four related co-investment vehicles at March 31, 2015. As a result of the acquisition, the Company now has a new energy infrastructure equity strategy focused on generating long-term, stable cash-flowing investments in the power generation, transmission and midstream energy sector. EIF is part of the Company's Private Equity Group segment. | ||||||||
The acquisition-date fair value of the consideration transferred totaled $149.2 million, which consisted of the following: | ||||||||
Cash | $ | 64,532 | ||||||
Equity (1,578,947 Ares Operating Group units) | 25,468 | |||||||
Contingent consideration | 59,171 | |||||||
| | | | | ||||
Total | $ | 149,171 | ||||||
| | | | | ||||
| | | | | ||||
The acquisition-date fair value of $25.5 million for the 1,578,947 Ares Operating Group Units issued was determined based on the volume weighted average price of Ares common units on the New York Stock Exchange from October 17, 2014 to November 13, 2014. | ||||||||
The transaction also included contingent consideration that is payable to EIF's former membership interest holders if Ares successfully launches a new fund ("Fund V") that meets certain revenue and fee paying commitment targets during Fund V's commitment period. | ||||||||
The fair value of the liability for contingent consideration as of the acquisition date was $78.0 million and is subject to change until the liability is settled with the related impact recorded to our condensed consolidated statements of operations as acquisition-related and other expenses. Contingent consideration includes (i) cash and equity consideration, with fair value estimated to be approximately $59.2 million, that are not subjected to vesting or are fully vested and will be recorded as purchase price and (ii) equity consideration, with fair value estimated to be approximately $18.8 million, that will generally vest ratably over a period of two to five years after Fund V's final closing and will be recorded as equity-based compensation. Up to half of the Ares Operating Group Units that have been issued are exchangeable from and after July 1, 2015 and all of the Ares Operating Group Units that have been issued are exchangeable in the transaction from and after January 2, 2016, subject to customary conversion rate adjustments for splits, unit distributions and reclassifications, or, at the Company's option, for cash. | ||||||||
The fair value of the contingent consideration was estimated using an income approach, specifically a probability-weighted discounted cash flow model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level III measurement as defined in ASC 820. The key assumptions in applying the discounted cash flow model are as follows: discount rate of 4.1% estimated based on the short-term pre-tax cost of debt and probability adjusted revenues between $16.9 million and $45.0 million. | ||||||||
The following is a summary of the estimated fair values of assets acquired and liabilities assumed for the EIF acquisition as of January 1, 2015. The Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the provisional measurements of contingent consideration, intangible assets, goodwill and deferred income tax are subject to change. Additionally, the Company evaluated three leases assumed in connection with the EIF acquisition as of January 1, 2015. Based upon the existing terms of the acquired leases, the Company determined that the lease payments are at current market conditions. The fair value of assets acquired and liabilities assumed are estimated to be: | ||||||||
Cash | $ | 95 | ||||||
Other tangible assets | 610 | |||||||
Intangible assets: | ||||||||
Management contracts | 48,521 | |||||||
Client relationships | 38,600 | |||||||
Trade name | 3,200 | |||||||
| | | | | ||||
Total intangible assets | 90,321 | |||||||
| | | | | ||||
Total identifiable assets acquired | 91,026 | |||||||
| | | | | ||||
Accounts payable, accrued expenses and other liabilities | 455 | |||||||
| | | | | ||||
Total liabilities assumed | 455 | |||||||
Net identifiable assets acquired | $ | 90,571 | ||||||
| | | | | ||||
| | | | | ||||
Goodwill: | ||||||||
Assembled workforce | $ | 8,300 | ||||||
Others | 50,300 | |||||||
| | | | | ||||
Total goodwill | 58,600 | |||||||
| | | | | ||||
Net assets acquired | $ | 149,171 | ||||||
| | | | | ||||
| | | | | ||||
The Company incurred $3.6 million of acquisition-related costs which are expensed as incurred and reported within general, administrative, and other expenses within the Condensed Consolidated Statements of Operations. | ||||||||
The carrying value of goodwill was $58.6 million as of March 31, 2015 and is entirely allocated to the Private Equity Group segment. The goodwill to be recognized is attributable primarily to expected synergies and the assembled workforce of EIF. | ||||||||
The $90.3 million acquired intangible assets are assigned to finite-lived intangible assets as follows: | ||||||||
• | $38.6 million is provisionally assigned to client relationship and is subject to an estimated useful life of approximately 12 to 15 years; | |||||||
• | $48.5 million is provisionally assigned to acquired management contracts and is subject to an estimated useful life of approximately two to four years; and | |||||||
• | $3.2 million is provisionally assigned to trade name that is subject to an estimated useful life of approximately seven to eight years. | |||||||
In connection with certain business combinations and asset acquisitions, the Company records the fair value of intangible assets acquired together with goodwill. | ||||||||
Goodwill and Intangible Assets | ||||||||
The following table summarizes the carrying value for the Company's intangible assets: | ||||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Finite-lived intangible assets | $ | 203,899 | $ | 114,102 | ||||
Less: accumulated amortization | (83,631 | ) | (73,154 | ) | ||||
| | | | | | | | |
Finite-lived intangible assets, net | 120,268 | 40,948 | ||||||
Goodwill | 144,080 | 85,582 | ||||||
| | | | | | | | |
Total intangible assets and goodwill, net | $ | 264,348 | $ | 126,530 | ||||
| | | | | | | | |
| | | | | | | | |
There were no impairments of goodwill recorded as of March 31, 2015 and December 31, 2014. | ||||||||
Finite-Lived Intangible Assets, Net | ||||||||
Intangible assets, net represents the fair value in excess of carrying value related to the acquisition of management contracts, client relationships and a trade name, and the future benefits of managing new assets for existing clients. | ||||||||
The following table summarizes the carrying value, net of accumulated amortization, for the Company's intangible assets: | ||||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Previously acquired management contracts(1) | $ | 113,578 | $ | 114,102 | ||||
EIF management contracts | 48,521 | — | ||||||
EIF client relationships | 38,600 | — | ||||||
EIF trade name | 3,200 | — | ||||||
| | | | | | | | |
Total intangible assets acquired | 203,899 | 114,102 | ||||||
Less: accumulated amortization | (83,631 | ) | (73,154 | ) | ||||
| | | | | | | | |
Intangible assets, net | $ | 120,268 | $ | 40,948 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | Intangibles relating to London based asset manager are recorded in Pounds Sterling and are translated at spot rate at each reporting date. | |||||||
Amortization expense associated with intangible assets was $10.9 million and $8.8 million for the three months ended March 31, 2015 and 2014, respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. | ||||||||
For the three months ended March 31, 2014, the Company accelerated amortization expense by $3.0 million to remove the remaining carrying value of certain management contracts within the Tradable Credit Group that had terminated. There was no acceleration of amortization expense for the three months ended March 31, 2015. | ||||||||
INVESTMENTS
INVESTMENTS | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
INVESTMENTS | ||||||||||||||
INVESTMENTS | ||||||||||||||
4. INVESTMENTS | ||||||||||||||
Investments of the Company | ||||||||||||||
The Company's investments are comprised of equity-method investments and investments presented at fair value in accordance with the investment company guidance. | ||||||||||||||
Fair Value Investments | ||||||||||||||
The Company's fair value investments are presented below: | ||||||||||||||
Fair value at | Fair value as a | |||||||||||||
percentage of total | ||||||||||||||
investments at | ||||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Private Investment Partnership Interests: | ||||||||||||||
AREA European Property Enhancement Program L.P. | $ | 1,989 | $ | 1,760 | 1.0 | % | 1.0 | % | ||||||
AREA Sponsor Holdings LLC | 42,027 | 40,296 | 22.1 | % | 23.6 | % | ||||||||
Ares Capital Europe II (D), L.P. | 19,294 | 15,592 | 10.2 | % | 9.2 | % | ||||||||
Ares Capital Europe II (E), L.P.(1) | 35 | 31 | 0.0 | % | 0.0 | % | ||||||||
Ares Centre Street Partnership, L.P. | 2,471 | 256 | 1.3 | % | 0.2 | % | ||||||||
Ares Corporate Opportunities Fund, L.P.(2) | 576 | 777 | 0.3 | % | 0.5 | % | ||||||||
Ares Corporate Opportunities Fund IV, L.P. | 27,233 | 21,836 | 14.4 | % | 12.8 | % | ||||||||
Ares Credit Strategies Fund II, L.P. | 636 | 627 | 0.3 | % | 0.4 | % | ||||||||
Ares Credit Strategies Fund III, L.P. | 19 | 19 | 0.0 | % | 0.0 | % | ||||||||
Ares European Credit Strategies Fund (C) L.P(1). | 547 | 497 | 0.3 | % | 0.3 | % | ||||||||
Ares European Real Estate Fund IV L.P. | 1,923 | 2,455 | 1.0 | % | 1.4 | % | ||||||||
Ares Multi-Strategy Credit Fund V (H), L.P. | 1,088 | 1,068 | 0.6 | % | 0.6 | % | ||||||||
Ares Special Situations Fund I-B, L.P. | 1 | 2 | 0.0 | % | 0.0 | % | ||||||||
Ares Special Situations Fund III, L.P. | 27,452 | 26,867 | 14.5 | % | 15.8 | % | ||||||||
Ares Special Situations Fund IV, L.P. | 6,622 | — | 3.5 | % | — | |||||||||
Ares SSF Riopelle, L.P.(3) | 3,915 | 4,211 | 2.1 | % | 2.5 | % | ||||||||
Ares Strategic Investment Partners, L.P. | 76 | 75 | 0.0 | % | 0.0 | % | ||||||||
Ares Strategic Investment Partners III, L.P. | — | 2,672 | — | 1.6 | % | |||||||||
Ares Strategic Real Estate Program—HHC, LLC | 4,344 | 3,094 | 2.3 | % | 1.8 | % | ||||||||
Ares US Real Estate Fund VIII, L.P.(3) | 2,877 | 1,574 | 1.5 | % | 0.9 | % | ||||||||
Resolution Life L.P. | 45,348 | 45,348 | 23.9 | % | 26.6 | % | ||||||||
| | | | | | | | | | | | | | |
Total private investment partnership interests (cost: $147,712 and $128,756 at March 31, 2015 and December 31, 2014, respectively) | 188,473 | 169,057 | 99.3 | % | 99.2 | % | ||||||||
| | | | | | | | | | | | | | |
Common Stock: | ||||||||||||||
Ares Multi-Strategy Credit Fund, Inc. | 95 | 89 | 0.1 | % | 0.1 | % | ||||||||
| | | | | | | | | | | | | | |
Total common stock (cost: $110 and $108 at March 31, 2015 and December 31, 2014, respectively) | 95 | 89 | 0.1 | % | 0.1 | % | ||||||||
| | | | | | | | | | | | | | |
Corporate Bonds: | ||||||||||||||
Ares Commercial Real Estate Corporation Convertible Senior Notes | 1,178 | 1,178 | 0.6 | % | 0.7 | % | ||||||||
| | | | | | | | | | | | | | |
Total corporate bond (cost: $1,150, at March 31, 2015 and December 31, 2014, respectively) | 1,178 | 1,178 | 0.6 | % | 0.7 | % | ||||||||
| | | | | | | | | | | | | | |
Total fair value investments (cost: $148,972 and $130,014 at March 31, 2015 and December 31, 2014, respectively) | $ | 189,746 | $ | 170,324 | 100.0 | % | 100.0 | % | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | Denominated in foreign currency; fair value is translated into U.S. Dollars | |||||||||||||
-2 | Security represents the sole investment held by ACOF Co-Investors LLC | |||||||||||||
-3 | Represents underlying security that is held through multiple vehicles | |||||||||||||
Equity-Method Investments | ||||||||||||||
The Company's equity-method investments include investments that are not consolidated but in which the Company exerts significant influence. The Company's equity-method investments, including those where the fair value option was elected, are summarized below: | ||||||||||||||
As of March 31, | As of December 31, | |||||||||||||
2015 | 2014 | |||||||||||||
Equity-method investment | $ | 3,884 | $ | 3,728 | ||||||||||
Equity-method investment at fair value | 5,000 | — | ||||||||||||
| | | | | | | | |||||||
Total equity-method investment | $ | 8,884 | $ | 3,728 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Investments of the Consolidated Funds | ||||||||||||||
Investments held in the Consolidated Funds are summarized below: | ||||||||||||||
Fair value at | Fair value as a | |||||||||||||
percentage of total | ||||||||||||||
investments at | ||||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
United States: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | $ | 3,232,955 | $ | 3,136,899 | 17.0 | % | 16.3 | % | ||||||
Consumer staples | 251,814 | 221,708 | 1.3 | % | 1.2 | % | ||||||||
Energy | 304,943 | 416,861 | 1.6 | % | 2.2 | % | ||||||||
Financials | 473,222 | 401,673 | 2.5 | % | 2.1 | % | ||||||||
Healthcare, education and childcare | 1,262,427 | 1,191,619 | 6.6 | % | 6.2 | % | ||||||||
Industrials | 1,639,565 | 1,717,523 | 8.6 | % | 9.0 | % | ||||||||
Information technology | 787,710 | 745,920 | 4.1 | % | 3.9 | % | ||||||||
Materials | 456,200 | 393,569 | 2.4 | % | 2.1 | % | ||||||||
Partnership and LLC interests | 14,839 | 16,256 | 0.1 | % | 0.1 | % | ||||||||
Telecommunication services | 1,347,337 | 1,287,688 | 7.1 | % | 6.7 | % | ||||||||
Utilities | 201,436 | 223,553 | 1.1 | % | 1.2 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $10,029,620 and $9,928,006, at March 31, 2015 and December 31, 2014, respectively) | 9,972,448 | 9,753,269 | 52.4 | % | 51.0 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Consumer discretionary | 2,958,697 | 2,852,369 | 15.7 | % | 14.9 | % | ||||||||
Consumer staples | 499,372 | 443,711 | 2.6 | % | 2.3 | % | ||||||||
Energy | 82,451 | 150,755 | 0.4 | % | 0.8 | % | ||||||||
Financials | 10,223 | 8,272 | 0.1 | % | 0.0 | % | ||||||||
Healthcare, education and childcare | 533,239 | 464,159 | 2.8 | % | 2.4 | % | ||||||||
Industrials | 124,747 | 128,247 | 0.7 | % | 0.7 | % | ||||||||
Partnership and LLC interests | 114,040 | 89,105 | 0.6 | % | 0.5 | % | ||||||||
Telecommunication services | 9,643 | 16,576 | 0.1 | % | 0.1 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $2,957,558 and $2,964,900 at March 31, 2015 and December 31, 2014, respectively) | 4,332,412 | 4,153,194 | 23.0 | % | 21.7 | % | ||||||||
| | | | | | | | | | | | | | |
Fair value at | Fair value as a | |||||||||||||
percentage of total | ||||||||||||||
investments at | ||||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Europe: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | 887,516 | 1,080,270 | 4.7 | % | 5.6 | % | ||||||||
Consumer staples | 108,667 | 126,766 | 0.6 | % | 0.7 | % | ||||||||
Energy | 5,138 | 16,509 | 0 | % | 0.1 | % | ||||||||
Financials | 362,526 | 345,811 | 1.9 | % | 1.8 | % | ||||||||
Healthcare, education and childcare | 252,273 | 303,116 | 1.3 | % | 1.6 | % | ||||||||
Industrials | 441,604 | 526,214 | 2.3 | % | 2.8 | % | ||||||||
Information technology | 145,224 | 130,504 | 0.8 | % | 0.7 | % | ||||||||
Materials | 371,322 | 326,659 | 2 | % | 1.7 | % | ||||||||
Telecommunication services | 595,715 | 833,015 | 3.1 | % | 4.4 | % | ||||||||
Utilities | 1,123 | 2,516 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $3,232,752 and $3,813,343 at March 31, 2015 and December 31, 2014, respectively) | 3,171,108 | 3,691,380 | 16.7 | % | 19.4 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Consumer discretionary | 3,678 | 2,940 | 0 | % | 0 | % | ||||||||
Consumer staples | 895 | 862 | 0 | % | 0 | % | ||||||||
Healthcare, education and childcare | 26,455 | 27,774 | 0.1 | % | 0.1 | % | ||||||||
Industrials | — | 76 | — | 0 | % | |||||||||
Partnership and LLC interests | 19,012 | 17,107 | 0.1 | % | 0.1 | % | ||||||||
Telecommunication services | 5,092 | 4,686 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $102,244 and $98,913 at March 31, 2015 and December 31, 2014, respectively) | 55,132 | 53,445 | 0.2 | % | 0.2 | % | ||||||||
| | | | | | | | | | | | | | |
Asia and other: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | 68,495 | 73,250 | 0.4 | % | 0.4 | % | ||||||||
Financials | 480,936 | 493,618 | 2.5 | % | 2.6 | % | ||||||||
Healthcare, education and childcare | 38,835 | 41,536 | 0.2 | % | 0.2 | % | ||||||||
Telecommunication services | 37,084 | 30,777 | 0.2 | % | 0.2 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $570,443 and $579,436, at March 31, 2015 and December 31, 2014, respectively) | 625,350 | 639,181 | 3.3 | % | 3.4 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Consumer discretionary | 66,861 | 89,897 | 0.4 | % | 0.5 | % | ||||||||
Consumer staples | 62,778 | 62,467 | 0.3 | % | 0.3 | % | ||||||||
Healthcare, education and childcare | 32,598 | 33,610 | 0.2 | % | 0.2 | % | ||||||||
Materials | 52,947 | 52,947 | 0.3 | % | 0.3 | % | ||||||||
Partnership and LLC interests | 16,287 | 13,478 | 0.1 | % | 0.1 | % | ||||||||
Utilities | 8,377 | 8,994 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $179,047 and $184,022 at March 31, 2015 and December 31, 2014, respectively) | 239,848 | 261,393 | 1.3 | % | 1.4 | % | ||||||||
| | | | | | | | | | | | | | |
Canada: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | 62,163 | 71,379 | 0.3 | % | 0.4 | % | ||||||||
Consumer staples | 12,747 | — | 0.1 | % | — | |||||||||
Energy | 60,059 | 60,605 | 0.3 | % | 0.3 | % | ||||||||
Healthcare, education and childcare | 95,322 | 84,470 | 0.5 | % | 0.4 | % | ||||||||
Industrials | 36,999 | 30,009 | 0.2 | % | 0.2 | % | ||||||||
Materials | — | 5,625 | — | 0 | % | |||||||||
Partnership and LLC interests | 3,807 | 1,327 | 0 | % | 0 | % | ||||||||
Telecommunication services | 107,811 | 109,805 | 0.6 | % | 0.6 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $408,532 and $396,108 at March 31, 2015 and December 31, 2014, respectively) | 378,908 | 363,220 | 2 | % | 1.9 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Energy | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $68,249 and $68,249 at March 31, 2015 and December 31, 2014, respectively) | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Australia: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Energy | 72,909 | 66,150 | 0.4 | % | 0.3 | % | ||||||||
Industrials | 40,350 | 32,146 | 0.2 | % | 0.2 | % | ||||||||
Utilities | 89,428 | 94,738 | 0.5 | % | 0.5 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $222,035 and $213,759 at March 31, 2015 and December 31, 2014, respectively) | 202,687 | 193,034 | 1.1 | % | 1 | % | ||||||||
| | | | | | | | | | | | | | |
Equity Securities: | ||||||||||||||
Telecommunication services | 7,765 | 7,547 | 0 | % | 0 | % | ||||||||
Utilities | 5,285 | 8,287 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $22,233 and $22,233 at March 31, 2015 and December 31, 2014, respectively) | 13,050 | 15,834 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities | 14,350,501 | 14,640,084 | 75.5 | % | 76.7 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities | 4,640,442 | 4,483,866 | 24.5 | % | 23.3 | % | ||||||||
| | | | | | | | | | | | | | |
Total investments, at fair value | $ | 18,990,943 | $ | 19,123,950 | 100 | % | 100 | % | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Securities sold short, at fair value | $ | (3,763 | ) | $ | (3,763 | ) | 100 | % | 100 | % | ||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
At March 31, 2015 and December 31, 2014, no single issuer or investment, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5.0% of the Company's total consolidated net assets. | ||||||||||||||
FAIR_VALUE
FAIR VALUE | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
FAIR VALUE | |||||||||||||||||
FAIR VALUE | |||||||||||||||||
5. FAIR VALUE | |||||||||||||||||
GAAP establishes a hierarchal disclosure framework which prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market 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 will 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 unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement. | ||||||||||||||||
• | Level II—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable. Level II inputs include prices in markets for which there are few transactions, prices that are not current, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. | ||||||||||||||||
• | Level III—Model-derived valuations for which one or more significant inputs are unobservable. These inputs reflect the Company's assessment of the assumptions that market participants use to value the investment based on the best available information. | ||||||||||||||||
In some instances, an instrument may fall into different levels 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. | |||||||||||||||||
Investment / Liability 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. | |||||||||||||||||
CLO loan obligations: The Company has elected the fair value option to measure the CLO loan obligations at fair value as the Company has determined that measurement of the loan obligations issued by the CLOs at fair value better correlates with the value of the assets held by the CLOs, which are held to provide the cash flows for the note obligations. | |||||||||||||||||
The fair value of CLO liabilities is estimated based on various valuation models of third-party pricing services as well as internal models. The valuation models generally utilize discounted cash flows and take into consideration prepayment and loss assumptions, based on historical experience and projected performance, economic factors, the characteristics and condition of the underlying collateral, comparable yields for similar securities and recent trading activity. These securities are classified as Level III. | |||||||||||||||||
Corporate debt, bonds, bank loans, securities sold short and derivative instruments: The fair value of corporate debt, bonds, bank loans, securities sold short 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 within 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 the pricing services are only able to obtain a single broker quote or utilize a pricing model, such securities will be classified as Level III. If the pricing services are unable to provide prices, the Company will attempt to obtain one or more broker quotes directly from a dealer, price such securities at the last bid price obtained and classify such securities 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. | |||||||||||||||||
Partnership interests: In accordance with ASU 2009-12, Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent), the Company generally values its investments using the net asset value ("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. Such valuations are classified as Level II to the extent the investments are currently redeemable; if the investments are subject to a lock-up period, they are classified as Level III. | |||||||||||||||||
Certain investments of the Company and the Consolidated Funds are valued at NAV per share of the fund. 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, in accordance with the requirements of GAAP. However, as of March 31, 2015 and December 31, 2014, the Company believes that NAV per share represents the fair value of the investments. | |||||||||||||||||
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. Investors in open-ended and evergreen funds generally have the right to withdraw their capital, subject to the terms of the respective constituent documents, over periods ranging from one month to three years. In addition, separately managed investment vehicles for a single fund investor may allow such investors to terminate the fund at the discretion of the investor pursuant to the terms of the applicable constituent documents of such vehicle. | |||||||||||||||||
In the absence of observable market prices, the Company values Level III investments using consistent valuation methodologies, typically market- or income-based approaches. The main inputs into the Company's valuation model for Level III securities include earnings multiples (based on the historical earnings of the issuer) and discounted cash flows. The Company may also consider original transaction price, recent transactions in the same or similar instruments, completed third-party transactions in comparable instruments and other liquidity, credit and market risk factors. The quarterly valuation process for Level III investments begins with each investment or loan being valued by the investment or valuation teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the investment team and other senior managers. All Level III investment values are ultimately approved by the valuation committees and designated investment professionals. For certain investments, the valuation process also includes a review by independent valuation parties, at least annually, to determine whether the fair values determined by management are reasonable. Results of the valuation process are evaluated each quarter, including an assessment of whether the underlying calculations should be adjusted. In connection with this process, the Company evaluates changes in fair value measurements from period to period for reasonableness, considering items such as industry trends, general economic and market conditions and factors specific to the investment. | |||||||||||||||||
Certain Level III assets are valued using prices obtained from brokers or pricing vendors. The Company obtains an average of one to two non-binding broker quotes. The Company seeks to obtain at least one quote directly from a broker making a market for the asset and one price from a pricing vendor for each security or similar securities. For investments where more than one quote is received, the investments are classified as Level II. For investments where only one quote is received, the investments are classified as Level III as the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustment for investment-specific factors or restrictions. Generally, the Company does not adjust any of the prices received from these sources but material prices are reviewed against the Company's valuation models with a limited exception for securities that are deemed to have no value. The Company evaluates the prices obtained from brokers and pricing vendors based on available market information, including trading activity of the subject or similar securities or by performing a comparable security analysis to ensure that fair values are reasonably estimated. The Company may also perform back-testing of valuation information obtained from brokers and pricing vendors against actual prices received in transactions to validate pricing discrepancies. In addition to on-going monitoring and back-testing, the Company performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process and to ensure compliance with required accounting disclosures. | |||||||||||||||||
Fair Value of Financial Instruments Held by the Company and Consolidated Funds | |||||||||||||||||
The tables below summarize the valuation of investments and other financial instruments by fair value hierarchy levels for the Company and Consolidated Funds as of March 31, 2015: | |||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 95 | $ | — | $ | — | $ | 95 | |||||||||
Bonds | — | 1,178 | — | 1,178 | |||||||||||||
Partnership interests | — | — | 193,473 | 193,473 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 95 | 1,178 | 193,473 | 194,746 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Forward foreign currency contracts | — | 8,217 | — | 8,217 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 8,217 | — | 8,217 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 95 | $ | 9,395 | $ | 193,473 | $ | 202,963 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (1,995 | ) | $ | — | $ | (1,995 | ) | |||||||
Interest rate contracts | — | (978 | ) | — | (978 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | $ | — | $ | (2,973 | ) | $ | — | $ | (2,973 | ) | |||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 609,982 | $ | 573,582 | $ | 3,321,849 | $ | 4,505,413 | |||||||||
Bonds | — | 909,652 | 551,906 | 1,461,558 | |||||||||||||
Loans | — | 11,742,281 | 584,377 | 12,326,658 | |||||||||||||
Collateralized loan obligations | — | — | 528,180 | 528,180 | |||||||||||||
Partnership interests | — | — | 167,985 | 167,985 | |||||||||||||
Other | — | — | 1,149 | 1,149 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 609,982 | 13,225,515 | 5,155,446 | 18,990,943 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Foreign exchange contracts | — | 873 | — | 873 | |||||||||||||
Purchased options | — | 890 | — | 890 | |||||||||||||
Other | — | 1,933 | — | 1,933 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 3,696 | — | 3,696 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 609,982 | $ | 13,229,211 | $ | 5,155,446 | $ | 18,994,639 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Credit contracts | $ | — | $ | (11,716 | ) | $ | — | $ | (11,716 | ) | |||||||
Foreign exchange contracts | — | (9,411 | ) | — | (9,411 | ) | |||||||||||
Other | — | — | (38,356 | ) | (38,356 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | — | (21,127 | ) | (38,356 | ) | (59,483 | ) | ||||||||||
Loan obligations of CLOs | — | — | (12,154,677 | ) | (12,154,677 | ) | |||||||||||
Securities sold short, at fair value | — | (3,763 | ) | — | (3,763 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | — | $ | (24,890 | ) | $ | (12,193,033 | ) | $ | (12,217,923 | ) | ||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
The tables below summarize the valuation of investments and other financial instruments by fair value hierarchy levels for the Company and Consolidated Funds as of December 31, 2014: | |||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 89 | $ | — | $ | — | $ | 89 | |||||||||
Bonds | — | 1,178 | — | 1,178 | |||||||||||||
Partnership interests | — | — | 169,057 | 169,057 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 89 | 1,178 | 169,057 | 170,324 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Forward foreign currency contracts | — | 5,721 | — | 5,721 | |||||||||||||
Purchased option contracts | — | 1,902 | — | 1,902 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 7,623 | — | 7,623 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 89 | $ | 8,801 | $ | 169,057 | $ | 177,947 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (2,003 | ) | $ | — | $ | (2,003 | ) | |||||||
Interest rate contracts | — | (847 | ) | — | (847 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | $ | — | $ | (2,850 | ) | $ | — | $ | (2,850 | ) | |||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 590,095 | $ | 513,771 | $ | 3,263,311 | $ | 4,367,177 | |||||||||
Bonds | — | 1,113,103 | 565,634 | 1,678,737 | |||||||||||||
Loans | — | 11,312,518 | 1,070,494 | 12,383,012 | |||||||||||||
Collateralized loan obligations | — | — | 556,267 | 556,267 | |||||||||||||
Partnership interests | — | — | 137,272 | 137,272 | |||||||||||||
Other | — | 336 | 1,149 | 1,485 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 590,095 | 12,939,728 | 5,594,127 | 19,123,950 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Foreign exchange contracts | — | 2,070 | — | 2,070 | |||||||||||||
Other | — | 1,056 | — | 1,056 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 3,126 | — | 3,126 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 590,095 | $ | 12,942,854 | $ | 5,594,127 | $ | 19,127,076 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (6,906 | ) | $ | — | $ | (6,906 | ) | |||||||
Credit contracts | — | (13,263 | ) | — | (13,263 | ) | |||||||||||
Interest rate swaps | — | (21 | ) | — | (21 | ) | |||||||||||
Other | — | — | (22,142 | ) | (22,142 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | — | (20,190 | ) | (22,142 | ) | (42,332 | ) | ||||||||||
Loan obligations of CLOs(1) | — | — | (12,049,019 | ) | (12,049,019 | ) | |||||||||||
Securities sold short, at fair value | — | (3,763 | ) | — | (3,763 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | — | $ | (23,953 | ) | $ | (12,071,161 | ) | $ | (12,095,114 | ) | ||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
-1 | Ares Enhanced Loan Investment Strategy II, Ltd. ("AELIS II") had not elected to fair value its loan obligation and was therefore carried at cost of $151 through December 31, 2014, after which AELIS II was deconsolidated. | ||||||||||||||||
The following tables set forth a summary of changes in the fair value of the Level III investments for the three months ended March 31, 2015: | |||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Partnership | |||||||||||||||||
Interests | |||||||||||||||||
Balance, beginning of period | $ | 169,057 | |||||||||||||||
Purchases(1) | 30,516 | ||||||||||||||||
Sales(2) | (7,916 | ) | |||||||||||||||
Realized and unrealized appreciation (depreciation), net | 1,816 | ||||||||||||||||
| | | | | |||||||||||||
Balance, end of period | $ | 193,473 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 1,947 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Equity | Fixed | Partnership | Other | Total | |||||||||||||
Securities | Income | Interests | Financial | ||||||||||||||
Instruments | |||||||||||||||||
Balance, beginning of period | $ | 3,263,311 | $ | 2,192,395 | $ | 137,272 | $ | (20,993 | ) | $ | 5,571,985 | ||||||
Deconsolidation of funds(3) | (471 | ) | (1 | ) | — | — | (472 | ) | |||||||||
Transfer in | — | 189,684 | — | — | 189,684 | ||||||||||||
Transfer out | (163 | ) | (651,403 | ) | — | — | (651,566 | ) | |||||||||
Purchases(1) | — | 159,797 | 39,582 | 8 | 199,387 | ||||||||||||
Sales(2) | (20,273 | ) | (171,391 | ) | (15,155 | ) | 211 | (206,608 | ) | ||||||||
Accrued discounts/premiums | 4,135 | (756 | ) | — | (1,309 | ) | 2,070 | ||||||||||
Realized and unrealized appreciation (depreciation), net | 75,310 | (53,862 | ) | 6,286 | (15,124 | ) | 12,610 | ||||||||||
| | | | | | | | | | | | | | | | | |
Balance, end of period | $ | 3,321,849 | $ | 1,664,463 | $ | 167,985 | $ | (37,207 | ) | $ | 5,117,090 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 62,677 | $ | (35,936 | ) | $ | 6,239 | $ | (18,511 | ) | $ | 14,469 | |||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
-1 | Purchases include paid-in-kind interest and securities received in connection with restructurings. | ||||||||||||||||
-2 | Sales include paid-in-kind interest, principal redemptions and securities disposed of in connection with restructurings. | ||||||||||||||||
-3 | Represents investment in Consolidated Fund that was deconsolidated during the period. Balance was previously eliminated upon consolidation and not reported as Level III investment. | ||||||||||||||||
The following tables set forth a summary of changes in the fair value of the Level III investments for the three months ended March 31, 2014: | |||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Partnership | |||||||||||||||||
Interests | |||||||||||||||||
Balance, beginning of period | $ | 88,177 | |||||||||||||||
Investment in deconsolidated fund(1) | 9,951 | ||||||||||||||||
Purchases(2) | 21,504 | ||||||||||||||||
Sales(3) | (23,124 | ) | |||||||||||||||
Realized and unrealized appreciation (depreciation), net | 23,834 | ||||||||||||||||
| | | | | |||||||||||||
Balance, end of period | $ | 120,342 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 4,286 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Equity | Fixed | Partnership | Other | Total | |||||||||||||
Securities | Income | Interests | Financial | ||||||||||||||
Instruments | |||||||||||||||||
Balance, beginning of period | $ | 2,958,232 | $ | 3,627,153 | $ | 41,001 | $ | (1,348 | ) | $ | 6,625,038 | ||||||
Deconsolidation of previous funds(1) | 8,152 | (378,397 | ) | — | — | (370,245 | ) | ||||||||||
Transfer in | — | 222,382 | — | — | 222,382 | ||||||||||||
Transfer out | — | (364,608 | ) | — | — | (364,608 | ) | ||||||||||
Purchases(2) | 11,337 | 215,514 | 2,276 | 5 | 229,132 | ||||||||||||
Sales(3) | (167,142 | ) | (274,491 | ) | — | (6,387 | ) | (448,020 | ) | ||||||||
Accrued discounts/premiums | 15 | 10,849 | — | — | 10,864 | ||||||||||||
Realized and unrealized appreciation (depreciation), net | 14,627 | (29,540 | ) | 717 | 3,277 | (10,919 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Balance, end of period | $ | 2,825,221 | $ | 3,028,862 | $ | 43,994 | $ | (4,453 | ) | $ | 5,893,624 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 118,757 | $ | (21,711 | ) | $ | 717 | $ | 1,102 | $ | 98,865 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
-1 | Represents investment in Consolidated Fund that was deconsolidated during the period. Balance was previously eliminated upon consolidation and not reported as Level III investment. | ||||||||||||||||
-2 | Purchases include paid-in-kind interest and securities received in connection with restructurings. | ||||||||||||||||
-3 | Sales include paid-in-kind interest, principal redemptions and securities disposed of in connection with restructurings. | ||||||||||||||||
Total realized and unrealized appreciation (depreciation) recorded for the Company's Level III investments are included in net realized gain (loss) on investments and net change in unrealized appreciation (depreciation) on investments in the Condensed Consolidated Statements of Operations, respectively. | |||||||||||||||||
Total realized and unrealized appreciation (depreciation) recorded for the Consolidated Funds' Level III investments are included in net realized gain (loss) on investments of Consolidated Funds and net change in unrealized appreciation (depreciation) on investments of Consolidated Funds in the Condensed Consolidated Statements of Operations, respectively. | |||||||||||||||||
The Company recognizes transfers between the levels as of the beginning of the period. Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service. For the three months ended March 31, 2015, there are no transfers between Level I and Level II. | |||||||||||||||||
The following table sets forth a summary of changes in the fair value of the Level III investments for the CLO loan obligations for the three months ended March 31, 2015 and 2014: | |||||||||||||||||
For the three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Balance, beginning of period | $ | 12,049,019 | $ | 11,534,956 | |||||||||||||
Deconsolidation of funds | (571 | ) | (3,033 | ) | |||||||||||||
Borrowings | 602,074 | 23,528 | |||||||||||||||
Paydowns(1) | (218,496 | ) | (472,434 | ) | |||||||||||||
Realized and unrealized gains, net | (277,349 | ) | (16,764 | ) | |||||||||||||
| | | | | | | | ||||||||||
Balance, end of period | $ | 12,154,677 | $ | 11,066,253 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
-1 | Amounts include distributions made to Subordinated Notes equity holders. | ||||||||||||||||
The following tables summarize the quantitative inputs and assumptions used for the Company's Level III inputs as of March 31, 2015: | |||||||||||||||||
Investments | Fair | Valuation Technique(s) | Unobservable | Range | |||||||||||||
Value | Input(s) | ||||||||||||||||
Assets | |||||||||||||||||
Partnership interests | $ | 143,125 | NAV | N/A | N/A | ||||||||||||
Partnership interests | 50,348 | Recent Transaction Price(1) | N/A | N/A | |||||||||||||
| | | | | | | | | | ||||||||
| | | | | | | | | | ||||||||
Total | $ | 193,473 | |||||||||||||||
| | | | | | | | | | ||||||||
| | | | | | | | | | ||||||||
-1 | Recent transaction price consists of securities purchased or restructured within six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
The following tables summarize the quantitative inputs and assumptions used for the Consolidated Funds' Level III inputs as of March 31, 2015: | |||||||||||||||||
Investments | Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range | Weighted | ||||||||||||
Average | |||||||||||||||||
Assets | |||||||||||||||||
Equity securities | |||||||||||||||||
Consumer discretionary | 3,678 | EV market multiple analysis | EBITDA multiple | 9.4x | 9.4x | ||||||||||||
$ | |||||||||||||||||
219,945 | Market approach (comparable companies) | Book value multiple | 1.8x - 2.0x | 1.9x | |||||||||||||
2,175,607 | Market approach (comparable companies) | EBITDA multiple | 8.5x - 15.0x | 10.8x | |||||||||||||
711 | Other | Future distribution estimates | 82.40% | 82.40% | |||||||||||||
4,236 | Other | Illiquidity discount | 15.00% | 15.00% | |||||||||||||
Consumer staples | 895 | EV market multiple analysis | EBITDA multiple | 7.9x | 7.9x | ||||||||||||
14,492 | Market approach (comparable companies) | EBITDA multiple | 7.0x | 7.0x | |||||||||||||
41,561 | Market approach (comparable companies)(2) | Net income multiple | 11.0x | 11.0x | |||||||||||||
Energy | 68,000 | Discounted Cash Flow | Discount rate | 8.00% | 8.00% | ||||||||||||
EBITDA multiple | 6.0x | 6.0x | |||||||||||||||
Financials | 9,171 | EV market multiple analysis | EBITDA multiple | 10.5x | 10.5x | ||||||||||||
Healthcare, education, and childcare | 26,455 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 4.5x | ||||||||||||
532,156 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 13.0x | 11.1x | |||||||||||||
32,598 | Market approach (comparable companies) | Net income multiple | 35.0x | 35.0x | |||||||||||||
Industrials | 124,682 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 12.0x | 9.8x | ||||||||||||
Materials | 52,947 | Market approach (comparable companies) | Net income multiple | 9.0x | 9.0x | ||||||||||||
Telecommunication services | 593 | Recent transaction price(1) | N/A | N/A | N/A | ||||||||||||
460 | EV market multiple analysis | EBITDA multiple | 10.0x | 10.0x | |||||||||||||
Utilities | 13,662 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Fixed Income securities | |||||||||||||||||
Consumer discretionary | 196,267 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
17,339 | EV market multiple analysis | EBITDA multiple | 8.0x - 13.5x | 12.8x | |||||||||||||
59,299 | Income approach (other) | Yield | 2.5% - 13.0% | 11.90% | |||||||||||||
122,543 | Market approach (comparable companies) | Book value multiple | 1.7x - 2.0x | 1.9x | |||||||||||||
5,265 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
Consumer staples | 493 | Discounted cash flow | Discount Rate | 20.00% | 20.00% | ||||||||||||
1,202 | Market approach (comparable companies) | EBITDA multiple | 6.5x | 6.5x | |||||||||||||
Financials | 527,998 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
5,274 | Discounted cash flow | Discount rate and Cumulative loss rate | 16.6% / 8.4% | 16.6% / 8.4% | |||||||||||||
37,927 | Discounted cash flow | Discount rate | 11.50% | 11.50% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 21.30% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.10% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 73.20% | |||||||||||||||
2,256 | Income Approach (Other) | Cash flow % of book value | 8.70% | 8.70% | |||||||||||||
247,584 | Income Approach (Other) | Yield | 9.5% - 11.5% | 10.50% | |||||||||||||
7,959 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
Healthcare, education, and childcare | 40,891 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
19,527 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 5.6x | |||||||||||||
24,605 | Income approach (Other) | Yield | 6.00% | 5.80% | |||||||||||||
Industrials | 102,659 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
28,052 | Income approach (other) | Yield | 5.3% - 13.3% | 10.80% | |||||||||||||
32,315 | Market approach (comparable companies) | EBITDA multiple | 9.0x - 12.0x | 10.5x | |||||||||||||
Information technology | 6,837 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Materials | 142,374 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Telecommunication services | 35,797 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Partnership and LLC interests | 149,339 | NAV | N/A | N/A | N/A | ||||||||||||
Financials | 3,807 | NAV | N/A | N/A | N/A | ||||||||||||
14,839 | Discounted Cash Flow | Constant default rate | 9.90% | 9.90% | |||||||||||||
Constant prepayment rate | 10.00% | 10.00% | |||||||||||||||
Recovery rate | 30.00% | 30.00% | |||||||||||||||
Other | |||||||||||||||||
Healthcare, education, and childcare | 1,084 | Market approach (comparable companies) | EBITDA multiple | 8.8x | 8.8x | ||||||||||||
Industrials | 65 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total assets | 5,155,446 | ||||||||||||||||
$ | |||||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
Liabilities | |||||||||||||||||
Loans payable of Consolidated Funds: | |||||||||||||||||
Fixed income | 11,733,481 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
$ | |||||||||||||||||
353,248 | Discounted cash flow | Discount rate | 12.0% - 15.0%% | 13.00% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 20.00% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.00% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 75.00% | |||||||||||||||
67,948 | Discounted cash flow | Discount margin | 5.3% - 6.8% | 6.10% | |||||||||||||
Constant prepayment rate | 0% - 50.0% | 20.00% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.00% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 75.00% | |||||||||||||||
Derivatives instruments of Consolidated Funds | 38,356 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total liabilities | 12,193,033 | ||||||||||||||||
$ | |||||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
-1 | Recent transaction price consists of securities purchased or restructured within the last six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
-2 | Valuation technique above includes a 30% liquidity discount on an investment held by a fund within the Private Equity Group. | ||||||||||||||||
The following tables summarize the quantitative inputs and assumptions used for the Company's Level III inputs as of December 31, 2014: | |||||||||||||||||
Investments | Fair | Valuation Technique(s) | Unobservable | Range | |||||||||||||
Value | Input(s) | ||||||||||||||||
Assets | |||||||||||||||||
Partnership interests | $ | 123,709 | NAV | N/A | N/A | ||||||||||||
Partnership interests | 45,348 | Recent Transaction Price(1) | N/A | N/A | |||||||||||||
| | | | | | | | | | ||||||||
Total | $ | 169,057 | |||||||||||||||
| | | | | | | | | | ||||||||
| | | | | | | | | | ||||||||
-1 | Recent transaction price consists of securities purchased or restructured within six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
The following tables summarize the quantitative inputs and assumptions used for the Consolidated Funds' Level III inputs as of December 31, 2014: | |||||||||||||||||
Investments | Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range | Weighted | ||||||||||||
Average | |||||||||||||||||
Assets | |||||||||||||||||
Equity securities | |||||||||||||||||
Consumer discretionary | $ | 2,940 | EV market multiple analysis | EBITDA multiple | 9.4x | 9.4x | |||||||||||
208,498 | Market approach (comparable companies) | Book value multiple | 1.7x - 2.0x | 1.9x | |||||||||||||
2,121,864 | Market approach (comparable companies) | EBITDA multiple | 7.0x - 15.0x | 10.7x | |||||||||||||
979 | Other | Future distribution estimates | 18.7x | 18.7x | |||||||||||||
5,140 | Other | Illiquidity discount | 15.00% | 15.00% | |||||||||||||
Consumer staples | 862 | EV market multiple analysis | EBITDA multiple | 7.9x | 7.9x | ||||||||||||
10,349 | Market approach (comparable companies) | EBITDA multiple | 7.0x | 7.0x | |||||||||||||
44,553 | Market approach (comparable companies)(2) | Net income multiple | 11.0x | 11.0x | |||||||||||||
Energy | 136,045 | Discounted Cash Flow | Discount rate | 9.00% | 9.00% | ||||||||||||
EBITDA multiple | 7.5x | 7.5x | |||||||||||||||
Financials | 8,272 | EV market multiple analysis | EBITDA multiple | 10.5x | 10.5x | ||||||||||||
Healthcare, education, and childcare | 27,774 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 5.4x | ||||||||||||
463,075 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 13.0x | 11.2x | |||||||||||||
33,610 | Market approach (comparable companies) | Net income multiple | 35.0x | 35.0x | |||||||||||||
Industrials | 76 | Recent transaction price(1) | N/A | N/A | N/A | ||||||||||||
128,182 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 12.0x | 9.8x | |||||||||||||
Materials | 52,947 | Market approach (comparable companies) | Net income multiple | 9.0x | 9.0x | ||||||||||||
Telecommunication services | 331 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
533 | EV market multiple analysis | EBITDA multiple | 10.0x | 10.0x | |||||||||||||
Utilities | 17,281 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Fixed Income securities | |||||||||||||||||
Consumer discretionary | 256,994 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
18,205 | EV market multiple analysis | EBITDA multiple | 9.0x - 11.0x | 9.3x | |||||||||||||
69,418 | Income approach (other) | Yield | 2.5% - 18.7% | 12.80% | |||||||||||||
120,658 | Market approach (comparable companies) | Book value multiple | 1.7x - 2.0x | 1.9x | |||||||||||||
15,400 | Market approach (comparable companies) | EBITDA multiple | 7.5x | 7.5x | |||||||||||||
5,923 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
Consumer staples | 540 | Discounted cash flow | Discount Rate | 20.00% | 20.00% | ||||||||||||
776 | Market approach (comparable companies) | EBITDA multiple | 6.5x | 6.5x | |||||||||||||
28,965 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | |||||||||||||
Energy | 33,687 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Financials | 470,417 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
8,551 | Discounted cash flow | Discount rate and Cumulative loss rate | 13.3% / 10.0% | 13.3% / 10.0% | |||||||||||||
85,851 | Discounted cash flow | Discount rate | 11.50% | 11.50% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 21.50% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.20% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 73.80% | |||||||||||||||
2,541 | Income Approach (Other) | Cash flow % of book value | 8.70% | 8.70% | |||||||||||||
224,245 | Income Approach (Other) | Yield | 9.5% - 11.5% | 10.50% | |||||||||||||
Healthcare, education, and childcare | 168,371 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
20,104 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 5.6x | |||||||||||||
25,549 | Income approach (Other) | Yield | 6.00% | 6.00% | |||||||||||||
Industrials | 196,725 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
43,614 | Income approach (other) | Yield | 2.5% - 13.5% | 12.10% | |||||||||||||
32,315 | Market approach (comparable companies) | EBITDA multiple | 9.0x - 12.0x | 10.5x | |||||||||||||
Information technology | 137,042 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Materials | 212,022 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Telecommunication services | 14,482 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Partnership and LLC interests | 119,690 | NAV | N/A | N/A | N/A | ||||||||||||
Financials | 17,582 | Recent transaction price(1) | N/A | N/A | N/A | ||||||||||||
Other | |||||||||||||||||
Healthcare, education, and childcare | 1,084 | Market approach (comparable companies) | EBITDA multiple | 8.8x | 8.8x | ||||||||||||
Industrials | 65 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total assets | $ | 5,594,127 | |||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
Liabilities | |||||||||||||||||
Loans payable of Consolidated Funds: | |||||||||||||||||
Fixed income | $ | 11,273,923 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | |||||||||||
499,305 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
258,096 | Discounted cash flow | Discount rate | 11.50% | 11.50% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 20.40% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.10% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 74.60% | |||||||||||||||
17,079 | Discounted cash flow | Discount margin | 300 - 800 | 482.5 | |||||||||||||
Constant prepayment rate | 0% - 50.0% | 23.00% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.00% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 75.00% | |||||||||||||||
616 | Market approach (other) | Other | N/A | N/A | |||||||||||||
Derivatives instruments of Consolidated Funds | 22,142 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total liabilities | $ | 12,071,161 | |||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
-1 | Recent transaction price consists of securities purchased or restructured within the last six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
-2 | Valuation technique above includes a 30% liquidity discount on an investment held by a fund within the Private Equity Group. | ||||||||||||||||
The significant unobservable inputs used in the fair value measurement of the Company's investments in equity securities include earnings before interest, tax, depreciation and amortization ("EBITDA"), book value and net income multiples. Significant increase (decrease) in EBITDA, book value or net income multiples in isolation would result in a significantly higher (lower) fair value measurement. | |||||||||||||||||
The significant unobservable inputs used in the fair value measurement of the Company's investments in fixed income securities are EBITDA and book value multiples, discount rates, prepayment rates, recovery rates, and market yields. Significant increases (decreases) in EBITDA and book value multiples and recovery rates in isolation would result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in prepayment rates and market yields in isolation would result in lower (higher) fair value measurements. | |||||||||||||||||
The significant unobservable inputs used in the fair value measurement of the Company's loans payable are discount rates, default rates, prepayment rates and other. Significant increases (decreases) in discount rates or default rates in isolation would result in a significantly lower (higher) fair value measurement. | |||||||||||||||||
For investments valued using NAV per share, a summary of fair value by segment along with the remaining unfunded commitment and any redemption restriction of such investments are presented below: | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
Strategy | Fair Value | Unfunded | Redemption | ||||||||||||||
Commitments | Restriction | ||||||||||||||||
Direct Lending Group | $ | 40,559 | $ | 20,792 | (1)(3) | ||||||||||||
Real Estate Group | 59,541 | 87,311 | -1 | ||||||||||||||
Tradable Credit Group | 56,878 | 51,048 | (1)(2)(3) | ||||||||||||||
Private Equity Group | 139,293 | 77,284 | -1 | ||||||||||||||
| | | | | | | | | | | |||||||
Totals | $ | 296,271 | $ | 236,435 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
As of December 31, 2014 | |||||||||||||||||
Strategy | Fair Value | Unfunded | Redemption | ||||||||||||||
Commitments | Restriction | ||||||||||||||||
Direct Lending Group | $ | 30,501 | $ | 26,854 | (1)(3) | ||||||||||||
Real Estate Group | 49,178 | 45,239 | -1 | ||||||||||||||
Tradable Credit Group | 52,001 | 7,420 | (1)(2)(3) | ||||||||||||||
Private Equity Group | 111,719 | 97,194 | -1 | ||||||||||||||
| | | | | | | | | | | |||||||
Totals | $ | 243,399 | $ | 176,707 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
-1 | Certain funds within these strategies are closed-ended and generally do not permit investors to redeem their interests. Distributions are received as the underlying investments are liquidated. | ||||||||||||||||
-2 | Certain funds within these strategies are open-ended and subject to a lock-up period of nine months after the closing date, after which an investor has the right to withdraw its capital. Distributions are received as the underlying investments are liquidated. | ||||||||||||||||
-3 | Certain funds within these strategies are separately managed investment vehicles, which may be redeemed only upon dissolution or liquidation of the fund at the discretion of a simple majority of investors. Distributions are received as the underlying investments are liquidated. | ||||||||||||||||
LOANS_HELD_AS_INVESTMENTS
LOANS HELD AS INVESTMENTS | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
LOANS HELD AS INVESTMENTS | |||||||||||||||||
LOANS HELD AS INVESTMENTS | 6. LOANS HELD AS INVESTMENTS | ||||||||||||||||
Fair Value Disclosure of Financial Instruments Reported at Cost | |||||||||||||||||
The following tables present the estimated fair value and carrying value of the Consolidated Fund's loans held as investments that are carried at cost, less an allowance for loan losses aggregated by the level in the fair value hierarchy as of March 31, 2015 and December 31, 2014: | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
Level I | Level II | Level III | Total | Carrying | |||||||||||||
Value | |||||||||||||||||
Loans held for investments | $ | — | $ | — | $ | 86,518 | $ | 86,518 | $ | 85,214 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
As of December 31, 2014 | |||||||||||||||||
Level I | Level II | Level III | Total | Carrying | |||||||||||||
Value | |||||||||||||||||
Loans held for investments | $ | — | $ | — | $ | 78,895 | $ | 78,895 | $ | 77,514 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
A summary of activity in loans held as investments for the three months ended March 31, 2015, is presented below: | |||||||||||||||||
Balance at December 31, 2014 | $ | 77,514 | |||||||||||||||
Loan acquisition and origination | 183,732 | ||||||||||||||||
Allowance for loan losses | (119 | ) | |||||||||||||||
Principal repayment | (176,069 | ) | |||||||||||||||
Amortization of loan origination fees | 156 | ||||||||||||||||
| | | | | |||||||||||||
Balance as of March 31, 2015 | $ | 85,214 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
The Consolidated Fund estimates the fair value of loans held as investments for fair value disclosures primarily using inputs such as the borrower's financial performance, discounted cash flow projections, interest rates available for borrowers with similar credit metrics, market comparables, if available, and other qualitative and quantitative factors. A summary of the changes in the allowance for loan losses is presented below: | |||||||||||||||||
Balance at December 31, 2014 | $ | 1,185 | |||||||||||||||
Increase in allowance for loan losses | 119 | ||||||||||||||||
| | | | | |||||||||||||
Balance as of March 31, 2015 | $ | 1,304 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Investment in loan receivables consists of outstanding unpaid principal balance of loans held as investments, net of allowance of loan losses, unamortized loan origination fees and deferred interest on non-accrual loans. A summary of the loan receivable balance is presented below: | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
Loan receivables—unpaid principal balance | $ | 86,921 | |||||||||||||||
Unamortized loan origination fees | (235 | ) | |||||||||||||||
Deferred interest on non-accrual loans | (168 | ) | |||||||||||||||
Allowance for loan losses | (1,304 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance as of March 31, 2015 | $ | 85,214 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
As of December 31, 2014 | |||||||||||||||||
Loan receivables—unpaid principal balance | $ | 79,018 | |||||||||||||||
Unamortized loan origination fees | (196 | ) | |||||||||||||||
Deferred interest on non-accrual loans | (123 | ) | |||||||||||||||
Allowance for loan losses | (1,185 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance as of December 31, 2014 | $ | 77,514 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
As of March 31, 2015, the Consolidated Fund had $151.1 million in loan commitment to it borrowers, of which $64.2 million remained undrawn. As of December 31, 2014, the Consolidated Fund had $155.1 million in loan commitment to it borrowers, of which $76.1 million remained undrawn. | |||||||||||||||||
DERIVATIVE_FINANCIAL_INSTRUMEN
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||||||
7. DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||||||
In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit, foreign exchange and interest rate risk. The derivative instruments used by the Company and Consolidated Funds include warrants, currency options, purchased options, interest rate swaps, credit default swaps and forward contracts. The derivative instruments do not qualify for hedge accounting under the accounting standards for derivatives and hedging as the Company does not designate its derivatives as hedging instruments. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition. | ||||||||||||||||||||
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 in the Condensed 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 Condensed 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 present derivative and other financial instruments, and any related cash collateral amounts, on both a gross and a net basis. This election is generally determined at management's discretion on a fund by fund basis. The Company has retained each fund's presentation upon consolidation. | ||||||||||||||||||||
Certain Consolidated Funds have entered into transactions where cash collateral is received and/or pledged with the counterparty. Generally, the collateral practices are governed within each agreement entered into between the Consolidated Funds and the respective counterparty. These agreements specify how the collateral will be handled between the two parties, and the terms of the agreements may dictate that the derivatives be marked to market on a daily basis (or other specified period) and that any collateral needs be met by posting collateral based upon certain financial thresholds and/or upon certain dates, after any applicable minimum thresholds are met. The collateral may also be required to be held in segregated accounts with a custodian in compliance with the terms of the agreements. | ||||||||||||||||||||
Qualitative Disclosures of Derivative Financial Instruments | ||||||||||||||||||||
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 a net change in unrealized appreciation (depreciation) on investments. Upon settlement of the instrument, the Company records net realized gain (loss) on investments in the Condensed Consolidated Statements of Operations. | ||||||||||||||||||||
Following is a description of the significant derivative instruments utilized by the Company and the Consolidated Funds during the reporting periods. | ||||||||||||||||||||
Forward Foreign Currency Contracts | ||||||||||||||||||||
The Company and the Consolidated Funds enter into foreign currency forward exchange contracts to hedge against foreign currency exchange rate risk on certain non-U.S. dollar denominated cash flow. When entering into a forward currency contract, the Company and the Consolidated Funds agree to receive and/or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed-upon future date. Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected in the Condensed Consolidated Statements of Financial Condition. The Company and the Consolidated Funds bear the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. In addition, the potential inability of the counterparties to meet the terms of their contracts poses a risk to the Company and the Consolidated Funds. | ||||||||||||||||||||
Interest Rate Swaps | ||||||||||||||||||||
The Company and the Consolidated Funds enter into interest rate swap contracts to mitigate their interest rate risk exposure to higher floating interest rates. Interest rate swaps represent an agreement between two counterparties to exchange cash flows based on the difference in two interest rates, applied to the notional principal amount for a specified period. The payment flows are generally netted, with the difference being paid by one party to the other. The interest rate swap contracts effectively mitigate the Company and the Consolidated Funds' exposure to interest rate risk by converting a portion of the Company and the Consolidated Funds' floating-rate debt to a fixed-rate basis. | ||||||||||||||||||||
Credit Default Swaps | ||||||||||||||||||||
The Consolidated Funds enter into credit default swap contracts for investment purposes and to manage credit risk. As a seller in a credit default swap contract, a Consolidated Fund is required to pay the notional or other agreed-upon value to the counterparty in the event of a default by a third party, either a U.S. or foreign corporate issuer (or an index of U.S. or foreign corporate issuers), on the referenced debt obligation. In return, the Consolidated Fund receives from the counterparty a periodic stream of payments over the term of the contract, provided that no event of default has occurred, and has no payment obligations. | ||||||||||||||||||||
The Consolidated Funds may also purchase credit default swap contracts to mitigate the risk of default by issuers of debt securities held. In these cases, the Consolidated Fund functions as the counterparty referenced in the preceding paragraph. As a purchaser of a credit default swap contract, the Consolidated Fund receives the notional or other agreed upon value from the counterparty in the event of default by a third party, either a U.S. or foreign corporate issuer (or an index of U.S. or foreign corporate issuers) on the referenced debt obligation. In return, the Consolidated Fund makes periodic payments to the counterparty over the term of the contract provided no event of default has occurred. | ||||||||||||||||||||
Entering into credit default swaps exposes the Consolidated Funds to credit, market and documentation risk in excess of the related amounts recognized in the Condensed Consolidated Statements of Financial Condition. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligations to perform or disagree as to the meaning of the contractual terms in the agreements, and that there will be unfavorable changes in net interest rates. | ||||||||||||||||||||
Quantitative Disclosures of Derivative Financial Instruments | ||||||||||||||||||||
The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds as of March 31, 2015 and December 31, 2014. These amounts may be offset (to the extent that there is a legal right to offset) and presented on a net basis in derivative assets or derivative liabilities in the Condensed Consolidated Statements of Financial Condition: | ||||||||||||||||||||
As of March 31, 2015 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
The Company | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | — | $ | — | $ | 250,000 | $ | 978 | ||||||||||||
Foreign exchange contracts | 102,217 | 8,217 | 65,341 | 1,995 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | $ | 102,217 | $ | 8,217 | $ | 315,341 | $ | 2,973 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
As of March 31, 2015 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
Consolidated Funds | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | 37,000 | $ | — | $ | — | $ | — | ||||||||||||
Credit contracts | 101,000 | 1,153 | 223,756 | 11,716 | ||||||||||||||||
Foreign exchange contracts | 40,330 | 1,652 | 152,983 | 9,411 | ||||||||||||||||
Other financial instruments | 3,514 | 891 | 94,083 | 38,356 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | 181,844 | 3,696 | 470,822 | 59,483 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Other—equity(2) | 3,706 | 4,429 | — | — | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
TOTAL | $ | 185,550 | $ | 8,125 | $ | 470,822 | $ | 59,483 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
-1 | Represents the total contractual amount of derivative assets and liabilities outstanding. | |||||||||||||||||||
-2 | Includes the fair value of warrants and equity distribution rights which are presented within investments, at fair value in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
The Company | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | — | $ | — | $ | 250,000 | $ | 847 | ||||||||||||
Foreign exchange contracts | 161,890 | 7,623 | 102,231 | 2,003 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | $ | 161,890 | $ | 7,623 | $ | 352,231 | $ | 2,850 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
As of December 31, 2014 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
Consolidated Funds | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | 34,000 | $ | 0 | $ | 10,000 | $ | 21 | ||||||||||||
Credit contracts | — | — | 385,296 | 13,265 | ||||||||||||||||
Foreign exchange contracts | 43,303 | 2,070 | 207,577 | 9,991 | ||||||||||||||||
Other financial instruments | 4,542 | 1,056 | 90,302 | 19,055 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | 81,845 | 3,126 | 693,175 | 42,332 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Other—equity(2) | 79,551 | 3,866 | — | — | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
TOTAL | $ | 161,396 | $ | 6,992 | $ | 693,175 | $ | 42,332 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
-1 | Represents the total contractual amount of derivative assets and liabilities outstanding. | |||||||||||||||||||
-2 | Includes the fair value of warrants and equity distribution rights which are presented within investments, at fair value in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
The following tables present a summary of net realized gain (loss) and unrealized appreciation (depreciation) on derivative instruments for the three months ended March 31, 2015 and 2014, and the corresponding line item where these changes are presented within the Condensed Consolidated Statements of Operations: | ||||||||||||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||
The Company | Interest Rate | Foreign | Total | |||||||||||||||||
Contracts | Exchange | |||||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments | ||||||||||||||||||||
Purchased options | $ | — | $ | 2,022 | $ | 2,022 | ||||||||||||||
Swaps | (337 | ) | — | (337 | ) | |||||||||||||||
Foreign currency forward contracts | — | 5,116 | 5,116 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Net realized gain (loss) on investments | $ | (337 | ) | $ | 7,138 | $ | 6,801 | |||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Net change in unrealized appreciation (depreciation) on investments | ||||||||||||||||||||
Purchased options | $ | — | $ | (1,057 | ) | $ | (1,057 | ) | ||||||||||||
Swaps | (131 | ) | — | (131 | ) | |||||||||||||||
Foreign currency forward contracts | — | 2,504 | 2,504 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total net change in unrealized appreciation (depreciation) on investments | $ | (131 | ) | $ | 1,447 | $ | 1,316 | |||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||
Consolidated Funds | Interest Rate | Credit | Equity | Foreign | Other | Total | ||||||||||||||
Contracts | Contracts | Contracts | Exchange | |||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | (2,582 | ) | $ | — | $ | — | $ | (2,582 | ) | ||||||
Swaps | (135 | ) | (9,449 | ) | — | — | (1,146 | ) | (10,730 | ) | ||||||||||
Foreign currency forward contracts | — | — | — | 3,190 | — | 3,190 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net realized gain (loss) on investments of Consolidated Funds | $ | (135 | ) | $ | (9,449 | ) | $ | (2,582 | ) | $ | 3,190 | $ | (1,146 | ) | $ | (10,122 | ) | |||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | (191 | ) | $ | 7 | $ | — | $ | (184 | ) | ||||||
Swaps | 135 | (113 | ) | — | — | 2,082 | 2,104 | |||||||||||||
Warrants(1) | — | — | 40 | — | — | 40 | ||||||||||||||
Foreign currency forward contracts | — | — | — | (434 | ) | — | (434 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | $ | 135 | $ | (113 | ) | $ | (151 | ) | $ | (427 | ) | $ | 2,082 | $ | 1,526 | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Realized and unrealized gains (losses) on warrants are also reflected in the changes presented within investments, at fair value of the Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
For the three months ended | ||||||||||||||||||||
March 31, 2014 | ||||||||||||||||||||
The Company | Interest Rate | Foreign | Total | |||||||||||||||||
Contracts | Exchange | |||||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments | ||||||||||||||||||||
Swaps | $ | (341 | ) | $ | — | $ | (341 | ) | ||||||||||||
Foreign currency forward contracts | — | (793 | ) | (793 | ) | |||||||||||||||
| | | | | | | | | | | ||||||||||
Net realized gain (loss) on investments | $ | (341 | ) | $ | (793 | ) | $ | (1,134 | ) | |||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Net change in unrealized appreciation (depreciation) on investments | ||||||||||||||||||||
Purchased options | $ | — | $ | (61 | ) | $ | (61 | ) | ||||||||||||
Swaps | 57 | — | 57 | |||||||||||||||||
Foreign currency forward contracts | — | (63 | ) | (63 | ) | |||||||||||||||
| | | | | | | | | | | ||||||||||
Total net change in unrealized appreciation (depreciation) on investments | $ | 57 | $ | (124 | ) | $ | (67 | ) | ||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||
Consolidated Funds | Interest Rate | Credit | Equity | Foreign | Other | Total | ||||||||||||||
Contracts | Contracts | Contracts | Exchange | |||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | (2,019 | ) | $ | (273 | ) | $ | — | $ | (2,292 | ) | |||||
Written options | — | — | — | 1,853 | — | 1,853 | ||||||||||||||
Swaps | (514 | ) | (10,206 | ) | — | — | 3,546 | (7,174 | ) | |||||||||||
Warrants(1) | — | — | 1,261 | — | — | 1,261 | ||||||||||||||
Foreign currency forward contracts | — | — | — | (17,888 | ) | — | (17,888 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net realized gain (loss) on investments of Consolidated Funds | $ | (514 | ) | $ | (10,206 | ) | $ | (758 | ) | $ | (16,308 | ) | $ | 3,546 | $ | (24,240 | ) | |||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | 108 | $ | (1,663 | ) | $ | (113 | ) | $ | (1,668 | ) | |||||
Written options | — | — | — | (1,214 | ) | — | (1,214 | ) | ||||||||||||
Swaps | (342 | ) | 3,476 | — | (15 | ) | (3,591 | ) | (472 | ) | ||||||||||
Interest rate caps/floor | (4 | ) | — | — | — | — | (4 | ) | ||||||||||||
Warrants(1) | — | — | (7,180 | ) | — | — | (7,180 | ) | ||||||||||||
Foreign currency forward contracts | (22 | ) | — | 1,222 | 17,142 | — | 18,342 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | $ | (368 | ) | $ | 3,476 | $ | (5,850 | ) | $ | 14,250 | $ | (3,704 | ) | $ | 7,804 | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Realized and unrealized gains (losses) on warrants are also reflected in the changes presented within investments in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
The table below sets forth the rights of setoff and related arrangements associated with the Company's derivative and other financial instruments as of March 31, 2015 and December 31, 2014. The column titled "Gross Amounts Not Offset in the Statement of Financial Position" in the table below relates to derivative instruments that are eligible to be offset in accordance with applicable accounting guidance but for which management has elected not to offset in the Condensed Consolidated Statements of Financial Condition. | ||||||||||||||||||||
Derivative and Other Instruments of the Company as of March 31, 2015 | ||||||||||||||||||||
Gross Amounts | ||||||||||||||||||||
Not Offset in | ||||||||||||||||||||
the Statement | ||||||||||||||||||||
Gross | Gross | of Financial | ||||||||||||||||||
Amounts of | Amounts | Position | ||||||||||||||||||
Recognized | Offset in | |||||||||||||||||||
Assets | Assets | Net Amounts | ||||||||||||||||||
(Liabilities) | (Liabilities) | of Assets | ||||||||||||||||||
(Liabilities) | ||||||||||||||||||||
Presented | Financial | Net Amount | ||||||||||||||||||
Instruments | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 8,217 | $ | — | $ | 8,217 | $ | 1,995 | $ | 6,222 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | 8,217 | — | 8,217 | 1,995 | 6,222 | |||||||||||||||
| | | | | | | | | | | | | | | | | ||||
Liabilities: | ||||||||||||||||||||
Derivatives | (2,973 | ) | — | (2,973 | ) | (1,995 | ) | (978 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | (2,973 | ) | — | (2,973 | ) | (1,995 | ) | (978 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Grand Total | $ | 5,244 | $ | — | $ | 5,244 | $ | — | $ | 5,244 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | | | | ||||
Derivative and Other Instruments of the Company as of December 31, 2014 | ||||||||||||||||||||
Gross Amounts | ||||||||||||||||||||
Not Offset in | ||||||||||||||||||||
the Statement | ||||||||||||||||||||
Gross | Gross | of Financial | ||||||||||||||||||
Amounts of | Amounts | Position | ||||||||||||||||||
Recognized | Offset in | |||||||||||||||||||
Assets | Assets | Net Amounts | ||||||||||||||||||
(Liabilities) | (Liabilities) | of Assets | ||||||||||||||||||
(Liabilities) | ||||||||||||||||||||
Presented | Financial | Net Amount | ||||||||||||||||||
Instruments | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 7,623 | $ | — | $ | 7,623 | $ | 1,056 | $ | 6,567 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | 7,623 | — | 7,623 | 1,056 | 6,567 | |||||||||||||||
| | | | | | | | | | | | | | | | | ||||
Liabilities: | ||||||||||||||||||||
Derivatives | (2,850 | ) | — | (2,850 | ) | (1,056 | ) | (1,794 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | (2,850 | ) | — | (2,850 | ) | (1,056 | ) | (1,794 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Grand Total | $ | 4,773 | $ | — | $ | 4,773 | $ | — | $ | 4,773 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | | | | ||||
The table below sets forth the rights of setoff and related arrangements associated with the Consolidated Funds' derivative and other financial instruments as of March 31, 2015 and December 31, 2014. The column titled "Gross Amounts Not Offset in the Statement of Financial Position" in the table below relates to derivative instruments that are eligible to be offset in accordance with applicable accounting guidance but for which management has elected not to offset in the Condensed Consolidated Statements of Financial Condition. | ||||||||||||||||||||
Derivative and Other Instruments of the Consolidated Funds as of March 31, 2015 | ||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||
in the Statement of | ||||||||||||||||||||
Gross Amounts | Financial Position | |||||||||||||||||||
of | ||||||||||||||||||||
Recognized Assets | ||||||||||||||||||||
(Liabilities) | Gross Amounts | Net Amounts of | Financial | Cash Collateral | Net Amount | |||||||||||||||
Offset in Assets | Assets (Liabilities) | Instruments | Received | |||||||||||||||||
(Liabilities) | Presented | (Pledged) | ||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 4,877 | $ | 1,181 | $ | 3,696 | $ | 727 | $ | (1,080 | ) | $ | 4,049 | |||||||
Reverse repurchase, securities borrowing, and similar arrangements(1) | 4,150 | — | 4,150 | — | — | 4,150 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | 9,027 | 1,181 | 7,846 | 727 | (1,080 | ) | 8,199 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||||||||
Derivatives | (60,664 | ) | (1,181 | ) | (59,483 | ) | (727 | ) | (11,119 | ) | (47,637 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | (60,664 | ) | (1,181 | ) | (59,483 | ) | (727 | ) | (11,119 | ) | (47,637 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Grand Total | $ | (51,637 | ) | $ | — | $ | (51,637 | ) | $ | — | $ | (12,199 | ) | $ | (39,438 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Derivative and Other Instruments of the Consolidated Funds as of December 31, 2014 | ||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||
in the Statement of | ||||||||||||||||||||
Gross Amounts | Financial Position | |||||||||||||||||||
of | ||||||||||||||||||||
Recognized Assets | ||||||||||||||||||||
(Liabilities) | Gross Amounts | Net Amounts of | Financial | Cash Collateral | Net Amount | |||||||||||||||
Offset in Assets | Assets (Liabilities) | Instruments | Received | |||||||||||||||||
(Liabilities) | Presented | (Pledged) | ||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 4,940 | $ | 1,814 | $ | 3,126 | $ | 989 | $ | (2,295 | ) | $ | 4,432 | |||||||
Reverse repurchase, securities borrowing, and similar arrangements(1) | 4,150 | — | 4,150 | — | — | 4,150 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | 9,090 | 1,814 | 7,276 | 989 | (2,295 | ) | 8,582 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||||||||
Derivatives | (44,146 | ) | (1,814 | ) | (42,332 | ) | (989 | ) | (12,386 | ) | (28,957 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | (44,146 | ) | (1,814 | ) | (42,332 | ) | (989 | ) | (12,386 | ) | (28,957 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Grand Total | $ | (35,056 | ) | $ | — | $ | (35,056 | ) | $ | — | $ | (14,681 | ) | $ | (20,375 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Included within investments, at fair value in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
DEBT
DEBT | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
DEBT | ||||||||||||||||||||
DEBT | ||||||||||||||||||||
8. DEBT | ||||||||||||||||||||
Debt represents the (a) Company's Credit Facility (as defined below), (b) senior notes of Ares Finance Co. LLC, a wholly owned subsidiary of Ares Holdings, (c) loan obligations of the consolidated CLOs and (d) credit facilities of the Consolidated Funds. The Company has elected to measure the loan obligations of the consolidated CLOs at fair value and reflect the credit facilities of the Company and Consolidated Funds at cost. | ||||||||||||||||||||
Credit Facility of the Company | ||||||||||||||||||||
The Company is party to a $1.03 billion revolving credit facility (the "Credit Facility"), which matures on April 30, 2019. Interest rates are dependent upon corporate credit ratings. Base rate loans bear interest calculated based on the base rate plus 0.50% and LIBOR rate loans bear interest calculated based on LIBOR rate plus 1.50%. Unused commitment fees are payable quarterly in arrears at a rate of 0.20% per annum. As of March 31, 2015 and December 31, 2014, the Company had an outstanding balance of $60.0 million and no balance outstanding, respectively, under the Credit Facility. | ||||||||||||||||||||
At March 31, 2015, unamortized debt issuance costs of $5.0 million are included in the Condensed Consolidated Statements of Financial Condition as a deduction from the carrying value of the Credit Facility. At December 31, 2014, unamortized debt issuance costs of $5.3 million, incurred in connection with the October 29, 2013 and May 7, 2014 amendments of the Credit Facility were capitalized and are included in other assets in the Condensed Consolidated Statements of Financial Condition. For the three months ended March 31, 2015, $0.5 million in unused commitment fees, $0.2 million of interest and $0.3 million of amortization of debt issuance costs are included in interest expense in the Condensed Consolidated Statements of Operations. For the three months ended March 31, 2014, $0.4 million in unused commitment fees, $0.6 million of interest and $0.2 million of amortization of debt issuance costs are included in interest expense in the Condensed Consolidated Statements of Operations. | ||||||||||||||||||||
Senior Notes of the Company | ||||||||||||||||||||
On October 8, 2014, Ares Finance Co. LLC, a subsidiary of the Company, issued $250.0 million aggregate principal amount of 4.000% senior notes (the "Notes") due October 8, 2024, at 98.268% of the face amount. The Notes are fully and unconditionally guaranteed by the Company, AHI, Domestic Holdings, Ares Real Estate Holdings LLC, Ares Holdings, Ares Domestic Holdings, Ares Investments, Ares Real Estate, AM LLC and AIH LLC. Interest is payable semi-annually on April 8 and October 8 each year, commencing on April 8, 2015. The Notes may be redeemed prior to maturity at the Company's option at a redemption price equal to the greater of 100% of the principal amount to be redeemed and a "make-whole" redemption price, plus accrued and unpaid interest to the redemption date; however, Ares Finance Co. LLC is not required to pay any "make-whole" on or after July 8, 2024. Debt issuance costs of $2.4 million are amortized on a straight line basis over the life of the Notes. The discount of $4.3 million is amortized using the effective interest rate over the life of the Notes. | ||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, the Company had $243.6 million and $245.8 million, respectively, reported within debt obligations on the Condensed Consolidated Statements of Financial Condition. The effective annual interest rate of the Notes is 4.21%. Unamortized debt issuance costs were $2.2 million and $2.3 million as of March 31, 2015 and December 31, 2014, respectively, and are shown as a deduction from the carrying value of the debt balance reported in the Condensed Consolidated Statements of Financial Condition. Interest expense of $3.7 million, including $0.4 million from the amortization of debt issuance costs, is included in interest expense in the Condensed Consolidated Statements of Financial Operations for the three months ended March 31, 2015. | ||||||||||||||||||||
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. Several of the Consolidated CLOs issued preferred shares representing the subordinated interests that are mandatorily redeemable upon the maturity dates of the senior secured loan obligations. As a result, these shares have been classified as liabilities and are included in CLO loan obligations in the Condensed Consolidated Statements of Financial Condition. | ||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, the following loan obligations were outstanding and classified as liabilities: | ||||||||||||||||||||
As of March 31, 2015 | ||||||||||||||||||||
Loan | Market Value of | Weighted Average | ||||||||||||||||||
Obligations | Loan Obligations | Remaining | ||||||||||||||||||
Maturity In Years | ||||||||||||||||||||
Senior secured notes(1) | $ | 11,360,083 | $ | 11,191,664 | 8.88 | |||||||||||||||
Subordinated notes / preferred shares(2) | 1,506,610 | 873,437 | 9.26 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total loan obligations of Consolidated CLOs | $ | 12,866,693 | $ | 12,065,101 | ||||||||||||||||
| | | | | | | | | | | ||||||||||
Type of Facility | Total Facility | Loan | Market Value of | Effective | Commitment | Maturity | ||||||||||||||
(Capacity) | Obligations | Loan Obligations | Rate | Fee | Date | |||||||||||||||
Revolvers of Consolidated CLOs | ||||||||||||||||||||
Revolving credit line | $ | 42,806 | $ | 42,806 | $ | 42,676 | 0.51 | % | 0.17 | % | 7/16/20 | |||||||||
Revolving credit line | 47,480 | 47,480 | 46,900 | 0.45 | % | 0.17 | % | 10/11/21 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total revolvers of Consolidated CLOs | 90,286 | 89,576 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total notes payable and credit facilities of Consolidated CLOs | $ | 12,956,979 | $ | 12,154,677 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Weighted average interest rate of 2.67%. | |||||||||||||||||||
-2 | The subordinated notes do not have contractual interest rates, but instead receive distributions from the excess cash flows generated by each Consolidated CLO. | |||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Loan | Market Value of | Weighted Average | ||||||||||||||||||
Obligations | Loan Obligations | Remaining | ||||||||||||||||||
Maturity In Years | ||||||||||||||||||||
Senior secured notes(1) | $ | 11,394,820 | $ | 11,062,501 | 9.02 | |||||||||||||||
Subordinated notes / preferred shares(2) | 1,523,670 | 894,795 | 9.44 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total loan obligations of Consolidated CLOs | $ | 12,918,490 | $ | 11,957,296 | ||||||||||||||||
| | | | | | | | | | | ||||||||||
Type of Facility | Total Facility | Loan | Market Value of | Effective | Commitment | Maturity | ||||||||||||||
(Capacity) | Obligations | Loan Obligations | Rate | Fee | Date | |||||||||||||||
Revolvers of Consolidated CLOs | ||||||||||||||||||||
Revolving credit line | $ | 44,113 | $ | 44,113 | $ | 43,980 | 0.49 | % | 0.17 | % | 4/16/21 | |||||||||
Revolving credit line | 48,510 | 48,510 | 47,894 | 0.43 | % | 0.17 | % | 10/11/21 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total revolvers of Consolidated CLOs | 92,623 | 91,874 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total notes payable and credit facilities of Consolidated CLOs | $ | 13,011,113 | $ | 12,049,170 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Weighted average interest rate of 2.62%. | |||||||||||||||||||
-2 | The subordinated notes do not have contractual interest rates, but instead 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. The Company has elected to apply the fair value option to all of the loan obligations of the Consolidated CLOs, with the exception of the loan obligation of AELIS II, which was carried at cost in the historical financial statements to accommodate investor preference through December 31, 2014, after which AELIS II was deconsolidated. | ||||||||||||||||||||
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 entities have no recourse to the Company. As of March 31, 2015 and December 31, 2014, the Consolidated Funds were in compliance with all financial and non-financial covenants under such credit facilities. | ||||||||||||||||||||
The Consolidated Funds had the following revolving bank credit facilities and term loans outstanding as of March 31, 2015: | ||||||||||||||||||||
Type of Facility | Total Facility | Outstanding | Effective | Commitment | Maturity | |||||||||||||||
(Capacity) | Loan(1) | Rate | Fee | Date | ||||||||||||||||
Short-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | $ | 25,000 | $ | — | LIBOR + 1.75% | 0.30% | 6/6/15 | |||||||||||||
Credit facility | 25,000 | — | LIBOR + 2.00% | 0.30% | 6/30/15 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total short-term borrowings of Consolidated | ||||||||||||||||||||
Funds | — | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Long-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | 18,000 | 4,459 | 1.81% | N/A | 1/1/23 | |||||||||||||||
Credit facility | 150,000 | 48,500 | LIBOR + 2.25% | 0.25% | 6/4/18 | |||||||||||||||
Notes payable | 1,500,000 | 630,605 | LIBOR + 1.65% | 0.75% | 9/19/18 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total long-term borrowings of Consolidated Funds | 683,564 | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total borrowings of Consolidated Funds | $ | 683,564 | ||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
| | | | | | | | | | | | | | | ||||||
-1 | The market values of the long term notes approximate the current carrying value that is tied to the LIBOR rate. | |||||||||||||||||||
The Consolidated Funds had the following revolving bank credit facilities and term loans outstanding as of December 31, 2014: | ||||||||||||||||||||
Type of Facility | Total Facility | Outstanding | Effective | Commitment | Maturity | |||||||||||||||
(Capacity) | Loan(1) | Rate | Fee | Date | ||||||||||||||||
Short-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | $ | 25,000 | $ | — | LIBOR + 1.75% | 0.30% | 6/6/15 | |||||||||||||
Credit facility | 25,000 | — | LIBOR + 2.00% | 0.30% | 6/30/15 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total short-term borrowings of Consolidated Funds | — | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Long-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | 150,000 | 39,300 | LIBOR + 2.25% | 0.25% | 6/4/18 | |||||||||||||||
Notes payable | 1,500,000 | 731,983 | LIBOR + 1.65% | 0.75% | 9/19/18 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total long-term borrowings of Consolidated Funds | 771,283 | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total borrowings of Consolidated Funds | $ | 771,283 | ||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
| | | | | | | | | | | | | | | ||||||
-1 | The market values of the long term notes approximate the current carrying value that is tied to the LIBOR rate. | |||||||||||||||||||
Loan Obligations of the Consolidated Mezzanine Debt Funds | ||||||||||||||||||||
Loan obligations of consolidated mezzanine debt funds represent amounts due to holders of debt securities issued by Ares Institutional Loan Fund B.V. (the "AILF Master Fund"), a Netherlands limited liability company. The AILF Master Fund issued Class A, Class B and Class C participating notes that have equal rights and privileges, except with respect to management fees and the performance fee that are applicable to only the Class A participating notes. These participating notes are redeemable debt instruments that do not have a stated interest rate or fixed maturity date. The AILF Master Fund may cause any holders to redeem all or any portion of such notes at any time upon at least five days prior written notice for any reason or no reason. A participating note holder may withdraw all or some of its notes as of the last business day of each calendar month by providing at least 30 days prior written notice. The holders of these participating notes have the right to receive the AILF Master Fund's first gains and the obligation to absorb the AILF Master Fund's first losses. As of March 31, 2015 and December 31, 2014, outstanding loan obligations of the consolidated mezzanine debt funds were approximately $406.4 million and $378.4 million, respectively, and are presented as mezzanine debt in the Condensed Consolidated Statements of Financial Condition. The residual interests of the consolidated mezzanine debt funds are carried at cost plus accrued interest. The mezzanine funds are collateralized by all of the assets of the AILF Master Fund with no recourse to the Company. | ||||||||||||||||||||
REDEEMABLE_INTERESTS
REDEEMABLE INTERESTS | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
REDEEMABLE INTERESTS | |||||
REDEEMABLE INTERESTS | |||||
9. REDEEMABLE INTERESTS | |||||
The following table sets forth a summary of changes in the redeemable interests in Consolidated Funds and redeemable interests in Ares Operating Group entities as of March 31, 2015: | |||||
Redeemable interests in Consolidated Funds | |||||
Redeemable non-controlling interests in Consolidated Funds, beginning of period | $ | 1,037,450 | |||
Contributions from redeemable, non-controlling interests in Consolidated Funds | 122 | ||||
Distributions to redeemable, non-controlling interests in Consolidated Funds | (138,414 | ) | |||
Net income (loss) attributable to redeemable, non-controlling interests in Consolidated Funds | 15,859 | ||||
| | | | | |
Ending Balance | $ | 915,017 | |||
| | | | | |
| | | | | |
Redeemable interests in Ares Operating Group Entities | |||||
Beginning balance | $ | 23,988 | |||
Reallocation of Partners' capital for change in ownership interest | 81 | ||||
Deferred tax liabilities arising from allocation of contributions and Partners' capital | (1 | ) | |||
Distributions | (260 | ) | |||
Net income | 243 | ||||
Currency translation adjustment | (7 | ) | |||
Equity compensation | 33 | ||||
| | | | | |
| | | | | |
Ending Balance | $ | 24,077 | |||
| | | | | |
| | | | | |
No additional components exist for the three months ended March 31, 2015 from those presented in the Condensed Consolidated Statement of Changes in Equity. | |||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | |
10. COMMITMENTS AND CONTINGENCIES | |
Indemnification Arrangements | |
Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company's maximum exposure under these arrangements cannot be determined and has not been recorded in the Condensed Consolidated Statements of Financial Condition. As of March 31, 2015, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. | |
Capital Commitments | |
As of March 31, 2015 and December 31, 2014, the Company had aggregate unfunded commitments of $ 258.3 million and $ 187.9 million, of which $4.8 million and $5.6 million is contingent consideration recorded in relation to the acquisition of AREA Management Holdings, LLC, and is presented within accounts payable and accrued expenses in the consolidated statements of financial condition, respectively, including commitments to both non-consolidated funds and Consolidated Funds. | |
Guarantees | |
The Company guaranteed loans for certain professionals in affiliated co-investment entities. These entities were formed to permit certain employees and members to invest alongside the Company and its investors in the funds managed by the Company. The Company would be responsible for all outstanding payments due in the event of a default on the loans by certain professionals. As of March 31, 2015 and December 31, 2014, the total outstanding loan balance was approximately $2.7 million and $3.2 million with an additional $1.0 million and $1.1 million in unfunded commitments, respectively. There has been no history of default and the Company has determined that the likelihood of default is remote. These guarantees are not considered to be compensation. | |
On July 30, 2014, AM LLC agreed to provide credit support to a new $75 million credit facility, (the "Guaranteed Facility") entered into by a wholly owned subsidiary of Ares Commercial Real Estate Corporation ("ACRE") with a national banking association. AM LLC is the parent entity to ACRE's external manager. In connection with the facility, AM LLC agreed to purchase all loans and other obligations outstanding under the Guaranteed Facility at a price equal to 100% of the outstanding balance (i) upon an acceleration or certain events of default by ACRE under the Guaranteed Facility or (ii) in the event that AM LLC's corporate credit rating is downgraded to below investment grade, among other things. ACRE pays AM LLC a credit support fee of 1.50% per annum times the average amount of the loans outstanding under the Guaranteed Facility, payable monthly, and reimburses AM LLC for its out-of-pocket costs and expenses in connection with the Guaranteed Facility. In addition to the credit support fee, ACRE pledged to AM LLC its ownership interest in its principal lending holding entity to support the Guaranteed Facility. The Company's maximum exposure to loss shall not exceed $75 million plus accrued interest. The Company recorded the fair value of this guarantee in the amount of $1.6 million within accounts payable, accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition as of March 31, 2015. The total outstanding balance under the Guaranteed Facility was $75.0 million as of March 31, 2015 and December 31, 2014, respectively. The Company believes the likelihood of default by the subsidiary of ACRE to be remote. | |
Performance Fees | |
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 obligation is known as a "clawback" obligation. The clawback obligation may be reduced by income taxes paid by the Company related to its carried interest. | |
At March 31, 2015 and December 31, 2014, if the Company assumed all existing investments were valued at $0, the amount of performance fees subject to potential clawback, net of tax, which may differ from the recognition of revenue, would have been approximately $306.3 million and $295.7 million, respectively, of which approximately $244.3 million and $239.3 million, respectively, is reimbursable to the Company by certain professionals. Management believes the possibility of all of the investments becoming worthless is remote. If the funds were liquidated at their then current fair values as of March 31, 2015 and December 31, 2014, there would be no event of clawback. For all periods presented, the Company did not accrue any expense or record a liability associated with the clawback obligation. | |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
11. RELATED PARTY TRANSACTIONS | ||||||||
Substantially all of the Company's revenue is earned from its affiliates, including management fees, performance fees, administrative expense reimbursements and service fees. The related accounts receivable are included within due from affiliates within the Condensed Consolidated Statements of Financial Condition, except that performance fees receivable, which are entirely due from affiliated funds, are presented separately within the Condensed Consolidated Statements of Financial Condition. | ||||||||
The Company has investment management agreements with various funds and accounts that it manages. In accordance with these agreements, the Consolidated Funds bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Consolidated Funds. In addition, the Company has agreements to provide administrative services to various entities. | ||||||||
The Company also has entered into agreements to provide administrative services which are eligible for reimbursement from related parties, including Ares Capital Corporation ("ARCC"), ACRE, Ares Dynamic Credit Allocation Fund, Inc. ("ARDC"), Ares Multi-Strategy Credit Fund, Inc. ("ARMF"), Ivy Hill Asset Management, L.P., European Senior Secured Loan Programme S.à.r.l. and ACF FinCo I L.P. | ||||||||
Employees and other related parties may be permitted to participate in co-investment vehicles that generally invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These co-investment vehicles generally do not require these individuals to pay management or performance fees. | ||||||||
Performance fees from the funds can be distributed to professionals on a current basis, subject to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several and not joint and are limited to distributions received by the relevant recipient. | ||||||||
The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were comprised of the following: | ||||||||
As of March 31, | As of December 31, | |||||||
2015 | 2014 | |||||||
Due from affiliates: | ||||||||
Management fees receivable from non-consolidated funds | $ | 98,775 | $ | 113,358 | ||||
Payments made on behalf of and amounts due from non-consolidated funds | 31,095 | 33,176 | ||||||
| | | | | | | | |
Due from affiliates—Company | $ | 129,870 | $ | 146,534 | ||||
| | | | | | | | |
| | | | | | | | |
Amounts due from portfolio companies and non-consolidated funds | $ | 9,338 | $ | 11,342 | ||||
| | | | | | | | |
Due from affiliates—Consolidated Funds | $ | 9,338 | $ | 11,342 | ||||
| | | | | | | | |
| | | | | | | | |
Due to affiliates: | ||||||||
Management fee rebate payable to non-consolidated funds | $ | 6,048 | $ | 14,390 | ||||
Payments made by non-consolidated funds on behalf of and amounts due from the Company | 1,378 | 4,640 | ||||||
| | | | | | | | |
Due to affiliates—Company | $ | 7,426 | $ | 19,030 | ||||
| | | | | | | | |
| | | | | | | | |
Amounts due to non-consolidated funds | $ | 2,332 | $ | 2,441 | ||||
| | | | | | | | |
Due to affiliates—Consolidated Funds | $ | 2,332 | $ | 2,441 | ||||
| | | | | | | | |
| | | | | | | | |
Due from Ares Funds and Portfolio Companies | ||||||||
In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional travel and other costs associated with particular portfolio company holdings, may be reimbursed by the portfolio companies. | ||||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2015 | |
INCOME TAXES | |
INCOME TAXES | |
12. INCOME TAXES | |
A substantial portion of the Company's earnings flow through to owners of the Company without being subject to entity level income taxes. Consequently, a significant portion of the Company's earnings reflects no provision for income taxes except those for foreign, city and local income taxes incurred at the entity level. A portion of the Company's operations is held through AHI and Domestic Holdings, which are U.S. corporations for tax purposes. Their income is subject to U.S. federal, state and local income taxes and certain of its foreign subsidiaries are subject to foreign income taxes (for which a foreign tax credit can generally offset U.S. corporate taxes imposed on the same income). A provision for corporate level income taxes imposed on AHI's and Domestic Holdings' earnings is included in the Company's tax provision. The Company's tax provision also includes entity level income taxes incurred by certain affiliated funds and co-investment entities that are consolidated in these financial statements. The Company's income tax expense was $5.9 million for the three months ended March 31, 2015 and income tax benefit was $6.7 million for three months ended March 31, 2014. | |
The Company's effective income tax rate is dependent on many factors, including the estimated nature of many amounts and the mix of revenues and expenses between U.S. corporate subsidiaries that are subject to income taxes and those subsidiaries that are not. For the three months ended March 31, 2015 and 2014, the Company has utilized the discrete effective tax rate method, as allowed by Accounting Standards Codification ("ASC") 740-270-30-18, "Income Taxes—Interim Reporting," to calculate its interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis. Additionally, the Company's effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment entities that are consolidated in these financial statements. Consequently, the effective income tax rate is subject to significant variation from period to period. | |
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 federal, state, local and foreign tax regulators. As of March 31, 2015, the Company's U.S. federal income tax returns for the years 2011 through 2014 are open under the normal three-year statute of limitations and therefore subject to examination. State and local tax returns are general subject to audit from 2010 to 2014. Foreign tax returns are generally subject to audit from 2009 to 2014. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company's condensed consolidated financial statements. | |
EARNINGS_PER_COMMON_UNIT
EARNINGS PER COMMON UNIT | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
EARNINGS PER COMMON UNIT | ||||||||
EARNINGS PER COMMON UNIT | ||||||||
13. EARNINGS PER COMMON UNIT | ||||||||
Prior to the Reorganization and the IPO in May 2014, the Company's businesses were conducted through multiple operating businesses rather than a single holding entity. As such, there was no single capital structure upon which to calculate historical earnings per common unit information. Accordingly, earnings per common unit information has not been presented for historical periods prior to the IPO. | ||||||||
Basic earnings per common unit is computed by dividing income available to common unitholders by the weighted-average number of common units outstanding during the period. Diluted earnings per common unit is computed using the more dilutive method of either the two-class method or the treasury stock method. | ||||||||
The two-class method is an earnings allocation method under which earnings per unit is calculated for common units 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. Because the holders of unvested restricted units have the right to participate in distributions when declared, the unvested restricted units are considered participating securities to the extent they are expected to vest. For the three months ended March 31, 2015, the two-class method was the more dilutive method for the unvested restricted stock units. For the three months ended March 31, 2015, no participating securities have rights to undistributed earnings. | ||||||||
The treasury stock method is used to determine potentially dilutive securities resulting from options and unvested restricted units granted under the 2014 Equity Incentive Plan. Potentially dilutive securities representing 25,022,983 options were excluded from the computation of diluted earnings per common unit because their effect would have been anti-dilutive. If the treasury stock method had been the more dilutive method for the unvested restricted stock units, the dilutive effect of those units would have been 834,288 units for the three months ended March 31, 2015. | ||||||||
Holders of AOG Units may exchange their AOG Units for common units on a one-for-one basis after the second anniversary of the date of the closing of the IPO provided that Alleghany may exchange up to half of its AOG Units from and after May 7, 2015 (the first anniversary of the IPO), subject to any applicable transfer restrictions and other provisions. The Company applies the "if-converted" method to determine the dilutive weighted-average partnership units represented by these contingently issuable common units, assuming March 31, 2015 represents the end of contingency period. | ||||||||
The Company has excluded 132,437,609 AOG Units from the calculation of diluted earnings per common unit for the three months ended March 31, 2015 since the exchange of these units would proportionally increase Ares Management, L.P.'s interest in the Ares Operating Group and would have an anti-dilutive effect on earnings per common unit as a result of certain tax benefits that Ares Management, L.P. is assumed to receive upon the exchange. | ||||||||
The following table presents the computation of basic and diluted earnings per common unit: | ||||||||
For the three months ended | ||||||||
March 31, 2015 | ||||||||
(Dollars in thousands, except unit data) | Basic | Diluted | ||||||
Net income attributable to Ares Management, L.P. | $ | 18,456 | $ | 18,456 | ||||
Earnings distributed to participating securities | (237 | ) | (237 | ) | ||||
| | | | | | | | |
Net income available to common unitholders | $ | 18,219 | $ | 18,219 | ||||
| | | | | | | | |
| | | | | | | | |
Weighted-average common units | 80,667,664 | 80,667,664 | ||||||
| | | | | | | | |
| | | | | | | | |
Effect of dilutive units: | ||||||||
Restricted units | — | — | ||||||
Options | — | — | ||||||
Contingently issuable common units | — | — | ||||||
| | | | | | | | |
Diluted weighted-average common units | 80,667,664 | 80,667,664 | ||||||
| | | | | | | | |
| | | | | | | | |
Earnings per common unit | $ | 0.23 | $ | 0.23 | ||||
| | | | | | | | |
| | | | | | | | |
EQUITY_COMPENSATION
EQUITY COMPENSATION | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
EQUITY COMPENSATION | ||||||||||||||
EQUITY COMPENSATION | ||||||||||||||
14. EQUITY COMPENSATION | ||||||||||||||
Ares Employee Participation LLC Interests | ||||||||||||||
Prior to the IPO, the Company historically issued various profit interests and membership interests to pools of certain professionals that provide for the participation in the profits of APMC and/or proceeds of certain capital events. Unless otherwise stated, the grant date fair value of each award or respective membership interest was determined by an independent third-party valuation firm principally using a contingent claims analysis. These awards are referred to as Ares Employee Participation ("AEP") plans. | ||||||||||||||
The following summarizes the grant date fair value associated with each equity award issued prior to May 1, 2014, as well as the expense recognized for each year presented: | ||||||||||||||
Equity | ||||||||||||||
Compensation | ||||||||||||||
Expenses | ||||||||||||||
Recognized, | ||||||||||||||
Net of | ||||||||||||||
Forfeitures | ||||||||||||||
Three Months | ||||||||||||||
Ended | ||||||||||||||
Grant Date Fair | March 31, | |||||||||||||
(Presented in thousands) | Value | 2015 | 2014 | |||||||||||
AEP I Profit Interest | $ | 38,400 | $ | — | $ | — | ||||||||
AEP II Profit Interests | 33,423 | — | 1,504 | |||||||||||
AEP IV Profit Interests | 10,657 | — | — | |||||||||||
AEP VI Profit Interests | 9,047 | — | — | |||||||||||
Exchanged AEP Awards | 68,607 | — | — | |||||||||||
Indicus | ||||||||||||||
Membership Interest | 20,700 | — | 1,036 | |||||||||||
Profit Interest | 5,464 | — | 456 | |||||||||||
AREA Membership Interest | 25,381 | — | 2,343 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 211,679 | $ | — | $ | 5,339 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Ares Management, L.P. 2014 Equity Incentive Plan | ||||||||||||||
In connection with the IPO, the Company adopted the Equity Incentive Plan. Under the Equity Incentive Plan, the Company granted options to acquire 24,835,227 common units, 4,936,051 restricted units to be settled in common units and 686,395 phantom common units to be settled in cash. The total number of units immediately available for issuance under the Equity Incentive Plan was 31,704,545 as of the date of the IPO. Based on a formula as defined in the Equity Incentive Plan, the total number units available to be issued under the Equity Incentive Plan increases annually on January 1. As of January 1, 2015, the total number of units available for issuance under the Equity Incentive Plan increased to 31,728,949 and as of March 31, 2015, 30,840,965 units had not been issued. | ||||||||||||||
Equity-based compensation expense, net of assumed forfeitures is included in the following table: | ||||||||||||||
For the | ||||||||||||||
three months ended | ||||||||||||||
March 31, 2015 | ||||||||||||||
Restricted units | $ | 3,445 | ||||||||||||
Options | 3,853 | |||||||||||||
Phantom units | 623 | |||||||||||||
| | | | | ||||||||||
Equity-based compensation expense | $ | 7,921 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Restricted Units | ||||||||||||||
Each restricted unit represents an unfunded, unsecured right of the holder to receive a common unit on the vesting date. The restricted units generally vest either (i) at a rate of one-third per year, beginning on the third anniversary of the grant date, or (ii) in their entirety on the fifth anniversary of the grant date. Compensation expense associated with restricted units is being recognized on a straight-line basis over the service period of the respective grant. The grant date fair value gives effect to a discount for lack of marketability imposed by a five-year lock up period that was determined to be 5.0% based on Finnerty's average strike price put option model. | ||||||||||||||
The holders of restricted units have the right to receive as current compensation an amount in cash equal to (i) the amount of any distribution paid with respect to a common unit multiplied by (ii) the number of unvested restricted units held at the time such distributions are declared ("Distribution Equivalent"). The Company declared a quarterly distribution of $0.24 per common unit to common unitholders of record at the close of business on March 16, 2015. For the three months ended March 31, 2015, Distribution Equivalents were made to the holders of restricted units in the amount of $1.1 million, of which $0.2 million is presented within compensation and benefits in the Condensed Consolidated Statements of Operations and $0.9 million is included in distributions in the Condensed Consolidated Statements of Changes in Equity. | ||||||||||||||
The following table presents unvested restricted units' activity during the three months ended March 31, 2015: | ||||||||||||||
Restricted Units | Weighted Average | |||||||||||||
Grant Date Fair | ||||||||||||||
Value Per Unit | ||||||||||||||
Balance—January 1, 2015 | 4,776,053 | $ | 18.08 | |||||||||||
Granted | 171,444 | 17.27 | ||||||||||||
Forfeited | (75,920 | ) | 18.05 | |||||||||||
| | | | | | | | |||||||
Balance—March 31, 2015 | 4,871,577 | $ | 18.06 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
No restricted units were vested during the three months ended March 31, 2015. The total compensation expense expected to be recognized in all future periods associated with the restricted units, considering assumed annual forfeitures of 7.0%, is approximately $56.8 million at March 31, 2015, which is expected to be recognized over the remaining weighted average period of 4.10 years. | ||||||||||||||
Options | ||||||||||||||
Each option entitles the holders to purchase from the Company, upon exercise thereof, one common unit at the stated exercise price. The term of the options is generally ten years from the grant date. The options generally vest at a rate of one-third per year, beginning on the third anniversary of the grant date. Compensation expense associated with these options is being recognized on a straight-line basis during the service period of the respective grant. As of March 31, 2015, there was $63.4 million of total unrecognized compensation expense, net of assumed annual forfeitures of 7.0%, that is expected to be recognized over the remaining weighted average period of 4.08 years. | ||||||||||||||
A summary of unvested options activity during the three months ended March 31, 2015 is presented below: | ||||||||||||||
Options | Weighted Average | Weighted Average | Aggregate | |||||||||||
Exercise Price | Remaining Life | Intrinsic | ||||||||||||
(in years) | Value | |||||||||||||
Balance—January 1, 2015 | 24,230,518 | $ | 19 | 9.33 | ||||||||||
Granted | 935,135 | 18.82 | 9.83 | |||||||||||
Forfeited | (142,675 | ) | 19 | — | ||||||||||
| | | | | | | | | | | | | | |
Balance—March 31, 2015 | 25,022,978 | $ | 18.99 | 9.11 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Exercisable at March 31, 2015 | — | — | — | $ | — | |||||||||
Expected to vest after March 31, 2015 | 19,333,428 | 18.99 | 9.11 | $ | — | |||||||||
Aggregate intrinsic value represents the value of the Company's closing unit price 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. As of March 31, 2015, the Company's closing unit price is lower than the weighted average exercise price of the options exercisable or expected to vest. As a result, the options are out of the money and have no intrinsic value. | ||||||||||||||
The fair value of each option granted during the three months ended March 31, 2015 is measured on the date of grant using the Black-Scholes option-pricing model and the following weighted average assumptions: | ||||||||||||||
Risk-free interest rate | 1.71% to 1.80% | |||||||||||||
Weighted average expected dividend yield | 5.00% | |||||||||||||
Expected volatility factor(a) | 35.00% to 36.00% | |||||||||||||
Expected life in years | 6.66 to 7.49 | |||||||||||||
(a) | Expected volatility is based on comparable companies using daily stock prices. | |||||||||||||
The fair value of an award is affected by the Company's unit price on the date of grant as well as other assumptions including the estimated volatility of the Company's unit price over the term of the awards and the estimated period of time that management expects employees to hold their unit options. The estimated period of time that management expects employees to hold their options was estimated as the midpoint between the vesting date and maturity date. | ||||||||||||||
Phantom Units | ||||||||||||||
Each phantom unit represents an unfunded, unsecured right of the holder to receive an amount in cash per phantom unit equal to the average closing price of a common unit for the 15 trading days immediately prior to, and the 15 trading days immediately following, the vesting date. The phantom units will vest in equal installments over five years at the anniversaries of the IPO date. The phantom units are accounted for as liability awards with compensation expense being recognized based on a straight-line basis based on the number of units expected to vest during the service period. Forfeitures will reduce the expenses in the period in which the forfeiture occurs. | ||||||||||||||
A summary of unvested phantom units' activity during the three months ended March 31, 2015 is presented below: | ||||||||||||||
Phantom Units | Weighted Average | |||||||||||||
Grant Date Fair Value | ||||||||||||||
Per Unit | ||||||||||||||
Balance January 1, 2015 | 610,711 | $ | 19 | |||||||||||
Forfeited | (16,538 | ) | 19 | |||||||||||
| | | | | | | | |||||||
Balance March 31, 2015 | 594,173 | $ | 19 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
No phantom units were vested during the three months ended March 31, 2015. Forfeitures are accounted for as they occur. The fair value of the awards is remeasured at each reporting period and was $18.54 per unit as of March 31, 2015. Based on the fair value of the awards at March 31, 2015, $9.0 million of unrecognized compensation expense in connection with phantom units outstanding is expected to be recognized over a weighted average period of 4.08 years. For the three months ended March 31, 2015, no cash was paid to settle phantom units. | ||||||||||||||
Unvested phantom units, restricted units and options are forfeited upon any termination of employment; provided that, with respect to certain restricted units and options, if a participant's employment is terminated between the first and second year after grant by the Company without "cause," or as a result of a participant's death or disability, 11% of the award will vest and, if the participant's employment is so terminated between the second and third year after grant, 22% of the award will vest. | ||||||||||||||
The Company records deferred tax assets for equity-based compensation awards, based on the amount of equity-based compensation expense recognized at the statutory tax rate in the jurisdiction in which the Company is expected to receive a future tax deduction. For the three months ended March 31, 2015, the Company recognized $3.5 million of deferred tax assets related to its equity-based award. In addition, differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company's income tax returns are recorded as adjustments to partners' capital. If the tax deduction is less than the deferred tax asset, the calculated shortfall reduces the pool of excess tax benefits. If the pool of excess tax benefits is reduced to zero, then subsequent shortfalls would increase the income tax expense. | ||||||||||||||
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2015 | |
EQUITY | |
EQUITY | |
15. EQUITY | |
Ares Management, L.P. | |
Common units represent limited partnership interests in the Company. The holders of common units are entitled to participate pro rata in distributions from the Company and to exercise the rights or privileges that are available to common unitholders under the Company's partnership agreement. The common unitholders have limited voting rights and have no right to remove the Company's general partner, Ares Management GP LLC, or, except in limited circumstances, to elect the directors of the general partner. | |
At March 31, 2015, Ares Management, L.P. owns a 37.85% direct interest, or 80,667,664 AOG Units, in each of the Ares Operating Group entities; Ares Owners Holding L.P. owns a 56.28% direct interest, or 119,937,609 AOG Units, in each of the Ares Operating Group entities; and an affiliate of Alleghany owns a 5.87% direct interest, or 12,500,000 AOG Units, in each of the Ares Operating Group entities. For the three months ended March 31, 2015, the daily average ownership of AOG Units in each of the Ares Operating Group entities by Ares Owners Holding L.P., Alleghany and Ares Management, L.P. was 56.28%, 5.87% and 37.85%, respectively. | |
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 common units; and (iii) the cancellation of AOG Units in connection with certain individuals' forfeiture of AOG Units upon termination of employment. Holders of the AOG Units may exchange their AOG Units for common units on a one-for-one basis up to four times each year after the second anniversary of the date of the closing of the IPO, except that Alleghany may exchange up to half of its AOG Units for common units on a one-for-one basis after May 7, 2015 (the first anniversary of the date of the closing of the IPO) and EIF may exchange up to half of its AOG Units for common units on a one-for-one basis after six months following the closing of the EIF transaction and all of its AOG Units on the first anniversary of the closing of the EIF transaction. 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 in the statement of changes in equity. | |
SEGMENT_REPORTING
SEGMENT REPORTING | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||||||
16. SEGMENT REPORTING | |||||||||||||||||||||||
The Company conducts its alternative asset management business through four operating segments: | |||||||||||||||||||||||
• | Tradable Credit Group: The Company's Tradable Credit Group managed 75 funds, with approximately $33.4 billion of assets under management, as of March 31, 2015. The group's fund seek a wide variety of investments ranging from commingled and separately managed accounts for institutional investors to publicly traded vehicles and sub-advised funds for retail investors. While each of the group's funds is tailored to specific investment objectives, mandates can be broadly categorized between long-only credit and alternative credit investment strategies. | ||||||||||||||||||||||
• | Direct Lending Group: The Company's Direct Lending Group is primarily comprised of self-originating direct lenders to the U.S. and European markets, with approximately $28.7 billion of assets under management across 34 funds or investment vehicles as of March 31, 2015, which include separately managed accounts for large institutional investors seeking tailored investment solutions, commingled funds and joint venture lending programs with affiliates of General Electric Company. In the second quarter of 2014, the group acquired Keltic Financial Services LLC and Keltic Financial Partners II, LP, a leading commercial finance company that provides asset-based loans to small and middle market companies based in New York (the "Keltic acquisition") that now operates as Ares Commercial Finance. | ||||||||||||||||||||||
• | Private Equity Group: The Company's Private Equity Group had approximately $14.8 billion of assets under management as of March 31, 2015. The group managed four corporate private equity commingled funds focused on North America and; to a lesser extent Europe, one China growth fund and four commingled funds and four related co-investment vehicles focused on U.S. energy and power assets as of March 31, 2015. The corporate private equity funds pursue majority or shared-control investments in businesses with strong franchises and attractive growth opportunities in North America and Europe. The China growth fund pursues privately negotiated growth equity investment in China. On January 1, 2015, the group acquired EIF. EIF had approximately $4.4 billion of AUM across four commingled funds and four related co-investment vehicles as of March 31, 2015. The EIF funds target assets across the U.S. power generation, transmission and midstream sectors, and seek attractive risk-adjusted equity returns with current cash flow and capital appreciation. | ||||||||||||||||||||||
• | Real Estate Group: The Company's Real Estate Group manages comprehensive public and private equity and debt strategies, with approximately $10.0 billion of assets under management across 42 funds and services a portfolio of over $5.6 billion in mortgage loans principally through a subsidiary of ACRE as of March 31, 2015. The Real Estate Group provides debt and equity capital to a broad spectrum of borrowers, property owners and real estate developers. The group seeks to create value for investors by investing in under-managed and undercapitalized assets in supply-constrained markets, targeting de-risked assets and markets with consistent demand fundamentals, high barriers to new supply and strong liquidity characteristics. The group has achieved significant scale in a short period of time through various acquisitions and successful fundraising efforts. | ||||||||||||||||||||||
The Company established an Operations Management Group (the "OMG") that consists of five independent, 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, business development, legal/compliance and human resources. Additionally, the OMG provides services to certain of the Company's investment companies and partnerships, which reimburse the OMG for expenses equal to the costs of services provided. The Company's clients seek to partner with investment management firms that not only have compelling investment track records across multiple investment products but also possess seasoned infrastructure support functions. As such, significant investments have been made to develop the OMG. The Company has successfully launched new business lines, integrated acquired businesses into the operations and created scale within the OMG to support a much larger platform in the future. The OMG's expenses are not allocated to the Company's four reportable segments but the Company does consider the cost structure of the OMG when evaluating its financial performance. | |||||||||||||||||||||||
Economic net income ("ENI") is a key performance indicator used in the alternative asset management industry. ENI represents net income excluding (a) income tax expense, (b) operating results of Consolidated Funds, (c) depreciation expense, (d) the effects of changes arising from corporate actions and (e) certain other items that the Company does not believe are indicative of its core performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with acquisitions and capital transactions, placement fees and underwriting costs and expenses incurred in connection with corporate reorganization. The Company believes the exclusion of these items provides investors with a meaningful indication of the Company's core operating performance. ENI is evaluated regularly by management as a decision tool for deployment of resources and assess performances of each of the business segments. The Company believes that reporting ENI is helpful in understanding its business and that investors should review the same supplemental non-GAAP financial measures that management uses to analyze the segment performance. These measures supplement and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with GAAP. | |||||||||||||||||||||||
Fee related earnings ("FRE") is a component of ENI and is used to assess the ability of the business to cover direct base compensation and operating expenses from management fees. FRE differs from income before taxes computed in accordance with GAAP as it adjusts for the items included in the calculation of ENI and excludes performance fees, performance fee compensation and investment income from Consolidated Funds and certain other items. | |||||||||||||||||||||||
Performance related earnings ("PRE") is a measure used to assess the Company's investment performance and its ability to cover performance fee compensation from performance fees and total investment income. PRE differs from income before taxes computed in accordance with GAAP as it only includes performance fees, performance fee compensation and total investment and other income (expense) earned from Consolidated Funds and non-consolidated funds. | |||||||||||||||||||||||
Distributable earnings ("DE") is a pre-income tax measure that is used to assess amounts potentially available for distributions to stakeholders. Distributable earnings is calculated as the sum of FRE, realized performance fees, realized performance fee compensation and realized net investment and other income, and further adjusts for expenses arising from transaction costs associated with acquisitions, placement fees, underwriting costs, expenses incurred in connection with corporate reorganization and depreciation. DE differs from income before taxes computed in accordance with GAAP as it is presented before giving effect to unrealized performance fees, unrealized performance fee compensation, unrealized net investment income, amortization of intangibles, equity compensation expense and is further adjusted by certain items described in the reconciling table (d) following our segment results. | |||||||||||||||||||||||
Management makes operating decisions and assesses the performance of each of the Company's business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non-consolidated funds. | |||||||||||||||||||||||
The following table presents the financial results for the Company's operating segments, as well as the OMG, as of and for the three months ended March 31, 2015: | |||||||||||||||||||||||
Tradable | Direct | Private | Real | Total | OMG | Total | |||||||||||||||||
Credit | Lending | Equity | Estate | Segments | Stand | ||||||||||||||||||
Group | Group | Group | Group | Alone | |||||||||||||||||||
Management fees (includes ARCC Part I Fees of $29,042) | $ | 37,609 | $ | 70,739 | $ | 36,589 | $ | 17,378 | $ | 162,316 | $ | — | $ | 162,316 | |||||||||
Administrative fees and other income | 21 | 77 | 13 | 856 | 967 | 6,385 | 7,350 | ||||||||||||||||
Compensation and benefits | (8,889 | ) | (33,676 | ) | (12,321 | ) | (10,131 | ) | (65,017 | ) | (28,914 | ) | (93,931 | ) | |||||||||
General, administrative and other expenses | (3,831 | ) | (3,294 | ) | (3,118 | ) | (2,545 | ) | (12,788 | ) | (15,326 | ) | (28,114 | ) | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Fee related earnings (loss) | 24,910 | 33,846 | 21,163 | 5,558 | 85,477 | (37,855 | ) | 47,622 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance fees—realized | 33,325 | 1,889 | 425 | — | 35,639 | — | 35,639 | ||||||||||||||||
Performance fees—unrealized | (27,692 | ) | 8,491 | 87,331 | 319 | 68,449 | — | 68,449 | |||||||||||||||
Performance fee compensation—realized | (19,871 | ) | (1,133 | ) | (340 | ) | — | (21,344 | ) | — | (21,344 | ) | |||||||||||
Performance fee compensation—unrealized | 19,554 | (5,023 | ) | (69,981 | ) | 403 | (55,048 | ) | — | (55,048 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net performance fees | 5,316 | 4,224 | 17,435 | 722 | 27,697 | — | 27,697 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Investment income (loss)—realized | 7,222 | 1,396 | 4,172 | 132 | 12,922 | — | 12,922 | ||||||||||||||||
Investment income (loss)—unrealized | (1,526 | ) | (1,843 | ) | (1,442 | ) | 196 | (4,615 | ) | — | (4,615 | ) | |||||||||||
Interest and other investment income | (1,739 | ) | 213 | 4,485 | 29 | 2,988 | — | 2,988 | |||||||||||||||
Interest expense | (1,208 | ) | (526 | ) | (1,680 | ) | (270 | ) | (3,684 | ) | — | (3,684 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | 2,749 | (760 | ) | 5,535 | 87 | 7,611 | — | 7,611 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance related earnings (loss) | 8,065 | 3,464 | 22,970 | 809 | 35,308 | — | 35,308 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Economic net income (loss) | $ | 32,975 | $ | 37,310 | $ | 44,133 | $ | 6,367 | $ | 120,785 | $ | (37,855 | ) | $ | 82,930 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Distributable earnings (loss) | $ | 41,126 | $ | 34,581 | $ | 27,086 | $ | 3,382 | $ | 106,175 | $ | (38,880 | ) | $ | 67,295 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 451,176 | $ | 248,342 | $ | 862,147 | $ | 166,715 | $ | 1,728,380 | $ | 16,941 | $ | 1,745,321 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
The following table presents the financial results for the Company's operating segments, as well as the OMG, as of and for the three months ended March 31, 2014: | |||||||||||||||||||||||
Tradable | Direct | Private | Real | Total | OMG | Total | |||||||||||||||||
Credit | Lending | Equity | Estate | Segments | Stand | ||||||||||||||||||
Group | Group | Group | Group | Alone | |||||||||||||||||||
Management fees (includes ARCC Part I Fees of $28,318) | $ | 33,693 | $ | 66,204 | $ | 23,196 | $ | 16,768 | $ | 139,861 | $ | — | $ | 139,861 | |||||||||
Administrative fees and other income | 17 | 90 | 76 | 1,290 | 1,473 | 5,392 | 6,865 | ||||||||||||||||
Compensation and benefits | (10,805 | ) | (32,212 | ) | (8,195 | ) | (11,485 | ) | (62,697 | ) | (27,657 | ) | (90,354 | ) | |||||||||
General, administrative and other expenses | (3,696 | ) | (1,914 | ) | (2,000 | ) | (4,267 | ) | (11,877 | ) | (13,535 | ) | (25,412 | ) | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Fee related earnings (loss) | 19,209 | 32,168 | 13,077 | 2,306 | 66,760 | (35,800 | ) | 30,960 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance fees—realized | 10,213 | 39 | 13,086 | — | 23,338 | — | 23,338 | ||||||||||||||||
Performance fees—unrealized | 13,509 | 2,292 | 21,341 | 2,950 | 40,092 | — | 40,092 | ||||||||||||||||
Performance fee compensation—realized | (5,506 | ) | (29 | ) | (10,472 | ) | — | (16,007 | ) | — | (16,007 | ) | |||||||||||
Performance fee compensation—unrealized | (6,355 | ) | (1,451 | ) | (16,912 | ) | — | (24,718 | ) | — | (24,718 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net performance fees | 11,861 | 851 | 7,043 | 2,950 | 22,705 | — | 22,705 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Investment income (loss)—realized | 18,018 | (597 | ) | 1,131 | 730 | 19,282 | — | 19,282 | |||||||||||||||
Investment income (loss)—unrealized | (12,866 | ) | 1,524 | 15,156 | (862 | ) | 2,952 | — | 2,952 | ||||||||||||||
Interest and other income | 251 | 98 | 2,785 | 11 | 3,145 | — | 3,145 | ||||||||||||||||
Interest expense | (387 | ) | (304 | ) | (623 | ) | (325 | ) | (1,639 | ) | — | (1,639 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | 5,016 | 721 | 18,449 | (446 | ) | 23,740 | — | 23,740 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance related earnings | 16,877 | 1,572 | 25,492 | 2,504 | 46,445 | — | 46,445 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Economic net income (loss) | $ | 36,086 | $ | 33,740 | $ | 38,569 | $ | 4,810 | $ | 113,205 | $ | (35,800 | ) | $ | 77,405 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Distributable earnings (loss) | $ | 40,704 | $ | 31,158 | $ | 18,698 | $ | 1,499 | $ | 92,059 | $ | (37,512 | ) | $ | 54,547 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 555,851 | $ | 195,543 | $ | 477,710 | $ | 167,315 | $ | 1,396,419 | $ | 10,437 | $ | 1,406,856 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
The following reconciliations contain rounded values that are presented elsewhere within the financial statements. Consequently, the sum of certain values may not match the totals presented herein. | |||||||||||||||||||||||
For the Three months ended March 31, 2015 | |||||||||||||||||||||||
Total | Consolidation Adjustments | Consolidated | |||||||||||||||||||||
Segments | and Reconciling Items | Results | |||||||||||||||||||||
Revenues | $ | 267,370 | -1 | $ | -85,642 | (a) | $ | 181,728 | |||||||||||||||
Expenses | 154,196 | -2 | 84,666 | (b) | 238,862 | ||||||||||||||||||
Other income (expense) | 7,611 | -3 | 456,088 | (c) | 463,699 | ||||||||||||||||||
Economic net income / Income before taxes | 120,785 | 285,780 | (d) | 406,565 | |||||||||||||||||||
Total assets | 1,728,380 | 19,889,776 | (e) | 21,618,156 | |||||||||||||||||||
For the Three months ended March 31, 2014 | |||||||||||||||||||||||
Total | Consolidation Adjustments | Consolidated | |||||||||||||||||||||
Segments | and Reconciling Items | Results | |||||||||||||||||||||
Revenues | $ | 204,764 | -1 | $ | -71,136 | (a) | $ | 133,628 | |||||||||||||||
Expenses | 115,299 | -2 | 68,831 | (b) | 184,130 | ||||||||||||||||||
Other income (expense) | 23,740 | -3 | 301,437 | (c) | 325,177 | ||||||||||||||||||
Economic net income / Income before taxes | 113,205 | 161,470 | (d) | 274,675 | |||||||||||||||||||
Total assets | 1,396,419 | 20,639,082 | (e) | 22,035,501 | |||||||||||||||||||
-1 | Segment revenues consist of management fees, administrative fees and other income, as well as realized and unrealized performance fees. | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Management fees | $ | 162,316 | $ | 139,861 | |||||||||||||||||||
Administrative fees and other income | 967 | 1,473 | |||||||||||||||||||||
Performance fees—realized | 35,639 | 23,338 | |||||||||||||||||||||
Performance fees—unrealized | 68,449 | 40,092 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total segment revenue | $ | 267,370 | $ | 204,764 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-2 | Segment expenses consist of compensation and benefits, and general, administrative and other expenses, as well as realized and unrealized performance fee expenses. | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Compensation and benefits | $ | 65,017 | $ | 62,697 | |||||||||||||||||||
General, administrative and other expenses | 12,788 | 11,877 | |||||||||||||||||||||
Performance fee compensation—realized | 21,344 | 16,007 | |||||||||||||||||||||
Performance fee compensation—unrealized | 55,048 | 24,718 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total segment expense | $ | 154,196 | $ | 115,299 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-3 | Segment net investment income consists of realized and unrealized investment income and expenses, interest and other income and interest expenses. | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Investment income (loss)—realized | $ | 12,922 | $ | 19,282 | |||||||||||||||||||
Investment Income (loss)—unrealized | (4,615 | ) | 2,952 | ||||||||||||||||||||
Interest, dividend and other investment income | 2,988 | 3,145 | |||||||||||||||||||||
Interest expense | (3,684 | ) | (1,639 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Net investment income | $ | 7,611 | $ | 23,740 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
(a) | The revenues adjustment principally represents management and performance fees earned from Consolidated Funds which were eliminated in consolidation to arrive at Ares consolidated revenues. | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Consolidated Fund income eliminated in consolidation | $ | (91,036 | ) | $ | (73,578 | ) | |||||||||||||||||
Administrative fees and other income attributable to OMG | 6,385 | 5,392 | |||||||||||||||||||||
Performance fees—unrealized reclass(1) | (990 | ) | (2,950 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidated adjustments and reconciling items | $ | (85,642 | ) | $ | (71,136 | ) | |||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-1 | Related to performance fees for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within other income (expense) in the Company's Condensed Consolidated Statements of Operations. | ||||||||||||||||||||||
(b) | The expenses adjustment represents the addition of expenses of the Consolidated Funds to the Ares unconsolidated expenses, depreciation expense, equity-based compensation and expenses associated with acquisitions and corporate actions necessary to arrive at Ares consolidated expenses. | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Consolidated Fund expenses added in consolidation | $ | 48,571 | $ | 40,637 | |||||||||||||||||||
Consolidated Fund expenses eliminated in consolidation | (33,499 | ) | (31,700 | ) | |||||||||||||||||||
OMG expenses | 44,240 | 41,192 | |||||||||||||||||||||
Acquisition related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Equity compensation expense | 7,921 | 5,339 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | $ | 84,666 | $ | 68,831 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
(c) | The other income adjustment represents the addition of net investment income (loss) and net interest income (expense) to arrive at Ares consolidated other income. | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Consolidated Funds other income added in consolidation, net | $ | 461,059 | $ | 321,117 | |||||||||||||||||||
Other income from Consolidated Funds eliminated in consolidation, net | (5,951 | ) | (22,630 | ) | |||||||||||||||||||
Performance fee reclass(1) | 990 | 2,950 | |||||||||||||||||||||
Other non-cash items | (10 | ) | — | ||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | $ | 456,088 | $ | 301,437 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-1 | Related to performance fees for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within other (income) expense in the Company's Condensed Consolidated Statements of Operations. | ||||||||||||||||||||||
(d) | The reconciliation of income before taxes as reported in the Condensed Consolidated Statements of Operations to segment results of economic net income, fee related earnings, performance related earnings and distributable earnings consists of the following: | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Economic net income | |||||||||||||||||||||||
Income before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
Acquisition-related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
OMG expenses, net | 37,855 | 35,800 | |||||||||||||||||||||
Other non-cash items | 10 | — | |||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | (285,780 | ) | (161,470 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Economic net income | $ | 120,785 | $ | 113,205 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | |||||||||||||||||||||||
Income before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
Acquisition-related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
OMG expenses, net | 37,855 | 35,800 | |||||||||||||||||||||
Other non-cash items | 10 | — | |||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | (285,780 | ) | (161,470 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Economic net income | 120,785 | 113,205 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total performance fees income—realized | (35,639 | ) | (23,338 | ) | |||||||||||||||||||
Total performance fees income—unrealized | (68,449 | ) | (40,092 | ) | |||||||||||||||||||
Total performance fee compensation—realized | 21,344 | 16,007 | |||||||||||||||||||||
Total performance fee compensation—unrealized | 55,048 | 24,718 | |||||||||||||||||||||
Total investment income | (7,611 | ) | (23,740 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | $ | 85,477 | $ | 66,760 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Management fees | $ | 162,316 | $ | 139,861 | |||||||||||||||||||
Administrative fees and other income | 967 | 1,473 | |||||||||||||||||||||
Compensation and benefits | (65,017 | ) | (62,697 | ) | |||||||||||||||||||
General, administrative and other expenses | (12,788 | ) | (11,877 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | $ | 85,477 | $ | 66,760 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Performance related earnings: | |||||||||||||||||||||||
Income before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
Acquisition-related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
OMG expenses, net | 37,855 | 35,800 | |||||||||||||||||||||
Other non-cash items | 10 | — | |||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Economic net income | 120,785 | 113,205 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total management fees | (162,316 | ) | (139,861 | ) | |||||||||||||||||||
Administrative fees and other income | (967 | ) | (1,473 | ) | |||||||||||||||||||
Compensation and benefits | 65,017 | 62,697 | |||||||||||||||||||||
General, administrative and other expenses | 12,788 | 11,877 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Performance related earnings | $ | 35,308 | $ | 46,445 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Total performance fees—realized | $ | 35,639 | $ | 23,338 | |||||||||||||||||||
Total performance fees—unrealized | 68,449 | 40,092 | |||||||||||||||||||||
Total performance fee compensation—realized | (21,344 | ) | (16,007 | ) | |||||||||||||||||||
Total performance fee compensation—unrealized | (55,048 | ) | (24,718 | ) | |||||||||||||||||||
Net investment income (loss) | 7,611 | 23,740 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Performance related earnings | $ | 35,308 | $ | 46,445 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Distributable earnings | |||||||||||||||||||||||
Income (loss) before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
OMG distributable loss(1) | 38,880 | 37,512 | |||||||||||||||||||||
Non-cash acquisition-related expenses | 1,251 | — | |||||||||||||||||||||
Taxes paid(2) | (479 | ) | — | ||||||||||||||||||||
Dividend equivalent | (912 | ) | — | ||||||||||||||||||||
Other non-cash items | (156 | ) | — | ||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
Unrealized performance fees | (68,449 | ) | (40,092 | ) | |||||||||||||||||||
Unrealized performance fee compensation | 55,048 | 24,718 | |||||||||||||||||||||
Unrealized investment and other income (loss) | 4,615 | (2,952 | ) | ||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Distributable earnings | $ | 106,175 | $ | 92,059 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | $ | 85,477 | $ | 66,760 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Performance fees—realized | 35,639 | 23,338 | |||||||||||||||||||||
Performance fee compensation—realized | (21,344 | ) | (16,007 | ) | |||||||||||||||||||
Investment and other income realized, net | 12,226 | 20,788 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Net performance related earnings—realized | 26,521 | 28,119 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Less: | |||||||||||||||||||||||
Dividend equivalent(3) | (684 | ) | — | ||||||||||||||||||||
One-time acquisition costs(3) | (724 | ) | — | ||||||||||||||||||||
Income tax expense(3) | (476 | ) | — | ||||||||||||||||||||
Non-cash items | (156 | ) | — | ||||||||||||||||||||
Placement fees and underwriting costs | (3,045 | ) | (1,052 | ) | |||||||||||||||||||
Non-cash depreciation and amortization(3) | (739 | ) | (1,768 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Distributable earnings | $ | 106,175 | $ | 92,059 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-1 | Represents OMG distributable earnings which includes depreciation expense. | ||||||||||||||||||||||
-2 | Represents current portion of income tax expense of subsidiary operating entities. | ||||||||||||||||||||||
-3 | Certain costs are reduced by the amounts attributable to OMG, which is excluded from segment results. | ||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Total assets from Consolidated Funds added in consolidation | $ | 20,722,470 | $ | 21,420,284 | |||||||||||||||||||
Total assets from Consolidated Funds eliminated in consolidation | (849,635 | ) | (791,639 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
OMG assets | 16,941 | 10,437 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | $ | 19,889,776 | $ | 20,639,082 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
CONSOLIDATING_SCHEDULES
CONSOLIDATING SCHEDULES | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
CONSOLIDATING SCHEDULES | ||||||||||||||
CONSOLIDATING SCHEDULES | ||||||||||||||
17. CONSOLIDATING SCHEDULES | ||||||||||||||
The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of March 31, 2015 and December 31, 2014 and results from operations for the three months ended March 31, 2015 and 2014. | ||||||||||||||
As of March 31, 2015 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 69,372 | $ | — | $ | — | $ | 69,372 | ||||||
Investments | 606,875 | — | (408,245 | ) | 198,630 | |||||||||
Derivative assets, at fair value | 8,217 | — | — | 8,217 | ||||||||||
Performance fees receivable | 590,308 | — | (418,515 | ) | 171,793 | |||||||||
Due from affiliates | 150,466 | — | (20,596 | ) | 129,870 | |||||||||
Other assets | 55,735 | — | (45 | ) | 55,690 | |||||||||
Intangible assets, net | 120,268 | — | — | 120,268 | ||||||||||
Goodwill | 144,080 | — | — | 144,080 | ||||||||||
Assets of Consolidated Funds | ||||||||||||||
Cash and cash equivalents | — | 1,318,017 | — | 1,318,017 | ||||||||||
Investments | — | 18,990,943 | — | 18,990,943 | ||||||||||
Loans held for investment, net | — | 85,214 | — | 85,214 | ||||||||||
Due from affiliates | — | 11,572 | (2,234 | ) | 9,338 | |||||||||
Dividends and interest receivable | — | 71,761 | — | 71,761 | ||||||||||
Receivable for securities sold | — | 234,938 | — | 234,938 | ||||||||||
Derivative assets, at fair value | — | 3,696 | — | 3,696 | ||||||||||
Other assets | — | 6,329 | — | 6,329 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 1,745,321 | $ | 20,722,470 | $ | (849,635 | ) | $ | 21,618,156 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Accounts payable and accrued expenses | $ | 127,053 | $ | — | $ | (668 | ) | $ | 126,385 | |||||
Accrued compensation | 55,307 | — | — | 55,307 | ||||||||||
Derivative liabilities, at fair value | 2,973 | — | — | 2,973 | ||||||||||
Due to affiliates | 8,456 | — | (1,030 | ) | 7,426 | |||||||||
Performance fee compensation payable | 421,074 | — | (887 | ) | 420,187 | |||||||||
Debt obligations | 298,614 | — | — | 298,614 | ||||||||||
Equity compensation put option liability | 20,000 | — | — | 20,000 | ||||||||||
Deferred tax liability, net | 21,026 | — | — | 21,026 | ||||||||||
Liabilities of Consolidated Funds | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | — | 54,337 | (273 | ) | 54,064 | |||||||||
Due to affiliates | — | 66,545 | (64,213 | ) | 2,332 | |||||||||
Payable for securities purchased | — | 475,380 | — | 475,380 | ||||||||||
Derivative liabilities, at fair value | — | 59,483 | — | 59,483 | ||||||||||
Securities sold short, at fair value | — | 3,763 | — | 3,763 | ||||||||||
Deferred tax liability, net | — | 23,585 | — | 23,585 | ||||||||||
CLO loan obligations | — | 12,222,880 | (68,203 | ) | 12,154,677 | |||||||||
Fund borrowings | — | 683,564 | — | 683,564 | ||||||||||
Mezzanine debt | — | 406,371 | — | 406,371 | ||||||||||
| | | | | | | | | | | | | | |
Total liabilities | 954,503 | 13,995,908 | (135,274 | ) | 14,815,137 | |||||||||
| | | | | | | | | | | | | | |
Commitments and contingencies | ||||||||||||||
Redeemable interest in Consolidated Funds | — | 915,017 | — | 915,017 | ||||||||||
Redeemable interest in Ares Operating Group entities | 24,077 | — | — | 24,077 | ||||||||||
Non-controlling interest in Consolidated Funds: | ||||||||||||||
Non-controlling interest in Consolidated Funds | — | 5,755,549 | (718,910 | ) | 5,036,639 | |||||||||
Equity appropriated for Consolidated Funds | — | 55,996 | — | 55,996 | ||||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Consolidated Funds | — | 5,811,545 | (718,910 | ) | 5,092,635 | |||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Ares Operating Group entities | 481,775 | — | — | 481,775 | ||||||||||
Controlling interest in Ares Management, L.P.: | ||||||||||||||
Partners' Capital (80,667,664 units issued and outstanding) | 291,641 | — | — | 291,641 | ||||||||||
Accumulated other comprehensive gain (loss) | (6,676 | ) | — | 4,550 | (2,126 | ) | ||||||||
| | | | | | | | | | | | | | |
Total controlling interest in Ares Management, L.P | 284,965 | — | 4,550 | 289,515 | ||||||||||
| | | | | | | | | | | | | | |
Total equity | 766,740 | 5,811,545 | (714,360 | ) | 5,863,925 | |||||||||
| | | | | | | | | | | | | | |
Total liabilities, redeemable interests, non-controlling interests and equity | $ | 1,745,321 | $ | 20,722,470 | $ | (849,635 | ) | $ | 21,618,156 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
As of December 31, 2014 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 148,858 | $ | — | $ | — | $ | 148,858 | ||||||
Restricted cash and cash equivalents | 32,734 | — | — | 32,734 | ||||||||||
Investments | 598,074 | — | (424,022 | ) | 174,052 | |||||||||
Derivative assets, at fair value | 7,623 | — | — | 7,623 | ||||||||||
Performance fees receivable | 548,098 | — | (361,039 | ) | 187,059 | |||||||||
Due from affiliates | 166,225 | — | (19,691 | ) | 146,534 | |||||||||
Other assets | 58,809 | — | (93 | ) | 58,716 | |||||||||
Intangible assets, net | 40,948 | — | — | 40,948 | ||||||||||
Goodwill | 85,582 | — | — | 85,582 | ||||||||||
Assets of Consolidated Funds | ||||||||||||||
Cash and cash equivalents | — | 1,314,397 | — | 1,314,397 | ||||||||||
Investments, at fair value | — | 19,123,950 | — | 19,123,950 | ||||||||||
Loans held for investment, net | — | 77,514 | — | 77,514 | ||||||||||
Due from affiliates | — | 13,262 | (1,920 | ) | 11,342 | |||||||||
Dividends and interest receivable | — | 81,331 | — | 81,331 | ||||||||||
Receivable for securities sold | — | 132,753 | — | 132,753 | ||||||||||
Derivative assets, at fair value | — | 3,126 | — | 3,126 | ||||||||||
Other assets | — | 6,156 | — | 6,156 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 1,686,951 | $ | 20,752,489 | $ | (806,765 | ) | $ | 21,632,675 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Accounts payable and accrued expenses | $ | 101,912 | $ | — | $ | (602 | ) | $ | 101,310 | |||||
Accrued compensation | 129,433 | — | — | 129,433 | ||||||||||
Derivative liabilities, at fair value | 2,850 | — | — | 2,850 | ||||||||||
Due to affiliates | 19,881 | — | (851 | ) | 19,030 | |||||||||
Performance fee compensation payable | 381,164 | — | (896 | ) | 380,268 | |||||||||
Debt obligations | 243,491 | — | — | 243,491 | ||||||||||
Equity compensation put option liability | 20,000 | — | — | 20,000 | ||||||||||
Deferred tax liability, net | 19,861 | — | — | 19,861 | ||||||||||
Liabilities of Consolidated Funds | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | — | 68,674 | (85 | ) | 68,589 | |||||||||
Due to affiliates | — | 63,417 | (60,976 | ) | 2,441 | |||||||||
Payable for securities purchased | — | 618,902 | — | 618,902 | ||||||||||
Derivative liabilities, at fair value | — | 42,332 | — | 42,332 | ||||||||||
Securities sold short, at fair value | — | 3,763 | — | 3,763 | ||||||||||
Deferred tax liability, net | — | 22,214 | — | 22,214 | ||||||||||
CLO loan obligations | — | 12,120,842 | (71,672 | ) | 12,049,170 | |||||||||
Fund borrowings | — | 771,283 | — | 771,283 | ||||||||||
Mezzanine debt | — | 378,365 | — | 378,365 | ||||||||||
| | | | | | | | | | | | | | |
Total liabilities | 918,592 | 14,089,792 | (135,082 | ) | 14,873,302 | |||||||||
| | | | | | | | | | | | | | |
Commitments and contingencies | ||||||||||||||
Redeemable interest in Consolidated Funds | — | 1,037,450 | — | 1,037,450 | ||||||||||
Redeemable interest in Ares Operating Group entities | 23,988 | — | — | 23,988 | ||||||||||
Non-controlling interest in Consolidated Funds: | ||||||||||||||
Non-controlling interest in Consolidated Funds | — | 5,663,172 | (674,443 | ) | 4,988,729 | |||||||||
Equity appropriated for Consolidated Funds | — | (37,926 | ) | — | (37,926 | ) | ||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Consolidated Funds | — | 5,625,246 | (674,443 | ) | 4,950,803 | |||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Ares Operating Group entities | 463,493 | — | — | 463,493 | ||||||||||
Controlling interest in Ares Management, L.P.: | ||||||||||||||
Partners' Capital (80,667,664 units issued and outstanding) | 285,025 | — | — | 285,025 | ||||||||||
Accumulated other comprehensive gain (loss) | (4,146 | ) | — | 2,760 | (1,386 | ) | ||||||||
| | | | | | | | | | | | | | |
Total controlling interest in Ares Management, L.P | 280,879 | — | 2,760 | 283,639 | ||||||||||
| | | | | | | | | | | | | | |
Total equity | 744,372 | 5,625,246 | (671,683 | ) | 5,697,935 | |||||||||
| | | | | | | | | | | | | | |
Total liabilities, redeemable interests, non-controlling interests and equity | $ | 1,686,951 | $ | 20,752,489 | $ | (806,765 | ) | $ | 21,632,675 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
For the Three Months Ended March 31, 2015 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Revenues | ||||||||||||||
Management fees (includes ARCC Part I Fees of $29,042) | $ | 162,316 | $ | — | $ | (26,927 | ) | $ | 135,389 | |||||
Performance fees | 103,098 | — | (63,038 | ) | 40,060 | |||||||||
Other fees | 7,350 | — | (1,071 | ) | 6,279 | |||||||||
| | | | | | | | | | | | | | |
Total revenues | 272,764 | — | (91,036 | ) | 181,728 | |||||||||
| | | | | | | | | | | | | | |
Expenses | ||||||||||||||
Compensation and benefits | 101,851 | — | — | 101,851 | ||||||||||
Performance fee compensation | 76,392 | — | — | 76,392 | ||||||||||
General, administrative and other expense | 45,547 | — | — | 45,547 | ||||||||||
Consolidated Fund expenses | — | 48,571 | (33,499 | ) | 15,072 | |||||||||
| | | | | | | | | | | | | | |
Total expenses | 223,790 | 48,571 | (33,499 | ) | 238,862 | |||||||||
| | | | | | | | | | | | | | |
Other income (expense) | ||||||||||||||
Interest and other investment income | 6,033 | — | (5,691 | ) | 342 | |||||||||
Interest expense | (3,684 | ) | — | — | (3,684 | ) | ||||||||
Other income (expense), net | (3,054 | ) | — | 2,724 | (330 | ) | ||||||||
Net realized gain (loss) on investments | 12,922 | — | (6,158 | ) | 6,764 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | (3,626 | ) | — | 7,102 | 3,476 | |||||||||
Interest and other investment income of Consolidated Funds | — | 338,376 | (190 | ) | 338,186 | |||||||||
Interest expense of Consolidated Funds | — | (122,634 | ) | 3,923 | (118,711 | ) | ||||||||
Net realized gain (loss) on investments of Consolidated Funds | — | (61,436 | ) | — | (61,436 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | — | 306,753 | (7,661 | ) | 299,092 | |||||||||
| | | | | | | | | | | | | | |
Total other income (expense) | 8,591 | 461,059 | (5,951 | ) | 463,699 | |||||||||
| | | | | | | | | | | | | | |
Income before taxes | 57,565 | 412,488 | (63,488 | ) | 406,565 | |||||||||
Income tax expense (benefit) | 4,059 | 1,833 | — | 5,892 | ||||||||||
| | | | | | | | | | | | | | |
Net income | 53,506 | 410,655 | (63,488 | ) | 400,673 | |||||||||
| | | | | | | | | | | | | | |
Less: Net income attributable to redeemable interests in Consolidated Funds | — | 18,219 | (2,360 | ) | 15,859 | |||||||||
Less: Net income attributable to non-controlling interests in Consolidated Funds | — | 392,437 | (61,128 | ) | 331,309 | |||||||||
Less: Net income attributable to redeemable interests in Ares Operating Group entities | 243 | — | — | 243 | ||||||||||
Less: Net income attributable to non-controlling interests in Ares Operating Group entities | 34,806 | — | — | 34,806 | ||||||||||
| | | | | | | | | | | | | | |
Net income attributable to Ares Management, L.P. | $ | 18,456 | $ | — | $ | — | $ | 18,456 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
For the Three Months Ended March 31, 2014 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Revenues | ||||||||||||||
Management fees (includes ARCC Part I Fees of $28,318) | $ | 139,861 | $ | — | $ | (29,312 | ) | $ | 110,549 | |||||
Performance fees | 60,480 | — | (44,266 | ) | 16,214 | |||||||||
Other fees | 6,865 | — | — | 6,865 | ||||||||||
| | | | | | | | | | | | | | |
Total revenues | 207,206 | — | (73,578 | ) | 133,628 | |||||||||
| | | | | | | | | | | | | | |
Expenses | ||||||||||||||
Compensation and benefits | 95,693 | — | — | 95,693 | ||||||||||
Performance fee compensation | 40,725 | — | — | 40,725 | ||||||||||
General, administrative and other expense | 38,775 | — | — | 38,775 | ||||||||||
Consolidated Fund expenses | — | 40,637 | (31,700 | ) | 8,937 | |||||||||
| | | | | | | | | | | | | | |
Total expenses | 175,193 | 40,637 | (31,700 | ) | 184,130 | |||||||||
| | | | | | | | | | | | | | |
Other income (expense) | ||||||||||||||
Interest and other investment income | 3,483 | — | (3,359 | ) | 124 | |||||||||
Interest expense | (1,639 | ) | — | — | (1,639 | ) | ||||||||
Net realized gain (loss) on investments | 19,281 | — | (19,347 | ) | (66 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on investments | 5,565 | — | (1,419 | ) | 4,146 | |||||||||
Interest and other investment income of Consolidated Funds | — | 345,476 | (131 | ) | 345,345 | |||||||||
Interest expense of Consolidated Funds | — | (145,737 | ) | 695 | (145,042 | ) | ||||||||
Net realized gain (loss) on investments of Consolidated Funds | — | 54,965 | — | 54,965 | ||||||||||
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | — | 66,413 | 931 | 67,344 | ||||||||||
| | | | | | | | | | | | | | |
Total other income (expense) | 26,690 | 321,117 | (22,630 | ) | 325,177 | |||||||||
| | | | | | | | | | | | | | |
Income before taxes | 58,703 | 280,480 | (64,508 | ) | 274,675 | |||||||||
Income tax expense | 2,514 | (9,209 | ) | — | (6,695 | ) | ||||||||
| | | | | | | | | | | | | | |
Net income | 56,189 | 289,689 | (64,508 | ) | 281,370 | |||||||||
| | | | | | | | | | | | | | |
Less: Net income attributable to redeemable interests in Consolidated Funds | — | 42,018 | (4,970 | ) | 37,048 | |||||||||
Less: Net income attributable to non-controlling interests in Consolidated Funds | — | 247,671 | (59,538 | ) | 188,133 | |||||||||
Less: Net income attributable to redeemable interests in Ares Operating Group entities | 406 | — | — | 406 | ||||||||||
Less: Net income attributable to non-controlling interests in Ares Operating Group entities | 12,936 | — | — | 12,936 | ||||||||||
Less: Net income attributable to controlling interest in Predecessor | 42,847 | — | — | 42,847 | ||||||||||
| | | | | | | | | | | | | | |
Net income attributable to Ares Management, L.P. | $ | — | $ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | |
18. SUBSEQUENT EVENTS | |
In May 2015, the Company declared a quarterly distribution of $0.25 per common unit to common unitholders of record at the close of business on May 22, 2015, payable on June 2, 2015. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
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 or a voting interest model. 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, including Ares affiliates and affiliated funds and co-investment entities for which the Company is the general partner and is presumed to have control and (b) entities that the Company concludes are variable interest entities ("VIEs"), including limited partnerships in which the Company has a nominal economic interest and CLOs for which the Company is deemed to be the primary beneficiary. | ||||||||
With respect to the Consolidated Funds, which typically represent limited partnerships and single member limited liability companies, the Company earns a fixed management fee based on invested capital or a derivation thereof, and a performance fee based upon the investment returns in excess of a stated benchmark or hurdle rate. The Company, as the general partner of various funds, generally has operational discretion and control, and limited partners have no substantive rights to impact ongoing governance and operating activities of the fund. Such a fund is required to be consolidated unless the Company has a less than significant level of equity at risk. The fund is typically considered a VIE, as described below, to the extent that the Company's equity at risk is less than significant in a given fund and it has no obligation to fund any future losses. In these cases, the fund investors are generally deemed to be the primary beneficiaries, and the Company does not consolidate the fund. In cases where the Company's equity at risk is deemed to be significant, the fund is generally not considered to be a VIE, and the Company will generally consolidate the fund unless the limited partners are granted substantive rights to remove the general partner or liquidate the fund. These rights are known as kick-out rights. | ||||||||
Variable Interest Model | Variable Interest Model | |||||||
The Company consolidates entities that are determined to be VIEs where the Company is deemed to be the primary beneficiary. An entity is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity's business and (b) 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 consolidation rules require an analysis to determine whether (i) an entity in which the Company holds a variable interest is a VIE and (ii) the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees), would give the Company a controlling financial interest. The consolidation rules may be deferred for VIEs if the VIE and the reporting entity's interest in VIE meet deferral conditions set forth in FASB Accounting Standards Codification ("ASC") 810-10-65-2. Certain limited partnerships meet the deferral conditions if: (a) the limited partnerships generally have all the attributes of an investment company, (b) the Company does not have the obligation to fund losses of the limited partnership and (c) the limited partnership is not a securitization, asset- backed financing entity or qualifying special purpose vehicle. Where a VIE qualifies for the deferral of the consolidation rules, the analysis is based on consolidation rules prior to January 1, 2010. These rules require an analysis to determine (i) whether an entity in which the Company holds a variable interest is a VIE and (ii) whether the Company's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management and performance related fees) would be expected to absorb a majority of the variability of the entity. Under either guideline, the Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders the conclusion at each reporting date. 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 assessment 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, (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 (6) estimating cash flows in evaluating which member within the equity group absorbs a majority of the expected losses and hence would be deemed the primary beneficiary. | ||||||||
As of March 31, 2015 and December 31, 2014, assets of consolidated VIEs reflected in the Condensed Consolidated Statements of Financial Condition were $14.3 billion and $14.2 billion, respectively, and are presented within "Assets of Consolidated Funds." As of March 31, 2015 and December 31, 2014, liabilities of consolidated VIEs reflected in the Condensed Consolidated Statements of Financial Condition were $13.3 billion and $13.2 billion, respectively, and are presented within "Liabilities of Consolidated Funds." The holders of the consolidated VIEs' liabilities do not have recourse to the Company other than to the assets of the consolidated VIEs. The assets and liabilities of the consolidated VIEs are comprised primarily of investment securities and loan obligations, respectively. All significant intercompany transactions and balances have been eliminated in consolidation. | ||||||||
As of March 31, 2015 and December 31, 2014, the Company held $178.2 million and $193.0 million of investments in these consolidated VIEs, respectively, which represents its maximum exposure to loss. The maximum exposure to loss represents the Company's total investment in these entities. | ||||||||
Certain funds that have historically been consolidated in the financial statements are no longer consolidated because, as of the reporting period: (a) they were liquidated or dissolved, including one and three funds for the three months ended March 31, 2015 and 2014, respectively, (b) the Company no longer holds a majority voting interest, including none and four funds for the three months ended March 31, 2015 and 2014, respectively, or (c) the Company is no longer deemed to be the primary beneficiary of the VIEs as it has no economic interest, no obligation to absorb losses and no significant rights to receive benefits from the VIEs, including eight and eleven funds for the three months ended March 31, 2015 and 2014, respectively. For deconsolidated funds, the Company continues as the general partner and/or investment manager until such funds are fully liquidated. | ||||||||
Equity Appropriated for Consolidated Funds | Equity Appropriated for Consolidated Funds | |||||||
As of March 31, 2015 and December 31, 2014, the Company consolidated 26 and 31 CLOs, respectively. CLOs are investment vehicles created for the sole purpose of issuing collateralized loan obligations. Upon consolidation, the Company elected the fair value option for eligible liabilities to mitigate accounting mismatches between the carrying value of the assets and liabilities. The Company accounts for the excess in fair value of assets over liabilities upon initial consolidation of funds as an increase in equity appropriated for Consolidated Funds. Net income (loss) of the CLOs is allocated to equity appropriated for Consolidated Funds. | ||||||||
The loan obligations issued by the CLOs are backed by diversified collateral asset portfolios and by structured debt or equity. In exchange for managing the collateral for the CLOs, the Company earns management fees, including, in some cases, senior and subordinated management fees and contingent performance fees. In cases where the Company earns fees from a fund that it consolidates with the CLOs, 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. | ||||||||
Investments in Non-Consolidated Variable Interest Entities | Investments in Non-Consolidated Variable Interest Entities | |||||||
The Company holds interests in certain VIEs that are not consolidated because the Company has determined it is not the primary beneficiary. The Company's interest in such entities generally is in the form of direct equity interests and fixed fee arrangements. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. There is no difference between the carrying value and fair value as investments in the non-consolidated VIEs are carried at fair value. The Company's interests and the Consolidated Funds' interests in these non-consolidated VIEs and their respective maximum exposure to loss relating to non-consolidated VIEs are as follows: | ||||||||
As of March 31, | As of December 31, | |||||||
2015 | 2014 | |||||||
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs | $ | 16,741 | $ | 14,851 | ||||
Maximum exposure to loss attributable to Consolidated Funds' investments in non-consolidated VIEs | $ | 2,236 | $ | 2,519 | ||||
Basis of Accounting | Basis of Accounting | |||||||
The accompanying condensed consolidated financial statements are prepared in accordance with GAAP. Certain comparative amounts for prior periods have been reclassified to conform to the current year's presentation. Management has determined that the Company's Consolidated Funds are investment companies under GAAP for the purposes of financial reporting 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 in the Condensed 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 condensed consolidated financial statements, the Company has retained the specialized accounting guidance 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 in the Company's Condensed Consolidated Statements of Financial Condition. The excess of the CLO assets over the CLO liabilities upon consolidation is reflected in the Company's Condensed Consolidated Statements of Financial Condition as equity appropriated for Consolidated Funds. Net income attributable to the investors in the CLOs is included in net income (loss) attributable to non-controlling interests in Consolidated Funds in the Condensed Consolidated Statements of Operations and equity appropriated for Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. | ||||||||
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management's estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. These assumptions and estimates require management to exercise judgment in the process of applying the Company's accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on performance fee revenue and performance fee compensation involve a high degree of judgment and complexity, and these assumptions and estimates may be significant to the condensed consolidated financial statements. Actual results could differ from these estimates and such differences could be material. | ||||||||
Non-Controlling Interests in Ares Operating Group Entities | Non-Controlling Interests in Ares Operating Group Entities | |||||||
Following the Reorganization, non-controlling interests in Ares Operating Group entities (collectively, the "Ares Operating Group Units" or "AOG Units") represent a component of equity and net income attributable to the owners of AOG Units that are not held directly or indirectly by Ares Management, L.P. These interests are adjusted for contributions to and distributions from Ares Operating Group entities during the reporting period and are allocated income from the Ares Operating Group entities based on their historical ownership percentage for the proportional number of days in the reporting period. | ||||||||
For the periods presented prior to the Reorganization, non-controlling interests in Ares Operating Group entities represent equity interests and net income attributable to various minority non-control oriented strategic investment partners, which were reflected as non-controlling interests in the Predecessor's historical results. | ||||||||
Redeemable Interest in Ares Operating Group Entities | Redeemable Interest in Ares Operating Group Entities | |||||||
Redeemable interests in Ares Operating Group entities represent a portion of the collective ownership interest in Ares Operating Group Units granted to professionals of the Company in connection with the Company's acquisition of Indicus Advisors, LLP ("Indicus") during 2011. This ownership interest may be redeemed for a cash payment of $20.0 million provided that a portion of such interests are subject to certain conditions relating to continued employment. Income is allocated in proportion to the redeemable interests' ownership percentage in Ares Operating Group Units. | ||||||||
Income Allocation | Income Allocation | |||||||
Income (loss) before taxes is allocated based on each partner's average daily ownership of the Ares Operating Group entities for each year presented. The net income attributable to Ares Management, L.P. for the three months ended March 31, 2015 represents its average daily ownership of 37.85%. | ||||||||
Equity-Method Investments | Equity-Method Investments | |||||||
The Company accounts for its investments held by its operating subsidiary, and in which it has or is otherwise presumed to have significant influence, including investments in unconsolidated funds and strategic investments, using the equity-method of accounting or at fair value pursuant to the fair value option permitted by FASB ASC 825, Financial Instruments. | ||||||||
Unless the Company elects the fair value option, 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. 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. The Company's share of the investee's income and expenses for the Company's equity-method investments is included within net realized gain (loss) on investments on the Condensed Consolidated Statements of Operations. | ||||||||
The fair value option permits the irrevocable fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The Company elected the fair value option for certain of its equity-method investments. Unrealized appreciation (depreciation) and realized gains (losses) from the Company's equity-method investments at fair value are included within net change in unrealized appreciation (depreciation) on investments and net realized gain (loss) on investments, respectively, on the Condensed Consolidated Statements of Operations. | ||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||||||
In February 2015, the FASB amended the consolidation standards for reporting entities that are required to evaluate whether they should consolidate certain legal entities. Under the new guidance, all legal entities are subject to reevaluation under the revised consolidation model. Specifically, the guidance (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities; (ii) eliminates the presumption that a general partner should consolidate a limited partnership; (iii) affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (iv) provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940, as amended for registered money market funds. The amendments are effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. | ||||||||
In April 2015, the FASB issued guidance simplifying the presentation of debt issuance costs. The amendments require that debt issuance costs related to recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the new guidance. The amendments are effective for annual reporting periods, including interim periods within those reporting periods, beginning after December 15, 2015, and early adoption is permitted. The guidance is to be applied on a retrospective basis and accounted for as a change in accounting principle. The Company has elected to adopt this guidance in this Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2015. Accordingly, unamortized debt issuance costs as of March 31, 2015 of $7.2 million for the Company and $5.9 million for the Consolidated Funds are reported as a reduction from the carrying amount of the respective debt obligations in the Condensed Consolidated Statements of Financial Condition. Unamortized debt issuance costs of $2.3 million as of December 31, 2014, which were previously reported in other assets in the Condensed Consolidated Statements of Financial Condition, have been reclassified as a deduction from the carrying amount of the respective debt. Unamortized debt issuance costs of $5.3 million related to the Company's Credit Facility (as defined in Note 8), continue to be included in other assets in the Condensed Consolidated Statements of Financial Condition as of December 31, 2014, as there was no balance outstanding under the Credit Facility as of December 31, 2014. Unamortized debt issuance costs of $6.3 million as of December 31, 2014, which were reported in other assets of the Consolidated Funds in the Condensed Consolidated Statements of Financial Condition, have been reclassified as a deduction from the carrying amount of the respective debt. The changes represent the change in accounting principle that has been applied to all periods presented for consistency. | ||||||||
In May 2015, the FASB issued guidance removing the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Removing these investments from the fair value hierarchy will eliminate diversity in current practice resulting from the way in which investments measured at net asset value per share with future redemption dates are classified and ensure that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share, but for which the practical expedient is not applied, will continue to be included in the fair value hierarchy. The amendments are effective for public entities for annual reporting periods beginning after December 15, 2015 and interim periods within those reporting periods and should be applied retrospectively to all periods presented. Early adoption of the amendments is permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. | ||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Schedule of interests in non-consolidated VIEs and respective maximum exposure to loss relating to non-consolidated VIEs | ||||||||
As of March 31, | As of December 31, | |||||||
2015 | 2014 | |||||||
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs | $ | 16,741 | $ | 14,851 | ||||
Maximum exposure to loss attributable to Consolidated Funds' investments in non-consolidated VIEs | $ | 2,236 | $ | 2,519 | ||||
BUSINESS_COMBINATIONS_GOODWILL1
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS | ||||||||
Summary of consideration transferred | ||||||||
Cash | $ | 64,532 | ||||||
Equity (1,578,947 Ares Operating Group units) | 25,468 | |||||||
Contingent consideration | 59,171 | |||||||
| | | | | ||||
Total | $ | 149,171 | ||||||
| | | | | ||||
| | | | | ||||
Summary of the estimated fair value of the assets acquired and liabilities assumed | ||||||||
Cash | $ | 95 | ||||||
Other tangible assets | 610 | |||||||
Intangible assets: | ||||||||
Management contracts | 48,521 | |||||||
Client relationships | 38,600 | |||||||
Trade name | 3,200 | |||||||
| | | | | ||||
Total intangible assets | 90,321 | |||||||
| | | | | ||||
Total identifiable assets acquired | 91,026 | |||||||
| | | | | ||||
Accounts payable, accrued expenses and other liabilities | 455 | |||||||
| | | | | ||||
Total liabilities assumed | 455 | |||||||
Net identifiable assets acquired | $ | 90,571 | ||||||
| | | | | ||||
| | | | | ||||
Goodwill: | ||||||||
Assembled workforce | $ | 8,300 | ||||||
Others | 50,300 | |||||||
| | | | | ||||
Total goodwill | 58,600 | |||||||
| | | | | ||||
Net assets acquired | $ | 149,171 | ||||||
| | | | | ||||
| | | | | ||||
Schedule of carrying value for the Company's intangible assets | ||||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Finite-lived intangible assets | $ | 203,899 | $ | 114,102 | ||||
Less: accumulated amortization | (83,631 | ) | (73,154 | ) | ||||
| | | | | | | | |
Finite-lived intangible assets, net | 120,268 | 40,948 | ||||||
Goodwill | 144,080 | 85,582 | ||||||
| | | | | | | | |
Total intangible assets and goodwill, net | $ | 264,348 | $ | 126,530 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of carrying value, net of accumulated amortization, for the Company's intangible assets | ||||||||
As of | As of | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Previously acquired management contracts(1) | $ | 113,578 | $ | 114,102 | ||||
EIF management contracts | 48,521 | — | ||||||
EIF client relationships | 38,600 | — | ||||||
EIF trade name | 3,200 | — | ||||||
| | | | | | | | |
Total intangible assets acquired | 203,899 | 114,102 | ||||||
Less: accumulated amortization | (83,631 | ) | (73,154 | ) | ||||
| | | | | | | | |
Intangible assets, net | $ | 120,268 | $ | 40,948 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | Intangibles relating to London based asset manager are recorded in Pounds Sterling and are translated at spot rate at each reporting date. | |||||||
INVESTMENTS_Tables
INVESTMENTS (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Parent Company | ||||||||||||||
Investments | ||||||||||||||
Schedule of equity method investments | ||||||||||||||
As of March 31, | As of December 31, | |||||||||||||
2015 | 2014 | |||||||||||||
Equity-method investment | $ | 3,884 | $ | 3,728 | ||||||||||
Equity-method investment at fair value | 5,000 | — | ||||||||||||
| | | | | | | | |||||||
Total equity-method investment | $ | 8,884 | $ | 3,728 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Summary of investments held | ||||||||||||||
Fair value at | Fair value as a | |||||||||||||
percentage of total | ||||||||||||||
investments at | ||||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Private Investment Partnership Interests: | ||||||||||||||
AREA European Property Enhancement Program L.P. | $ | 1,989 | $ | 1,760 | 1.0 | % | 1.0 | % | ||||||
AREA Sponsor Holdings LLC | 42,027 | 40,296 | 22.1 | % | 23.6 | % | ||||||||
Ares Capital Europe II (D), L.P. | 19,294 | 15,592 | 10.2 | % | 9.2 | % | ||||||||
Ares Capital Europe II (E), L.P.(1) | 35 | 31 | 0.0 | % | 0.0 | % | ||||||||
Ares Centre Street Partnership, L.P. | 2,471 | 256 | 1.3 | % | 0.2 | % | ||||||||
Ares Corporate Opportunities Fund, L.P.(2) | 576 | 777 | 0.3 | % | 0.5 | % | ||||||||
Ares Corporate Opportunities Fund IV, L.P. | 27,233 | 21,836 | 14.4 | % | 12.8 | % | ||||||||
Ares Credit Strategies Fund II, L.P. | 636 | 627 | 0.3 | % | 0.4 | % | ||||||||
Ares Credit Strategies Fund III, L.P. | 19 | 19 | 0.0 | % | 0.0 | % | ||||||||
Ares European Credit Strategies Fund (C) L.P(1). | 547 | 497 | 0.3 | % | 0.3 | % | ||||||||
Ares European Real Estate Fund IV L.P. | 1,923 | 2,455 | 1.0 | % | 1.4 | % | ||||||||
Ares Multi-Strategy Credit Fund V (H), L.P. | 1,088 | 1,068 | 0.6 | % | 0.6 | % | ||||||||
Ares Special Situations Fund I-B, L.P. | 1 | 2 | 0.0 | % | 0.0 | % | ||||||||
Ares Special Situations Fund III, L.P. | 27,452 | 26,867 | 14.5 | % | 15.8 | % | ||||||||
Ares Special Situations Fund IV, L.P. | 6,622 | — | 3.5 | % | — | |||||||||
Ares SSF Riopelle, L.P.(3) | 3,915 | 4,211 | 2.1 | % | 2.5 | % | ||||||||
Ares Strategic Investment Partners, L.P. | 76 | 75 | 0.0 | % | 0.0 | % | ||||||||
Ares Strategic Investment Partners III, L.P. | — | 2,672 | — | 1.6 | % | |||||||||
Ares Strategic Real Estate Program—HHC, LLC | 4,344 | 3,094 | 2.3 | % | 1.8 | % | ||||||||
Ares US Real Estate Fund VIII, L.P.(3) | 2,877 | 1,574 | 1.5 | % | 0.9 | % | ||||||||
Resolution Life L.P. | 45,348 | 45,348 | 23.9 | % | 26.6 | % | ||||||||
| | | | | | | | | | | | | | |
Total private investment partnership interests (cost: $147,712 and $128,756 at March 31, 2015 and December 31, 2014, respectively) | 188,473 | 169,057 | 99.3 | % | 99.2 | % | ||||||||
| | | | | | | | | | | | | | |
Common Stock: | ||||||||||||||
Ares Multi-Strategy Credit Fund, Inc. | 95 | 89 | 0.1 | % | 0.1 | % | ||||||||
| | | | | | | | | | | | | | |
Total common stock (cost: $110 and $108 at March 31, 2015 and December 31, 2014, respectively) | 95 | 89 | 0.1 | % | 0.1 | % | ||||||||
| | | | | | | | | | | | | | |
Corporate Bonds: | ||||||||||||||
Ares Commercial Real Estate Corporation Convertible Senior Notes | 1,178 | 1,178 | 0.6 | % | 0.7 | % | ||||||||
| | | | | | | | | | | | | | |
Total corporate bond (cost: $1,150, at March 31, 2015 and December 31, 2014, respectively) | 1,178 | 1,178 | 0.6 | % | 0.7 | % | ||||||||
| | | | | | | | | | | | | | |
Total fair value investments (cost: $148,972 and $130,014 at March 31, 2015 and December 31, 2014, respectively) | $ | 189,746 | $ | 170,324 | 100.0 | % | 100.0 | % | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | Denominated in foreign currency; fair value is translated into U.S. Dollars | |||||||||||||
-2 | Security represents the sole investment held by ACOF Co-Investors LLC | |||||||||||||
-3 | Represents underlying security that is held through multiple vehicles | |||||||||||||
Consolidated Funds | ||||||||||||||
Investments | ||||||||||||||
Summary of investments held | ||||||||||||||
Fair value at | Fair value as a | |||||||||||||
percentage of total | ||||||||||||||
investments at | ||||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
United States: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | $ | 3,232,955 | $ | 3,136,899 | 17.0 | % | 16.3 | % | ||||||
Consumer staples | 251,814 | 221,708 | 1.3 | % | 1.2 | % | ||||||||
Energy | 304,943 | 416,861 | 1.6 | % | 2.2 | % | ||||||||
Financials | 473,222 | 401,673 | 2.5 | % | 2.1 | % | ||||||||
Healthcare, education and childcare | 1,262,427 | 1,191,619 | 6.6 | % | 6.2 | % | ||||||||
Industrials | 1,639,565 | 1,717,523 | 8.6 | % | 9.0 | % | ||||||||
Information technology | 787,710 | 745,920 | 4.1 | % | 3.9 | % | ||||||||
Materials | 456,200 | 393,569 | 2.4 | % | 2.1 | % | ||||||||
Partnership and LLC interests | 14,839 | 16,256 | 0.1 | % | 0.1 | % | ||||||||
Telecommunication services | 1,347,337 | 1,287,688 | 7.1 | % | 6.7 | % | ||||||||
Utilities | 201,436 | 223,553 | 1.1 | % | 1.2 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $10,029,620 and $9,928,006, at March 31, 2015 and December 31, 2014, respectively) | 9,972,448 | 9,753,269 | 52.4 | % | 51.0 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Consumer discretionary | 2,958,697 | 2,852,369 | 15.7 | % | 14.9 | % | ||||||||
Consumer staples | 499,372 | 443,711 | 2.6 | % | 2.3 | % | ||||||||
Energy | 82,451 | 150,755 | 0.4 | % | 0.8 | % | ||||||||
Financials | 10,223 | 8,272 | 0.1 | % | 0.0 | % | ||||||||
Healthcare, education and childcare | 533,239 | 464,159 | 2.8 | % | 2.4 | % | ||||||||
Industrials | 124,747 | 128,247 | 0.7 | % | 0.7 | % | ||||||||
Partnership and LLC interests | 114,040 | 89,105 | 0.6 | % | 0.5 | % | ||||||||
Telecommunication services | 9,643 | 16,576 | 0.1 | % | 0.1 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $2,957,558 and $2,964,900 at March 31, 2015 and December 31, 2014, respectively) | 4,332,412 | 4,153,194 | 23.0 | % | 21.7 | % | ||||||||
| | | | | | | | | | | | | | |
Fair value at | Fair value as a | |||||||||||||
percentage of total | ||||||||||||||
investments at | ||||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Europe: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | 887,516 | 1,080,270 | 4.7 | % | 5.6 | % | ||||||||
Consumer staples | 108,667 | 126,766 | 0.6 | % | 0.7 | % | ||||||||
Energy | 5,138 | 16,509 | 0 | % | 0.1 | % | ||||||||
Financials | 362,526 | 345,811 | 1.9 | % | 1.8 | % | ||||||||
Healthcare, education and childcare | 252,273 | 303,116 | 1.3 | % | 1.6 | % | ||||||||
Industrials | 441,604 | 526,214 | 2.3 | % | 2.8 | % | ||||||||
Information technology | 145,224 | 130,504 | 0.8 | % | 0.7 | % | ||||||||
Materials | 371,322 | 326,659 | 2 | % | 1.7 | % | ||||||||
Telecommunication services | 595,715 | 833,015 | 3.1 | % | 4.4 | % | ||||||||
Utilities | 1,123 | 2,516 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $3,232,752 and $3,813,343 at March 31, 2015 and December 31, 2014, respectively) | 3,171,108 | 3,691,380 | 16.7 | % | 19.4 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Consumer discretionary | 3,678 | 2,940 | 0 | % | 0 | % | ||||||||
Consumer staples | 895 | 862 | 0 | % | 0 | % | ||||||||
Healthcare, education and childcare | 26,455 | 27,774 | 0.1 | % | 0.1 | % | ||||||||
Industrials | — | 76 | — | 0 | % | |||||||||
Partnership and LLC interests | 19,012 | 17,107 | 0.1 | % | 0.1 | % | ||||||||
Telecommunication services | 5,092 | 4,686 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $102,244 and $98,913 at March 31, 2015 and December 31, 2014, respectively) | 55,132 | 53,445 | 0.2 | % | 0.2 | % | ||||||||
| | | | | | | | | | | | | | |
Asia and other: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | 68,495 | 73,250 | 0.4 | % | 0.4 | % | ||||||||
Financials | 480,936 | 493,618 | 2.5 | % | 2.6 | % | ||||||||
Healthcare, education and childcare | 38,835 | 41,536 | 0.2 | % | 0.2 | % | ||||||||
Telecommunication services | 37,084 | 30,777 | 0.2 | % | 0.2 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $570,443 and $579,436, at March 31, 2015 and December 31, 2014, respectively) | 625,350 | 639,181 | 3.3 | % | 3.4 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Consumer discretionary | 66,861 | 89,897 | 0.4 | % | 0.5 | % | ||||||||
Consumer staples | 62,778 | 62,467 | 0.3 | % | 0.3 | % | ||||||||
Healthcare, education and childcare | 32,598 | 33,610 | 0.2 | % | 0.2 | % | ||||||||
Materials | 52,947 | 52,947 | 0.3 | % | 0.3 | % | ||||||||
Partnership and LLC interests | 16,287 | 13,478 | 0.1 | % | 0.1 | % | ||||||||
Utilities | 8,377 | 8,994 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $179,047 and $184,022 at March 31, 2015 and December 31, 2014, respectively) | 239,848 | 261,393 | 1.3 | % | 1.4 | % | ||||||||
| | | | | | | | | | | | | | |
Canada: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Consumer discretionary | 62,163 | 71,379 | 0.3 | % | 0.4 | % | ||||||||
Consumer staples | 12,747 | — | 0.1 | % | — | |||||||||
Energy | 60,059 | 60,605 | 0.3 | % | 0.3 | % | ||||||||
Healthcare, education and childcare | 95,322 | 84,470 | 0.5 | % | 0.4 | % | ||||||||
Industrials | 36,999 | 30,009 | 0.2 | % | 0.2 | % | ||||||||
Materials | — | 5,625 | — | 0 | % | |||||||||
Partnership and LLC interests | 3,807 | 1,327 | 0 | % | 0 | % | ||||||||
Telecommunication services | 107,811 | 109,805 | 0.6 | % | 0.6 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $408,532 and $396,108 at March 31, 2015 and December 31, 2014, respectively) | 378,908 | 363,220 | 2 | % | 1.9 | % | ||||||||
| | | | | | | | | | | | | | |
Equity securities: | ||||||||||||||
Energy | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $68,249 and $68,249 at March 31, 2015 and December 31, 2014, respectively) | — | — | — | — | ||||||||||
| | | | | | | | | | | | | | |
Australia: | ||||||||||||||
Fixed income securities: | ||||||||||||||
Energy | 72,909 | 66,150 | 0.4 | % | 0.3 | % | ||||||||
Industrials | 40,350 | 32,146 | 0.2 | % | 0.2 | % | ||||||||
Utilities | 89,428 | 94,738 | 0.5 | % | 0.5 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities (cost: $222,035 and $213,759 at March 31, 2015 and December 31, 2014, respectively) | 202,687 | 193,034 | 1.1 | % | 1 | % | ||||||||
| | | | | | | | | | | | | | |
Equity Securities: | ||||||||||||||
Telecommunication services | 7,765 | 7,547 | 0 | % | 0 | % | ||||||||
Utilities | 5,285 | 8,287 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities (cost: $22,233 and $22,233 at March 31, 2015 and December 31, 2014, respectively) | 13,050 | 15,834 | 0 | % | 0 | % | ||||||||
| | | | | | | | | | | | | | |
Total fixed income securities | 14,350,501 | 14,640,084 | 75.5 | % | 76.7 | % | ||||||||
| | | | | | | | | | | | | | |
Total equity securities | 4,640,442 | 4,483,866 | 24.5 | % | 23.3 | % | ||||||||
| | | | | | | | | | | | | | |
Total investments, at fair value | $ | 18,990,943 | $ | 19,123,950 | 100 | % | 100 | % | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Securities sold short, at fair value | $ | (3,763 | ) | $ | (3,763 | ) | 100 | % | 100 | % | ||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
FAIR VALUE | |||||||||||||||||
Summary of changes in the fair value of the Level III investments for the CLO loan obligations | |||||||||||||||||
For the three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Balance, beginning of period | $ | 12,049,019 | $ | 11,534,956 | |||||||||||||
Deconsolidation of funds | (571 | ) | (3,033 | ) | |||||||||||||
Borrowings | 602,074 | 23,528 | |||||||||||||||
Paydowns(1) | (218,496 | ) | (472,434 | ) | |||||||||||||
Realized and unrealized gains, net | (277,349 | ) | (16,764 | ) | |||||||||||||
| | | | | | | | ||||||||||
Balance, end of period | $ | 12,154,677 | $ | 11,066,253 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
-1 | Amounts include distributions made to Subordinated Notes equity holders. | ||||||||||||||||
Summary of fair value by segment along with the remaining unfunded commitment and any redemption restriction of investments valued using NAV per share | As of March 31, 2015 | ||||||||||||||||
Strategy | Fair Value | Unfunded | Redemption | ||||||||||||||
Commitments | Restriction | ||||||||||||||||
Direct Lending Group | $ | 40,559 | $ | 20,792 | (1)(3) | ||||||||||||
Real Estate Group | 59,541 | 87,311 | -1 | ||||||||||||||
Tradable Credit Group | 56,878 | 51,048 | (1)(2)(3) | ||||||||||||||
Private Equity Group | 139,293 | 77,284 | -1 | ||||||||||||||
| | | | | | | | | | | |||||||
Totals | $ | 296,271 | $ | 236,435 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
As of December 31, 2014 | |||||||||||||||||
Strategy | Fair Value | Unfunded | Redemption | ||||||||||||||
Commitments | Restriction | ||||||||||||||||
Direct Lending Group | $ | 30,501 | $ | 26,854 | (1)(3) | ||||||||||||
Real Estate Group | 49,178 | 45,239 | -1 | ||||||||||||||
Tradable Credit Group | 52,001 | 7,420 | (1)(2)(3) | ||||||||||||||
Private Equity Group | 111,719 | 97,194 | -1 | ||||||||||||||
| | | | | | | | | | | |||||||
Totals | $ | 243,399 | $ | 176,707 | |||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
-1 | Certain funds within these strategies are closed-ended and generally do not permit investors to redeem their interests. Distributions are received as the underlying investments are liquidated. | ||||||||||||||||
-2 | Certain funds within these strategies are open-ended and subject to a lock-up period of nine months after the closing date, after which an investor has the right to withdraw its capital. Distributions are received as the underlying investments are liquidated. | ||||||||||||||||
-3 | Certain funds within these strategies are separately managed investment vehicles, which may be redeemed only upon dissolution or liquidation of the fund at the discretion of a simple majority of investors. Distributions are received as the underlying investments are liquidated. | ||||||||||||||||
Parent Company | |||||||||||||||||
FAIR VALUE | |||||||||||||||||
Summary of valuation of investments and other financial instruments by fair value hierarchy levels | The tables below summarize the valuation of investments and other financial instruments by fair value hierarchy levels for the Company and Consolidated Funds as of March 31, 2015: | ||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 95 | $ | — | $ | — | $ | 95 | |||||||||
Bonds | — | 1,178 | — | 1,178 | |||||||||||||
Partnership interests | — | — | 193,473 | 193,473 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 95 | 1,178 | 193,473 | 194,746 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Forward foreign currency contracts | — | 8,217 | — | 8,217 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 8,217 | — | 8,217 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 95 | $ | 9,395 | $ | 193,473 | $ | 202,963 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (1,995 | ) | $ | — | $ | (1,995 | ) | |||||||
Interest rate contracts | — | (978 | ) | — | (978 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | $ | — | $ | (2,973 | ) | $ | — | $ | (2,973 | ) | |||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
The tables below summarize the valuation of investments and other financial instruments by fair value hierarchy levels for the Company and Consolidated Funds as of December 31, 2014: | |||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 89 | $ | — | $ | — | $ | 89 | |||||||||
Bonds | — | 1,178 | — | 1,178 | |||||||||||||
Partnership interests | — | — | 169,057 | 169,057 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 89 | 1,178 | 169,057 | 170,324 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Forward foreign currency contracts | — | 5,721 | — | 5,721 | |||||||||||||
Purchased option contracts | — | 1,902 | — | 1,902 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 7,623 | — | 7,623 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 89 | $ | 8,801 | $ | 169,057 | $ | 177,947 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (2,003 | ) | $ | — | $ | (2,003 | ) | |||||||
Interest rate contracts | — | (847 | ) | — | (847 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | $ | — | $ | (2,850 | ) | $ | — | $ | (2,850 | ) | |||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Summary of changes in the fair value of the Level III investments | |||||||||||||||||
The following tables set forth a summary of changes in the fair value of the Level III investments for the three months ended March 31, 2015: | |||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Partnership | |||||||||||||||||
Interests | |||||||||||||||||
Balance, beginning of period | $ | 169,057 | |||||||||||||||
Purchases(1) | 30,516 | ||||||||||||||||
Sales(2) | (7,916 | ) | |||||||||||||||
Realized and unrealized appreciation (depreciation), net | 1,816 | ||||||||||||||||
| | | | | |||||||||||||
Balance, end of period | $ | 193,473 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 1,947 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
-1 | Purchases include paid-in-kind interest and securities received in connection with restructurings. | ||||||||||||||||
-2 | Sales include paid-in-kind interest, principal redemptions and securities disposed of in connection with restructurings. | ||||||||||||||||
The following tables set forth a summary of changes in the fair value of the Level III investments for the three months ended March 31, 2014: | |||||||||||||||||
Investments and Derivatives of the Company | |||||||||||||||||
Partnership | |||||||||||||||||
Interests | |||||||||||||||||
Balance, beginning of period | $ | 88,177 | |||||||||||||||
Investment in deconsolidated fund(1) | 9,951 | ||||||||||||||||
Purchases(2) | 21,504 | ||||||||||||||||
Sales(3) | (23,124 | ) | |||||||||||||||
Realized and unrealized appreciation (depreciation), net | 23,834 | ||||||||||||||||
| | | | | |||||||||||||
Balance, end of period | $ | 120,342 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 4,286 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
-1 | Represents investment in Consolidated Fund that was deconsolidated during the period. Balance was previously eliminated upon consolidation and not reported as Level III investment. | ||||||||||||||||
-2 | Purchases include paid-in-kind interest and securities received in connection with restructurings. | ||||||||||||||||
-3 | Sales include paid-in-kind interest, principal redemptions and securities disposed of in connection with restructurings. | ||||||||||||||||
Summary of quantitative inputs and assumptions used for the Company's Level III inputs | The following tables summarize the quantitative inputs and assumptions used for the Company's Level III inputs as of March 31, 2015: | ||||||||||||||||
Investments | Fair | Valuation Technique(s) | Unobservable | Range | |||||||||||||
Value | Input(s) | ||||||||||||||||
Assets | |||||||||||||||||
Partnership interests | $ | 143,125 | NAV | N/A | N/A | ||||||||||||
Partnership interests | 50,348 | Recent Transaction Price(1) | N/A | N/A | |||||||||||||
| | | | | | | | | | ||||||||
| | | | | | | | | | ||||||||
Total | $ | 193,473 | |||||||||||||||
| | | | | | | | | | ||||||||
| | | | | | | | | | ||||||||
-1 | Recent transaction price consists of securities purchased or restructured within six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
The following tables summarize the quantitative inputs and assumptions used for the Company's Level III inputs as of December 31, 2014: | |||||||||||||||||
Investments | Fair | Valuation Technique(s) | Unobservable | Range | |||||||||||||
Value | Input(s) | ||||||||||||||||
Assets | |||||||||||||||||
Partnership interests | $ | 123,709 | NAV | N/A | N/A | ||||||||||||
Partnership interests | 45,348 | Recent Transaction Price(1) | N/A | N/A | |||||||||||||
| | | | | | | | | | ||||||||
Total | $ | 169,057 | |||||||||||||||
| | | | | | | | | | ||||||||
| | | | | | | | | | ||||||||
-1 | Recent transaction price consists of securities purchased or restructured within six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
Consolidated Funds | |||||||||||||||||
FAIR VALUE | |||||||||||||||||
Summary of valuation of investments and other financial instruments by fair value hierarchy levels | |||||||||||||||||
The tables below summarize the valuation of investments and other financial instruments by fair value hierarchy levels for the Company and Consolidated Funds as of March 31, 2015: | |||||||||||||||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 609,982 | $ | 573,582 | $ | 3,321,849 | $ | 4,505,413 | |||||||||
Bonds | — | 909,652 | 551,906 | 1,461,558 | |||||||||||||
Loans | — | 11,742,281 | 584,377 | 12,326,658 | |||||||||||||
Collateralized loan obligations | — | — | 528,180 | 528,180 | |||||||||||||
Partnership interests | — | — | 167,985 | 167,985 | |||||||||||||
Other | — | — | 1,149 | 1,149 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 609,982 | 13,225,515 | 5,155,446 | 18,990,943 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Foreign exchange contracts | — | 873 | — | 873 | |||||||||||||
Purchased options | — | 890 | — | 890 | |||||||||||||
Other | — | 1,933 | — | 1,933 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 3,696 | — | 3,696 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 609,982 | $ | 13,229,211 | $ | 5,155,446 | $ | 18,994,639 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Credit contracts | $ | — | $ | (11,716 | ) | $ | — | $ | (11,716 | ) | |||||||
Foreign exchange contracts | — | (9,411 | ) | — | (9,411 | ) | |||||||||||
Other | — | — | (38,356 | ) | (38,356 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | — | (21,127 | ) | (38,356 | ) | (59,483 | ) | ||||||||||
Loan obligations of CLOs | — | — | (12,154,677 | ) | (12,154,677 | ) | |||||||||||
Securities sold short, at fair value | — | (3,763 | ) | — | (3,763 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | — | $ | (24,890 | ) | $ | (12,193,033 | ) | $ | (12,217,923 | ) | ||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
The tables below summarize the valuation of investments and other financial instruments by fair value hierarchy levels for the Company and Consolidated Funds as of December 31, 2014: | |||||||||||||||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||||
Investments, at fair value | |||||||||||||||||
Equity securities | $ | 590,095 | $ | 513,771 | $ | 3,263,311 | $ | 4,367,177 | |||||||||
Bonds | — | 1,113,103 | 565,634 | 1,678,737 | |||||||||||||
Loans | — | 11,312,518 | 1,070,494 | 12,383,012 | |||||||||||||
Collateralized loan obligations | — | — | 556,267 | 556,267 | |||||||||||||
Partnership interests | — | — | 137,272 | 137,272 | |||||||||||||
Other | — | 336 | 1,149 | 1,485 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total investments, at fair value | 590,095 | 12,939,728 | 5,594,127 | 19,123,950 | |||||||||||||
| | | | | | | | | | | | | | ||||
Derivative assets, at fair value | |||||||||||||||||
Foreign exchange contracts | — | 2,070 | — | 2,070 | |||||||||||||
Other | — | 1,056 | — | 1,056 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total derivative assets, at fair value | — | 3,126 | — | 3,126 | |||||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | 590,095 | $ | 12,942,854 | $ | 5,594,127 | $ | 19,127,076 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Derivative liabilities, at fair value | |||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (6,906 | ) | $ | — | $ | (6,906 | ) | |||||||
Credit contracts | — | (13,263 | ) | — | (13,263 | ) | |||||||||||
Interest rate swaps | — | (21 | ) | — | (21 | ) | |||||||||||
Other | — | — | (22,142 | ) | (22,142 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total derivative liabilities, at fair value | — | (20,190 | ) | (22,142 | ) | (42,332 | ) | ||||||||||
Loan obligations of CLOs(1) | — | — | (12,049,019 | ) | (12,049,019 | ) | |||||||||||
Securities sold short, at fair value | — | (3,763 | ) | — | (3,763 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Total | $ | — | $ | (23,953 | ) | $ | (12,071,161 | ) | $ | (12,095,114 | ) | ||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
-1 | Ares Enhanced Loan Investment Strategy II, Ltd. ("AELIS II") had not elected to fair value its loan obligation and was therefore carried at cost of $151 through December 31, 2014, after which AELIS II was deconsolidated. | ||||||||||||||||
Summary of changes in the fair value of the Level III investments | The following tables set forth a summary of changes in the fair value of the Level III investments for the three months ended March 31, 2015: | ||||||||||||||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Equity | Fixed | Partnership | Other | Total | |||||||||||||
Securities | Income | Interests | Financial | ||||||||||||||
Instruments | |||||||||||||||||
Balance, beginning of period | $ | 3,263,311 | $ | 2,192,395 | $ | 137,272 | $ | (20,993 | ) | $ | 5,571,985 | ||||||
Deconsolidation of funds(3) | (471 | ) | (1 | ) | — | — | (472 | ) | |||||||||
Transfer in | — | 189,684 | — | — | 189,684 | ||||||||||||
Transfer out | (163 | ) | (651,403 | ) | — | — | (651,566 | ) | |||||||||
Purchases(1) | — | 159,797 | 39,582 | 8 | 199,387 | ||||||||||||
Sales(2) | (20,273 | ) | (171,391 | ) | (15,155 | ) | 211 | (206,608 | ) | ||||||||
Accrued discounts/premiums | 4,135 | (756 | ) | — | (1,309 | ) | 2,070 | ||||||||||
Realized and unrealized appreciation (depreciation), net | 75,310 | (53,862 | ) | 6,286 | (15,124 | ) | 12,610 | ||||||||||
| | | | | | | | | | | | | | | | | |
Balance, end of period | $ | 3,321,849 | $ | 1,664,463 | $ | 167,985 | $ | (37,207 | ) | $ | 5,117,090 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 62,677 | $ | (35,936 | ) | $ | 6,239 | $ | (18,511 | ) | $ | 14,469 | |||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
-1 | Purchases include paid-in-kind interest and securities received in connection with restructurings. | ||||||||||||||||
-2 | Sales include paid-in-kind interest, principal redemptions and securities disposed of in connection with restructurings. | ||||||||||||||||
-3 | Represents investment in Consolidated Fund that was deconsolidated during the period. Balance was previously eliminated upon consolidation and not reported as Level III investment. | ||||||||||||||||
The following tables set forth a summary of changes in the fair value of the Level III investments for the three months ended March 31, 2014: | |||||||||||||||||
Investments and Derivatives of Consolidated Funds | |||||||||||||||||
Equity | Fixed | Partnership | Other | Total | |||||||||||||
Securities | Income | Interests | Financial | ||||||||||||||
Instruments | |||||||||||||||||
Balance, beginning of period | $ | 2,958,232 | $ | 3,627,153 | $ | 41,001 | $ | (1,348 | ) | $ | 6,625,038 | ||||||
Deconsolidation of previous funds(1) | 8,152 | (378,397 | ) | — | — | (370,245 | ) | ||||||||||
Transfer in | — | 222,382 | — | — | 222,382 | ||||||||||||
Transfer out | — | (364,608 | ) | — | — | (364,608 | ) | ||||||||||
Purchases(2) | 11,337 | 215,514 | 2,276 | 5 | 229,132 | ||||||||||||
Sales(3) | (167,142 | ) | (274,491 | ) | — | (6,387 | ) | (448,020 | ) | ||||||||
Accrued discounts/premiums | 15 | 10,849 | — | — | 10,864 | ||||||||||||
Realized and unrealized appreciation (depreciation), net | 14,627 | (29,540 | ) | 717 | 3,277 | (10,919 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Balance, end of period | $ | 2,825,221 | $ | 3,028,862 | $ | 43,994 | $ | (4,453 | ) | $ | 5,893,624 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | $ | 118,757 | $ | (21,711 | ) | $ | 717 | $ | 1,102 | $ | 98,865 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
-1 | Represents investment in Consolidated Fund that was deconsolidated during the period. Balance was previously eliminated upon consolidation and not reported as Level III investment. | ||||||||||||||||
-2 | Purchases include paid-in-kind interest and securities received in connection with restructurings. | ||||||||||||||||
-3 | Sales include paid-in-kind interest, principal redemptions and securities disposed of in connection with restructurings. | ||||||||||||||||
Summary of quantitative inputs and assumptions used for the Company's Level III inputs | |||||||||||||||||
The following tables summarize the quantitative inputs and assumptions used for the Consolidated Funds' Level III inputs as of March 31, 2015: | |||||||||||||||||
Investments | Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range | Weighted | ||||||||||||
Average | |||||||||||||||||
Assets | |||||||||||||||||
Equity securities | |||||||||||||||||
Consumer discretionary | 3,678 | EV market multiple analysis | EBITDA multiple | 9.4x | 9.4x | ||||||||||||
$ | |||||||||||||||||
219,945 | Market approach (comparable companies) | Book value multiple | 1.8x - 2.0x | 1.9x | |||||||||||||
2,175,607 | Market approach (comparable companies) | EBITDA multiple | 8.5x - 15.0x | 10.8x | |||||||||||||
711 | Other | Future distribution estimates | 82.40% | 82.40% | |||||||||||||
4,236 | Other | Illiquidity discount | 15.00% | 15.00% | |||||||||||||
Consumer staples | 895 | EV market multiple analysis | EBITDA multiple | 7.9x | 7.9x | ||||||||||||
14,492 | Market approach (comparable companies) | EBITDA multiple | 7.0x | 7.0x | |||||||||||||
41,561 | Market approach (comparable companies)(2) | Net income multiple | 11.0x | 11.0x | |||||||||||||
Energy | 68,000 | Discounted Cash Flow | Discount rate | 8.00% | 8.00% | ||||||||||||
EBITDA multiple | 6.0x | 6.0x | |||||||||||||||
Financials | 9,171 | EV market multiple analysis | EBITDA multiple | 10.5x | 10.5x | ||||||||||||
Healthcare, education, and childcare | 26,455 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 4.5x | ||||||||||||
532,156 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 13.0x | 11.1x | |||||||||||||
32,598 | Market approach (comparable companies) | Net income multiple | 35.0x | 35.0x | |||||||||||||
Industrials | 124,682 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 12.0x | 9.8x | ||||||||||||
Materials | 52,947 | Market approach (comparable companies) | Net income multiple | 9.0x | 9.0x | ||||||||||||
Telecommunication services | 593 | Recent transaction price(1) | N/A | N/A | N/A | ||||||||||||
460 | EV market multiple analysis | EBITDA multiple | 10.0x | 10.0x | |||||||||||||
Utilities | 13,662 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Fixed Income securities | |||||||||||||||||
Consumer discretionary | 196,267 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
17,339 | EV market multiple analysis | EBITDA multiple | 8.0x - 13.5x | 12.8x | |||||||||||||
59,299 | Income approach (other) | Yield | 2.5% - 13.0% | 11.90% | |||||||||||||
122,543 | Market approach (comparable companies) | Book value multiple | 1.7x - 2.0x | 1.9x | |||||||||||||
5,265 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
Consumer staples | 493 | Discounted cash flow | Discount Rate | 20.00% | 20.00% | ||||||||||||
1,202 | Market approach (comparable companies) | EBITDA multiple | 6.5x | 6.5x | |||||||||||||
Financials | 527,998 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
5,274 | Discounted cash flow | Discount rate and Cumulative loss rate | 16.6% / 8.4% | 16.6% / 8.4% | |||||||||||||
37,927 | Discounted cash flow | Discount rate | 11.50% | 11.50% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 21.30% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.10% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 73.20% | |||||||||||||||
2,256 | Income Approach (Other) | Cash flow % of book value | 8.70% | 8.70% | |||||||||||||
247,584 | Income Approach (Other) | Yield | 9.5% - 11.5% | 10.50% | |||||||||||||
7,959 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
Healthcare, education, and childcare | 40,891 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
19,527 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 5.6x | |||||||||||||
24,605 | Income approach (Other) | Yield | 6.00% | 5.80% | |||||||||||||
Industrials | 102,659 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
28,052 | Income approach (other) | Yield | 5.3% - 13.3% | 10.80% | |||||||||||||
32,315 | Market approach (comparable companies) | EBITDA multiple | 9.0x - 12.0x | 10.5x | |||||||||||||
Information technology | 6,837 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Materials | 142,374 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Telecommunication services | 35,797 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Partnership and LLC interests | 149,339 | NAV | N/A | N/A | N/A | ||||||||||||
Financials | 3,807 | NAV | N/A | N/A | N/A | ||||||||||||
14,839 | Discounted Cash Flow | Constant default rate | 9.90% | 9.90% | |||||||||||||
Constant prepayment rate | 10.00% | 10.00% | |||||||||||||||
Recovery rate | 30.00% | 30.00% | |||||||||||||||
Other | |||||||||||||||||
Healthcare, education, and childcare | 1,084 | Market approach (comparable companies) | EBITDA multiple | 8.8x | 8.8x | ||||||||||||
Industrials | 65 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total assets | 5,155,446 | ||||||||||||||||
$ | |||||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
Liabilities | |||||||||||||||||
Loans payable of Consolidated Funds: | |||||||||||||||||
Fixed income | 11,733,481 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
$ | |||||||||||||||||
353,248 | Discounted cash flow | Discount rate | 12.0% - 15.0%% | 13.00% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 20.00% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.00% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 75.00% | |||||||||||||||
67,948 | Discounted cash flow | Discount margin | 5.3% - 6.8% | 6.10% | |||||||||||||
Constant prepayment rate | 0% - 50.0% | 20.00% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.00% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 75.00% | |||||||||||||||
Derivatives instruments of Consolidated Funds | 38,356 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total liabilities | 12,193,033 | ||||||||||||||||
$ | |||||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
-1 | Recent transaction price consists of securities purchased or restructured within the last six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
-2 | Valuation technique above includes a 30% liquidity discount on an investment held by a fund within the Private Equity Group. | ||||||||||||||||
The following tables summarize the quantitative inputs and assumptions used for the Consolidated Funds' Level III inputs as of December 31, 2014: | |||||||||||||||||
Investments | Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range | Weighted | ||||||||||||
Average | |||||||||||||||||
Assets | |||||||||||||||||
Equity securities | |||||||||||||||||
Consumer discretionary | $ | 2,940 | EV market multiple analysis | EBITDA multiple | 9.4x | 9.4x | |||||||||||
208,498 | Market approach (comparable companies) | Book value multiple | 1.7x - 2.0x | 1.9x | |||||||||||||
2,121,864 | Market approach (comparable companies) | EBITDA multiple | 7.0x - 15.0x | 10.7x | |||||||||||||
979 | Other | Future distribution estimates | 18.7x | 18.7x | |||||||||||||
5,140 | Other | Illiquidity discount | 15.00% | 15.00% | |||||||||||||
Consumer staples | 862 | EV market multiple analysis | EBITDA multiple | 7.9x | 7.9x | ||||||||||||
10,349 | Market approach (comparable companies) | EBITDA multiple | 7.0x | 7.0x | |||||||||||||
44,553 | Market approach (comparable companies)(2) | Net income multiple | 11.0x | 11.0x | |||||||||||||
Energy | 136,045 | Discounted Cash Flow | Discount rate | 9.00% | 9.00% | ||||||||||||
EBITDA multiple | 7.5x | 7.5x | |||||||||||||||
Financials | 8,272 | EV market multiple analysis | EBITDA multiple | 10.5x | 10.5x | ||||||||||||
Healthcare, education, and childcare | 27,774 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 5.4x | ||||||||||||
463,075 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 13.0x | 11.2x | |||||||||||||
33,610 | Market approach (comparable companies) | Net income multiple | 35.0x | 35.0x | |||||||||||||
Industrials | 76 | Recent transaction price(1) | N/A | N/A | N/A | ||||||||||||
128,182 | Market approach (comparable companies) | EBITDA multiple | 8.0x - 12.0x | 9.8x | |||||||||||||
Materials | 52,947 | Market approach (comparable companies) | Net income multiple | 9.0x | 9.0x | ||||||||||||
Telecommunication services | 331 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
533 | EV market multiple analysis | EBITDA multiple | 10.0x | 10.0x | |||||||||||||
Utilities | 17,281 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Fixed Income securities | |||||||||||||||||
Consumer discretionary | 256,994 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
18,205 | EV market multiple analysis | EBITDA multiple | 9.0x - 11.0x | 9.3x | |||||||||||||
69,418 | Income approach (other) | Yield | 2.5% - 18.7% | 12.80% | |||||||||||||
120,658 | Market approach (comparable companies) | Book value multiple | 1.7x - 2.0x | 1.9x | |||||||||||||
15,400 | Market approach (comparable companies) | EBITDA multiple | 7.5x | 7.5x | |||||||||||||
5,923 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
Consumer staples | 540 | Discounted cash flow | Discount Rate | 20.00% | 20.00% | ||||||||||||
776 | Market approach (comparable companies) | EBITDA multiple | 6.5x | 6.5x | |||||||||||||
28,965 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | |||||||||||||
Energy | 33,687 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Financials | 470,417 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
8,551 | Discounted cash flow | Discount rate and Cumulative loss rate | 13.3% / 10.0% | 13.3% / 10.0% | |||||||||||||
85,851 | Discounted cash flow | Discount rate | 11.50% | 11.50% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 21.50% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.20% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 73.80% | |||||||||||||||
2,541 | Income Approach (Other) | Cash flow % of book value | 8.70% | 8.70% | |||||||||||||
224,245 | Income Approach (Other) | Yield | 9.5% - 11.5% | 10.50% | |||||||||||||
Healthcare, education, and childcare | 168,371 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
20,104 | EV market multiple analysis | EBITDA multiple | 1.6x - 7.1x | 5.6x | |||||||||||||
25,549 | Income approach (Other) | Yield | 6.00% | 6.00% | |||||||||||||
Industrials | 196,725 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
43,614 | Income approach (other) | Yield | 2.5% - 13.5% | 12.10% | |||||||||||||
32,315 | Market approach (comparable companies) | EBITDA multiple | 9.0x - 12.0x | 10.5x | |||||||||||||
Information technology | 137,042 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Materials | 212,022 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Telecommunication services | 14,482 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
Partnership and LLC interests | 119,690 | NAV | N/A | N/A | N/A | ||||||||||||
Financials | 17,582 | Recent transaction price(1) | N/A | N/A | N/A | ||||||||||||
Other | |||||||||||||||||
Healthcare, education, and childcare | 1,084 | Market approach (comparable companies) | EBITDA multiple | 8.8x | 8.8x | ||||||||||||
Industrials | 65 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total assets | $ | 5,594,127 | |||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
Liabilities | |||||||||||||||||
Loans payable of Consolidated Funds: | |||||||||||||||||
Fixed income | $ | 11,273,923 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | |||||||||||
499,305 | Recent transaction price(1) | N/A | N/A | N/A | |||||||||||||
258,096 | Discounted cash flow | Discount rate | 11.50% | 11.50% | |||||||||||||
Constant prepayment rate | 0.0% - 50.0% | 20.40% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.10% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 74.60% | |||||||||||||||
17,079 | Discounted cash flow | Discount margin | 300 - 800 | 482.5 | |||||||||||||
Constant prepayment rate | 0% - 50.0% | 23.00% | |||||||||||||||
Constant default rate | 2.0% - 10.0% | 2.00% | |||||||||||||||
Recovery rate | 10.0% - 80.0% | 75.00% | |||||||||||||||
616 | Market approach (other) | Other | N/A | N/A | |||||||||||||
Derivatives instruments of Consolidated Funds | 22,142 | Broker quotes and/or 3rd party pricing services | N/A | N/A | N/A | ||||||||||||
| | | | | | | | | | | | ||||||
Total liabilities | $ | 12,071,161 | |||||||||||||||
| | | | | | | | | | | | ||||||
| | | | | | | | | | | | ||||||
-1 | Recent transaction price consists of securities purchased or restructured within the last six months. The Company has determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. | ||||||||||||||||
-2 | Valuation technique above includes a 30% liquidity discount on an investment held by a fund within the Private Equity Group. | ||||||||||||||||
LOANS_HELD_AS_INVESTMENTS_Tabl
LOANS HELD AS INVESTMENTS (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
LOANS HELD AS INVESTMENTS | |||||||||||||||||
Schedule of estimated fair value and carrying value of the Company's financial instruments carried at cost, less an allowance for loan losses | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
Level I | Level II | Level III | Total | Carrying | |||||||||||||
Value | |||||||||||||||||
Loans held for investments | $ | — | $ | — | $ | 86,518 | $ | 86,518 | $ | 85,214 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
As of December 31, 2014 | |||||||||||||||||
Level I | Level II | Level III | Total | Carrying | |||||||||||||
Value | |||||||||||||||||
Loans held for investments | $ | — | $ | — | $ | 78,895 | $ | 78,895 | $ | 77,514 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Summary of activity in loans held as investments | |||||||||||||||||
Balance at December 31, 2014 | $ | 77,514 | |||||||||||||||
Loan acquisition and origination | 183,732 | ||||||||||||||||
Allowance for loan losses | (119 | ) | |||||||||||||||
Principal repayment | (176,069 | ) | |||||||||||||||
Amortization of loan origination fees | 156 | ||||||||||||||||
| | | | | |||||||||||||
Balance as of March 31, 2015 | $ | 85,214 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Summary of changes in the allowance for loan losses | |||||||||||||||||
Balance at December 31, 2014 | $ | 1,185 | |||||||||||||||
Increase in allowance for loan losses | 119 | ||||||||||||||||
| | | | | |||||||||||||
Balance as of March 31, 2015 | $ | 1,304 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Schedule of loan receivable balance | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
Loan receivables—unpaid principal balance | $ | 86,921 | |||||||||||||||
Unamortized loan origination fees | (235 | ) | |||||||||||||||
Deferred interest on non-accrual loans | (168 | ) | |||||||||||||||
Allowance for loan losses | (1,304 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance as of March 31, 2015 | $ | 85,214 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
As of December 31, 2014 | |||||||||||||||||
Loan receivables—unpaid principal balance | $ | 79,018 | |||||||||||||||
Unamortized loan origination fees | (196 | ) | |||||||||||||||
Deferred interest on non-accrual loans | (123 | ) | |||||||||||||||
Allowance for loan losses | (1,185 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance as of December 31, 2014 | $ | 77,514 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
DERIVATIVE_FINANCIAL_INSTRUMEN1
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||||||
Schedule of fair value and notional amounts of derivative contracts by major product type on a gross basis | ||||||||||||||||||||
As of March 31, 2015 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
Consolidated Funds | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | 37,000 | $ | — | $ | — | $ | — | ||||||||||||
Credit contracts | 101,000 | 1,153 | 223,756 | 11,716 | ||||||||||||||||
Foreign exchange contracts | 40,330 | 1,652 | 152,983 | 9,411 | ||||||||||||||||
Other financial instruments | 3,514 | 891 | 94,083 | 38,356 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | 181,844 | 3,696 | 470,822 | 59,483 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Other—equity(2) | 3,706 | 4,429 | — | — | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
TOTAL | $ | 185,550 | $ | 8,125 | $ | 470,822 | $ | 59,483 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
-1 | Represents the total contractual amount of derivative assets and liabilities outstanding. | |||||||||||||||||||
-2 | Includes the fair value of warrants and equity distribution rights which are presented within investments, at fair value in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
Consolidated Funds | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | 34,000 | $ | 0 | $ | 10,000 | $ | 21 | ||||||||||||
Credit contracts | — | — | 385,296 | 13,265 | ||||||||||||||||
Foreign exchange contracts | 43,303 | 2,070 | 207,577 | 9,991 | ||||||||||||||||
Other financial instruments | 4,542 | 1,056 | 90,302 | 19,055 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | 81,845 | 3,126 | 693,175 | 42,332 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Other—equity(2) | 79,551 | 3,866 | — | — | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
TOTAL | $ | 161,396 | $ | 6,992 | $ | 693,175 | $ | 42,332 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
-1 | Represents the total contractual amount of derivative assets and liabilities outstanding. | |||||||||||||||||||
-2 | Includes the fair value of warrants and equity distribution rights which are presented within investments, at fair value in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
Summary of net realized and unrealized appreciation (depreciation) on derivative instruments | ||||||||||||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||
Consolidated Funds | Interest Rate | Credit | Equity | Foreign | Other | Total | ||||||||||||||
Contracts | Contracts | Contracts | Exchange | |||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | (2,582 | ) | $ | — | $ | — | $ | (2,582 | ) | ||||||
Swaps | (135 | ) | (9,449 | ) | — | — | (1,146 | ) | (10,730 | ) | ||||||||||
Foreign currency forward contracts | — | — | — | 3,190 | — | 3,190 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net realized gain (loss) on investments of Consolidated Funds | $ | (135 | ) | $ | (9,449 | ) | $ | (2,582 | ) | $ | 3,190 | $ | (1,146 | ) | $ | (10,122 | ) | |||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | (191 | ) | $ | 7 | $ | — | $ | (184 | ) | ||||||
Swaps | 135 | (113 | ) | — | — | 2,082 | 2,104 | |||||||||||||
Warrants(1) | — | — | 40 | — | — | 40 | ||||||||||||||
Foreign currency forward contracts | — | — | — | (434 | ) | — | (434 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | $ | 135 | $ | (113 | ) | $ | (151 | ) | $ | (427 | ) | $ | 2,082 | $ | 1,526 | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Realized and unrealized gains (losses) on warrants are also reflected in the changes presented within investments, at fair value of the Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||
Consolidated Funds | Interest Rate | Credit | Equity | Foreign | Other | Total | ||||||||||||||
Contracts | Contracts | Contracts | Exchange | |||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | (2,019 | ) | $ | (273 | ) | $ | — | $ | (2,292 | ) | |||||
Written options | — | — | — | 1,853 | — | 1,853 | ||||||||||||||
Swaps | (514 | ) | (10,206 | ) | — | — | 3,546 | (7,174 | ) | |||||||||||
Warrants(1) | — | — | 1,261 | — | — | 1,261 | ||||||||||||||
Foreign currency forward contracts | — | — | — | (17,888 | ) | — | (17,888 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net realized gain (loss) on investments of Consolidated Funds | $ | (514 | ) | $ | (10,206 | ) | $ | (758 | ) | $ | (16,308 | ) | $ | 3,546 | $ | (24,240 | ) | |||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | ||||||||||||||||||||
Purchased options | $ | — | $ | — | $ | 108 | $ | (1,663 | ) | $ | (113 | ) | $ | (1,668 | ) | |||||
Written options | — | — | — | (1,214 | ) | — | (1,214 | ) | ||||||||||||
Swaps | (342 | ) | 3,476 | — | (15 | ) | (3,591 | ) | (472 | ) | ||||||||||
Interest rate caps/floor | (4 | ) | — | — | — | — | (4 | ) | ||||||||||||
Warrants(1) | — | — | (7,180 | ) | — | — | (7,180 | ) | ||||||||||||
Foreign currency forward contracts | (22 | ) | — | 1,222 | 17,142 | — | 18,342 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | $ | (368 | ) | $ | 3,476 | $ | (5,850 | ) | $ | 14,250 | $ | (3,704 | ) | $ | 7,804 | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Realized and unrealized gains (losses) on warrants are also reflected in the changes presented within investments in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
Schedule of setoff and related arrangements associated with the derivative and other financial instruments | Derivative and Other Instruments of the Consolidated Funds as of March 31, 2015 | |||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||
in the Statement of | ||||||||||||||||||||
Gross Amounts | Financial Position | |||||||||||||||||||
of | ||||||||||||||||||||
Recognized Assets | ||||||||||||||||||||
(Liabilities) | Gross Amounts | Net Amounts of | Financial | Cash Collateral | Net Amount | |||||||||||||||
Offset in Assets | Assets (Liabilities) | Instruments | Received | |||||||||||||||||
(Liabilities) | Presented | (Pledged) | ||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 4,877 | $ | 1,181 | $ | 3,696 | $ | 727 | $ | (1,080 | ) | $ | 4,049 | |||||||
Reverse repurchase, securities borrowing, and similar arrangements(1) | 4,150 | — | 4,150 | — | — | 4,150 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | 9,027 | 1,181 | 7,846 | 727 | (1,080 | ) | 8,199 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||||||||
Derivatives | (60,664 | ) | (1,181 | ) | (59,483 | ) | (727 | ) | (11,119 | ) | (47,637 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | (60,664 | ) | (1,181 | ) | (59,483 | ) | (727 | ) | (11,119 | ) | (47,637 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Grand Total | $ | (51,637 | ) | $ | — | $ | (51,637 | ) | $ | — | $ | (12,199 | ) | $ | (39,438 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Derivative and Other Instruments of the Consolidated Funds as of December 31, 2014 | ||||||||||||||||||||
Gross Amounts Not Offset | ||||||||||||||||||||
in the Statement of | ||||||||||||||||||||
Gross Amounts | Financial Position | |||||||||||||||||||
of | ||||||||||||||||||||
Recognized Assets | ||||||||||||||||||||
(Liabilities) | Gross Amounts | Net Amounts of | Financial | Cash Collateral | Net Amount | |||||||||||||||
Offset in Assets | Assets (Liabilities) | Instruments | Received | |||||||||||||||||
(Liabilities) | Presented | (Pledged) | ||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 4,940 | $ | 1,814 | $ | 3,126 | $ | 989 | $ | (2,295 | ) | $ | 4,432 | |||||||
Reverse repurchase, securities borrowing, and similar arrangements(1) | 4,150 | — | 4,150 | — | — | 4,150 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | 9,090 | 1,814 | 7,276 | 989 | (2,295 | ) | 8,582 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Liabilities: | ||||||||||||||||||||
Derivatives | (44,146 | ) | (1,814 | ) | (42,332 | ) | (989 | ) | (12,386 | ) | (28,957 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | (44,146 | ) | (1,814 | ) | (42,332 | ) | (989 | ) | (12,386 | ) | (28,957 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Grand Total | $ | (35,056 | ) | $ | — | $ | (35,056 | ) | $ | — | $ | (14,681 | ) | $ | (20,375 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Included within investments, at fair value in the Condensed Consolidated Statements of Financial Condition. | |||||||||||||||||||
Parent Company | ||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||||||
Schedule of fair value and notional amounts of derivative contracts by major product type on a gross basis | ||||||||||||||||||||
As of March 31, 2015 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
The Company | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | — | $ | — | $ | 250,000 | $ | 978 | ||||||||||||
Foreign exchange contracts | 102,217 | 8,217 | 65,341 | 1,995 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | $ | 102,217 | $ | 8,217 | $ | 315,341 | $ | 2,973 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
-1 | Represents the total contractual amount of derivative assets and liabilities outstanding. | |||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||
The Company | Notional(1) | Fair Value | Notional(1) | Fair Value | ||||||||||||||||
Interest rate contracts | $ | — | $ | — | $ | 250,000 | $ | 847 | ||||||||||||
Foreign exchange contracts | 161,890 | 7,623 | 102,231 | 2,003 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total derivatives, at fair value | $ | 161,890 | $ | 7,623 | $ | 352,231 | $ | 2,850 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
-1 | Represents the total contractual amount of derivative assets and liabilities outstanding. | |||||||||||||||||||
Summary of net realized and unrealized appreciation (depreciation) on derivative instruments | ||||||||||||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||
The Company | Interest Rate | Foreign | Total | |||||||||||||||||
Contracts | Exchange | |||||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments | ||||||||||||||||||||
Purchased options | $ | — | $ | 2,022 | $ | 2,022 | ||||||||||||||
Swaps | (337 | ) | — | (337 | ) | |||||||||||||||
Foreign currency forward contracts | — | 5,116 | 5,116 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Net realized gain (loss) on investments | $ | (337 | ) | $ | 7,138 | $ | 6,801 | |||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Net change in unrealized appreciation (depreciation) on investments | ||||||||||||||||||||
Purchased options | $ | — | $ | (1,057 | ) | $ | (1,057 | ) | ||||||||||||
Swaps | (131 | ) | — | (131 | ) | |||||||||||||||
Foreign currency forward contracts | — | 2,504 | 2,504 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total net change in unrealized appreciation (depreciation) on investments | $ | (131 | ) | $ | 1,447 | $ | 1,316 | |||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
For the three months ended | ||||||||||||||||||||
March 31, 2014 | ||||||||||||||||||||
The Company | Interest Rate | Foreign | Total | |||||||||||||||||
Contracts | Exchange | |||||||||||||||||||
Contracts | ||||||||||||||||||||
Net realized gain (loss) on investments | ||||||||||||||||||||
Swaps | $ | (341 | ) | $ | — | $ | (341 | ) | ||||||||||||
Foreign currency forward contracts | — | (793 | ) | (793 | ) | |||||||||||||||
| | | | | | | | | | | ||||||||||
Net realized gain (loss) on investments | $ | (341 | ) | $ | (793 | ) | $ | (1,134 | ) | |||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Net change in unrealized appreciation (depreciation) on investments | ||||||||||||||||||||
Purchased options | $ | — | $ | (61 | ) | $ | (61 | ) | ||||||||||||
Swaps | 57 | — | 57 | |||||||||||||||||
Foreign currency forward contracts | — | (63 | ) | (63 | ) | |||||||||||||||
| | | | | | | | | | | ||||||||||
Total net change in unrealized appreciation (depreciation) on investments | $ | 57 | $ | (124 | ) | $ | (67 | ) | ||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Schedule of setoff and related arrangements associated with the derivative and other financial instruments | Derivative and Other Instruments of the Company as of March 31, 2015 | |||||||||||||||||||
Gross Amounts | ||||||||||||||||||||
Not Offset in | ||||||||||||||||||||
the Statement | ||||||||||||||||||||
Gross | Gross | of Financial | ||||||||||||||||||
Amounts of | Amounts | Position | ||||||||||||||||||
Recognized | Offset in | |||||||||||||||||||
Assets | Assets | Net Amounts | ||||||||||||||||||
(Liabilities) | (Liabilities) | of Assets | ||||||||||||||||||
(Liabilities) | ||||||||||||||||||||
Presented | Financial | Net Amount | ||||||||||||||||||
Instruments | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 8,217 | $ | — | $ | 8,217 | $ | 1,995 | $ | 6,222 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | 8,217 | — | 8,217 | 1,995 | 6,222 | |||||||||||||||
| | | | | | | | | | | | | | | | | ||||
Liabilities: | ||||||||||||||||||||
Derivatives | (2,973 | ) | — | (2,973 | ) | (1,995 | ) | (978 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | (2,973 | ) | — | (2,973 | ) | (1,995 | ) | (978 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Grand Total | $ | 5,244 | $ | — | $ | 5,244 | $ | — | $ | 5,244 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | | | | ||||
Derivative and Other Instruments of the Company as of December 31, 2014 | ||||||||||||||||||||
Gross Amounts | ||||||||||||||||||||
Not Offset in | ||||||||||||||||||||
the Statement | ||||||||||||||||||||
Gross | Gross | of Financial | ||||||||||||||||||
Amounts of | Amounts | Position | ||||||||||||||||||
Recognized | Offset in | |||||||||||||||||||
Assets | Assets | Net Amounts | ||||||||||||||||||
(Liabilities) | (Liabilities) | of Assets | ||||||||||||||||||
(Liabilities) | ||||||||||||||||||||
Presented | Financial | Net Amount | ||||||||||||||||||
Instruments | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Derivatives | $ | 7,623 | $ | — | $ | 7,623 | $ | 1,056 | $ | 6,567 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | 7,623 | — | 7,623 | 1,056 | 6,567 | |||||||||||||||
| | | | | | | | | | | | | | | | | ||||
Liabilities: | ||||||||||||||||||||
Derivatives | (2,850 | ) | — | (2,850 | ) | (1,056 | ) | (1,794 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Total | (2,850 | ) | — | (2,850 | ) | (1,056 | ) | (1,794 | ) | |||||||||||
| | | | | | | | | | | | | | | | | ||||
Grand Total | $ | 4,773 | $ | — | $ | 4,773 | $ | — | $ | 4,773 | ||||||||||
| | | | | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | | | | ||||
DEBT_Tables
DEBT (Tables) (Consolidated Funds) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Consolidated Funds | ||||||||||||||||||||
DEBT | ||||||||||||||||||||
Schedule of borrowings outstanding | ||||||||||||||||||||
As of March 31, 2015 | ||||||||||||||||||||
Loan | Market Value of | Weighted Average | ||||||||||||||||||
Obligations | Loan Obligations | Remaining | ||||||||||||||||||
Maturity In Years | ||||||||||||||||||||
Senior secured notes(1) | $ | 11,360,083 | $ | 11,191,664 | 8.88 | |||||||||||||||
Subordinated notes / preferred shares(2) | 1,506,610 | 873,437 | 9.26 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total loan obligations of Consolidated CLOs | $ | 12,866,693 | $ | 12,065,101 | ||||||||||||||||
| | | | | | | | | | | ||||||||||
Type of Facility | Total Facility | Loan | Market Value of | Effective | Commitment | Maturity | ||||||||||||||
(Capacity) | Obligations | Loan Obligations | Rate | Fee | Date | |||||||||||||||
Revolvers of Consolidated CLOs | ||||||||||||||||||||
Revolving credit line | $ | 42,806 | $ | 42,806 | $ | 42,676 | 0.51 | % | 0.17 | % | 7/16/20 | |||||||||
Revolving credit line | 47,480 | 47,480 | 46,900 | 0.45 | % | 0.17 | % | 10/11/21 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total revolvers of Consolidated CLOs | 90,286 | 89,576 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total notes payable and credit facilities of Consolidated CLOs | $ | 12,956,979 | $ | 12,154,677 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Weighted average interest rate of 2.67%. | |||||||||||||||||||
-2 | The subordinated notes do not have contractual interest rates, but instead receive distributions from the excess cash flows generated by each Consolidated CLO. | |||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Loan | Market Value of | Weighted Average | ||||||||||||||||||
Obligations | Loan Obligations | Remaining | ||||||||||||||||||
Maturity In Years | ||||||||||||||||||||
Senior secured notes(1) | $ | 11,394,820 | $ | 11,062,501 | 9.02 | |||||||||||||||
Subordinated notes / preferred shares(2) | 1,523,670 | 894,795 | 9.44 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total loan obligations of Consolidated CLOs | $ | 12,918,490 | $ | 11,957,296 | ||||||||||||||||
| | | | | | | | | | | ||||||||||
Type of Facility | Total Facility | Loan | Market Value of | Effective | Commitment | Maturity | ||||||||||||||
(Capacity) | Obligations | Loan Obligations | Rate | Fee | Date | |||||||||||||||
Revolvers of Consolidated CLOs | ||||||||||||||||||||
Revolving credit line | $ | 44,113 | $ | 44,113 | $ | 43,980 | 0.49 | % | 0.17 | % | 4/16/21 | |||||||||
Revolving credit line | 48,510 | 48,510 | 47,894 | 0.43 | % | 0.17 | % | 10/11/21 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total revolvers of Consolidated CLOs | 92,623 | 91,874 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total notes payable and credit facilities of Consolidated CLOs | $ | 13,011,113 | $ | 12,049,170 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
-1 | Weighted average interest rate of 2.62%. | |||||||||||||||||||
-2 | The subordinated notes do not have contractual interest rates, but instead receive distributions from the excess cash flows generated by each Consolidated CLO. | |||||||||||||||||||
Funds were in compliance with all financial and non-financial covenants under such credit facilities. | ||||||||||||||||||||
The Consolidated Funds had the following revolving bank credit facilities and term loans outstanding as of March 31, 2015: | ||||||||||||||||||||
Type of Facility | Total Facility | Outstanding | Effective | Commitment | Maturity | |||||||||||||||
(Capacity) | Loan(1) | Rate | Fee | Date | ||||||||||||||||
Short-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | $ | 25,000 | $ | — | LIBOR + 1.75% | 0.30% | 6/6/15 | |||||||||||||
Credit facility | 25,000 | — | LIBOR + 2.00% | 0.30% | 6/30/15 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total short-term borrowings of Consolidated | ||||||||||||||||||||
Funds | — | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Long-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | 18,000 | 4,459 | 1.81% | N/A | 1/1/23 | |||||||||||||||
Credit facility | 150,000 | 48,500 | LIBOR + 2.25% | 0.25% | 6/4/18 | |||||||||||||||
Notes payable | 1,500,000 | 630,605 | LIBOR + 1.65% | 0.75% | 9/19/18 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total long-term borrowings of Consolidated Funds | 683,564 | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total borrowings of Consolidated Funds | $ | 683,564 | ||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
| | | | | | | | | | | | | | | ||||||
-1 | The market values of the long term notes approximate the current carrying value that is tied to the LIBOR rate. | |||||||||||||||||||
The Consolidated Funds had the following revolving bank credit facilities and term loans outstanding as of December 31, 2014: | ||||||||||||||||||||
Type of Facility | Total Facility | Outstanding | Effective | Commitment | Maturity | |||||||||||||||
(Capacity) | Loan(1) | Rate | Fee | Date | ||||||||||||||||
Short-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | $ | 25,000 | $ | — | LIBOR + 1.75% | 0.30% | 6/6/15 | |||||||||||||
Credit facility | 25,000 | — | LIBOR + 2.00% | 0.30% | 6/30/15 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total short-term borrowings of Consolidated Funds | — | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Long-term borrowings of Consolidated Funds | ||||||||||||||||||||
Credit facility | 150,000 | 39,300 | LIBOR + 2.25% | 0.25% | 6/4/18 | |||||||||||||||
Notes payable | 1,500,000 | 731,983 | LIBOR + 1.65% | 0.75% | 9/19/18 | |||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total long-term borrowings of Consolidated Funds | 771,283 | |||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
Total borrowings of Consolidated Funds | $ | 771,283 | ||||||||||||||||||
| | | | | | | | | | | | | | | ||||||
| | | | | | | | | | | | | | | ||||||
-1 | The market values of the long term notes approximate the current carrying value that is tied to the LIBOR rate. | |||||||||||||||||||
REDEEMABLE_INTERESTS_Tables
REDEEMABLE INTERESTS (Tables) (AOG) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Summary of changes in the redeemable interests | The following table sets forth a summary of changes in the redeemable interests in Consolidated Funds and redeemable interests in Ares Operating Group entities as of March 31, 2015: | ||||
Redeemable interests in Ares Operating Group Entities | |||||
Beginning balance | $ | 23,988 | |||
Reallocation of Partners' capital for change in ownership interest | 81 | ||||
Deferred tax liabilities arising from allocation of contributions and Partners' capital | (1 | ) | |||
Distributions | (260 | ) | |||
Net income | 243 | ||||
Currency translation adjustment | (7 | ) | |||
Equity compensation | 33 | ||||
| | | | | |
| | | | | |
Ending Balance | $ | 24,077 | |||
| | | | | |
| | | | | |
Consolidated Funds | |||||
Summary of changes in the redeemable interests | The following table sets forth a summary of changes in the redeemable interests in Consolidated Funds and redeemable interests in Ares Operating Group entities as of March 31, 2015: | ||||
Redeemable interests in Consolidated Funds | |||||
Redeemable non-controlling interests in Consolidated Funds, beginning of period | $ | 1,037,450 | |||
Contributions from redeemable, non-controlling interests in Consolidated Funds | 122 | ||||
Distributions to redeemable, non-controlling interests in Consolidated Funds | (138,414 | ) | |||
Net income (loss) attributable to redeemable, non-controlling interests in Consolidated Funds | 15,859 | ||||
| | | | | |
Ending Balance | $ | 915,017 | |||
| | | | | |
| | | | | |
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
RELATED PARTY TRANSACTIONS | ||||||||
Schedule of amounts due from and to affiliates | ||||||||
As of March 31, | As of December 31, | |||||||
2015 | 2014 | |||||||
Due from affiliates: | ||||||||
Management fees receivable from non-consolidated funds | $ | 98,775 | $ | 113,358 | ||||
Payments made on behalf of and amounts due from non-consolidated funds | 31,095 | 33,176 | ||||||
| | | | | | | | |
Due from affiliates—Company | $ | 129,870 | $ | 146,534 | ||||
| | | | | | | | |
| | | | | | | | |
Amounts due from portfolio companies and non-consolidated funds | $ | 9,338 | $ | 11,342 | ||||
| | | | | | | | |
Due from affiliates—Consolidated Funds | $ | 9,338 | $ | 11,342 | ||||
| | | | | | | | |
| | | | | | | | |
Due to affiliates: | ||||||||
Management fee rebate payable to non-consolidated funds | $ | 6,048 | $ | 14,390 | ||||
Payments made by non-consolidated funds on behalf of and amounts due from the Company | 1,378 | 4,640 | ||||||
| | | | | | | | |
Due to affiliates—Company | $ | 7,426 | $ | 19,030 | ||||
| | | | | | | | |
| | | | | | | | |
Amounts due to non-consolidated funds | $ | 2,332 | $ | 2,441 | ||||
| | | | | | | | |
Due to affiliates—Consolidated Funds | $ | 2,332 | $ | 2,441 | ||||
| | | | | | | | |
| | | | | | | | |
EARNINGS_PER_COMMON_UNIT_Table
EARNINGS PER COMMON UNIT (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
EARNINGS PER COMMON UNIT | ||||||||
Schedule of the computation of basic and diluted earnings per common unit | ||||||||
For the three months ended | ||||||||
March 31, 2015 | ||||||||
(Dollars in thousands, except unit data) | Basic | Diluted | ||||||
Net income attributable to Ares Management, L.P. | $ | 18,456 | $ | 18,456 | ||||
Earnings distributed to participating securities | (237 | ) | (237 | ) | ||||
| | | | | | | | |
Net income available to common unitholders | $ | 18,219 | $ | 18,219 | ||||
| | | | | | | | |
| | | | | | | | |
Weighted-average common units | 80,667,664 | 80,667,664 | ||||||
| | | | | | | | |
| | | | | | | | |
Effect of dilutive units: | ||||||||
Restricted units | — | — | ||||||
Options | — | — | ||||||
Contingently issuable common units | — | — | ||||||
| | | | | | | | |
Diluted weighted-average common units | 80,667,664 | 80,667,664 | ||||||
| | | | | | | | |
| | | | | | | | |
Earnings per common unit | $ | 0.23 | $ | 0.23 | ||||
| | | | | | | | |
| | | | | | | | |
EQUITY_COMPENSATION_Tables
EQUITY COMPENSATION (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
EQUITY COMPENSATION | ||||||||||||||
Summary of the grant date fair value associated with each equity award issued as well as the expense recognized | ||||||||||||||
Equity | ||||||||||||||
Compensation | ||||||||||||||
Expenses | ||||||||||||||
Recognized, | ||||||||||||||
Net of | ||||||||||||||
Forfeitures | ||||||||||||||
Three Months | ||||||||||||||
Ended | ||||||||||||||
Grant Date Fair | March 31, | |||||||||||||
(Presented in thousands) | Value | 2015 | 2014 | |||||||||||
AEP I Profit Interest | $ | 38,400 | $ | — | $ | — | ||||||||
AEP II Profit Interests | 33,423 | — | 1,504 | |||||||||||
AEP IV Profit Interests | 10,657 | — | — | |||||||||||
AEP VI Profit Interests | 9,047 | — | — | |||||||||||
Exchanged AEP Awards | 68,607 | — | — | |||||||||||
Indicus | ||||||||||||||
Membership Interest | 20,700 | — | 1,036 | |||||||||||
Profit Interest | 5,464 | — | 456 | |||||||||||
AREA Membership Interest | 25,381 | — | 2,343 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 211,679 | $ | — | $ | 5,339 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Schedule of equity-based compensation expense, net of assumed forfeitures | ||||||||||||||
For the | ||||||||||||||
three months ended | ||||||||||||||
March 31, 2015 | ||||||||||||||
Restricted units | $ | 3,445 | ||||||||||||
Options | 3,853 | |||||||||||||
Phantom units | 623 | |||||||||||||
| | | | | ||||||||||
Equity-based compensation expense | $ | 7,921 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Summary of unvested restricted units' activity | ||||||||||||||
Restricted Units | Weighted Average | |||||||||||||
Grant Date Fair | ||||||||||||||
Value Per Unit | ||||||||||||||
Balance—January 1, 2015 | 4,776,053 | $ | 18.08 | |||||||||||
Granted | 171,444 | 17.27 | ||||||||||||
Forfeited | (75,920 | ) | 18.05 | |||||||||||
| | | | | | | | |||||||
Balance—March 31, 2015 | 4,871,577 | $ | 18.06 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Summary of unvested options activity | ||||||||||||||
Options | Weighted Average | Weighted Average | Aggregate | |||||||||||
Exercise Price | Remaining Life | Intrinsic | ||||||||||||
(in years) | Value | |||||||||||||
Balance—January 1, 2015 | 24,230,518 | $ | 19 | 9.33 | ||||||||||
Granted | 935,135 | 18.82 | 9.83 | |||||||||||
Forfeited | (142,675 | ) | 19 | — | ||||||||||
| | | | | | | | | | | | | | |
Balance—March 31, 2015 | 25,022,978 | $ | 18.99 | 9.11 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Exercisable at March 31, 2015 | — | — | — | $ | — | |||||||||
Expected to vest after March 31, 2015 | 19,333,428 | 18.99 | 9.11 | $ | — | |||||||||
Schedule of fair value of each option based on the Black-Scholes model and the weighted averages | The fair value of each option granted during the three months ended March 31, 2015 is measured on the date of grant using the Black-Scholes option-pricing model and the following weighted average assumptions: | |||||||||||||
Risk-free interest rate | 1.71% to 1.80% | |||||||||||||
Weighted average expected dividend yield | 5.00% | |||||||||||||
Expected volatility factor(a) | 35.00% to 36.00% | |||||||||||||
Expected life in years | 6.66 to 7.49 | |||||||||||||
(a) | Expected volatility is based on comparable companies using daily stock prices. | |||||||||||||
Summary of unvested Phantom units activity | ||||||||||||||
Phantom Units | Weighted Average | |||||||||||||
Grant Date Fair Value | ||||||||||||||
Per Unit | ||||||||||||||
Balance January 1, 2015 | 610,711 | $ | 19 | |||||||||||
Forfeited | (16,538 | ) | 19 | |||||||||||
| | | | | | | | |||||||
Balance March 31, 2015 | 594,173 | $ | 19 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
SEGMENT REPORTING | |||||||||||||||||||||||
Schedule of financial results for Company's operating segments, as well as the OMG | The following table presents the financial results for the Company's operating segments, as well as the OMG, as of and for the three months ended March 31, 2015: | ||||||||||||||||||||||
Tradable | Direct | Private | Real | Total | OMG | Total | |||||||||||||||||
Credit | Lending | Equity | Estate | Segments | Stand | ||||||||||||||||||
Group | Group | Group | Group | Alone | |||||||||||||||||||
Management fees (includes ARCC Part I Fees of $29,042) | $ | 37,609 | $ | 70,739 | $ | 36,589 | $ | 17,378 | $ | 162,316 | $ | — | $ | 162,316 | |||||||||
Administrative fees and other income | 21 | 77 | 13 | 856 | 967 | 6,385 | 7,350 | ||||||||||||||||
Compensation and benefits | (8,889 | ) | (33,676 | ) | (12,321 | ) | (10,131 | ) | (65,017 | ) | (28,914 | ) | (93,931 | ) | |||||||||
General, administrative and other expenses | (3,831 | ) | (3,294 | ) | (3,118 | ) | (2,545 | ) | (12,788 | ) | (15,326 | ) | (28,114 | ) | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Fee related earnings (loss) | 24,910 | 33,846 | 21,163 | 5,558 | 85,477 | (37,855 | ) | 47,622 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance fees—realized | 33,325 | 1,889 | 425 | — | 35,639 | — | 35,639 | ||||||||||||||||
Performance fees—unrealized | (27,692 | ) | 8,491 | 87,331 | 319 | 68,449 | — | 68,449 | |||||||||||||||
Performance fee compensation—realized | (19,871 | ) | (1,133 | ) | (340 | ) | — | (21,344 | ) | — | (21,344 | ) | |||||||||||
Performance fee compensation—unrealized | 19,554 | (5,023 | ) | (69,981 | ) | 403 | (55,048 | ) | — | (55,048 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net performance fees | 5,316 | 4,224 | 17,435 | 722 | 27,697 | — | 27,697 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Investment income (loss)—realized | 7,222 | 1,396 | 4,172 | 132 | 12,922 | — | 12,922 | ||||||||||||||||
Investment income (loss)—unrealized | (1,526 | ) | (1,843 | ) | (1,442 | ) | 196 | (4,615 | ) | — | (4,615 | ) | |||||||||||
Interest and other investment income | (1,739 | ) | 213 | 4,485 | 29 | 2,988 | — | 2,988 | |||||||||||||||
Interest expense | (1,208 | ) | (526 | ) | (1,680 | ) | (270 | ) | (3,684 | ) | — | (3,684 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | 2,749 | (760 | ) | 5,535 | 87 | 7,611 | — | 7,611 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance related earnings (loss) | 8,065 | 3,464 | 22,970 | 809 | 35,308 | — | 35,308 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Economic net income (loss) | $ | 32,975 | $ | 37,310 | $ | 44,133 | $ | 6,367 | $ | 120,785 | $ | (37,855 | ) | $ | 82,930 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Distributable earnings (loss) | $ | 41,126 | $ | 34,581 | $ | 27,086 | $ | 3,382 | $ | 106,175 | $ | (38,880 | ) | $ | 67,295 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 451,176 | $ | 248,342 | $ | 862,147 | $ | 166,715 | $ | 1,728,380 | $ | 16,941 | $ | 1,745,321 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
The following table presents the financial results for the Company's operating segments, as well as the OMG, as of and for the three months ended March 31, 2014: | |||||||||||||||||||||||
Tradable | Direct | Private | Real | Total | OMG | Total | |||||||||||||||||
Credit | Lending | Equity | Estate | Segments | Stand | ||||||||||||||||||
Group | Group | Group | Group | Alone | |||||||||||||||||||
Management fees (includes ARCC Part I Fees of $28,318) | $ | 33,693 | $ | 66,204 | $ | 23,196 | $ | 16,768 | $ | 139,861 | $ | — | $ | 139,861 | |||||||||
Administrative fees and other income | 17 | 90 | 76 | 1,290 | 1,473 | 5,392 | 6,865 | ||||||||||||||||
Compensation and benefits | (10,805 | ) | (32,212 | ) | (8,195 | ) | (11,485 | ) | (62,697 | ) | (27,657 | ) | (90,354 | ) | |||||||||
General, administrative and other expenses | (3,696 | ) | (1,914 | ) | (2,000 | ) | (4,267 | ) | (11,877 | ) | (13,535 | ) | (25,412 | ) | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Fee related earnings (loss) | 19,209 | 32,168 | 13,077 | 2,306 | 66,760 | (35,800 | ) | 30,960 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance fees—realized | 10,213 | 39 | 13,086 | — | 23,338 | — | 23,338 | ||||||||||||||||
Performance fees—unrealized | 13,509 | 2,292 | 21,341 | 2,950 | 40,092 | — | 40,092 | ||||||||||||||||
Performance fee compensation—realized | (5,506 | ) | (29 | ) | (10,472 | ) | — | (16,007 | ) | — | (16,007 | ) | |||||||||||
Performance fee compensation—unrealized | (6,355 | ) | (1,451 | ) | (16,912 | ) | — | (24,718 | ) | — | (24,718 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net performance fees | 11,861 | 851 | 7,043 | 2,950 | 22,705 | — | 22,705 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Investment income (loss)—realized | 18,018 | (597 | ) | 1,131 | 730 | 19,282 | — | 19,282 | |||||||||||||||
Investment income (loss)—unrealized | (12,866 | ) | 1,524 | 15,156 | (862 | ) | 2,952 | — | 2,952 | ||||||||||||||
Interest and other income | 251 | 98 | 2,785 | 11 | 3,145 | — | 3,145 | ||||||||||||||||
Interest expense | (387 | ) | (304 | ) | (623 | ) | (325 | ) | (1,639 | ) | — | (1,639 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | 5,016 | 721 | 18,449 | (446 | ) | 23,740 | — | 23,740 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Performance related earnings | 16,877 | 1,572 | 25,492 | 2,504 | 46,445 | — | 46,445 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Economic net income (loss) | $ | 36,086 | $ | 33,740 | $ | 38,569 | $ | 4,810 | $ | 113,205 | $ | (35,800 | ) | $ | 77,405 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Distributable earnings (loss) | $ | 40,704 | $ | 31,158 | $ | 18,698 | $ | 1,499 | $ | 92,059 | $ | (37,512 | ) | $ | 54,547 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 555,851 | $ | 195,543 | $ | 477,710 | $ | 167,315 | $ | 1,396,419 | $ | 10,437 | $ | 1,406,856 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Schedule of reconcile segment results to the Company's income before taxes and total assets | |||||||||||||||||||||||
For the Three months ended March 31, 2015 | |||||||||||||||||||||||
Total | Consolidation Adjustments | Consolidated | |||||||||||||||||||||
Segments | and Reconciling Items | Results | |||||||||||||||||||||
Revenues | $ | 267,370 | -1 | $ | -85,642 | (a) | $ | 181,728 | |||||||||||||||
Expenses | 154,196 | -2 | 84,666 | (b) | 238,862 | ||||||||||||||||||
Other income (expense) | 7,611 | -3 | 456,088 | (c) | 463,699 | ||||||||||||||||||
Economic net income / Income before taxes | 120,785 | 285,780 | (d) | 406,565 | |||||||||||||||||||
Total assets | 1,728,380 | 19,889,776 | (e) | 21,618,156 | |||||||||||||||||||
For the Three months ended March 31, 2014 | |||||||||||||||||||||||
Total | Consolidation Adjustments | Consolidated | |||||||||||||||||||||
Segments | and Reconciling Items | Results | |||||||||||||||||||||
Revenues | $ | 204,764 | -1 | $ | -71,136 | (a) | $ | 133,628 | |||||||||||||||
Expenses | 115,299 | -2 | 68,831 | (b) | 184,130 | ||||||||||||||||||
Other income (expense) | 23,740 | -3 | 301,437 | (c) | 325,177 | ||||||||||||||||||
Economic net income / Income before taxes | 113,205 | 161,470 | (d) | 274,675 | |||||||||||||||||||
Total assets | 1,396,419 | 20,639,082 | (e) | 22,035,501 | |||||||||||||||||||
Schedule of segment revenues consist of management fees, administrative fees and other income, as well as realized and unrealized performance fees | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Management fees | $ | 162,316 | $ | 139,861 | |||||||||||||||||||
Administrative fees and other income | 967 | 1,473 | |||||||||||||||||||||
Performance fees—realized | 35,639 | 23,338 | |||||||||||||||||||||
Performance fees—unrealized | 68,449 | 40,092 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total segment revenue | $ | 267,370 | $ | 204,764 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Schedule of segment expenses consist of compensation and benefits, and general, administrative and other expenses, as well as realized and unrealized performance fee expenses | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Compensation and benefits | $ | 65,017 | $ | 62,697 | |||||||||||||||||||
General, administrative and other expenses | 12,788 | 11,877 | |||||||||||||||||||||
Performance fee compensation—realized | 21,344 | 16,007 | |||||||||||||||||||||
Performance fee compensation—unrealized | 55,048 | 24,718 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total segment expense | $ | 154,196 | $ | 115,299 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Schedule of segment other income consists of realized and unrealized investment income and expenses, interest and other income and interest expenses | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Investment income (loss)—realized | $ | 12,922 | $ | 19,282 | |||||||||||||||||||
Investment Income (loss)—unrealized | (4,615 | ) | 2,952 | ||||||||||||||||||||
Interest, dividend and other investment income | 2,988 | 3,145 | |||||||||||||||||||||
Interest expense | (3,684 | ) | (1,639 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Net investment income | $ | 7,611 | $ | 23,740 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Schedule of revenue adjustment | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Consolidated Fund income eliminated in consolidation | $ | (91,036 | ) | $ | (73,578 | ) | |||||||||||||||||
Administrative fees and other income attributable to OMG | 6,385 | 5,392 | |||||||||||||||||||||
Performance fees—unrealized reclass(1) | (990 | ) | (2,950 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidated adjustments and reconciling items | $ | (85,642 | ) | $ | (71,136 | ) | |||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-1 | Related to performance fees for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within other income (expense) in the Company's Condensed Consolidated Statements of Operations. | ||||||||||||||||||||||
Schedule of expenses adjustment | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Consolidated Fund expenses added in consolidation | $ | 48,571 | $ | 40,637 | |||||||||||||||||||
Consolidated Fund expenses eliminated in consolidation | (33,499 | ) | (31,700 | ) | |||||||||||||||||||
OMG expenses | 44,240 | 41,192 | |||||||||||||||||||||
Acquisition related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Equity compensation expense | 7,921 | 5,339 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | $ | 84,666 | $ | 68,831 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Schedule of other income adjustment | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Consolidated Funds other income added in consolidation, net | $ | 461,059 | $ | 321,117 | |||||||||||||||||||
Other income from Consolidated Funds eliminated in consolidation, net | (5,951 | ) | (22,630 | ) | |||||||||||||||||||
Performance fee reclass(1) | 990 | 2,950 | |||||||||||||||||||||
Other non-cash items | (10 | ) | — | ||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | $ | 456,088 | $ | 301,437 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-1 | Related to performance fees for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within other (income) expense in the Company's Condensed Consolidated Statements of Operations. | ||||||||||||||||||||||
Schedule of reconciliation of income before taxes from reportable segments to economic net income, to fee related earnings, to performance related earnings and to distributable earnings of entity's Consolidated Statement of Operations | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Economic net income | |||||||||||||||||||||||
Income before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
Acquisition-related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
OMG expenses, net | 37,855 | 35,800 | |||||||||||||||||||||
Other non-cash items | 10 | — | |||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | (285,780 | ) | (161,470 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Economic net income | $ | 120,785 | $ | 113,205 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | |||||||||||||||||||||||
Income before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
Acquisition-related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
OMG expenses, net | 37,855 | 35,800 | |||||||||||||||||||||
Other non-cash items | 10 | — | |||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | (285,780 | ) | (161,470 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Economic net income | 120,785 | 113,205 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total performance fees income—realized | (35,639 | ) | (23,338 | ) | |||||||||||||||||||
Total performance fees income—unrealized | (68,449 | ) | (40,092 | ) | |||||||||||||||||||
Total performance fee compensation—realized | 21,344 | 16,007 | |||||||||||||||||||||
Total performance fee compensation—unrealized | 55,048 | 24,718 | |||||||||||||||||||||
Total investment income | (7,611 | ) | (23,740 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | $ | 85,477 | $ | 66,760 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Management fees | $ | 162,316 | $ | 139,861 | |||||||||||||||||||
Administrative fees and other income | 967 | 1,473 | |||||||||||||||||||||
Compensation and benefits | (65,017 | ) | (62,697 | ) | |||||||||||||||||||
General, administrative and other expenses | (12,788 | ) | (11,877 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | $ | 85,477 | $ | 66,760 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Performance related earnings: | |||||||||||||||||||||||
Income before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Depreciation expense | 1,273 | 2,059 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
Acquisition-related expenses | 2,224 | 1,421 | |||||||||||||||||||||
Placement fees and underwriting costs | 3,045 | 1,052 | |||||||||||||||||||||
OMG expenses, net | 37,855 | 35,800 | |||||||||||||||||||||
Other non-cash items | 10 | — | |||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Economic net income | 120,785 | 113,205 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total management fees | (162,316 | ) | (139,861 | ) | |||||||||||||||||||
Administrative fees and other income | (967 | ) | (1,473 | ) | |||||||||||||||||||
Compensation and benefits | 65,017 | 62,697 | |||||||||||||||||||||
General, administrative and other expenses | 12,788 | 11,877 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Performance related earnings | $ | 35,308 | $ | 46,445 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Total performance fees—realized | $ | 35,639 | $ | 23,338 | |||||||||||||||||||
Total performance fees—unrealized | 68,449 | 40,092 | |||||||||||||||||||||
Total performance fee compensation—realized | (21,344 | ) | (16,007 | ) | |||||||||||||||||||
Total performance fee compensation—unrealized | (55,048 | ) | (24,718 | ) | |||||||||||||||||||
Net investment income (loss) | 7,611 | 23,740 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Performance related earnings | $ | 35,308 | $ | 46,445 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Distributable earnings | |||||||||||||||||||||||
Income (loss) before taxes | $ | 406,565 | $ | 274,675 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles | 10,892 | 8,831 | |||||||||||||||||||||
Equity compensation expenses | 7,921 | 5,339 | |||||||||||||||||||||
OMG distributable loss(1) | 38,880 | 37,512 | |||||||||||||||||||||
Non-cash acquisition-related expenses | 1,251 | — | |||||||||||||||||||||
Taxes paid(2) | (479 | ) | — | ||||||||||||||||||||
Dividend equivalent | (912 | ) | — | ||||||||||||||||||||
Other non-cash items | (156 | ) | — | ||||||||||||||||||||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | (349,001 | ) | (215,972 | ) | |||||||||||||||||||
Unrealized performance fees | (68,449 | ) | (40,092 | ) | |||||||||||||||||||
Unrealized performance fee compensation | 55,048 | 24,718 | |||||||||||||||||||||
Unrealized investment and other income (loss) | 4,615 | (2,952 | ) | ||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Distributable earnings | $ | 106,175 | $ | 92,059 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
Fee related earnings | $ | 85,477 | $ | 66,760 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Performance fees—realized | 35,639 | 23,338 | |||||||||||||||||||||
Performance fee compensation—realized | (21,344 | ) | (16,007 | ) | |||||||||||||||||||
Investment and other income realized, net | 12,226 | 20,788 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Net performance related earnings—realized | 26,521 | 28,119 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Less: | |||||||||||||||||||||||
Dividend equivalent(3) | (684 | ) | — | ||||||||||||||||||||
One-time acquisition costs(3) | (724 | ) | — | ||||||||||||||||||||
Income tax expense(3) | (476 | ) | — | ||||||||||||||||||||
Non-cash items | (156 | ) | — | ||||||||||||||||||||
Placement fees and underwriting costs | (3,045 | ) | (1,052 | ) | |||||||||||||||||||
Non-cash depreciation and amortization(3) | (739 | ) | (1,768 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
Distributable earnings | $ | 106,175 | $ | 92,059 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
-1 | Represents OMG distributable earnings which includes depreciation expense. | ||||||||||||||||||||||
-2 | Represents current portion of income tax expense of subsidiary operating entities. | ||||||||||||||||||||||
-3 | Certain costs are reduced by the amounts attributable to OMG, which is excluded from segment results. | ||||||||||||||||||||||
Schedule of reconciliation of total segment assets to total assets reported in the Consolidated Statements of Financial Condition | |||||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Total assets from Consolidated Funds added in consolidation | $ | 20,722,470 | $ | 21,420,284 | |||||||||||||||||||
Total assets from Consolidated Funds eliminated in consolidation | (849,635 | ) | (791,639 | ) | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
OMG assets | 16,941 | 10,437 | |||||||||||||||||||||
| | | | | | | | ||||||||||||||||
Total consolidation adjustments and reconciling items | $ | 19,889,776 | $ | 20,639,082 | |||||||||||||||||||
| | | | | | | | ||||||||||||||||
| | | | | | | | ||||||||||||||||
CONSOLIDATING_SCHEDULES_Tables
CONSOLIDATING SCHEDULES (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
CONSOLIDATING SCHEDULES | ||||||||||||||
Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition | ||||||||||||||
As of March 31, 2015 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 69,372 | $ | — | $ | — | $ | 69,372 | ||||||
Investments | 606,875 | — | (408,245 | ) | 198,630 | |||||||||
Derivative assets, at fair value | 8,217 | — | — | 8,217 | ||||||||||
Performance fees receivable | 590,308 | — | (418,515 | ) | 171,793 | |||||||||
Due from affiliates | 150,466 | — | (20,596 | ) | 129,870 | |||||||||
Other assets | 55,735 | — | (45 | ) | 55,690 | |||||||||
Intangible assets, net | 120,268 | — | — | 120,268 | ||||||||||
Goodwill | 144,080 | — | — | 144,080 | ||||||||||
Assets of Consolidated Funds | ||||||||||||||
Cash and cash equivalents | — | 1,318,017 | — | 1,318,017 | ||||||||||
Investments | — | 18,990,943 | — | 18,990,943 | ||||||||||
Loans held for investment, net | — | 85,214 | — | 85,214 | ||||||||||
Due from affiliates | — | 11,572 | (2,234 | ) | 9,338 | |||||||||
Dividends and interest receivable | — | 71,761 | — | 71,761 | ||||||||||
Receivable for securities sold | — | 234,938 | — | 234,938 | ||||||||||
Derivative assets, at fair value | — | 3,696 | — | 3,696 | ||||||||||
Other assets | — | 6,329 | — | 6,329 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 1,745,321 | $ | 20,722,470 | $ | (849,635 | ) | $ | 21,618,156 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Accounts payable and accrued expenses | $ | 127,053 | $ | — | $ | (668 | ) | $ | 126,385 | |||||
Accrued compensation | 55,307 | — | — | 55,307 | ||||||||||
Derivative liabilities, at fair value | 2,973 | — | — | 2,973 | ||||||||||
Due to affiliates | 8,456 | — | (1,030 | ) | 7,426 | |||||||||
Performance fee compensation payable | 421,074 | — | (887 | ) | 420,187 | |||||||||
Debt obligations | 298,614 | — | — | 298,614 | ||||||||||
Equity compensation put option liability | 20,000 | — | — | 20,000 | ||||||||||
Deferred tax liability, net | 21,026 | — | — | 21,026 | ||||||||||
Liabilities of Consolidated Funds | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | — | 54,337 | (273 | ) | 54,064 | |||||||||
Due to affiliates | — | 66,545 | (64,213 | ) | 2,332 | |||||||||
Payable for securities purchased | — | 475,380 | — | 475,380 | ||||||||||
Derivative liabilities, at fair value | — | 59,483 | — | 59,483 | ||||||||||
Securities sold short, at fair value | — | 3,763 | — | 3,763 | ||||||||||
Deferred tax liability, net | — | 23,585 | — | 23,585 | ||||||||||
CLO loan obligations | — | 12,222,880 | (68,203 | ) | 12,154,677 | |||||||||
Fund borrowings | — | 683,564 | — | 683,564 | ||||||||||
Mezzanine debt | — | 406,371 | — | 406,371 | ||||||||||
| | | | | | | | | | | | | | |
Total liabilities | 954,503 | 13,995,908 | (135,274 | ) | 14,815,137 | |||||||||
| | | | | | | | | | | | | | |
Commitments and contingencies | ||||||||||||||
Redeemable interest in Consolidated Funds | — | 915,017 | — | 915,017 | ||||||||||
Redeemable interest in Ares Operating Group entities | 24,077 | — | — | 24,077 | ||||||||||
Non-controlling interest in Consolidated Funds: | ||||||||||||||
Non-controlling interest in Consolidated Funds | — | 5,755,549 | (718,910 | ) | 5,036,639 | |||||||||
Equity appropriated for Consolidated Funds | — | 55,996 | — | 55,996 | ||||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Consolidated Funds | — | 5,811,545 | (718,910 | ) | 5,092,635 | |||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Ares Operating Group entities | 481,775 | — | — | 481,775 | ||||||||||
Controlling interest in Ares Management, L.P.: | ||||||||||||||
Partners' Capital (80,667,664 units issued and outstanding) | 291,641 | — | — | 291,641 | ||||||||||
Accumulated other comprehensive gain (loss) | (6,676 | ) | — | 4,550 | (2,126 | ) | ||||||||
| | | | | | | | | | | | | | |
Total controlling interest in Ares Management, L.P | 284,965 | — | 4,550 | 289,515 | ||||||||||
| | | | | | | | | | | | | | |
Total equity | 766,740 | 5,811,545 | (714,360 | ) | 5,863,925 | |||||||||
| | | | | | | | | | | | | | |
Total liabilities, redeemable interests, non-controlling interests and equity | $ | 1,745,321 | $ | 20,722,470 | $ | (849,635 | ) | $ | 21,618,156 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
As of December 31, 2014 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 148,858 | $ | — | $ | — | $ | 148,858 | ||||||
Restricted cash and cash equivalents | 32,734 | — | — | 32,734 | ||||||||||
Investments | 598,074 | — | (424,022 | ) | 174,052 | |||||||||
Derivative assets, at fair value | 7,623 | — | — | 7,623 | ||||||||||
Performance fees receivable | 548,098 | — | (361,039 | ) | 187,059 | |||||||||
Due from affiliates | 166,225 | — | (19,691 | ) | 146,534 | |||||||||
Other assets | 58,809 | — | (93 | ) | 58,716 | |||||||||
Intangible assets, net | 40,948 | — | — | 40,948 | ||||||||||
Goodwill | 85,582 | — | — | 85,582 | ||||||||||
Assets of Consolidated Funds | ||||||||||||||
Cash and cash equivalents | — | 1,314,397 | — | 1,314,397 | ||||||||||
Investments, at fair value | — | 19,123,950 | — | 19,123,950 | ||||||||||
Loans held for investment, net | — | 77,514 | — | 77,514 | ||||||||||
Due from affiliates | — | 13,262 | (1,920 | ) | 11,342 | |||||||||
Dividends and interest receivable | — | 81,331 | — | 81,331 | ||||||||||
Receivable for securities sold | — | 132,753 | — | 132,753 | ||||||||||
Derivative assets, at fair value | — | 3,126 | — | 3,126 | ||||||||||
Other assets | — | 6,156 | — | 6,156 | ||||||||||
| | | | | | | | | | | | | | |
Total assets | $ | 1,686,951 | $ | 20,752,489 | $ | (806,765 | ) | $ | 21,632,675 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Liabilities | ||||||||||||||
Accounts payable and accrued expenses | $ | 101,912 | $ | — | $ | (602 | ) | $ | 101,310 | |||||
Accrued compensation | 129,433 | — | — | 129,433 | ||||||||||
Derivative liabilities, at fair value | 2,850 | — | — | 2,850 | ||||||||||
Due to affiliates | 19,881 | — | (851 | ) | 19,030 | |||||||||
Performance fee compensation payable | 381,164 | — | (896 | ) | 380,268 | |||||||||
Debt obligations | 243,491 | — | — | 243,491 | ||||||||||
Equity compensation put option liability | 20,000 | — | — | 20,000 | ||||||||||
Deferred tax liability, net | 19,861 | — | — | 19,861 | ||||||||||
Liabilities of Consolidated Funds | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | — | 68,674 | (85 | ) | 68,589 | |||||||||
Due to affiliates | — | 63,417 | (60,976 | ) | 2,441 | |||||||||
Payable for securities purchased | — | 618,902 | — | 618,902 | ||||||||||
Derivative liabilities, at fair value | — | 42,332 | — | 42,332 | ||||||||||
Securities sold short, at fair value | — | 3,763 | — | 3,763 | ||||||||||
Deferred tax liability, net | — | 22,214 | — | 22,214 | ||||||||||
CLO loan obligations | — | 12,120,842 | (71,672 | ) | 12,049,170 | |||||||||
Fund borrowings | — | 771,283 | — | 771,283 | ||||||||||
Mezzanine debt | — | 378,365 | — | 378,365 | ||||||||||
| | | | | | | | | | | | | | |
Total liabilities | 918,592 | 14,089,792 | (135,082 | ) | 14,873,302 | |||||||||
| | | | | | | | | | | | | | |
Commitments and contingencies | ||||||||||||||
Redeemable interest in Consolidated Funds | — | 1,037,450 | — | 1,037,450 | ||||||||||
Redeemable interest in Ares Operating Group entities | 23,988 | — | — | 23,988 | ||||||||||
Non-controlling interest in Consolidated Funds: | ||||||||||||||
Non-controlling interest in Consolidated Funds | — | 5,663,172 | (674,443 | ) | 4,988,729 | |||||||||
Equity appropriated for Consolidated Funds | — | (37,926 | ) | — | (37,926 | ) | ||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Consolidated Funds | — | 5,625,246 | (674,443 | ) | 4,950,803 | |||||||||
| | | | | | | | | | | | | | |
Non-controlling interest in Ares Operating Group entities | 463,493 | — | — | 463,493 | ||||||||||
Controlling interest in Ares Management, L.P.: | ||||||||||||||
Partners' Capital (80,667,664 units issued and outstanding) | 285,025 | — | — | 285,025 | ||||||||||
Accumulated other comprehensive gain (loss) | (4,146 | ) | — | 2,760 | (1,386 | ) | ||||||||
| | | | | | | | | | | | | | |
Total controlling interest in Ares Management, L.P | 280,879 | — | 2,760 | 283,639 | ||||||||||
| | | | | | | | | | | | | | |
Total equity | 744,372 | 5,625,246 | (671,683 | ) | 5,697,935 | |||||||||
| | | | | | | | | | | | | | |
Total liabilities, redeemable interests, non-controlling interests and equity | $ | 1,686,951 | $ | 20,752,489 | $ | (806,765 | ) | $ | 21,632,675 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of results from operations | ||||||||||||||
For the Three Months Ended March 31, 2015 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Revenues | ||||||||||||||
Management fees (includes ARCC Part I Fees of $29,042) | $ | 162,316 | $ | — | $ | (26,927 | ) | $ | 135,389 | |||||
Performance fees | 103,098 | — | (63,038 | ) | 40,060 | |||||||||
Other fees | 7,350 | — | (1,071 | ) | 6,279 | |||||||||
| | | | | | | | | | | | | | |
Total revenues | 272,764 | — | (91,036 | ) | 181,728 | |||||||||
| | | | | | | | | | | | | | |
Expenses | ||||||||||||||
Compensation and benefits | 101,851 | — | — | 101,851 | ||||||||||
Performance fee compensation | 76,392 | — | — | 76,392 | ||||||||||
General, administrative and other expense | 45,547 | — | — | 45,547 | ||||||||||
Consolidated Fund expenses | — | 48,571 | (33,499 | ) | 15,072 | |||||||||
| | | | | | | | | | | | | | |
Total expenses | 223,790 | 48,571 | (33,499 | ) | 238,862 | |||||||||
| | | | | | | | | | | | | | |
Other income (expense) | ||||||||||||||
Interest and other investment income | 6,033 | — | (5,691 | ) | 342 | |||||||||
Interest expense | (3,684 | ) | — | — | (3,684 | ) | ||||||||
Other income (expense), net | (3,054 | ) | — | 2,724 | (330 | ) | ||||||||
Net realized gain (loss) on investments | 12,922 | — | (6,158 | ) | 6,764 | |||||||||
Net change in unrealized appreciation (depreciation) on investments | (3,626 | ) | — | 7,102 | 3,476 | |||||||||
Interest and other investment income of Consolidated Funds | — | 338,376 | (190 | ) | 338,186 | |||||||||
Interest expense of Consolidated Funds | — | (122,634 | ) | 3,923 | (118,711 | ) | ||||||||
Net realized gain (loss) on investments of Consolidated Funds | — | (61,436 | ) | — | (61,436 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | — | 306,753 | (7,661 | ) | 299,092 | |||||||||
| | | | | | | | | | | | | | |
Total other income (expense) | 8,591 | 461,059 | (5,951 | ) | 463,699 | |||||||||
| | | | | | | | | | | | | | |
Income before taxes | 57,565 | 412,488 | (63,488 | ) | 406,565 | |||||||||
Income tax expense (benefit) | 4,059 | 1,833 | — | 5,892 | ||||||||||
| | | | | | | | | | | | | | |
Net income | 53,506 | 410,655 | (63,488 | ) | 400,673 | |||||||||
| | | | | | | | | | | | | | |
Less: Net income attributable to redeemable interests in Consolidated Funds | — | 18,219 | (2,360 | ) | 15,859 | |||||||||
Less: Net income attributable to non-controlling interests in Consolidated Funds | — | 392,437 | (61,128 | ) | 331,309 | |||||||||
Less: Net income attributable to redeemable interests in Ares Operating Group entities | 243 | — | — | 243 | ||||||||||
Less: Net income attributable to non-controlling interests in Ares Operating Group entities | 34,806 | — | — | 34,806 | ||||||||||
| | | | | | | | | | | | | | |
Net income attributable to Ares Management, L.P. | $ | 18,456 | $ | — | $ | — | $ | 18,456 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
For the Three Months Ended March 31, 2014 | ||||||||||||||
Consolidated | Consolidated | Eliminations | Consolidated | |||||||||||
Company | Funds | |||||||||||||
Entities | ||||||||||||||
Revenues | ||||||||||||||
Management fees (includes ARCC Part I Fees of $28,318) | $ | 139,861 | $ | — | $ | (29,312 | ) | $ | 110,549 | |||||
Performance fees | 60,480 | — | (44,266 | ) | 16,214 | |||||||||
Other fees | 6,865 | — | — | 6,865 | ||||||||||
| | | | | | | | | | | | | | |
Total revenues | 207,206 | — | (73,578 | ) | 133,628 | |||||||||
| | | | | | | | | | | | | | |
Expenses | ||||||||||||||
Compensation and benefits | 95,693 | — | — | 95,693 | ||||||||||
Performance fee compensation | 40,725 | — | — | 40,725 | ||||||||||
General, administrative and other expense | 38,775 | — | — | 38,775 | ||||||||||
Consolidated Fund expenses | — | 40,637 | (31,700 | ) | 8,937 | |||||||||
| | | | | | | | | | | | | | |
Total expenses | 175,193 | 40,637 | (31,700 | ) | 184,130 | |||||||||
| | | | | | | | | | | | | | |
Other income (expense) | ||||||||||||||
Interest and other investment income | 3,483 | — | (3,359 | ) | 124 | |||||||||
Interest expense | (1,639 | ) | — | — | (1,639 | ) | ||||||||
Net realized gain (loss) on investments | 19,281 | — | (19,347 | ) | (66 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on investments | 5,565 | — | (1,419 | ) | 4,146 | |||||||||
Interest and other investment income of Consolidated Funds | — | 345,476 | (131 | ) | 345,345 | |||||||||
Interest expense of Consolidated Funds | — | (145,737 | ) | 695 | (145,042 | ) | ||||||||
Net realized gain (loss) on investments of Consolidated Funds | — | 54,965 | — | 54,965 | ||||||||||
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | — | 66,413 | 931 | 67,344 | ||||||||||
| | | | | | | | | | | | | | |
Total other income (expense) | 26,690 | 321,117 | (22,630 | ) | 325,177 | |||||||||
| | | | | | | | | | | | | | |
Income before taxes | 58,703 | 280,480 | (64,508 | ) | 274,675 | |||||||||
Income tax expense | 2,514 | (9,209 | ) | — | (6,695 | ) | ||||||||
| | | | | | | | | | | | | | |
Net income | 56,189 | 289,689 | (64,508 | ) | 281,370 | |||||||||
| | | | | | | | | | | | | | |
Less: Net income attributable to redeemable interests in Consolidated Funds | — | 42,018 | (4,970 | ) | 37,048 | |||||||||
Less: Net income attributable to non-controlling interests in Consolidated Funds | — | 247,671 | (59,538 | ) | 188,133 | |||||||||
Less: Net income attributable to redeemable interests in Ares Operating Group entities | 406 | — | — | 406 | ||||||||||
Less: Net income attributable to non-controlling interests in Ares Operating Group entities | 12,936 | — | — | 12,936 | ||||||||||
Less: Net income attributable to controlling interest in Predecessor | 42,847 | — | — | 42,847 | ||||||||||
| | | | | | | | | | | | | | |
Net income attributable to Ares Management, L.P. | $ | — | $ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
ORGANIZATION_AND_BASIS_OF_PRES1
ORGANIZATION AND BASIS OF PRESENTATION (Details) | 3 Months Ended |
Mar. 31, 2015 | |
entity | |
item | |
ORGANIZATION AND BASIS OF PRESENTATION | |
Number operating segments | 4 |
ORGANIZATION AND BASIS OF PRESENTATION | |
Number of affiliated entities results included in accompanying combined and consolidated financial statements | 2 |
APMC | AH LLC | |
ORGANIZATION AND BASIS OF PRESENTATION | |
Controlling ownership interest (as a percent) | 50.10% |
APMC | AI | |
ORGANIZATION AND BASIS OF PRESENTATION | |
Controlling ownership interest (as a percent) | 70.30% |
ORGANIZATION_AND_BASIS_OF_PRES2
ORGANIZATION AND BASIS OF PRESENTATION (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | |
Jun. 04, 2014 | 7-May-14 | Mar. 31, 2015 | |
ORGANIZATION AND BASIS OF PRESENTATION | |||
Ares Owners Holdings, L.P. direct ownership percentage of each of the Ares Operating Group Entities | 56.28% | ||
Number of partnership units Ares Owners Holdings, L.P. of each of the Ares Operating Group Entities | 119,937,609 | ||
An affiliate of Alleghany Corporation direct ownership percentage of each of the Ares Operating Group Entities | 5.87% | ||
Number of AOG Units an affiliate of Alleghany Corporation owns of each of the Ares Operating Group entities | 12,500,000 | ||
Issuance of common units (in units) | 11,363,636 | ||
Price per common units issued in IPO (in dollars per unit) | $19 | ||
Common units issued pursuant to over-allotment option (in units) | 225,794 | ||
Price per common units issued pursuant to over-allotment option (in dollars per unit) | $19 | ||
AOG | |||
ORGANIZATION AND BASIS OF PRESENTATION | |||
Maximum ratio for exchange of units | 4 | ||
Units conversion ratio | 100.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
item | item | ||
Variable Interest Model | |||
Assets | $21,618,156,000 | $22,035,501,000 | $21,632,675,000 |
Liabilities | 14,815,137,000 | 14,873,302,000 | |
Number of funds deconsolidated due to them being liquidated or dissolved | 1 | 3 | |
Number of funds deconsolidated due to no longer holding majority voting interest | 0 | 4 | |
Number of funds deconsolidated due to no longer being primary beneficiary | 8 | 11 | |
Investments in Non-Consolidated Variable Interest Entities | |||
Cash payment to redeem interest in Ares Operating Group entities | 20,000,000 | ||
Income Allocation | |||
Average daily ownership (as a percent) | 37.85% | ||
Unfunded commitments | 258,300,000 | 187,900,000 | |
Minimum | |||
Variable Interest Model | |||
Number of parties equity interests to be aggregated | 2 | ||
Parent Company | |||
Equity Appropriated for Consolidated Funds | |||
Investments | 198,630,000 | 174,052,000 | |
Investments in Non-Consolidated Variable Interest Entities | |||
Maximum exposure to loss in non-consolidated VIEs | 16,741,000 | 14,851,000 | |
Parent Company | Consolidated VIEs | |||
Equity Appropriated for Consolidated Funds | |||
Investments | 178,200,000 | 193,000,000 | |
Consolidated VIEs | |||
Variable Interest Model | |||
Assets | 14,300,000,000 | 14,200,000,000 | |
Liabilities | 13,300,000,000 | 13,200,000,000 | |
Consolidated Funds | |||
Equity Appropriated for Consolidated Funds | |||
Investments | 18,990,943,000 | 19,123,950,000 | |
Investments in Non-Consolidated Variable Interest Entities | |||
Maximum exposure to loss in non-consolidated VIEs | $2,236,000 | $2,519,000 | |
Consolidated Funds | Collateralized loan obligation | |||
Equity Appropriated for Consolidated Funds | |||
Number of CLOs consolidated | 26 | 31 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Dec. 31, 2014 | Mar. 31, 2015 |
In Millions, unless otherwise specified | ||
Other assets | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Unamortized debt issuance costs | $5.30 | |
Debt obligations | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Unamortized debt issuance costs | 7.2 | |
Debt obligations | Adjustments for New Accounting Principle, Early Adoption | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Unamortized debt issuance costs | 2.3 | |
Debt obligations | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Unamortized debt issuance costs | 6.3 | |
Consolidated Funds | Debt obligations | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Unamortized debt issuance costs | $5.90 |
BUSINESS_COMBINATIONS_GOODWILL2
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS (Details 1) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Jan. 01, 2015 | Jul. 01, 2015 | Dec. 31, 2014 | |
item | ||||
Business Combination Consideration Transferred | ||||
Equity (1,578,947 Ares Operating Group units) | $25,468,000 | |||
Units issued (in units) | 80,667,664 | 80,667,664 | ||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Goodwill, Total | 144,080,000 | 85,582,000 | ||
AOG | ||||
Business Combination Consideration Transferred | ||||
Units issued (in units) | 80,667,664 | |||
EIF Management, LLC | ||||
Business Combination Consideration Transferred | ||||
Assets under management | 4,400,000,000 | |||
Number of commingled funds | 4 | |||
Number of related co-investment vehicles | 4 | |||
Cash | 64,532,000 | |||
Equity (1,578,947 Ares Operating Group units) | 25,468,000 | |||
Contingent consideration | 59,171,000 | |||
Total | 149,171,000 | |||
The fair value of the liability for contingent consideration | 78,000,000 | |||
The fair value of the equity portion of the liability of contingent consideration | 18,800,000 | |||
Contingent consideration discount rate | 4.10% | |||
Number of leases evaluated | 3 | |||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Cash | 95,000 | |||
Other tangible assets | 610,000 | |||
Total intangible assets acquired | 90,321,000 | |||
Total identifiable assets acquired | 91,026,000 | |||
Accounts payable, accrued expenses and other liabilities | 455,000 | |||
Total liabilities assumed | 455,000 | |||
Net identifiable assets acquired | 90,571,000 | |||
Goodwill: Assembled workforce | 8,300,000 | |||
Goodwill: Others | 50,300,000 | |||
Goodwill, Total | 58,600,000 | 58,600,000 | ||
Net assets acquired | 149,171,000 | |||
Acquisition-related expenses | 3,600,000 | |||
EIF Management, LLC | Management Contracts | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Total intangible assets acquired | 48,521,000 | |||
EIF Management, LLC | Client relationships | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Total intangible assets acquired | 38,600,000 | |||
EIF Management, LLC | Trade Name | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Total intangible assets acquired | 3,200,000 | |||
EIF Management, LLC | AOG | ||||
Business Combination Consideration Transferred | ||||
Units issued (in units) | 1,578,947 | |||
EIF Management, LLC | Minimum | ||||
Business Combination Consideration Transferred | ||||
Fund V final closing vesting period | 2 years | |||
Contingent consideration adjusted revenue amount | 16,900,000 | |||
EIF Management, LLC | Minimum | Management Contracts | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Estimated useful lives | 2 years | |||
EIF Management, LLC | Minimum | Client relationships | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Estimated useful lives | 12 years | |||
EIF Management, LLC | Minimum | Trade Name | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Estimated useful lives | 7 years | |||
EIF Management, LLC | Maximum | ||||
Business Combination Consideration Transferred | ||||
Fund V final closing vesting period | 5 years | |||
Percentage of Ares Operating Group Units exchangeable | 50.00% | 50.00% | ||
Contingent consideration adjusted revenue amount | $45,000,000 | |||
EIF Management, LLC | Maximum | Management Contracts | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Estimated useful lives | 4 years | |||
EIF Management, LLC | Maximum | Client relationships | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Estimated useful lives | 15 years | |||
EIF Management, LLC | Maximum | Trade Name | ||||
Business Combination Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ||||
Estimated useful lives | 8 years |
BUSINESS_COMBINATIONS_GOODWILL3
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS (Details 2) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Carrying value for the Company's intangible assets | ||
Finite-lived intangible assets | $203,899 | $114,102 |
Less: accumulated amortization | -83,631 | -73,154 |
Finite-lived intangible assets, net | 120,268 | 40,948 |
Goodwill | 144,080 | 85,582 |
Total intangible assets and goodwill, net | 264,348 | 126,530 |
Impairments of goodwill | 0 | 0 |
Parent Company | ||
Carrying value for the Company's intangible assets | ||
Goodwill | $144,080 | $85,582 |
BUSINESS_COMBINATIONS_GOODWILL4
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS (Details 3) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Finite-lived intangible assets, net | |||
Total intangible assets acquired | $203,899,000 | $114,102,000 | |
Less: accumulated amortization | -83,631,000 | -73,154,000 | |
Finite-lived intangible assets, net | 120,268,000 | 40,948,000 | |
Amortization expense | 10,900,000 | 8,800,000 | |
Accelerated amortization expense | 0 | 3,000,000 | |
Previously acquired management contracts | |||
Finite-lived intangible assets, net | |||
Total intangible assets acquired | 113,578,000 | 114,102,000 | |
Management contracts | EIF Management, LLC | |||
Finite-lived intangible assets, net | |||
Total intangible assets acquired | 48,521,000 | ||
Client relationships | EIF Management, LLC | |||
Finite-lived intangible assets, net | |||
Total intangible assets acquired | 38,600,000 | ||
Trade Name | EIF Management, LLC | |||
Finite-lived intangible assets, net | |||
Total intangible assets acquired | $3,200,000 |
INVESTMENTS_Detail
INVESTMENTS (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
INVESTMENTS | ||
Equity-method investment | $3,884 | $3,728 |
Equity-method investment at fair value | 5,000 | |
Total equity-method investment | $8,884 | $3,728 |
INVESTMENTS_Details_2
INVESTMENTS (Details 2) (Parent Company, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Investments | ||
Investments, at fair value | $189,746 | $170,324 |
Fair value as a percentage of total investments | 100.00% | 100.00% |
Investments, at cost | 148,972 | 130,014 |
Private Investment Partnership Interests | ||
Investments | ||
Investments, at fair value | 188,473 | 169,057 |
Fair value as a percentage of total investments | 99.30% | 99.20% |
Investments, at cost | 147,712 | 128,756 |
Private Investment Partnership Interests | AREA European Property Enhancement Program L.P | ||
Investments | ||
Investments, at fair value | 1,989 | 1,760 |
Fair value as a percentage of total investments | 1.00% | 1.00% |
Private Investment Partnership Interests | AREA Sponsor Holdings, LLC | ||
Investments | ||
Investments, at fair value | 42,027 | 40,296 |
Fair value as a percentage of total investments | 22.10% | 23.60% |
Private Investment Partnership Interests | Ares Capital Europe II (D), L.P | ||
Investments | ||
Investments, at fair value | 19,294 | 15,592 |
Fair value as a percentage of total investments | 10.20% | 9.20% |
Private Investment Partnership Interests | Ares Capital Europe II (E), L.P | ||
Investments | ||
Investments, at fair value | 35 | 31 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Private Investment Partnership Interests | Ares Centre Street Partnership, L.P. | ||
Investments | ||
Investments, at fair value | 2,471 | 256 |
Fair value as a percentage of total investments | 1.30% | 0.20% |
Private Investment Partnership Interests | Ares Corporate Opportunities Fund, L.P (2) | ||
Investments | ||
Investments, at fair value | 576 | 777 |
Fair value as a percentage of total investments | 0.30% | 0.50% |
Private Investment Partnership Interests | Ares Corporate Opportunities Fund IV LP | ||
Investments | ||
Investments, at fair value | 27,233 | 21,836 |
Fair value as a percentage of total investments | 14.40% | 12.80% |
Private Investment Partnership Interests | Ares Credit Strategies Fund II, L.P | ||
Investments | ||
Investments, at fair value | 636 | 627 |
Fair value as a percentage of total investments | 0.30% | 0.40% |
Private Investment Partnership Interests | Ares Credit Strategies Fund III, L.P | ||
Investments | ||
Investments, at fair value | 19 | 19 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Private Investment Partnership Interests | Ares European Credit Strategies Fund C LP | ||
Investments | ||
Investments, at fair value | 547 | 497 |
Fair value as a percentage of total investments | 0.30% | 0.30% |
Private Investment Partnership Interests | ARES European Real Estate Fund IV LP | ||
Investments | ||
Investments, at fair value | 1,923 | 2,455 |
Fair value as a percentage of total investments | 1.00% | 1.40% |
Private Investment Partnership Interests | Ares Multi Strategy Credit Fund V (H), L.P | ||
Investments | ||
Investments, at fair value | 1,088 | 1,068 |
Fair value as a percentage of total investments | 0.60% | 0.60% |
Private Investment Partnership Interests | Ares Special Situations Fund I-B, L.P | ||
Investments | ||
Investments, at fair value | 1 | 2 |
Private Investment Partnership Interests | Ares Special Situations Fund III, L.P | ||
Investments | ||
Investments, at fair value | 27,452 | 26,867 |
Fair value as a percentage of total investments | 14.50% | 15.80% |
Private Investment Partnership Interests | Ares Special Situations Fund IV, L.P. | ||
Investments | ||
Investments, at fair value | 6,622 | |
Fair value as a percentage of total investments | 3.50% | 0.00% |
Private Investment Partnership Interests | Ares SSF Riopelle, L.P | ||
Investments | ||
Investments, at fair value | 3,915 | 4,211 |
Fair value as a percentage of total investments | 2.10% | 2.50% |
Private Investment Partnership Interests | Ares Strategic Investment Partners, L.P | ||
Investments | ||
Investments, at fair value | 76 | 75 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Private Investment Partnership Interests | Ares Strategic Investment Partners III, L.P | ||
Investments | ||
Investments, at fair value | 2,672 | |
Fair value as a percentage of total investments | 1.60% | |
Private Investment Partnership Interests | Ares Strategic Real Estate Program - HHC, LLC | ||
Investments | ||
Investments, at fair value | 4,344 | 3,094 |
Fair value as a percentage of total investments | 2.30% | 1.80% |
Private Investment Partnership Interests | Ares US Real Estate Fund VIII, L.P. | ||
Investments | ||
Investments, at fair value | 2,877 | 1,574 |
Fair value as a percentage of total investments | 1.50% | 0.90% |
Private Investment Partnership Interests | Resolution Life L.P | ||
Investments | ||
Investments, at fair value | 45,348 | 45,348 |
Fair value as a percentage of total investments | 23.90% | 26.60% |
Common Stock. | ||
Investments | ||
Investments, at fair value | 95 | 89 |
Fair value as a percentage of total investments | 0.10% | 0.10% |
Investments, at cost | 110 | 108 |
Common Stock. | Ares Multi Strategy Credit Fund, Inc. | ||
Investments | ||
Investments, at fair value | 95 | 89 |
Fair value as a percentage of total investments | 0.10% | 0.10% |
Corporate Bonds | ||
Investments | ||
Investments, at fair value | 1,178 | 1,178 |
Fair value as a percentage of total investments | 0.60% | 0.70% |
Investments, at cost | 1,150 | 1,150 |
Corporate Bonds | Ares Commercial Real Estate Corporation Convertible Senior Notes | ||
Investments | ||
Investments, at fair value | $1,178 | $1,178 |
Fair value as a percentage of total investments | 0.60% | 0.70% |
INVESTMENTS_Details_3
INVESTMENTS (Details 3) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
item | item | |
Investments | ||
Number of single issuers above 5% | 0 | 0 |
Maximum | ||
Investments | ||
Fair value as a percentage of total investments | 5.00% | 5.00% |
Consolidated Funds | ||
Investments | ||
Investments, at fair value | 18,990,943 | 19,123,950 |
Fair value as a percentage of total investments | 100.00% | 100.00% |
Securities sold short, at fair value | -3,763 | -3,763 |
Securities sold short, percentage of total investments | 100.00% | 100.00% |
Consolidated Funds | Fixed income asset | ||
Investments | ||
Investments, at fair value | 14,350,501 | 14,640,084 |
Fair value as a percentage of total investments | 75.50% | 76.70% |
Consolidated Funds | Common Stock. | ||
Investments | ||
Investments, at fair value | 4,640,442 | 4,483,866 |
Fair value as a percentage of total investments | 24.50% | 23.30% |
Consolidated Funds | United States | Fixed income asset | ||
Investments | ||
Investments, at fair value | 9,972,448 | 9,753,269 |
Fair value as a percentage of total investments | 52.40% | 51.00% |
Investments, at cost | 10,029,620 | 9,928,006 |
Consolidated Funds | United States | Fixed income asset | Consumer discretionary | ||
Investments | ||
Investments, at fair value | 3,232,955 | 3,136,899 |
Fair value as a percentage of total investments | 17.00% | 16.30% |
Consolidated Funds | United States | Fixed income asset | Consumer staples | ||
Investments | ||
Investments, at fair value | 251,814 | 221,708 |
Fair value as a percentage of total investments | 1.30% | 1.20% |
Consolidated Funds | United States | Fixed income asset | Energy | ||
Investments | ||
Investments, at fair value | 304,943 | 416,861 |
Fair value as a percentage of total investments | 1.60% | 2.20% |
Consolidated Funds | United States | Fixed income asset | Financials | ||
Investments | ||
Investments, at fair value | 473,222 | 401,673 |
Fair value as a percentage of total investments | 2.50% | 2.10% |
Consolidated Funds | United States | Fixed income asset | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | 1,262,427 | 1,191,619 |
Fair value as a percentage of total investments | 6.60% | 6.20% |
Consolidated Funds | United States | Fixed income asset | Industrials | ||
Investments | ||
Investments, at fair value | 1,639,565 | 1,717,523 |
Fair value as a percentage of total investments | 8.60% | 9.00% |
Consolidated Funds | United States | Fixed income asset | Information technology | ||
Investments | ||
Investments, at fair value | 787,710 | 745,920 |
Fair value as a percentage of total investments | 4.10% | 3.90% |
Consolidated Funds | United States | Fixed income asset | Materials | ||
Investments | ||
Investments, at fair value | 456,200 | 393,569 |
Fair value as a percentage of total investments | 2.40% | 2.10% |
Consolidated Funds | United States | Fixed income asset | Partnership and LLC interests | ||
Investments | ||
Investments, at fair value | 14,839 | 16,256 |
Fair value as a percentage of total investments | 0.10% | 0.10% |
Consolidated Funds | United States | Fixed income asset | Telecommunication services | ||
Investments | ||
Investments, at fair value | 1,347,337 | 1,287,688 |
Fair value as a percentage of total investments | 7.10% | 6.70% |
Consolidated Funds | United States | Fixed income asset | Utilities | ||
Investments | ||
Investments, at fair value | 201,436 | 223,553 |
Fair value as a percentage of total investments | 1.10% | 1.20% |
Consolidated Funds | United States | Common Stock. | ||
Investments | ||
Investments, at fair value | 4,332,412 | 4,153,194 |
Fair value as a percentage of total investments | 23.00% | 21.70% |
Investments, at cost | 2,957,558 | 2,964,900 |
Consolidated Funds | United States | Common Stock. | Consumer discretionary | ||
Investments | ||
Investments, at fair value | 2,958,697 | 2,852,369 |
Fair value as a percentage of total investments | 15.70% | 14.90% |
Consolidated Funds | United States | Common Stock. | Consumer staples | ||
Investments | ||
Investments, at fair value | 499,372 | 443,711 |
Fair value as a percentage of total investments | 2.60% | 2.30% |
Consolidated Funds | United States | Common Stock. | Energy | ||
Investments | ||
Investments, at fair value | 82,451 | 150,755 |
Fair value as a percentage of total investments | 0.40% | 0.80% |
Consolidated Funds | United States | Common Stock. | Financials | ||
Investments | ||
Investments, at fair value | 10,223 | 8,272 |
Fair value as a percentage of total investments | 0.10% | 0.00% |
Consolidated Funds | United States | Common Stock. | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | 533,239 | 464,159 |
Fair value as a percentage of total investments | 2.80% | 2.40% |
Consolidated Funds | United States | Common Stock. | Industrials | ||
Investments | ||
Investments, at fair value | 124,747 | 128,247 |
Fair value as a percentage of total investments | 0.70% | 0.70% |
Consolidated Funds | United States | Common Stock. | Partnership and LLC interests | ||
Investments | ||
Investments, at fair value | 114,040 | 89,105 |
Fair value as a percentage of total investments | 0.60% | 0.50% |
Consolidated Funds | United States | Common Stock. | Telecommunication services | ||
Investments | ||
Investments, at fair value | 9,643 | 16,576 |
Fair value as a percentage of total investments | 0.10% | 0.10% |
Consolidated Funds | Europe | Fixed income asset | ||
Investments | ||
Investments, at fair value | 3,171,108 | 3,691,380 |
Fair value as a percentage of total investments | 16.70% | 19.40% |
Investments, at cost | 3,232,752 | 3,813,343 |
Consolidated Funds | Europe | Fixed income asset | Consumer discretionary | ||
Investments | ||
Investments, at fair value | 887,516 | 1,080,270 |
Fair value as a percentage of total investments | 4.70% | 5.60% |
Consolidated Funds | Europe | Fixed income asset | Consumer staples | ||
Investments | ||
Investments, at fair value | 108,667 | 126,766 |
Fair value as a percentage of total investments | 0.60% | 0.70% |
Consolidated Funds | Europe | Fixed income asset | Energy | ||
Investments | ||
Investments, at fair value | 5,138 | 16,509 |
Fair value as a percentage of total investments | 0.00% | 0.10% |
Consolidated Funds | Europe | Fixed income asset | Financials | ||
Investments | ||
Investments, at fair value | 362,526 | 345,811 |
Fair value as a percentage of total investments | 1.90% | 1.80% |
Consolidated Funds | Europe | Fixed income asset | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | 252,273 | 303,116 |
Fair value as a percentage of total investments | 1.30% | 1.60% |
Consolidated Funds | Europe | Fixed income asset | Industrials | ||
Investments | ||
Investments, at fair value | 441,604 | 526,214 |
Fair value as a percentage of total investments | 2.30% | 2.80% |
Consolidated Funds | Europe | Fixed income asset | Information technology | ||
Investments | ||
Investments, at fair value | 145,224 | 130,504 |
Fair value as a percentage of total investments | 0.80% | 0.70% |
Consolidated Funds | Europe | Fixed income asset | Materials | ||
Investments | ||
Investments, at fair value | 371,322 | 326,659 |
Fair value as a percentage of total investments | 2.00% | 1.70% |
Consolidated Funds | Europe | Fixed income asset | Telecommunication services | ||
Investments | ||
Investments, at fair value | 595,715 | 833,015 |
Fair value as a percentage of total investments | 3.10% | 4.40% |
Consolidated Funds | Europe | Fixed income asset | Utilities | ||
Investments | ||
Investments, at fair value | 1,123 | 2,516 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Europe | Common Stock. | ||
Investments | ||
Investments, at fair value | 55,132 | 53,445 |
Fair value as a percentage of total investments | 0.20% | 0.20% |
Investments, at cost | 102,244 | 98,913 |
Consolidated Funds | Europe | Common Stock. | Consumer discretionary | ||
Investments | ||
Investments, at fair value | 3,678 | 2,940 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Europe | Common Stock. | Consumer staples | ||
Investments | ||
Investments, at fair value | 895 | 862 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Europe | Common Stock. | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | 26,455 | 27,774 |
Fair value as a percentage of total investments | 0.10% | 0.10% |
Consolidated Funds | Europe | Common Stock. | Industrials | ||
Investments | ||
Investments, at fair value | 76 | |
Fair value as a percentage of total investments | 0.00% | |
Consolidated Funds | Europe | Common Stock. | Partnership and LLC interests | ||
Investments | ||
Investments, at fair value | 19,012 | 17,107 |
Fair value as a percentage of total investments | 0.10% | 0.10% |
Consolidated Funds | Europe | Common Stock. | Telecommunication services | ||
Investments | ||
Investments, at fair value | 5,092 | 4,686 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Asia and other | Fixed income asset | ||
Investments | ||
Investments, at fair value | 625,350 | 639,181 |
Fair value as a percentage of total investments | 3.30% | 3.40% |
Investments, at cost | 570,443 | 579,436 |
Consolidated Funds | Asia and other | Fixed income asset | Consumer discretionary | ||
Investments | ||
Investments, at fair value | 68,495 | 73,250 |
Fair value as a percentage of total investments | 0.40% | 0.40% |
Consolidated Funds | Asia and other | Fixed income asset | Financials | ||
Investments | ||
Investments, at fair value | 480,936 | 493,618 |
Fair value as a percentage of total investments | 2.50% | 2.60% |
Consolidated Funds | Asia and other | Fixed income asset | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | 38,835 | 41,536 |
Fair value as a percentage of total investments | 0.20% | 0.20% |
Consolidated Funds | Asia and other | Fixed income asset | Telecommunication services | ||
Investments | ||
Investments, at fair value | 37,084 | 30,777 |
Fair value as a percentage of total investments | 0.20% | 0.20% |
Consolidated Funds | Asia and other | Common Stock. | ||
Investments | ||
Investments, at fair value | 239,848 | 261,393 |
Fair value as a percentage of total investments | 1.30% | 1.40% |
Investments, at cost | 179,047 | 184,022 |
Consolidated Funds | Asia and other | Common Stock. | Consumer discretionary | ||
Investments | ||
Investments, at fair value | 66,861 | 89,897 |
Fair value as a percentage of total investments | 0.40% | 0.50% |
Consolidated Funds | Asia and other | Common Stock. | Consumer staples | ||
Investments | ||
Investments, at fair value | 62,778 | 62,467 |
Fair value as a percentage of total investments | 0.30% | 0.30% |
Consolidated Funds | Asia and other | Common Stock. | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | 32,598 | 33,610 |
Fair value as a percentage of total investments | 0.20% | 0.20% |
Consolidated Funds | Asia and other | Common Stock. | Materials | ||
Investments | ||
Investments, at fair value | 52,947 | 52,947 |
Fair value as a percentage of total investments | 0.30% | 0.30% |
Consolidated Funds | Asia and other | Common Stock. | Partnership and LLC interests | ||
Investments | ||
Investments, at fair value | 16,287 | 13,478 |
Fair value as a percentage of total investments | 0.10% | 0.10% |
Consolidated Funds | Asia and other | Common Stock. | Utilities | ||
Investments | ||
Investments, at fair value | 8,377 | 8,994 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Canada | Fixed income asset | ||
Investments | ||
Investments, at fair value | 378,908 | 363,220 |
Fair value as a percentage of total investments | 2.00% | 1.90% |
Investments, at cost | 408,532 | 396,108 |
Consolidated Funds | Canada | Fixed income asset | Consumer discretionary | ||
Investments | ||
Investments, at fair value | 62,163 | 71,379 |
Fair value as a percentage of total investments | 0.30% | 0.40% |
Consolidated Funds | Canada | Fixed income asset | Consumer staples | ||
Investments | ||
Investments, at fair value | 12,747 | |
Fair value as a percentage of total investments | 0.10% | |
Consolidated Funds | Canada | Fixed income asset | Energy | ||
Investments | ||
Investments, at fair value | 60,059 | 60,605 |
Fair value as a percentage of total investments | 0.30% | 0.30% |
Consolidated Funds | Canada | Fixed income asset | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | 95,322 | 84,470 |
Fair value as a percentage of total investments | 0.50% | 0.40% |
Consolidated Funds | Canada | Fixed income asset | Industrials | ||
Investments | ||
Investments, at fair value | 36,999 | 30,009 |
Fair value as a percentage of total investments | 0.20% | 0.20% |
Consolidated Funds | Canada | Fixed income asset | Materials | ||
Investments | ||
Investments, at fair value | 5,625 | |
Fair value as a percentage of total investments | 0.00% | |
Consolidated Funds | Canada | Fixed income asset | Partnership and LLC interests | ||
Investments | ||
Investments, at fair value | 3,807 | 1,327 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Canada | Fixed income asset | Telecommunication services | ||
Investments | ||
Investments, at fair value | 107,811 | 109,805 |
Fair value as a percentage of total investments | 0.60% | 0.60% |
Consolidated Funds | Canada | Common Stock. | ||
Investments | ||
Investments, at cost | 68,249 | 68,249 |
Consolidated Funds | Australia | Fixed income asset | ||
Investments | ||
Investments, at fair value | 202,687 | 193,034 |
Fair value as a percentage of total investments | 1.10% | 1.00% |
Investments, at cost | 222,035 | 213,759 |
Consolidated Funds | Australia | Fixed income asset | Energy | ||
Investments | ||
Investments, at fair value | 72,909 | 66,150 |
Fair value as a percentage of total investments | 0.40% | 0.30% |
Consolidated Funds | Australia | Fixed income asset | Industrials | ||
Investments | ||
Investments, at fair value | 40,350 | 32,146 |
Fair value as a percentage of total investments | 0.20% | 0.20% |
Consolidated Funds | Australia | Fixed income asset | Utilities | ||
Investments | ||
Investments, at fair value | 89,428 | 94,738 |
Fair value as a percentage of total investments | 0.50% | 0.50% |
Consolidated Funds | Australia | Common Stock. | ||
Investments | ||
Investments, at fair value | 13,050 | 15,834 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Investments, at cost | 22,233 | 22,233 |
Consolidated Funds | Australia | Common Stock. | Telecommunication services | ||
Investments | ||
Investments, at fair value | 7,765 | 7,547 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Australia | Common Stock. | Utilities | ||
Investments | ||
Investments, at fair value | 5,285 | 8,287 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Minimum | ||
FAIR VALUE | ||
Period within which investors of open ended and evergreen funds can withdraw their capital | 1 month | |
Maximum | ||
FAIR VALUE | ||
Period within which investors of open ended and evergreen funds can withdraw their capital | 3 years | |
Level III | Minimum | ||
FAIR VALUE | ||
Number of broker quotes to be obtained directly from dealer if pricing services are unable to provide prices to measure fair value of assets or liabilities | 1 | |
Number of broker non-binding quotes to measure fair value of assets or liabilities | 1 | |
Number of quote obtained directly from a broker making a market for the asset | 1 | |
Number of price obtained directly from a pricing vendor for each security or similar securities | 1 | |
Level III | Maximum | ||
FAIR VALUE | ||
Number of broker non-binding quotes to measure fair value of assets or liabilities | 2 | |
Parent Company | ||
FAIR VALUE | ||
Investments, at fair value | 189,746 | $170,324 |
Derivative assets, at fair value | 8,217 | 7,623 |
Derivative liabilities, at fair value | -2,973 | -2,850 |
Parent Company | Interest rate contracts | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -978 | -847 |
Parent Company | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 8,217 | 7,623 |
Derivative liabilities, at fair value | -1,995 | -2,003 |
Parent Company | Level I | ||
FAIR VALUE | ||
Investments, at fair value | 95 | 89 |
Assets, at fair value | 95 | 89 |
Parent Company | Level I | Common Stock. | ||
FAIR VALUE | ||
Investments, at fair value | 95 | 89 |
Parent Company | Level II | ||
FAIR VALUE | ||
Investments, at fair value | 1,178 | 1,178 |
Derivative assets, at fair value | 8,217 | 7,623 |
Assets, at fair value | 9,395 | 8,801 |
Derivative liabilities, at fair value | -2,973 | -2,850 |
Parent Company | Level II | Forward foreign currency contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 8,217 | 5,721 |
Derivative liabilities, at fair value | -1,995 | -2,003 |
Parent Company | Level II | Purchased option contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 1,902 | |
Parent Company | Level II | Interest rate contracts | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -978 | -847 |
Parent Company | Level II | Corporate Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 1,178 | 1,178 |
Parent Company | Level III | ||
FAIR VALUE | ||
Investments, at fair value | 193,473 | 169,057 |
Assets, at fair value | 193,473 | 169,057 |
Parent Company | Level III | Private Investment Partnership Interests | ||
FAIR VALUE | ||
Investments, at fair value | 193,473 | 169,057 |
Parent Company | Total | ||
FAIR VALUE | ||
Investments, at fair value | 194,746 | 170,324 |
Derivative assets, at fair value | 8,217 | 7,623 |
Assets, at fair value | 202,963 | 177,947 |
Derivative liabilities, at fair value | -2,973 | -2,850 |
Parent Company | Total | Forward foreign currency contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 8,217 | 5,721 |
Derivative liabilities, at fair value | -1,995 | -2,003 |
Parent Company | Total | Purchased option contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 1,902 | |
Parent Company | Total | Interest rate contracts | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -978 | -847 |
Parent Company | Total | Common Stock. | ||
FAIR VALUE | ||
Investments, at fair value | 95 | 89 |
Parent Company | Total | Corporate Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 1,178 | 1,178 |
Parent Company | Total | Private Investment Partnership Interests | ||
FAIR VALUE | ||
Investments, at fair value | 193,473 | 169,057 |
Consolidated Funds | ||
FAIR VALUE | ||
Investments, at fair value | 18,990,943 | 19,123,950 |
Derivative assets, at fair value | 3,696 | 3,126 |
Derivative liabilities, at fair value | -59,483 | -42,332 |
Securities sold short, at fair value | -3,763 | -3,763 |
Consolidated Funds | Interest rate contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 0 | |
Derivative liabilities, at fair value | -21 | |
Consolidated Funds | Credit contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 1,153 | |
Derivative liabilities, at fair value | -11,716 | -13,265 |
Consolidated Funds | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 1,652 | 2,070 |
Derivative liabilities, at fair value | -9,411 | -9,991 |
Consolidated Funds | Other financial instruments | ||
FAIR VALUE | ||
Derivative assets, at fair value | 891 | 1,056 |
Derivative liabilities, at fair value | -38,356 | -19,055 |
Consolidated Funds | Loan obligations of CLOS | Ares Enhanced Loan Investment Strategy II, Ltd | ||
FAIR VALUE | ||
Debt carried at cost | 151 | 151 |
Consolidated Funds | Level I | ||
FAIR VALUE | ||
Investments, at fair value | 609,982 | 590,095 |
Assets, at fair value | 609,982 | 590,095 |
Consolidated Funds | Level I | Common Stock. | ||
FAIR VALUE | ||
Investments, at fair value | 609,982 | 590,095 |
Consolidated Funds | Level II | ||
FAIR VALUE | ||
Investments, at fair value | 13,225,515 | 12,939,728 |
Derivative assets, at fair value | 3,696 | 3,126 |
Assets, at fair value | 13,229,211 | 12,942,854 |
Derivative liabilities, at fair value | -21,127 | -20,190 |
Securities sold short, at fair value | -3,763 | -3,763 |
Liabilities, at fair value | -24,890 | -23,953 |
Consolidated Funds | Level II | Forward foreign currency contracts | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -9,411 | -6,906 |
Consolidated Funds | Level II | Purchased option contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 890 | |
Consolidated Funds | Level II | Credit contracts | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -11,716 | -13,263 |
Consolidated Funds | Level II | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 873 | 2,070 |
Consolidated Funds | Level II | Interest rate swaps | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -21 | |
Consolidated Funds | Level II | Other financial instruments | ||
FAIR VALUE | ||
Derivative assets, at fair value | 1,933 | 1,056 |
Consolidated Funds | Level II | Common Stock. | ||
FAIR VALUE | ||
Investments, at fair value | 573,582 | 513,771 |
Consolidated Funds | Level II | Corporate Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 909,652 | 1,113,103 |
Consolidated Funds | Level II | Loans | ||
FAIR VALUE | ||
Investments, at fair value | 11,742,281 | 11,312,518 |
Consolidated Funds | Level II | Other | ||
FAIR VALUE | ||
Investments, at fair value | 336 | |
Consolidated Funds | Level III | ||
FAIR VALUE | ||
Investments, at fair value | 5,155,446 | 5,594,127 |
Assets, at fair value | 5,155,446 | 5,594,127 |
Derivative liabilities, at fair value | -38,356 | -22,142 |
Liabilities, at fair value | -12,193,033 | -12,071,161 |
Consolidated Funds | Level III | Other financial instruments | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -38,356 | -22,142 |
Consolidated Funds | Level III | Loan obligations of CLOS | ||
FAIR VALUE | ||
Loan obligations of debt | -12,154,677 | -12,049,019 |
Consolidated Funds | Level III | Common Stock. | ||
FAIR VALUE | ||
Investments, at fair value | 3,321,849 | 3,263,311 |
Consolidated Funds | Level III | Corporate Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 551,906 | 565,634 |
Consolidated Funds | Level III | Private Investment Partnership Interests | ||
FAIR VALUE | ||
Investments, at fair value | 167,985 | 137,272 |
Consolidated Funds | Level III | Loans | ||
FAIR VALUE | ||
Investments, at fair value | 584,377 | 1,070,494 |
Consolidated Funds | Level III | Collateralized loan obligation | ||
FAIR VALUE | ||
Investments, at fair value | 528,180 | 556,267 |
Consolidated Funds | Level III | Other | ||
FAIR VALUE | ||
Investments, at fair value | 1,149 | 1,149 |
Consolidated Funds | Total | ||
FAIR VALUE | ||
Investments, at fair value | 18,990,943 | 19,123,950 |
Derivative assets, at fair value | 3,696 | 3,126 |
Assets, at fair value | 18,994,639 | 19,127,076 |
Derivative liabilities, at fair value | -59,483 | -42,332 |
Securities sold short, at fair value | -3,763 | -3,763 |
Liabilities, at fair value | -12,217,923 | -12,095,114 |
Consolidated Funds | Total | Forward foreign currency contracts | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -9,411 | -6,906 |
Consolidated Funds | Total | Purchased option contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 890 | |
Consolidated Funds | Total | Credit contracts | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -11,716 | -13,263 |
Consolidated Funds | Total | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 873 | 2,070 |
Consolidated Funds | Total | Interest rate swaps | ||
FAIR VALUE | ||
Derivative liabilities, at fair value | -21 | |
Consolidated Funds | Total | Other financial instruments | ||
FAIR VALUE | ||
Derivative assets, at fair value | 1,933 | 1,056 |
Derivative liabilities, at fair value | -38,356 | -22,142 |
Consolidated Funds | Total | Loan obligations of CLOS | ||
FAIR VALUE | ||
Loan obligations of debt | -12,154,677 | -12,049,019 |
Consolidated Funds | Total | Common Stock. | ||
FAIR VALUE | ||
Investments, at fair value | 4,505,413 | 4,367,177 |
Consolidated Funds | Total | Corporate Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 1,461,558 | 1,678,737 |
Consolidated Funds | Total | Private Investment Partnership Interests | ||
FAIR VALUE | ||
Investments, at fair value | 167,985 | 137,272 |
Consolidated Funds | Total | Loans | ||
FAIR VALUE | ||
Investments, at fair value | 12,326,658 | 12,383,012 |
Consolidated Funds | Total | Collateralized loan obligation | ||
FAIR VALUE | ||
Investments, at fair value | 528,180 | 556,267 |
Consolidated Funds | Total | Other | ||
FAIR VALUE | ||
Investments, at fair value | 1,149 | $1,485 |
FAIR_VALUE_Details_2
FAIR VALUE (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Changes in the fair value of the Level III investments | ||
Transfers from Level I to Level II | $0 | |
Parent Company | Private Investment Partnership Interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 169,057,000 | 88,177,000 |
Initial consolidation of new funds | 9,951,000 | |
Purchases | 30,516,000 | 21,504,000 |
Sales | -7,916,000 | -23,124,000 |
Realized and unrealized appreciation, (depreciation), net | 1,816,000 | 23,834,000 |
Balance, end of period | 193,473,000 | 120,342,000 |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | 1,947,000 | 4,286,000 |
Consolidated Funds | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 5,571,985,000 | 6,625,038,000 |
Transfer in | 189,684,000 | 222,382,000 |
Deconsolidation of previous funds | -370,245,000 | |
Deconsolidation of funds | -472,000 | |
Transfer out | -651,566,000 | -364,608,000 |
Purchases | 199,387,000 | 229,132,000 |
Sales | -206,608,000 | -448,020,000 |
Accrued discounts/premiums | 2,070,000 | 10,864,000 |
Realized and unrealized appreciation, (depreciation), net | 12,610,000 | -10,919,000 |
Balance, end of period | 5,117,090,000 | 5,893,624,000 |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | 14,469,000 | 98,865,000 |
Consolidated Funds | Common Stock. | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 3,263,311,000 | 2,958,232,000 |
Deconsolidation of previous funds | 8,152,000 | |
Deconsolidation of funds | -471,000 | |
Transfer out | -163,000 | |
Purchases | 11,337,000 | |
Sales | -20,273,000 | -167,142,000 |
Accrued discounts/premiums | 4,135,000 | 15,000 |
Realized and unrealized appreciation, (depreciation), net | 75,310,000 | 14,627,000 |
Balance, end of period | 3,321,849,000 | 2,825,221,000 |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | 62,677,000 | 118,757,000 |
Consolidated Funds | Fixed income asset | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 2,192,395,000 | 3,627,153,000 |
Transfer in | 189,684,000 | 222,382,000 |
Deconsolidation of previous funds | -378,397,000 | |
Deconsolidation of funds | -1,000 | |
Transfer out | -651,403,000 | -364,608,000 |
Purchases | 159,797,000 | 215,514,000 |
Sales | -171,391,000 | -274,491,000 |
Accrued discounts/premiums | -756,000 | 10,849,000 |
Realized and unrealized appreciation, (depreciation), net | -53,862,000 | -29,540,000 |
Balance, end of period | 1,664,463,000 | 3,028,862,000 |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | -35,936,000 | -21,711,000 |
Consolidated Funds | Private Investment Partnership Interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 137,272,000 | 41,001,000 |
Purchases | 39,582,000 | 2,276,000 |
Sales | -15,155,000 | |
Realized and unrealized appreciation, (depreciation), net | 6,286,000 | 717,000 |
Balance, end of period | 167,985,000 | 43,994,000 |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | 6,239,000 | 717,000 |
Consolidated Funds | Other financial instruments | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | -20,993,000 | -1,348,000 |
Purchases | 8,000 | 5,000 |
Sales | 211,000 | -6,387,000 |
Accrued discounts/premiums | -1,309,000 | |
Realized and unrealized appreciation, (depreciation), net | -15,124,000 | 3,277,000 |
Balance, end of period | -37,207,000 | -4,453,000 |
Changes in unrealized appreciation (depreciation) included in earnings related to financial assets still held at the reporting date | ($18,511,000) | $1,102,000 |
FAIR_VALUE_Details_3
FAIR VALUE (Details 3) (Collateralized loan obligation, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Collateralized loan obligation | ||
Changes in the fair value of the Level III investments for loan obligations | ||
Balance, beginning of period | $12,049,019 | $11,534,956 |
Deconsolidation of funds | -571 | -3,033 |
Borrowings | 602,074 | 23,528 |
Paydowns | -218,496 | -472,434 |
Realized and unrealized gains, net | -277,349 | -16,764 |
Balance, end of period | $12,154,677 | $11,066,253 |
FAIR_VALUE_Details_4
FAIR VALUE (Details 4) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Parent Company | Level III | ||
FAIR VALUE | ||
Assets, at fair value | 193,473 | 169,057 |
Parent Company | Level III | Recent transaction price | ||
Unobservable Input | ||
Period within which securities are purchased or restructured | 6 months | 6 months |
Parent Company | Level III | Private Investment Partnership Interests | NAV | ||
FAIR VALUE | ||
Assets, at fair value | 143,125 | 123,709 |
Parent Company | Level III | Private Investment Partnership Interests | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | 50,348 | 45,348 |
Consolidated Funds | Level III | ||
FAIR VALUE | ||
Assets, at fair value | 5,155,446 | 5,594,127 |
Liabilities, at fair value | 12,193,033 | 12,071,161 |
Consolidated Funds | Level III | Recent transaction price | ||
Unobservable Input | ||
Period within which securities are purchased or restructured | 6 months | 6 months |
Consolidated Funds | Level III | Fixed income liability | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Liabilities, at fair value | 11,733,481 | 11,273,923 |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Other | ||
FAIR VALUE | ||
Liabilities, at fair value | 67,948 | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Other | Minimum | ||
Unobservable Input | ||
Discount rate (as a percent) | 5.30% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Other | Maximum | ||
Unobservable Input | ||
Discount rate (as a percent) | 6.80% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Other | Weighted Average | ||
Unobservable Input | ||
Discount rate (as a percent) | 6.10% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Discount rate | ||
FAIR VALUE | ||
Liabilities, at fair value | 353,248 | 258,096 |
Unobservable Input | ||
Discount rate (as a percent) | 11.50% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Discount rate | Minimum | ||
Unobservable Input | ||
Discount rate (as a percent) | 12.00% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Discount rate | Maximum | ||
Unobservable Input | ||
Discount rate (as a percent) | 15.00% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow, Discount rate | Weighted Average | ||
Unobservable Input | ||
Discount rate (as a percent) | 13.00% | 11.50% |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow Constant default rate, Constant prepayment rate, Recovery rate | Minimum | ||
Unobservable Input | ||
Constant default rate (as a percent) | 2.00% | 2.00% |
Recovery rate (as a percent) | 10.00% | 10.00% |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow Constant default rate, Constant prepayment rate, Recovery rate | Maximum | ||
Unobservable Input | ||
Constant default rate (as a percent) | 10.00% | 10.00% |
Recovery rate (as a percent) | 80.00% | 80.00% |
Constant prepayment rate (as a percent) | 50.00% | 50.00% |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow Constant default rate, Constant prepayment rate, Recovery rate | Weighted Average | ||
Unobservable Input | ||
Constant default rate (as a percent) | 2.00% | 2.10% |
Recovery rate (as a percent) | 75.00% | 74.60% |
Constant prepayment rate (as a percent) | 20.00% | 20.40% |
Consolidated Funds | Level III | Fixed income liability | Market approach (other) | ||
FAIR VALUE | ||
Liabilities, at fair value | 616 | |
Consolidated Funds | Level III | Fixed income liability | Recent transaction price | ||
FAIR VALUE | ||
Liabilities, at fair value | 499,305 | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow | ||
FAIR VALUE | ||
Liabilities, at fair value | 17,079 | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow | Minimum | ||
Unobservable Input | ||
Discount rate (as a percent) | 300.00% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow | Maximum | ||
Unobservable Input | ||
Discount rate (as a percent) | 800.00% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow | Weighted Average | ||
Unobservable Input | ||
Discount rate (as a percent) | 482.50% | |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow 2 | Minimum | ||
Unobservable Input | ||
Constant default rate (as a percent) | 2.00% | 2.00% |
Recovery rate (as a percent) | 10.00% | 10.00% |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow 2 | Maximum | ||
Unobservable Input | ||
Constant default rate (as a percent) | 10.00% | 10.00% |
Recovery rate (as a percent) | 80.00% | 80.00% |
Constant prepayment rate (as a percent) | 50.00% | 50.00% |
Consolidated Funds | Level III | Fixed income liability | Discounted cash flow 2 | Weighted Average | ||
Unobservable Input | ||
Constant default rate (as a percent) | 2.00% | 2.00% |
Recovery rate (as a percent) | 75.00% | 75.00% |
Constant prepayment rate (as a percent) | 20.00% | 23.00% |
Consolidated Funds | Level III | Derivatives liabilities of Consolidated Funds | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Liabilities, at fair value | 38,356 | 22,142 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | EV market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | 3,678 | 2,940 |
Unobservable Input | ||
EBITDA multiple | 9.4 | 9.4 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | EV market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 9.4 | 9.4 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), Book value multiple | ||
FAIR VALUE | ||
Assets, at fair value | 219,945 | 208,498 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), Book value multiple | Minimum | ||
Unobservable Input | ||
Book value multiple | 1.8 | 1.7 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), Book value multiple | Maximum | ||
Unobservable Input | ||
Book value multiple | 2 | 2 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), Book value multiple | Weighted Average | ||
Unobservable Input | ||
Book value multiple | 1.9 | 1.9 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 2,175,607 | 2,121,864 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), EBITDA multiple | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 8.5 | 7 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), EBITDA multiple | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 15 | 15 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 10.8 | 10.7 |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Other | ||
FAIR VALUE | ||
Assets, at fair value | 711 | |
Unobservable Input | ||
Future distribution estimate (as a percent) | 82.40% | |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Other | Weighted Average | ||
Unobservable Input | ||
Future distribution estimate (as a percent) | 82.40% | |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Other, Illiquidity discount | ||
FAIR VALUE | ||
Assets, at fair value | 4,236 | 5,140 |
Unobservable Input | ||
Illiquidity discount (as a percent) | 15.00% | 15.00% |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Other, Illiquidity discount | Weighted Average | ||
Unobservable Input | ||
Illiquidity discount (as a percent) | 15.00% | 15.00% |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Other, Future distribution estimates | ||
FAIR VALUE | ||
Assets, at fair value | 979 | |
Unobservable Input | ||
Future distribution estimate | 18.7 | |
Consolidated Funds | Level III | Common Stock. | Consumer discretionary | Other, Future distribution estimates | Weighted Average | ||
Unobservable Input | ||
Future distribution estimate | 18.7 | |
Consolidated Funds | Level III | Common Stock. | Consumer staples | EV market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | 895 | 862 |
Unobservable Input | ||
EBITDA multiple | 7.9 | 7.9 |
Consolidated Funds | Level III | Common Stock. | Consumer staples | EV market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 7.9 | 7.9 |
Consolidated Funds | Level III | Common Stock. | Consumer staples | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 14,492 | 10,349 |
Unobservable Input | ||
EBITDA multiple | 7 | 7 |
Consolidated Funds | Level III | Common Stock. | Consumer staples | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 7 | 7 |
Consolidated Funds | Level III | Common Stock. | Consumer staples | Market approach (comparable companies),Net income multiple | ||
FAIR VALUE | ||
Assets, at fair value | 41,561 | 44,553 |
Unobservable Input | ||
Net income multiple | 11 | 11 |
Consolidated Funds | Level III | Common Stock. | Consumer staples | Market approach (comparable companies),Net income multiple | Weighted Average | ||
Unobservable Input | ||
Net income multiple | 11 | 11 |
Consolidated Funds | Level III | Common Stock. | Energy | ||
Unobservable Input | ||
EBITDA multiple | 6 | 7.5 |
Consolidated Funds | Level III | Common Stock. | Energy | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 6 | 7.5 |
Consolidated Funds | Level III | Common Stock. | Energy | Discounted cash flow, Discount rate | ||
FAIR VALUE | ||
Assets, at fair value | 68,000 | 136,045 |
Unobservable Input | ||
Discount rate (as a percent) | 8.00% | 9.00% |
Consolidated Funds | Level III | Common Stock. | Energy | Discounted cash flow, Discount rate | Weighted Average | ||
Unobservable Input | ||
Discount rate (as a percent) | 8.00% | 9.00% |
Consolidated Funds | Level III | Common Stock. | Financials | EV market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | 9,171 | 8,272 |
Unobservable Input | ||
EBITDA multiple | 10.5 | 10.5 |
Consolidated Funds | Level III | Common Stock. | Financials | EV market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 10.5 | 10.5 |
Consolidated Funds | Level III | Common Stock. | Financials | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | 7,959 | |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | EV market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | 26,455 | 27,774 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | EV market multiple analysis | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 1.6 | 1.6 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | EV market multiple analysis | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 7.1 | 7.1 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | EV market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 4.5 | 5.4 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 532,156 | 463,075 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | Market approach (comparable companies), EBITDA multiple | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 8 | 8 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | Market approach (comparable companies), EBITDA multiple | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 13 | 13 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 11.1 | 11.2 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | Market approach (comparable companies),Net income multiple | ||
FAIR VALUE | ||
Assets, at fair value | 32,598 | 33,610 |
Unobservable Input | ||
Net income multiple | 35 | 35 |
Consolidated Funds | Level III | Common Stock. | Healthcare, education and childcare | Market approach (comparable companies),Net income multiple | Weighted Average | ||
Unobservable Input | ||
Net income multiple | 35 | 35 |
Consolidated Funds | Level III | Common Stock. | Industrials | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 124,682 | 128,182 |
Consolidated Funds | Level III | Common Stock. | Industrials | Market approach (comparable companies), EBITDA multiple | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 8 | 8 |
Consolidated Funds | Level III | Common Stock. | Industrials | Market approach (comparable companies), EBITDA multiple | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 12 | 12 |
Consolidated Funds | Level III | Common Stock. | Industrials | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 9.8 | 9.8 |
Consolidated Funds | Level III | Common Stock. | Industrials | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | 76 | |
Consolidated Funds | Level III | Common Stock. | Materials | Market approach (comparable companies),Net income multiple | ||
FAIR VALUE | ||
Assets, at fair value | 52,947 | 52,947 |
Unobservable Input | ||
Net income multiple | 9 | |
Consolidated Funds | Level III | Common Stock. | Materials | Market approach (comparable companies),Net income multiple | Minimum | ||
Unobservable Input | ||
Net income multiple | 9 | |
Consolidated Funds | Level III | Common Stock. | Materials | Market approach (comparable companies),Net income multiple | Weighted Average | ||
Unobservable Input | ||
Net income multiple | 9 | 9 |
Consolidated Funds | Level III | Common Stock. | Telecommunication services | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 331 | |
Consolidated Funds | Level III | Common Stock. | Telecommunication services | EV market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | 460 | 533 |
Unobservable Input | ||
EBITDA multiple | 10 | 10 |
Consolidated Funds | Level III | Common Stock. | Telecommunication services | EV market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 10 | 10 |
Consolidated Funds | Level III | Common Stock. | Telecommunication services | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | 593 | |
Consolidated Funds | Level III | Common Stock. | Utilities | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 13,662 | 17,281 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 196,267 | 256,994 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | EV market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | 17,339 | 18,205 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | EV market multiple analysis | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 8 | 9 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | EV market multiple analysis | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 13.5 | 11 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | EV market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 12.8 | 9.3 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Income approach (other), Yield | ||
FAIR VALUE | ||
Assets, at fair value | 59,299 | 69,418 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Income approach (other), Yield | Minimum | ||
Unobservable Input | ||
Yield (as a percent) | 2.50% | 2.50% |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Income approach (other), Yield | Maximum | ||
Unobservable Input | ||
Yield (as a percent) | 13.00% | 18.70% |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Income approach (other), Yield | Weighted Average | ||
Unobservable Input | ||
Yield (as a percent) | 11.90% | 12.80% |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Market approach (comparable companies), Book value multiple | ||
FAIR VALUE | ||
Assets, at fair value | 122,543 | 120,658 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Market approach (comparable companies), Book value multiple | Minimum | ||
Unobservable Input | ||
Book value multiple | 1.7 | 1.7 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Market approach (comparable companies), Book value multiple | Maximum | ||
Unobservable Input | ||
Book value multiple | 2 | 2 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Market approach (comparable companies), Book value multiple | Weighted Average | ||
Unobservable Input | ||
Book value multiple | 1.9 | 1.9 |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 15,400 | |
Unobservable Input | ||
EBITDA multiple | 7.5 | |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 7.5 | |
Consolidated Funds | Level III | Fixed income asset | Consumer discretionary | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | 5,265 | 5,923 |
Consolidated Funds | Level III | Fixed income asset | Consumer staples | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 28,965 | |
Consolidated Funds | Level III | Fixed income asset | Consumer staples | Discounted cash flow, Discount rate | ||
FAIR VALUE | ||
Assets, at fair value | 493 | 540 |
Unobservable Input | ||
Discount rate (as a percent) | 20.00% | 20.00% |
Consolidated Funds | Level III | Fixed income asset | Consumer staples | Discounted cash flow, Discount rate | Weighted Average | ||
Unobservable Input | ||
Discount rate (as a percent) | 20.00% | 20.00% |
Consolidated Funds | Level III | Fixed income asset | Consumer staples | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 1,202 | 776 |
Unobservable Input | ||
EBITDA multiple | 6.5 | 6.5 |
Consolidated Funds | Level III | Fixed income asset | Consumer staples | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 6.5 | 6.5 |
Consolidated Funds | Level III | Fixed income asset | Energy | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 33,687 | |
Consolidated Funds | Level III | Fixed income asset | Financials | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 527,998 | 470,417 |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow, Discount rate | ||
FAIR VALUE | ||
Assets, at fair value | 37,927 | 85,851 |
Unobservable Input | ||
Discount rate (as a percent) | 11.50% | 11.50% |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow, Discount rate | Weighted Average | ||
Unobservable Input | ||
Discount rate (as a percent) | 11.50% | 11.50% |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow Constant default rate, Constant prepayment rate, Recovery rate | Minimum | ||
Unobservable Input | ||
Constant default rate (as a percent) | 2.00% | 2.00% |
Recovery rate (as a percent) | 10.00% | 10.00% |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow Constant default rate, Constant prepayment rate, Recovery rate | Maximum | ||
Unobservable Input | ||
Constant default rate (as a percent) | 10.00% | 10.00% |
Recovery rate (as a percent) | 80.00% | 80.00% |
Constant prepayment rate (as a percent) | 50.00% | 50.00% |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow Constant default rate, Constant prepayment rate, Recovery rate | Weighted Average | ||
Unobservable Input | ||
Constant default rate (as a percent) | 2.10% | 2.20% |
Recovery rate (as a percent) | 73.20% | 73.80% |
Constant prepayment rate (as a percent) | 21.30% | 21.50% |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow, Discount rate and Cumulative Loss Rate | ||
FAIR VALUE | ||
Assets, at fair value | 5,274 | 8,551 |
Unobservable Input | ||
Discount rate (as a percent) | 16.60% | 13.30% |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow, Discount rate and Cumulative Loss Rate | Weighted Average | ||
Unobservable Input | ||
Discount rate (as a percent) | 16.60% | 13.30% |
Cumulative loss rate (as a percent) | 10.00% | |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow, Cumulative loss rate | ||
Unobservable Input | ||
Cumulative loss rate (as a percent) | 10.00% | |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow, Cumulative loss rate | Maximum | ||
Unobservable Input | ||
Cumulative loss rate (as a percent) | 8.40% | |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow, Cumulative loss rate | Weighted Average | ||
Unobservable Input | ||
Cumulative loss rate (as a percent) | 8.40% | |
Consolidated Funds | Level III | Fixed income asset | Financials | Income approach (other), Yield | ||
FAIR VALUE | ||
Assets, at fair value | 247,584 | 224,245 |
Consolidated Funds | Level III | Fixed income asset | Financials | Income approach (other), Yield | Minimum | ||
Unobservable Input | ||
Yield (as a percent) | 9.50% | 9.50% |
Consolidated Funds | Level III | Fixed income asset | Financials | Income approach (other), Yield | Maximum | ||
Unobservable Input | ||
Yield (as a percent) | 11.50% | 11.50% |
Consolidated Funds | Level III | Fixed income asset | Financials | Income approach (other), Yield | Weighted Average | ||
Unobservable Input | ||
Yield (as a percent) | 10.50% | 10.50% |
Consolidated Funds | Level III | Fixed income asset | Financials | Income approach (other), Cash flow % of book value | ||
FAIR VALUE | ||
Assets, at fair value | 2,256 | 2,541 |
Unobservable Input | ||
Cash Flow % of Book Value | 8.70% | 8.70% |
Consolidated Funds | Level III | Fixed income asset | Financials | Income approach (other), Cash flow % of book value | Weighted Average | ||
Unobservable Input | ||
Cash Flow % of Book Value | 8.70% | 8.70% |
Consolidated Funds | Level III | Fixed income asset | Financials | NAV | ||
FAIR VALUE | ||
Assets, at fair value | 3,807 | |
Consolidated Funds | Level III | Fixed income asset | Financials | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | 17,582 | |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow | ||
FAIR VALUE | ||
Assets, at fair value | 14,839 | |
Unobservable Input | ||
Constant default rate (as a percent) | 9.90% | |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow | Weighted Average | ||
Unobservable Input | ||
Constant default rate (as a percent) | 9.90% | |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow 2 | ||
Unobservable Input | ||
Recovery rate (as a percent) | 30.00% | |
Constant prepayment rate (as a percent) | 10.00% | |
Consolidated Funds | Level III | Fixed income asset | Financials | Discounted cash flow 2 | Weighted Average | ||
Unobservable Input | ||
Recovery rate (as a percent) | 30.00% | |
Constant prepayment rate (as a percent) | 10.00% | |
Consolidated Funds | Level III | Fixed income asset | Healthcare, education and childcare | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 40,891 | 168,371 |
Consolidated Funds | Level III | Fixed income asset | Healthcare, education and childcare | EV market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | 19,527 | 20,104 |
Consolidated Funds | Level III | Fixed income asset | Healthcare, education and childcare | EV market multiple analysis | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 1.6 | 1.6 |
Consolidated Funds | Level III | Fixed income asset | Healthcare, education and childcare | EV market multiple analysis | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 7.1 | 7.1 |
Consolidated Funds | Level III | Fixed income asset | Healthcare, education and childcare | EV market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 5.6 | 5.6 |
Consolidated Funds | Level III | Fixed income asset | Healthcare, education and childcare | Income approach (other), Yield | ||
FAIR VALUE | ||
Assets, at fair value | 24,605 | 25,549 |
Unobservable Input | ||
Yield (as a percent) | 6.00% | 6.00% |
Consolidated Funds | Level III | Fixed income asset | Healthcare, education and childcare | Income approach (other), Yield | Weighted Average | ||
Unobservable Input | ||
Yield (as a percent) | 5.80% | 6.00% |
Consolidated Funds | Level III | Fixed income asset | Industrials | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 102,659 | 196,725 |
Consolidated Funds | Level III | Fixed income asset | Industrials | Income approach (other), Yield | ||
FAIR VALUE | ||
Assets, at fair value | 28,052 | 43,614 |
Consolidated Funds | Level III | Fixed income asset | Industrials | Income approach (other), Yield | Minimum | ||
Unobservable Input | ||
Yield (as a percent) | 5.30% | 2.50% |
Consolidated Funds | Level III | Fixed income asset | Industrials | Income approach (other), Yield | Maximum | ||
Unobservable Input | ||
Yield (as a percent) | 13.30% | 13.50% |
Consolidated Funds | Level III | Fixed income asset | Industrials | Income approach (other), Yield | Weighted Average | ||
Unobservable Input | ||
Yield (as a percent) | 10.80% | 12.10% |
Consolidated Funds | Level III | Fixed income asset | Industrials | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 32,315 | 32,315 |
Consolidated Funds | Level III | Fixed income asset | Industrials | Market approach (comparable companies), EBITDA multiple | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 9 | 9 |
Consolidated Funds | Level III | Fixed income asset | Industrials | Market approach (comparable companies), EBITDA multiple | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 12 | 12 |
Consolidated Funds | Level III | Fixed income asset | Industrials | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 10.5 | 10.5 |
Consolidated Funds | Level III | Fixed income asset | Information technology | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 6,837 | 137,042 |
Consolidated Funds | Level III | Fixed income asset | Materials | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 142,374 | 212,022 |
Consolidated Funds | Level III | Fixed income asset | Telecommunication services | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 35,797 | 14,482 |
Consolidated Funds | Level III | Fixed income asset | Partnership and LLC interests | NAV | ||
FAIR VALUE | ||
Assets, at fair value | 149,339 | 119,690 |
Consolidated Funds | Level III | Other. | Healthcare, education and childcare | Market approach (comparable companies), EBITDA multiple | ||
FAIR VALUE | ||
Assets, at fair value | 1,084 | 1,084 |
Unobservable Input | ||
EBITDA multiple | 8.8 | |
Consolidated Funds | Level III | Other. | Healthcare, education and childcare | Market approach (comparable companies), EBITDA multiple | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 8.8 | |
Consolidated Funds | Level III | Other. | Healthcare, education and childcare | Market approach (comparable companies), EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 8.8 | 8.8 |
Consolidated Funds | Level III | Other. | Industrials | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 65 | 65 |
Consolidated Funds | Private Equity Group | ||
Unobservable Input | ||
Liquidity discount percentage | 30.00% | 30.00% |
FAIR_VALUE_Details_5
FAIR VALUE (Details 5) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
FAIR VALUE | ||
Fair Value | $296,271 | $243,399 |
Unfunded Commitments | 236,435 | 176,707 |
Direct Lending Group | ||
FAIR VALUE | ||
Fair Value | 40,559 | 30,501 |
Unfunded Commitments | 20,792 | 26,854 |
Real Estate Group | ||
FAIR VALUE | ||
Fair Value | 59,541 | 49,178 |
Unfunded Commitments | 87,311 | 45,239 |
Tradable Credit Group | ||
FAIR VALUE | ||
Fair Value | 56,878 | 52,001 |
Unfunded Commitments | 51,048 | 7,420 |
Redemption restriction period | 9 months | 9 months |
Private Equity Group | ||
FAIR VALUE | ||
Fair Value | 139,293 | 111,719 |
Unfunded Commitments | $77,284 | $97,194 |
LOANS_HELD_AS_INVESTMENTS_Deta
LOANS HELD AS INVESTMENTS (Details) (Consolidated Funds, USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Activity in loans held as investments | ||
Balance at beginning of period | $77,514,000 | |
Loan acquisition and origination | 183,732,000 | |
Allowance for loan losses | -119,000 | |
Principal repayment | -176,069,000 | |
Amortization of loan origination fees | 156,000 | |
Balance at end of period | 85,214,000 | |
Changes in the allowance for loan losses | ||
Balance at the beginning of the period | 1,185,000 | |
Increase in allowance for loan losses | 119,000 | |
Balance at the end of the period | 1,304,000 | |
Loan receivable balance | ||
Loan receivables - unpaid principal balance | 86,921,000 | 79,018,000 |
Unamortized loan origination fees | -235,000 | -196,000 |
Deferred interest on non-accrual loans | -168,000 | -123,000 |
Allowance for loan losses | -1,304,000 | |
Loans and Leases Receivable, Net Amount, Total | 85,214,000 | |
Loan commitment amount to borrowers | 151,100,000 | 155,100,000 |
undrawn loan commitment amount to borrowers | 64,200,000 | 76,100,000 |
Carrying Value | ||
LOANS HELD AS INVESTMENTS | ||
Loans held for investments | 85,214,000 | 77,514,000 |
Total | ||
LOANS HELD AS INVESTMENTS | ||
Loans held for investments | 86,518,000 | 78,895,000 |
Level III | ||
LOANS HELD AS INVESTMENTS | ||
Loans held for investments | $86,518,000 | $78,895,000 |
DERIVATIVE_FINANCIAL_INSTRUMEN2
DERIVATIVE FINANCIAL INSTRUMENTS (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
item | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Number of counterparties | 2 | |
Number of interest rates | 2 | |
Parent Company | ||
Assets | ||
Notional amount, Assets | 102,217 | $161,890 |
Fair Value, Assets | 8,217 | 7,623 |
Fair Value, Warrants | 189,746 | 170,324 |
Liabilities | ||
Notional amount, Liabilities | 315,341 | 352,231 |
Fair Value, Liabilities | 2,973 | 2,850 |
Parent Company | Interest rate contracts | ||
Liabilities | ||
Notional amount, Liabilities | 250,000 | 250,000 |
Fair Value, Liabilities | 978 | 847 |
Parent Company | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 102,217 | 161,890 |
Fair Value, Assets | 8,217 | 7,623 |
Liabilities | ||
Notional amount, Liabilities | 65,341 | 102,231 |
Fair Value, Liabilities | 1,995 | 2,003 |
Consolidated Funds | ||
Assets | ||
Notional amount, Assets | 181,844 | 81,845 |
Notional amount, Total | 185,550 | 161,396 |
Fair Value, Assets | 3,696 | 3,126 |
Fair Value, Warrants | 18,990,943 | 19,123,950 |
Fair Value, Total | 8,125 | 6,992 |
Liabilities | ||
Notional amount, Liabilities | 470,822 | 693,175 |
Fair Value, Liabilities | 59,483 | 42,332 |
Consolidated Funds | Interest rate contracts | ||
Assets | ||
Notional amount, Assets | 37,000 | 34,000 |
Fair Value, Assets | 0 | |
Liabilities | ||
Notional amount, Liabilities | 10,000 | |
Fair Value, Liabilities | 21 | |
Consolidated Funds | Credit contracts | ||
Assets | ||
Notional amount, Assets | 101,000 | |
Fair Value, Assets | 1,153 | |
Liabilities | ||
Notional amount, Liabilities | 223,756 | 385,296 |
Fair Value, Liabilities | 11,716 | 13,265 |
Consolidated Funds | Equity contracts | Other | ||
Assets | ||
Notional amount, Assets | 3,706 | 79,551 |
Fair Value, Warrants | 4,429 | 3,866 |
Consolidated Funds | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 40,330 | 43,303 |
Fair Value, Assets | 1,652 | 2,070 |
Liabilities | ||
Notional amount, Liabilities | 152,983 | 207,577 |
Fair Value, Liabilities | 9,411 | 9,991 |
Consolidated Funds | Other financial instruments | ||
Assets | ||
Notional amount, Assets | 3,514 | 4,542 |
Fair Value, Assets | 891 | 1,056 |
Liabilities | ||
Notional amount, Liabilities | 94,083 | 90,302 |
Fair Value, Liabilities | 38,356 | $19,055 |
DERIVATIVE_FINANCIAL_INSTRUMEN3
DERIVATIVE FINANCIAL INSTRUMENTS (Details 2) (Net realized gain (loss) on investments, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Parent Company | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | $6,801 | ($1,134) |
Total net change in unrealized appreciation (depreciation) on investments | 1,316 | -67 |
Parent Company | Purchased option contracts | Purchased | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 2,022 | |
Total net change in unrealized appreciation (depreciation) on investments | -1,057 | -61 |
Parent Company | Swaps | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -337 | -341 |
Total net change in unrealized appreciation (depreciation) on investments | -131 | 57 |
Parent Company | Foreign currency forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 5,116 | -793 |
Total net change in unrealized appreciation (depreciation) on investments | 2,504 | -63 |
Parent Company | Interest rate contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -337 | -341 |
Total net change in unrealized appreciation (depreciation) on investments | -131 | 57 |
Parent Company | Interest rate contracts | Swaps | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -337 | -341 |
Total net change in unrealized appreciation (depreciation) on investments | -131 | 57 |
Parent Company | Foreign exchange contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 7,138 | -793 |
Total net change in unrealized appreciation (depreciation) on investments | 1,447 | -124 |
Parent Company | Foreign exchange contracts | Purchased option contracts | Purchased | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 2,022 | |
Total net change in unrealized appreciation (depreciation) on investments | -1,057 | -61 |
Parent Company | Foreign exchange contracts | Foreign currency forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 5,116 | -793 |
Total net change in unrealized appreciation (depreciation) on investments | 2,504 | -63 |
Consolidated Funds | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -10,122 | -24,240 |
Total net change in unrealized appreciation (depreciation) on investments | 1,526 | 7,804 |
Consolidated Funds | Purchased option contracts | Purchased | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -2,582 | -2,292 |
Total net change in unrealized appreciation (depreciation) on investments | -184 | -1,668 |
Consolidated Funds | Purchased option contracts | Written | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 1,853 | |
Total net change in unrealized appreciation (depreciation) on investments | -1,214 | |
Consolidated Funds | Swaps | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -10,730 | -7,174 |
Total net change in unrealized appreciation (depreciation) on investments | 2,104 | -472 |
Consolidated Funds | Interest rate caps/floor | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net change in unrealized appreciation (depreciation) on investments | -4 | |
Consolidated Funds | Other | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 1,261 | |
Total net change in unrealized appreciation (depreciation) on investments | 40 | -7,180 |
Consolidated Funds | Foreign currency forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 3,190 | -17,888 |
Total net change in unrealized appreciation (depreciation) on investments | -434 | 18,342 |
Consolidated Funds | Interest rate contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -135 | -514 |
Total net change in unrealized appreciation (depreciation) on investments | 135 | -368 |
Consolidated Funds | Interest rate contracts | Swaps | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -135 | -514 |
Total net change in unrealized appreciation (depreciation) on investments | 135 | -342 |
Consolidated Funds | Interest rate contracts | Interest rate caps/floor | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net change in unrealized appreciation (depreciation) on investments | -4 | |
Consolidated Funds | Interest rate contracts | Foreign currency forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net change in unrealized appreciation (depreciation) on investments | -22 | |
Consolidated Funds | Credit contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -9,449 | -10,206 |
Total net change in unrealized appreciation (depreciation) on investments | -113 | 3,476 |
Consolidated Funds | Credit contracts | Swaps | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -9,449 | -10,206 |
Total net change in unrealized appreciation (depreciation) on investments | -113 | 3,476 |
Consolidated Funds | Equity contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -2,582 | -758 |
Total net change in unrealized appreciation (depreciation) on investments | -151 | -5,850 |
Consolidated Funds | Equity contracts | Purchased option contracts | Purchased | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -2,582 | -2,019 |
Total net change in unrealized appreciation (depreciation) on investments | -191 | 108 |
Consolidated Funds | Equity contracts | Other | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 1,261 | |
Total net change in unrealized appreciation (depreciation) on investments | 40 | -7,180 |
Consolidated Funds | Equity contracts | Foreign currency forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net change in unrealized appreciation (depreciation) on investments | 1,222 | |
Consolidated Funds | Foreign exchange contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 3,190 | -16,308 |
Total net change in unrealized appreciation (depreciation) on investments | -427 | 14,250 |
Consolidated Funds | Foreign exchange contracts | Purchased option contracts | Purchased | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -273 | |
Total net change in unrealized appreciation (depreciation) on investments | 7 | -1,663 |
Consolidated Funds | Foreign exchange contracts | Purchased option contracts | Written | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 1,853 | |
Total net change in unrealized appreciation (depreciation) on investments | -1,214 | |
Consolidated Funds | Foreign exchange contracts | Swaps | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net change in unrealized appreciation (depreciation) on investments | -15 | |
Consolidated Funds | Foreign exchange contracts | Foreign currency forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | 3,190 | -17,888 |
Total net change in unrealized appreciation (depreciation) on investments | -434 | 17,142 |
Consolidated Funds | Other financial instruments | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -1,146 | 3,546 |
Total net change in unrealized appreciation (depreciation) on investments | 2,082 | -3,704 |
Consolidated Funds | Other financial instruments | Purchased option contracts | Purchased | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net change in unrealized appreciation (depreciation) on investments | -113 | |
Consolidated Funds | Other financial instruments | Swaps | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Total net realized gain (loss) on investments | -1,146 | 3,546 |
Total net change in unrealized appreciation (depreciation) on investments | $2,082 | ($3,591) |
DERIVATIVE_FINANCIAL_INSTRUMEN4
DERIVATIVE FINANCIAL INSTRUMENTS (Details 3) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Parent Company | ||
Derivatives, Assets | ||
Gross Amounts of Recognized Assets | $8,217 | $7,623 |
Net Amounts of Assets Presented | 8,217 | 7,623 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 1,995 | 1,056 |
Net Amount | 6,222 | 6,567 |
Total | ||
Gross Amounts of Recognized Assets | 8,217 | 7,623 |
Net Amounts of Assets Presented | 8,217 | 7,623 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 1,995 | 1,056 |
Net Amount | 6,222 | 6,567 |
Derivatives, Liabilities | ||
Gross Amounts of Recognized Liabilities | -2,973 | -2,850 |
Derivatives instruments | -2,973 | -2,850 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | -1,995 | -1,056 |
Net Amount | -978 | -1,794 |
Total | ||
Gross Amounts of Recognized Liabilities | -2,973 | -2,850 |
Net Amounts of Liabilities Presented | -2,973 | -2,850 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | -1,995 | -1,056 |
Net Amount | -978 | -1,794 |
Grand Total | ||
Gross Amounts of Recognized Assets (Liabilities) | 5,244 | 4,773 |
Net Amounts of Assets (Liabilities) Presented | 5,244 | 4,773 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Net Amount | 5,244 | 4,773 |
Consolidated Funds | ||
Derivatives, Assets | ||
Gross Amounts of Recognized Assets | 4,877 | 4,940 |
Gross Amounts Offset in Assets | 1,181 | 1,814 |
Net Amounts of Assets Presented | 3,696 | 3,126 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 727 | 989 |
Cash Collateral Received | -1,080 | -2,295 |
Net Amount | 4,049 | 4,432 |
Reverse repurchase, securities borrowing, and similar arrangements | ||
Gross Amounts of Recognized Assets | 4,150 | 4,150 |
Net Amounts of Assets Presented | 4,150 | 4,150 |
Net Amount | 4,150 | 4,150 |
Total | ||
Gross Amounts of Recognized Assets | 9,027 | 9,090 |
Gross Amounts Offset in Assets | 1,181 | 1,814 |
Net Amounts of Assets Presented | 7,846 | 7,276 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | 727 | 989 |
Cash Collateral Received | -1,080 | -2,295 |
Net Amount | 8,199 | 8,582 |
Derivatives, Liabilities | ||
Gross Amounts of Recognized Liabilities | -60,664 | -44,146 |
Gross Amounts Offset in Liabilities | -1,181 | -1,814 |
Derivatives instruments | -59,483 | -42,332 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | -727 | -989 |
Cash Collateral Pledged | -11,119 | -12,386 |
Net Amount | -47,637 | -28,957 |
Total | ||
Gross Amounts of Recognized Liabilities | -60,664 | -44,146 |
Gross Amounts Offset in Liabilities | -1,181 | -1,814 |
Net Amounts of Liabilities Presented | -59,483 | -42,332 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Financial Instruments | -727 | -989 |
Cash Collateral Pledged | -11,119 | -12,386 |
Net Amount | -47,637 | -28,957 |
Grand Total | ||
Gross Amounts of Recognized Assets (Liabilities) | -51,637 | -35,056 |
Net Amounts of Assets (Liabilities) Presented | -51,637 | -35,056 |
Gross Amounts Not Offset in the Statement of Financial Position | ||
Cash Collateral Received (Pledged) | -12,199 | -14,681 |
Net Amount | ($39,438) | ($20,375) |
DEBT_Details
DEBT (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Oct. 08, 2014 | Dec. 31, 2014 | |
Parent Company | ||||
DEBT | ||||
Amount outstanding | $298,614,000 | $243,491,000 | ||
Other assets | ||||
DEBT | ||||
Unamortized debt issuance costs | 5,300,000 | |||
Revolving credit line | Parent Company | ||||
DEBT | ||||
Maximum borrowing capacity | 1,030,000,000 | |||
Unused commitment fees (as a percent) | 0.20% | |||
Amount outstanding | 60,000,000 | 0 | ||
Revolving credit line | Base rate | Parent Company | ||||
DEBT | ||||
Interest rate basis | base rate | |||
Interest rate spread (as a percent) | 0.50% | |||
Revolving credit line | LIBOR | Parent Company | ||||
DEBT | ||||
Interest rate basis | LIBOR | |||
Interest rate spread (as a percent) | 1.50% | |||
Line of credit | Parent Company | ||||
DEBT | ||||
Amount outstanding | 243,600,000 | 245,800,000 | ||
Debt issuance costs | 5,000,000 | 5,300,000 | ||
Line of credit | Interest expense. | Parent Company | ||||
DEBT | ||||
Interest expense | 200,000 | 600,000 | ||
Expense relating to unused commitment fee | 500,000 | 400,000 | ||
Line of credit | Interest expense and debt extinguishment expense | Parent Company | ||||
DEBT | ||||
Amortization of debt issuance costs | 300,000 | 200,000 | ||
Senior secured notes | Parent Company | ||||
DEBT | ||||
Face amount | 250,000,000 | |||
Debt issuance percentage | 98.27% | |||
Debt issuance costs | 2,400,000 | |||
Unamortized debt issuance costs | 4,300,000 | |||
Redemption percentage | 100.00% | |||
Fixed rate obligation (as a percent) | 4.00% | |||
Effective rate (as a percent) | 4.21% | |||
Senior secured notes | Interest expense. | Parent Company | ||||
DEBT | ||||
Interest expense | 3,700,000 | |||
Amortization of debt issuance costs | 400,000 | |||
Senior secured notes | Other assets | Parent Company | ||||
DEBT | ||||
Unamortized debt issuance costs | $2,200,000 | $2,300,000 |
DEBT_Details_2
DEBT (Details 2) (Consolidated Funds, USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
DEBT | ||
Market Value of Loan Obligations | $12,154,677 | $12,049,170 |
Collateralized loan obligation | ||
DEBT | ||
Market Value of Loan Obligations | 12,154,677 | 12,049,170 |
Loan Obligations | 12,956,979 | 13,001,113 |
Senior secured notes | Collateralized loan obligation | ||
DEBT | ||
Borrowing Outstanding | 11,360,083 | 11,394,820 |
Market Value of Loan Obligations | 11,191,664 | 11,062,501 |
Weighted Average Remaining Maturity In Years | 8 years 10 months 17 days | 9 years 7 days |
Weighted average interest rate (as a percent) | 2.67% | 2.62% |
Subordinated notes / preferred shares | Collateralized loan obligation | ||
DEBT | ||
Borrowing Outstanding | 1,506,610 | 1,523,670 |
Market Value of Loan Obligations | 873,437 | 894,795 |
Weighted Average Remaining Maturity In Years | 9 years 3 months 4 days | 9 years 5 months 9 days |
Notes payable | Collateralized loan obligation | ||
DEBT | ||
Borrowing Outstanding | 12,866,693 | 12,918,490 |
Market Value of Loan Obligations | 12,065,101 | 11,957,296 |
Line of credit | Revolving credit line | Collateralized loan obligation | ||
DEBT | ||
Market Value of Loan Obligations | 89,576 | 91,874 |
Loan Obligations | 90,286 | 92,623 |
Line of credit | Revolving credit line | Revolving credit line with maturity 04/16/21 | Collateralized loan obligation | ||
DEBT | ||
Market Value of Loan Obligations | 43,980 | |
Total Facility (Capacity) | 44,113 | |
Loan Obligations | 44,113 | |
Effective rate (as a percent) | 0.49% | |
Commitment Fee (as a percent) | 0.17% | |
Line of credit | Revolving credit line | Revolving credit line with maturity 07/16/20 | Collateralized loan obligation | ||
DEBT | ||
Market Value of Loan Obligations | 42,676 | |
Total Facility (Capacity) | 42,806 | |
Loan Obligations | 42,806 | |
Effective rate (as a percent) | 0.51% | |
Commitment Fee (as a percent) | 0.17% | |
Line of credit | Revolving credit line | Revolving credit line with maturity 10/11/21 | Collateralized loan obligation | ||
DEBT | ||
Market Value of Loan Obligations | 46,900 | 47,894 |
Total Facility (Capacity) | 47,480 | 48,510 |
Loan Obligations | $47,480 | $48,510 |
Effective rate (as a percent) | 0.45% | 0.43% |
Commitment Fee (as a percent) | 0.17% | 0.17% |
DEBT_Details_3
DEBT (Details 3) (Consolidated Funds, USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
DEBT | ||
Long term borrowings, Outstanding Loan | $683,564 | $771,283 |
Outstanding Loan | 683,564 | 771,283 |
Line of credit | Revolving credit line | Credit facility with maturity 01/01/23 | ||
DEBT | ||
Total Facility (Capacity) | 18,000 | |
Long term borrowings, Outstanding Loan | 4,459 | |
Line of credit | Revolving credit line | Credit facility with maturity 01/01/23 | LIBOR | ||
DEBT | ||
Effective rate spread (as a percent) | 1.81% | |
Line of credit | Revolving credit line | Credit facility with maturity 06/04/18 | ||
DEBT | ||
Total Facility (Capacity) | 150,000 | 150,000 |
Long term borrowings, Outstanding Loan | 48,500 | 39,300 |
Commitment Fee (as a percent) | 0.25% | 0.25% |
Line of credit | Revolving credit line | Credit facility with maturity 06/04/18 | LIBOR | ||
DEBT | ||
Effective rate basis | LIBOR | LIBOR |
Effective rate spread (as a percent) | 2.25% | 2.25% |
Term note | Notes payable, four | ||
DEBT | ||
Total Facility (Capacity) | 1,500,000 | |
Long term borrowings, Outstanding Loan | 630,605 | |
Commitment Fee (as a percent) | 0.75% | |
Term note | Notes payable, four | LIBOR | ||
DEBT | ||
Effective rate basis | LIBOR | |
Effective rate spread (as a percent) | 1.65% | |
Term note | Notes payable, five | ||
DEBT | ||
Total Facility (Capacity) | 1,500,000 | |
Long term borrowings, Outstanding Loan | 731,983 | |
Commitment Fee (as a percent) | 0.75% | |
Term note | Notes payable, five | LIBOR | ||
DEBT | ||
Effective rate basis | LIBOR | |
Effective rate spread (as a percent) | 1.65% | |
Line of credit | Revolving credit line | Credit facility with maturity 06/06/15 | ||
DEBT | ||
Total Facility (Capacity) | 25,000 | 25,000 |
Commitment Fee (as a percent) | 0.30% | 0.30% |
Line of credit | Revolving credit line | Credit facility with maturity 06/06/15 | LIBOR | ||
DEBT | ||
Effective rate basis | LIBOR | LIBOR |
Effective rate spread (as a percent) | 1.75% | 1.75% |
Line of credit | Revolving credit line | Credit facility with maturity 06/30/15 | ||
DEBT | ||
Total Facility (Capacity) | $25,000 | $25,000 |
Commitment Fee (as a percent) | 0.30% | 0.30% |
Line of credit | Revolving credit line | Credit facility with maturity 06/30/15 | LIBOR | ||
DEBT | ||
Effective rate basis | LIBOR | LIBOR |
Effective rate spread (as a percent) | 2.00% | 2.00% |
DEBT_Details_4
DEBT (Details 4) (Consolidated Funds, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
DEBT | ||
Outstanding loan obligations | 406,371 | $378,365 |
Mezzanine debt | ||
DEBT | ||
Outstanding loan obligations | 406,400 | $378,400 |
Mezzanine debt | Minimum | ||
DEBT | ||
Term of prior written notice to cause holders to redeem notes | 5 days | |
Term of prior written notice for withdrawal of note | 30 days |
REDEEMABLE_INTERESTS_Details
REDEEMABLE INTERESTS (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
AOG | |
Redeemable interests | |
Beginning balance | $23,988 |
Reallocation of Partners' capital for changes in ownership interests | 81 |
Deferred tax liabilities arising from allocation of contributions and Partners' capital | -1 |
Distributions | -260 |
Net income (loss) attributable to redeemable, non-controlling interests | 243 |
Currency translation adjustment | -7 |
Equity compensation | 33 |
Ending balance | 24,077 |
Consolidated Funds | |
Redeemable interests | |
Beginning balance | 1,037,450 |
Contributions from redeemable, non-controlling interests | 122 |
Distributions to redeemable, non-controlling interests | -138,414 |
Net income (loss) attributable to redeemable, non-controlling interests | 15,859 |
Ending balance | $915,017 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | Jul. 30, 2014 | |
COMMITMENTS AND CONTINGENCIES | |||
Unfunded commitments | $258,300,000 | $187,900,000 | |
Revolving credit line | ACRE | |||
COMMITMENTS AND CONTINGENCIES | |||
Fair value of guarantee included within accounts payable, accrued expenses and other liabilities | 1,600,000 | ||
Outstanding Loan | 75,000,000 | 75,000,000 | |
Revolving credit line | ACRE | Maximum | |||
COMMITMENTS AND CONTINGENCIES | |||
Maximum exposure to loss | 75,000,000 | ||
Revolving credit line | City National Bank | ACRE | |||
COMMITMENTS AND CONTINGENCIES | |||
Fund borrowings | 75,000,000 | ||
Percentage of outstanding balance at which entity agreed to purchase all loans and other obligations outstanding | 100.00% | ||
Percentage of credit support fee receivable annually | 1.50% | ||
Affiliated Co-investment Entities | |||
COMMITMENTS AND CONTINGENCIES | |||
Guaranteed loans payable balance | 2,700,000 | 3,200,000 | |
Additional unfunded commitments | 1,000,000 | 1,100,000 | |
AREA | Accounts payable and accrued expenses | |||
COMMITMENTS AND CONTINGENCIES | |||
Unfunded commitments | 4,800,000 | 5,600,000 | |
Performance Fees | |||
COMMITMENTS AND CONTINGENCIES | |||
Assumed investments value for clawback obligation | 0 | 0 | |
Performance fees subject to potential clawback provision | 306,300,000 | 295,700,000 | |
Performance fees subject to potential claw back provision that are reimbursable by professionals | $244,300,000 | $239,300,000 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Parent Company | ||
Due from affiliates: | ||
Due from affiliates | $129,870 | $146,534 |
Due to affiliates: | ||
Due to affiliates | 7,426 | 19,030 |
Parent Company | Affiliated entity | ||
Due from affiliates: | ||
Management fees receivable from non consolidated funds | 98,775 | 113,358 |
Payments made on behalf of and amounts due from non consolidated funds | 31,095 | 33,176 |
Due to affiliates: | ||
Management fee rebate payable to non consolidated funds | 6,048 | 14,390 |
Payments made by non consolidated funds on behalf of and amounts due from the Company | 1,378 | 4,640 |
Consolidated Funds | ||
Due from affiliates: | ||
Due from affiliates | 9,338 | 11,342 |
Due to affiliates: | ||
Due to affiliates | 2,332 | 2,441 |
Consolidated Funds | Affiliated entity | ||
Due from affiliates: | ||
Due from affiliates | 9,338 | 11,342 |
Due to affiliates: | ||
Due to affiliates | $2,332 | $2,441 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Income taxes | ||
Income tax expense (benefit) | $5,892 | ($6,695) |
EARNINGS_PER_COMMON_UNIT_Detai
EARNINGS PER COMMON UNIT (Details) | 3 Months Ended |
Mar. 31, 2015 | |
AOG | |
Earnings per common unit | |
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 132,437,609 |
Partners Capital Account Units Conversion Ratio | 100.00% |
Restricted unit | |
Earnings per common unit | |
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 834,288 |
Stock Options | |
Earnings per common unit | |
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 25,022,983 |
EARNINGS_PER_COMMON_UNIT_Detai1
EARNINGS PER COMMON UNIT (Details 2) (USD $) | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 |
Basic | |
Net income attributable to Ares Management L.P. | $18,456 |
Earnings distributed to participating securities (restricted stock) | -237 |
Net income available to common unitholders | 18,219 |
Basic weighted-average common units | 80,667,664 |
Earnings per common unit, basic (in dollars per unit) | $0.23 |
Diluted | |
Net income attributable to Ares Management L.P. | 18,456 |
Earnings distributed to participating securities (restricted stock) | -237 |
Net income available to common unitholders | $18,219 |
Basic weighted-average common units | 80,667,664 |
Diluted weighted-average common units | 80,667,664 |
Earnings per common unit, diluted (in dollars per unit) | $0.23 |
EQUITY_COMPENSATION_Details
EQUITY COMPENSATION (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 01, 2015 | 1-May-14 |
Equity compensation | ||||
Grant date fair value (in dollars) | $211,679 | |||
Equity Compensation Expenses Recognized, Net of Forfeitures (in dollars) | 5,339 | |||
Total number of units available for grant under the Equity Incentive Plan | 30,840,965 | 31,728,949 | 31,704,545 | |
AEP I Profit Interests | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 38,400 | |||
AEP II Profit Interests | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 33,423 | |||
Equity Compensation Expenses Recognized, Net of Forfeitures (in dollars) | 1,504 | |||
AEP IV Profit Interests | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 10,657 | |||
AEP VI Profit Interests | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 9,047 | |||
Exchanged AEP Awards | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 68,607 | |||
Indicus Membership Interest | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 20,700 | |||
Equity Compensation Expenses Recognized, Net of Forfeitures (in dollars) | 1,036 | |||
Indicus Profit Interest | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 5,464 | |||
Equity Compensation Expenses Recognized, Net of Forfeitures (in dollars) | 456 | |||
AREA Membership Interest | ||||
Equity compensation | ||||
Grant date fair value (in dollars) | 25,381 | |||
Equity Compensation Expenses Recognized, Net of Forfeitures (in dollars) | $2,343 |
EQUITY_COMPENSATION_Details_2
EQUITY COMPENSATION (Details 2) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2015 | Mar. 16, 2015 | 1-May-14 | |
Equity compensation | ||||
Equity compensation expenses | $5,339,000 | |||
Compensation and benefits | ||||
Equity compensation | ||||
Equity compensation expenses | 7,921,000 | |||
Restricted unit | ||||
Equity compensation | ||||
Equity compensation expenses | 3,445,000 | |||
Discount for lack of marketability percentage | 5.00% | |||
Quarterly distribution declared (in dollars per unit) | $0.24 | |||
Distribution equivalents made to holders | 1,100,000 | |||
Distribution equivalents made to holders recorded in equity compensation in the Consolidated Statements of Changes in Equity | 900,000 | |||
Restricted Units and Phantom Units | ||||
Balance at the beginning of the period (in units) | 4,776,053 | |||
Restricted stock granted (in units) | 171,444 | |||
Forfeited (in units) | -75,920 | |||
Balance at the end of the period (in units) | 4,871,577 | |||
Vested (in units) | 0 | |||
Weighted Average Grant Date Fair Value | ||||
Balance at the beginning of the period (in dollars per unit) | $18.08 | |||
Granted (in dollars per unit) | $17.27 | |||
Forfeited (in dollars per unit) | $18.05 | |||
Balance at the end of the period (in dollars per unit) | $18.06 | |||
Assumed forfeiture (as a percent) | 7.00% | |||
Unrecognized Compensation Expenses (in dollars) | 56,800,000 | |||
Weighted average period of compensation expense expected to be recognized | 4 years 1 month 6 days | |||
Vesting period | 5 years | |||
Restricted unit | Compensation and benefits | ||||
Equity compensation | ||||
Distribution equivalents made to holders | 200,000 | |||
Restricted unit | IPO | ||||
Restricted Units and Phantom Units | ||||
Restricted stock granted (in units) | 4,936,051 | |||
Restricted unit | Awards vested beginning on the third anniversary of the date the initial public offering became effective | ||||
Equity compensation | ||||
Vesting rights (as a percent) | 33.00% | |||
Stock Options | ||||
Equity compensation | ||||
Equity compensation expenses | 3,853,000 | |||
Vesting rights (as a percent) | 33.30% | |||
Weighted Average Grant Date Fair Value | ||||
Assumed forfeiture (as a percent) | 7.00% | |||
Unrecognized Compensation Expenses (in dollars) | 63,400,000 | |||
Weighted average period of compensation expense expected to be recognized | 4 years 29 days | |||
Phantom units | ||||
Equity compensation | ||||
Equity compensation expenses | 623,000 | |||
Restricted Units and Phantom Units | ||||
Balance at the beginning of the period (in units) | 610,711 | |||
Forfeited (in units) | -16,538 | |||
Balance at the end of the period (in units) | 594,173 | |||
Vested (in units) | 0 | |||
Weighted Average Grant Date Fair Value | ||||
Balance at the beginning of the period (in dollars per unit) | $19 | |||
Forfeited (in dollars per unit) | $19 | |||
Balance at the end of the period (in dollars per unit) | $19 | |||
Unrecognized Compensation Expenses (in dollars) | 9,000,000 | |||
Weighted average period of compensation expense expected to be recognized | 4 years 29 days | |||
Number of trading days immediately prior to vesting dates which gives right to the holder to receive amount in cash per unit | 15 days | |||
Number of trading days immediately following the vesting dates which gives right to the holder to receive amount in cash per unit | 15 days | |||
Vesting period | 5 years | |||
Cash paid to settle awards (in dollars) | $0 | |||
Fair value of awards (in dollars per share) | $18.54 | |||
Phantom units | IPO | ||||
Restricted Units and Phantom Units | ||||
Restricted stock granted (in units) | 686,395 | |||
Restricted units and options | ||||
Weighted Average Grant Date Fair Value | ||||
Percentage of awards that will vest if participant's employment is terminated between the first and second year after grant | 11.00% | |||
Percentage of awards that will vest if participant's employment is terminated between the second and third year after grant | 22.00% |
EQUITY_COMPENSATION_Details_3
EQUITY COMPENSATION (Details 3) (USD $) | 3 Months Ended | 0 Months Ended |
Mar. 31, 2015 | 1-May-14 | |
Equity compensation | ||
Deferred tax assets related to equity based awards | $3,500,000 | |
Stock Options | ||
Equity compensation | ||
Number of common units which holder is entitle to purchase | 1 | |
Term of option | P10Y | |
Vesting rights (as a percent) | 33.30% | |
Unrecognized Compensation Expenses (in dollars) | 63,400,000 | |
Assumed forfeiture (as a percent) | 7.00% | |
Weighted average remaining period of compensation expense expected to be recognized | 4 years 29 days | |
Options | ||
Balance at the beginning of the period (in units) | 24,230,518 | |
Granted (in units) | 935,135 | |
Forfeited (in units) | -142,675 | |
Balance at the end of the period (in units) | 25,022,978 | |
Expected to vest at the end of the period (in units) | 19,333,428 | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period (in dollars per unit) | $19 | |
Granted (in dollars per unit) | $18.82 | |
Forfeited (in dollars per unit) | $19 | |
Balance at the end of the period (in dollars per unit) | $18.99 | |
Expected to vest at the end of the period (in dollars per unit) | $18.99 | |
Weighted Average Remaining Life | ||
Balance at the beginning of the period | 9 years 1 month 10 days | |
Granted | 9 years 9 months 29 days | |
Balance at the end of the period | 9 years 1 month 10 days | |
Expected to vest at the end of the period | 9 years 1 month 10 days | |
Aggregate Intrinsic Value | ||
Balance at the end of the period (in dollars) | $0 | |
Stock Options | IPO | ||
Options | ||
Granted (in units) | 24,835,227 | |
Stock Options | Black-Scholes option pricing model | ||
Weighted average assumptions used to measure the fair value of each options granted using Black-Scholes option-pricing model | ||
Weighted average expected dividend yield (as a percent) | 5.00% | |
Stock Options | Minimum | Black-Scholes option pricing model | ||
Weighted average assumptions used to measure the fair value of each options granted using Black-Scholes option-pricing model | ||
Risk free rate (as a percent) | 1.71% | |
Expected volatility factor (as a percent) | 35.00% | |
Expected life | 6 years 7 months 28 days | |
Stock Options | Maximum | Black-Scholes option pricing model | ||
Weighted average assumptions used to measure the fair value of each options granted using Black-Scholes option-pricing model | ||
Risk free rate (as a percent) | 1.80% | |
Expected volatility factor (as a percent) | 36.00% | |
Expected life | 7 years 5 months 27 days |
EQUITY_Details
EQUITY (Details) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Jul. 01, 2015 | Dec. 31, 2014 | Jan. 01, 2015 | |
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Units issued (in units) | 80,667,664 | 80,667,664 | ||
Ares Owners Holdings, L.P. direct ownership percentage of each of the Ares Operating Group Entities | 56.28% | |||
Number of Partnership Units Ares Owners Holdings LP Holds of Each Ares Operating Group Entities | 119,937,609 | |||
Affiliate of Allehany Corporation Direct Ownership Percentage of Each Ares Operating Group Entities | 5.87% | |||
Number of Ares Operating Group Units an Affiliate of Alleghany Corporation Holds of Each Ares Operating Group Entities | 12,500,000 | |||
Daily average ownership percentage Ares Owners Holdings LP owned of each of the Ares Operating Group entities | 56.28% | |||
Daily average ownership percentage Affiliate of Alleghany Corporation owned of each of the Ares Operating Group entities | 5.87% | |||
Daily average ownership percentage Ares Management LP owned of each of the Ares Operating Group entities | 37.85% | |||
EIF Management, LLC | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Units conversion ratio | 100.00% | |||
Period after close of transaction for exchange | 6 months | |||
EIF Management, LLC | Maximum | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Percentage of units exchangeable | 50.00% | 50.00% | ||
AH LLC | APMC | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Controlling ownership interest (as a percent) | 50.10% | |||
AI | APMC | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Controlling ownership interest (as a percent) | 70.30% | |||
AOG | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Controlling ownership interest (as a percent) | 37.85% | |||
Units issued (in units) | 80,667,664 | |||
Units conversion ratio | 100.00% | |||
Maximum ratio for exchange of units | 4 | |||
AOG | EIF Management, LLC | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Units issued (in units) | 1,578,947 |
SEGMENT_REPORTING_Details
SEGMENT REPORTING (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Jan. 01, 2015 | Dec. 31, 2014 | |
item | item | |||
Segment reporting | ||||
Number of investment groups operated | 4 | |||
Management fees | ||||
Net investment income (loss) | $463,699,000 | $325,177,000 | ||
Economic net income | 406,565,000 | 274,675,000 | ||
Total assets | 21,618,156,000 | 22,035,501,000 | 21,632,675,000 | |
EIF Management, LLC | ||||
Segment reporting | ||||
Assets under management | 4,400,000,000 | |||
Number of commingled funds | 4 | |||
Number of related co-investment vehicles | 4 | |||
Affiliated entity | ARCC | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 29,042,000 | 28,318,000 | ||
Ares Management L.P and Consolidated Funds | Private Equity Group | ||||
Segment reporting | ||||
Assets under management | 14,800,000,000 | |||
Number of growth fund | 1 | |||
Number of funds focused on U.S. energy and power assets | 4 | |||
Number of co-investment vehicles focused on U.S. energy and power assets | 4 | |||
Number of commingled funds | 4 | |||
Ares Management L.P and Consolidated Funds | Private Equity Group | EIF Management, LLC | ||||
Segment reporting | ||||
Assets under management | 4,400,000,000 | |||
Number of commingled funds | 4 | |||
Number of related co-investment vehicles | 4 | |||
Ares Management L.P and Consolidated Funds | Direct Lending Group | ||||
Segment reporting | ||||
Assets under management | 28,700,000,000 | |||
Number of investment funds | 34 | |||
Ares Management L.P and Consolidated Funds | Direct Lending Group | Affiliated entity | ARCC | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 29,042,000 | 28,318,000 | ||
Ares Management L.P and Consolidated Funds | Tradable Credit Group | ||||
Segment reporting | ||||
Assets under management | 33,400,000,000 | |||
Number of investment funds | 75 | |||
Ares Management L.P and Consolidated Funds | Real Estate Group | ||||
Segment reporting | ||||
Assets under management | 10,000,000,000 | |||
Number of investment funds | 42 | |||
Loans Receivable, Gross, Commercial, Mortgage | 5,600,000,000 | |||
Ares Management L.P and Consolidated Funds | Operating segment | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 162,316,000 | 139,861,000 | ||
Administrative fees and other income | 967,000 | 1,473,000 | ||
Compensation and benefits | -65,017,000 | -62,697,000 | ||
General, administrative and other expenses | -12,788,000 | -11,877,000 | ||
Fee related earnings | 85,477,000 | 66,760,000 | ||
Performance fees-realized | 35,639,000 | 23,338,000 | ||
Performance fees-unrealized | 68,449,000 | 40,092,000 | ||
Performance fee compensation-realized | -21,344,000 | -16,007,000 | ||
Performance fee compensation-unrealized | -55,048,000 | -24,718,000 | ||
Net performance fees | 27,697,000 | 22,705,000 | ||
Investment income (loss)-realized | 12,922,000 | 19,282,000 | ||
Investment income (loss)-unrealized | -4,615,000 | 2,952,000 | ||
Interest and other investment income | 2,988,000 | 3,145,000 | ||
Interest expense | -3,684,000 | -1,639,000 | ||
Net investment income (loss) | 7,611,000 | 23,740,000 | ||
Performance related earnings | 35,308,000 | 46,445,000 | ||
Economic net income | 120,785,000 | 113,205,000 | ||
Distributable earnings (loss) | 106,175,000 | 92,059,000 | ||
Total assets | 1,728,380,000 | 1,396,419,000 | ||
Ares Management L.P and Consolidated Funds | Operating segment | Private Equity Group | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 36,589,000 | 23,196,000 | ||
Administrative fees and other income | 13,000 | 76,000 | ||
Compensation and benefits | -12,321,000 | -8,195,000 | ||
General, administrative and other expenses | -3,118,000 | -2,000,000 | ||
Fee related earnings | 21,163,000 | 13,077,000 | ||
Performance fees-realized | 425,000 | 13,086,000 | ||
Performance fees-unrealized | 87,331,000 | 21,341,000 | ||
Performance fee compensation-realized | -340,000 | -10,472,000 | ||
Performance fee compensation-unrealized | -69,981,000 | -16,912,000 | ||
Net performance fees | 17,435,000 | 7,043,000 | ||
Investment income (loss)-realized | 4,172,000 | 1,131,000 | ||
Investment income (loss)-unrealized | -1,442,000 | 15,156,000 | ||
Interest and other investment income | 4,485,000 | 2,785,000 | ||
Interest expense | -1,680,000 | -623,000 | ||
Net investment income (loss) | 5,535,000 | 18,449,000 | ||
Performance related earnings | 22,970,000 | 25,492,000 | ||
Economic net income | 44,133,000 | 38,569,000 | ||
Distributable earnings (loss) | 27,086,000 | 18,698,000 | ||
Total assets | 862,147,000 | 477,710,000 | ||
Ares Management L.P and Consolidated Funds | Operating segment | Direct Lending Group | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 70,739,000 | 66,204,000 | ||
Administrative fees and other income | 77,000 | 90,000 | ||
Compensation and benefits | -33,676,000 | -32,212,000 | ||
General, administrative and other expenses | -3,294,000 | -1,914,000 | ||
Fee related earnings | 33,846,000 | 32,168,000 | ||
Performance fees-realized | 1,889,000 | 39,000 | ||
Performance fees-unrealized | 8,491,000 | 2,292,000 | ||
Performance fee compensation-realized | -1,133,000 | -29,000 | ||
Performance fee compensation-unrealized | -5,023,000 | -1,451,000 | ||
Net performance fees | 4,224,000 | 851,000 | ||
Investment income (loss)-realized | 1,396,000 | -597,000 | ||
Investment income (loss)-unrealized | -1,843,000 | 1,524,000 | ||
Interest and other investment income | 213,000 | 98,000 | ||
Interest expense | -526,000 | -304,000 | ||
Net investment income (loss) | -760,000 | 721,000 | ||
Performance related earnings | 3,464,000 | 1,572,000 | ||
Economic net income | 37,310,000 | 33,740,000 | ||
Distributable earnings (loss) | 34,581,000 | 31,158,000 | ||
Total assets | 248,342,000 | 195,543,000 | ||
Ares Management L.P and Consolidated Funds | Operating segment | Tradable Credit Group | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 37,609,000 | 33,693,000 | ||
Administrative fees and other income | 21,000 | 17,000 | ||
Compensation and benefits | -8,889,000 | -10,805,000 | ||
General, administrative and other expenses | -3,831,000 | -3,696,000 | ||
Fee related earnings | 24,910,000 | 19,209,000 | ||
Performance fees-realized | 33,325,000 | 10,213,000 | ||
Performance fees-unrealized | -27,692,000 | 13,509,000 | ||
Performance fee compensation-realized | -19,871,000 | -5,506,000 | ||
Performance fee compensation-unrealized | 19,554,000 | -6,355,000 | ||
Net performance fees | 5,316,000 | 11,861,000 | ||
Investment income (loss)-realized | 7,222,000 | 18,018,000 | ||
Investment income (loss)-unrealized | -1,526,000 | -12,866,000 | ||
Interest and other investment income | -1,739,000 | 251,000 | ||
Interest expense | -1,208,000 | -387,000 | ||
Net investment income (loss) | 2,749,000 | 5,016,000 | ||
Performance related earnings | 8,065,000 | 16,877,000 | ||
Economic net income | 32,975,000 | 36,086,000 | ||
Distributable earnings (loss) | 41,126,000 | 40,704,000 | ||
Total assets | 451,176,000 | 555,851,000 | ||
Ares Management L.P and Consolidated Funds | Operating segment | Real Estate Group | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 17,378,000 | 16,768,000 | ||
Administrative fees and other income | 856,000 | 1,290,000 | ||
Compensation and benefits | -10,131,000 | -11,485,000 | ||
General, administrative and other expenses | -2,545,000 | -4,267,000 | ||
Fee related earnings | 5,558,000 | 2,306,000 | ||
Performance fees-unrealized | 319,000 | 2,950,000 | ||
Performance fee compensation-unrealized | 403,000 | |||
Net performance fees | 722,000 | 2,950,000 | ||
Investment income (loss)-realized | 132,000 | 730,000 | ||
Investment income (loss)-unrealized | 196,000 | -862,000 | ||
Interest and other investment income | 29,000 | 11,000 | ||
Interest expense | -270,000 | -325,000 | ||
Net investment income (loss) | 87,000 | -446,000 | ||
Performance related earnings | 809,000 | 2,504,000 | ||
Economic net income | 6,367,000 | 4,810,000 | ||
Distributable earnings (loss) | 3,382,000 | 1,499,000 | ||
Total assets | 166,715,000 | 167,315,000 | ||
Ares Management L.P and Consolidated Funds | OMG | ||||
Segment reporting | ||||
Number of independent shared resource groups to support entity's operating segments | 5 | |||
Management fees | ||||
Administrative fees and other income | 6,385,000 | 5,392,000 | ||
Compensation and benefits | -28,914,000 | -27,657,000 | ||
General, administrative and other expenses | -15,326,000 | -13,535,000 | ||
Fee related earnings | -37,855,000 | -35,800,000 | ||
Economic net income | -37,855,000 | -35,800,000 | ||
Distributable earnings (loss) | -38,880,000 | -37,512,000 | ||
Total assets | 16,941,000 | 10,437,000 | ||
Ares Management L.P and Consolidated Funds | Stand Alone | ||||
Management fees | ||||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 162,316,000 | 139,861,000 | ||
Administrative fees and other income | 7,350,000 | 6,865,000 | ||
Compensation and benefits | -93,931,000 | -90,354,000 | ||
General, administrative and other expenses | -28,114,000 | -25,412,000 | ||
Fee related earnings | 47,622,000 | 30,960,000 | ||
Performance fees-realized | 35,639,000 | 23,338,000 | ||
Performance fees-unrealized | 68,449,000 | 40,092,000 | ||
Performance fee compensation-realized | -21,344,000 | -16,007,000 | ||
Performance fee compensation-unrealized | -55,048,000 | -24,718,000 | ||
Net performance fees | 27,697,000 | 22,705,000 | ||
Investment income (loss)-realized | 12,922,000 | 19,282,000 | ||
Investment income (loss)-unrealized | -4,615,000 | 2,952,000 | ||
Interest and other investment income | 2,988,000 | 3,145,000 | ||
Interest expense | -3,684,000 | -1,639,000 | ||
Net investment income (loss) | 7,611,000 | 23,740,000 | ||
Performance related earnings | 35,308,000 | 46,445,000 | ||
Economic net income | 82,930,000 | 77,405,000 | ||
Distributable earnings (loss) | 67,295,000 | 54,547,000 | ||
Total assets | $1,745,321,000 | $1,406,856,000 |
SEGMENT_REPORTING_Details_2
SEGMENT REPORTING (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Reconcile segment results to the Company's income before taxes and total assets | |||
Revenues | $181,728 | $133,628 | $133,628 |
Expenses | 238,862 | 184,130 | 184,130 |
Other income (expense) | 463,699 | 325,177 | |
Economic net income / Income before taxes | 406,565 | 274,675 | |
Total assets | 21,618,156 | 22,035,501 | 21,632,675 |
Ares Management L.P and Consolidated Funds | Operating segment | |||
Reconcile segment results to the Company's income before taxes and total assets | |||
Revenues | 267,370 | 204,764 | |
Expenses | 154,196 | 115,299 | |
Other income (expense) | 7,611 | 23,740 | |
Economic net income / Income before taxes | 120,785 | 113,205 | |
Total assets | 1,728,380 | 1,396,419 | |
Ares Management L.P and Consolidated Funds | Reconciling items | |||
Reconcile segment results to the Company's income before taxes and total assets | |||
Revenues | -85,642 | -71,136 | |
Expenses | 84,666 | 68,831 | |
Other income (expense) | 456,088 | 301,437 | |
Economic net income / Income before taxes | 285,780 | 161,470 | |
Total assets | $19,889,776 | $20,639,082 |
SEGMENT_REPORTING_Details_3
SEGMENT REPORTING (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Segment revenues | |||
Total revenues | $181,728 | $133,628 | $133,628 |
Segment expenses | |||
Total expenses | 238,862 | 184,130 | 184,130 |
Segment other income | |||
Net investment income | 463,699 | 325,177 | |
Ares Management L.P and Consolidated Funds | Operating segment | |||
Segment revenues | |||
Management fees | 162,316 | 139,861 | |
Administrative fees and other income | 967 | 1,473 | |
Performance fees-realized | 35,639 | 23,338 | |
Performance fees-unrealized | 68,449 | 40,092 | |
Total revenues | 267,370 | 204,764 | |
Segment expenses | |||
Compensation and benefits | 65,017 | 62,697 | |
General, administrative and other expenses | 12,788 | 11,877 | |
Performance fee compensation expense-realized | 21,344 | 16,007 | |
Performance fee compensation expense-unrealized | 55,048 | 24,718 | |
Total expenses | 154,196 | 115,299 | |
Segment other income | |||
Investment income (loss)-realized | 12,922 | 19,282 | |
Investment income (loss)-unrealized | -4,615 | 2,952 | |
Interest, dividends and other investment income | 2,988 | 3,145 | |
Interest expense | -3,684 | -1,639 | |
Net investment income | $7,611 | $23,740 |
SEGMENT_REPORTING_Details_4
SEGMENT REPORTING (Details 4) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Revenue adjustment | |||
Revenues | $181,728 | $133,628 | $133,628 |
Ares Management L.P and Consolidated Funds | Reconciling items | |||
Revenue adjustment | |||
Revenues | -85,642 | -71,136 | |
Ares Management L.P and Consolidated Funds | Reconciling items | AREA Sponsor Holdings, LLC | |||
Revenue adjustment | |||
Performance fees - Unrealized reclass | -990 | -2,950 | |
Ares Management L.P and Consolidated Funds | OMG | |||
Revenue adjustment | |||
Administrative fees and other income | 6,385 | 5,392 | |
Consolidated Funds | Eliminations | |||
Revenue adjustment | |||
Revenues | ($91,036) | ($73,578) |
SEGMENT_REPORTING_Details_5
SEGMENT REPORTING (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Expenses adjustment | |||
Equity compensation expense | $5,339 | ||
Income tax expense (benefit) | 5,892 | -6,695 | |
Amortization of intangibles | 10,900 | 8,800 | |
Total expenses | 238,862 | 184,130 | 184,130 |
Ares Management L.P and Consolidated Funds | Reconciling items | |||
Expenses adjustment | |||
Acquisition-related expenses | 2,224 | 1,421 | |
Equity compensation expense | 7,921 | 5,339 | |
Placement fees and underwriting costs | 3,045 | 1,052 | |
Amortization of intangibles | 10,892 | 8,831 | |
Depreciation expense | 1,273 | 2,059 | |
Total expenses | 84,666 | 68,831 | |
Ares Management L.P and Consolidated Funds | OMG | |||
Expenses adjustment | |||
Total expenses | 44,240 | 41,192 | |
Consolidated Funds | Reconciling items | |||
Expenses adjustment | |||
Consolidated Fund expenses added in consolidation | 48,571 | 40,637 | |
Consolidated Fund expenses eliminated in consolidation | ($33,499) | ($31,700) |
SEGMENT_REPORTING_Details_6
SEGMENT REPORTING (Details 6) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Other income adjustment | ||
Net investment income | $463,699 | $325,177 |
Ares Management L.P and Consolidated Funds | Reconciling items | ||
Other income adjustment | ||
Net investment income | 456,088 | 301,437 |
Consolidated Funds | Reconciling items | ||
Other income adjustment | ||
Consolidated Funds other income added in consolidation, net | 461,059 | 321,117 |
Other income from Consolidated Funds eliminated in consolidation, net | -5,951 | -22,630 |
Other non-cash items | -10 | |
Consolidated Funds | Reconciling items | AREA Sponsor Holdings, LLC | ||
Other income adjustment | ||
Performance fee reclass | $990 | $2,950 |
SEGMENT_REPORTING_Details_7
SEGMENT REPORTING (Details 7) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Economic net income | |||
Income before taxes | $406,565 | $274,675 | $274,675 |
Adjustments | |||
Amortization of intangibles | 10,900 | 8,800 | |
Equity compensation expenses | 5,339 | ||
Income tax expense (benefit) | 5,892 | -6,695 | |
Economic net income | 406,565 | 274,675 | |
Ares Management L.P and Consolidated Funds | Operating segment | |||
Adjustments | |||
Amortization of intangibles | 10,892 | 8,831 | |
Depreciation expense | 1,273 | 2,059 | |
Equity compensation expenses | 7,921 | 5,339 | |
Income tax expense (benefit) | 476 | ||
Acquisition-related expenses | 2,224 | 1,421 | |
Placement fees and underwriting costs | 3,045 | 1,052 | |
OMG expenses, net | -85,477 | -66,760 | |
Other non-cash items | 10 | ||
Economic net income | 120,785 | 113,205 | |
Ares Management L.P and Consolidated Funds | OMG | |||
Adjustments | |||
OMG expenses, net | 37,855 | 35,800 | |
Economic net income | -37,855 | -35,800 | |
Ares Management L.P and Consolidated Funds | Reconciling items | |||
Adjustments | |||
Amortization of intangibles | 10,892 | 8,831 | |
Depreciation expense | 1,273 | 2,059 | |
Equity compensation expenses | 7,921 | 5,339 | |
Acquisition-related expenses | 2,224 | 1,421 | |
Placement fees and underwriting costs | 3,045 | 1,052 | |
Economic net income | 285,780 | 161,470 | |
Consolidated Funds | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | -331,309 | -188,133 | |
Consolidated Funds | Operating segment | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | -349,001 | -215,972 | |
Consolidated Funds | Reconciling items | |||
Adjustments | |||
Other non-cash items | -10 | ||
Economic net income | ($285,780) | ($161,470) |
SEGMENT_REPORTING_Details_8
SEGMENT REPORTING (Details 8) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Fee related earnings | |||
Income before taxes | $406,565 | $274,675 | $274,675 |
Adjustments | |||
Amortization of intangibles | 10,900 | 8,800 | |
Equity compensation expenses | 5,339 | ||
Economic net income | 406,565 | 274,675 | |
Net investment income | -463,699 | -325,177 | |
Ares Management L.P and Consolidated Funds | Operating segment | |||
Adjustments | |||
Amortization of intangibles | 10,892 | 8,831 | |
Depreciation expense | 1,273 | 2,059 | |
Equity compensation expenses | 7,921 | 5,339 | |
Acquisition-related expenses | 2,224 | 1,421 | |
Placement fees and underwriting costs | 3,045 | 1,052 | |
Other non-cash items | 10 | ||
Economic net income | 120,785 | 113,205 | |
Total performance fee income - realized | -35,639 | -23,338 | |
Total performance fee income - unrealized | -68,449 | -40,092 | |
Total performance fee compensation - realized | 21,344 | 16,007 | |
Total performance fee compensation - unrealized | 55,048 | 24,718 | |
Net investment income | -7,611 | -23,740 | |
Management fees | 162,316 | 139,861 | |
Administrative fees and other income | 967 | 1,473 | |
Compensation and benefits | -65,017 | -62,697 | |
General, administrative and other expenses | -12,788 | -11,877 | |
Fee related earnings | 85,477 | 66,760 | |
Ares Management L.P and Consolidated Funds | Reconciling items | |||
Adjustments | |||
Amortization of intangibles | 10,892 | 8,831 | |
Depreciation expense | 1,273 | 2,059 | |
Equity compensation expenses | 7,921 | 5,339 | |
Acquisition-related expenses | 2,224 | 1,421 | |
Placement fees and underwriting costs | 3,045 | 1,052 | |
Economic net income | 285,780 | 161,470 | |
Net investment income | -456,088 | -301,437 | |
Ares Management L.P and Consolidated Funds | OMG | |||
Adjustments | |||
Economic net income | -37,855 | -35,800 | |
Administrative fees and other income | 6,385 | 5,392 | |
Compensation and benefits | -28,914 | -27,657 | |
General, administrative and other expenses | -15,326 | -13,535 | |
Fee related earnings | -37,855 | -35,800 | |
Consolidated Funds | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | -331,309 | -188,133 | |
Consolidated Funds | Operating segment | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | -349,001 | -215,972 | |
Consolidated Funds | Reconciling items | |||
Adjustments | |||
Other non-cash items | -10 | ||
Economic net income | ($285,780) | ($161,470) |
SEGMENT_REPORTING_Details_9
SEGMENT REPORTING (Details 9) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Performance related earnings: | |||
Income before taxes | $406,565 | $274,675 | $274,675 |
Adjustments | |||
Amortization of intangibles | 10,900 | 8,800 | |
Equity compensation expenses | 5,339 | ||
Economic net income | 406,565 | 274,675 | |
Net investment income (loss) | 463,699 | 325,177 | |
Ares Management L.P and Consolidated Funds | Operating segment | |||
Adjustments | |||
Amortization of intangibles | 10,892 | 8,831 | |
Depreciation expense | 1,273 | 2,059 | |
Equity compensation expenses | 7,921 | 5,339 | |
Acquisition-related expenses | 2,224 | 1,421 | |
Placement fees and underwriting costs | 3,045 | 1,052 | |
OMG expenses, net | -85,477 | -66,760 | |
Other non-cash items | 10 | ||
Economic net income | 120,785 | 113,205 | |
Total management fees | -162,316 | -139,861 | |
Administrative fees and other income | -967 | -1,473 | |
Compensation and benefits | 65,017 | 62,697 | |
General, administrative and other expenses | 12,788 | 11,877 | |
Total performance fees - realized | 35,639 | 23,338 | |
Total performance fee - unrealized | 68,449 | 40,092 | |
Total performance fee compensation - realized | -21,344 | -16,007 | |
Total performance fee compensation - unrealized | -55,048 | -24,718 | |
Net investment income (loss) | 7,611 | 23,740 | |
Performance related earnings | 35,308 | 46,445 | |
Ares Management L.P and Consolidated Funds | OMG | |||
Adjustments | |||
OMG expenses, net | 37,855 | 35,800 | |
Economic net income | -37,855 | -35,800 | |
Administrative fees and other income | -6,385 | -5,392 | |
Compensation and benefits | 28,914 | 27,657 | |
General, administrative and other expenses | 15,326 | 13,535 | |
Consolidated Funds | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | -331,309 | -188,133 | |
Consolidated Funds | Operating segment | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | ($349,001) | ($215,972) |
SEGMENT_REPORTING_Details_10
SEGMENT REPORTING (Details 10) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Distributable earnings | |||
Income before taxes | $406,565 | $274,675 | $274,675 |
Adjustments | |||
Amortization of intangibles | 10,900 | 8,800 | |
Equity compensation expenses | 5,339 | ||
Less: | |||
Income tax expense | -5,892 | 6,695 | |
Parent Company | |||
Adjustments | |||
Investment and other income realized, net | -330 | ||
Less: | |||
Non-cash depreciation and amortization | -12,618 | ||
Ares Management L.P and Consolidated Funds | |||
Adjustments | |||
Dividend equivalent | -912 | ||
Less: | |||
Dividend equivalent | -912 | ||
Ares Management L.P and Consolidated Funds | Operating segment | |||
Adjustments | |||
Amortization of intangibles | 10,892 | 8,831 | |
Equity compensation expenses | 7,921 | 5,339 | |
Non-cash acquisition related expenses | 1,251 | ||
Taxes paid | -479 | ||
Dividend equivalent | -684 | ||
Other non-cash items | -156 | ||
Unrealized performance fee expense | -68,449 | -40,092 | |
Unrealized performance fee compensation | 55,048 | 24,718 | |
Unrealized investment and other income (loss) | 4,615 | -2,952 | |
Distributable earnings | -106,175 | -92,059 | |
Fee related earnings | 85,477 | 66,760 | |
Performance fees-realized | 35,639 | 23,338 | |
Performance fee compensation-realized | -21,344 | -16,007 | |
Investment and other income realized, net | 12,226 | 20,788 | |
Net performance related earnings-realized | 26,521 | 28,119 | |
Less: | |||
Dividend equivalent | -684 | ||
One-time acquisition costs | -724 | ||
Income tax expense | -476 | ||
Non-cash items | -156 | ||
Placement fees and underwriting costs | -3,045 | -1,052 | |
Non-cash depreciation and amortization | -739 | -1,768 | |
Distributable Earnings | 106,175 | 92,059 | |
Ares Management L.P and Consolidated Funds | OMG | |||
Adjustments | |||
Distributable earnings | 38,880 | 37,512 | |
Fee related earnings | -37,855 | -35,800 | |
Less: | |||
Distributable Earnings | -38,880 | -37,512 | |
Consolidated Funds | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | -331,309 | -188,133 | |
Consolidated Funds | Operating segment | |||
Adjustments | |||
Income (loss) before taxes of non-controlling interests in Consolidated Funds | ($349,001) | ($215,972) |
SEGMENT_REPORTING_Details_11
SEGMENT REPORTING (Details 11) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |||
Reconciliation of total segment assets to total assets | |||
Total assets | $21,618,156 | $21,632,675 | $22,035,501 |
Ares Management L.P and Consolidated Funds | Reconciling items | |||
Reconciliation of total segment assets to total assets | |||
Total assets | 19,889,776 | 20,639,082 | |
Ares Management L.P and Consolidated Funds | OMG | |||
Reconciliation of total segment assets to total assets | |||
Total assets | 16,941 | 10,437 | |
Consolidated Funds | Reconciling items | |||
Reconciliation of total segment assets to total assets | |||
Total assets from Consolidated Funds added in consolidation | 20,722,470 | 21,420,284 | |
Total assets from Consolidated Funds eliminated in consolidation | ($849,635) | ($791,639) |
CONSOLIDATING_SCHEDULES_Detail
CONSOLIDATING SCHEDULES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||||
Assets | ||||
Goodwill | $144,080 | $85,582 | ||
Total assets | 21,618,156 | 21,632,675 | 22,035,501 | |
Liabilities | ||||
Total liabilities | 14,815,137 | 14,873,302 | ||
Commitments and contingencies | ||||
Controlling interest in Ares Management L.P.: | ||||
Partners' Capital (80,667,664 units, issued and outstanding) | 291,641 | 285,025 | ||
Accumulated other comprehensive gain (loss) | -2,126 | -1,386 | ||
Total controlling interest in Ares Management L.P | 289,515 | 283,639 | ||
Total equity | 5,863,925 | 5,697,935 | ||
Total liabilities, redeemable interest, non-controlling interests and equity | 21,618,156 | 21,632,675 | ||
Units issued (in units) | 80,667,664 | 80,667,664 | ||
Units outstanding (in units) | 80,667,664 | 80,667,664 | ||
Predecessor | ||||
Controlling interest in Ares Management L.P.: | ||||
Total controlling interest in Ares Management L.P | 289,515 | 283,639 | ||
Eliminations. | ||||
Assets | ||||
Total assets | -849,635 | -806,765 | ||
Liabilities | ||||
Total liabilities | -135,274 | -135,082 | ||
Controlling interest in Ares Management L.P.: | ||||
Accumulated other comprehensive gain (loss) | 4,550 | 2,760 | ||
Total controlling interest in Ares Management L.P | 4,550 | 2,760 | ||
Total equity | -714,360 | -671,683 | ||
Total liabilities, redeemable interest, non-controlling interests and equity | -849,635 | -806,765 | ||
Consolidated Company Entities | Eliminations. | ||||
Assets | ||||
Investments | -408,245 | -424,022 | ||
Performance fees receivable | -418,515 | -361,039 | ||
Due from affiliates | -20,596 | -19,691 | ||
Other assets | -45 | -93 | ||
Liabilities | ||||
Accounts payable and accrued expenses | -668 | -602 | ||
Due to affiliates | -1,030 | -851 | ||
Performance fee compensation payable | -887 | -896 | ||
Consolidated Company Entities | Reportable legal entity | ||||
Assets | ||||
Cash and cash equivalents | 69,372 | 148,858 | ||
Restricted cash and cash equivalents | 32,734 | |||
Investments | 606,875 | 598,074 | ||
Derivative assets, at fair value | 8,217 | 7,623 | ||
Performance fees receivable | 590,308 | 548,098 | ||
Due from affiliates | 150,466 | 166,225 | ||
Other assets | 55,735 | 58,809 | ||
Intangible assets, net | 120,268 | 40,948 | ||
Goodwill | 144,080 | 85,582 | ||
Total assets | 1,745,321 | 1,686,951 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 127,053 | 101,912 | ||
Accrued compensation | 55,307 | 129,433 | ||
Derivative liabilities, at fair value | 2,973 | 2,850 | ||
Due to affiliates | 8,456 | 19,881 | ||
Performance fee compensation payable | 421,074 | 381,164 | ||
Debt obligations | 298,614 | 243,491 | ||
Equity compensation put option liability | 20,000 | 20,000 | ||
Deferred tax liability, net | 21,026 | 19,861 | ||
Total liabilities | 954,503 | 918,592 | ||
Controlling interest in Ares Management L.P.: | ||||
Partners' Capital (80,667,664 units, issued and outstanding) | 291,641 | 285,025 | ||
Accumulated other comprehensive gain (loss) | -6,676 | -4,146 | ||
Total equity | 766,740 | 744,372 | ||
Total liabilities, redeemable interest, non-controlling interests and equity | 1,745,321 | 1,686,951 | ||
Consolidated Company Entities | Reportable legal entity | Predecessor | ||||
Controlling interest in Ares Management L.P.: | ||||
Total controlling interest in Ares Management L.P | 284,965 | 280,879 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 69,372 | 148,858 | ||
Restricted cash and cash equivalents | 32,734 | |||
Investments | 198,630 | 174,052 | ||
Derivative assets, at fair value | 8,217 | 7,623 | ||
Performance fees receivable | 171,793 | 187,059 | ||
Due from affiliates | 129,870 | 146,534 | ||
Other assets | 55,690 | 58,716 | ||
Intangible assets, net | 120,268 | 40,948 | ||
Goodwill | 144,080 | 85,582 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 126,385 | 101,310 | ||
Accrued compensation | 55,307 | 129,433 | ||
Derivative liabilities, at fair value | 2,973 | 2,850 | ||
Due to affiliates | 7,426 | 19,030 | ||
Performance fee compensation payable | 420,187 | 380,268 | ||
Debt obligations | 298,614 | 243,491 | ||
Equity compensation put option liability | 20,000 | 20,000 | ||
Deferred tax liability, net | 21,026 | 19,861 | ||
Controlling interest in Ares Management L.P.: | ||||
Total equity | 5,863,925 | 5,697,935 | ||
Parent Company | Predecessor | ||||
Assets | ||||
Cash and cash equivalents | 36,634 | 89,802 | ||
Consolidated Funds | ||||
Assets | ||||
Cash and cash equivalents | 1,318,017 | 1,314,397 | ||
Investments | 18,990,943 | 19,123,950 | ||
Derivative assets, at fair value | 3,696 | 3,126 | ||
Loans held for investment, net | 85,214 | 77,514 | ||
Due from affiliates | 9,338 | 11,342 | ||
Other assets | 6,329 | 6,156 | ||
Dividends and interest receivable | 71,761 | 81,331 | ||
Receivable for securities sold | 234,938 | 132,753 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 54,064 | 68,589 | ||
Derivative liabilities, at fair value | 59,483 | 42,332 | ||
Due to affiliates | 2,332 | 2,441 | ||
Payable for securities purchased | 475,380 | 618,902 | ||
Securities sold short, at fair value | 3,763 | 3,763 | ||
Equity appropriated for Consolidated Funds | 55,996 | -37,926 | ||
Deferred tax liability, net | 23,585 | 22,214 | ||
CLO loan obligations | 12,154,677 | 12,049,170 | ||
Fund borrowings | 683,564 | 771,283 | ||
Mezzanine debt | 406,371 | 378,365 | ||
Redeemable interest | 915,017 | 1,037,450 | ||
Non-controlling interest in Consolidated Funds: | ||||
Non-controlling interest in Consolidated Funds | 5,036,639 | 4,988,729 | ||
Non-controlling interest | 5,092,635 | 4,950,803 | ||
Consolidated Funds | Eliminations. | ||||
Assets | ||||
Due from affiliates | -2,234 | -1,920 | ||
Liabilities | ||||
Accounts payable and accrued expenses | -273 | -85 | ||
Due to affiliates | -64,213 | -60,976 | ||
CLO loan obligations | -68,203 | -71,672 | ||
Non-controlling interest in Consolidated Funds: | ||||
Non-controlling interest in Consolidated Funds | -718,910 | -674,443 | ||
Non-controlling interest | -718,910 | -674,443 | ||
Consolidated Funds | Reportable legal entity | ||||
Assets | ||||
Cash and cash equivalents | 1,318,017 | 1,314,397 | ||
Investments | 18,990,943 | 19,123,950 | ||
Derivative assets, at fair value | 3,696 | 3,126 | ||
Loans held for investment, net | 85,214 | 77,514 | ||
Due from affiliates | 11,572 | 13,262 | ||
Other assets | 6,329 | 6,156 | ||
Dividends and interest receivable | 71,761 | 81,331 | ||
Receivable for securities sold | 234,938 | 132,753 | ||
Total assets | 20,722,470 | 20,752,489 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 54,337 | 68,674 | ||
Derivative liabilities, at fair value | 59,483 | 42,332 | ||
Due to affiliates | 66,545 | 63,417 | ||
Payable for securities purchased | 475,380 | 618,902 | ||
Securities sold short, at fair value | 3,763 | 3,763 | ||
Equity appropriated for Consolidated Funds | 55,996 | -37,926 | ||
Deferred tax liability, net | 23,585 | 22,214 | ||
CLO loan obligations | 12,222,880 | 12,120,842 | ||
Fund borrowings | 683,564 | 771,283 | ||
Mezzanine debt | 406,371 | 378,365 | ||
Total liabilities | 13,995,908 | 14,089,792 | ||
Redeemable interest | 915,017 | 1,037,450 | ||
Non-controlling interest in Consolidated Funds: | ||||
Non-controlling interest in Consolidated Funds | 5,755,549 | 5,663,172 | ||
Non-controlling interest | 5,811,545 | 5,625,246 | ||
Controlling interest in Ares Management L.P.: | ||||
Total equity | 5,811,545 | 5,625,246 | ||
Total liabilities, redeemable interest, non-controlling interests and equity | 20,722,470 | 20,752,489 | ||
AOG | ||||
Liabilities | ||||
Redeemable interest | 24,077 | 23,988 | ||
Non-controlling interest in Consolidated Funds: | ||||
Non-controlling interest | 481,775 | 463,493 | ||
AOG | Reportable legal entity | ||||
Liabilities | ||||
Redeemable interest | 24,077 | 23,988 | ||
Non-controlling interest in Consolidated Funds: | ||||
Non-controlling interest | $481,775 | $463,493 |
CONSOLIDATING_SCHEDULES_Detail1
CONSOLIDATING SCHEDULES (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Revenues | |||
Total revenues | $181,728 | $133,628 | $133,628 |
Expenses | |||
Total expenses | 238,862 | 184,130 | 184,130 |
Other income (expense) | |||
Total other income (expense) | 463,699 | 325,177 | |
Income before taxes | 406,565 | 274,675 | 274,675 |
Income tax expense (benefit) | 5,892 | -6,695 | |
Net income | 400,673 | 281,370 | |
Net income attributable to Ares Management, L.P. | 18,456 | ||
Predecessor | |||
Revenues | |||
Total revenues | 133,628 | ||
Expenses | |||
Total expenses | 184,130 | ||
Other income (expense) | |||
Total other income (expense) | 325,177 | ||
Income before taxes | 274,675 | ||
Income tax expense (benefit) | -6,695 | ||
Net income | 281,370 | ||
Less: Net income attributable to non-controlling interests | 42,847 | ||
Net income attributable to Ares Management, L.P. | 42,847 | ||
Affiliated entity | ARCC | |||
Revenues | |||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 29,042 | 28,318 | |
Eliminations. | |||
Revenues | |||
Total revenues | -91,036 | -73,578 | |
Expenses | |||
Total expenses | -33,499 | -31,700 | |
Other income (expense) | |||
Total other income (expense) | -5,951 | -22,630 | |
Income before taxes | -63,488 | -64,508 | |
Net income | -63,488 | -64,508 | |
Reportable legal entity | Predecessor | |||
Other income (expense) | |||
Less: Net income attributable to non-controlling interests | 42,847 | ||
Consolidated Company Entities | Eliminations. | |||
Revenues | |||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | -26,927 | -29,312 | |
Performance fees | -63,038 | -44,266 | |
Other fees | -1,071 | ||
Other income (expense) | |||
Interest and other investment income | -5,691 | -3,359 | |
Other income (expense), net | 2,724 | ||
Net realized gain (loss) on investments | -6,158 | -19,347 | |
Net change in unrealized appreciation (depreciation) on investments | 7,102 | -1,419 | |
Consolidated Company Entities | Reportable legal entity | |||
Revenues | |||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 162,316 | 139,861 | |
Performance fees | 103,098 | 60,480 | |
Other fees | 7,350 | 6,865 | |
Total revenues | 272,764 | 207,206 | |
Expenses | |||
Compensation and benefits | 101,851 | 95,693 | |
Performance fee compensation | 76,392 | 40,725 | |
General, administrative and other expense | 45,547 | 38,775 | |
Total expenses | 223,790 | 175,193 | |
Other income (expense) | |||
Interest and other investment income | 6,033 | 3,483 | |
Interest expense | -3,684 | -1,639 | |
Other income (expense), net | -3,054 | ||
Net realized gain (loss) on investments | 12,922 | 19,281 | |
Net change in unrealized appreciation (depreciation) on investments | -3,626 | 5,565 | |
Total other income (expense) | 8,591 | 26,690 | |
Income before taxes | 57,565 | 58,703 | |
Income tax expense (benefit) | 4,059 | 2,514 | |
Net income | 53,506 | 56,189 | |
Net income attributable to Ares Management, L.P. | 18,456 | ||
Parent Company | |||
Revenues | |||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 135,389 | 110,549 | |
Performance fees | 40,060 | 16,214 | |
Other fees | 6,279 | 6,865 | |
Expenses | |||
Compensation and benefits | 101,851 | 95,693 | |
Performance fee compensation | 76,392 | 40,725 | |
General, administrative and other expense | 45,547 | 38,775 | |
Other income (expense) | |||
Interest and other investment income | 342 | 124 | |
Interest expense | -3,684 | -1,639 | |
Other income (expense), net | -330 | ||
Net realized gain (loss) on investments | 6,764 | -66 | |
Net change in unrealized appreciation (depreciation) on investments | 3,476 | 4,146 | |
Parent Company | Predecessor | |||
Revenues | |||
Management fees (includes ARCC Part I Fees of $29,042 and $28,318 for the three months ended March 31, 2015 and 2014, respectively) | 110,549 | ||
Performance fees | 16,214 | ||
Other fees | 6,865 | ||
Expenses | |||
Compensation and benefits | 95,693 | ||
Performance fee compensation | 40,725 | ||
General, administrative and other expense | 38,775 | ||
Other income (expense) | |||
Interest and other investment income | 124 | ||
Interest expense | -1,639 | ||
Net realized gain (loss) on investments | -66 | ||
Net change in unrealized appreciation (depreciation) on investments | 4,146 | ||
Consolidated Funds | |||
Expenses | |||
Consolidated Fund expenses | 15,072 | 8,937 | |
Other income (expense) | |||
Interest and other investment income | 338,186 | 345,345 | |
Interest expense | -118,711 | -145,042 | |
Net realized gain (loss) on investments | -61,436 | 54,965 | |
Net change in unrealized appreciation (depreciation) on investments | 299,092 | 67,344 | |
Less: Net income attributable to redeemable interests | 15,859 | 37,048 | |
Less: Net income attributable to non-controlling interests | 331,309 | 188,133 | |
Consolidated Funds | Predecessor | |||
Expenses | |||
Consolidated Fund expenses | 8,937 | ||
Other income (expense) | |||
Interest and other investment income | 345,345 | ||
Interest expense | -145,042 | ||
Net realized gain (loss) on investments | 54,965 | ||
Net change in unrealized appreciation (depreciation) on investments | 67,344 | ||
Less: Net income attributable to redeemable interests | 37,048 | ||
Less: Net income attributable to non-controlling interests | 188,133 | ||
Consolidated Funds | Eliminations. | |||
Expenses | |||
Consolidated Fund expenses | -33,499 | -31,700 | |
Other income (expense) | |||
Interest and other investment income | -190 | -131 | |
Interest expense | 3,923 | 695 | |
Net change in unrealized appreciation (depreciation) on investments | -7,661 | 931 | |
Less: Net income attributable to redeemable interests | -2,360 | -4,970 | |
Less: Net income attributable to non-controlling interests | -61,128 | -59,538 | |
Consolidated Funds | Reportable legal entity | |||
Expenses | |||
Consolidated Fund expenses | 48,571 | 40,637 | |
Total expenses | 48,571 | 40,637 | |
Other income (expense) | |||
Interest and other investment income | 338,376 | 345,476 | |
Interest expense | -122,634 | -145,737 | |
Net realized gain (loss) on investments | -61,436 | 54,965 | |
Net change in unrealized appreciation (depreciation) on investments | 306,753 | 66,413 | |
Total other income (expense) | 461,059 | 321,117 | |
Income before taxes | 412,488 | 280,480 | |
Income tax expense (benefit) | 1,833 | -9,209 | |
Net income | 410,655 | 289,689 | |
Less: Net income attributable to redeemable interests | 18,219 | 42,018 | |
Less: Net income attributable to non-controlling interests | 392,437 | 247,671 | |
AOG | |||
Other income (expense) | |||
Less: Net income attributable to redeemable interests | 243 | 406 | |
Less: Net income attributable to non-controlling interests | 34,806 | 12,936 | |
AOG | Predecessor | |||
Other income (expense) | |||
Less: Net income attributable to redeemable interests | 406 | ||
Less: Net income attributable to non-controlling interests | 12,936 | ||
AOG | Reportable legal entity | |||
Other income (expense) | |||
Less: Net income attributable to redeemable interests | 243 | 406 | |
Less: Net income attributable to non-controlling interests | $34,806 | $12,936 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 3 Months Ended | 0 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | 1-May-15 |
Business Combination Consideration Transferred | ||
Equity (1,578,947 Ares Operating Group units) | $25,468 | |
Subsequent event | ||
Subsequent events | ||
Quarterly distribution declared (in dollars per unit) | $0.25 |