Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | ARES MANAGEMENT LP | |
Entity Central Index Key | 1,176,948 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 82,145,734 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Goodwill | $ 143,824 | $ 143,724 |
Total assets | 6,244,449 | 5,829,712 |
Liabilities | ||
Total liabilities | 4,995,976 | 4,452,450 |
Commitments and contingencies | ||
Preferred equity (12,400,000 units issued and outstanding at June 30, 2017 and December 31, 2016) | 298,761 | 298,761 |
Controlling interest in Ares Management, L.P. : | ||
Partners' Capital (82,131,000 units and 80,814,732 units issued and outstanding at June 30, 2017 and at December 31, 2016, respectively) | 278,012 | 301,790 |
Accumulated other comprehensive loss, net of tax | (7,403) | (8,939) |
Total controlling interest in Ares Management, L.P | 270,609 | 292,851 |
Total equity | 1,248,473 | 1,377,262 |
Total liabilities and equity | 6,244,449 | 5,829,712 |
Ares Management L.P | ||
Assets | ||
Cash and cash equivalents | 137,256 | 342,861 |
Investments, at fair value | 598,681 | 468,471 |
Performance fees receivable | 1,082,775 | 759,099 |
Due from affiliates | 157,372 | 162,936 |
Deferred tax asset, net | 39,080 | 6,731 |
Other assets | 101,520 | 65,565 |
Intangible assets, net | 47,766 | 58,315 |
Goodwill | 143,824 | 143,724 |
Liabilities | ||
Accounts payable, accrued expenses and other liabilities | 84,745 | 83,336 |
Accrued compensation | 89,100 | 131,736 |
Due to affiliates | 23,891 | 17,564 |
Performance fee compensation payable | 844,789 | 598,050 |
Debt obligations | 510,856 | 305,784 |
Controlling interest in Ares Management, L.P. : | ||
Partners' Capital (82,131,000 units and 80,814,732 units issued and outstanding at June 30, 2017 and at December 31, 2016, respectively) | 278,012 | 301,790 |
Accumulated other comprehensive loss, net of tax | (7,403) | (8,939) |
Total controlling interest in Ares Management, L.P | 270,609 | 292,851 |
Consolidated Funds | ||
Assets | ||
Cash and cash equivalents | 424,652 | 455,280 |
Investments, at fair value | 3,441,802 | 3,330,203 |
Due from affiliates | 5,503 | 3,592 |
Other assets | 4,927 | 2,501 |
Dividends and interest receivable | 6,797 | 8,479 |
Receivable for securities sold | 52,494 | 21,955 |
Liabilities | ||
Accounts payable, accrued expenses and other liabilities | 33,638 | 21,056 |
Due to affiliates | 0 | 0 |
Payable for securities purchased | 231,634 | 208,742 |
CLO loan obligations, at fair value | 3,093,598 | 3,031,112 |
Fund borrowings | 83,725 | 55,070 |
Non-controlling interest in Consolidated Funds | 345,462 | 338,035 |
Non-controlling interest in Ares Operating Group entities | 345,462 | 338,035 |
AOG | ||
Liabilities | ||
Non-controlling interest in Ares Operating Group entities | $ 333,641 | $ 447,615 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Preferred equity, units issued (in units) | 12,400,000 | 12,400,000 |
Preferred equity, units outstanding (in units) | 12,400,000 | 12,400,000 |
Partners' Capital units issued (in units) | 82,131,000 | 80,814,732 |
Partners' Capital units outstanding (in units) | 82,131,000 | 80,814,732 |
Ares Management L.P | ||
Investments, at fair value | $ 577,280 | $ 448,336 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | ||||
Administrative and other fees | $ 0 | |||
Total revenues | 533,890 | $ 369,535 | $ 775,547 | $ 505,550 |
Expenses | ||||
Total expenses | 448,197 | 303,935 | 939,664 | 433,473 |
Other income (expense) | ||||
Total other income | 29,387 | 17,406 | 88,609 | 1,955 |
Income (loss) before taxes | 115,080 | 83,006 | (75,508) | 74,032 |
Income tax expense (benefit) | 1,253 | (4,434) | (33,011) | 231 |
Net income (loss) | 113,827 | 87,440 | (42,497) | 73,801 |
Net income attributable to Ares Management, L.P. | 49,878 | 37,574 | 8,744 | 34,484 |
Less: Preferred equity distributions paid | 5,425 | 0 | 10,850 | 0 |
Net income (loss) attributable to Ares Management, L.P. common unitholders | $ 44,453 | $ 37,574 | $ (2,106) | $ 34,484 |
Net income (loss) attributable to Ares Management, L.P. per common unit: | ||||
Basic (in dollars per unit) | $ 0.54 | $ 0.46 | $ (0.04) | $ 0.42 |
Diluted (in dollars per unit) | $ 0.53 | $ 0.46 | $ (0.04) | $ 0.42 |
Weighted-average common units: | ||||
Basic (in units) | 81,829,086 | 80,715,723 | 81,469,967 | 80,699,387 |
Diluted (in units) | 84,319,882 | 82,332,193 | 81,469,967 | 81,752,468 |
Distribution declared and paid per common unit (in units per share) | $ 0.13 | $ 0.15 | $ 0.41 | $ 0.35 |
Ares Management L.P | ||||
Revenues | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | $ 180,768 | $ 158,521 | $ 352,813 | $ 316,954 |
Performance fees | 338,024 | 203,151 | 393,196 | 173,204 |
Administrative and other fees | 15,098 | 7,863 | 29,538 | 15,392 |
Total revenues | 533,890 | 369,535 | 775,547 | 505,550 |
Expenses | ||||
Compensation and benefits | 131,219 | 112,654 | 255,558 | 223,333 |
Performance fee compensation | 261,705 | 151,896 | 302,407 | 130,566 |
General, administrative and other expenses | 50,751 | 38,686 | 98,089 | 78,648 |
Transaction support expense | 0 | 0 | 275,177 | 0 |
Other income (expense) | ||||
Investment income and net interest income (expense) | (2,252) | 4,993 | (4,387) | 1,634 |
Other income, net | 2,822 | 5,673 | 19,318 | 10,914 |
Net realized and unrealized gain (loss) on investments | 30,079 | (3,151) | 32,734 | 1,991 |
Consolidated Funds | ||||
Expenses | ||||
Expenses of the Consolidated Funds | 4,522 | 699 | 8,433 | 926 |
Other income (expense) | ||||
Investment income and net interest income (expense) | 11,451 | 9,690 | 21,621 | 17,022 |
Net realized and unrealized gain (loss) on investments | (12,713) | 201 | 19,323 | (29,606) |
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | (8,647) | 1,054 | 7,208 | (10,925) |
AOG | ||||
Other income (expense) | ||||
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | 72,596 | 48,473 | (58,449) | 49,893 |
Less: Net income attributable to redeemable interests in Ares Operating Group entities | $ 0 | $ 339 | $ 0 | $ 349 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Ares Management L.P | ||||
Interest expense | $ 5,354 | $ 4,828 | $ 10,233 | $ 9,683 |
Ares Management L.P | Affiliated entity | ARCC | ||||
Management fees, part I fees | 19,143 | 28,999 | 52,400 | 57,624 |
Consolidated Funds | ||||
Interest expense | $ 26,875 | $ 18,607 | $ 58,197 | $ 41,056 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income (loss) | $ 113,827 | $ 87,440 | $ (42,497) | $ 73,801 |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 5,471 | |||
Ares Management L.P | ||||
Other comprehensive income: | ||||
Foreign currency translation adjustments | 2,029 | (7,628) | 5,471 | (10,325) |
Total comprehensive income (loss) | 115,856 | 79,812 | (37,026) | 63,476 |
Comprehensive income attributable to Ares Management, L.P. | 50,213 | 34,684 | 10,280 | 30,571 |
Consolidated Funds | ||||
Other comprehensive income: | ||||
Less: Comprehensive income (loss) attributable to non-controlling interests | (8,818) | 1,054 | 7,038 | (10,925) |
AOG | ||||
Other comprehensive income: | ||||
Less: Comprehensive income (loss) attributable to non-controlling interests | 74,461 | 43,768 | (54,344) | 43,526 |
Less: Comprehensive income attributable to redeemable interests in Ares Operating Group entities | $ 0 | $ 306 | $ 0 | $ 304 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Changes in Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Partners' CapitalPreferred Partner | Ares Management L.P | Ares Management L.PPartners' Capital | Ares Management L.PAccumulated Other Comprehensive Loss | Ares Management L.PNon-Controlling interest | Consolidated FundsNon-Controlling interest |
Balance at Dec. 31, 2016 | $ 1,377,262 | $ 298,761 | $ 301,790 | $ (8,939) | $ 447,615 | $ 338,035 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Changes in ownership interests | (14,102) | (1,068) | (13,034) | ||||
Contributions | 49,149 | 1,884 | 47,265 | ||||
Distributions | (160,041) | (10,850) | (33,400) | (68,915) | (46,876) | ||
Net income (loss) | (42,497) | 10,850 | (2,106) | (58,449) | 7,208 | ||
Currency translation adjustment | 5,471 | $ 5,471 | 1,536 | 4,105 | (170) | ||
Equity compensation | 33,231 | 12,796 | 20,435 | ||||
Balance at Jun. 30, 2017 | $ 1,248,473 | $ 298,761 | $ 278,012 | $ (7,403) | $ 333,641 | $ 345,462 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (42,497) | $ 73,801 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | (92,537) | 23,103 |
Cash flows due to changes in operating assets and liabilities | (144,249) | (76,356) |
Net cash provided by (used in) operating activities | (304,160) | 69,025 |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net | (21,194) | (5,273) |
Net cash used in investing activities | (21,194) | (5,273) |
Allocable to non-controlling interest in Consolidated Funds: | ||
Net cash provided by financing activities | 108,063 | 85,972 |
Ares Management L.P | ||
Cash flows from financing activities: | ||
Proceeds from credit facility | 165,000 | 147,000 |
Proceeds from term notes | 70,009 | 0 |
Repayments of credit facility | (30,000) | (257,000) |
Proceeds from the issuance of preferred equity, net of issuance costs | 0 | 298,971 |
Distributions | (102,315) | (82,462) |
Preferred equity distributions | (10,850) | 0 |
Net settlement of vested common units | (13,471) | 0 |
Stock option exercise | 1,036 | 0 |
Excess tax benefit related to stock option exercise | 81 | 0 |
Other financing activities | 1,583 | (569) |
Allocable to non-controlling interest in Consolidated Funds: | ||
Effect of exchange rate changes | 11,686 | (6,619) |
Net change in cash and cash equivalents | (205,605) | 143,105 |
Cash and cash equivalents, beginning of period | 342,861 | 121,483 |
Cash and cash equivalents, end of period | 137,256 | 264,588 |
Consolidated Funds | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | (61,985) | 58,401 |
Cash flows due to changes in operating assets and liabilities | 37,108 | (9,924) |
Allocable to non-controlling interest in Consolidated Funds: | ||
Contributions from non-controlling interests in Consolidated Funds | 47,265 | 48,122 |
Distributions to non-controlling interests in Consolidated Funds | (46,876) | (23,228) |
Borrowings under loan obligations by Consolidated Funds | 1,314,026 | 750 |
Repayments under loan obligations by Consolidated Funds | (1,287,425) | $ (45,612) |
Cash and cash equivalents, beginning of period | 455,280 | |
Cash and cash equivalents, end of period | $ 424,652 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Ares Management, L.P. ("the Company"), a Delaware limited partnership, is a leading global alternative asset management firm that operates three distinct but complementary investment groups: the Credit Group, the Private Equity Group and the Real Estate Group. Information about segments should be read together with Note 14, “Segment Reporting.” Subsidiaries of the Company serve as the general partners and/or investment managers to various investment funds and managed accounts within each investment group (the “Ares Funds”), 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 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 Company is a holding partnership, and the Company’s sole assets are equity interests in Ares Holdings Inc. (“AHI”), Ares Offshore Holdings, Ltd., and Ares AI Holdings L.P. In this quarterly report, the following of the Company’s subsidiaries are collectively referred to as the “Ares Operating Group”: Ares Offshore Holdings L.P. (“Ares Offshore”), Ares Holdings L.P. (“Ares Holdings”), and Ares Investments L.P. (“Ares Investments”). The Company, indirectly through its wholly owned subsidiaries, is the general partner of each of the Ares Operating Group entities. The Company operates and controls all of the businesses and affairs of and conducts all of its material business activities through the Ares Operating Group. Non-Controlling Interests in Ares Operating Group Entities The non-controlling interests in Ares Operating Group (“AOG”) entities represent a component of equity and net income attributable to the owners of the Ares Operating Group Units (“AOG Units”) that are not held directly or indirectly by the Company. These interests are adjusted for contributions to and distributions from AOG during the reporting period and are allocated income from the AOG entities based on their historical ownership percentage for the proportional number of days in the reporting period. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC. The condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. These Consolidated Funds include certain Ares-affiliated funds, related co-investment entities and collateralized loan obligations (“CLOs”) (collectively, the “Consolidated Funds”) managed by Ares Management LLC (“AM LLC”) and its wholly owned subsidiaries. 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 controlling equity. Instead, economic ownership interests of the investors in the Consolidated Funds are reflected as non-controlling interests in 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 Statements of Cash Flows. All intercompany balances and transactions have been eliminated upon consolidation. The Company has reclassified certain prior period amounts to conform to the current year presentation. Transaction Support Expense On January 3, 2017, ARCC and American Capital, Ltd. (“ACAS”) consummated a merger transaction valued at approximately $4.2 billion (the "ARCC-ACAS Transaction"). To support the ARCC-ACAS Transaction, the Company, through its subsidiary Ares Capital Management LLC, which serves as the investment adviser to ARCC, paid $275.2 million to ACAS shareholders in accordance with the terms and conditions set forth in the merger agreement. Recent Accounting Pronouncements The Company considers the applicability and impact of all Financial Accounting Standards Board (“FASB") Accounting Standards Update ("ASU") issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its condensed consolidated financial statements. Revenue Recognition: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU provides alternative methods of adoption. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, Deferral of the Effective Date. ASU 2015-14 defers the effective date of ASU 2014-09 by one year to December 15, 2017 for fiscal years, and interim periods within those years, beginning after that date and permits early adoption of the standard, but not before the original effective date for fiscal years beginning after December 15, 2016. In March, April and May 2016, the FASB issued additional ASUs clarifying certain aspects of ASU 2014-09. The core principle of ASU 2014-09 was not changed by the additional guidance. During 2016, four ASUs: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients; and ASU 2016-20 , Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , were issued to provide clarification to previously issued revenue recognition guidance (ASU 2014-09) that has not yet been implemented. These updates are required to be adopted with ASU 2014-09, but are not expected to change its application by the Company. While the Company continues to evaluate the impact of the above revenue recognitions guidance, and cannot currently quantify the impact of the guidance, the Company has begun an assessment of the impact. The assessment includes a detailed review of investment management agreements, establishing which agreements are expected to be in place, and understanding when revenue would be recognized under those agreements. The primary contracts impacted by this standard crystallize revenue on an annual basis but could have elements that prevent annual recognition subject to management’s evaluation of the investment management agreements in consideration of the new standard and its subsequent clarification. Other Guidance: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The objective of the guidance in ASU 2016-02 is to increase transparency and comparability among organizations by recognizing lease assets and liabilities in the balance sheet and disclosing key information. ASU 2016-02 amends previous lease guidance, which required a lessee to categorize and account for leases as either operating leases or capital leases, and instead requires a lessee to recognize a lease liability and a right-of-use asset on the entity’s balance sheet for all leases with terms that exceed one year. The lease liability and right-of-use asset are to be carried at the present value of remaining expected future lease payments. The guidance should be applied using a modified retrospective approach. ASU 2016-02 is effective for public entities for annual reporting periods beginning after December 15, 2018 and interim periods within those reporting periods, with early adoption permitted. The Company is currently compiling all leases and right–of–use terms to evaluate the impact of this guidance on its condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist with evaluating whether a transaction should be accounted for as an acquisition or a disposal of a business. This ASU provides specific evaluation process, and factors that should be used in this determination. The guidance should be applied prospectively. ASU 2017-01 is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods within those reporting periods, with early adoption permitted. This guidance will not have a material impact on the Company's condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. Currently, goodwill impairment requires an entity to perform a two-step test to determine the amount of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. ASU 2017-04 simplifies the goodwill impairment test by removing Step 2 of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The guidance should be applied prospectively. ASU 2017-04 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods, with early adoption permitted. This guidance will not have a material impact on the Company's condensed consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 clarifies the application of current accounting guidance to the derecognition of nonfinancial assets, including partial sales of nonfinancial assets. This ASU specifies that an entity should allocate the consideration to each distinct asset using the guidance established in ASC 606 on allocating the transaction price to performance obligations. For partial sales of nonfinancial assets, ASU 2017-05 also requires an entity to derecognize a portion of the nonfinancial asset when the entity no longer has a controlling financial interest in the legal entity holding the asset and the entity has transferred control of the asset in accordance with ASC 606. Any noncontrolling or retained interest should be measured at fair value. The guidance should be adopted using either a full or modified retrospective approach. ASU 2017-05 is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods within those reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies the application of current accounting guidance to the modification of share-based compensation awards. This ASU specifies that an entity should account for the impact of an award modification in accordance with ASC Topic 718 unless all of the following conditions are met: (i) the fair value of the modified award is the same as the fair value of the original award prior to the modification; (ii) the vesting conditions of the modified award are the same as the original award prior to the modification; and (iii) the classification of the modified award as an equity instrument or liability instrument is the same as the original award. The guidance should be applied prospectively to awards modified on or after the adoption date. ASU 2017-09 is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods within those reporting periods, with early adoption permitted. This guidance will not have a material impact on the Company's condensed consolidated financial statements. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Finite Lived Intangible Assets, Net The Company's intangible assets include acquired management contracts, client relationships, a trade name, and the future benefits of managing new assets for existing clients that were recognized at fair value as of their acquisition dates. The following table summarizes the carrying value, net of accumulated amortization, for the Company's intangible assets: Weighted Average Amortization Period as of June 30, 2017 As of June 30, As of December 31, 2017 2016 Management contracts 2.0 years $ 67,306 $ 111,939 Client relationships 11.0 years 38,600 38,600 Trade name 5.0 years 3,200 3,200 Intangible assets 109,106 153,739 Foreign currency translation — (3,205 ) Total intangible assets 109,106 150,534 Less: accumulated amortization (61,340 ) (92,219 ) Intangible assets, net $ 47,766 $ 58,315 Amortization expense associated with intangible assets was $5.2 million and $7.1 million for the three months ended June 30, 2017 and 2016 , respectively, and $10.5 million and $14.4 million for the six months ended June 30, 2017 and 2016 , respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. During the first quarter of 2017, the Company removed $41.4 million of intangible assets that were fully amortized. Goodwill The following table summarizes the carrying value of the Company's goodwill assets: Credit Private Real Total Balance as of December 31, 2016 $ 32,196 $ 58,600 $ 52,928 $ 143,724 Foreign currency translation — — 100 100 Balance as of June 30, 2017 $ 32,196 $ 58,600 $ 53,028 $ 143,824 There was no impairment of goodwill recorded during the six months ended June 30, 2017 and 2016 . The impact of foreign currency translation is reflected within other comprehensive income. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
INVESTMENTS | INVESTMENTS The Company’s investments are comprised of: (i) investments presented at fair value as a result of the election of the fair value option or in accordance with investment company accounting, (ii) equity method investments (using equity method or fair value option) and (iii) held-to-maturity investments. Fair Value Investments, excluding Equity Method Investments Held at Fair Value Fair value at Fair value as a percentage of total investments at June 30, December 31, June 30, December 31, 2017 2016 2017 2016 Private Investment Partnership Interests: AREA Sponsor Holdings, LLC $ 25,711 $ 28,898 4.6 % 6.8 % ACE II Master Fund, L.P. (1)(2) 19,897 22,042 3.6 % 5.2 % Ares Corporate Opportunities Fund III, L.P. 125,097 97,549 22.3 % 22.9 % Ares Corporate Opportunities Fund IV, L.P. (2) 43,443 37,308 7.8 % 8.7 % Resolution Life L.P. 33,410 33,410 6.0 % 7.8 % Other private investment partnership interests (1)(3) 146,577 118,075 26.2 % 27.7 % Total private investment partnership interests (cost: $270,555 and $256,638 at June 30, 2017 and December 31, 2016, respectively) 394,135 337,282 70.5 % 79.1 % Collateralized loan obligations (cost: $165,706 and $89,743 at June 30, 2017 and December 31, 2016, respectively)(3) 164,807 89,111 29.3 % 20.9 % Common stock (cost: $1,128 and $124 at June 30, 2017 and December 31, 2016, respectively)(3) 1,234 100 0.2 % 0.0 % Total fair value investments (cost: $437,389 and $346,505 at June 30, 2017 and December 31, 2016, respectively) $ 560,176 $ 426,493 (1) Investment or portion of the investment is denominated in foreign currency; fair value is translated into U.S. dollars at each reporting date. (2) Represents underlying security that is held through various legal entities. (3) No single issuer or investment had a fair value that exceeded 5% of the Company's total assets. Equity Method Investments The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company's equity method investments, including those where the fair value option was elected, are summarized below: As of June 30, As of December 31, 2017 2016 Equity method investment $ 3,480 $ 3,616 Equity method investments at fair value 17,104 21,843 Total equity method investments $ 20,584 $ 25,459 The material assets of the Company's equity method investments are investments for which long term capital appreciation is expected, the material liabilities are debt instruments collateralized by, or related to, the financing of the assets and net income is primarily comprised of the changes in fair value of these net assets. Held-to-Maturity Investments The Company classifies certain investments as held-to-maturity investments when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are reported as investments and are recorded at amortized cost. A summary of the cost and fair value of CLO notes classified as held-to maturity investments is as follows: As of June 30, As of December 31, 2017 2016 Amortized cost $ 17,921 $ 16,519 Unrealized gain (loss), net 142 (116 ) Fair value $ 18,063 $ 16,403 Based on the Company's ability and intent to hold the investments until maturity and the underlying credit performance of such investments, the Company has determined that the net unrealized losses are temporary impairments as of December 31, 2016 . There were no sales of held-to-maturity investments during the six months ended June 30, 2017 and 2016 . All contractual maturities are greater than 10 years as of June 30, 2017 . Actual maturities may differ from contractual maturities because underlying collateral may have the right to call or prepay obligations with or without call or prepayment penalties. 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 June 30, December 31, June 30, December 31, 2017 2016 2017 2016 United States: Fixed income securities: Consumer discretionary $ 753,922 $ 665,773 21.8 % 20.0 % Consumer staples 45,708 64,840 1.3 % 1.9 % Energy 74,433 45,409 2.2 % 1.4 % Financials 162,618 139,285 4.7 % 4.2 % Healthcare, education and childcare 264,325 246,403 7.7 % 7.4 % Industrials 142,110 149,632 4.1 % 4.5 % Information technology 122,366 194,394 3.6 % 5.8 % Materials 130,831 139,994 3.8 % 4.2 % Telecommunication services 217,617 261,771 6.3 % 7.9 % Utilities 40,373 47,800 1.2 % 1.4 % Total fixed income securities (cost: $1,956,026 and $1,945,977 at June 30, 2017 and December 31, 2016, respectively) 1,954,303 1,955,301 56.7 % 58.7 % Equity securities: Energy 271 421 0.0 % 0.0 % Partnership and LLC interests 217,740 171,696 6.3 % 5.2 % Total equity securities (cost: $192,265 and $149,872 at June 30, 2017 and December 31, 2016, respectively) 218,011 172,117 6.3 % 5.2 % Fair value at Fair value as a percentage of total investments at June 30, December 31, June 30, December 31, 2017 2016 2017 2016 Europe: Fixed income securities: Consumer discretionary $ 353,662 $ 274,678 10.3 % 8.2 % Consumer staples 53,666 39,197 1.6 % 1.2 % Financials 54,523 28,769 1.6 % 0.9 % Healthcare, education and childcare 139,683 111,589 4.1 % 3.4 % Industrials 84,965 118,466 2.5 % 3.6 % Information technology 39,657 49,507 1.2 % 1.5 % Materials 151,706 124,629 4.4 % 3.7 % Telecommunication services 104,514 118,632 3.0 % 3.6 % Utilities 12,246 4,007 0.4 % 0.1 % Total fixed income securities (cost: $1,050,273 and $892,108 at June 30, 2017 and December 31, 2016, respectively) 994,622 869,474 29.1 % 26.2 % Equity securities: Consumer staples 1,645 1,517 0.0 % 0.0 % Healthcare, education and childcare 45,063 41,329 1.3 % 1.2 % Telecommunication services — 24 — % 0.0 % Total equity securities (cost: $67,199 and $67,290 at June 30, 2017 and December 31, 2016, respectively) 46,708 42,870 1.3 % 1.2 % Asia and other: Fixed income securities: Consumer discretionary 20,587 24,244 0.6 % 0.7 % Financials — 1,238 — % 0.0 % Healthcare, education and childcare — 10,010 — % 0.3 % Telecommunication services 11,917 8,696 0.3 % 0.3 % Total fixed income securities (cost: $32,149 and $46,545 at June 30, 2017 and December 31, 2016, respectively) 32,504 44,188 0.9 % 1.3 % Equity securities: Consumer discretionary 38,843 44,642 1.1 % 1.3 % Consumer staples 46,746 50,101 1.4 % 1.5 % Healthcare, education and childcare 44,637 32,598 1.3 % 1.0 % Industrials 16,578 16,578 0.5 % 0.5 % Total equity securities (cost: $122,418 and $122,418 at June 30, 2017 and December 31, 2016, respectively) 146,804 143,919 4.3 % 4.3 % Fair value at Fair value as a percentage of total investments at June 30, December 31, June 30, December 31, 2017 2016 2017 2016 Canada: Fixed income securities: Consumer discretionary $ 3,277 $ — 0.1 % — % Consumer staples 2,764 5,256 0.1 % 0.2 % Energy 16,488 12,830 0.5 % 0.4 % Healthcare, education and childcare — 15,509 — % 0.5 % Industrials 1,266 1,401 0.0 % 0.0 % Telecommunication services 10,659 13,852 0.3 % 0.4 % Total fixed income securities (cost: $34,299 and $48,274 at June 30, 2017 and December 31, 2016, respectively) 34,454 48,848 1.0 % 1.5 % Equity securities: Consumer discretionary 7,532 164 0.2 % 0.0 % Total equity securities (cost: $17,202 and $408 at June 30, 2017 and December 31, 2016, respectively) 7,532 164 0.2 % 0.0 % Australia: Fixed income securities: Consumer discretionary 4,347 5,627 0.1 % 0.2 % Energy 2,517 6,046 0.1 % 0.2 % Industrials — 2,926 — % 0.1 % Utilities — 21,154 — % 0.6 % Total fixed income securities (cost: $8,087 and $37,975 at June 30, 2017 and December 31, 2016, respectively) 6,864 35,753 0.2 % 1.1 % Equity securities: Utilities — 17,569 — % 0.5 % Total equity securities (cost: $0 and $18,442 at June 30, 2017 and December 31, 2016, respectively) — 17,569 — % 0.5 % Total fixed income securities 3,022,747 2,953,564 87.9 % 88.8 % Total equity securities 419,055 376,639 12.1 % 11.2 % Total investments, at fair value $ 3,441,802 $ 3,330,203 At June 30, 2017 and December 31, 2016 , no single issuer or investments, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5.0% of the Company’s total assets. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair Value Measurements GAAP establishes a hierarchal disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model‑derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available. In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period. Fair Value of Financial Instruments Held by the Company and Consolidated Funds The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and Consolidated Funds as of June 30, 2017 : Financial Instruments of the Company Level I Level II Level III Investments Total Investments, at fair value Fixed income-collateralized loan obligations $ — $ — $ 164,807 $ — $ 164,807 Equity securities 236 998 — — 1,234 Partnership interests — — 33,410 377,829 411,239 Total investments, at fair value 236 998 198,217 377,829 577,280 Derivative assets, at fair value Foreign exchange contracts — 384 — — 384 Total derivative assets, at fair value — 384 — — 384 Total assets, at fair value $ 236 $ 1,382 $ 198,217 $ 377,829 $ 577,664 Liabilities, at fair value Derivative liabilities: Foreign exchange contracts $ — $ (3,737 ) $ — $ — $ (3,737 ) Total derivative liabilities — (3,737 ) — — (3,737 ) Contingent consideration — — (1,940 ) — (1,940 ) Total liabilities, at fair value $ — $ (3,737 ) $ (1,940 ) $ — $ (5,677 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Investments, at fair value Fixed income investments: Bonds $ — $ 96,698 $ 8,833 $ 105,531 Loans — 2,732,616 173,466 2,906,082 Collateralized loan obligations — 5,856 5,280 11,136 Total fixed income investments — 2,835,170 187,579 3,022,749 Equity securities 55,039 — 146,274 201,313 Partnership interests — — 217,740 217,740 Total investments, at fair value 55,039 2,835,170 551,593 3,441,802 Derivative assets, at fair value Other — — 2,809 2,809 Total derivative assets, at fair value — — 2,809 2,809 Total assets, at fair value $ 55,039 $ 2,835,170 $ 554,402 $ 3,444,611 Liabilities, at fair value Loan obligations of CLOs $ — $ (3,093,598 ) $ — $ (3,093,598 ) Total liabilities, at fair value $ — $ (3,093,598 ) $ — $ (3,093,598 ) The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and Consolidated Funds as of December 31, 2016 : Financial Instruments of the Company Level I Level II Level III Investments Total Investments, at fair value Fixed income-collateralized loan obligations $ — $ — $ 89,111 $ — $ 89,111 Equity securities 100 — — — 100 Partnership interests — — 33,410 325,715 359,125 Total investments, at fair value 100 — 122,521 325,715 448,336 Derivative assets, at fair value Foreign exchange contracts — 3,171 — — 3,171 Total derivative assets, at fair value — 3,171 — — 3,171 Total assets, at fair value $ 100 $ 3,171 $ 122,521 $ 325,715 $ 451,507 Liabilities, at fair value Contingent considerations $ — $ — $ (22,156 ) $ — $ (22,156 ) Total liabilities, at fair value $ — $ — $ (22,156 ) $ — $ (22,156 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Investments, at fair value Fixed income investments: Bonds $ — $ 104,886 $ 37,063 $ 141,949 Loans — 2,606,423 199,217 2,805,640 Collateralized loan obligations — — 5,973 5,973 Total fixed income investments — 2,711,309 242,253 2,953,562 Equity securities 56,662 17,569 130,690 204,921 Partnership interests — — 171,696 171,696 Other — 24 — 24 Total investments, at fair value 56,662 2,728,902 544,639 3,330,203 Derivative assets, at fair value Foreign exchange contracts — 529 — 529 Other — — 291 291 Total derivative assets, at fair value — 529 291 820 Total assets, at fair value $ 56,662 $ 2,729,431 $ 544,930 $ 3,331,023 Liabilities, at fair value Other derivative liabilities $ — $ — $ (2,999 ) $ (2,999 ) Loan obligations of CLOs — (3,031,112 ) — (3,031,112 ) Total liabilities, at fair value $ — $ (3,031,112 ) $ (2,999 ) $ (3,034,111 ) The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2017 : Level III Assets Level III Liabilities Level III Assets and Liabilities of the Company Fixed Income Partnership Total Contingent Considerations Balance, beginning of period $ 108,253 $ 33,410 $ 141,663 $ 1,909 Purchases(1) 60,242 — 60,242 — Sales(2) (3,324 ) — (3,324 ) — Realized and unrealized appreciation (depreciation), net (364 ) — (364 ) 31 Balance, end of period $ 164,807 $ 33,410 $ 198,217 $ 1,940 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ (625 ) $ — $ (625 ) $ 31 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 142,358 $ 278,829 $ 196,690 $ 845 $ 618,722 Transfer in 444 18,356 — — 18,800 Transfer out — (108,757 ) — — (108,757 ) Purchases(1) — 56,292 50,000 — 106,292 Sales(2) — (60,481 ) (30,000 ) — (90,481 ) Settlements, net — — — (888 ) (888 ) Amortized discounts/premiums — (78 ) — (100 ) (178 ) Realized and unrealized appreciation, net 3,472 3,418 1,050 2,952 10,892 Balance, end of period $ 146,274 $ 187,579 $ 217,740 $ 2,809 $ 554,402 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 3,472 $ (277 ) $ 1,050 $ 3,145 $ 7,390 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2016 : Level III Assets Level III Liabilities Level III Assets and Liabilities of the Company Fixed Income Partnership Total Contingent Considerations Balance, beginning of period $ 54,118 $ 58,203 $ 112,321 $ 41,059 Purchases(1) 4 1,667 1,671 — Sales(2) (1,517 ) — (1,517 ) — Realized and unrealized appreciation (depreciation), net 1,550 (15,124 ) (13,574 ) (24 ) Balance, end of period $ 54,155 $ 44,746 $ 98,901 $ 41,035 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 718 $ (15,123 ) $ (14,405 ) $ (24 ) Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 141,805 $ 212,209 $ 103,621 $ (4,127 ) $ 453,508 Transfer in — 83,608 — — 83,608 Transfer out (15,384 ) (31,290 ) — — (46,674 ) Purchases(1) 9,668 32,622 5,800 — 48,090 Sales(2) — (48,276 ) — — (48,276 ) Settlements, net — — — 88 88 Amortized discounts/premiums — 255 — (206 ) 49 Realized and unrealized appreciation (depreciation), net 7,245 (11,756 ) 6,019 2,169 3,677 Balance, end of period $ 143,334 $ 237,372 $ 115,440 $ (2,076 ) $ 494,070 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 7,245 $ (2,340 ) $ 6,020 $ 1,967 $ 12,892 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2017 : Level III Assets Level III Liabilities Level III Assets and Liabilities of the Company Fixed Income Partnership Total Contingent Considerations Balance, beginning of period $ 89,111 $ 33,410 $ 122,521 $ 22,156 Purchases(1) 80,684 169 80,853 — Sales(2) (5,241 ) — (5,241 ) — Realized and unrealized appreciation (depreciation), net 253 (169 ) 84 (20,216 ) Balance, end of period $ 164,807 $ 33,410 $ 198,217 $ 1,940 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ (155 ) $ — $ (155 ) $ 61 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 130,690 $ 242,253 $ 171,696 $ (2,708 ) $ 541,931 Transfer in — 34,182 — — 34,182 Transfer out (6,160 ) (108,806 ) — — (114,966 ) Purchases(1) 6,692 93,111 73,000 — 172,803 Sales(2) — (76,714 ) (30,000 ) — (106,714 ) Settlements, net — — — 1,966 1,966 Amortized discounts/premiums — 46 — 216 262 Realized and unrealized appreciation, net 15,052 3,507 3,044 3,335 24,938 Balance, end of period $ 146,274 $ 187,579 $ 217,740 $ 2,809 $ 554,402 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 15,749 $ (785 ) $ 3,044 $ 3,914 $ 21,922 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2016 : Level III Assets Level III Liabilities Level III Assets and Liabilities of the Company Fixed Income Partnership Total Contingent Considerations Balance, beginning of period $ 55,752 $ 51,703 $ 107,455 $ 40,831 Purchases(1) 7 8,167 8,174 — Sales(2) (2,293 ) — (2,293 ) — Realized and unrealized appreciation (depreciation), net 689 (15,124 ) (14,435 ) 204 Balance, end of period $ 54,155 $ 44,746 $ 98,901 $ 41,035 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ (455 ) $ (15,123 ) $ (15,578 ) $ 204 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 129,809 $ 249,490 $ 86,902 $ (10,307 ) $ 455,894 Transfer in — 72,636 — — 72,636 Transfer out (344 ) (68,427 ) — — (68,771 ) Purchases(1) 9,668 45,951 13,100 — 68,719 Sales(2) — (46,865 ) (300 ) — (47,165 ) Settlements, net — — — 589 589 Amortized discounts/premiums — 696 — 84 780 Realized and unrealized appreciation (depreciation), net 4,201 (16,109 ) 15,738 7,558 11,388 Balance, end of period $ 143,334 $ 237,372 $ 115,440 $ (2,076 ) $ 494,070 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 4,202 $ (7,566 ) $ 15,654 $ 6,878 $ 19,168 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales include distributions, principal redemptions and securities disposed of in connection with restructurings. The Company recognizes transfers between the levels as of the beginning of the period. Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service. For the six months ended June 30, 2017 , two of the Company's investments totaling $7.5 million were transferred from a Level II to a Level I fair value measurement. The investments transferred are equity securities that were previously thinly traded that now have significant levels of market activity to support quoted market prices as of June 30, 2017. For the six months ended June 30, 2016 , there were no transfers between Level I and Level II fair value measurements. The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of June 30, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 33,410 Other N/A N/A Collateralized loan obligations 164,807 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 198,217 Liabilities Contingent consideration liability $ 1,940 Discounted cash flow Discount rate 6.4% Total $ 1,940 The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of December 31, 2016 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 33,410 Other N/A N/A Collateralized loan obligations 89,111 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 122,521 Liabilities Contingent consideration liabilities $ 20,278 Other N/A N/A 1,878 Discounted cash flow Discount rate 6.5% Total $ 22,156 The following table summarizes the quantitative inputs and assumptions used for the Consolidated Funds’ Level III measurements as of June 30, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Assets Equity securities $ 46,707 Enterprise value market multiple analysis EBITDA multiple(2) 2.3x - 7.9x 2.5x 61,215 Market approach (comparable companies) Net income multiple 30.0x - 45.0x 36.5x 271 Broker quotes and/or 3rd party pricing services N/A N/A N/A 217,740 Discounted cash flow Discount rate 17.0% 17.0% 38,081 Recent transaction price(1) N/A N/A N/A Fixed income securities 134,462 Broker quotes and/or 3rd party pricing services N/A N/A N/A 52,909 Income approach Yield 6.0% - 14.3% 9.4% 208 Market approach (comparable companies) EBITDA multiple(2) 5.6x 5.6x Derivative instruments of Consolidated Funds 2,809 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 554,402 (1) Recent transaction price consists of securities recently purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The following table summarizes the quantitative inputs and assumptions used for the Consolidated Funds’ Level III measurements as of December 31, 2016 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 43,011 Enterprise value market multiple analysis EBITDA multiple(2) 2.0x - 11.2x 2.3x 32,598 Market approach (comparable companies) Net income multiple 30.0x - 40.0x 35.0x 421 Broker quotes and/or 3rd party pricing services N/A N/A N/A 171,696 Discounted cash flow Discount rate 20% 20% 54,660 Recent transaction price(1) N/A N/A N/A Fixed income securities 170,231 Broker quotes and/or 3rd party pricing services N/A N/A N/A 6,693 Enterprise value market multiple analysis EBITDA multiple(2) 7.1x 7.1x 5,473 Income approach Collection rates 1.2x 1.2x 28,595 Income approach Yield 6.0% - 13.6% 10.9% 24,052 Discounted cash flow Discount rate 7.8% - 15.3% 11.1% 1,776 Market approach (comparable companies) EBITDA multiple(2) 6.5x 6.5x 4,887 Recent transaction price(1) N/A N/A N/A 546 Market approach EBITDA multiple(2) 6.1x 6.1x Derivative instruments of Consolidated Funds 291 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 544,930 Liabilities Derivatives instruments of Consolidated Funds $ (2,999 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (2,999 ) (1) Recent transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The Company's investments valued using net asset value (“NAV”) per share have terms and conditions that do not allow for redemption without certain events or approvals that are outside the Company's control. A summary of fair value by segment and the remaining unfunded commitment are presented below: As of June 30, 2017 As of December 31, 2016 Segment Fair Value Unfunded Fair Value Unfunded Credit Group $ 62,812 $ 71,352 $ 53,131 $ 30,896 Private Equity Group 217,531 329,962 181,096 96,687 Real Estate Group 79,028 55,355 71,669 35,708 Non-core investments(1) 18,458 32,435 19,819 34,500 Totals $ 377,829 $ 489,104 $ 325,715 $ 197,791 (1) Non-core investments are held at the Company's Operations Management Group ("OMG"). |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management. The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds as of June 30, 2017 and December 31, 2016 : As of June 30, 2017 As of December 31, 2016 Assets Liabilities Assets Liabilities The Company Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ 32,616 $ 384 $ 84,564 $ 3,737 $ 62,830 $ 3,171 $ — $ — Total derivatives, at fair value(2) $ 32,616 $ 384 $ 84,564 $ 3,737 $ 62,830 $ 3,171 $ — $ — As of June 30, 2017 As of December 31, 2016 Assets Liabilities Assets Liabilities Consolidated Funds Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ — $ — $ — $ — $ 25,304 $ 529 $ — $ — Other financial instruments 8,011 2,809 — — 3,575 291 (204 ) (2,999 ) Total derivatives, at fair value(3) 8,011 2,809 — — 28,879 820 (204 ) (2,999 ) Other—equity(4) — — — — 253 24 — — Total $ 8,011 $ 2,809 $ — $ — $ 29,132 $ 844 $ (204 ) $ (2,999 ) (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of June 30, 2017 , the Company had the right to, but elected not to, offset $0.4 million of its derivative assets and liabilities. As of December 31, 2016 , the Company did not have any derivative liabilities to offset its derivative assets. (3) As of June 30, 2017 and December 31, 2016 , the Consolidated Funds offset $0.1 million and $1.4 million of their derivative assets and liabilities, respectively. (4) Includes the fair value of warrants which are presented as equity securities within investments of the Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of June 30, 2017 As of December 31, 2016 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility(1) Revolver 2/24/2022 N/A $ 135,000 2.65% $ — —% Senior Notes(2) 10/8/2014 10/8/2024 $ 250,000 244,992 4.21% 244,684 4.21% 2015 Term Loan(3) 9/2/2015 7/29/2026 $ 35,250 35,073 3.02% 35,063 2.74% 2016 Term Loan(4) 12/21/2016 1/15/2029 $ 26,376 25,991 2.88% 26,037 2.66% 2017 Term Loan A(4) 3/22/2017 1/22/2028 $ 17,600 17,470 2.70% N/A N/A 2017 Term Loan B(4) 5/10/2017 10/15/2029 $ 35,198 35,124 2.63% N/A N/A 2017 Term Loan C(4) 6/22/2017 7/30/2029 $ 17,211 17,206 2.75% N/A N/A Total debt obligations $ 510,856 $ 305,784 (1) The AOG entities are borrowers under the Credit Facility, which, as amended in February 2017, provides a $1.04 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of June 30, 2017, base rate loans bear interest calculated based on the base rate plus 0.50% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.50%. The unused commitment fee is 0.20% per annum. There is a base rate and LIBOR floor of zero . (2) The Senior Notes were issued in October 2014 by Ares Finance Co. LLC, a subsidiary of the Company, at 98.268% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture . (3) The 2015 Term Loan was entered into in August 2015 by a subsidiary of the Company that acts as a manager to a CLO. The 2015 Term Loan is secured by collateral in the form of CLO senior tranches owned by the Company. To the extent the assets are not sufficient to cover the Term Loan, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.025% of a maximum investment amount . (4) The 2016 and 2017 Term Loans ("Term Loans") were entered into by a subsidiary of the Company. The Term Loans are secured by collateral in the form of CLO senior tranches and subordinated notes owned by the Company. Collateral associated with one of the Term Loans may be used to satisfy outstanding liabilities of another term loan should the collateral fall short. To the extent the assets associated with these Term Loans are not sufficient, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.03% of a maximum investment amount. Debt obligations of the Company and its subsidiaries are reflected at cost, net of debt issuance costs of the Senior Notes and Term Loans, in the Condensed Consolidated Statements of Financial Condition. As of June 30, 2017 , the Company and its subsidiaries were in compliance with all covenants under the Credit Facility, Senior Notes and Term Loan obligations. The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs may be recorded as a reduction of the corresponding debt obligation and are amortized over the term of the obligation. The following table shows the activity of the Company's debt issuance costs: Credit Facility(1) Senior Notes(2) Term Loans(2) Unamortized debt issuance costs as of December 31, 2016 $ 4,800 $ 1,803 $ 526 Debt issuance costs incurred 3,343 — 276 Amortization of debt issuance costs (863 ) (116 ) (32 ) Unamortized debt issuance costs as of June 30, 2017 $ 7,280 $ 1,687 $ 770 (1) Unamortized debt issuance costs of the Credit Facility are included in other assets in the Condensed Consolidated Statements of Financial Condition. (2) Unamortized debt issuance costs of the Senior Notes and Term Loans are presented on a net basis with the net carrying value of the Company’s debt obligations in the Condensed Consolidated Statements of Financial Condition. Loan Obligations of the Consolidated CLOs Loan obligations of the Consolidated Funds that are CLOs ("Consolidated CLOs") represent amounts due to holders of debt securities issued by the Consolidated CLOs. The Company measures the loan obligations of the Consolidated CLOs using the fair value of the financial assets of its Consolidated CLOs. 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 June 30, 2017 and December 31, 2016 the following loan obligations were outstanding and classified as liabilities of the Company’s Consolidated CLOs: As of June 30, 2017 As of December 31, 2016 Loan Obligations Fair Value of Loan Obligations Weighted Loan Fair Value of Loan Obligations Weighted Average Remaining Maturity In Years Senior secured notes(1) $ 2,914,099 $ 2,905,347 9.78 $ 2,839,779 $ 2,841,440 9.68 Subordinated notes(2) 257,209 188,251 10.05 284,046 189,672 9.97 Total loan obligations of Consolidated CLOs $ 3,171,308 $ 3,093,598 $ 3,123,825 $ 3,031,112 (1) Original borrowings under the senior secured notes totaled $3.2 billion , with various maturity dates ranging from October 2024 to April 2030. The weighted average interest rate as of June 30, 2017 was 3.72% . (2) Original borrowings under the subordinated notes totaled $257.2 million , with various maturity dates ranging from October 2024 to April 2030. They 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. Based on the terms of these facilities, the creditors of the facilities have no recourse to the Company. Credit Facilities of the Consolidated Funds Certain Consolidated Funds maintain credit facilities to fund investments between capital drawdowns. These facilities generally are collateralized by the unfunded capital commitments of the Consolidated Funds’ limited partners, bear an annual commitment fee based on unfunded commitments and contain various affirmative and negative covenants and reporting obligations, including restrictions on additional indebtedness, liens, margin stock, affiliate transactions, dividends and distributions, release of capital commitments and portfolio asset dispositions. The creditors of these facilities have no recourse to the Company except to the extent the debt is guaranteed by a subsidiary or if a general partner is liable for the Consolidated Fund’s liabilities under the applicable law. Credit facilities of the Consolidated Funds are reflected at cost in the Condensed Consolidated Statements of Financial Condition. As of June 30, 2017 and December 31, 2016 , the Consolidated Funds were in compliance with all covenants under such credit facilities. The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding as of June 30, 2017 and December 31, 2016 : As of June 30, 2017 As of December 31, 2016 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan(1) Effective Rate Outstanding Loan(1) Effective Rate Credit Facilities: 1/1/2023 $ 18,000 $ 12,942 2.75% $ 12,942 2.38% 6/30/2018 45,686 11,422 1.55% (2) 42,128 1.55% (2) 3/7/2018 71,500 50,000 2.39% N/A N/A Revolving Term Loan 8/19/2019 14,286 9,361 5.55% N/A N/A Total borrowings $ 83,725 $ 55,070 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. (2) The effective rate is based on the three month EURIBOR or zero , whichever is higher, plus an applicable margin. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Indemnification Arrangements Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the Condensed Consolidated Statements of Financial Condition. As of June 30, 2017 , the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. Commitments As of June 30, 2017 and December 31, 2016 , the Company had aggregate unfunded commitments of $586.5 million and $535.3 million , respectively, including commitments to both non-consolidated funds and Consolidated Funds. Total unfunded commitments included $32.4 million and $89.2 million in commitments to funds not managed by the Company as of June 30, 2017 and December 31, 2016 , respectively. In connection with the acquisition of EIF, contingent consideration was payable to EIF’s former membership interest holders if certain funds and co-investment vehicles met certain revenue and fee paying commitment targets during their commitment periods. The fair value of contingent consideration liabilities are reviewed on a quarterly basis and are subject to change until the liability is settled, with the related impact recorded to the Company's Condensed Consolidated Statements of Operations within other income (expense), net. Since the revenue and fee paying targets were not met, the liability associated with the EIF contingent consideration, which was $20.3 million as of December 31, 2016 , was reversed in the first quarter of 2017, resulting in a $20.3 million gain. ARCC Fee Waiver In conjunction with the ARCC-ACAS Transaction, the Company agreed to waive up to $10 million per quarter of ARCC's Part I Fees for ten calendar quarters, which began in the second quarter of 2017. ARCC Part I Fees will only be waived to the extent they are paid. If Part I Fees are less than $10 million in any single quarter the shortfall will not carryover to the subsequent quarters. There are nine remaining quarters as part of the fee waiver agreement, with a maximum of $90 million in potential waivers. ARCC Part I Fees are shown net of the fee waiver. 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 contingent obligation is normally reduced by income taxes paid by the Company related to its carried interest. At June 30, 2017 and December 31, 2016 , if the Company assumed all existing investments were worthless, the amount of performance fees subject to potential repayment, net of tax, which may differ from the recognition of revenue, would have been approximately $451.7 million and $418.3 million , respectively, of which approximately $350.5 million and $323.9 million , respectively, is reimbursable to the Company by certain professionals who are the recipients of such performance fees. Management believes the possibility of all of the investments becoming worthless is remote. As of June 30, 2017 and December 31, 2016 , if the funds were liquidated at their fair values, there would be no repayment obligation, and accordingly, the Company did not record a contingent repayment liability as of either date. Litigation From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Substantially all of the Company’s revenue is earned from its affiliates, including management fees, performance fees, and administrative expense reimbursements. The related accounts receivable are included within due from affiliates within the Condensed Consolidated Statements of Financial Condition, except that performance fees receivable 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. The Company also has entered into agreements with related parties to be reimbursed for its expenses incurred for providing administrative services to such related parties, including ARCC, ACRE, ARDC, Ivy Hill Asset Management, L.P., ACF FinCo I L.P, and CION Ares Diversified Credit Fund. Employees and other related parties may be permitted to participate in co-investment vehicles that invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These employee co-investment vehicles generally do not require the participants 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 June 30, As of December 31, 2017 2016 Due from affiliates: Management fees receivable from non-consolidated funds $ 115,437 $ 123,781 Payments made on behalf of and amounts due from non-consolidated funds and employees 41,935 39,155 Due from affiliates—Company $ 157,372 $ 162,936 Amounts due from portfolio companies and non-consolidated funds $ 5,503 $ 3,592 Due from affiliates—Consolidated Funds $ 5,503 $ 3,592 Due to affiliates: Management fee rebate payable to non-consolidated funds $ 5,120 $ 7,914 Management fees received in advance 7,720 1,788 Tax receivable agreement liability 4,748 4,748 Payments made by non-consolidated funds on behalf of and payable by the Company 6,303 3,114 Due to affiliates—Company $ 23,891 $ 17,564 Due from Ares Funds and Portfolio Companies In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional services, travel and other costs associated with particular portfolio company holdings are subject to reimbursement by the portfolio companies. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 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, state, city and local income taxes incurred at the entity level. A portion of the Company’s operations is held through AHI, as well as corporate subsidiaries of Ares Holdings and Ares Investments, which are U.S. corporations for tax purposes. AHI is subject to U.S. corporate tax on earnings that flow through from Ares Holdings with respect to both AOG Units and preferred units. The income of these U.S. corporations 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). The Company’s income tax provision includes corporate level income taxes and entity level income taxes, as well as income taxes incurred by certain affiliated funds that are consolidated in these financial statements. The Company had an income tax expense of $1.3 million for the three months ended June 30, 2017 , and an income tax benefit of $4.4 million for the three months ended June 30, 2016 . For the six months ended June 30, 2017 , the Company had an income tax benefit of $33.0 million primarily driven by the one-time ARCC-ACAS transaction support payment compared to an income tax expense of $0.2 million for the six months ended June 30, 2016 . 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 and six months ended June 30, 2017 and 2016 , the Company has utilized the discrete effective tax rate method 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 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 June 30, 2017 , the Company’s U.S. federal income tax returns for the years 2013 through 2017 are open under the normal statute of limitations and therefore subject to examination. State and local tax returns are generally subject to audit from 2012 to 2017 . Foreign tax returns are generally subject to audit from 2011 to 2017 . Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed consolidated financial statements. |
EARNINGS PER COMMON UNIT
EARNINGS PER COMMON UNIT | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON UNIT | EARNINGS PER COMMON UNIT Basic earnings per common unit are 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 are computed using the more dilutive method of either the two-class method or the treasury stock method. For the three months ended June 30, 2017 and the three and six months ended June 30, 2016, the treasury stock method was the more dilutive method for the unvested restricted units. For the six months ended June 30, 2017 , the two-class method was the more dilutive method for the unvested restricted units. No participating securities had rights to undistributed earnings during any period presented. The computation of diluted earnings per common unit for the three and six months ended June 30, 2017 and 2016 excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Options 21,155,026 23,363,784 21,244,858 23,429,835 Restricted units 39,082 64,516 14,463,590 94,363 AOG units 130,249,329 132,350,586 130,325,826 132,366,701 The following table presents the computation of basic and diluted earnings per common unit: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Net income (loss) attributable to Ares Management, L.P. common unitholders $ 44,453 $ 37,574 $ (2,106 ) $ 34,484 Earnings distributed to participating securities (restricted units) (419 ) (180 ) (1,246 ) (408 ) Preferred stock dividends(1) — (4 ) — (8 ) Net income (loss) available to common unitholders $ 44,034 $ 37,390 $ (3,352 ) $ 34,068 Basic weighted-average common units 81,829,086 80,715,723 81,469,967 80,699,387 Basic earnings per common unit $ 0.54 $ 0.46 $ (0.04 ) $ 0.42 Net income (loss) attributable to Ares Management, L.P. common unitholders $ 44,453 $ 37,574 $ (2,106 ) $ 34,484 Earnings distributed to participating securities (restricted units) — — (1,246 ) — Preferred stock dividends(1) — (4 ) — (8 ) Net income (loss) available to common unitholders $ 44,453 $ 37,570 $ (3,352 ) $ 34,476 Effect of dilutive units: Restricted units 2,490,796 1,616,470 — 1,053,081 Diluted weighted-average common units 84,319,882 82,332,193 81,469,967 81,752,468 Diluted earnings per common unit $ 0.53 $ 0.46 $ (0.04 ) $ 0.42 (1) Dividends relate to the preferred shares that were issued by Ares Real Estate Holdings LLC and were redeemed on July 1, 2016. |
EQUITY COMPENSATION
EQUITY COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY COMPENSATION | EQUITY COMPENSATION Equity Incentive Plan In 2014, the Company adopted the Ares Management, L.P. 2014 Equity Incentive Plan (the "Equity Incentive Plan"). Based on a formula as defined in the Equity Incentive Plan, the total number of units available to be issued under the Equity Incentive Plan resets and may increase on January 1 each year. Accordingly, on January 1, 2017 , the total number of units available for issuance under the Equity Incentive Plan increased to 30,397,280 units, and as of June 30, 2017 , 24,305,433 units remain available for issuance. Generally, unvested phantom units, restricted units and options are forfeited upon termination of employment in accordance with the Equity Incentive Plan. The Company recognizes forfeitures as a reversal of previously recognized compensation expense in the period the forfeiture occurs. Equity-based compensation expense, net of forfeitures is included in the following table: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Restricted units $ 14,601 $ 4,684 $ 25,818 $ 9,448 Options 3,931 4,547 7,413 8,460 Phantom units 385 305 775 801 Equity-based compensation expense $ 18,917 $ 9,536 $ 34,006 $ 18,709 Restricted Units Each restricted unit represents an unfunded, unsecured right of the holder to receive a common unit on a specific date. The restricted units generally vest and are settled in common units either (i) at a rate of one-third per year, beginning on the third anniversary of the grant date, (ii) in their entirety on the fifth anniversary of the grant date, or (iii) at a rate of one quarter per year, beginning on the first anniversary of the grant date. Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award. The holders of restricted units generally 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 restricted units held at the time such distributions are declared (“Distribution Equivalent”). For the three and six months ended June 30, 2017 , Distribution Equivalents were made to the holders of restricted units in the aggregate amount of $1.8 million and $6.0 million , respectively, which are presented as distributions within the Condensed Consolidated Statement of Changes in Equity. When units are forfeited, the cumulative amount of distribution equivalents previously paid is reclassified to compensation and benefits expense in the Condensed Consolidated Statements of Operations. The following table presents unvested restricted units’ activity during the six months ended June 30, 2017 : Restricted Units Weighted Average Grant Date Fair Value Per Unit Balance - January 1, 2017 8,058,372 $ 16.38 Granted 7,944,144 18.61 Vested (1,757,514 ) 16.48 Forfeited (388,694 ) 18.40 Balance - June 30, 2017 13,856,308 $ 17.58 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $199.5 million as of June 30, 2017 and is expected to be recognized over the remaining weighted average period of 3.92 years . Options A summary of options activity during the six months ended June 30, 2017 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value Balance - January 1, 2017 22,232,134 $ 19.00 7.35 Granted — — — Exercised (54,500 ) 19.00 — Expired (389,575 ) 19.00 — Forfeited (633,033 ) 19.00 — Balance - June 30, 2017 21,155,026 $ 18.99 6.87 $ — Exercisable at June 30, 2017 7,151,023 $ 19.00 6.86 $ — As of June 30, 2017 , there was $30.9 million of total unrecognized compensation expense that is expected to be recognized over the remaining weighted average period of 1.85 years . Phantom Units A summary of unvested phantom unit activity during the six months ended June 30, 2017 is presented below: Phantom Units Weighted Average Balance - January 1, 2017 266,138 $ 19.00 Vested (87,222 ) 19.00 Forfeited (7,036 ) 19.00 Balance - June 30, 2017 171,880 $ 19.00 The fair value of the phantom unit awards is remeasured at each reporting period and was $ 17.90 per unit as of June 30, 2017 . Based on the fair value of the awards at June 30, 2017 , $2.8 million of unrecognized compensation expense in connection with phantom units outstanding is expected to be recognized over a weighted average period of 1.84 years . During the six months ended June 30, 2017 , the Company paid $1.7 million to settle any vested phantom units. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Ares Management, L.P. Common Units: 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. The following table presents each partner's AOG units and corresponding ownership interest in each of the Ares Operating Group entities as of June 30, 2017 , as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities for the three and six months ended June 30, 2017 . Daily Average Ownership As of June 30, 2017 As of December 31, 2016 For the Three Months Ended June 30, For the Six Months Ended June 30, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2017 2016 2017 2016 Ares Management, L.P. 82,131,000 38.68 % 80,814,732 38.26 % 38.58 % 37.88 % 38.47 % 37.87 % Ares Owners Holding L.P. 117,710,070 55.43 % 117,928,313 55.82 % 55.53 % 56.25 % 55.63 % 56.26 % Affiliate of Alleghany Corporation 12,500,000 5.89 % 12,500,000 5.92 % 5.89 % 5.87 % 5.90 % 5.87 % Total 212,341,070 100.00 % 211,243,045 100 % Preferred Equity As of June 30, 2017 and December 31, 2016 , the Company had 12,400,000 units of Series A Preferred Equity (the “Preferred Equity”) outstanding. When, as and if declared by the Company’s board of directors, distributions on the Preferred Equity are payable quarterly at a rate per annum equal to 7.00% . The Preferred Equity may be redeemed at the Company’s option, in whole or in part, at any time on or after June 30, 2021, at a price of $25.00 per unit. Secondary Offering Pursuant to a prospectus supplement dated March 2, 2017, AREC Holdings Ltd., a wholly owned subsidiary of Abu Dhabi Investment Authority ("ADIA" or “the selling unitholder”) sold 7,500,000 units of the Company's common units through a public secondary offering. The Company did not receive any of the proceeds from the offering. The transaction closed on March 2, 2017. The Company incurred approximately $0.7 million of expenses related to the secondary offering transaction. The fees related to the secondary offering were non-operating expenses and are included in other income (expense), net in the Condensed Consolidated Statements of Operations. The selling unitholder paid the underwriting discounts and commissions and/or similar charges incurred for the sale of the common units. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company operates through its three distinct operating segments. During the six months ended June 30, 2017 , the Company reclassified certain expenses from OMG to its operating segments. Historical results have been modified to conform to the current period presentation. The Company’s three operating segments are: Credit Group: The Company’s Credit Group is a leading manager of credit strategies across the non-investment grade credit universe in the U.S. and Europe, with approximately $67.4 billion of assets under management and 139 funds as of June 30, 2017 . The Credit Group offers a range of credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, credit opportunities, structured credit investments and U.S. and European direct lending. The Credit Group provides solutions for traditional fixed income investors seeking to access the syndicated loans and high yield bond markets and capitalizes on opportunities across traded corporate credit. It additionally provides investors access to directly originated fixed and floating rate credit assets and the ability to capitalize on illiquidity premiums across the credit spectrum. The Credit Group’s syndicated loans strategy focuses on liquid, traded non-investment grade secured loans to corporate issuers. The high yield bond strategy seeks to deliver a diversified portfolio of liquid, traded non-investment grade corporate bonds, including secured, unsecured and subordinated debt instruments. Credit opportunities is a “go anywhere” strategy seeking to capitalize on market inefficiencies and relative value opportunities across the capital structure. The structured credit strategy invests across the capital structures of syndicated collateralized loan obligation vehicles (CLOs) and in directly-originated asset-backed instruments comprised of diversified portfolios of consumer and commercial assets. The Company has one of the largest self-originating direct lending platforms in the U.S. and European middle markets, providing one-stop financing solutions for small-to-medium sized companies, which the Company believes are increasingly underserved by traditional lenders. The Credit Group conducts its U.S. direct lending activities primarily through ARCC, the largest business development company as of June 30, 2017 , by both market capitalization and total assets. In addition, the Credit Group manages a commercial finance business that provides asset-based and cash flow loans to small and middle-market companies, as well as asset-based facilities to specialty finance companies. The Credit Group’s European direct lending platform is one of the most significant participants in the European middle-market, focusing on self-originated investments in illiquid middle-market credits. Private Equity Group: The Company’s Private Equity Group has approximately $25.8 billion of assets under management as of June 30, 2017 , broadly categorizing its investment strategies as corporate private equity, U.S. power and energy infrastructure and special situations. As of June 30, 2017 the group managed five corporate private equity commingled funds focused on North America and Europe and two focused on greater China, five commingled funds and six related co-investment vehicles focused on U.S. power and energy infrastructure and three special situations funds. In its North American and European flexible capital strategy, the Company targets opportunistic majority or shared-control investments in businesses with strong franchises and attractive growth opportunities in North America and Europe. The U.S. power and energy infrastructure strategy targets U.S. energy infrastructure-related assets across the power generation, transmission and midstream sectors, seeking attractive risk-adjusted equity returns with current cash flow and capital appreciation. The special situations strategy seeks to invest opportunistically across a broad spectrum of distressed or mispriced investments, including corporate debt, rescue capital, private asset-backed investments, post-reorganization securities and non-performing portfolios. Real Estate Group: The Company’s Real Estate Group manages comprehensive public and private equity and debt strategies, with approximately $10.8 billion of assets under management across 43 funds as of June 30, 2017 . Real Estate equity strategies focus on applying hands-on value creation initiatives to mismanaged and capital-starved assets, as well as new development, ultimately selling stabilized assets back into the market. The Real Estate Group manages both a value-add strategy and an opportunistic strategy. The value-add strategy seeks to create value by buying assets at attractive valuations and through active asset management of income-producing properties across the U.S. and Western Europe. The opportunistic strategy focuses on manufacturing core assets through development, redevelopment and fixing distressed capital structures across major properties in the U.S. and Europe. The Company’s debt strategies leverage the Real Estate Group’s diverse sources of capital to directly originate and manage commercial mortgage investments on properties that range from stabilized to requiring hands-on value creation. In addition to managing private debt funds, the Real Estate Group makes debt investments through a publicly traded commercial mortgage real estate investment trust, ACRE. The Company has an Operations Management Group (the “OMG”) that consists of five 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/corporate strategy, legal/compliance and human resources. Additionally, the OMG provides services to certain of the Company’s investment companies and partnerships, which reimburse the OMG for expenses equal to the costs of services provided. The OMG’s expenses are not allocated to the Company’s three reportable segments but the Company does consider the cost structure of the OMG when evaluating its financial performance. Non-GAAP Measures: These measures supplement and should be considered in addition to, and not in lieu of, the Consolidated Statements of Operations prepared in accordance with GAAP. Economic net income (“ENI”), a non-GAAP measure, is an operating metric used by management to evaluate total operating performance, a decision tool for deployment of resources, and an assessment of the performance of the Company’s business segments. ENI differs from net income by excluding (a) income tax expense, (b) operating results of the Consolidated Funds, (c) depreciation and amortization expense, (d) placement fees and underwriting costs (e) the effects of changes arising from corporate actions, and (f) certain other items that the Company believes are not indicative of its total operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers and acquisitions and capital transactions, and expenses incurred in connection with corporate reorganization. Fee related earnings (“FRE”), a non-GAAP measure, refers to a component of ENI that is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it adjusts for the items included in the calculation of ENI and excludes performance fees, performance fee compensation, investment income from the Consolidated Funds and non-consolidated funds and certain other items that the Company believes are not indicative of its core operating performance. Performance related earnings (“PRE”), a non-GAAP measure, is used to assess the Company’s investment performance net of performance fee compensation. PRE differs from income (loss) before taxes computed in accordance with GAAP as it only includes performance fees, performance fee compensation and total investment and other income earned from the Consolidated Funds and non-consolidated funds. Distributable earnings (“DE”), a non-GAAP measure, is an operating metric that assesses the Company’s performance without the effects of the Consolidated Funds and the impact of unrealized income and expenses, which generally fluctuate with fair value changes. Among other things, this metric also is used to assist in determining amounts potentially available for distribution. However, the declaration, payment, and determination of the amount of distributions to unitholders, if any, is at the sole discretion of the Company’s Board of Directors, which may change the distribution policy at any time. Distributable earnings is calculated as the sum of fee related earnings, realized performance fees, realized performance fee compensation, realized net investment and other income, and is reduced by expenses arising from transaction costs associated with acquisitions, placement fees and underwriting costs, expenses incurred in connection with corporate reorganization and depreciation. Distributable earnings differs from income before taxes computed in accordance with GAAP as it is typically presented before giving effect to unrealized performance fees, unrealized performance fee compensation, unrealized net investment income, amortization of intangibles and equity compensation expense. DE is presented prior to the effect of income taxes attributable to Ares Holdings, Inc. and to distributions made to the Company’s preferred unitholders, unless otherwise noted. Management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non‑consolidated funds. The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2017 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $19,143) $ 112,654 $ 56,427 $ 16,479 $ 185,560 $ — $ 185,560 Other fees 5,663 338 19 6,020 — 6,020 Compensation and benefits (44,754 ) (18,388 ) (9,714 ) (72,856 ) (30,990 ) (103,846 ) General, administrative and other expenses (7,949 ) (4,345 ) (3,091 ) (15,385 ) (18,961 ) (34,346 ) Fee related earnings 65,614 34,032 3,693 103,339 (49,951 ) 53,388 Performance fees—realized 7,883 64,780 1,467 74,130 — 74,130 Performance fees—unrealized 5,093 228,747 29,789 263,629 — 263,629 Performance fee compensation—realized (1,898 ) (50,914 ) (161 ) (52,973 ) — (52,973 ) Performance fee compensation—unrealized (6,079 ) (184,021 ) (18,632 ) (208,732 ) — (208,732 ) Net performance fees 4,999 58,592 12,463 76,054 — 76,054 Investment income—realized 2,525 2,717 373 5,615 1,340 6,955 Investment income (loss)—unrealized (3,450 ) 25,354 1,134 23,038 (2,728 ) 20,310 Interest and other investment income (expense) 2,958 1,983 1,534 6,475 225 6,700 Interest expense (3,065 ) (1,397 ) (429 ) (4,891 ) (463 ) (5,354 ) Net investment income (loss) (1,032 ) 28,657 2,612 30,237 (1,626 ) 28,611 Performance related earnings 3,967 87,249 15,075 106,291 (1,626 ) 104,665 Economic net income $ 69,581 $ 121,281 $ 18,768 $ 209,630 $ (51,577 ) $ 158,053 Distributable earnings $ 67,010 $ 47,973 $ 4,747 $ 119,730 $ (50,038 ) $ 69,692 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2016 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $28,999) $ 109,141 $ 37,241 $ 16,230 $ 162,612 $ — $ 162,612 Other fees 550 334 435 1,319 — 1,319 Compensation and benefits (45,937 ) (15,495 ) (10,633 ) (72,065 ) (24,988 ) (97,053 ) General, administrative and other expenses (6,799 ) (3,324 ) (2,511 ) (12,634 ) (14,679 ) (27,313 ) Fee related earnings 56,955 18,756 3,521 79,232 (39,667 ) 39,565 Performance fees—realized 16,024 62,779 2,801 81,604 — 81,604 Performance fees—unrealized 16,351 105,702 1,261 123,314 — 123,314 Performance fee compensation—realized (754 ) (50,224 ) (53 ) (51,031 ) — (51,031 ) Performance fee compensation—unrealized (14,604 ) (84,488 ) (1,773 ) (100,865 ) — (100,865 ) Net performance fees 17,017 33,769 2,236 53,022 — 53,022 Investment income (loss)—realized (280 ) 3,406 695 3,821 (31 ) 3,790 Investment income (loss)—unrealized 5,391 2,061 (1,067 ) 6,385 (11,904 ) (5,519 ) Interest and other investment income (expense) 8,098 8,206 36 16,340 (19 ) 16,321 Interest expense (2,450 ) (1,397 ) (272 ) (4,119 ) (709 ) (4,828 ) Net investment income (loss) 10,759 12,276 (608 ) 22,427 (12,663 ) 9,764 Performance related earnings 27,776 46,045 1,628 75,449 (12,663 ) 62,786 Economic net income $ 84,731 $ 64,801 $ 5,149 $ 154,681 $ (52,330 ) $ 102,351 Distributable earnings $ 73,342 $ 40,310 $ 7,781 $ 121,433 $ (44,613 ) $ 76,820 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2017 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $52,400) $ 234,001 $ 96,246 $ 32,094 $ 362,341 $ — $ 362,341 Other fees 10,166 678 10 10,854 — 10,854 Compensation and benefits (96,096 ) (31,606 ) (19,450 ) (147,152 ) (57,304 ) (204,456 ) General, administrative and other expenses (15,915 ) (8,543 ) (5,822 ) (30,280 ) (38,349 ) (68,629 ) Fee related earnings 132,156 56,775 6,832 195,763 (95,653 ) 100,110 Performance fees—realized 16,661 64,780 1,494 82,935 — 82,935 Performance fees—unrealized 8,029 260,984 43,877 312,890 — 312,890 Performance fee compensation—realized (7,183 ) (50,914 ) (177 ) (58,274 ) — (58,274 ) Performance fee compensation—unrealized (7,537 ) (209,526 ) (27,070 ) (244,133 ) — (244,133 ) Net performance fees 9,970 65,324 18,124 93,418 — 93,418 Investment income—realized 2,843 3,296 2,156 8,295 3,199 11,494 Investment income (loss)—unrealized 1,139 33,900 690 35,729 (4,135 ) 31,594 Interest and other investment income 2,939 2,135 1,353 6,427 1,099 7,526 Interest expense (5,523 ) (2,910 ) (861 ) (9,294 ) (939 ) (10,233 ) Net investment income (loss) 1,398 36,421 3,338 41,157 (776 ) 40,381 Performance related earnings 11,368 101,745 21,462 134,575 (776 ) 133,799 Economic net income $ 143,524 $ 158,520 $ 28,294 $ 330,338 $ (96,429 ) $ 233,909 Distributable earnings $ 131,282 $ 69,887 $ 7,860 $ 209,029 $ (98,428 ) $ 110,601 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2016 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $57,624) $ 216,388 $ 75,917 $ 32,975 $ 325,280 $ — $ 325,280 Other fees 659 674 693 2,026 — 2,026 Compensation and benefits (89,846 ) (29,859 ) (21,868 ) (141,573 ) (51,265 ) (192,838 ) General, administrative and other expenses (12,109 ) (6,564 ) (5,952 ) (24,625 ) (31,230 ) (55,855 ) Fee related earnings 115,092 40,168 5,848 161,108 (82,495 ) 78,613 Performance fees—realized 22,202 62,779 2,972 87,953 — 87,953 Performance fees—unrealized (12,696 ) 93,279 5,383 85,966 — 85,966 Performance fee compensation—realized (2,737 ) (50,224 ) (53 ) (53,014 ) — (53,014 ) Performance fee compensation—unrealized 1,833 (75,379 ) (4,006 ) (77,552 ) — (77,552 ) Net performance fees 8,602 30,455 4,296 43,353 — 43,353 Investment income (loss)—realized (198 ) 3,374 563 3,739 (88 ) 3,651 Investment income (loss)—unrealized 3,796 (8,096 ) 1,732 (2,568 ) (11,519 ) (14,087 ) Interest and other investment income (expense) 15,677 8,115 928 24,720 (68 ) 24,652 Interest expense (4,898 ) (2,802 ) (546 ) (8,246 ) (1,437 ) (9,683 ) Net investment income (loss) 14,377 591 2,677 17,645 (13,112 ) 4,533 Performance related earnings 22,979 31,046 6,973 60,998 (13,112 ) 47,886 Economic net income $ 138,071 $ 71,214 $ 12,821 $ 222,106 $ (95,607 ) $ 126,499 Distributable earnings $ 139,815 $ 58,681 $ 10,459 $ 208,955 $ (90,854 ) $ 118,101 The following table presents the components of the Company’s operating segments’ revenue, expenses and other income (expense): For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Segment Revenues Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) $ 185,560 $ 162,612 $ 362,341 $ 325,280 Other fees 6,020 1,319 10,854 2,026 Performance fees—realized 74,130 81,604 82,935 87,953 Performance fees—unrealized 263,629 123,314 312,890 85,966 Total segment revenues $ 529,339 $ 368,849 $ 769,020 $ 501,225 Segment Expenses Compensation and benefits $ 72,856 $ 72,065 $ 147,152 $ 141,573 General, administrative and other expenses 15,385 12,634 30,280 24,625 Performance fee compensation—realized 52,973 51,031 58,274 53,014 Performance fee compensation—unrealized 208,732 100,865 244,133 77,552 Total segment expenses $ 349,946 $ 236,595 $ 479,839 $ 296,764 Other Income (Expense) Investment income (loss)—realized $ 5,615 $ 3,821 $ 8,295 $ 3,739 Investment income (loss)—unrealized 23,038 6,385 35,729 (2,568 ) Interest and other investment income (expense) 6,475 16,340 6,427 24,720 Interest expense (4,891 ) (4,119 ) (9,294 ) (8,246 ) Total other income (expense) $ 30,237 $ 22,427 $ 41,157 $ 17,645 The following table reconciles segment revenue to Ares consolidated revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Total segment revenue $ 529,339 $ 368,849 $ 769,020 $ 501,225 Revenue of Consolidated Funds eliminated in consolidation (4,310 ) (4,842 ) (11,916 ) (7,453 ) Administrative fees(1) 9,132 6,544 18,738 13,366 Performance fees reclass(2) (217 ) (1,016 ) (241 ) (1,588 ) Revenue of non-controlling interests in consolidated subsidiaries(3) (54 ) — (54 ) — Total consolidated adjustments and reconciling items 4,551 686 6,527 4,325 Total consolidated revenue $ 533,890 $ 369,535 $ 775,547 $ 505,550 (1) Represents administrative fees that are presented in administrative and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance 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. (3) Adjustments for administrative fees reimbursed and other revenue items attributable to certain of our joint venture partners. The following table reconciles segment expenses to Ares consolidated expenses: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Total segment expenses $ 349,946 $ 236,595 $ 479,839 $ 296,764 Expenses of Consolidated Funds added in consolidation 8,825 5,288 19,334 11,267 Expenses of Consolidated Funds eliminated in consolidation (4,303 ) (4,589 ) (10,901 ) (10,341 ) Administrative fees(1) 9,132 6,544 18,738 13,366 OMG expenses 49,951 39,667 95,653 82,495 Acquisition and merger-related expenses 724 85 276,060 353 Equity compensation expense 18,917 9,536 34,006 18,709 Placement fees and underwriting costs 6,383 1,754 9,822 2,684 Amortization of intangibles 5,274 7,121 10,549 14,384 Depreciation expense 2,774 1,934 5,990 3,792 Expenses of non-controlling interests in consolidated subsidiaries(2) 574 — 574 — Total consolidation adjustments and reconciling items 98,251 67,340 459,825 136,709 Total consolidated expenses $ 448,197 $ 303,935 $ 939,664 $ 433,473 (1) Represents administrative fees that are presented in administrative and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Adjustments to eliminate costs being borne by certain of our joint venture partners. The following table reconciles segment other income (expense) to Ares consolidated other income: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Total other income (expense) $ 30,237 $ 22,427 $ 41,157 $ 17,645 Other income (expense) from Consolidated Funds added in consolidation, net (3,150 ) 7,168 35,295 (15,635 ) Other income (expense) from Consolidated Funds eliminated in consolidation, net 3,731 (566 ) (6,874 ) 11,673 Other income of non-controlling interests in consolidated subsidiaries(1) 5 — 5 — OMG other expense (1,626 ) (12,663 ) (776 ) (13,112 ) Performance fee reclass(2) 217 1,016 241 1,588 Changes in fair value of contingent consideration (32 ) 24 20,216 (204 ) Offering costs 5 — (655 ) — Total consolidation adjustments and reconciling items (850 ) (5,021 ) 47,452 (15,690 ) Total consolidated other income $ 29,387 $ 17,406 $ 88,609 $ 1,955 (1) Adjustments to eliminate costs being borne by certain of our joint venture partners. (2) 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. The following table presents the reconciliation of income before taxes as reported in the Condensed Consolidated Statements of Operations to segment results of ENI, FRE, PRE and DE: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Economic net income Income (loss) before taxes $ 115,080 $ 83,006 $ (75,508 ) $ 74,032 Adjustments: Amortization of intangibles 5,274 7,121 10,549 14,384 Depreciation expense 2,774 1,934 5,990 3,792 Equity compensation expenses 18,917 9,536 34,006 18,709 Acquisition and merger-related expenses 756 61 255,844 557 Placement fees and underwriting costs 6,383 1,754 9,822 2,684 OMG expenses, net 51,577 52,330 96,429 95,607 Offering costs (5 ) — 655 — (Income) loss before taxes of non-controlling interests in consolidated subsidiaries(1) 623 — 623 — (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations 8,251 (1,061 ) (8,072 ) 12,341 Total consolidation adjustments and reconciling items 94,550 71,675 405,846 148,074 Economic net income 209,630 154,681 330,338 222,106 Total performance fees income - realized (74,130 ) (81,604 ) (82,935 ) (87,953 ) Total performance fees income - unrealized (263,629 ) (123,314 ) (312,890 ) (85,966 ) Total performance fee compensation - realized 52,973 51,031 58,274 53,014 Total performance fee compensation - unrealized 208,732 100,865 244,133 77,552 Total investment income (30,237 ) (22,427 ) (41,157 ) (17,645 ) Fee related earnings 103,339 79,232 195,763 161,108 Performance fees—realized 74,130 81,604 82,935 87,953 Performance fee compensation—realized (52,973 ) (51,031 ) (58,274 ) (53,014 ) Investment and other income (expense) realized, net 4,522 14,657 5,907 18,828 Additional adjustments: Dividend equivalent(2) (1,520 ) (706 ) (4,201 ) (1,390 ) One-time acquisition costs(2) (11 ) (12 ) (23 ) (282 ) Income tax expense(2) (381 ) (249 ) (607 ) (481 ) Non-cash items 322 683 136 847 Placement fees and underwriting costs(2) (6,383 ) (1,747 ) (9,822 ) (2,685 ) Depreciation and amortization(2) (1,315 ) (998 ) (2,785 ) (1,929 ) Distributable earnings $ 119,730 $ 121,433 $ 209,029 $ 208,955 Performance related earnings Economic net income $ 209,630 $ 154,681 $ 330,338 $ 222,106 Less: fee related earnings (103,339 ) (79,232 ) (195,763 ) (161,108 ) Performance related earnings $ 106,291 $ 75,449 $ 134,575 $ 60,998 (1) Adjustments to eliminate costs being borne by certain of our joint venture partners. (2) Certain costs are reduced by the amounts attributable to OMG, which is excluded from segment results. |
CONSOLIDATION
CONSOLIDATION | 6 Months Ended |
Jun. 30, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
CONSOLIDATION | CONSOLIDATION Investments in Consolidated Variable Interest Entities The Company consolidates entities in which the Company has a variable interest and, as the general partner or investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at their carrying value, which approximates fair value, and represents the Company’s maximum exposure to loss. Investments in Non-Consolidated Variable Interest Entities The Company holds interests in certain VIEs that are not consolidated as the Company is not the primary beneficiary. The Company's interest in such entities generally is in the form of direct equity interests, fixed fee arrangements or both. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. Investments in the non-consolidated VIEs are carried at fair value. The Company's interests and the Consolidated Funds' interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and their respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of June 30, As of December 31, 2017 2016 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs $ 371,688 $ 268,950 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs $ 140,478 $ 153,746 Assets of consolidated VIEs $ 3,936,175 $ 3,822,010 Liabilities of consolidated VIEs $ 3,471,917 $ 3,360,329 For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Net income (loss) attributable to non-controlling interests related to consolidated VIEs $ (8,647 ) $ 1,054 $ 7,208 $ (10,925 ) CONSOLIDATING SCHEDULES The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of June 30, 2017 and December 31, 2016 and results from operations for the three and six months ended June 30, 2017 and 2016 . As of June 30, 2017 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 137,256 $ — $ — $ 137,256 Investments (includes fair value investments of $577,280) 739,159 — (140,478 ) 598,681 Performance fees receivable 1,085,407 — (2,632 ) 1,082,775 Due from affiliates 162,380 — (5,008 ) 157,372 Deferred tax asset, net 39,080 — — 39,080 Other assets 101,520 — — 101,520 Intangible assets, net 47,766 — — 47,766 Goodwill 143,824 — — 143,824 Assets of Consolidated Funds Cash and cash equivalents — 424,652 — 424,652 Investments, at fair value — 3,441,802 — 3,441,802 Due from affiliates — 5,503 — 5,503 Dividends and interest receivable — 6,797 — 6,797 Receivable for securities sold — 52,494 — 52,494 Other assets — 4,927 — 4,927 Total assets $ 2,456,392 $ 3,936,175 $ (148,118 ) $ 6,244,449 Liabilities Accounts payable, accrued expenses and other liabilities $ 84,745 $ — $ — $ 84,745 Accrued compensation 89,100 — — 89,100 Due to affiliates 23,891 — — 23,891 Performance fee compensation payable 844,789 — — 844,789 Debt obligations 510,856 — — 510,856 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 33,638 — 33,638 Due to affiliates — 7,639 (7,639 ) — Payable for securities purchased — 231,634 — 231,634 CLO loan obligations, at fair value — 3,115,281 (21,683 ) 3,093,598 Fund borrowings — 83,725 — 83,725 Total liabilities 1,553,381 3,471,917 (29,322 ) 4,995,976 Commitments and contingencies Preferred equity (12,400,000 units issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 464,258 (118,796 ) 345,462 Non-controlling interest in Ares Operating Group entities 333,641 — — 333,641 Controlling interest in Ares Management, L.P.: Partners' Capital (82,131,000 units issued and outstanding) 278,012 — — 278,012 Accumulated other comprehensive loss, net of tax (7,403 ) — — (7,403 ) Total controlling interest in Ares Management, L.P. 270,609 — — 270,609 Total equity 903,011 464,258 (118,796 ) 1,248,473 Total liabilities and equity $ 2,456,392 $ 3,936,175 $ (148,118 ) $ 6,244,449 As of December 31, 2016 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 342,861 $ — $ — $ 342,861 Investments (includes fair value investments of $448,336) 622,215 — (153,744 ) 468,471 Performance fees receivable 767,429 — (8,330 ) 759,099 Due from affiliates 169,252 — (6,316 ) 162,936 Deferred tax asset, net 6,731 — — 6,731 Other assets 65,565 — — 65,565 Intangible assets, net 58,315 — — 58,315 Goodwill 143,724 — — 143,724 Assets of Consolidated Funds Cash and cash equivalents — 455,280 — 455,280 Investments, at fair value — 3,330,203 — 3,330,203 Due from affiliates — 3,592 — 3,592 Dividends and interest receivable — 8,479 — 8,479 Receivable for securities sold — 21,955 — 21,955 Other assets — 2,501 — 2,501 Total assets $ 2,176,092 $ 3,822,010 $ (168,390 ) $ 5,829,712 Liabilities Accounts payable, accrued expenses and other liabilities $ 83,336 $ — $ — $ 83,336 Accrued compensation 131,736 — — 131,736 Due to affiliates 17,959 — (395 ) 17,564 Performance fee compensation payable 598,050 — — 598,050 Debt obligations 305,784 — — 305,784 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 21,056 — 21,056 Due to affiliates — 10,599 (10,599 ) — Payable for securities purchased — 208,742 — 208,742 CLO loan obligations, at fair value — 3,064,862 (33,750 ) 3,031,112 Fund borrowings — 55,070 — 55,070 Total liabilities 1,136,865 3,360,329 (44,744 ) 4,452,450 Commitments and contingencies Preferred equity (12,400,000 units issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 461,681 (123,646 ) 338,035 Non-controlling interest in Ares Operating Group entities 447,615 — — 447,615 Controlling interest in Ares Management, L.P.: Partners' Capital (80,814,732 units issued and outstanding) 301,790 — — 301,790 Accumulated other comprehensive loss, net of tax (8,939 ) — — (8,939 ) Total controlling interest in Ares Management, L.P. 292,851 — — 292,851 Total equity 1,039,227 461,681 (123,646 ) 1,377,262 Total liabilities and equity $ 2,176,092 $ 3,822,010 $ (168,390 ) $ 5,829,712 For the Three Months Ended June 30, 2017 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $19,143) $ 185,560 $ — $ (4,792 ) $ 180,768 Performance fees 337,542 — 482 338,024 Administrative and other fees 15,098 — — 15,098 Total revenues 538,200 — (4,310 ) 533,890 Expenses Compensation and benefits 131,219 — — 131,219 Performance fee compensation 261,705 — — 261,705 General, administrative and other expense 50,751 — — 50,751 Expenses of the Consolidated Funds — 8,825 (4,303 ) 4,522 Total expenses 443,675 8,825 (4,303 ) 448,197 Other income (expense) Investment income and net interest expense (includes interest expense of $5,354) (1,497 ) — (755 ) (2,252 ) Other income, net 2,822 — — 2,822 Net realized and unrealized gain on investments 27,481 — 2,598 30,079 Investment income and net interest income of the Consolidated Funds (includes interest expense of $26,875) — (4,103 ) 15,554 11,451 Net realized and unrealized loss on investments of the Consolidated Funds — 953 (13,666 ) (12,713 ) Total other income 28,806 (3,150 ) 3,731 29,387 Income (loss) before taxes 123,331 (11,975 ) 3,724 115,080 Income tax expense (benefit) 857 396 — 1,253 Net income (loss) 122,474 (12,371 ) 3,724 113,827 Less: Net loss attributable to non-controlling interests in Consolidated Funds — (12,371 ) 3,724 (8,647 ) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 72,596 — — 72,596 Net income attributable to Ares Management, L.P. 49,878 — — 49,878 Less: Preferred equity distributions paid 5,425 — — 5,425 Net income attributable to Ares Management, L.P. common unitholders $ 44,453 $ — $ — $ 44,453 For the Three Months Ended June 30, 2016 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $28,999) $ 162,612 $ — $ (4,091 ) $ 158,521 Performance fees 203,902 — (751 ) 203,151 Administrative and other fees 7,863 — — 7,863 Total revenues 374,377 — (4,842 ) 369,535 Expenses Compensation and benefits 112,654 — — 112,654 Performance fee compensation 151,896 — — 151,896 General, administrative and other expense 38,686 — — 38,686 Expenses of the Consolidated Funds — 5,288 (4,589 ) 699 Total expenses 303,236 5,288 (4,589 ) 303,935 Other income (expense) Investment income and net interest and investment income (includes interest expense of $4,828) 5,845 — (852 ) 4,993 Other income, net 5,673 — — 5,673 Net realized and unrealized loss on investments (714 ) — (2,437 ) (3,151 ) Investment income and net interest income of the Consolidated Funds (includes interest expense of $18,607) — 8,336 1,354 9,690 Net realized and unrealized gain (loss) on investments of the Consolidated Funds — (1,168 ) 1,369 201 Total other income 10,804 7,168 (566 ) 17,406 Income before taxes 81,945 1,880 (819 ) 83,006 Income tax expense (benefit) (4,441 ) 7 — (4,434 ) Net income 86,386 1,873 (819 ) 87,440 Less: Net income attributable to non-controlling interests in Consolidated Funds — 1,873 (819 ) 1,054 Less: Net income attributable to redeemable interests in Ares Operating Group entities 339 — — 339 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 48,473 — — 48,473 Net income attributable to Ares Management, L.P. common unitholders $ 37,574 $ — $ — $ 37,574 For the Six Months Ended June 30, 2017 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $52,400) $ 362,341 $ — $ (9,528 ) $ 352,813 Performance fees 395,584 — (2,388 ) 393,196 Administrative and other fees 29,538 — — 29,538 Total revenues 787,463 — (11,916 ) 775,547 Expenses Compensation and benefits 255,558 — — 255,558 Performance fee compensation 302,407 — — 302,407 General, administrative and other expense 98,089 — — 98,089 Transaction support expense 275,177 — — 275,177 Expenses of the Consolidated Funds — 19,334 (10,901 ) 8,433 Total expenses 931,231 19,334 (10,901 ) 939,664 Other income (expense) Investment income and net interest expense (includes interest expense of $10,233) (2,458 ) — (1,929 ) (4,387 ) Other income, net 19,318 — — 19,318 Net realized and unrealized gain on investments 43,328 — (10,594 ) 32,734 Investment income and net interest income of the Consolidated Funds (includes interest expense of $58,197) — 3,903 17,718 21,621 Net realized and unrealized income on investments of the Consolidated Funds — 31,392 (12,069 ) 19,323 Total other income 60,188 35,295 (6,874 ) 88,609 Income (loss) before taxes (83,580 ) 15,961 (7,889 ) (75,508 ) Income tax expense (benefit) (33,875 ) 864 — (33,011 ) Net income (loss) (49,705 ) 15,097 (7,889 ) (42,497 ) Less: Net income attributable to non-controlling interests in Consolidated Funds — 15,097 (7,889 ) 7,208 Less: Net loss attributable to non-controlling interests in Ares Operating Group entities (58,449 ) — — (58,449 ) Net income attributable to Ares Management, L.P. 8,744 — — 8,744 Less: Preferred equity distributions paid 10,850 — — 10,850 Net loss attributable to Ares Management, L.P. common unitholders $ (2,106 ) $ — $ — $ (2,106 ) For the Six Months Ended June 30, 2016 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $57,624) $ 325,280 $ — $ (8,326 ) $ 316,954 Performance fees 172,331 — 873 173,204 Administrative and other fees 15,392 — — 15,392 Total revenues 513,003 — (7,453 ) 505,550 Expenses Compensation and benefits 223,333 — — 223,333 Performance fee compensation 130,566 — — 130,566 General, administrative and other expense 78,648 — — 78,648 Expenses of the Consolidated Funds — 11,267 (10,341 ) 926 Total expenses 432,547 11,267 (10,341 ) 433,473 Other income (expense) Investment income and net interest income (includes interest expense of $9,683) 3,852 — (2,218 ) 1,634 Other income, net 10,914 — — 10,914 Net realized and unrealized gain (loss) on investments (8,849 ) — 10,840 1,991 Investment income and net interest income of the Consolidated Funds (includes interest expense of $41,056) — 13,610 3,412 17,022 Net realized and unrealized loss on investments of the Consolidated Funds — (29,245 ) (361 ) (29,606 ) Total other income (expense) 5,917 (15,635 ) 11,673 1,955 Income (loss) before taxes 86,373 (26,902 ) 14,561 74,032 Income tax expense (benefit) 1,647 (1,416 ) — 231 Net income (loss) 84,726 (25,486 ) 14,561 73,801 Less: Net loss attributable to non-controlling interests in Consolidated Funds — (25,486 ) 14,561 (10,925 ) Less: Net income attributable to redeemable interests in Ares Operating Group entities 349 — — 349 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 49,893 — — 49,893 Net income attributable to Ares Management, L.P. common unitholders $ 34,484 $ — $ — $ 34,484 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after June 30, 2017 through the date the condensed consolidated financial statements were issued. During this period the Company had the following material subsequent events that require disclosure: In August 2017, the board of directors of the Company's general partner declared a quarterly distribution of $0.31 per common unit to common unitholders of record at the close of business on August 18, 2017 , with a payment date of September 1, 2017 . In August 2017, the board of directors of the Company's general partner declared a quarterly distribution of $0.4375 per preferred equity unit to preferred equity unitholders of record at the close of business on September 15, 2017 , with a payment date of September 30, 2017 . |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Presentation The accompanying condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC. The condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. These Consolidated Funds include certain Ares-affiliated funds, related co-investment entities and collateralized loan obligations (“CLOs”) (collectively, the “Consolidated Funds”) managed by Ares Management LLC (“AM LLC”) and its wholly owned subsidiaries. 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 controlling equity. Instead, economic ownership interests of the investors in the Consolidated Funds are reflected as non-controlling interests in 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 Statements of Cash Flows. All intercompany balances and transactions have been eliminated upon consolidation. |
Reclassifications | The Company has reclassified certain prior period amounts to conform to the current year presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all Financial Accounting Standards Board (“FASB") Accounting Standards Update ("ASU") issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its condensed consolidated financial statements. Revenue Recognition: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU provides alternative methods of adoption. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, Deferral of the Effective Date. ASU 2015-14 defers the effective date of ASU 2014-09 by one year to December 15, 2017 for fiscal years, and interim periods within those years, beginning after that date and permits early adoption of the standard, but not before the original effective date for fiscal years beginning after December 15, 2016. In March, April and May 2016, the FASB issued additional ASUs clarifying certain aspects of ASU 2014-09. The core principle of ASU 2014-09 was not changed by the additional guidance. During 2016, four ASUs: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients; and ASU 2016-20 , Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , were issued to provide clarification to previously issued revenue recognition guidance (ASU 2014-09) that has not yet been implemented. These updates are required to be adopted with ASU 2014-09, but are not expected to change its application by the Company. While the Company continues to evaluate the impact of the above revenue recognitions guidance, and cannot currently quantify the impact of the guidance, the Company has begun an assessment of the impact. The assessment includes a detailed review of investment management agreements, establishing which agreements are expected to be in place, and understanding when revenue would be recognized under those agreements. The primary contracts impacted by this standard crystallize revenue on an annual basis but could have elements that prevent annual recognition subject to management’s evaluation of the investment management agreements in consideration of the new standard and its subsequent clarification. Other Guidance: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The objective of the guidance in ASU 2016-02 is to increase transparency and comparability among organizations by recognizing lease assets and liabilities in the balance sheet and disclosing key information. ASU 2016-02 amends previous lease guidance, which required a lessee to categorize and account for leases as either operating leases or capital leases, and instead requires a lessee to recognize a lease liability and a right-of-use asset on the entity’s balance sheet for all leases with terms that exceed one year. The lease liability and right-of-use asset are to be carried at the present value of remaining expected future lease payments. The guidance should be applied using a modified retrospective approach. ASU 2016-02 is effective for public entities for annual reporting periods beginning after December 15, 2018 and interim periods within those reporting periods, with early adoption permitted. The Company is currently compiling all leases and right–of–use terms to evaluate the impact of this guidance on its condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist with evaluating whether a transaction should be accounted for as an acquisition or a disposal of a business. This ASU provides specific evaluation process, and factors that should be used in this determination. The guidance should be applied prospectively. ASU 2017-01 is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods within those reporting periods, with early adoption permitted. This guidance will not have a material impact on the Company's condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. Currently, goodwill impairment requires an entity to perform a two-step test to determine the amount of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. ASU 2017-04 simplifies the goodwill impairment test by removing Step 2 of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The guidance should be applied prospectively. ASU 2017-04 is effective for public entities for annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods, with early adoption permitted. This guidance will not have a material impact on the Company's condensed consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 clarifies the application of current accounting guidance to the derecognition of nonfinancial assets, including partial sales of nonfinancial assets. This ASU specifies that an entity should allocate the consideration to each distinct asset using the guidance established in ASC 606 on allocating the transaction price to performance obligations. For partial sales of nonfinancial assets, ASU 2017-05 also requires an entity to derecognize a portion of the nonfinancial asset when the entity no longer has a controlling financial interest in the legal entity holding the asset and the entity has transferred control of the asset in accordance with ASC 606. Any noncontrolling or retained interest should be measured at fair value. The guidance should be adopted using either a full or modified retrospective approach. ASU 2017-05 is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods within those reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies the application of current accounting guidance to the modification of share-based compensation awards. This ASU specifies that an entity should account for the impact of an award modification in accordance with ASC Topic 718 unless all of the following conditions are met: (i) the fair value of the modified award is the same as the fair value of the original award prior to the modification; (ii) the vesting conditions of the modified award are the same as the original award prior to the modification; and (iii) the classification of the modified award as an equity instrument or liability instrument is the same as the original award. The guidance should be applied prospectively to awards modified on or after the adoption date. ASU 2017-09 is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods within those reporting periods, with early adoption permitted. This guidance will not have a material impact on the Company's condensed consolidated financial statements. |
Fair Value Measurements | Fair Value Measurements GAAP establishes a hierarchal disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model‑derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available. In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period. |
Derivative Instruments | In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying value for the Company's intangible assets | The following table summarizes the carrying value, net of accumulated amortization, for the Company's intangible assets: Weighted Average Amortization Period as of June 30, 2017 As of June 30, As of December 31, 2017 2016 Management contracts 2.0 years $ 67,306 $ 111,939 Client relationships 11.0 years 38,600 38,600 Trade name 5.0 years 3,200 3,200 Intangible assets 109,106 153,739 Foreign currency translation — (3,205 ) Total intangible assets 109,106 150,534 Less: accumulated amortization (61,340 ) (92,219 ) Intangible assets, net $ 47,766 $ 58,315 |
Schedule of goodwill rollforward | The following table summarizes the carrying value of the Company's goodwill assets: Credit Private Real Total Balance as of December 31, 2016 $ 32,196 $ 58,600 $ 52,928 $ 143,724 Foreign currency translation — — 100 100 Balance as of June 30, 2017 $ 32,196 $ 58,600 $ 53,028 $ 143,824 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Summary of investments held | Fair Value Investments, excluding Equity Method Investments Held at Fair Value Fair value at Fair value as a percentage of total investments at June 30, December 31, June 30, December 31, 2017 2016 2017 2016 Private Investment Partnership Interests: AREA Sponsor Holdings, LLC $ 25,711 $ 28,898 4.6 % 6.8 % ACE II Master Fund, L.P. (1)(2) 19,897 22,042 3.6 % 5.2 % Ares Corporate Opportunities Fund III, L.P. 125,097 97,549 22.3 % 22.9 % Ares Corporate Opportunities Fund IV, L.P. (2) 43,443 37,308 7.8 % 8.7 % Resolution Life L.P. 33,410 33,410 6.0 % 7.8 % Other private investment partnership interests (1)(3) 146,577 118,075 26.2 % 27.7 % Total private investment partnership interests (cost: $270,555 and $256,638 at June 30, 2017 and December 31, 2016, respectively) 394,135 337,282 70.5 % 79.1 % Collateralized loan obligations (cost: $165,706 and $89,743 at June 30, 2017 and December 31, 2016, respectively)(3) 164,807 89,111 29.3 % 20.9 % Common stock (cost: $1,128 and $124 at June 30, 2017 and December 31, 2016, respectively)(3) 1,234 100 0.2 % 0.0 % Total fair value investments (cost: $437,389 and $346,505 at June 30, 2017 and December 31, 2016, respectively) $ 560,176 $ 426,493 (1) Investment or portion of the investment is denominated in foreign currency; fair value is translated into U.S. dollars at each reporting date. (2) Represents underlying security that is held through various legal entities. (3) No single issuer or investment had a fair value that exceeded 5% of the Company's total assets. Investments held in the Consolidated Funds are summarized below: Fair value at Fair value as a percentage of total investments at June 30, December 31, June 30, December 31, 2017 2016 2017 2016 United States: Fixed income securities: Consumer discretionary $ 753,922 $ 665,773 21.8 % 20.0 % Consumer staples 45,708 64,840 1.3 % 1.9 % Energy 74,433 45,409 2.2 % 1.4 % Financials 162,618 139,285 4.7 % 4.2 % Healthcare, education and childcare 264,325 246,403 7.7 % 7.4 % Industrials 142,110 149,632 4.1 % 4.5 % Information technology 122,366 194,394 3.6 % 5.8 % Materials 130,831 139,994 3.8 % 4.2 % Telecommunication services 217,617 261,771 6.3 % 7.9 % Utilities 40,373 47,800 1.2 % 1.4 % Total fixed income securities (cost: $1,956,026 and $1,945,977 at June 30, 2017 and December 31, 2016, respectively) 1,954,303 1,955,301 56.7 % 58.7 % Equity securities: Energy 271 421 0.0 % 0.0 % Partnership and LLC interests 217,740 171,696 6.3 % 5.2 % Total equity securities (cost: $192,265 and $149,872 at June 30, 2017 and December 31, 2016, respectively) 218,011 172,117 6.3 % 5.2 % Fair value at Fair value as a percentage of total investments at June 30, December 31, June 30, December 31, 2017 2016 2017 2016 Europe: Fixed income securities: Consumer discretionary $ 353,662 $ 274,678 10.3 % 8.2 % Consumer staples 53,666 39,197 1.6 % 1.2 % Financials 54,523 28,769 1.6 % 0.9 % Healthcare, education and childcare 139,683 111,589 4.1 % 3.4 % Industrials 84,965 118,466 2.5 % 3.6 % Information technology 39,657 49,507 1.2 % 1.5 % Materials 151,706 124,629 4.4 % 3.7 % Telecommunication services 104,514 118,632 3.0 % 3.6 % Utilities 12,246 4,007 0.4 % 0.1 % Total fixed income securities (cost: $1,050,273 and $892,108 at June 30, 2017 and December 31, 2016, respectively) 994,622 869,474 29.1 % 26.2 % Equity securities: Consumer staples 1,645 1,517 0.0 % 0.0 % Healthcare, education and childcare 45,063 41,329 1.3 % 1.2 % Telecommunication services — 24 — % 0.0 % Total equity securities (cost: $67,199 and $67,290 at June 30, 2017 and December 31, 2016, respectively) 46,708 42,870 1.3 % 1.2 % Asia and other: Fixed income securities: Consumer discretionary 20,587 24,244 0.6 % 0.7 % Financials — 1,238 — % 0.0 % Healthcare, education and childcare — 10,010 — % 0.3 % Telecommunication services 11,917 8,696 0.3 % 0.3 % Total fixed income securities (cost: $32,149 and $46,545 at June 30, 2017 and December 31, 2016, respectively) 32,504 44,188 0.9 % 1.3 % Equity securities: Consumer discretionary 38,843 44,642 1.1 % 1.3 % Consumer staples 46,746 50,101 1.4 % 1.5 % Healthcare, education and childcare 44,637 32,598 1.3 % 1.0 % Industrials 16,578 16,578 0.5 % 0.5 % Total equity securities (cost: $122,418 and $122,418 at June 30, 2017 and December 31, 2016, respectively) 146,804 143,919 4.3 % 4.3 % Fair value at Fair value as a percentage of total investments at June 30, December 31, June 30, December 31, 2017 2016 2017 2016 Canada: Fixed income securities: Consumer discretionary $ 3,277 $ — 0.1 % — % Consumer staples 2,764 5,256 0.1 % 0.2 % Energy 16,488 12,830 0.5 % 0.4 % Healthcare, education and childcare — 15,509 — % 0.5 % Industrials 1,266 1,401 0.0 % 0.0 % Telecommunication services 10,659 13,852 0.3 % 0.4 % Total fixed income securities (cost: $34,299 and $48,274 at June 30, 2017 and December 31, 2016, respectively) 34,454 48,848 1.0 % 1.5 % Equity securities: Consumer discretionary 7,532 164 0.2 % 0.0 % Total equity securities (cost: $17,202 and $408 at June 30, 2017 and December 31, 2016, respectively) 7,532 164 0.2 % 0.0 % Australia: Fixed income securities: Consumer discretionary 4,347 5,627 0.1 % 0.2 % Energy 2,517 6,046 0.1 % 0.2 % Industrials — 2,926 — % 0.1 % Utilities — 21,154 — % 0.6 % Total fixed income securities (cost: $8,087 and $37,975 at June 30, 2017 and December 31, 2016, respectively) 6,864 35,753 0.2 % 1.1 % Equity securities: Utilities — 17,569 — % 0.5 % Total equity securities (cost: $0 and $18,442 at June 30, 2017 and December 31, 2016, respectively) — 17,569 — % 0.5 % Total fixed income securities 3,022,747 2,953,564 87.9 % 88.8 % Total equity securities 419,055 376,639 12.1 % 11.2 % Total investments, at fair value $ 3,441,802 $ 3,330,203 |
Schedule of equity method investments | The Company's equity method investments, including those where the fair value option was elected, are summarized below: As of June 30, As of December 31, 2017 2016 Equity method investment $ 3,480 $ 3,616 Equity method investments at fair value 17,104 21,843 Total equity method investments $ 20,584 $ 25,459 |
Summary of cost and fair value of investments classified as HTM | A summary of the cost and fair value of CLO notes classified as held-to maturity investments is as follows: As of June 30, As of December 31, 2017 2016 Amortized cost $ 17,921 $ 16,519 Unrealized gain (loss), net 142 (116 ) Fair value $ 18,063 $ 16,403 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of valuation of investments and other financial instruments by fair value hierarchy levels | The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and Consolidated Funds as of June 30, 2017 : Financial Instruments of the Company Level I Level II Level III Investments Total Investments, at fair value Fixed income-collateralized loan obligations $ — $ — $ 164,807 $ — $ 164,807 Equity securities 236 998 — — 1,234 Partnership interests — — 33,410 377,829 411,239 Total investments, at fair value 236 998 198,217 377,829 577,280 Derivative assets, at fair value Foreign exchange contracts — 384 — — 384 Total derivative assets, at fair value — 384 — — 384 Total assets, at fair value $ 236 $ 1,382 $ 198,217 $ 377,829 $ 577,664 Liabilities, at fair value Derivative liabilities: Foreign exchange contracts $ — $ (3,737 ) $ — $ — $ (3,737 ) Total derivative liabilities — (3,737 ) — — (3,737 ) Contingent consideration — — (1,940 ) — (1,940 ) Total liabilities, at fair value $ — $ (3,737 ) $ (1,940 ) $ — $ (5,677 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Investments, at fair value Fixed income investments: Bonds $ — $ 96,698 $ 8,833 $ 105,531 Loans — 2,732,616 173,466 2,906,082 Collateralized loan obligations — 5,856 5,280 11,136 Total fixed income investments — 2,835,170 187,579 3,022,749 Equity securities 55,039 — 146,274 201,313 Partnership interests — — 217,740 217,740 Total investments, at fair value 55,039 2,835,170 551,593 3,441,802 Derivative assets, at fair value Other — — 2,809 2,809 Total derivative assets, at fair value — — 2,809 2,809 Total assets, at fair value $ 55,039 $ 2,835,170 $ 554,402 $ 3,444,611 Liabilities, at fair value Loan obligations of CLOs $ — $ (3,093,598 ) $ — $ (3,093,598 ) Total liabilities, at fair value $ — $ (3,093,598 ) $ — $ (3,093,598 ) The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and Consolidated Funds as of December 31, 2016 : Financial Instruments of the Company Level I Level II Level III Investments Total Investments, at fair value Fixed income-collateralized loan obligations $ — $ — $ 89,111 $ — $ 89,111 Equity securities 100 — — — 100 Partnership interests — — 33,410 325,715 359,125 Total investments, at fair value 100 — 122,521 325,715 448,336 Derivative assets, at fair value Foreign exchange contracts — 3,171 — — 3,171 Total derivative assets, at fair value — 3,171 — — 3,171 Total assets, at fair value $ 100 $ 3,171 $ 122,521 $ 325,715 $ 451,507 Liabilities, at fair value Contingent considerations $ — $ — $ (22,156 ) $ — $ (22,156 ) Total liabilities, at fair value $ — $ — $ (22,156 ) $ — $ (22,156 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Investments, at fair value Fixed income investments: Bonds $ — $ 104,886 $ 37,063 $ 141,949 Loans — 2,606,423 199,217 2,805,640 Collateralized loan obligations — — 5,973 5,973 Total fixed income investments — 2,711,309 242,253 2,953,562 Equity securities 56,662 17,569 130,690 204,921 Partnership interests — — 171,696 171,696 Other — 24 — 24 Total investments, at fair value 56,662 2,728,902 544,639 3,330,203 Derivative assets, at fair value Foreign exchange contracts — 529 — 529 Other — — 291 291 Total derivative assets, at fair value — 529 291 820 Total assets, at fair value $ 56,662 $ 2,729,431 $ 544,930 $ 3,331,023 Liabilities, at fair value Other derivative liabilities $ — $ — $ (2,999 ) $ (2,999 ) Loan obligations of CLOs — (3,031,112 ) — (3,031,112 ) Total liabilities, at fair value $ — $ (3,031,112 ) $ (2,999 ) $ (3,034,111 ) |
Summary of changes in the fair value of the Level III investments | The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2017 : Level III Assets Level III Liabilities Level III Assets and Liabilities of the Company Fixed Income Partnership Total Contingent Considerations Balance, beginning of period $ 108,253 $ 33,410 $ 141,663 $ 1,909 Purchases(1) 60,242 — 60,242 — Sales(2) (3,324 ) — (3,324 ) — Realized and unrealized appreciation (depreciation), net (364 ) — (364 ) 31 Balance, end of period $ 164,807 $ 33,410 $ 198,217 $ 1,940 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ (625 ) $ — $ (625 ) $ 31 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 142,358 $ 278,829 $ 196,690 $ 845 $ 618,722 Transfer in 444 18,356 — — 18,800 Transfer out — (108,757 ) — — (108,757 ) Purchases(1) — 56,292 50,000 — 106,292 Sales(2) — (60,481 ) (30,000 ) — (90,481 ) Settlements, net — — — (888 ) (888 ) Amortized discounts/premiums — (78 ) — (100 ) (178 ) Realized and unrealized appreciation, net 3,472 3,418 1,050 2,952 10,892 Balance, end of period $ 146,274 $ 187,579 $ 217,740 $ 2,809 $ 554,402 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 3,472 $ (277 ) $ 1,050 $ 3,145 $ 7,390 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended June 30, 2016 : Level III Assets Level III Liabilities Level III Assets and Liabilities of the Company Fixed Income Partnership Total Contingent Considerations Balance, beginning of period $ 54,118 $ 58,203 $ 112,321 $ 41,059 Purchases(1) 4 1,667 1,671 — Sales(2) (1,517 ) — (1,517 ) — Realized and unrealized appreciation (depreciation), net 1,550 (15,124 ) (13,574 ) (24 ) Balance, end of period $ 54,155 $ 44,746 $ 98,901 $ 41,035 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 718 $ (15,123 ) $ (14,405 ) $ (24 ) Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 141,805 $ 212,209 $ 103,621 $ (4,127 ) $ 453,508 Transfer in — 83,608 — — 83,608 Transfer out (15,384 ) (31,290 ) — — (46,674 ) Purchases(1) 9,668 32,622 5,800 — 48,090 Sales(2) — (48,276 ) — — (48,276 ) Settlements, net — — — 88 88 Amortized discounts/premiums — 255 — (206 ) 49 Realized and unrealized appreciation (depreciation), net 7,245 (11,756 ) 6,019 2,169 3,677 Balance, end of period $ 143,334 $ 237,372 $ 115,440 $ (2,076 ) $ 494,070 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 7,245 $ (2,340 ) $ 6,020 $ 1,967 $ 12,892 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the six months ended June 30, 2017 : Level III Assets Level III Liabilities Level III Assets and Liabilities of the Company Fixed Income Partnership Total Contingent Considerations Balance, beginning of period $ 89,111 $ 33,410 $ 122,521 $ 22,156 Purchases(1) 80,684 169 80,853 — Sales(2) (5,241 ) — (5,241 ) — Realized and unrealized appreciation (depreciation), net 253 (169 ) 84 (20,216 ) Balance, end of period $ 164,807 $ 33,410 $ 198,217 $ 1,940 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ (155 ) $ — $ (155 ) $ 61 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 130,690 $ 242,253 $ 171,696 $ (2,708 ) $ 541,931 Transfer in — 34,182 — — 34,182 Transfer out (6,160 ) (108,806 ) — — (114,966 ) Purchases(1) 6,692 93,111 73,000 — 172,803 Sales(2) — (76,714 ) (30,000 ) — (106,714 ) Settlements, net — — — 1,966 1,966 Amortized discounts/premiums — 46 — 216 262 Realized and unrealized appreciation, net 15,052 3,507 3,044 3,335 24,938 Balance, end of period $ 146,274 $ 187,579 $ 217,740 $ 2,809 $ 554,402 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 15,749 $ (785 ) $ 3,044 $ 3,914 $ 21,922 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales include distributions, principal redemptions and securities disposed of in connection with restructurings. |
Summary of quantitative inputs and assumptions used for Level III inputs | The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of June 30, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 33,410 Other N/A N/A Collateralized loan obligations 164,807 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 198,217 Liabilities Contingent consideration liability $ 1,940 Discounted cash flow Discount rate 6.4% Total $ 1,940 The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of December 31, 2016 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 33,410 Other N/A N/A Collateralized loan obligations 89,111 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 122,521 Liabilities Contingent consideration liabilities $ 20,278 Other N/A N/A 1,878 Discounted cash flow Discount rate 6.5% Total $ 22,156 The following table summarizes the quantitative inputs and assumptions used for the Consolidated Funds’ Level III measurements as of June 30, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Assets Equity securities $ 46,707 Enterprise value market multiple analysis EBITDA multiple(2) 2.3x - 7.9x 2.5x 61,215 Market approach (comparable companies) Net income multiple 30.0x - 45.0x 36.5x 271 Broker quotes and/or 3rd party pricing services N/A N/A N/A 217,740 Discounted cash flow Discount rate 17.0% 17.0% 38,081 Recent transaction price(1) N/A N/A N/A Fixed income securities 134,462 Broker quotes and/or 3rd party pricing services N/A N/A N/A 52,909 Income approach Yield 6.0% - 14.3% 9.4% 208 Market approach (comparable companies) EBITDA multiple(2) 5.6x 5.6x Derivative instruments of Consolidated Funds 2,809 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 554,402 (1) Recent transaction price consists of securities recently purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The following table summarizes the quantitative inputs and assumptions used for the Consolidated Funds’ Level III measurements as of December 31, 2016 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 43,011 Enterprise value market multiple analysis EBITDA multiple(2) 2.0x - 11.2x 2.3x 32,598 Market approach (comparable companies) Net income multiple 30.0x - 40.0x 35.0x 421 Broker quotes and/or 3rd party pricing services N/A N/A N/A 171,696 Discounted cash flow Discount rate 20% 20% 54,660 Recent transaction price(1) N/A N/A N/A Fixed income securities 170,231 Broker quotes and/or 3rd party pricing services N/A N/A N/A 6,693 Enterprise value market multiple analysis EBITDA multiple(2) 7.1x 7.1x 5,473 Income approach Collection rates 1.2x 1.2x 28,595 Income approach Yield 6.0% - 13.6% 10.9% 24,052 Discounted cash flow Discount rate 7.8% - 15.3% 11.1% 1,776 Market approach (comparable companies) EBITDA multiple(2) 6.5x 6.5x 4,887 Recent transaction price(1) N/A N/A N/A 546 Market approach EBITDA multiple(2) 6.1x 6.1x Derivative instruments of Consolidated Funds 291 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 544,930 Liabilities Derivatives instruments of Consolidated Funds $ (2,999 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (2,999 ) (1) Recent transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. |
Summary of fair value by segment along with the remaining unfunded commitment and any redemption restriction of investments valued using NAV per share | The Company's investments valued using net asset value (“NAV”) per share have terms and conditions that do not allow for redemption without certain events or approvals that are outside the Company's control. A summary of fair value by segment and the remaining unfunded commitment are presented below: As of June 30, 2017 As of December 31, 2016 Segment Fair Value Unfunded Fair Value Unfunded Credit Group $ 62,812 $ 71,352 $ 53,131 $ 30,896 Private Equity Group 217,531 329,962 181,096 96,687 Real Estate Group 79,028 55,355 71,669 35,708 Non-core investments(1) 18,458 32,435 19,819 34,500 Totals $ 377,829 $ 489,104 $ 325,715 $ 197,791 (1) Non-core investments are held at the Company's Operations Management Group ("OMG"). |
DERIVATIVE FINANCIAL INSTRUME29
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value and notional amounts of derivative contracts by major product type on a gross basis | The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds as of June 30, 2017 and December 31, 2016 : As of June 30, 2017 As of December 31, 2016 Assets Liabilities Assets Liabilities The Company Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ 32,616 $ 384 $ 84,564 $ 3,737 $ 62,830 $ 3,171 $ — $ — Total derivatives, at fair value(2) $ 32,616 $ 384 $ 84,564 $ 3,737 $ 62,830 $ 3,171 $ — $ — As of June 30, 2017 As of December 31, 2016 Assets Liabilities Assets Liabilities Consolidated Funds Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Foreign exchange contracts $ — $ — $ — $ — $ 25,304 $ 529 $ — $ — Other financial instruments 8,011 2,809 — — 3,575 291 (204 ) (2,999 ) Total derivatives, at fair value(3) 8,011 2,809 — — 28,879 820 (204 ) (2,999 ) Other—equity(4) — — — — 253 24 — — Total $ 8,011 $ 2,809 $ — $ — $ 29,132 $ 844 $ (204 ) $ (2,999 ) (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of June 30, 2017 , the Company had the right to, but elected not to, offset $0.4 million of its derivative assets and liabilities. As of December 31, 2016 , the Company did not have any derivative liabilities to offset its derivative assets. (3) As of June 30, 2017 and December 31, 2016 , the Consolidated Funds offset $0.1 million and $1.4 million of their derivative assets and liabilities, respectively. (4) Includes the fair value of warrants which are presented as equity securities within investments of the Consolidated Funds in the Condensed Consolidated Statements of Financial Condition. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings outstanding | As of June 30, 2017 and December 31, 2016 the following loan obligations were outstanding and classified as liabilities of the Company’s Consolidated CLOs: As of June 30, 2017 As of December 31, 2016 Loan Obligations Fair Value of Loan Obligations Weighted Loan Fair Value of Loan Obligations Weighted Average Remaining Maturity In Years Senior secured notes(1) $ 2,914,099 $ 2,905,347 9.78 $ 2,839,779 $ 2,841,440 9.68 Subordinated notes(2) 257,209 188,251 10.05 284,046 189,672 9.97 Total loan obligations of Consolidated CLOs $ 3,171,308 $ 3,093,598 $ 3,123,825 $ 3,031,112 (1) Original borrowings under the senior secured notes totaled $3.2 billion , with various maturity dates ranging from October 2024 to April 2030. The weighted average interest rate as of June 30, 2017 was 3.72% . (2) Original borrowings under the subordinated notes totaled $257.2 million , with various maturity dates ranging from October 2024 to April 2030. They do not have contractual interest rates, but instead receive distributions from the excess cash flows generated by each Consolidated CLO. The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding as of June 30, 2017 and December 31, 2016 : As of June 30, 2017 As of December 31, 2016 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan(1) Effective Rate Outstanding Loan(1) Effective Rate Credit Facilities: 1/1/2023 $ 18,000 $ 12,942 2.75% $ 12,942 2.38% 6/30/2018 45,686 11,422 1.55% (2) 42,128 1.55% (2) 3/7/2018 71,500 50,000 2.39% N/A N/A Revolving Term Loan 8/19/2019 14,286 9,361 5.55% N/A N/A Total borrowings $ 83,725 $ 55,070 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. (2) The effective rate is based on the three month EURIBOR or zero , whichever is higher, plus an applicable margin. The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of June 30, 2017 As of December 31, 2016 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility(1) Revolver 2/24/2022 N/A $ 135,000 2.65% $ — —% Senior Notes(2) 10/8/2014 10/8/2024 $ 250,000 244,992 4.21% 244,684 4.21% 2015 Term Loan(3) 9/2/2015 7/29/2026 $ 35,250 35,073 3.02% 35,063 2.74% 2016 Term Loan(4) 12/21/2016 1/15/2029 $ 26,376 25,991 2.88% 26,037 2.66% 2017 Term Loan A(4) 3/22/2017 1/22/2028 $ 17,600 17,470 2.70% N/A N/A 2017 Term Loan B(4) 5/10/2017 10/15/2029 $ 35,198 35,124 2.63% N/A N/A 2017 Term Loan C(4) 6/22/2017 7/30/2029 $ 17,211 17,206 2.75% N/A N/A Total debt obligations $ 510,856 $ 305,784 (1) The AOG entities are borrowers under the Credit Facility, which, as amended in February 2017, provides a $1.04 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of June 30, 2017, base rate loans bear interest calculated based on the base rate plus 0.50% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.50%. The unused commitment fee is 0.20% per annum. There is a base rate and LIBOR floor of zero . (2) The Senior Notes were issued in October 2014 by Ares Finance Co. LLC, a subsidiary of the Company, at 98.268% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture . (3) The 2015 Term Loan was entered into in August 2015 by a subsidiary of the Company that acts as a manager to a CLO. The 2015 Term Loan is secured by collateral in the form of CLO senior tranches owned by the Company. To the extent the assets are not sufficient to cover the Term Loan, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.025% of a maximum investment amount . (4) The 2016 and 2017 Term Loans ("Term Loans") were entered into by a subsidiary of the Company. The Term Loans are secured by collateral in the form of CLO senior tranches and subordinated notes owned by the Company. Collateral associated with one of the Term Loans may be used to satisfy outstanding liabilities of another term loan should the collateral fall short. To the extent the assets associated with these Term Loans are not sufficient, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.03% of a maximum investment amount. The following table shows the activity of the Company's debt issuance costs: Credit Facility(1) Senior Notes(2) Term Loans(2) Unamortized debt issuance costs as of December 31, 2016 $ 4,800 $ 1,803 $ 526 Debt issuance costs incurred 3,343 — 276 Amortization of debt issuance costs (863 ) (116 ) (32 ) Unamortized debt issuance costs as of June 30, 2017 $ 7,280 $ 1,687 $ 770 (1) Unamortized debt issuance costs of the Credit Facility are included in other assets in the Condensed Consolidated Statements of Financial Condition. (2) Unamortized debt issuance costs of the Senior Notes and Term Loans are presented on a net basis with the net carrying value of the Company’s debt obligations in the Condensed Consolidated Statements of Financial Condition. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of amounts due from and to affiliates | The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were comprised of the following: As of June 30, As of December 31, 2017 2016 Due from affiliates: Management fees receivable from non-consolidated funds $ 115,437 $ 123,781 Payments made on behalf of and amounts due from non-consolidated funds and employees 41,935 39,155 Due from affiliates—Company $ 157,372 $ 162,936 Amounts due from portfolio companies and non-consolidated funds $ 5,503 $ 3,592 Due from affiliates—Consolidated Funds $ 5,503 $ 3,592 Due to affiliates: Management fee rebate payable to non-consolidated funds $ 5,120 $ 7,914 Management fees received in advance 7,720 1,788 Tax receivable agreement liability 4,748 4,748 Payments made by non-consolidated funds on behalf of and payable by the Company 6,303 3,114 Due to affiliates—Company $ 23,891 $ 17,564 |
EARNINGS PER COMMON UNIT (Table
EARNINGS PER COMMON UNIT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from earnings per common unit | The computation of diluted earnings per common unit for the three and six months ended June 30, 2017 and 2016 excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Options 21,155,026 23,363,784 21,244,858 23,429,835 Restricted units 39,082 64,516 14,463,590 94,363 AOG units 130,249,329 132,350,586 130,325,826 132,366,701 |
Schedule of the computation of basic and diluted earnings per common unit | The following table presents the computation of basic and diluted earnings per common unit: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Net income (loss) attributable to Ares Management, L.P. common unitholders $ 44,453 $ 37,574 $ (2,106 ) $ 34,484 Earnings distributed to participating securities (restricted units) (419 ) (180 ) (1,246 ) (408 ) Preferred stock dividends(1) — (4 ) — (8 ) Net income (loss) available to common unitholders $ 44,034 $ 37,390 $ (3,352 ) $ 34,068 Basic weighted-average common units 81,829,086 80,715,723 81,469,967 80,699,387 Basic earnings per common unit $ 0.54 $ 0.46 $ (0.04 ) $ 0.42 Net income (loss) attributable to Ares Management, L.P. common unitholders $ 44,453 $ 37,574 $ (2,106 ) $ 34,484 Earnings distributed to participating securities (restricted units) — — (1,246 ) — Preferred stock dividends(1) — (4 ) — (8 ) Net income (loss) available to common unitholders $ 44,453 $ 37,570 $ (3,352 ) $ 34,476 Effect of dilutive units: Restricted units 2,490,796 1,616,470 — 1,053,081 Diluted weighted-average common units 84,319,882 82,332,193 81,469,967 81,752,468 Diluted earnings per common unit $ 0.53 $ 0.46 $ (0.04 ) $ 0.42 (1) Dividends relate to the preferred shares that were issued by Ares Real Estate Holdings LLC and were redeemed on July 1, 2016. |
EQUITY COMPENSATION (Tables)
EQUITY COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of equity-based compensation expense, net of assumed forfeitures | Equity-based compensation expense, net of forfeitures is included in the following table: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Restricted units $ 14,601 $ 4,684 $ 25,818 $ 9,448 Options 3,931 4,547 7,413 8,460 Phantom units 385 305 775 801 Equity-based compensation expense $ 18,917 $ 9,536 $ 34,006 $ 18,709 |
Summary of unvested restricted units' activity | The following table presents unvested restricted units’ activity during the six months ended June 30, 2017 : Restricted Units Weighted Average Grant Date Fair Value Per Unit Balance - January 1, 2017 8,058,372 $ 16.38 Granted 7,944,144 18.61 Vested (1,757,514 ) 16.48 Forfeited (388,694 ) 18.40 Balance - June 30, 2017 13,856,308 $ 17.58 |
Summary of unvested options activity | A summary of options activity during the six months ended June 30, 2017 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value Balance - January 1, 2017 22,232,134 $ 19.00 7.35 Granted — — — Exercised (54,500 ) 19.00 — Expired (389,575 ) 19.00 — Forfeited (633,033 ) 19.00 — Balance - June 30, 2017 21,155,026 $ 18.99 6.87 $ — Exercisable at June 30, 2017 7,151,023 $ 19.00 6.86 $ — |
Summary of unvested phantom units activity | A summary of unvested phantom unit activity during the six months ended June 30, 2017 is presented below: Phantom Units Weighted Average Balance - January 1, 2017 266,138 $ 19.00 Vested (87,222 ) 19.00 Forfeited (7,036 ) 19.00 Balance - June 30, 2017 171,880 $ 19.00 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of financial results for Company's operating segments, as well as the OMG | The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2017 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $19,143) $ 112,654 $ 56,427 $ 16,479 $ 185,560 $ — $ 185,560 Other fees 5,663 338 19 6,020 — 6,020 Compensation and benefits (44,754 ) (18,388 ) (9,714 ) (72,856 ) (30,990 ) (103,846 ) General, administrative and other expenses (7,949 ) (4,345 ) (3,091 ) (15,385 ) (18,961 ) (34,346 ) Fee related earnings 65,614 34,032 3,693 103,339 (49,951 ) 53,388 Performance fees—realized 7,883 64,780 1,467 74,130 — 74,130 Performance fees—unrealized 5,093 228,747 29,789 263,629 — 263,629 Performance fee compensation—realized (1,898 ) (50,914 ) (161 ) (52,973 ) — (52,973 ) Performance fee compensation—unrealized (6,079 ) (184,021 ) (18,632 ) (208,732 ) — (208,732 ) Net performance fees 4,999 58,592 12,463 76,054 — 76,054 Investment income—realized 2,525 2,717 373 5,615 1,340 6,955 Investment income (loss)—unrealized (3,450 ) 25,354 1,134 23,038 (2,728 ) 20,310 Interest and other investment income (expense) 2,958 1,983 1,534 6,475 225 6,700 Interest expense (3,065 ) (1,397 ) (429 ) (4,891 ) (463 ) (5,354 ) Net investment income (loss) (1,032 ) 28,657 2,612 30,237 (1,626 ) 28,611 Performance related earnings 3,967 87,249 15,075 106,291 (1,626 ) 104,665 Economic net income $ 69,581 $ 121,281 $ 18,768 $ 209,630 $ (51,577 ) $ 158,053 Distributable earnings $ 67,010 $ 47,973 $ 4,747 $ 119,730 $ (50,038 ) $ 69,692 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2016 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $28,999) $ 109,141 $ 37,241 $ 16,230 $ 162,612 $ — $ 162,612 Other fees 550 334 435 1,319 — 1,319 Compensation and benefits (45,937 ) (15,495 ) (10,633 ) (72,065 ) (24,988 ) (97,053 ) General, administrative and other expenses (6,799 ) (3,324 ) (2,511 ) (12,634 ) (14,679 ) (27,313 ) Fee related earnings 56,955 18,756 3,521 79,232 (39,667 ) 39,565 Performance fees—realized 16,024 62,779 2,801 81,604 — 81,604 Performance fees—unrealized 16,351 105,702 1,261 123,314 — 123,314 Performance fee compensation—realized (754 ) (50,224 ) (53 ) (51,031 ) — (51,031 ) Performance fee compensation—unrealized (14,604 ) (84,488 ) (1,773 ) (100,865 ) — (100,865 ) Net performance fees 17,017 33,769 2,236 53,022 — 53,022 Investment income (loss)—realized (280 ) 3,406 695 3,821 (31 ) 3,790 Investment income (loss)—unrealized 5,391 2,061 (1,067 ) 6,385 (11,904 ) (5,519 ) Interest and other investment income (expense) 8,098 8,206 36 16,340 (19 ) 16,321 Interest expense (2,450 ) (1,397 ) (272 ) (4,119 ) (709 ) (4,828 ) Net investment income (loss) 10,759 12,276 (608 ) 22,427 (12,663 ) 9,764 Performance related earnings 27,776 46,045 1,628 75,449 (12,663 ) 62,786 Economic net income $ 84,731 $ 64,801 $ 5,149 $ 154,681 $ (52,330 ) $ 102,351 Distributable earnings $ 73,342 $ 40,310 $ 7,781 $ 121,433 $ (44,613 ) $ 76,820 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2017 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $52,400) $ 234,001 $ 96,246 $ 32,094 $ 362,341 $ — $ 362,341 Other fees 10,166 678 10 10,854 — 10,854 Compensation and benefits (96,096 ) (31,606 ) (19,450 ) (147,152 ) (57,304 ) (204,456 ) General, administrative and other expenses (15,915 ) (8,543 ) (5,822 ) (30,280 ) (38,349 ) (68,629 ) Fee related earnings 132,156 56,775 6,832 195,763 (95,653 ) 100,110 Performance fees—realized 16,661 64,780 1,494 82,935 — 82,935 Performance fees—unrealized 8,029 260,984 43,877 312,890 — 312,890 Performance fee compensation—realized (7,183 ) (50,914 ) (177 ) (58,274 ) — (58,274 ) Performance fee compensation—unrealized (7,537 ) (209,526 ) (27,070 ) (244,133 ) — (244,133 ) Net performance fees 9,970 65,324 18,124 93,418 — 93,418 Investment income—realized 2,843 3,296 2,156 8,295 3,199 11,494 Investment income (loss)—unrealized 1,139 33,900 690 35,729 (4,135 ) 31,594 Interest and other investment income 2,939 2,135 1,353 6,427 1,099 7,526 Interest expense (5,523 ) (2,910 ) (861 ) (9,294 ) (939 ) (10,233 ) Net investment income (loss) 1,398 36,421 3,338 41,157 (776 ) 40,381 Performance related earnings 11,368 101,745 21,462 134,575 (776 ) 133,799 Economic net income $ 143,524 $ 158,520 $ 28,294 $ 330,338 $ (96,429 ) $ 233,909 Distributable earnings $ 131,282 $ 69,887 $ 7,860 $ 209,029 $ (98,428 ) $ 110,601 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2016 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $57,624) $ 216,388 $ 75,917 $ 32,975 $ 325,280 $ — $ 325,280 Other fees 659 674 693 2,026 — 2,026 Compensation and benefits (89,846 ) (29,859 ) (21,868 ) (141,573 ) (51,265 ) (192,838 ) General, administrative and other expenses (12,109 ) (6,564 ) (5,952 ) (24,625 ) (31,230 ) (55,855 ) Fee related earnings 115,092 40,168 5,848 161,108 (82,495 ) 78,613 Performance fees—realized 22,202 62,779 2,972 87,953 — 87,953 Performance fees—unrealized (12,696 ) 93,279 5,383 85,966 — 85,966 Performance fee compensation—realized (2,737 ) (50,224 ) (53 ) (53,014 ) — (53,014 ) Performance fee compensation—unrealized 1,833 (75,379 ) (4,006 ) (77,552 ) — (77,552 ) Net performance fees 8,602 30,455 4,296 43,353 — 43,353 Investment income (loss)—realized (198 ) 3,374 563 3,739 (88 ) 3,651 Investment income (loss)—unrealized 3,796 (8,096 ) 1,732 (2,568 ) (11,519 ) (14,087 ) Interest and other investment income (expense) 15,677 8,115 928 24,720 (68 ) 24,652 Interest expense (4,898 ) (2,802 ) (546 ) (8,246 ) (1,437 ) (9,683 ) Net investment income (loss) 14,377 591 2,677 17,645 (13,112 ) 4,533 Performance related earnings 22,979 31,046 6,973 60,998 (13,112 ) 47,886 Economic net income $ 138,071 $ 71,214 $ 12,821 $ 222,106 $ (95,607 ) $ 126,499 Distributable earnings $ 139,815 $ 58,681 $ 10,459 $ 208,955 $ (90,854 ) $ 118,101 |
Schedule of segment’ revenue, expenses and other income (expense) | The following table presents the components of the Company’s operating segments’ revenue, expenses and other income (expense): For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Segment Revenues Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) $ 185,560 $ 162,612 $ 362,341 $ 325,280 Other fees 6,020 1,319 10,854 2,026 Performance fees—realized 74,130 81,604 82,935 87,953 Performance fees—unrealized 263,629 123,314 312,890 85,966 Total segment revenues $ 529,339 $ 368,849 $ 769,020 $ 501,225 Segment Expenses Compensation and benefits $ 72,856 $ 72,065 $ 147,152 $ 141,573 General, administrative and other expenses 15,385 12,634 30,280 24,625 Performance fee compensation—realized 52,973 51,031 58,274 53,014 Performance fee compensation—unrealized 208,732 100,865 244,133 77,552 Total segment expenses $ 349,946 $ 236,595 $ 479,839 $ 296,764 Other Income (Expense) Investment income (loss)—realized $ 5,615 $ 3,821 $ 8,295 $ 3,739 Investment income (loss)—unrealized 23,038 6,385 35,729 (2,568 ) Interest and other investment income (expense) 6,475 16,340 6,427 24,720 Interest expense (4,891 ) (4,119 ) (9,294 ) (8,246 ) Total other income (expense) $ 30,237 $ 22,427 $ 41,157 $ 17,645 |
Schedule of segment revenues components | The following table reconciles segment revenue to Ares consolidated revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Total segment revenue $ 529,339 $ 368,849 $ 769,020 $ 501,225 Revenue of Consolidated Funds eliminated in consolidation (4,310 ) (4,842 ) (11,916 ) (7,453 ) Administrative fees(1) 9,132 6,544 18,738 13,366 Performance fees reclass(2) (217 ) (1,016 ) (241 ) (1,588 ) Revenue of non-controlling interests in consolidated subsidiaries(3) (54 ) — (54 ) — Total consolidated adjustments and reconciling items 4,551 686 6,527 4,325 Total consolidated revenue $ 533,890 $ 369,535 $ 775,547 $ 505,550 (1) Represents administrative fees that are presented in administrative and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance 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. (3) Adjustments for administrative fees reimbursed and other revenue items attributable to certain of our joint venture partners. |
Schedule of segment expenses components | The following table reconciles segment expenses to Ares consolidated expenses: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Total segment expenses $ 349,946 $ 236,595 $ 479,839 $ 296,764 Expenses of Consolidated Funds added in consolidation 8,825 5,288 19,334 11,267 Expenses of Consolidated Funds eliminated in consolidation (4,303 ) (4,589 ) (10,901 ) (10,341 ) Administrative fees(1) 9,132 6,544 18,738 13,366 OMG expenses 49,951 39,667 95,653 82,495 Acquisition and merger-related expenses 724 85 276,060 353 Equity compensation expense 18,917 9,536 34,006 18,709 Placement fees and underwriting costs 6,383 1,754 9,822 2,684 Amortization of intangibles 5,274 7,121 10,549 14,384 Depreciation expense 2,774 1,934 5,990 3,792 Expenses of non-controlling interests in consolidated subsidiaries(2) 574 — 574 — Total consolidation adjustments and reconciling items 98,251 67,340 459,825 136,709 Total consolidated expenses $ 448,197 $ 303,935 $ 939,664 $ 433,473 (1) Represents administrative fees that are presented in administrative and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Adjustments to eliminate costs being borne by certain of our joint venture partners. |
Schedule of segment other income (expense) components | The following table reconciles segment other income (expense) to Ares consolidated other income: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Total other income (expense) $ 30,237 $ 22,427 $ 41,157 $ 17,645 Other income (expense) from Consolidated Funds added in consolidation, net (3,150 ) 7,168 35,295 (15,635 ) Other income (expense) from Consolidated Funds eliminated in consolidation, net 3,731 (566 ) (6,874 ) 11,673 Other income of non-controlling interests in consolidated subsidiaries(1) 5 — 5 — OMG other expense (1,626 ) (12,663 ) (776 ) (13,112 ) Performance fee reclass(2) 217 1,016 241 1,588 Changes in fair value of contingent consideration (32 ) 24 20,216 (204 ) Offering costs 5 — (655 ) — Total consolidation adjustments and reconciling items (850 ) (5,021 ) 47,452 (15,690 ) Total consolidated other income $ 29,387 $ 17,406 $ 88,609 $ 1,955 (1) Adjustments to eliminate costs being borne by certain of our joint venture partners. (2) 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. |
Reconciliation of segment results to the Company's income before taxes and total assets | The following table presents the reconciliation of income before taxes as reported in the Condensed Consolidated Statements of Operations to segment results of ENI, FRE, PRE and DE: For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Economic net income Income (loss) before taxes $ 115,080 $ 83,006 $ (75,508 ) $ 74,032 Adjustments: Amortization of intangibles 5,274 7,121 10,549 14,384 Depreciation expense 2,774 1,934 5,990 3,792 Equity compensation expenses 18,917 9,536 34,006 18,709 Acquisition and merger-related expenses 756 61 255,844 557 Placement fees and underwriting costs 6,383 1,754 9,822 2,684 OMG expenses, net 51,577 52,330 96,429 95,607 Offering costs (5 ) — 655 — (Income) loss before taxes of non-controlling interests in consolidated subsidiaries(1) 623 — 623 — (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations 8,251 (1,061 ) (8,072 ) 12,341 Total consolidation adjustments and reconciling items 94,550 71,675 405,846 148,074 Economic net income 209,630 154,681 330,338 222,106 Total performance fees income - realized (74,130 ) (81,604 ) (82,935 ) (87,953 ) Total performance fees income - unrealized (263,629 ) (123,314 ) (312,890 ) (85,966 ) Total performance fee compensation - realized 52,973 51,031 58,274 53,014 Total performance fee compensation - unrealized 208,732 100,865 244,133 77,552 Total investment income (30,237 ) (22,427 ) (41,157 ) (17,645 ) Fee related earnings 103,339 79,232 195,763 161,108 Performance fees—realized 74,130 81,604 82,935 87,953 Performance fee compensation—realized (52,973 ) (51,031 ) (58,274 ) (53,014 ) Investment and other income (expense) realized, net 4,522 14,657 5,907 18,828 Additional adjustments: Dividend equivalent(2) (1,520 ) (706 ) (4,201 ) (1,390 ) One-time acquisition costs(2) (11 ) (12 ) (23 ) (282 ) Income tax expense(2) (381 ) (249 ) (607 ) (481 ) Non-cash items 322 683 136 847 Placement fees and underwriting costs(2) (6,383 ) (1,747 ) (9,822 ) (2,685 ) Depreciation and amortization(2) (1,315 ) (998 ) (2,785 ) (1,929 ) Distributable earnings $ 119,730 $ 121,433 $ 209,029 $ 208,955 Performance related earnings Economic net income $ 209,630 $ 154,681 $ 330,338 $ 222,106 Less: fee related earnings (103,339 ) (79,232 ) (195,763 ) (161,108 ) Performance related earnings $ 106,291 $ 75,449 $ 134,575 $ 60,998 (1) Adjustments to eliminate costs being borne by certain of our joint venture partners. (2) Certain costs are reduced by the amounts attributable to OMG, which is excluded from segment results. |
CONSOLIDATION (Tables)
CONSOLIDATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of interest in VIEs | The Company's interests and the Consolidated Funds' interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and their respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of June 30, As of December 31, 2017 2016 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs $ 371,688 $ 268,950 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs $ 140,478 $ 153,746 Assets of consolidated VIEs $ 3,936,175 $ 3,822,010 Liabilities of consolidated VIEs $ 3,471,917 $ 3,360,329 For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Net income (loss) attributable to non-controlling interests related to consolidated VIEs $ (8,647 ) $ 1,054 $ 7,208 $ (10,925 ) |
Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition | The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of June 30, 2017 and December 31, 2016 and results from operations for the three and six months ended June 30, 2017 and 2016 . As of June 30, 2017 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 137,256 $ — $ — $ 137,256 Investments (includes fair value investments of $577,280) 739,159 — (140,478 ) 598,681 Performance fees receivable 1,085,407 — (2,632 ) 1,082,775 Due from affiliates 162,380 — (5,008 ) 157,372 Deferred tax asset, net 39,080 — — 39,080 Other assets 101,520 — — 101,520 Intangible assets, net 47,766 — — 47,766 Goodwill 143,824 — — 143,824 Assets of Consolidated Funds Cash and cash equivalents — 424,652 — 424,652 Investments, at fair value — 3,441,802 — 3,441,802 Due from affiliates — 5,503 — 5,503 Dividends and interest receivable — 6,797 — 6,797 Receivable for securities sold — 52,494 — 52,494 Other assets — 4,927 — 4,927 Total assets $ 2,456,392 $ 3,936,175 $ (148,118 ) $ 6,244,449 Liabilities Accounts payable, accrued expenses and other liabilities $ 84,745 $ — $ — $ 84,745 Accrued compensation 89,100 — — 89,100 Due to affiliates 23,891 — — 23,891 Performance fee compensation payable 844,789 — — 844,789 Debt obligations 510,856 — — 510,856 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 33,638 — 33,638 Due to affiliates — 7,639 (7,639 ) — Payable for securities purchased — 231,634 — 231,634 CLO loan obligations, at fair value — 3,115,281 (21,683 ) 3,093,598 Fund borrowings — 83,725 — 83,725 Total liabilities 1,553,381 3,471,917 (29,322 ) 4,995,976 Commitments and contingencies Preferred equity (12,400,000 units issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 464,258 (118,796 ) 345,462 Non-controlling interest in Ares Operating Group entities 333,641 — — 333,641 Controlling interest in Ares Management, L.P.: Partners' Capital (82,131,000 units issued and outstanding) 278,012 — — 278,012 Accumulated other comprehensive loss, net of tax (7,403 ) — — (7,403 ) Total controlling interest in Ares Management, L.P. 270,609 — — 270,609 Total equity 903,011 464,258 (118,796 ) 1,248,473 Total liabilities and equity $ 2,456,392 $ 3,936,175 $ (148,118 ) $ 6,244,449 As of December 31, 2016 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 342,861 $ — $ — $ 342,861 Investments (includes fair value investments of $448,336) 622,215 — (153,744 ) 468,471 Performance fees receivable 767,429 — (8,330 ) 759,099 Due from affiliates 169,252 — (6,316 ) 162,936 Deferred tax asset, net 6,731 — — 6,731 Other assets 65,565 — — 65,565 Intangible assets, net 58,315 — — 58,315 Goodwill 143,724 — — 143,724 Assets of Consolidated Funds Cash and cash equivalents — 455,280 — 455,280 Investments, at fair value — 3,330,203 — 3,330,203 Due from affiliates — 3,592 — 3,592 Dividends and interest receivable — 8,479 — 8,479 Receivable for securities sold — 21,955 — 21,955 Other assets — 2,501 — 2,501 Total assets $ 2,176,092 $ 3,822,010 $ (168,390 ) $ 5,829,712 Liabilities Accounts payable, accrued expenses and other liabilities $ 83,336 $ — $ — $ 83,336 Accrued compensation 131,736 — — 131,736 Due to affiliates 17,959 — (395 ) 17,564 Performance fee compensation payable 598,050 — — 598,050 Debt obligations 305,784 — — 305,784 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 21,056 — 21,056 Due to affiliates — 10,599 (10,599 ) — Payable for securities purchased — 208,742 — 208,742 CLO loan obligations, at fair value — 3,064,862 (33,750 ) 3,031,112 Fund borrowings — 55,070 — 55,070 Total liabilities 1,136,865 3,360,329 (44,744 ) 4,452,450 Commitments and contingencies Preferred equity (12,400,000 units issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 461,681 (123,646 ) 338,035 Non-controlling interest in Ares Operating Group entities 447,615 — — 447,615 Controlling interest in Ares Management, L.P.: Partners' Capital (80,814,732 units issued and outstanding) 301,790 — — 301,790 Accumulated other comprehensive loss, net of tax (8,939 ) — — (8,939 ) Total controlling interest in Ares Management, L.P. 292,851 — — 292,851 Total equity 1,039,227 461,681 (123,646 ) 1,377,262 Total liabilities and equity $ 2,176,092 $ 3,822,010 $ (168,390 ) $ 5,829,712 |
Schedule of results from operations | For the Three Months Ended June 30, 2017 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $19,143) $ 185,560 $ — $ (4,792 ) $ 180,768 Performance fees 337,542 — 482 338,024 Administrative and other fees 15,098 — — 15,098 Total revenues 538,200 — (4,310 ) 533,890 Expenses Compensation and benefits 131,219 — — 131,219 Performance fee compensation 261,705 — — 261,705 General, administrative and other expense 50,751 — — 50,751 Expenses of the Consolidated Funds — 8,825 (4,303 ) 4,522 Total expenses 443,675 8,825 (4,303 ) 448,197 Other income (expense) Investment income and net interest expense (includes interest expense of $5,354) (1,497 ) — (755 ) (2,252 ) Other income, net 2,822 — — 2,822 Net realized and unrealized gain on investments 27,481 — 2,598 30,079 Investment income and net interest income of the Consolidated Funds (includes interest expense of $26,875) — (4,103 ) 15,554 11,451 Net realized and unrealized loss on investments of the Consolidated Funds — 953 (13,666 ) (12,713 ) Total other income 28,806 (3,150 ) 3,731 29,387 Income (loss) before taxes 123,331 (11,975 ) 3,724 115,080 Income tax expense (benefit) 857 396 — 1,253 Net income (loss) 122,474 (12,371 ) 3,724 113,827 Less: Net loss attributable to non-controlling interests in Consolidated Funds — (12,371 ) 3,724 (8,647 ) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 72,596 — — 72,596 Net income attributable to Ares Management, L.P. 49,878 — — 49,878 Less: Preferred equity distributions paid 5,425 — — 5,425 Net income attributable to Ares Management, L.P. common unitholders $ 44,453 $ — $ — $ 44,453 For the Three Months Ended June 30, 2016 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $28,999) $ 162,612 $ — $ (4,091 ) $ 158,521 Performance fees 203,902 — (751 ) 203,151 Administrative and other fees 7,863 — — 7,863 Total revenues 374,377 — (4,842 ) 369,535 Expenses Compensation and benefits 112,654 — — 112,654 Performance fee compensation 151,896 — — 151,896 General, administrative and other expense 38,686 — — 38,686 Expenses of the Consolidated Funds — 5,288 (4,589 ) 699 Total expenses 303,236 5,288 (4,589 ) 303,935 Other income (expense) Investment income and net interest and investment income (includes interest expense of $4,828) 5,845 — (852 ) 4,993 Other income, net 5,673 — — 5,673 Net realized and unrealized loss on investments (714 ) — (2,437 ) (3,151 ) Investment income and net interest income of the Consolidated Funds (includes interest expense of $18,607) — 8,336 1,354 9,690 Net realized and unrealized gain (loss) on investments of the Consolidated Funds — (1,168 ) 1,369 201 Total other income 10,804 7,168 (566 ) 17,406 Income before taxes 81,945 1,880 (819 ) 83,006 Income tax expense (benefit) (4,441 ) 7 — (4,434 ) Net income 86,386 1,873 (819 ) 87,440 Less: Net income attributable to non-controlling interests in Consolidated Funds — 1,873 (819 ) 1,054 Less: Net income attributable to redeemable interests in Ares Operating Group entities 339 — — 339 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 48,473 — — 48,473 Net income attributable to Ares Management, L.P. common unitholders $ 37,574 $ — $ — $ 37,574 For the Six Months Ended June 30, 2017 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $52,400) $ 362,341 $ — $ (9,528 ) $ 352,813 Performance fees 395,584 — (2,388 ) 393,196 Administrative and other fees 29,538 — — 29,538 Total revenues 787,463 — (11,916 ) 775,547 Expenses Compensation and benefits 255,558 — — 255,558 Performance fee compensation 302,407 — — 302,407 General, administrative and other expense 98,089 — — 98,089 Transaction support expense 275,177 — — 275,177 Expenses of the Consolidated Funds — 19,334 (10,901 ) 8,433 Total expenses 931,231 19,334 (10,901 ) 939,664 Other income (expense) Investment income and net interest expense (includes interest expense of $10,233) (2,458 ) — (1,929 ) (4,387 ) Other income, net 19,318 — — 19,318 Net realized and unrealized gain on investments 43,328 — (10,594 ) 32,734 Investment income and net interest income of the Consolidated Funds (includes interest expense of $58,197) — 3,903 17,718 21,621 Net realized and unrealized income on investments of the Consolidated Funds — 31,392 (12,069 ) 19,323 Total other income 60,188 35,295 (6,874 ) 88,609 Income (loss) before taxes (83,580 ) 15,961 (7,889 ) (75,508 ) Income tax expense (benefit) (33,875 ) 864 — (33,011 ) Net income (loss) (49,705 ) 15,097 (7,889 ) (42,497 ) Less: Net income attributable to non-controlling interests in Consolidated Funds — 15,097 (7,889 ) 7,208 Less: Net loss attributable to non-controlling interests in Ares Operating Group entities (58,449 ) — — (58,449 ) Net income attributable to Ares Management, L.P. 8,744 — — 8,744 Less: Preferred equity distributions paid 10,850 — — 10,850 Net loss attributable to Ares Management, L.P. common unitholders $ (2,106 ) $ — $ — $ (2,106 ) For the Six Months Ended June 30, 2016 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $57,624) $ 325,280 $ — $ (8,326 ) $ 316,954 Performance fees 172,331 — 873 173,204 Administrative and other fees 15,392 — — 15,392 Total revenues 513,003 — (7,453 ) 505,550 Expenses Compensation and benefits 223,333 — — 223,333 Performance fee compensation 130,566 — — 130,566 General, administrative and other expense 78,648 — — 78,648 Expenses of the Consolidated Funds — 11,267 (10,341 ) 926 Total expenses 432,547 11,267 (10,341 ) 433,473 Other income (expense) Investment income and net interest income (includes interest expense of $9,683) 3,852 — (2,218 ) 1,634 Other income, net 10,914 — — 10,914 Net realized and unrealized gain (loss) on investments (8,849 ) — 10,840 1,991 Investment income and net interest income of the Consolidated Funds (includes interest expense of $41,056) — 13,610 3,412 17,022 Net realized and unrealized loss on investments of the Consolidated Funds — (29,245 ) (361 ) (29,606 ) Total other income (expense) 5,917 (15,635 ) 11,673 1,955 Income (loss) before taxes 86,373 (26,902 ) 14,561 74,032 Income tax expense (benefit) 1,647 (1,416 ) — 231 Net income (loss) 84,726 (25,486 ) 14,561 73,801 Less: Net loss attributable to non-controlling interests in Consolidated Funds — (25,486 ) 14,561 (10,925 ) Less: Net income attributable to redeemable interests in Ares Operating Group entities 349 — — 349 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 49,893 — — 49,893 Net income attributable to Ares Management, L.P. common unitholders $ 34,484 $ — $ — $ 34,484 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of investing groups | 3 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - ARCC - American Capital Ltd. $ in Millions | Jan. 03, 2017USD ($) |
Business Acquisition [Line Items] | |
Merger transaction value | $ 4,200 |
Payments to shareholders | $ 275.2 |
GOODWILL AND INTANGIBLE ASSET38
GOODWILL AND INTANGIBLE ASSETS (Carrying Value of Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Finite-lived intangible assets, net | ||||||
Intangible assets | $ 109,106 | $ 109,106 | $ 153,739 | |||
Foreign currency translation | 0 | 0 | (3,205) | |||
Total intangible assets | 109,106 | 109,106 | 150,534 | |||
Less: accumulated amortization | (61,340) | (61,340) | (92,219) | |||
Intangible assets, net | 47,766 | 47,766 | 58,315 | |||
Amortization expense | $ 10,500 | $ 14,400 | ||||
Fully-amortized intangibles, amount removed during the period | $ 41,400 | |||||
General, administrative and other expense | ||||||
Finite-lived intangible assets, net | ||||||
Amortization expense | 5,200 | $ 7,100 | ||||
Management contracts | ||||||
Finite-lived intangible assets, net | ||||||
Weighted average amortization period | 2 years | |||||
Intangible assets | 67,306 | $ 67,306 | 111,939 | |||
Client relationships | ||||||
Finite-lived intangible assets, net | ||||||
Weighted average amortization period | 11 years | |||||
Intangible assets | 38,600 | $ 38,600 | 38,600 | |||
Trade name | ||||||
Finite-lived intangible assets, net | ||||||
Weighted average amortization period | 5 years | |||||
Intangible assets | $ 3,200 | $ 3,200 | $ 3,200 |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 143,724,000 | |
Foreign currency translation | 100,000 | |
Goodwill, ending balance | 143,824,000 | |
Impairments of goodwill | 0 | $ 0 |
Credit | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 32,196,000 | |
Foreign currency translation | 0 | |
Goodwill, ending balance | 32,196,000 | |
Private Equity | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 58,600,000 | |
Foreign currency translation | 0 | |
Goodwill, ending balance | 58,600,000 | |
Real Estate | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 52,928,000 | |
Foreign currency translation | 100,000 | |
Goodwill, ending balance | $ 53,028,000 |
INVESTMENTS (Fair Value Investm
INVESTMENTS (Fair Value Investments, excluding Equity Method Investments Held at Fair Value) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017USD ($)issuer | Dec. 31, 2016USD ($) | |
Investments | ||
Number of single issuers above 5% | issuer | 0 | |
Single issuer or investor threshold, as a percent | 5.00% | |
Ares Management L.P | ||
Investments | ||
Fair value investments | $ 560,176 | $ 426,493 |
Investments, at cost | 437,389 | 346,505 |
Partnership interests | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 394,135 | $ 337,282 |
Fair value as a percentage of total investments | 70.50% | 79.10% |
Investments, at cost | $ 270,555 | $ 256,638 |
Collateralized Debt Obligations | Ares Management L.P | ||
Investments | ||
Investments, at cost | 165,706 | 89,743 |
Common Stock | Ares Management L.P | ||
Investments | ||
Investments, at cost | 1,128 | 124 |
AREA Sponsor Holdings, LLC | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 25,711 | $ 28,898 |
Fair value as a percentage of total investments | 4.60% | 6.80% |
ACE II Master Fund L.P. | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 19,897 | $ 22,042 |
Fair value as a percentage of total investments | 3.60% | 5.20% |
Ares Corporate Opportunities Fund III, L.P. | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 125,097 | $ 97,549 |
Fair value as a percentage of total investments | 22.30% | 22.90% |
Ares Corporate Opportunities Fund IV, L.P. | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 43,443 | $ 37,308 |
Fair value as a percentage of total investments | 7.80% | 8.70% |
Resolution Life L.P. | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 33,410 | $ 33,410 |
Fair value as a percentage of total investments | 6.00% | 7.80% |
Other private investment partnership Interests | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 146,577 | $ 118,075 |
Fair value as a percentage of total investments | 26.20% | 27.70% |
Collateralized loan obligations interests | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 164,807 | $ 89,111 |
Fair value as a percentage of total investments | 29.30% | 20.90% |
Common stock | Ares Management L.P | ||
Investments | ||
Fair value investments | $ 1,234 | $ 100 |
Fair value as a percentage of total investments | 0.20% | 0.00% |
INVESTMENTS (Equity Method Inve
INVESTMENTS (Equity Method Investments) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | ||
Equity method investment | $ 3,480 | $ 3,616 |
Equity method investments at fair value | 17,104 | 21,843 |
Total equity method investments | $ 20,584 | $ 25,459 |
INVESTMENTS (Held to Maturity)
INVESTMENTS (Held to Maturity) (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||
Amortized cost | $ 17,921,000 | $ 16,519,000 | |
Unrealized gain (loss), net | 142,000 | (116,000) | |
Fair value | 18,063,000 | $ 16,403,000 | |
Sales of investments during the period | $ 0 | $ 0 | |
Investment maturity period | 10 years |
INVESTMENTS (Investments of the
INVESTMENTS (Investments of the Consolidated Funds) (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017USD ($)issuer | Dec. 31, 2016USD ($)issuer | |
Investments | ||
Number of single issuers above 5% | issuer | 0 | |
Single issuer or investor threshold, as a percent | 5.00% | |
Consolidated Funds | ||
Investments | ||
Investments, at fair value | $ 3,441,802 | $ 3,330,203 |
Number of single issuers above 5% | issuer | 0 | 0 |
Single issuer or investor threshold, as a percent | 5.00% | 5.00% |
Consolidated Funds | Fixed Income | ||
Investments | ||
Investments, at fair value | $ 3,022,747 | $ 2,953,564 |
Fair value as a percentage of total investments | 87.90% | 88.80% |
Consolidated Funds | Equity securities | ||
Investments | ||
Investments, at fair value | $ 419,055 | $ 376,639 |
Fair value as a percentage of total investments | 12.10% | 11.20% |
Consolidated Funds | United States | Fixed Income | ||
Investments | ||
Investments, at fair value | $ 1,954,303 | $ 1,955,301 |
Fair value as a percentage of total investments | 56.70% | 58.70% |
Investments, at cost | $ 1,956,026 | $ 1,945,977 |
Consolidated Funds | United States | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments, at fair value | $ 753,922 | $ 665,773 |
Fair value as a percentage of total investments | 21.80% | 20.00% |
Consolidated Funds | United States | Fixed Income | Consumer staples | ||
Investments | ||
Investments, at fair value | $ 45,708 | $ 64,840 |
Fair value as a percentage of total investments | 1.30% | 1.90% |
Consolidated Funds | United States | Fixed Income | Energy | ||
Investments | ||
Investments, at fair value | $ 74,433 | $ 45,409 |
Fair value as a percentage of total investments | 2.20% | 1.40% |
Consolidated Funds | United States | Fixed Income | Financials | ||
Investments | ||
Investments, at fair value | $ 162,618 | $ 139,285 |
Fair value as a percentage of total investments | 4.70% | 4.20% |
Consolidated Funds | United States | Fixed Income | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | $ 264,325 | $ 246,403 |
Fair value as a percentage of total investments | 7.70% | 7.40% |
Consolidated Funds | United States | Fixed Income | Industrials | ||
Investments | ||
Investments, at fair value | $ 142,110 | $ 149,632 |
Fair value as a percentage of total investments | 4.10% | 4.50% |
Consolidated Funds | United States | Fixed Income | Information technology | ||
Investments | ||
Investments, at fair value | $ 122,366 | $ 194,394 |
Fair value as a percentage of total investments | 3.60% | 5.80% |
Consolidated Funds | United States | Fixed Income | Materials | ||
Investments | ||
Investments, at fair value | $ 130,831 | $ 139,994 |
Fair value as a percentage of total investments | 3.80% | 4.20% |
Consolidated Funds | United States | Fixed Income | Telecommunication services | ||
Investments | ||
Investments, at fair value | $ 217,617 | $ 261,771 |
Fair value as a percentage of total investments | 6.30% | 7.90% |
Consolidated Funds | United States | Fixed Income | Utilities | ||
Investments | ||
Investments, at fair value | $ 40,373 | $ 47,800 |
Fair value as a percentage of total investments | 1.20% | 1.40% |
Consolidated Funds | United States | Equity securities | ||
Investments | ||
Investments, at fair value | $ 218,011 | $ 172,117 |
Fair value as a percentage of total investments | 6.30% | 5.20% |
Investments, at cost | $ 192,265 | $ 149,872 |
Consolidated Funds | United States | Equity securities | Energy | ||
Investments | ||
Investments, at fair value | $ 271 | $ 421 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | United States | Equity securities | Partnership and LLC interests | ||
Investments | ||
Investments, at fair value | $ 217,740 | $ 171,696 |
Fair value as a percentage of total investments | 6.30% | 5.20% |
Consolidated Funds | Europe | Fixed Income | ||
Investments | ||
Investments, at fair value | $ 994,622 | $ 869,474 |
Fair value as a percentage of total investments | 29.10% | 26.20% |
Investments, at cost | $ 1,050,273 | $ 892,108 |
Consolidated Funds | Europe | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments, at fair value | $ 353,662 | $ 274,678 |
Fair value as a percentage of total investments | 10.30% | 8.20% |
Consolidated Funds | Europe | Fixed Income | Consumer staples | ||
Investments | ||
Investments, at fair value | $ 53,666 | $ 39,197 |
Fair value as a percentage of total investments | 1.60% | 1.20% |
Consolidated Funds | Europe | Fixed Income | Financials | ||
Investments | ||
Investments, at fair value | $ 54,523 | $ 28,769 |
Fair value as a percentage of total investments | 1.60% | 0.90% |
Consolidated Funds | Europe | Fixed Income | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | $ 139,683 | $ 111,589 |
Fair value as a percentage of total investments | 4.10% | 3.40% |
Consolidated Funds | Europe | Fixed Income | Industrials | ||
Investments | ||
Investments, at fair value | $ 84,965 | $ 118,466 |
Fair value as a percentage of total investments | 2.50% | 3.60% |
Consolidated Funds | Europe | Fixed Income | Information technology | ||
Investments | ||
Investments, at fair value | $ 39,657 | $ 49,507 |
Fair value as a percentage of total investments | 1.20% | 1.50% |
Consolidated Funds | Europe | Fixed Income | Materials | ||
Investments | ||
Investments, at fair value | $ 151,706 | $ 124,629 |
Fair value as a percentage of total investments | 4.40% | 3.70% |
Consolidated Funds | Europe | Fixed Income | Telecommunication services | ||
Investments | ||
Investments, at fair value | $ 104,514 | $ 118,632 |
Fair value as a percentage of total investments | 3.00% | 3.60% |
Consolidated Funds | Europe | Fixed Income | Utilities | ||
Investments | ||
Investments, at fair value | $ 12,246 | $ 4,007 |
Fair value as a percentage of total investments | 0.40% | 0.10% |
Consolidated Funds | Europe | Equity securities | ||
Investments | ||
Investments, at fair value | $ 46,708 | $ 42,870 |
Fair value as a percentage of total investments | 1.30% | 1.20% |
Investments, at cost | $ 67,199 | $ 67,290 |
Consolidated Funds | Europe | Equity securities | Consumer staples | ||
Investments | ||
Investments, at fair value | $ 1,645 | $ 1,517 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Europe | Equity securities | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | $ 45,063 | $ 41,329 |
Fair value as a percentage of total investments | 1.30% | 1.20% |
Consolidated Funds | Europe | Equity securities | Telecommunication services | ||
Investments | ||
Investments, at fair value | $ 0 | $ 24 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Asia and other | Fixed Income | ||
Investments | ||
Investments, at fair value | $ 32,504 | $ 44,188 |
Fair value as a percentage of total investments | 0.90% | 1.30% |
Investments, at cost | $ 32,149 | $ 46,545 |
Consolidated Funds | Asia and other | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments, at fair value | $ 20,587 | $ 24,244 |
Fair value as a percentage of total investments | 0.60% | 0.70% |
Consolidated Funds | Asia and other | Fixed Income | Financials | ||
Investments | ||
Investments, at fair value | $ 0 | $ 1,238 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Asia and other | Fixed Income | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | $ 0 | $ 10,010 |
Fair value as a percentage of total investments | 0.00% | 0.30% |
Consolidated Funds | Asia and other | Fixed Income | Telecommunication services | ||
Investments | ||
Investments, at fair value | $ 11,917 | $ 8,696 |
Fair value as a percentage of total investments | 0.30% | 0.30% |
Consolidated Funds | Asia and other | Equity securities | ||
Investments | ||
Investments, at fair value | $ 146,804 | $ 143,919 |
Fair value as a percentage of total investments | 4.30% | 4.30% |
Investments, at cost | $ 122,418 | $ 122,418 |
Consolidated Funds | Asia and other | Equity securities | Consumer discretionary | ||
Investments | ||
Investments, at fair value | $ 38,843 | $ 44,642 |
Fair value as a percentage of total investments | 1.10% | 1.30% |
Consolidated Funds | Asia and other | Equity securities | Consumer staples | ||
Investments | ||
Investments, at fair value | $ 46,746 | $ 50,101 |
Fair value as a percentage of total investments | 1.40% | 1.50% |
Consolidated Funds | Asia and other | Equity securities | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | $ 44,637 | $ 32,598 |
Fair value as a percentage of total investments | 1.30% | 1.00% |
Consolidated Funds | Asia and other | Equity securities | Industrials | ||
Investments | ||
Investments, at fair value | $ 16,578 | $ 16,578 |
Fair value as a percentage of total investments | 0.50% | 0.50% |
Consolidated Funds | Canada | Fixed Income | ||
Investments | ||
Investments, at fair value | $ 34,454 | $ 48,848 |
Fair value as a percentage of total investments | 1.00% | 1.50% |
Investments, at cost | $ 34,299 | $ 48,274 |
Consolidated Funds | Canada | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments, at fair value | $ 3,277 | $ 0 |
Fair value as a percentage of total investments | 0.10% | 0.00% |
Consolidated Funds | Canada | Fixed Income | Consumer staples | ||
Investments | ||
Investments, at fair value | $ 2,764 | $ 5,256 |
Fair value as a percentage of total investments | 0.10% | 0.20% |
Consolidated Funds | Canada | Fixed Income | Energy | ||
Investments | ||
Investments, at fair value | $ 16,488 | $ 12,830 |
Fair value as a percentage of total investments | 0.50% | 0.40% |
Consolidated Funds | Canada | Fixed Income | Healthcare, education and childcare | ||
Investments | ||
Investments, at fair value | $ 0 | $ 15,509 |
Fair value as a percentage of total investments | 0.00% | 0.50% |
Consolidated Funds | Canada | Fixed Income | Industrials | ||
Investments | ||
Investments, at fair value | $ 1,266 | $ 1,401 |
Fair value as a percentage of total investments | 0.00% | 0.00% |
Consolidated Funds | Canada | Fixed Income | Telecommunication services | ||
Investments | ||
Investments, at fair value | $ 10,659 | $ 13,852 |
Fair value as a percentage of total investments | 0.30% | 0.40% |
Consolidated Funds | Canada | Equity securities | ||
Investments | ||
Investments, at fair value | $ 7,532 | $ 164 |
Fair value as a percentage of total investments | 0.20% | 0.00% |
Investments, at cost | $ 17,202 | $ 408 |
Consolidated Funds | Canada | Equity securities | Energy | ||
Investments | ||
Investments, at fair value | $ 7,532 | $ 164 |
Fair value as a percentage of total investments | 0.20% | 0.00% |
Consolidated Funds | Australia | Fixed Income | ||
Investments | ||
Investments, at fair value | $ 6,864 | $ 35,753 |
Fair value as a percentage of total investments | 0.20% | 1.10% |
Investments, at cost | $ 8,087 | $ 37,975 |
Consolidated Funds | Australia | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments, at fair value | $ 4,347 | $ 5,627 |
Fair value as a percentage of total investments | 0.10% | 0.20% |
Consolidated Funds | Australia | Fixed Income | Energy | ||
Investments | ||
Investments, at fair value | $ 2,517 | $ 6,046 |
Fair value as a percentage of total investments | 0.10% | 0.20% |
Consolidated Funds | Australia | Fixed Income | Industrials | ||
Investments | ||
Investments, at fair value | $ 0 | $ 2,926 |
Fair value as a percentage of total investments | 0.00% | 0.10% |
Consolidated Funds | Australia | Fixed Income | Utilities | ||
Investments | ||
Investments, at fair value | $ 0 | $ 21,154 |
Fair value as a percentage of total investments | 0.00% | 0.60% |
Consolidated Funds | Australia | Equity securities | ||
Investments | ||
Investments, at fair value | $ 0 | $ 17,569 |
Fair value as a percentage of total investments | 0.00% | 0.50% |
Investments, at cost | $ 0 | $ 18,442 |
Consolidated Funds | Australia | Equity securities | Utilities | ||
Investments | ||
Investments, at fair value | $ 0 | $ 17,569 |
Fair value as a percentage of total investments | 0.00% | 0.50% |
FAIR VALUE (Assets and Liabilit
FAIR VALUE (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
FAIR VALUE | ||
Investments Measured at NAV | $ 377,829 | $ 325,715 |
Ares Management L.P | ||
FAIR VALUE | ||
Investments, at fair value | 577,280 | 448,336 |
Investments Measured at NAV | 377,829 | 325,715 |
Derivative assets, at fair value | 384 | 3,171 |
Assets, at fair value | 577,664 | 451,507 |
Total derivative liabilities | (3,737) | |
Contingent consideration | (1,940) | (22,156) |
Total liabilities, at fair value | (5,677) | (22,156) |
Ares Management L.P | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 384 | 3,171 |
Derivative liabilities, at fair value | (3,737) | |
Ares Management L.P | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 164,807 | 89,111 |
Ares Management L.P | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 1,234 | 100 |
Ares Management L.P | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 411,239 | 359,125 |
Investments Measured at NAV | 377,829 | 325,715 |
Ares Management L.P | Level I | ||
FAIR VALUE | ||
Investments, at fair value | 236 | 100 |
Derivative assets, at fair value | 0 | 0 |
Assets, at fair value | 236 | 100 |
Total derivative liabilities | 0 | |
Contingent consideration | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level I | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 0 | 0 |
Derivative liabilities, at fair value | 0 | |
Ares Management L.P | Level I | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Ares Management L.P | Level I | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 236 | 100 |
Ares Management L.P | Level I | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Ares Management L.P | Level II | ||
FAIR VALUE | ||
Investments, at fair value | 998 | 0 |
Derivative assets, at fair value | 384 | 3,171 |
Assets, at fair value | 1,382 | 3,171 |
Total derivative liabilities | (3,737) | |
Contingent consideration | 0 | 0 |
Total liabilities, at fair value | (3,737) | 0 |
Ares Management L.P | Level II | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 384 | 3,171 |
Derivative liabilities, at fair value | (3,737) | |
Ares Management L.P | Level II | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Ares Management L.P | Level II | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 998 | 0 |
Ares Management L.P | Level II | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Ares Management L.P | Level III | ||
FAIR VALUE | ||
Investments, at fair value | 198,217 | 122,521 |
Derivative assets, at fair value | 0 | 0 |
Assets, at fair value | 198,217 | 122,521 |
Total derivative liabilities | 0 | |
Contingent consideration | (1,940) | (22,156) |
Total liabilities, at fair value | (1,940) | (22,156) |
Ares Management L.P | Level III | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 0 | 0 |
Derivative liabilities, at fair value | 0 | |
Ares Management L.P | Level III | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 164,807 | 89,111 |
Ares Management L.P | Level III | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Ares Management L.P | Level III | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 33,410 | 33,410 |
Consolidated Funds | ||
FAIR VALUE | ||
Investments, at fair value | 3,441,802 | 3,330,203 |
Derivative assets, at fair value | 2,809 | 820 |
Assets, at fair value | 3,444,611 | 3,331,023 |
Loan obligations of CLOs | (3,093,598) | (3,031,112) |
Total liabilities, at fair value | (3,093,598) | (3,034,111) |
Consolidated Funds | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 529 | |
Consolidated Funds | Other | ||
FAIR VALUE | ||
Derivative assets, at fair value | 2,809 | 291 |
Derivative liabilities, at fair value | (2,999) | |
Consolidated Funds | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 11,136 | 5,973 |
Consolidated Funds | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 201,313 | 204,921 |
Consolidated Funds | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 217,740 | 171,696 |
Consolidated Funds | Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 105,531 | 141,949 |
Consolidated Funds | Fixed Income | ||
FAIR VALUE | ||
Investments, at fair value | 3,022,749 | 2,953,562 |
Consolidated Funds | Loans | ||
FAIR VALUE | ||
Investments, at fair value | 2,906,082 | 2,805,640 |
Consolidated Funds | Other | ||
FAIR VALUE | ||
Investments, at fair value | 24 | |
Consolidated Funds | Level I | ||
FAIR VALUE | ||
Investments, at fair value | 55,039 | 56,662 |
Derivative assets, at fair value | 0 | 0 |
Assets, at fair value | 55,039 | 56,662 |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Consolidated Funds | Level I | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 0 | |
Consolidated Funds | Level I | Other | ||
FAIR VALUE | ||
Derivative assets, at fair value | 0 | 0 |
Derivative liabilities, at fair value | 0 | |
Consolidated Funds | Level I | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Consolidated Funds | Level I | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 55,039 | 56,662 |
Consolidated Funds | Level I | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Consolidated Funds | Level I | Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Consolidated Funds | Level I | Fixed Income | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Consolidated Funds | Level I | Loans | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Consolidated Funds | Level I | Other | ||
FAIR VALUE | ||
Investments, at fair value | 0 | |
Consolidated Funds | Level II | ||
FAIR VALUE | ||
Investments, at fair value | 2,835,170 | 2,728,902 |
Derivative assets, at fair value | 0 | 529 |
Assets, at fair value | 2,835,170 | 2,729,431 |
Loan obligations of CLOs | (3,093,598) | (3,031,112) |
Total liabilities, at fair value | (3,093,598) | (3,031,112) |
Consolidated Funds | Level II | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 529 | |
Consolidated Funds | Level II | Other | ||
FAIR VALUE | ||
Derivative assets, at fair value | 0 | 0 |
Derivative liabilities, at fair value | 0 | |
Consolidated Funds | Level II | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 5,856 | 0 |
Consolidated Funds | Level II | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 17,569 |
Consolidated Funds | Level II | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 0 | 0 |
Consolidated Funds | Level II | Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 96,698 | 104,886 |
Consolidated Funds | Level II | Fixed Income | ||
FAIR VALUE | ||
Investments, at fair value | 2,835,170 | 2,711,309 |
Consolidated Funds | Level II | Loans | ||
FAIR VALUE | ||
Investments, at fair value | 2,732,616 | 2,606,423 |
Consolidated Funds | Level II | Other | ||
FAIR VALUE | ||
Investments, at fair value | 24 | |
Consolidated Funds | Level III | ||
FAIR VALUE | ||
Investments, at fair value | 551,593 | 544,639 |
Derivative assets, at fair value | 2,809 | 291 |
Assets, at fair value | 554,402 | 544,930 |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | 0 | (2,999) |
Consolidated Funds | Level III | Foreign exchange contracts | ||
FAIR VALUE | ||
Derivative assets, at fair value | 0 | |
Consolidated Funds | Level III | Other | ||
FAIR VALUE | ||
Derivative assets, at fair value | 2,809 | 291 |
Derivative liabilities, at fair value | (2,999) | |
Consolidated Funds | Level III | Fixed income-collateralized loan obligations | ||
FAIR VALUE | ||
Investments, at fair value | 5,280 | 5,973 |
Consolidated Funds | Level III | Equity securities | ||
FAIR VALUE | ||
Investments, at fair value | 146,274 | 130,690 |
Consolidated Funds | Level III | Partnership interests | ||
FAIR VALUE | ||
Investments, at fair value | 217,740 | 171,696 |
Consolidated Funds | Level III | Bonds | ||
FAIR VALUE | ||
Investments, at fair value | 8,833 | 37,063 |
Consolidated Funds | Level III | Fixed Income | ||
FAIR VALUE | ||
Investments, at fair value | 187,579 | 242,253 |
Consolidated Funds | Level III | Loans | ||
FAIR VALUE | ||
Investments, at fair value | $ 173,466 | 199,217 |
Consolidated Funds | Level III | Other | ||
FAIR VALUE | ||
Investments, at fair value | $ 0 |
FAIR VALUE (Changes in Fair Val
FAIR VALUE (Changes in Fair Value of Level III Measurements) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)investment | Jun. 30, 2016USD ($) | |
Contingent Considerations | ||||
Transfer from a Level II to a Level I fair value measurement | $ 7,500 | $ 7,500 | ||
Number of investments transfered | investment | 2 | |||
Ares Management L.P | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 141,663 | $ 112,321 | $ 122,521 | $ 107,455 |
Purchases | 60,242 | 1,671 | 80,853 | 8,174 |
Sales | (3,324) | (1,517) | (5,241) | (2,293) |
Realized and unrealized appreciation (depreciation), net | (364) | (13,574) | 84 | (14,435) |
Balance, end of period | 198,217 | 98,901 | 198,217 | 98,901 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (625) | (14,405) | (155) | (15,578) |
Contingent Considerations | ||||
Balance, beginning of period | 1,909 | 41,059 | 22,156 | 40,831 |
Purchases | 0 | 0 | 0 | 0 |
Sales/settlements | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 31 | (24) | (20,216) | 204 |
Balance, end of period | 1,940 | 41,035 | 1,940 | 41,035 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 31 | (24) | 61 | 204 |
Ares Management L.P | Fixed Income | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 108,253 | 54,118 | 89,111 | 55,752 |
Purchases | 60,242 | 4 | 80,684 | 7 |
Sales | (3,324) | (1,517) | (5,241) | (2,293) |
Realized and unrealized appreciation (depreciation), net | (364) | 1,550 | 253 | 689 |
Balance, end of period | 164,807 | 54,155 | 164,807 | 54,155 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (625) | 718 | (155) | (455) |
Ares Management L.P | Partnership interests | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 33,410 | 58,203 | 33,410 | 51,703 |
Purchases | 0 | 1,667 | 169 | 8,167 |
Sales | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 0 | (15,124) | (169) | (15,124) |
Balance, end of period | 33,410 | 44,746 | 33,410 | 44,746 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 0 | (15,123) | 0 | (15,123) |
Consolidated Funds | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 618,722 | 453,508 | 541,931 | 455,894 |
Transfer in | 18,800 | 83,608 | 34,182 | 72,636 |
Transfer out | (108,757) | (46,674) | (114,966) | (68,771) |
Purchases | 106,292 | 48,090 | 172,803 | 68,719 |
Sales | (90,481) | (48,276) | (106,714) | (47,165) |
Settlements, net | (888) | 88 | 1,966 | 589 |
Amortized discounts/premiums | (178) | 49 | 262 | 780 |
Realized and unrealized appreciation (depreciation), net | 10,892 | 3,677 | 24,938 | 11,388 |
Balance, end of period | 554,402 | 494,070 | 554,402 | 494,070 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 7,390 | 12,892 | 21,922 | 19,168 |
Consolidated Funds | Equity securities | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 142,358 | 141,805 | 130,690 | 129,809 |
Transfer in | 444 | 0 | 0 | 0 |
Transfer out | 0 | (15,384) | (6,160) | (344) |
Purchases | 0 | 9,668 | 6,692 | 9,668 |
Sales | 0 | 0 | 0 | 0 |
Settlements, net | 0 | 0 | 0 | 0 |
Amortized discounts/premiums | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 3,472 | 7,245 | 15,052 | 4,201 |
Balance, end of period | 146,274 | 143,334 | 146,274 | 143,334 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 3,472 | 7,245 | 15,749 | 4,202 |
Consolidated Funds | Fixed Income | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 278,829 | 212,209 | 242,253 | 249,490 |
Transfer in | 18,356 | 83,608 | 34,182 | 72,636 |
Transfer out | (108,757) | (31,290) | (108,806) | (68,427) |
Purchases | 56,292 | 32,622 | 93,111 | 45,951 |
Sales | (60,481) | (48,276) | (76,714) | (46,865) |
Settlements, net | 0 | 0 | 0 | 0 |
Amortized discounts/premiums | (78) | 255 | 46 | 696 |
Realized and unrealized appreciation (depreciation), net | 3,418 | (11,756) | 3,507 | (16,109) |
Balance, end of period | 187,579 | 237,372 | 187,579 | 237,372 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | (277) | (2,340) | (785) | (7,566) |
Consolidated Funds | Partnership interests | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 196,690 | 103,621 | 171,696 | 86,902 |
Transfer in | 0 | 0 | 0 | 0 |
Transfer out | 0 | 0 | 0 | 0 |
Purchases | 50,000 | 5,800 | 73,000 | 13,100 |
Sales | (30,000) | 0 | (30,000) | (300) |
Settlements, net | 0 | 0 | 0 | 0 |
Amortized discounts/premiums | 0 | 0 | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 1,050 | 6,019 | 3,044 | 15,738 |
Balance, end of period | 217,740 | 115,440 | 217,740 | 115,440 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 1,050 | 6,020 | 3,044 | 15,654 |
Consolidated Funds | Derivatives, Net | ||||
Changes in the fair value of the Level III investments | ||||
Balance, beginning of period | 845 | (4,127) | (2,708) | (10,307) |
Transfer in | 0 | 0 | 0 | 0 |
Transfer out | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements, net | (888) | 88 | 1,966 | 589 |
Amortized discounts/premiums | (100) | (206) | 216 | 84 |
Realized and unrealized appreciation (depreciation), net | 2,952 | 2,169 | 3,335 | 7,558 |
Balance, end of period | 2,809 | (2,076) | 2,809 | (2,076) |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | $ 3,145 | $ 1,967 | $ 3,914 | $ 6,878 |
FAIR VALUE (Valuation Technique
FAIR VALUE (Valuation Techniques) (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Ares Management L.P | ||
FAIR VALUE | ||
Assets, at fair value | $ 577,664 | $ 451,507 |
Liabilities, at fair value | 5,677 | 22,156 |
Ares Management L.P | Level III | ||
FAIR VALUE | ||
Assets, at fair value | 198,217 | 122,521 |
Liabilities, at fair value | 1,940 | 22,156 |
Ares Management L.P | Level III | Liabilities | Other Valuation Technique | ||
FAIR VALUE | ||
Liabilities, at fair value | 20,278 | |
Ares Management L.P | Level III | Liabilities | Discounted cash flow | ||
FAIR VALUE | ||
Liabilities, at fair value | $ 1,940 | $ 1,878 |
Unobservable Input | ||
Discount rate | 6.40% | 6.50% |
Ares Management L.P | Level III | Partnership interests | Other Valuation Technique | ||
FAIR VALUE | ||
Assets, at fair value | $ 33,410 | $ 33,410 |
Ares Management L.P | Level III | Fixed income-collateralized loan obligations | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 164,807 | 89,111 |
Consolidated Funds | ||
FAIR VALUE | ||
Assets, at fair value | 3,444,611 | 3,331,023 |
Liabilities, at fair value | 3,093,598 | 3,034,111 |
Consolidated Funds | Level III | ||
FAIR VALUE | ||
Assets, at fair value | 554,402 | 544,930 |
Liabilities, at fair value | 0 | 2,999 |
Consolidated Funds | Level III | Derivatives liabilities of Consolidated Funds | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Liabilities, at fair value | 2,999 | |
Consolidated Funds | Level III | Equity securities | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 271 | 421 |
Consolidated Funds | Level III | Equity securities | Discounted cash flow | ||
FAIR VALUE | ||
Assets, at fair value | $ 217,740 | $ 171,696 |
Unobservable Input | ||
Discount rate | 17.00% | 20.00% |
Consolidated Funds | Level III | Equity securities | Discounted cash flow | Weighted Average | ||
Unobservable Input | ||
Discount rate | 17.00% | 20.00% |
Consolidated Funds | Level III | Equity securities | Enterprise value market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | $ 46,707 | $ 43,011 |
Consolidated Funds | Level III | Equity securities | Enterprise value market multiple analysis | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 2.3 | 2 |
Consolidated Funds | Level III | Equity securities | Enterprise value market multiple analysis | Maximum | ||
Unobservable Input | ||
EBITDA multiple | 7.9 | 11.2 |
Consolidated Funds | Level III | Equity securities | Enterprise value market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 2.5 | 2.3 |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | ||
FAIR VALUE | ||
Assets, at fair value | $ 61,215 | $ 32,598 |
Unobservable Input | ||
Illiquidity discount (as a percent) | 25.00% | |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | Minimum | ||
Unobservable Input | ||
Net income multiple | 30 | 30 |
Illiquidity discount (as a percent) | 25.00% | |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | Maximum | ||
Unobservable Input | ||
Net income multiple | 40 | 40 |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | Weighted Average | ||
Unobservable Input | ||
Net income multiple | 36.5 | 35 |
Illiquidity discount (as a percent) | 25.00% | 25.00% |
Consolidated Funds | Level III | Equity securities | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | $ 38,081 | $ 54,660 |
Consolidated Funds | Level III | Fixed Income | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 134,462 | 170,231 |
Consolidated Funds | Level III | Fixed Income | Discounted cash flow | ||
FAIR VALUE | ||
Assets, at fair value | $ 24,052 | |
Consolidated Funds | Level III | Fixed Income | Discounted cash flow | Minimum | ||
Unobservable Input | ||
Discount rate | 7.80% | |
Consolidated Funds | Level III | Fixed Income | Discounted cash flow | Maximum | ||
Unobservable Input | ||
Discount rate | 15.30% | |
Consolidated Funds | Level III | Fixed Income | Discounted cash flow | Weighted Average | ||
Unobservable Input | ||
Yield | 11.10% | |
Consolidated Funds | Level III | Fixed Income | Enterprise value market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | $ 6,693 | |
Unobservable Input | ||
EBITDA multiple | 7.1 | |
Consolidated Funds | Level III | Fixed Income | Enterprise value market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 7.1 | |
Consolidated Funds | Level III | Fixed Income | Market approach (comparable companies) | ||
FAIR VALUE | ||
Assets, at fair value | $ 208 | $ 1,776 |
Unobservable Input | ||
EBITDA multiple | 5.6 | 6.5 |
Consolidated Funds | Level III | Fixed Income | Market approach (comparable companies) | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 5.6 | 6.5 |
Consolidated Funds | Level III | Fixed Income | Recent transaction price | ||
FAIR VALUE | ||
Assets, at fair value | $ 4,887 | |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | ||
FAIR VALUE | ||
Assets, at fair value | $ 52,909 | $ 28,595 |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | Minimum | ||
Unobservable Input | ||
Yield | 6.00% | 6.00% |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | Maximum | ||
Unobservable Input | ||
Yield | 14.30% | 13.60% |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | Weighted Average | ||
Unobservable Input | ||
Discount rate | 10.90% | |
Yield | 9.40% | |
Consolidated Funds | Level III | Fixed Income | Income approach, collection rate | ||
FAIR VALUE | ||
Assets, at fair value | $ 5,473 | |
Unobservable Input | ||
Collection rates | 1.2 | |
Consolidated Funds | Level III | Fixed Income | Income approach, collection rate | Weighted Average | ||
Unobservable Input | ||
Collection rates | 1.2 | |
Consolidated Funds | Level III | Fixed Income | Market approach | ||
FAIR VALUE | ||
Assets, at fair value | $ 546 | |
Consolidated Funds | Level III | Fixed Income | Market approach | Minimum | ||
Unobservable Input | ||
EBITDA multiple | 6.1 | |
Consolidated Funds | Level III | Fixed Income | Market approach | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 6.1 | |
Consolidated Funds | Level III | Derivative Financial Instruments | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | $ 2,809 | $ 291 |
FAIR VALUE (Investments Using N
FAIR VALUE (Investments Using NAV per Share) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
FAIR VALUE | ||
Fair Value | $ 377,829 | $ 325,715 |
Unfunded Commitments | 489,104 | 197,791 |
Credit Group | ||
FAIR VALUE | ||
Fair Value | 62,812 | 53,131 |
Unfunded Commitments | 71,352 | 30,896 |
Private Equity Group | ||
FAIR VALUE | ||
Fair Value | 217,531 | 181,096 |
Unfunded Commitments | 329,962 | 96,687 |
Real Estate Group | ||
FAIR VALUE | ||
Fair Value | 79,028 | 71,669 |
Unfunded Commitments | 55,355 | 35,708 |
Non-core investments | ||
FAIR VALUE | ||
Fair Value | 18,458 | 19,819 |
Unfunded Commitments | $ 32,435 | $ 34,500 |
DERIVATIVE FINANCIAL INSTRUME48
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Liabilities | ||
Derivative asset, amount not offset | $ 400 | |
Derivative liability, amount not offset | 400 | |
Ares Management L.P | ||
Assets | ||
Notional amount, Assets | 32,616 | $ 62,830 |
Fair Value, Assets | 384 | 3,171 |
Liabilities | ||
Notional amount, Liabilities | 84,564 | 0 |
Fair Value, Liabilities | 3,737 | 0 |
Ares Management L.P | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 32,616 | 62,830 |
Fair Value, Assets | 384 | 3,171 |
Liabilities | ||
Notional amount, Liabilities | 84,564 | 0 |
Fair Value, Liabilities | 3,737 | 0 |
Consolidated Funds | ||
Assets | ||
Notional amount, Assets | 8,011 | 28,879 |
Fair Value, Assets | 2,809 | 820 |
Notional amount, Total | 8,011 | 29,132 |
Fair Value, Total | 2,809 | 844 |
Liabilities | ||
Notional amount, Liabilities | 0 | (204) |
Fair Value, Liabilities | 0 | (2,999) |
Derivative asset, amount offset | 100 | 1,400 |
Derivative liability, amount offset | 100 | 1,400 |
Consolidated Funds | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 0 | 25,304 |
Fair Value, Assets | 0 | 529 |
Liabilities | ||
Notional amount, Liabilities | 0 | 0 |
Fair Value, Liabilities | 0 | 0 |
Consolidated Funds | Other financial instruments | ||
Assets | ||
Notional amount, Assets | 8,011 | 3,575 |
Fair Value, Assets | 2,809 | 291 |
Liabilities | ||
Notional amount, Liabilities | 0 | (204) |
Fair Value, Liabilities | 0 | (2,999) |
Consolidated Funds | Other equity | ||
Assets | ||
Notional amount, Assets | 0 | 253 |
Fair Value, Assets | 0 | 24 |
Liabilities | ||
Notional amount, Liabilities | 0 | 0 |
Fair Value, Liabilities | $ 0 | $ 0 |
DEBT (Debt Obligations) (Detail
DEBT (Debt Obligations) (Details) - Ares Management L.P - USD ($) | 1 Months Ended | 6 Months Ended | ||
Oct. 31, 2014 | Jun. 30, 2017 | Feb. 28, 2017 | Dec. 31, 2016 | |
DEBT | ||||
Carrying Value | $ 510,856,000 | $ 305,784,000 | ||
Credit Facility | ||||
DEBT | ||||
Carrying Value | $ 135,000,000 | $ 0 | ||
Interest Rate | 2.65% | 0.00% | ||
Maximum borrowing capacity | $ 1,040,000,000 | |||
Unused commitment fees (as a percent) | 0.20% | |||
Interest rate (as a percent) | 0.00% | |||
Credit Facility | Base rate | ||||
DEBT | ||||
Interest rate spread (as a percent) | 0.50% | |||
Credit Facility | LIBOR | ||||
DEBT | ||||
Interest rate spread (as a percent) | 1.50% | |||
AFC Notes | ||||
DEBT | ||||
Debt issuance percentage | 98.268% | |||
Senior Notes | ||||
DEBT | ||||
Original Borrowing Amount | $ 250,000,000 | |||
Carrying Value | $ 244,992,000 | $ 244,684,000 | ||
Interest Rate | 4.21% | 4.21% | ||
Term Loan 2015 | ||||
DEBT | ||||
Original Borrowing Amount | $ 35,250,000 | |||
Carrying Value | $ 35,073,000 | $ 35,063,000 | ||
Interest Rate | 3.02% | 2.74% | ||
Unused commitment fees (as a percent) | 0.025% | |||
Term Loan 2016 | ||||
DEBT | ||||
Original Borrowing Amount | $ 26,376,000 | |||
Carrying Value | $ 25,991,000 | $ 26,037,000 | ||
Interest Rate | 2.88% | 2.66% | ||
Unused commitment fees (as a percent) | 0.03% | |||
Term Loan 2017 | ||||
DEBT | ||||
Unused commitment fees (as a percent) | 0.03% | |||
Term Loan 2017 Due January 2028 | ||||
DEBT | ||||
Original Borrowing Amount | $ 17,600,000 | |||
Carrying Value | $ 17,470,000 | |||
Interest Rate | 2.70% | |||
Term Loan 2017 Due October 2029 | ||||
DEBT | ||||
Original Borrowing Amount | $ 35,198,000 | |||
Carrying Value | $ 35,124,000 | |||
Interest Rate | 2.63% | |||
Term Loan 2017 Due July 2029 | ||||
DEBT | ||||
Original Borrowing Amount | $ 17,211,000 | |||
Carrying Value | $ 17,206,000 | |||
Interest Rate | 2.75% |
DEBT (Debt Issuance Costs) (Det
DEBT (Debt Issuance Costs) (Details) - Ares Management L.P $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Credit Facility | |
Debt Issuance Costs [Roll Forward] | |
Unamortized debt issuance costs as of December 31, 2016 | $ 4,800 |
Debt issuance costs incurred | 3,343 |
Amortization of debt issuance costs | (863) |
Unamortized debt issuance costs as of June 30, 2017 | 7,280 |
Senior Notes | |
Debt Issuance Costs [Roll Forward] | |
Unamortized debt issuance costs as of December 31, 2016 | 1,803 |
Debt issuance costs incurred | 0 |
Amortization of debt issuance costs | (116) |
Unamortized debt issuance costs as of June 30, 2017 | 1,687 |
Term Loan | |
Debt Issuance Costs [Roll Forward] | |
Unamortized debt issuance costs as of December 31, 2016 | 526 |
Debt issuance costs incurred | 276 |
Amortization of debt issuance costs | (32) |
Unamortized debt issuance costs as of June 30, 2017 | $ 770 |
DEBT (Loan Obligations of the C
DEBT (Loan Obligations of the Consolidated CLOs) (Details) - Consolidated Funds - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
DEBT | ||
Fair Value of Loan Obligations | $ 3,093,598,000 | $ 3,031,112,000 |
Fixed income-collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 3,171,308,000 | 3,123,825,000 |
Fair Value of Loan Obligations | 3,093,598,000 | 3,031,112,000 |
Senior secured notes | Fixed income-collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 2,914,099,000 | 2,839,779,000 |
Fair Value of Loan Obligations | $ 2,905,347,000 | $ 2,841,440,000 |
Weighted Average Remaining Maturity In Years | 9 years 9 months 10 days | 9 years 8 months 4 days |
Debt instrument face amount | $ 3,200,000,000 | |
Weighted average interest rate (as a percent) | 3.72% | |
Subordinated notes / preferred shares | Fixed income-collateralized loan obligations | ||
DEBT | ||
Loan Obligations | $ 257,209,000 | $ 284,046,000 |
Fair Value of Loan Obligations | $ 188,251,000 | $ 189,672,000 |
Weighted Average Remaining Maturity In Years | 10 years 18 days | 9 years 11 months 19 days |
Debt instrument face amount | $ 257,200,000 |
DEBT (Credit Facilities of the
DEBT (Credit Facilities of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
DEBT | ||
Total borrowings | $ 83,725 | $ 55,070 |
Credit facility with maturity 1/1/2023 | ||
DEBT | ||
Total Capacity | 18,000 | |
Outstanding Loan | $ 12,942 | $ 12,942 |
Effective Rate | 2.75% | 2.38% |
Credit facility with maturity 06/30/2018 | ||
DEBT | ||
Total Capacity | $ 45,686 | |
Outstanding Loan | $ 11,422 | $ 42,128 |
Effective Rate | 1.55% | 1.55% |
Interest rate (as a percent) | 0.00% | |
Credit facility with maturity 03/07/2018 | ||
DEBT | ||
Total Capacity | $ 71,500 | |
Outstanding Loan | $ 50,000 | |
Effective Rate | 2.39% | |
Credit facility with maturity 08/19/2019 | ||
DEBT | ||
Total Capacity | $ 14,286 | |
Outstanding Loan | $ 9,361 | |
Effective Rate | 5.55% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |||
Unfunded capital commitments | $ 586,500,000 | $ 535,300,000 | |
Performance Fees | |||
Performance Fees | |||
Performance fees subject to potential clawback provision | 451,700,000 | 418,300,000 | |
Performance fees subject to potential claw back provision that are reimbursable by professionals | 350,500,000 | 323,900,000 | |
EIF Management, LLC | |||
COMMITMENTS AND CONTINGENCIES | |||
Unfunded commitment related to acquisition | 20,300,000 | ||
Increase (decrease) in contingent consideration liability | $ (20,300,000) | ||
American Capital Ltd. | ARCC | |||
ARCC and American Capital, Ltd. Merger Agreement | |||
Maximum fees waived | $ 10,000,000 | ||
Term of fee waiver | 30 months | ||
Maximum amount that shortfall will not carry over | $ 10,000,000 | ||
Remaining fees waived | $ 90,000,000 | ||
Remaining term of fee waiver | 27 months | ||
Kayne Anderson Capital Advisors L.P. | |||
COMMITMENTS AND CONTINGENCIES | |||
Unfunded capital commitments | $ 32,400,000 | $ 89,200,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Ares Management L.P | ||
Due from affiliates: | ||
Due from affiliates | $ 157,372 | $ 162,936 |
Due to affiliates: | ||
Due to affiliates | 23,891 | 17,564 |
Ares Management L.P | Affiliated entity | ||
Due from affiliates: | ||
Management fees receivable from non-consolidated funds | 115,437 | 123,781 |
Payments made on behalf of and amounts due from non-consolidated funds and employees | 41,935 | 39,155 |
Due to affiliates: | ||
Management fee rebate payable to non-consolidated funds | 5,120 | 7,914 |
Management fees received in advance | 7,720 | 1,788 |
Tax receivable agreement liability | 4,748 | 4,748 |
Payments made by non-consolidated funds on behalf of and payable by the Company | 6,303 | 3,114 |
Consolidated Funds | ||
Due from affiliates: | ||
Due from affiliates | 5,503 | 3,592 |
Due to affiliates: | ||
Due to affiliates | 0 | 0 |
Consolidated Funds | Affiliated entity | ||
Due from affiliates: | ||
Due from affiliates | $ 5,503 | $ 3,592 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 1,253 | $ (4,434) | $ (33,011) | $ 231 |
EARNINGS PER COMMON UNIT (Antid
EARNINGS PER COMMON UNIT (Antidilutive) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
AOG | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 130,249,329 | 132,350,586 | 130,325,826 | 132,366,701 |
Options | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 21,155,026 | 23,363,784 | 21,244,858 | 23,429,835 |
Restricted units | ||||
Earnings per common unit | ||||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 39,082 | 64,516 | 14,463,590 | 94,363 |
EARNINGS PER COMMON UNIT (Compu
EARNINGS PER COMMON UNIT (Computation of Basic and Diluted Earnings Per Common Unit) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic | ||||
Net income (loss) attributable to Ares Management, L.P. common unitholders | $ 44,453 | $ 37,574 | $ (2,106) | $ 34,484 |
Earnings distributed to participating securities (restricted units) | (419) | (180) | (1,246) | (408) |
Preferred stock dividends | 0 | (4) | 0 | (8) |
Net income (loss) available to common unitholders | $ 44,034 | $ 37,390 | $ (3,352) | $ 34,068 |
Basic weighted-average common units (in units) | 81,829,086 | 80,715,723 | 81,469,967 | 80,699,387 |
Earnings per common unit, basic (in dollars per unit) | $ 0.54 | $ 0.46 | $ (0.04) | $ 0.42 |
Diluted | ||||
Earnings distributed to participating securities (restricted units) | $ 0 | $ 0 | $ (1,246) | $ 0 |
Preferred stock dividends | 0 | (4) | 0 | (8) |
Net income (loss) available to common unitholders | $ 44,453 | $ 37,570 | $ (3,352) | $ 34,476 |
Effect of dilutive units: | ||||
Diluted weighted-average common units (in units) | 84,319,882 | 82,332,193 | 81,469,967 | 81,752,468 |
Diluted earnings per common unit (in dollars per unit) | $ 0.53 | $ 0.46 | $ (0.04) | $ 0.42 |
Restricted units | ||||
Effect of dilutive units: | ||||
Restricted units (in units) | 2,490,796 | 1,616,470 | 0 | 1,053,081 |
EQUITY COMPENSATION (Equity Inc
EQUITY COMPENSATION (Equity Incentive Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jan. 01, 2017 | |
Equity compensation | |||||
Equity compensation expenses | $ 18,917 | $ 9,536 | $ 34,006 | $ 18,709 | |
Restricted units | |||||
Equity compensation | |||||
Equity compensation expenses | 14,601 | 4,684 | 25,818 | 9,448 | |
Options | |||||
Equity compensation | |||||
Equity compensation expenses | 3,931 | 4,547 | 7,413 | 8,460 | |
Phantom units | |||||
Equity compensation | |||||
Equity compensation expenses | $ 385 | $ 305 | $ 775 | $ 801 | |
Ares Management L.P | |||||
Equity compensation | |||||
Total number of units available for grant under the Equity Incentive Plan | 24,305,433 | 24,305,433 | 30,397,280 |
EQUITY COMPENSATION (Restricted
EQUITY COMPENSATION (Restricted Units) (Details) - Restricted units $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | |
Equity compensation | ||
Distribution equivalents made to holders | $ | $ 1.8 | $ 6 |
Units | ||
Balance at the beginning of the period (in units) | shares | 8,058,372 | |
Granted (in units) | shares | 7,944,144 | |
Vested (in units) | shares | (1,757,514) | |
Forfeited (in units) | shares | (388,694) | |
Balance at the end of the period (in units) | shares | 13,856,308 | 13,856,308 |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period (in dollars per unit) | $ / shares | $ 16.38 | |
Granted (in dollars per unit) | $ / shares | 18.61 | |
Vested (in dollars per unit) | $ / shares | 16.48 | |
Forfeited (in dollars per unit) | $ / shares | 18.40 | |
Balance at the end of the period (in dollars per unit) | $ / shares | $ 17.58 | $ 17.58 |
Unrecognized compensation expenses | $ | $ 199.5 | $ 199.5 |
Weighted average period of compensation expense expected to be recognized | 3 years 11 months 1 day | |
Third Anniversary of Grant Date | ||
Equity compensation | ||
Annual award vesting percentage | 33.33% | |
First Anniversary of Grant Date | ||
Equity compensation | ||
Annual award vesting percentage | 25.00% |
EQUITY COMPENSATION (Options) (
EQUITY COMPENSATION (Options) (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Options | ||
Balance at the beginning of the period (in units) | 22,232,134 | |
Granted (in units) | 0 | |
Exercised (in units) | (54,500) | |
Expired (in units) | (389,575) | |
Forfeited (in units) | (633,033) | |
Balance at the end of the period (in units) | 21,155,026 | 22,232,134 |
Exercisable at the end of the period (in units) | 7,151,023 | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period (in dollars per unit) | $ 19 | |
Granted (in dollars per unit) | 0 | |
Exercised (in dollars per unit) | 19 | |
Expired (in dollars per unit) | 19 | |
Forfeited (in dollars per unit) | 19 | |
Balance at the end of the period (in dollars per unit) | 18.99 | $ 19 |
Exercisable at the end of the period (in dollars per unit) | $ 19 | |
Weighted Average Remaining Life | ||
Weighted average remaining life | 7 years 4 months 5 days | |
Expected to vest at the end of the period | 6 years 10 months 13 days | |
Exercisable at the end of the period | 6 years 10 months 10 days | |
Aggregate Intrinsic Value | ||
Balance at the end of the period (in dollars) | $ 0 | |
Exercisable at end of the period (in dollars) | 0 | |
Unrecognized compensation expenses | $ 30,900 | |
Weighted average period of compensation expense expected to be recognized | 1 year 10 months 6 days |
EQUITY COMPENSATION (Phantom Un
EQUITY COMPENSATION (Phantom Units) (Details) - Phantom units $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Units | |
Balance at the beginning of the period (in units) | shares | 266,138 |
Vested (in units) | shares | (87,221.6) |
Forfeited (in units) | shares | (7,036) |
Balance at the end of the period (in units) | shares | 171,880 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per unit) | $ 19 |
Vested (in dollars per unit) | 19 |
Forfeited (in dollars per unit) | 19 |
Balance at the end of the period (in dollars per unit) | 19 |
Share price (USD per share) | $ 17.9 |
Unrecognized compensation expenses | $ | $ 2.8 |
Weighted average period of compensation expense expected to be recognized | 1 year 10 months 2 days |
Cash used to settle awards | $ | $ 1.7 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 02, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||||
AOG Units (in units) | 212,341,070 | 212,341,070 | 211,243,045 | |||
Direct Ownership Interest | 100.00% | 100.00% | 100.00% | |||
Dividend rate, percentage | 7.00% | |||||
Redemption price (dollars per unit) | $ 25 | $ 25 | ||||
Fees related to secondary offering | $ 0.7 | |||||
Preferred Equity | ||||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||||
Issuance of common units (in units) | 12,400,000 | 12,400,000 | 12,400,000 | |||
Ares Owners Holding L.P. | ||||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||||
AOG Units (in units) | 117,710,070 | 117,710,070 | 117,928,313 | |||
Direct Ownership Interest | 55.43% | 55.43% | 55.82% | |||
Daily Average Ownership | 55.53% | 56.25% | 55.63% | 56.26% | ||
Affiliate of Alleghany Corporation | ||||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||||
AOG Units (in units) | 12,500,000 | 12,500,000 | 12,500,000 | |||
Direct Ownership Interest | 5.89% | 5.89% | 5.92% | |||
Daily Average Ownership | 5.89% | 5.87% | 5.90% | 5.87% | ||
ADIA | ||||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||||
Number of units sold (in units) | 7,500,000 | |||||
Ares Management, L.P. | ||||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||||
AOG Units (in units) | 82,131,000 | 82,131,000 | 80,814,732 | |||
Direct Ownership Interest | 38.68% | 38.68% | 38.26% | |||
Daily Average Ownership | 38.58% | 37.88% | 38.47% | 37.87% |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) $ in Billions | 6 Months Ended |
Jun. 30, 2017USD ($)segmentgroupfund | |
Segment reporting | |
Number operating segments | segment | 3 |
Ares Management L.P | Credit Group | |
Segment reporting | |
Assets under management | $ | $ 67.4 |
Number of funds managed | 139 |
Ares Management L.P | Private Equity | |
Segment reporting | |
Assets under management | $ | $ 25.8 |
Number of private equity commingled funds focus North America and Europe | 5 |
Number of funds focused on U.S. energy and power assets | 5 |
Number of co-investment vehicles focused on U.S. energy and power assets | 6 |
Number of special situation funds | 3 |
Ares Management L.P | Real Estate | |
Segment reporting | |
Assets under management | $ | $ 10.8 |
Number of funds managed | 43 |
Ares Management L.P | OMG | |
Segment reporting | |
Number of independent shared resource groups to support entity's operating segments | group | 5 |
Greater China | Ares Management L.P | Private Equity | |
Segment reporting | |
Number of commingled funds | 2 |
SEGMENT REPORTING (Operating Se
SEGMENT REPORTING (Operating Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment reporting | ||||
Other fees | $ 0 | |||
Operating segment | ||||
Segment reporting | ||||
Fee related earnings | 103,339 | $ 79,232 | $ 195,763 | $ 161,108 |
Performance fees—realized | 74,130 | 81,604 | 82,935 | 87,953 |
Performance fees—unrealized | 263,629 | 123,314 | 312,890 | 85,966 |
Total performance fee compensation - realized | (52,973) | (51,031) | (58,274) | (53,014) |
Performance fee compensation—unrealized | (208,732) | (100,865) | (244,133) | (77,552) |
Net investment income (loss) | 30,237 | 22,427 | 41,157 | 17,645 |
Performance related earnings | 106,291 | 75,449 | 134,575 | 60,998 |
Economic net income | 209,630 | 154,681 | 330,338 | 222,106 |
Distributable earnings | 119,730 | 121,433 | 209,029 | 208,955 |
OMG | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 0 | 0 | 0 | 0 |
Other fees | 0 | 0 | 0 | 0 |
Compensation and benefits | (30,990) | (24,988) | (57,304) | (51,265) |
General, administrative and other expenses | (18,961) | (14,679) | (38,349) | (31,230) |
Fee related earnings | (49,951) | (39,667) | (95,653) | (82,495) |
Performance fees—realized | 0 | 0 | 0 | 0 |
Performance fees—unrealized | 0 | 0 | 0 | 0 |
Total performance fee compensation - realized | 0 | 0 | 0 | 0 |
Performance fee compensation—unrealized | 0 | 0 | 0 | 0 |
Net performance fees | 0 | 0 | 0 | 0 |
Investment income—realized | 1,340 | (31) | 3,199 | (88) |
Investment income (loss)—unrealized | (2,728) | (11,904) | (4,135) | (11,519) |
Interest and other investment income (expense) | 225 | (19) | 1,099 | (68) |
Interest expense | (463) | (709) | (939) | (1,437) |
Net investment income (loss) | (1,626) | (12,663) | (776) | (13,112) |
Performance related earnings | (1,626) | (12,663) | (776) | (13,112) |
Economic net income | (51,577) | (52,330) | (96,429) | (95,607) |
Distributable earnings | (50,038) | (44,613) | (98,428) | (90,854) |
Total | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 185,560 | 162,612 | 362,341 | 325,280 |
Other fees | 6,020 | 1,319 | 10,854 | 2,026 |
Compensation and benefits | (103,846) | (97,053) | (204,456) | (192,838) |
General, administrative and other expenses | (34,346) | (27,313) | (68,629) | (55,855) |
Fee related earnings | 53,388 | 39,565 | 100,110 | 78,613 |
Performance fees—realized | 74,130 | 81,604 | 82,935 | 87,953 |
Performance fees—unrealized | 263,629 | 123,314 | 312,890 | 85,966 |
Total performance fee compensation - realized | (52,973) | (51,031) | (58,274) | (53,014) |
Performance fee compensation—unrealized | (208,732) | (100,865) | (244,133) | (77,552) |
Net performance fees | 76,054 | 53,022 | 93,418 | 43,353 |
Investment income—realized | 6,955 | 3,790 | 11,494 | 3,651 |
Investment income (loss)—unrealized | 20,310 | (5,519) | 31,594 | (14,087) |
Interest and other investment income (expense) | 6,700 | 16,321 | 7,526 | 24,652 |
Interest expense | (5,354) | (4,828) | (10,233) | (9,683) |
Net investment income (loss) | 28,611 | 9,764 | 40,381 | 4,533 |
Performance related earnings | 104,665 | 62,786 | 133,799 | 47,886 |
Economic net income | 158,053 | 102,351 | 233,909 | 126,499 |
Distributable earnings | 69,692 | 76,820 | 110,601 | 118,101 |
Ares Management L.P | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 180,768 | 158,521 | 352,813 | 316,954 |
Other fees | 15,098 | 7,863 | 29,538 | 15,392 |
Compensation and benefits | (131,219) | (112,654) | (255,558) | (223,333) |
General, administrative and other expenses | (50,751) | (38,686) | (98,089) | (78,648) |
Net investment income (loss) | (2,252) | 4,993 | (4,387) | 1,634 |
Ares Management L.P | Affiliated entity | ARCC | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 19,143 | 28,999 | 52,400 | 57,624 |
Ares Management L.P | Operating segment | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 185,560 | 162,612 | 362,341 | 325,280 |
Other fees | 6,020 | 1,319 | 10,854 | 2,026 |
Compensation and benefits | (72,856) | (72,065) | (147,152) | (141,573) |
General, administrative and other expenses | (15,385) | (12,634) | (30,280) | (24,625) |
Fee related earnings | 103,339 | 79,232 | 195,763 | 161,108 |
Performance fees—realized | 74,130 | 81,604 | 82,935 | 87,953 |
Performance fees—unrealized | 263,629 | 123,314 | 312,890 | 85,966 |
Total performance fee compensation - realized | (52,973) | (51,031) | (58,274) | (53,014) |
Performance fee compensation—unrealized | (208,732) | (100,865) | (244,133) | (77,552) |
Net performance fees | 76,054 | 53,022 | 93,418 | 43,353 |
Investment income—realized | 5,615 | 3,821 | 8,295 | 3,739 |
Investment income (loss)—unrealized | 23,038 | 6,385 | 35,729 | (2,568) |
Interest and other investment income (expense) | 6,475 | 16,340 | 6,427 | 24,720 |
Interest expense | (4,891) | (4,119) | (9,294) | (8,246) |
Net investment income (loss) | 30,237 | 22,427 | 41,157 | 17,645 |
Performance related earnings | 106,291 | 75,449 | 134,575 | 60,998 |
Economic net income | 209,630 | 154,681 | 330,338 | 222,106 |
Distributable earnings | 119,730 | 121,433 | 209,029 | 208,955 |
Ares Management L.P | Operating segment | Credit Group | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 112,654 | 109,141 | 234,001 | 216,388 |
Other fees | 5,663 | 550 | 10,166 | 659 |
Compensation and benefits | (44,754) | (45,937) | (96,096) | (89,846) |
General, administrative and other expenses | (7,949) | (6,799) | (15,915) | (12,109) |
Fee related earnings | 65,614 | 56,955 | 132,156 | 115,092 |
Performance fees—realized | 7,883 | 16,024 | 16,661 | 22,202 |
Performance fees—unrealized | 5,093 | 16,351 | 8,029 | (12,696) |
Total performance fee compensation - realized | (1,898) | (754) | (7,183) | (2,737) |
Performance fee compensation—unrealized | (6,079) | (14,604) | (7,537) | 1,833 |
Net performance fees | 4,999 | 17,017 | 9,970 | 8,602 |
Investment income—realized | 2,525 | (280) | 2,843 | (198) |
Investment income (loss)—unrealized | (3,450) | 5,391 | 1,139 | 3,796 |
Interest and other investment income (expense) | 2,958 | 8,098 | 2,939 | 15,677 |
Interest expense | (3,065) | (2,450) | (5,523) | (4,898) |
Net investment income (loss) | (1,032) | 10,759 | 1,398 | 14,377 |
Performance related earnings | 3,967 | 27,776 | 11,368 | 22,979 |
Economic net income | 69,581 | 84,731 | 143,524 | 138,071 |
Distributable earnings | 67,010 | 73,342 | 131,282 | 139,815 |
Ares Management L.P | Operating segment | Private Equity | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 56,427 | 37,241 | 96,246 | 75,917 |
Other fees | 338 | 334 | 678 | 674 |
Compensation and benefits | (18,388) | (15,495) | (31,606) | (29,859) |
General, administrative and other expenses | (4,345) | (3,324) | (8,543) | (6,564) |
Fee related earnings | 34,032 | 18,756 | 56,775 | 40,168 |
Performance fees—realized | 64,780 | 62,779 | 64,780 | 62,779 |
Performance fees—unrealized | 228,747 | 105,702 | 260,984 | 93,279 |
Total performance fee compensation - realized | (50,914) | (50,224) | (50,914) | (50,224) |
Performance fee compensation—unrealized | (184,021) | (84,488) | (209,526) | (75,379) |
Net performance fees | 58,592 | 33,769 | 65,324 | 30,455 |
Investment income—realized | 2,717 | 3,406 | 3,296 | 3,374 |
Investment income (loss)—unrealized | 25,354 | 2,061 | 33,900 | (8,096) |
Interest and other investment income (expense) | 1,983 | 8,206 | 2,135 | 8,115 |
Interest expense | (1,397) | (1,397) | (2,910) | (2,802) |
Net investment income (loss) | 28,657 | 12,276 | 36,421 | 591 |
Performance related earnings | 87,249 | 46,045 | 101,745 | 31,046 |
Economic net income | 121,281 | 64,801 | 158,520 | 71,214 |
Distributable earnings | 47,973 | 40,310 | 69,887 | 58,681 |
Ares Management L.P | Operating segment | Real Estate | ||||
Segment reporting | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 16,479 | 16,230 | 32,094 | 32,975 |
Other fees | 19 | 435 | 10 | 693 |
Compensation and benefits | (9,714) | (10,633) | (19,450) | (21,868) |
General, administrative and other expenses | (3,091) | (2,511) | (5,822) | (5,952) |
Fee related earnings | 3,693 | 3,521 | 6,832 | 5,848 |
Performance fees—realized | 1,467 | 2,801 | 1,494 | 2,972 |
Performance fees—unrealized | 29,789 | 1,261 | 43,877 | 5,383 |
Total performance fee compensation - realized | (161) | (53) | (177) | (53) |
Performance fee compensation—unrealized | (18,632) | (1,773) | (27,070) | (4,006) |
Net performance fees | 12,463 | 2,236 | 18,124 | 4,296 |
Investment income—realized | 373 | 695 | 2,156 | 563 |
Investment income (loss)—unrealized | 1,134 | (1,067) | 690 | 1,732 |
Interest and other investment income (expense) | 1,534 | 36 | 1,353 | 928 |
Interest expense | (429) | (272) | (861) | (546) |
Net investment income (loss) | 2,612 | (608) | 3,338 | 2,677 |
Performance related earnings | 15,075 | 1,628 | 21,462 | 6,973 |
Economic net income | 18,768 | 5,149 | 28,294 | 12,821 |
Distributable earnings | $ 4,747 | $ 7,781 | $ 7,860 | $ 10,459 |
SEGMENT REPORTING (Revenue, Exp
SEGMENT REPORTING (Revenue, Expenses and Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment revenues | ||||
Other fees | $ 0 | |||
Total revenues | 533,890 | $ 369,535 | $ 775,547 | $ 505,550 |
Segment expenses | ||||
Total expenses | 448,197 | 303,935 | 939,664 | 433,473 |
Segment other income | ||||
Total other income | 29,387 | 17,406 | 88,609 | 1,955 |
Operating segment | ||||
Segment revenues | ||||
Performance fees—realized | 74,130 | 81,604 | 82,935 | 87,953 |
Performance fees—unrealized | 263,629 | 123,314 | 312,890 | 85,966 |
Segment expenses | ||||
Performance fee compensation—realized | 52,973 | 51,031 | 58,274 | 53,014 |
Total performance fee compensation - unrealized | 208,732 | 100,865 | 244,133 | 77,552 |
Ares Management L.P | ||||
Segment revenues | ||||
Management fees | 180,768 | 158,521 | 352,813 | 316,954 |
Other fees | 15,098 | 7,863 | 29,538 | 15,392 |
Total revenues | 533,890 | 369,535 | 775,547 | 505,550 |
Segment expenses | ||||
Compensation and benefits | 131,219 | 112,654 | 255,558 | 223,333 |
General, administrative and other expenses | 50,751 | 38,686 | 98,089 | 78,648 |
Ares Management L.P | Operating segment | ||||
Segment revenues | ||||
Management fees | 185,560 | 162,612 | 362,341 | 325,280 |
Other fees | 6,020 | 1,319 | 10,854 | 2,026 |
Performance fees—realized | 74,130 | 81,604 | 82,935 | 87,953 |
Performance fees—unrealized | 263,629 | 123,314 | 312,890 | 85,966 |
Total revenues | 529,339 | 368,849 | 769,020 | 501,225 |
Segment expenses | ||||
Compensation and benefits | 72,856 | 72,065 | 147,152 | 141,573 |
General, administrative and other expenses | 15,385 | 12,634 | 30,280 | 24,625 |
Performance fee compensation—realized | 52,973 | 51,031 | 58,274 | 53,014 |
Total performance fee compensation - unrealized | 208,732 | 100,865 | 244,133 | 77,552 |
Total expenses | 349,946 | 236,595 | 479,839 | 296,764 |
Segment other income | ||||
Investment income—realized | 5,615 | 3,821 | 8,295 | 3,739 |
Investment income (loss)—unrealized | 23,038 | 6,385 | 35,729 | (2,568) |
Interest and other investment income (expense) | 6,475 | 16,340 | 6,427 | 24,720 |
Interest expense | (4,891) | (4,119) | (9,294) | (8,246) |
Total other income | 30,237 | 22,427 | 41,157 | 17,645 |
Affiliated entity | ARCC | Ares Management L.P | ||||
Segment revenues | ||||
Management fees | $ 19,143 | $ 28,999 | $ 52,400 | $ 57,624 |
SEGMENT REPORTING (Revenue Reco
SEGMENT REPORTING (Revenue Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue adjustment | ||||
Revenues | $ 533,890 | $ 369,535 | $ 775,547 | $ 505,550 |
Administrative and other fees | 0 | |||
Reconciling items | ||||
Revenue adjustment | ||||
Revenues | 4,551 | 686 | 6,527 | 4,325 |
Administrative and other fees | 9,132 | 6,544 | 18,738 | 13,366 |
Reconciling items | Non-Controlling interest | Subsidiaries | ||||
Revenue adjustment | ||||
Revenues | (54) | 0 | (54) | 0 |
Reconciling items | AREA Sponsor Holdings, LLC | ||||
Revenue adjustment | ||||
Performance fee reclass | (217) | (1,016) | (241) | (1,588) |
Ares Management L.P | ||||
Revenue adjustment | ||||
Revenues | 533,890 | 369,535 | 775,547 | 505,550 |
Administrative and other fees | 15,098 | 7,863 | 29,538 | 15,392 |
Ares Management L.P | Operating segment | ||||
Revenue adjustment | ||||
Revenues | 529,339 | 368,849 | 769,020 | 501,225 |
Administrative and other fees | 6,020 | 1,319 | 10,854 | 2,026 |
Consolidated Funds | Reconciling items | ||||
Revenue adjustment | ||||
Revenues | $ (4,310) | $ (4,842) | $ (11,916) | $ (7,453) |
SEGMENT REPORTING (Expenses) (D
SEGMENT REPORTING (Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | $ 448,197 | $ 303,935 | $ 939,664 | $ 433,473 |
Equity compensation expenses | 18,917 | 9,536 | 34,006 | 18,709 |
Amortization of intangibles | 10,500 | 14,400 | ||
Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Acquisition and merger-related expenses | 0 | 0 | 275,177 | 0 |
Operating segment | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Acquisition and merger-related expenses | 756 | 61 | 255,844 | 557 |
Equity compensation expenses | 18,917 | 9,536 | 34,006 | 18,709 |
Placement fees and underwriting costs | 6,383 | 1,754 | 9,822 | 2,684 |
Amortization of intangibles | 5,274 | 7,121 | 10,549 | 14,384 |
Depreciation expense | 2,774 | 1,934 | 5,990 | 3,792 |
Operating segment | Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | 349,946 | 236,595 | 479,839 | 296,764 |
Reconciling items | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | 98,251 | 67,340 | 459,825 | 136,709 |
Administrative fees | 9,132 | 6,544 | 18,738 | 13,366 |
Acquisition and merger-related expenses | 724 | 85 | 276,060 | 353 |
Equity compensation expenses | 18,917 | 9,536 | 34,006 | 18,709 |
Placement fees and underwriting costs | 6,383 | 1,754 | 9,822 | 2,684 |
Amortization of intangibles | 5,274 | 7,121 | 10,549 | 14,384 |
Depreciation expense | 2,774 | 1,934 | 5,990 | 3,792 |
Reconciling items | Non-Controlling interest | Subsidiaries | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | 574 | 0 | 574 | 0 |
Reconciling items | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | 8,825 | 5,288 | 19,334 | 11,267 |
Eliminations | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | (4,303) | (4,589) | (10,901) | (10,341) |
Acquisition and merger-related expenses | 0 | |||
Eliminations | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | (4,303) | (4,589) | (10,901) | (10,341) |
OMG | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Expenses | $ 49,951 | $ 39,667 | $ 95,653 | $ 82,495 |
SEGMENT REPORTING (Other Income
SEGMENT REPORTING (Other Income (Expense)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | $ 29,387 | $ 17,406 | $ 88,609 | $ 1,955 |
Operating segment | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Offering costs | 5 | 0 | (655) | 0 |
Operating segment | Ares Management L.P | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | 30,237 | 22,427 | 41,157 | 17,645 |
Reconciling items | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | (850) | (5,021) | 47,452 | (15,690) |
Changes in fair value of contingent consideration | (32) | 24 | 20,216 | (204) |
Offering costs | 5 | 0 | (655) | 0 |
Reconciling items | Subsidiaries | Non-Controlling interest | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | 5 | 0 | 5 | 0 |
Reconciling items | AREA Sponsor Holdings, LLC | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Performance fee reclass | 217 | 1,016 | 241 | 1,588 |
Reconciling items | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | (3,150) | 7,168 | 35,295 | (15,635) |
Eliminations | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | 3,731 | (566) | (6,874) | 11,673 |
Eliminations | Consolidated Funds | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | 3,731 | (566) | (6,874) | 11,673 |
OMG | ||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||||
Total consolidated other income | $ (1,626) | $ (12,663) | $ (776) | $ (13,112) |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation of Income Before Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Economic net income | ||||
Income (loss) before taxes | $ 115,080 | $ 83,006 | $ (75,508) | $ 74,032 |
Adjustments: | ||||
Amortization of intangibles | 10,500 | 14,400 | ||
Equity compensation expenses | 18,917 | 9,536 | 34,006 | 18,709 |
Income tax expense (benefit) | (1,253) | 4,434 | 33,011 | (231) |
Operating segment | ||||
Adjustments: | ||||
Amortization of intangibles | 5,274 | 7,121 | 10,549 | 14,384 |
Depreciation expense | 2,774 | 1,934 | 5,990 | 3,792 |
Equity compensation expenses | 18,917 | 9,536 | 34,006 | 18,709 |
Acquisition and merger-related expenses | 756 | 61 | 255,844 | 557 |
Placement fees and underwriting costs | 6,383 | 1,754 | 9,822 | 2,684 |
Offering costs | (5) | 0 | 655 | 0 |
Economic net income | 209,630 | 154,681 | 330,338 | 222,106 |
Total performance fees income - realized | (74,130) | (81,604) | (82,935) | (87,953) |
Total performance fees income - unrealized | (263,629) | (123,314) | (312,890) | (85,966) |
Total performance fee compensation - realized | (52,973) | (51,031) | (58,274) | (53,014) |
Total performance fee compensation - unrealized | 208,732 | 100,865 | 244,133 | 77,552 |
Total investment income | (30,237) | (22,427) | (41,157) | (17,645) |
Fee related earnings | 103,339 | 79,232 | 195,763 | 161,108 |
Investment and other income (expense) realized, net | 4,522 | 14,657 | 5,907 | 18,828 |
Dividend equivalent | (1,520) | (706) | (4,201) | (1,390) |
One-time acquisition costs | (11) | (12) | (23) | (282) |
Income tax expense (benefit) | (381) | (249) | (607) | (481) |
Non-cash items | 322 | 683 | 136 | 847 |
Placement fees and underwriting costs | (6,383) | (1,747) | (9,822) | (2,685) |
Depreciation and amortization | (1,315) | (998) | (2,785) | (1,929) |
Distributable earnings | 119,730 | 121,433 | 209,029 | 208,955 |
Economic net income | 209,630 | 154,681 | 330,338 | 222,106 |
Performance related earnings | 106,291 | 75,449 | 134,575 | 60,998 |
Operating segment | Subsidiaries | ||||
Adjustments: | ||||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 623 | 0 | 623 | 0 |
Reconciling items | ||||
Adjustments: | ||||
Amortization of intangibles | 5,274 | 7,121 | 10,549 | 14,384 |
Depreciation expense | 2,774 | 1,934 | 5,990 | 3,792 |
Equity compensation expenses | 18,917 | 9,536 | 34,006 | 18,709 |
Acquisition and merger-related expenses | 724 | 85 | 276,060 | 353 |
Placement fees and underwriting costs | 6,383 | 1,754 | 9,822 | 2,684 |
Offering costs | (5) | 0 | 655 | 0 |
Total consolidation adjustments and reconciling items | 94,550 | 71,675 | 405,846 | 148,074 |
OMG | ||||
Adjustments: | ||||
OMG expenses, net | 51,577 | 52,330 | 96,429 | 95,607 |
Economic net income | (51,577) | (52,330) | (96,429) | (95,607) |
Total performance fees income - realized | 0 | 0 | 0 | 0 |
Total performance fees income - unrealized | 0 | 0 | 0 | 0 |
Total performance fee compensation - realized | 0 | 0 | 0 | 0 |
Total performance fee compensation - unrealized | 0 | 0 | 0 | 0 |
Total investment income | 1,626 | 12,663 | 776 | 13,112 |
Fee related earnings | (49,951) | (39,667) | (95,653) | (82,495) |
Distributable earnings | (50,038) | (44,613) | (98,428) | (90,854) |
Economic net income | (51,577) | (52,330) | (96,429) | (95,607) |
Performance related earnings | (1,626) | (12,663) | (776) | (13,112) |
Consolidated Funds | ||||
Adjustments: | ||||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (8,647) | 1,054 | 7,208 | (10,925) |
Total investment income | (11,451) | (9,690) | (21,621) | (17,022) |
Consolidated Funds | Operating segment | ||||
Adjustments: | ||||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | $ 8,251 | $ (1,061) | $ (8,072) | $ 12,341 |
CONSOLIDATION (Variable Interes
CONSOLIDATION (Variable Interest Entities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Variable Interest Entity [Line Items] | |||||
Assets of consolidated VIEs | $ 6,244,449 | $ 6,244,449 | $ 5,829,712 | ||
Liabilities of consolidated VIEs | 4,995,976 | 4,995,976 | 4,452,450 | ||
Consolidated Funds | |||||
Variable Interest Entity [Line Items] | |||||
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | (8,647) | $ 1,054 | 7,208 | $ (10,925) | |
Non-Consolidated Variable Interest Entities | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss attributable to the Company's investment in VIEs | 371,688 | 371,688 | 268,950 | ||
Consolidated VIEs | |||||
Variable Interest Entity [Line Items] | |||||
Maximum exposure to loss attributable to the Company's investment in VIEs | 140,478 | 140,478 | 153,746 | ||
Consolidated VIEs | Consolidated Funds | |||||
Variable Interest Entity [Line Items] | |||||
Assets of consolidated VIEs | 3,936,175 | 3,936,175 | 3,822,010 | ||
Liabilities of consolidated VIEs | $ 3,471,917 | $ 3,471,917 | $ 3,360,329 |
CONSOLIDATION (Balance Sheet) (
CONSOLIDATION (Balance Sheet) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Assets | ||||
Goodwill | $ 143,824 | $ 143,724 | ||
Total assets | 6,244,449 | 5,829,712 | ||
Liabilities | ||||
Total liabilities | 4,995,976 | 4,452,450 | ||
Commitments and contingencies | ||||
Preferred equity (12,400,000 units issued and outstanding at June 30, 2017 and December 31, 2016) | 298,761 | 298,761 | ||
Controlling interest in Ares Management, L.P. : | ||||
Partners' Capital (82,131,000 units and 80,814,732 units issued and outstanding at June 30, 2017 and at December 31, 2016, respectively) | 278,012 | 301,790 | ||
Accumulated other comprehensive loss, net of tax | (7,403) | (8,939) | ||
Total controlling interest in Ares Management, L.P | 270,609 | 292,851 | ||
Total equity | 1,248,473 | 1,377,262 | ||
Total liabilities and equity | $ 6,244,449 | $ 5,829,712 | ||
Preferred equity, units issued (in units) | 12,400,000 | 12,400,000 | ||
Preferred equity, units outstanding (in units) | 12,400,000 | 12,400,000 | ||
Partners' Capital units issued (in units) | 82,131,000 | 80,814,732 | ||
Partners' Capital units outstanding (in units) | 82,131,000 | 80,814,732 | ||
Reportable legal entity | ||||
Assets | ||||
Total assets | $ 3,936,175 | |||
Liabilities | ||||
Preferred equity (12,400,000 units issued and outstanding at June 30, 2017 and December 31, 2016) | 298,761 | $ 298,761 | ||
Eliminations | ||||
Assets | ||||
Total assets | (148,118) | (168,390) | ||
Liabilities | ||||
Total liabilities | (29,322) | (44,744) | ||
Commitments and contingencies | ||||
Preferred equity (12,400,000 units issued and outstanding at June 30, 2017 and December 31, 2016) | 0 | 0 | ||
Controlling interest in Ares Management, L.P. : | ||||
Total equity | (118,796) | (123,646) | ||
Total liabilities and equity | (148,118) | (168,390) | ||
Ares Management L.P | ||||
Assets | ||||
Cash and cash equivalents | 137,256 | 342,861 | $ 264,588 | $ 121,483 |
Investments, at fair value | 598,681 | 468,471 | ||
Performance fees receivable | 1,082,775 | 759,099 | ||
Due from affiliates | 157,372 | 162,936 | ||
Deferred tax asset, net | 39,080 | 6,731 | ||
Other assets | 101,520 | 65,565 | ||
Intangible assets, net | 47,766 | 58,315 | ||
Goodwill | 143,824 | 143,724 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 84,745 | 83,336 | ||
Accrued compensation | 89,100 | 131,736 | ||
Due to affiliates | 23,891 | 17,564 | ||
Performance fee compensation payable | 844,789 | 598,050 | ||
Debt obligations | 510,856 | 305,784 | ||
Controlling interest in Ares Management, L.P. : | ||||
Partners' Capital (82,131,000 units and 80,814,732 units issued and outstanding at June 30, 2017 and at December 31, 2016, respectively) | 278,012 | 301,790 | ||
Accumulated other comprehensive loss, net of tax | (7,403) | (8,939) | ||
Total controlling interest in Ares Management, L.P | 270,609 | 292,851 | ||
Investments, at fair value | 577,280 | 448,336 | ||
Ares Management L.P | Reportable legal entity | ||||
Assets | ||||
Cash and cash equivalents | 137,256 | 342,861 | ||
Investments, at fair value | 739,159 | 622,215 | ||
Performance fees receivable | 1,085,407 | 767,429 | ||
Due from affiliates | 162,380 | 169,252 | ||
Deferred tax asset, net | 39,080 | 6,731 | ||
Other assets | 101,520 | 65,565 | ||
Intangible assets, net | 47,766 | 58,315 | ||
Goodwill | 143,824 | 143,724 | ||
Total assets | 2,456,392 | 2,176,092 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 84,745 | 83,336 | ||
Accrued compensation | 89,100 | 131,736 | ||
Due to affiliates | 23,891 | 17,959 | ||
Performance fee compensation payable | 844,789 | 598,050 | ||
Debt obligations | 510,856 | 305,784 | ||
Total liabilities | 1,553,381 | 1,136,865 | ||
Commitments and contingencies | ||||
Controlling interest in Ares Management, L.P. : | ||||
Partners' Capital (82,131,000 units and 80,814,732 units issued and outstanding at June 30, 2017 and at December 31, 2016, respectively) | 278,012 | 301,790 | ||
Accumulated other comprehensive loss, net of tax | (7,403) | (8,939) | ||
Total controlling interest in Ares Management, L.P | 270,609 | 292,851 | ||
Total equity | 903,011 | 1,039,227 | ||
Total liabilities and equity | 2,456,392 | 2,176,092 | ||
Ares Management L.P | Eliminations | ||||
Assets | ||||
Cash and cash equivalents | 0 | |||
Investments, at fair value | (140,478) | (153,744) | ||
Performance fees receivable | (2,632) | (8,330) | ||
Due from affiliates | (5,008) | (6,316) | ||
Deferred tax asset, net | 0 | 0 | ||
Other assets | 0 | |||
Intangible assets, net | 0 | |||
Goodwill | 0 | |||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 0 | |||
Accrued compensation | 0 | |||
Due to affiliates | 0 | (395) | ||
Performance fee compensation payable | 0 | |||
Debt obligations | 0 | |||
Controlling interest in Ares Management, L.P. : | ||||
Partners' Capital (82,131,000 units and 80,814,732 units issued and outstanding at June 30, 2017 and at December 31, 2016, respectively) | 0 | |||
Accumulated other comprehensive loss, net of tax | 0 | |||
Total controlling interest in Ares Management, L.P | 0 | 0 | ||
Consolidated Funds | ||||
Assets | ||||
Cash and cash equivalents | 424,652 | 455,280 | ||
Investments, at fair value | 3,441,802 | 3,330,203 | ||
Due from affiliates | 5,503 | 3,592 | ||
Other assets | 4,927 | 2,501 | ||
Dividends and interest receivable | 6,797 | 8,479 | ||
Receivable for securities sold | 52,494 | 21,955 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 33,638 | 21,056 | ||
Due to affiliates | 0 | 0 | ||
Payable for securities purchased | 231,634 | 208,742 | ||
CLO loan obligations, at fair value | 3,093,598 | 3,031,112 | ||
Fund borrowings | 83,725 | 55,070 | ||
Non-controlling interest in Ares Operating Group entities | 345,462 | 338,035 | ||
Controlling interest in Ares Management, L.P. : | ||||
Investments, at fair value | 3,441,802 | 3,330,203 | ||
Consolidated Funds | Reportable legal entity | ||||
Assets | ||||
Cash and cash equivalents | 424,652 | 455,280 | ||
Investments, at fair value | 3,441,802 | 3,330,203 | ||
Due from affiliates | 5,503 | 3,592 | ||
Other assets | 4,927 | 2,501 | ||
Dividends and interest receivable | 6,797 | 8,479 | ||
Receivable for securities sold | 52,494 | 21,955 | ||
Total assets | 3,822,010 | |||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 33,638 | 21,056 | ||
Due to affiliates | 7,639 | 10,599 | ||
Payable for securities purchased | 231,634 | 208,742 | ||
CLO loan obligations, at fair value | 3,115,281 | 3,064,862 | ||
Fund borrowings | 83,725 | 55,070 | ||
Total liabilities | 3,471,917 | 3,360,329 | ||
Commitments and contingencies | ||||
Non-controlling interest in Ares Operating Group entities | 464,258 | 461,681 | ||
Controlling interest in Ares Management, L.P. : | ||||
Total equity | 464,258 | 461,681 | ||
Total liabilities and equity | 3,936,175 | 3,822,010 | ||
Consolidated Funds | Eliminations | ||||
Assets | ||||
Cash and cash equivalents | 0 | |||
Investments, at fair value | 0 | |||
Due from affiliates | 0 | |||
Other assets | 0 | |||
Dividends and interest receivable | 0 | |||
Receivable for securities sold | 0 | |||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 0 | |||
Due to affiliates | (7,639) | (10,599) | ||
Payable for securities purchased | 0 | 0 | ||
CLO loan obligations, at fair value | (21,683) | (33,750) | ||
Fund borrowings | 0 | 0 | ||
Non-controlling interest in Ares Operating Group entities | (118,796) | (123,646) | ||
AOG | ||||
Liabilities | ||||
Non-controlling interest in Ares Operating Group entities | 333,641 | 447,615 | ||
AOG | Reportable legal entity | ||||
Liabilities | ||||
Non-controlling interest in Ares Operating Group entities | $ 333,641 | $ 447,615 |
CONSOLIDATION (Income Statement
CONSOLIDATION (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | ||||
Administrative and other fees | $ 0 | |||
Total revenues | 533,890 | $ 369,535 | $ 775,547 | $ 505,550 |
Expenses | ||||
Total expenses | 448,197 | 303,935 | 939,664 | 433,473 |
Other income (expense) | ||||
Total other income | 29,387 | 17,406 | 88,609 | 1,955 |
Income (loss) before taxes | 115,080 | 83,006 | (75,508) | 74,032 |
Income tax expense (benefit) | 1,253 | (4,434) | (33,011) | 231 |
Net income (loss) | 113,827 | 87,440 | (42,497) | 73,801 |
Net income attributable to Ares Management, L.P. | 49,878 | 37,574 | 8,744 | 34,484 |
Less: Preferred equity distributions paid | 5,425 | 0 | 10,850 | 0 |
Net income (loss) attributable to Ares Management, L.P. common unitholders | 44,453 | 37,574 | (2,106) | 34,484 |
Reportable legal entity | ||||
Revenues | ||||
Administrative and other fees | 0 | 0 | 0 | |
Eliminations | ||||
Revenues | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | (4,792) | (4,091) | (9,528) | (8,326) |
Performance fees | 482 | (751) | (2,388) | 873 |
Administrative and other fees | 0 | |||
Total revenues | (4,310) | (4,842) | (11,916) | (7,453) |
Expenses | ||||
Compensation and benefits | 0 | |||
Performance fee compensation | 0 | |||
General, administrative and other expenses | 0 | |||
Transaction support expense | 0 | |||
Total expenses | (4,303) | (4,589) | (10,901) | (10,341) |
Other income (expense) | ||||
Investment income and net interest income (expense) | (755) | (852) | (1,929) | (2,218) |
Other income, net | 0 | |||
Net realized and unrealized gain (loss) on investments | 2,598 | (2,437) | (10,594) | 10,840 |
Total other income | 3,731 | (566) | (6,874) | 11,673 |
Income (loss) before taxes | 3,724 | (819) | (7,889) | 14,561 |
Income tax expense (benefit) | 0 | |||
Net income (loss) | 3,724 | (819) | (7,889) | 14,561 |
Less: Preferred equity distributions paid | 0 | 0 | ||
Net income (loss) attributable to Ares Management, L.P. common unitholders | 0 | 0 | ||
Ares Management L.P | ||||
Revenues | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 180,768 | 158,521 | 352,813 | 316,954 |
Performance fees | 338,024 | 203,151 | 393,196 | 173,204 |
Administrative and other fees | 15,098 | 7,863 | 29,538 | 15,392 |
Total revenues | 533,890 | 369,535 | 775,547 | 505,550 |
Expenses | ||||
Compensation and benefits | 131,219 | 112,654 | 255,558 | 223,333 |
Performance fee compensation | 261,705 | 151,896 | 302,407 | 130,566 |
General, administrative and other expenses | 50,751 | 38,686 | 98,089 | 78,648 |
Transaction support expense | 0 | 0 | 275,177 | 0 |
Other income (expense) | ||||
Investment income and net interest income (expense) | (2,252) | 4,993 | (4,387) | 1,634 |
Other income, net | 2,822 | 5,673 | 19,318 | 10,914 |
Net realized and unrealized gain (loss) on investments | 30,079 | (3,151) | 32,734 | 1,991 |
Interest expense | 5,354 | 4,828 | 10,233 | 9,683 |
Ares Management L.P | Affiliated entity | ARCC | ||||
Revenues | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 19,143 | 28,999 | 52,400 | 57,624 |
Ares Management L.P | Reportable legal entity | ||||
Revenues | ||||
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively) | 185,560 | 162,612 | 362,341 | 325,280 |
Performance fees | 337,542 | 203,902 | 395,584 | 172,331 |
Administrative and other fees | 15,098 | 7,863 | 29,538 | 15,392 |
Total revenues | 538,200 | 374,377 | 787,463 | 513,003 |
Expenses | ||||
Compensation and benefits | 131,219 | 112,654 | 255,558 | 223,333 |
Performance fee compensation | 261,705 | 151,896 | 302,407 | 130,566 |
General, administrative and other expenses | 50,751 | 38,686 | 98,089 | 78,648 |
Transaction support expense | 275,177 | |||
Total expenses | 443,675 | 303,236 | 931,231 | 432,547 |
Other income (expense) | ||||
Investment income and net interest income (expense) | (1,497) | 5,845 | (2,458) | 3,852 |
Other income, net | 2,822 | 5,673 | 19,318 | 10,914 |
Net realized and unrealized gain (loss) on investments | 27,481 | (714) | 43,328 | (8,849) |
Total other income | 28,806 | 10,804 | 60,188 | 5,917 |
Income (loss) before taxes | 123,331 | 81,945 | (83,580) | 86,373 |
Income tax expense (benefit) | 857 | (4,441) | (33,875) | 1,647 |
Net income (loss) | 122,474 | 86,386 | (49,705) | 84,726 |
Net income attributable to Ares Management, L.P. | 49,878 | 8,744 | ||
Less: Preferred equity distributions paid | 5,425 | 10,850 | ||
Net income (loss) attributable to Ares Management, L.P. common unitholders | 44,453 | 37,574 | (2,106) | 34,484 |
Consolidated Funds | ||||
Expenses | ||||
Expenses of the Consolidated Funds | 4,522 | 699 | 8,433 | 926 |
Other income (expense) | ||||
Investment income and net interest income (expense) | 11,451 | 9,690 | 21,621 | 17,022 |
Net realized and unrealized gain (loss) on investments | (12,713) | 201 | 19,323 | (29,606) |
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | (8,647) | 1,054 | 7,208 | (10,925) |
Interest expense | 26,875 | 18,607 | 58,197 | 41,056 |
Consolidated Funds | Reportable legal entity | ||||
Expenses | ||||
Expenses of the Consolidated Funds | 8,825 | 5,288 | 19,334 | 11,267 |
Total expenses | 8,825 | 5,288 | 19,334 | 11,267 |
Other income (expense) | ||||
Investment income and net interest income (expense) | (4,103) | 8,336 | 3,903 | 13,610 |
Net realized and unrealized gain (loss) on investments | 953 | (1,168) | 31,392 | (29,245) |
Total other income | (3,150) | 7,168 | 35,295 | (15,635) |
Income (loss) before taxes | (11,975) | 1,880 | 15,961 | (26,902) |
Income tax expense (benefit) | 396 | 7 | 864 | (1,416) |
Net income (loss) | (12,371) | 1,873 | 15,097 | (25,486) |
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | (12,371) | 1,873 | 15,097 | (25,486) |
Consolidated Funds | Eliminations | ||||
Expenses | ||||
Expenses of the Consolidated Funds | (4,303) | (4,589) | (10,901) | (10,341) |
Total expenses | (4,303) | (4,589) | (10,901) | (10,341) |
Other income (expense) | ||||
Investment income and net interest income (expense) | 15,554 | 1,354 | 17,718 | 3,412 |
Net realized and unrealized gain (loss) on investments | (13,666) | 1,369 | (12,069) | (361) |
Total other income | 3,731 | (566) | (6,874) | 11,673 |
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | 3,724 | (819) | (7,889) | 14,561 |
AOG | ||||
Other income (expense) | ||||
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | 72,596 | 48,473 | (58,449) | 49,893 |
Less: Net income attributable to redeemable interests in Ares Operating Group entities | 0 | 339 | 0 | 349 |
AOG | Reportable legal entity | ||||
Other income (expense) | ||||
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | 72,596 | 48,473 | $ (58,449) | 49,893 |
Less: Net income attributable to redeemable interests in Ares Operating Group entities | $ 339 | 349 | ||
AOG | Eliminations | ||||
Other income (expense) | ||||
Net income (loss) attributable to non-controlling interests related to consolidated VIEs | $ 0 | |||
Less: Net income attributable to redeemable interests in Ares Operating Group entities | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event | Aug. 04, 2017$ / shares |
Subsequent events | |
Quarterly distribution declared (in dollars per unit) | $ 0.31 |
Preferred equity quarterly distribution (in dollars per unit) | $ 0.4375 |