Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
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 | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 97,522,827 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Assets | ||||
Investments, at fair value | $ 1,724,571 | |||
Other assets | 130,341 | |||
Goodwill | $ 143,968 | 143,895 | ||
Total assets | 8,560,082 | 8,563,522 | ||
Liabilities | ||||
Total liabilities | 6,994,887 | 7,103,230 | ||
Commitments and contingencies | ||||
Preferred equity (12,400,000 shares issued and outstanding at March 31, 2018 and December 31, 2017) | 298,761 | 298,761 | ||
Controlling interest in Ares Management, L.P.: | ||||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 377,235 | 279,065 | ||
Accumulated other comprehensive loss, net of tax | (4,001) | (4,208) | ||
Total controlling interest in Ares Management, L.P. | 373,234 | 274,857 | ||
Total equity | 1,565,195 | 1,460,292 | ||
Total liabilities and equity | 8,560,082 | 8,563,522 | ||
Ares Management L.P | ||||
Assets | ||||
Cash and cash equivalents | 115,540 | 118,929 | $ 103,989 | $ 342,861 |
Investments, at fair value | 1,811,829 | 1,724,571 | ||
Due from affiliates | 168,810 | 165,750 | ||
Deferred tax asset, net | 50,986 | 8,326 | ||
Other assets | 105,187 | 130,341 | ||
Intangible assets, net | 37,178 | 40,465 | ||
Goodwill | 143,968 | 143,895 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 78,771 | 81,955 | ||
Accrued compensation | 49,944 | 27,978 | ||
Due to affiliates | 21,018 | 14,642 | ||
Performance related compensation payable | 856,421 | 846,626 | ||
Debt obligations | 590,169 | 616,176 | ||
Controlling interest in Ares Management, L.P.: | ||||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 377,235 | 279,065 | ||
Accumulated other comprehensive loss, net of tax | (4,001) | (4,208) | ||
Total controlling interest in Ares Management, L.P. | 373,234 | 274,857 | ||
Consolidated Funds | ||||
Assets | ||||
Cash and cash equivalents | 532,470 | 556,500 | ||
Investments, at fair value | 5,479,136 | 5,582,842 | ||
Due from affiliates | 17,782 | 15,884 | ||
Other assets | 1,382 | 1,989 | ||
Dividends and interest receivable | 12,096 | 12,568 | ||
Receivable for securities sold | 83,718 | 61,462 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 81,508 | 64,316 | ||
Due to affiliates | 0 | 0 | ||
Payable for securities purchased | 239,139 | 350,145 | ||
CLO loan obligations, at fair value | 4,937,264 | 4,963,194 | ||
Fund borrowings | 140,653 | 138,198 | ||
Non-controlling interest in Consolidated Funds | 544,380 | 528,488 | ||
Non-controlling interest in Ares Operating Group entities | 544,380 | 528,488 | ||
AOG | ||||
Liabilities | ||||
Non-controlling interest in Ares Operating Group entities | $ 348,820 | $ 358,186 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments | $ 1,724,571 | |
Preferred equity, shares issued (in shares) | 12,400,000 | 12,400,000 |
Preferred equity, shares outstanding (in shares) | 12,400,000 | 12,400,000 |
Partners' Capital shares issued (in shares) | 97,514,500 | 82,280,033 |
Partners' Capital shares outstanding (in shares) | 97,514,500 | 82,280,033 |
Ares Management L.P | ||
Investments | $ 1,811,829 | $ 1,724,571 |
Ares Management L.P | Accrued Interest | ||
Investments | 1,113,435 | 1,077,236 |
Ares Management L.P | Collateral Pledged | ||
Investments | $ 17,575 | $ 0 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Administrative, transaction and other fees | $ 0 | $ 0 |
Total revenues | 266,089 | 244,244 |
Expenses | ||
Total expenses | 206,283 | 491,467 |
Other income (expense) | ||
Total other income | 2,240 | 56,635 |
Income (loss) before taxes | 62,046 | (190,588) |
Income tax benefit | (12,375) | (34,264) |
Net income (loss) | 74,421 | (156,324) |
Net income (loss) attributable to Ares Management, L.P. | 40,948 | (41,134) |
Less: Preferred equity dividend paid | 5,425 | 5,425 |
Net income (loss) attributable to Ares Management, L.P. common shareholders | $ 35,523 | $ (46,559) |
Net income (loss) attributable to Ares Management, L.P. per common share: | ||
Basic (in dollars per share) | $ 0.39 | $ (0.58) |
Diluted (in dollars per unit) | $ 0.28 | $ (0.58) |
Weighted-average common shares: | ||
Basic (in shares) | 85,617,932 | 81,106,734 |
Diluted (in shares) | 213,852,928 | 81,106,734 |
Dividend declared and paid per common share (in dollar per share) | $ 0.4 | $ 0.28 |
Ares Management L.P | ||
Revenues | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | $ 189,515 | $ 172,045 |
Carried interest allocation | 54,129 | 52,007 |
Incentive fees | 5,071 | 3,165 |
Principal investment income | 4,909 | 2,587 |
Administrative, transaction and other fees | 12,465 | 14,440 |
Total revenues | 266,089 | 244,244 |
Expenses | ||
Compensation and benefits | 134,639 | 124,339 |
Performance related compensation | 25,878 | 40,702 |
General, administrative and other expenses | 44,450 | 47,338 |
Transaction support expense | 0 | 275,177 |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | (839) | 888 |
Interest and dividend income | 3,347 | 1,924 |
Interest expense | (6,869) | (4,879) |
Other income (expense), net | (311) | 16,496 |
Income tax benefit | (12,375) | (34,733) |
Consolidated Funds | ||
Expenses | ||
Expenses of Consolidated Funds | 1,316 | 3,911 |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | (13,085) | 32,036 |
Interest and dividend income | 64,422 | 41,492 |
Interest expense | (44,425) | (31,322) |
Income tax benefit | 0 | 469 |
Net income attributable to non-controlling interests related to consolidated VIEs | 367 | 15,855 |
AOG | ||
Other income (expense) | ||
Net income attributable to non-controlling interests related to consolidated VIEs | $ 33,106 | $ (131,045) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Ares Management L.P | Affiliated entity | ARCC | ||
Management fees, part I fees | $ 28,417 | $ 33,257 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net income (loss) | $ 74,421 | $ (156,324) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 6,687 | |
Ares Management L.P | ||
Other comprehensive income: | ||
Foreign currency translation adjustments | 5,485 | 3,442 |
Total comprehensive income (loss) | 79,906 | (152,882) |
Comprehensive income (loss) attributable to Ares Management, L.P. | 41,155 | (39,933) |
Consolidated Funds | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | 3,542 | 15,856 |
AOG | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | $ 35,209 | $ (128,805) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Ares Management L.P | Ares Management L.PAccumulated Other Comprehensive Loss | AOGNon-Controlling interest | Consolidated FundsNon-Controlling interest | Partners' CapitalAres Management L.P | Partners' CapitalPreferred Partner | Non-Controlling interestAOG |
Increase (Decrease) in Stockholders' Equity | ||||||||
Adoption of ASU | $ 0 | |||||||
Adoption of ASU | ASC 606 | (22,611) | $ 0 | $ (17,117) | $ 5,333 | $ (10,827) | $ 0 | $ (17,117) | |
Adoption of ASU | ASU 2018-02 | 0 | (1,202) | 1,202 | |||||
As adjusted balance at January 1, 2018 | 1,437,681 | (4,208) | 341,069 | 533,821 | 268,238 | 298,761 | ||
Balance at Dec. 31, 2017 | 1,460,292 | (4,208) | 358,186 | 528,488 | 279,065 | 298,761 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||
Changes in ownership interests | (7,311) | 18,809 | (26,120) | |||||
Effects arising from allocation of shareholders' equity on deferred tax assets | 17,770 | 0 | 17,769 | $ 1 | ||||
Contributions | 113,441 | 0 | 8,000 | 105,441 | ||||
Distributions | (98,188) | (58,677) | (983) | (33,103) | (5,425) | |||
Net income | 74,421 | 33,106 | 367 | 35,523 | 5,425 | |||
Currency translation adjustment | 6,687 | $ 5,485 | 1,409 | 2,103 | 3,175 | |||
Equity compensation | 20,694 | 12,409 | 8,285 | |||||
Balance at Mar. 31, 2018 | $ 1,565,195 | $ (4,001) | $ 348,820 | $ 544,380 | $ 377,235 | $ 298,761 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 74,421 | $ (156,324) |
Adjustments to reconcile net income (loss) to net cash used in operating activities | (19,979) | (18,522) |
Cash flows due to changes in operating assets and liabilities | (37,718) | (135,303) |
Net cash provided by (used in) operating activities | 80,507 | (291,816) |
Cash flows from investing activities: | ||
Purchase of furniture, equipment and leasehold improvements, net | (2,857) | (10,252) |
Net cash used in investing activities | (2,857) | (10,252) |
Allocable to non-controlling interests in Consolidated Funds: | ||
Net cash provided by (used in) financing activities | (85,652) | 60,781 |
Ares Management L.P | ||
Cash flows from financing activities: | ||
Proceeds from issuance of common shares | 105,441 | 0 |
Proceeds from credit facility | 240,000 | 165,000 |
Proceeds from term notes | 44,050 | 17,600 |
Repayments of credit facility | (310,000) | 0 |
Repayments of term notes | (56) | 0 |
Distributions | (91,780) | (68,595) |
Preferred equity distributions | (5,425) | (5,425) |
Taxes paid in net settlement of vested common shares | (7,311) | (3,913) |
Stock option exercise | 0 | 1,036 |
Tax from share-based payment | 0 | 81 |
Other financing activities | 0 | 646 |
Allocable to non-controlling interests in Consolidated Funds: | ||
Effect of exchange rate changes | 4,613 | 2,415 |
Net change in cash and cash equivalents | (3,389) | (238,872) |
Cash and cash equivalents, beginning of period | 118,929 | 342,861 |
Cash and cash equivalents, end of period | 115,540 | 103,989 |
Consolidated Funds | ||
Cash flows from operating activities: | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | 152,375 | (81,753) |
Cash flows due to changes in operating assets and liabilities | (88,592) | 100,086 |
Allocable to non-controlling interests in Consolidated Funds: | ||
Contributions from non-controlling interests in Consolidated Funds | 8,000 | 23,378 |
Distributions to non-controlling interests in Consolidated Funds | (983) | (7,822) |
Borrowings under loan obligations by Consolidated Funds | 1,303 | 505,714 |
Repayments under loan obligations by Consolidated Funds | (68,891) | $ (566,919) |
Cash and cash equivalents, beginning of period | 556,500 | |
Cash and cash equivalents, end of period | $ 532,470 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Ares Management, L.P. ("the Company"), a Delaware limited partnership treated as a corporation for U.S. federal income tax purposes, 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”). 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 company, and its sole assets are equity interests in Ares Holdings Inc. (“AHI”), Ares Offshore Holdings, Ltd., and Ares AI Holdings L.P., each of which is directly or indirectly wholly owned by the Company. 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. Change in Company Tax Status Election Effective March 1, 2018, the Company elected to be treated as a corporation for U.S. federal income tax purposes. The Company’s legal structure remains a Delaware limited partnership. In connection with the tax election, the Company amended and restated its partnership agreement to, among other things, reflect the new tax classification and change the name of its common units and preferred units to common shares and preferred shares, respectively. The terms of such common shares and preferred shares, and the associated rights, otherwise remain unchanged. Further, other terminology has been modified to be consistent with a corporation's results. For example, distributions are now referred to as dividends, and earnings per common unit are now referred to as earnings per common share. Comparative periods conform with the current period's presentation. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 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. Adoption of ASC 606 Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers . The Company adopted ASC 606 to all applicable contracts under the modified retrospective approach using the practical expedient provided for within paragraph 606-10-65-1(f)(3); therefore, the presentation of prior year periods has not been adjusted. The Company recognized the cumulative effect of initially adopting ASC 606 as an adjustment to the opening balance of components of equity as of January 1, 2018. Pursuant to ASC 606, the Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Under this standard, revenue is based on a contract with a determinable transaction price and distinct performance obligations with probable collectability. Revenues cannot be recognized until the performance obligation(s) are satisfied and control is transferred to the customer. The Company's adoption of ASC 606 impacted the timing and recognition of incentive fees in the Company’s consolidated statements of operations. The adoption of ASC 606 did not have an impact on the Company’s management fees, administrative fees, transaction fees or other fees. The details of the significant changes and quantitative impact of the adoption of ASC 606 are further discussed below. The adoption of ASC 606 had the following impact on the Company’s revenue streams: Revenues of the Company Impact of ASC 606 Management fees No Impact - Management fees are recognized as revenue in the period advisory services are rendered. Performance income - Carried interest allocation No impact. See discussion below for change in accounting policy. Performance income - Incentive fees See discussion below for impact. Administrative, transaction and other fees No Impact - Administrative, transaction and other fees are recognized as revenue in the period in which the related services are rendered. Performance Income Performance income consists of carried interest and incentive fees. Carried Interest In certain fund structures, typically in private equity and real estate equity funds, carried interest is allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s governing documents. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund's net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated, and may be subject to reversal to the extent that the amount allocated ultimately exceeds the amount due to the Company based on a fund’s cumulative investment returns. Carried interest is realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the specific hurdle rates as defined in the applicable governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally do not become realized until the end of a fund’s life. As of March 31, 2018 and December 31, 2017, the Company had no accrued contingent repayment obligations that would need to be paid if the funds were liquidated at fair value at the reporting dates. Prior to January 1, 2018, the Company accounted for carried interest under Method 2 described in ASC 605-20-S99-1, which provides guidance on accounting for incentive-based performance income, including carried interest. Since Method 2 is no longer available following the adoption of ASC 606, the Company has reassessed its accounting policy for carried interest, and has determined that carried interest is within scope of ASC 323, Investments-Equity Method and Joint Ventures, and out of scope under the scoping provision of ASC 606. Therefore, following the election of ASC 323, the Company accounted for carried interest, which represents a performance-based capital allocation from an investment fund to the Company, as earnings from financial assets within the scope of ASC 323. Accordingly, the Company recognizes carried interest allocation as a separate revenue line item in the Condensed Consolidated Statements of Operations. Uncollected carried interest as of the reporting date is recorded within investments in the Condensed Consolidated Statements of Financial Condition. The Company has applied the change in accounting principle on a full retrospective basis, and prior periods presented have been recast to conform with the current period's presentation. The change in accounting principle did not change the timing or the amount of carried interest recognized. Instead, the change in accounting principle resulted in reclassification from performance income to carried interest allocation, and therefore did not have any impact on net income. See the tables below for the impact of the change in accounting principle of carried interest under ASC 323 . Incentive Fees Incentive fees earned on the performance of certain fund structures, typically in credit funds, are recognized based on the fund’s performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. Incentive fees are realized at the end of a measurement period, typically annually. Once realized, such fees are no longer subject to reversal. Prior to January 1, 2018, the Company accounted for incentive fees under Method 2 as described above. However, the accounting for incentive fees is separate and distinct from the accounting for carried interest because the incentive fees are contractual fee arrangements and do not represent allocations of returns from partners' capital accounts. Upon the adoption of ASC 606, the Company accounts for incentive fees in accordance with ASC 606. Accordingly, the Company will recognize incentive fee revenue only when the amount is realized and no longer subject to reversal. Therefore, the Company will no longer recognize unrealized incentive fees in revenues in the condensed consolidated financial statements. The adoption of ASC 606 results in the delayed recognition of unrealized incentive fees in the condensed consolidated financial statements until they become realized at the end of the measurement period, which is typically annually. The Company adopted ASC 606 for incentive fees using the modified retrospective approach with effective date of January 1, 2018. The cumulative effect of the adoption resulted in the reversal of $22.6 million of unrealized incentive fees and is presented as a reduction to the opening balances of components of equity as of January 1, 2018. The following tables present the adjustments made in connection with the Company's change in accounting principle related to carried interest under ASC 323, Investments-Equity Method and Joint Ventures on the financial statement line items for the periods presented in the condensed consolidated financial statements: Condensed Consolidated Statement of Financial Condition As of December 31, 2017 As Previously Reported Adjustments As Adjusted (audited) Assets Investments ($1,077,236 of accrued carried interest, and $0 of pledged collateral) $ 647,335 $ 1,077,236 $ 1,724,571 Performance income receivable 1,099,847 (1,099,847 ) — Other assets 107,730 22,611 (1) 130,341 (1) Unrealized incentive fees receivable balance as of December 31, 2017. Condensed Consolidated Statement of Operations For the Three Months Ended March 31, 2017 As Previously Reported Adjustments As Adjusted Revenues Performance fees $ 55,172 $ (55,172 ) $ — Carried interest allocation — 52,007 52,007 Incentive fees — 3,165 3,165 Principal investment income — 2,587 2,587 Total revenues 241,657 2,587 244,244 Other income (expense) Net realized and unrealized gain on investments 2,655 (1,767 ) 888 Interest and dividend income 2,744 (820 ) 1,924 The Company's change in accounting policy related to carried interest under ASC 323 did not impact the Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Changes in Equity or Condensed Consolidated Statements of Cash Flows for the year ended December 31, 2017. The following tables present the impact of incentive fees on the condensed consolidated financial statements upon the adoption of ASC 606 effective January 1, 2018: As of January 1, 2018 As adjusted December 31, 2017 Adjustments As Adjusted for ASC 606 adoption Investments $ 1,724,571 $ — $ 1,724,571 Other assets 130,341 (22,611 ) (1) 107,730 Total assets 8,563,522 (22,611 ) 8,540,911 Total liabilities 7,103,230 — 7,103,230 Cumulative effect adjustment to equity(2) — (22,611 ) (22,611 ) Total equity 1,460,292 (22,611 ) 1,437,681 Total liabilities, non-controlling interests and equity 8,563,522 (22,611 ) 8,540,911 (1) Unrealized incentive fees receivable balance as of December 31, 2017. (2) See detail below. Condensed Consolidated Statement of Changes in Equity Preferred Equity Shareholders' Capital Accumulated Other Comprehensive Loss Non-controlling interest in Ares Operating Group Entities Non-Controlling Interest in Consolidated Funds Total Equity Balance at December 31, 2017 $ 298,761 $ 279,065 $ (4,208 ) $ 358,186 $ 528,488 $ 1,460,292 Cumulative effect of the adoption of ASC 606 — (10,827 ) — (17,117 ) 5,333 (22,611 ) As adjusted balance at January 1, 2018 $ 298,761 $ 268,238 $ (4,208 ) $ 341,069 $ 533,821 $ 1,437,681 In accordance with the ASC 606 disclosure requirements, the following tables present the adjustments made by the Company to remove the effects of adopting ASC 606 on the condensed consolidated financial statements as of and for the three months ended March 31, 2018 : Condensed Consolidated Statement of Financial Condition As of March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Assets Deferred tax asset, net $ 50,986 $ (250 ) $ 50,736 Other assets 105,187 23,704 128,891 Total assets 8,560,082 23,454 8,583,536 Commitments and contingencies Non-controlling interest in Consolidated Funds 544,380 (7,052 ) 537,328 Non-controlling interest in Ares Operating Group entities 348,820 18,803 367,623 Controlling interest in Ares Management, L.P.: Shareholders' equity (97,514,500 shares issued and outstanding) 377,235 11,603 388,838 Accumulated other comprehensive loss, net of tax (4,001 ) 100 (3,901 ) Total controlling interest in Ares Management, L.P 373,234 11,703 384,937 Total equity 1,565,195 23,454 1,588,649 Total liabilities and equity 8,560,082 23,454 8,583,536 Condensed Consolidated Statement of Operations For the Three Months Ended March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Revenues Incentive fees $ 5,071 $ 856 $ 5,927 Total revenues 266,089 856 266,945 Other income (expense) Other income (expense), net (311 ) (12 ) (323 ) Total other income 2,240 (12 ) 2,228 Income before taxes 62,046 844 62,890 Income tax benefit (12,375 ) 250 (12,125 ) Net income 74,421 594 75,015 Net income attributable to Ares Management, L.P. 40,948 594 41,542 Net income attributable to Ares Management, L.P. common shareholders 35,523 594 36,117 Condensed Consolidated Statement of Comprehensive Income Three Months Ended March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Net income $ 74,421 $ 594 $ 75,015 Other comprehensive income: Foreign currency translation adjustments 5,485 249 5,734 Total comprehensive income 79,906 843 80,749 Less: Comprehensive income attributable to non-controlling interests in Consolidated Funds 3,542 (1,719 ) 1,823 Less: Comprehensive income attributable to non-controlling interests in Ares Operating Group entities 35,209 1,686 36,895 Comprehensive income attributable to Ares Management, L.P. $ 41,155 $ 876 $ 42,031 Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Cash flows from operating activities: Net income $ 74,421 $ 594 $ 75,015 Cash flows due to changes in operating assets and liabilities (37,718 ) (2,313 ) (40,031 ) Cash flows due to changes in operating assets and liabilities allocable to non-controlling interests in Consolidated Funds (88,592 ) 1,719 (86,873 ) Recent Accounting Pronouncements The Company considers the applicability and impact of all FASB ASUs issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on the Company's condensed consolidated financial statements. 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 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Public Law No. 115-97 (the “Tax Cuts and Jobs Act”). Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. This ASU also requires certain disclosures about stranded tax effects. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The guidance should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company adopted ASU 2018-02 in the the three months ended March 31, 2018. As a result of the adoption of ASU 2018-02, $1.2 million of stranded tax effects resulting from the Tax Cuts and Jobs Act were reclassified from accumulated other comprehensive income to shareholders' equity during the three months ended March 31, 2018. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 As of March 31, As of December 31, 2018 2017 Management contracts 2.2 years $ 42,335 $ 67,306 Client relationships 10.3 years 38,600 38,600 Trade name 4.3 years 3,200 3,200 Total intangible assets 84,135 109,106 Less: accumulated amortization (46,957 ) (68,641 ) Intangible assets, net $ 37,178 $ 40,465 Amortization expense associated with intangible assets was $3.3 million and $5.3 million for the three months ended March 31, 2018 and 2017 , respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. During the first quarter of 2018, the Company removed $25.0 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, 2017 $ 32,196 $ 58,600 $ 53,099 $ 143,895 Foreign currency translation — — 73 73 Balance as of March 31, 2018 $ 32,196 $ 58,600 $ 53,172 $ 143,968 There was no impairment of goodwill recorded during the three months ended March 31, 2018 and 2017 . The impact of foreign currency translation is reflected within other comprehensive income. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Investments In And Advances To Affiliates [Abstract] | |
INVESTMENTS | INVESTMENTS The Company’s investments are comprised of: Percentage of total investments March 31, December 31, March 31, December 31, 2018 2017 2018 2017 As adjusted As adjusted Private Investment Partnership Interests: Equity method private investment partnership interests - principal (1) $ 347,406 $ 340,354 19.2 % 19.7 % Equity method - carried interest (1) 1,113,435 1,077,236 61.4 % 62.5 % Equity method private investment partnership interests - other 69,342 74,439 3.8 % 4.3 % Other private investment partnership interests 37,266 35,748 2.1 % 2.1 % Total private investment partnership interests 1,567,449 1,527,777 86.5 % 88.6 % Collateralized loan obligations 242,984 195,158 13.4 % 11.3 % Common stock 1,396 1,636 0.1 % 0.1 % Total investments $ 1,811,829 $ 1,724,571 (1) Interest or portion of the interest is denominated in foreign currency and is translated into U.S. dollars at each reporting date. Equity Method Investments The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant under SEC guidance. For the three months ended March 31, 2018 and 2017, no individual equity method investment held by the Company met the significance criteria. The Company recognized net gains of $3.5 million and $5.8 million related to its equity method investments for the three months ended March 31, 2018 and 2017 , respectively, that are included within both principal investment income and within net realized and unrealized gain on investments within the Consolidated Statements of Operations. The material assets of the Company's equity method investments are expected to generate long-term capital appreciation and/or interest income; the material liabilities are debt instruments collateralized by, or related to, the financing of the assets; and net income is materially comprised of the changes in fair value of these net assets. Investments of the Consolidated Funds Investments held in the Consolidated Funds are summarized below: Fair value at Fair value as a percentage of total investments at March 31, December 31, March 31, December 31, 2018 2017 2018 2017 United States: Fixed income securities: Consumer discretionary $ 1,303,537 $ 1,295,732 24.1 % 23.2 % Consumer staples 56,917 55,073 1.0 % 1.0 % Energy 173,698 176,836 3.2 % 3.2 % Financials 270,317 270,520 4.9 % 4.8 % Healthcare, education and childcare 453,622 449,888 8.3 % 8.1 % Industrials 364,479 370,926 6.7 % 6.6 % Information technology 146,733 167,089 2.7 % 3.0 % Materials 170,309 185,170 3.1 % 3.3 % Telecommunication services 385,829 399,617 7.0 % 7.2 % Utilities 62,667 77,102 1.1 % 1.4 % Total fixed income securities (cost: $3,393,506 3,388,108 3,447,953 62.1 % 61.8 % Equity securities: Energy 60 126 0.0 % 0.0 % Total equity securities (cost: $2,265 and $2,265 at March 31, 2018 and December 31, 2017, respectively) 60 126 0.0 % 0.0 % Partnership and interests Partnership and interests 252,700 232,332 4.6 % 4.2 % Total partnership and LLC interests (cost: $200,000 and $190,000 at March 31, 2018 and December 31, 2017, respectively) 252,700 232,332 4.6 % 4.2 % Fair value at Fair value as a percentage of total investments at March 31, December 31, March 31, December 31, 2018 2017 2018 2017 Europe: Fixed income securities: Consumer discretionary $ 603,516 $ 604,608 11.0 % 10.8 % Energy 2,461 2,413 0.0 % 0.0 % Consumer staples 72,317 76,361 1.3 % 1.4 % Financials 116,836 81,987 2.1 % 1.5 % Healthcare, education and childcare 187,032 209,569 3.4 % 3.8 % Industrials 128,345 145,706 2.3 % 2.6 % Information technology 20,603 21,307 0.4 % 0.4 % Materials 184,625 213,395 3.4 % 3.8 % Telecommunication services 181,917 182,543 3.3 % 3.3 % Total fixed income securities (cost: $1,507,741 and $1,545,297 at March 31, 2018 and December 31, 2017, respectively) 1,497,652 1,537,889 27.2 % 27.6 % Equity securities: Healthcare, education and childcare 61,065 63,155 1.1 % 1.1 % Total equity securities (cost: $67,198 and $67,198 at March 31, 2018 and December 31, 2017, respectively) 61,065 63,155 1.1 % 1.1 % Asia and other: Fixed income securities: Consumer discretionary 2,019 2,008 0.0 % 0.0 % Financials 22,476 12,453 0.4 % 0.2 % Telecommunication services 21,679 21,848 0.4 % 0.4 % Total fixed income securities (cost: $46,287 and $36,180 at March 31, 2018 and December 31, 2017, respectively) 46,174 36,309 0.8 % 0.6 % Equity securities: Consumer discretionary 50,071 59,630 0.9 % 1.1 % Consumer staples 46,232 45,098 0.8 % 0.8 % Healthcare, education and childcare 44,637 44,637 0.8 % 0.8 % Industrials 16,578 16,578 0.3 % 0.3 % Total equity securities (cost: $122,418 and $122,418 at March 31, 2018 and December 31, 2017, respectively) 157,518 165,943 2.8 % 3.0 % Fair value at Fair value as a percentage of total investments at March 31, December 31, March 31, December 31, 2018 2017 2018 2017 Canada: Fixed income securities: Consumer discretionary $ 7,474 $ 6,757 0.1 % 0.1 % Consumer staples 19,364 15,351 0.4 % 0.3 % Energy 14,103 33,715 0.3 % 0.6 % Industrials 18,667 18,785 0.3 % 0.3 % Telecommunication services 6,045 6,189 0.1 % 0.1 % Total fixed income securities (cost: $65,501 and $80,201 at March 31, 2018 and December 31, 2017, respectively) 65,653 80,797 1.2 % 1.4 % Equity securities: Consumer discretionary — 5,912 — % 0.1 % Total equity securities (cost: $0 and $17,202 at March 31, 2018 and December 31, 2017, respectively) — 5,912 — % 0.1 % Australia: Fixed income securities: Consumer discretionary 8,587 10,863 0.2 % 0.2 % Energy 1,619 1,563 0.0 % 0.0 % Total fixed income securities (cost: $10,446 and $12,714 at March 31, 2018 and December 31, 2017, respectively) 10,206 12,426 0.2 % 0.2 % Total fixed income securities 5,007,793 5,115,374 91.5 % 91.6 % Total equity securities 218,643 235,136 3.9 % 4.2 % Total partnership interests 252,700 232,332 4.6 % 4.2 % Total investments, at fair value $ 5,479,136 $ 5,582,842 At March 31, 2018 and December 31, 2017 , no single issuer or investment, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5.0% of the Company’s total assets. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income-collateralized loan obligations $ — $ — $ 242,984 $ — $ 242,984 Equity securities 377 1,019 — — 1,396 Partnership interests — — 44,769 37,266 82,035 Total investments, at fair value 377 1,019 287,753 37,266 326,415 Derivatives—foreign exchange contracts — 230 — — 230 Total assets, at fair value $ 377 $ 1,249 $ 287,753 $ 37,266 $ 326,645 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (4,229 ) $ — $ — $ (4,229 ) Total liabilities, at fair value $ — $ (4,229 ) $ — $ — $ (4,229 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 67,741 $ 6,570 $ 74,311 Loans — 4,648,235 234,193 4,882,428 Collateralized loan obligations — 51,054 — 51,054 Total fixed income investments — 4,767,030 240,763 5,007,793 Equity securities 58,221 — 160,422 218,643 Partnership interests — — 252,700 252,700 Total investments, at fair value 58,221 4,767,030 653,885 5,479,136 Derivatives: Asset swaps - other — — 834 834 Total assets, at fair value $ 58,221 $ 4,767,030 $ 654,719 $ 5,479,970 Liabilities, at fair value Asset swaps - other $ — $ — $ (748 ) $ (748 ) Loan obligations of CLOs — (4,937,264 ) — (4,937,264 ) Total liabilities, at fair value $ — $ (4,937,264 ) $ (748 ) $ (4,938,012 ) The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and Consolidated Funds as of December 31, 2017 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income-collateralized loan obligations $ — $ — $ 195,158 $ — $ 195,158 Equity securities 520 1,116 — — 1,636 Partnership interests — — 44,769 35,998 80,767 Total investments, at fair value 520 1,116 239,927 35,998 277,561 Derivatives—foreign exchange contracts — 498 — — 498 Total assets, at fair value $ 520 $ 1,614 $ 239,927 $ 35,998 $ 278,059 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (2,639 ) $ — $ — $ (2,639 ) Total liabilities, at fair value $ — $ (2,639 ) $ — $ — $ (2,639 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 82,151 $ 7,041 $ 89,192 Loans — 4,755,335 260,848 5,016,183 Collateralized loan obligations — 10,000 — 10,000 Total fixed income investments — 4,847,486 267,889 5,115,375 Equity securities 72,558 — 162,577 235,135 Partnership interests — — 232,332 232,332 Other — — — — Total investments, at fair value 72,558 4,847,486 662,798 5,582,842 Derivatives: Foreign exchange contracts — — — — Asset swaps - other — — 1,366 1,366 Total derivative assets, at fair value — — 1,366 1,366 Total assets, at fair value $ 72,558 $ 4,847,486 $ 664,164 $ 5,584,208 Liabilities, at fair value Asset swaps - other $ — $ — $ (462 ) $ (462 ) Loan obligations of CLOs — (4,963,194 ) — (4,963,194 ) Total liabilities, at fair value $ — $ (4,963,194 ) $ (462 ) $ (4,963,656 ) The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2018 : Level III Assets Level III Assets and Liabilities of the Company Fixed Income Partnership Total Balance, beginning of period $ 195,158 $ 44,769 $ 239,927 Deconsolidation of fund 78 — 78 Purchases(1) 48,731 — 48,731 Sales/settlements(2) (827 ) — (827 ) Realized and unrealized depreciation, net (156 ) — (156 ) Balance, end of period $ 242,984 $ 44,769 $ 287,753 Decrease in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ (610 ) $ — $ (610 ) Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 162,577 $ 267,889 $ 232,332 $ 904 $ 663,702 Deconsolidation of fund — (233 ) — — (233 ) Transfer in — 73,814 — — 73,814 Transfer out — (102,045 ) — — (102,045 ) Purchases(1) — 52,984 10,000 — 62,984 Sales(2) — (50,935 ) — — (50,935 ) Settlements, net — — — (177 ) (177 ) Amortized discounts/premiums — 96 — 7 103 Realized and unrealized appreciation (depreciation), net (2,155 ) (807 ) 10,368 (648 ) 6,758 Balance, end of period $ 160,422 $ 240,763 $ 252,700 $ 86 $ 653,971 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (2,156 ) $ (1,831 ) $ 10,368 $ (749 ) $ 5,632 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 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) 20,442 169 20,611 — Sales/settlements(2) (1,917 ) — (1,917 ) — Realized and unrealized appreciation (depreciation), net 617 (169 ) 448 (20,247 ) Balance, end of period $ 108,253 $ 33,410 $ 141,663 $ 1,909 Increase in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 470 $ — $ 470 $ 30 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 130,690 $ 242,253 $ 171,696 $ (2,708 ) $ 541,931 Transfer in — 86,197 — — 86,197 Transfer out (6,581 ) (66,805 ) — — (73,386 ) Purchases(1) 6,692 50,069 23,000 1,690 81,451 Sales(2) — (33,297 ) — 1,104 (32,193 ) Amortized discounts/premiums — 118 — 310 428 Realized and unrealized appreciation, net 11,557 294 1,994 449 14,294 Balance, end of period $ 142,358 $ 278,829 $ 196,690 $ 845 $ 618,722 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (3,488 ) $ (42 ) $ 1,994 $ (125 ) $ (1,661 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The Company recognizes transfers between the levels as of the beginning of the period. Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service. For the three months ended March 31, 2018 , 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 March 31, 2018 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 44,769 Other N/A N/A Collateralized loan obligations 242,984 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 287,753 The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of December 31, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 44,769 Other N/A N/A Collateralized loan obligations 195,158 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 239,927 The following table summarizes the quantitative inputs and assumptions used for the Consolidated Funds’ Level III measurements as of March 31, 2018 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Assets Equity securities $ 61,065 Enterprise value market multiple analysis EBITDA multiple(2) 3.0x 3.0 61,216 Market approach (comparable companies) Net income multiple 24.2x - 35.8x 32.7 Illiquidity discount 25.0% 25.0% 60 Broker quotes and/or 3rd party pricing services N/A N/A N/A 38,081 Recent transaction price(1) N/A N/A N/A Partnership interest 252,700 Discounted cash flow Discount rate 17.0% 17.0% Fixed income securities 192,660 Broker quotes and/or 3rd party pricing services N/A N/A N/A 48,103 Income approach Yield 7.6% - 14.9% 11.1% Derivative instruments 834 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 654,719 Liabilities Derivatives instruments $ (748 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (748 ) (1) 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, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 63,155 Enterprise value market multiple analysis EBITDA multiple(2) 2.7x 2.7x 61,215 Market approach (comparable companies) Net income multiple 27.0x - 36.2x 33.7x 126 Broker quotes and/or 3rd party pricing services N/A N/A N/A 38,081 Recent Transaction price(1) N/A N/A N/A Partnership interest 232,332 Discounted cash flow Discount rate 19.0% 19.0% Fixed income securities 222,413 Broker quotes and/or 3rd party pricing services N/A N/A N/A 45,243 Income approach Yield 10.8% - 22.5% 12.1% 233 Market approach (comparable companies) EBITDA multiple(2) 6.5x 6.5x Derivative instruments 1,366 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 664,164 Liabilities Derivatives instruments $ (462 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (462 ) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. The Company'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 commitments are presented below: As of March 31, 2018 As of December 31, 2017 Segment Fair Value Unfunded Fair Value Unfunded Non-core investments(1) $ 37,266 $ 16,317 $ 35,998 $ 16,492 Total $ 37,266 $ 16,317 $ 35,998 $ 16,492 (1) Non-core investments are reported within the Company's Operations Management Group ( “ OMG ” ). |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 and December 31, 2017 : As of March 31, 2018 As of December 31, 2017 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 $ 4,724 $ 230 $ 49,668 $ 4,229 $ 13,724 $ 498 $ 51,026 $ 2,639 Total derivatives, at fair value(2) $ 4,724 $ 230 $ 49,668 $ 4,229 $ 13,724 $ 498 $ 51,026 $ 2,639 As of March 31, 2018 As of December 31, 2017 Assets Liabilities Assets Liabilities Consolidated Funds Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Asset swap - other 4,843 834 1,750 748 5,363 1,366 1,840 462 Total derivatives, at fair value(3) 4,843 834 1,750 748 5,363 1,366 1,840 462 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of March 31, 2018 and December 31, 2017 , the Company had the right to, but elected not to, offset $0.2 million and $0.5 million of its derivative assets and liabilities, respectively. (3) As of March 31, 2018 and December 31, 2017 , the Consolidated Funds offset $0.4 million and $0.4 million of their derivative assets and liabilities, respectively. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of March 31, 2018 As of December 31, 2017 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility(1) Revolver 2/24/2022 N/A $ 140,000 3.38% $ 210,000 3.09% Senior Notes(2) 10/8/2014 10/8/2024 $ 250,000 245,469 4.21% 245,308 4.21% 2015 Term Loan(3) 9/2/2015 7/29/2026 35,205 35,042 3.24% 35,037 2.86% 2016 Term Loan(4) 12/21/2016 1/15/2029 26,376 25,959 3.44% 25,948 3.08% 2017 Term Loan A(4) 3/22/2017 1/22/2028 17,600 17,413 3.26% 17,407 2.90% 2017 Term Loan B(4) 5/10/2017 10/15/2029 35,198 35,066 3.26% 35,062 2.90% 2017 Term Loan C(4) 6/22/2017 7/30/2029 17,155 17,025 3.26% 17,078 2.88% 2017 Term Loan D(4) 11/16/2017 10/15/2030 30,450 30,339 3.07% 30,336 2.77% 2018 Term Loan A(4) 1/12/2018 1/15/2030 26,475 26,456 2.97% — N/A Repurchase Agreement Loan(5) 3/13/2018 4/20/2030 17,575 17,400 1.68% — N/A Total debt obligations $ 590,169 $ 616,176 (1) The AOG entities are borrowers under the Credit Facility, which provides a $1.065 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of March 31, 2018, 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, 2017 and 2018 Term Loans (“Term Loans”) were entered into by a subsidiary of the Company that acts as a manager to a CLO. 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 to cover the Term Loans, 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 ranging from 0.03% to 0.04% of a maximum investment amount. (5) See Repurchase Agreement below for details As of March 31, 2018 , the Company and its subsidiaries were in compliance with all covenants under the debt obligations. The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the Company's Senior Notes and Term Loans are recorded as a reduction of the corresponding debt obligation and debt issuance costs related to the Credit Facility are included in other assets in the Condensed Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the term of the related obligation. The following table presents the activity of the Company's debt issuance costs: Credit Facility Senior Notes Term Loans Repurchase Agreement Loan Unamortized debt issuance costs as of December 31, 2017 $ 6,543 $ 1,571 $ 1,171 $ — Debt issuance costs incurred — — 19 176 Amortization of debt issuance costs (393 ) (63 ) (32 ) (1 ) Unamortized debt issuance costs as of March 31, 2018 $ 6,150 $ 1,508 $ 1,158 $ 175 Repurchase Agreement In the three months ended March 31, 2018, the Company entered into a repurchase agreement with a third party. Under the terms of the agreement, the Company transferred certain fixed maturity securities to the third party and received cash as collateral in an amount equal to the estimated fair value of the securities at the inception of the transaction. The transfer did not meet the criteria for sale treatment as the Company did not relinquish control over the transferred assets. Therefore, the transferred assets remained in the Company's Condensed Consolidated Statements of Financial Condition. The associated liability is recorded at the amount of cash received. The Company monitors the estimated fair value of the collateral and the securities throughout the duration of the transaction and additional collateral will be obtained if necessary. The repurchase agreement does not provide restrictions on the sale or re-pledge of the securities by the third party. At the termination of the repurchase agreement, the third party is required to return the securities to the Company, and the Company is required to return the cash received as collateral plus the applicable interest. The followings are elements of the repurchase agreement as of March 31, 2018 : Amounts Securities transferred at carrying value $ 17,575 Estimated fair value of securities transferred(1) $ 17,575 Cash collateral received from counterparty(2) $ 17,575 (1) Included within the Company's investments. (2) Included within the Company's debt obligations. The following table shows cash collateral liability by security type: Remaining Contractual Maturity of the Agreement as of March 31, 2018 Less than 1 year 1 - 3 years 4 - 5 years Thereafter Total Collateralized loan obligations $ — $ — $ — $ 17,575 $ 17,575 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 March 31, 2018 and December 31, 2017 the following loan obligations were outstanding and classified as liabilities of the Company’s Consolidated CLOs: As of March 31, 2018 As of December 31, 2017 Loan Obligations Fair Value of Loan Obligations Weighted Loan Fair Value of Loan Obligations Weighted Average Remaining Maturity In Years Senior secured notes(1) $ 4,765,180 $ 4,758,121 10.39 $ 4,801,582 $ 4,776,883 10.57 Subordinated notes(2) 278,116 179,143 11.04 276,169 186,311 11.25 Total loan obligations of Consolidated CLOs $ 5,043,296 $ 4,937,264 $ 5,077,751 $ 4,963,194 (1) Original borrowings under the senior secured notes totaled $4.8 billion , with various maturity dates ranging from October 2024 to October 2030. The weighted average interest rate as of March 31, 2018 was 5.02% . (2) Original borrowings under the subordinated notes totaled $278.1 million , with various maturity dates ranging from October 2024 to October 2030. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO. Loan obligations of the Consolidated CLOs are collateralized by the assets held by the Consolidated CLOs, consisting of cash and cash equivalents, corporate loans, corporate bonds and other securities. The assets of one Consolidated CLO may not be used to satisfy the liabilities of another Consolidated CLO. Loan obligations of the Consolidated CLOs include floating rate notes, deferrable floating rate notes, revolving lines of credit and subordinated notes. Amounts borrowed under the notes are repaid based on available cash flows subject to priority of payments under each Consolidated CLO’s governing documents. Based on the terms of these facilities, the creditors of the facilities have no recourse to the Company. Credit Facilities of the Consolidated Funds Certain Consolidated Funds maintain credit facilities to fund investments between capital drawdowns. These facilities generally are collateralized by the unfunded capital commitments of the Consolidated Funds’ limited partners, bear an annual commitment fee based on unfunded commitments and contain various affirmative and negative covenants and reporting obligations, including restrictions on additional indebtedness, liens, margin stock, affiliate transactions, dividends and distributions, release of capital commitments and portfolio asset dispositions. The creditors of these facilities have no recourse to the Company 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 applicable law. Credit facilities of the Consolidated Funds are reflected at cost in the Condensed Consolidated Statements of Financial Condition. As of March 31, 2018 and December 31, 2017 , the Consolidated Funds were in compliance with all covenants under such credit facilities. The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding as of March 31, 2018 and December 31, 2017 : As of March 31, 2018 As of December 31, 2017 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 3.56% $ 12,942 2.88% 6/30/2018 49,194 49,194 1.55% (2) 48,042 1.55% (2) 3/7/2019 71,500 71,500 3.10% 71,500 2.88% Revolving Term Loan 1/31/2022 1,900 1,303 7.89% — —% 8/19/2019 11,429 5,714 8.91% 5,714 5.86% Total borrowings $ 140,653 $ 138,198 (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 | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 , the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. Commitments As of March 31, 2018 and December 31, 2017 , the Company had aggregate unfunded commitments of $291.3 million and $285.7 million , respectively, including commitments to both non-consolidated funds and Consolidated Funds. Total unfunded commitments included $16.3 million and $16.5 million in commitments to funds not managed by the Company as of March 31, 2018 and December 31, 2017 , respectively. ARCC Fee Waiver In conjunction with ARCC's acquisition of American Capital, Ltd. (“ACAS”), 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. The maximum amount of fees that may be waived in a quarter is $10 million , and if ARCC Part I Fees are less than $10 million in any single quarter, the shortfall will not carryover to subsequent quarters. As of March 31, 2018 , there are six remaining quarters as part of the fee waiver agreement, with a maximum of $60 million in potential waivers. ARCC Part I Fees are reported net of the fee waiver. Performance Income 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 March 31, 2018 and December 31, 2017 , if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment, net of tax, which may differ from the recognition of revenue, would have been approximately $479.4 million and $476.1 million , respectively, of which approximately $372.4 million and $370.0 million , respectively, is reimbursable to the Company by certain professionals who are the recipients of such performance income. Management believes the possibility of all of the investments becoming worthless is remote. As of March 31, 2018 and December 31, 2017 , 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 | 3 Months Ended |
Mar. 31, 2018 | |
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, carried interest allocation, incentive fees, investment income, other 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 accrued carried interest allocations and incentive fees receivable, which are presented within investments and other assets, respectively, 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 incentive fees. Performance income the Company earns from the funds can be distributed to professionals or their related entities 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 composed of the following: As of March 31, As of December 31, 2018 2017 Due from affiliates: Management fees receivable from non-consolidated funds $ 130,346 $ 126,506 Payments made on behalf of and amounts due from non-consolidated funds and employees 38,464 39,244 Due from affiliates—Company $ 168,810 $ 165,750 Amounts due from portfolio companies and non-consolidated funds $ 17,782 $ 15,884 Due from affiliates—Consolidated Funds $ 17,782 $ 15,884 Due to affiliates: Management fee rebate payable to non-consolidated funds $ 2,560 $ 5,213 Management fees received in advance 2,866 1,729 Tax receivable agreement liability 12,925 3,503 Payments made by non-consolidated funds on behalf of and payable by the Company 2,667 4,197 Due to affiliates—Company $ 21,018 $ 14,642 Due from Ares Funds and Portfolio Companies In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional services, travel and other costs associated with particular portfolio company holdings are subject to reimbursement by the portfolio companies. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Effective March 1, 2018, the Company elected to be treated as a corporation for U.S. federal income tax purposes, while remaining a limited partnership under state law. A portion of the Company’s operations was and continues to be held through AHI and corporate subsidiaries of Ares Investments. AHI and such corporate subsidiaries are U.S. corporations and subject to U.S. corporate tax on earnings that flow through from subsidiary entities. The income of such corporations has historically been subject to U.S. federal, state and local income taxes, and certain of its foreign subsidiaries continue to be subject to foreign income taxes (for which a foreign tax credit can generally offset U.S. corporate taxes imposed on the same income). Prior to March 1, 2018, a substantial portion of the Company’s earnings flowed through to owners of the Company without being subject to entity level income taxes. Consequently, a significant portion of the Company’s earnings did not reflect a provision for income taxes except those for foreign, state, city and local income taxes incurred at the entity level. From March 1, 2018, this portion of the Company’s earnings was subject to U.S. corporate tax. The Company’s income tax provision includes corporate income taxes and other entity level income taxes, as well as income taxes incurred by certain affiliated funds that are consolidated in these financial statements. The Company had an income tax benefit of $12.4 million for the three months ended March 31, 2018 . The net income tax benefit recorded for the three months ended March 31, 2018 includes a tax expense related to a deferred tax liability established for the anticipated future tax consequences of performance income and appreciation on certain investments that were previously exempt for tax purposes; however this tax expense was offset by a tax benefit related to a deferred tax asset established for certain equity based accounting adjustments. For the three months ended March 31, 2017 , the Company had an income tax benefit of $34.3 million primarily driven by the one-time ARCC-ACAS transaction support payment. Supplemental information on an unaudited pro forma basis, as if the Company's election to be treated as a corporation for U.S. federal income tax purposes was effective for the three months ended March 31, 2017 is as follows: Three Months Ended March 31, 2017 2018 2017 Pro forma Provision for Income Taxes - The Company Income tax benefit of the Company $ (12,375 ) $ (34,733 ) $ (28,344 ) Provision for Income Taxes - Consolidated Funds Income tax expense of the Consolidated Funds — 469 469 Total Provision for Income Taxes $ (12,375 ) $ (34,264 ) $ (27,875 ) The 2017 pro forma tax information was calculated as if the Company's election to be treated as a corporation for U.S. federal income tax purposes was effective for the three months ended March 31, 2017 . 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 entities that are subject to income taxes and those subsidiaries that are not. For the three months ended March 31, 2018 and 2017 , 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 March 31, 2018 , the Company’s U.S. federal income tax returns for the years 2014 through 2018 are open under the normal statute of limitations and therefore subject to examination. State and local tax returns are generally subject to audit from 2014 to 2018 . Foreign tax returns are generally subject to audit from 2013 to 2018 . Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed consolidated financial statements. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE Basic earnings per common share are computed by dividing income available to common shareholders by the weighted‑average number of common shares outstanding during the period. Diluted earnings per common share are computed using the more dilutive method of either the two-class method or the treasury stock method. For the three months ended March 31, 2018 and 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 share for the three months ended March 31, 2018 and 2017 excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive: For the Three Months Ended 2018 2017 Options 17,411,780 21,334,689 Restricted units 16,352,546 15,070,871 AOG Units — 130,403,174 The following table presents the computation of basic and diluted earnings per common share: For the Three Months Ended 2018 2017 Net income (loss) attributable to Ares Management, L.P. common shareholders $ 35,523 $ (46,559 ) Earnings distributed to participating securities (restricted units) (1,899 ) (825 ) Net income (loss) available to common shareholders $ 33,624 $ (47,384 ) Basic weighted-average common shares 85,617,932 81,106,734 Basic earnings (loss) per common share $ 0.39 $ (0.58 ) Net income (loss) attributable to Ares Management, L.P. common shareholders $ 35,523 $ (46,559 ) Earnings distributed to participating securities (restricted units) (1,899 ) (825 ) Incremental net income from assumed exchange of AOG Units 26,606 — Net income (loss) available to common shareholders $ 60,230 $ (47,384 ) Effect of dilutive shares: AOG Units 128,234,996 — Diluted weighted-average common shares 213,852,928 81,106,734 Diluted earnings (loss) per common share $ 0.28 $ (0.58 ) |
EQUITY COMPENSATION
EQUITY COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
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 shares available to be issued under the Equity Incentive Plan resets and may increase on January 1 each year. Accordingly, on January 1, 2018 , the total number of shares available for issuance under the Equity Incentive Plan increased to 31,853,504 shares, and as of March 31, 2018 , 28,637,981 shares 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 2018 2017 Restricted units $ 18,030 $ 11,219 Options 2,664 3,482 Phantom units 393 388 Equity-based compensation expense $ 21,087 $ 15,089 Restricted Units Each restricted unit represents an unfunded, unsecured right of the holder to receive a common share on a specific date. The restricted units generally vest and are settled in common shares 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 either the first or second 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 share multiplied by (ii) the number of restricted units held at the time such distributions are declared (“Dividend Equivalent”). For the three months ended March 31, 2018 , Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $6.6 million , which are presented as dividends within the Condensed Consolidated Statements of Changes in Equity. When restricted units are forfeited, the cumulative amount of dividend equivalents previously paid is reclassified to compensation and benefits expense in the Condensed Consolidated Statements of Operations. The following table presents unvested restricted units' activity during the three months ended March 31, 2018 : Restricted Units Weighted Average Grant Date Fair Value Per Unit Balance - January 1, 2018 13,751,888 $ 17.58 Granted 3,635,419 23.61 Vested (835,124 ) 15.33 Forfeited (199,637 ) 19.83 Balance - March 31, 2018 16,352,546 $ 18.98 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $233.3 million as of March 31, 2018 and is expected to be recognized over the remaining weighted average period of 3.70 years . Options A summary of options activity during the three months ended March 31, 2018 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value Balance - January 1, 2018 20,495,025 $ 18.99 6.09 $ 20,611 Granted — — — Exercised — — — Expired (219,034 ) 19.00 — Forfeited (444,203 ) 19.00 — Balance - March 31, 2018 19,831,788 $ 18.99 5.84 $ 47,762 Exercisable at March 31, 2018 7,235,214 $ 18.99 5.38 $ 17,420 As of March 31, 2018 , there was $16.6 million of total unrecognized compensation expense that is expected to be recognized over the remaining weighted average period of 1.11 years . Phantom Units A summary of unvested phantom unit activity during the three months ended March 31, 2018 is presented below: Phantom Units Weighted Average Balance - January 1, 2018 156,153 $ 19.00 Vested — Forfeited (9,362 ) 19.00 Balance - March 31, 2018 146,791 $ 19.00 The fair value of the phantom unit awards is remeasured at each reporting period and was $ 21.40 per unit as of March 31, 2018 . Based on the fair value of the awards at March 31, 2018 , $1.7 million of unrecognized compensation expense in connection with phantom units outstanding is expected to be recognized over a weighted average period of 1.09 years . During the three months ended March 31, 2018 , the Company did no t pay to settle any vested phantom units. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Ares Management, L.P. Common Shares Common shares represent limited partnership interests in the Company. The holders of common shares are entitled to participate pro rata in distributions from the Company and to exercise the rights or privileges that are available to common shareholders under the Company’s partnership agreement. The common shareholders 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. During the quarter ended March 31, 2018, an affiliate of Alleghany Corporation (“Alleghany”) exchanged 9,750,000 of its AOG Units into 9,750,000 common shares. The common shares will be restricted from sale or transfer until May 18, 2018. Alleghany continues to hold 2,750,000 AOG units following the exchange. Common Share Offering On March 12, 2018, AREC Holdings Ltd., a wholly owned subsidiary of Abu Dhabi Investment Authority (collectively, “ADIA”), and the Company completed a public offering of 15,000,000 common shares. In connection with this offering, ADIA sold 10,000,000 of its previously issued and outstanding common shares from which the Company received no proceeds. Additionally, the Company issued 5,000,000 common shares from which it received $105.9 million in gross proceeds. The Company incurred approximately $0.5 million of expenses in connection with this offering transaction. The expenses have been treated as a reduction of the proceeds received from the offering and are presented on a net basis together with the proceeds from the offering in shareholders' equity in the Condensed Consolidated Statements of Changes in Equity. Subsequent to March 31, 2018, the underwriters in the offering partially exercised their option to purchase additional common shares from ADIA. See Note 16, Subsequent Events. The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities as of March 31, 2018 and December 31, 2017 , as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities for the three months ended March 31, 2018 and 2017 . Daily Average Ownership As of March 31, 2018 As of December 31, 2017 For the Three Months Ended March 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2018 2017 Ares Management, L.P. 97,514,500 44.76 % 82,280,033 38.75 % 40.04 % 38.35 % Ares Owners Holding L.P. 117,576,663 53.98 % 117,576,663 55.36 % 54.98 % 55.74 % Affiliate of Alleghany Corporation 2,750,000 1.26 % 12,500,000 5.89 % 4.98 % 5.91 % Total 217,841,163 100.00 % 212,356,696 100.00 % Preferred Equity As of March 31, 2018 and December 31, 2017 , the Company had 12,400,000 shares 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 share. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company operates through its three distinct operating segments. During the three months ended March 31, 2018 , 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 $77.3 billion of assets under management and 145 funds as of March 31, 2018 . 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 composed 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 Company provides investors access to these capabilities through several vehicles, including commingled funds, separately managed accounts and a publicly traded vehicle. The Credit Group conducts its U.S. direct lending activities primarily through ARCC, the largest business development company as of March 31, 2018 , 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 $24.3 billion of assets under management as of March 31, 2018 , broadly categorizing its investment strategies as corporate private equity, U.S. power and energy infrastructure and special situations. As of March 31, 2018 the group managed five corporate private equity commingled funds focused on North America and Europe and three 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 $10.9 billion of assets under management across 41 funds as of March 31, 2018 . 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) the effects of changes arising from corporate actions, and (e) 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, underwriting costs, and expenses incurred in connection with corporate reorganization. Beginning in 2018, placement fees are no longer excluded but are amortized to match the period over which management fees are recognized. This change had an immaterial impact to FRE and RI for the current period. 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 income, performance related compensation, investment income from the Consolidated Funds and non-consolidated funds and certain other items that the Company believes are not indicative of its core operating performance. Performance related earnings (“PRE”), a non-GAAP measure, is used to assess the Company’s investment performance net of performance related compensation. PRE differs from income (loss) before taxes computed in accordance with GAAP as it only includes performance income, performance related compensation and total investment and other income earned from the Consolidated Funds and non-consolidated funds. Realized income (“RI”), a non-GAAP measure, is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and expenses, which may or may not be eventually realized at the levels presented and whose realizations depend more on future outcomes than current business operations. RI differs from net income by excluding (a) income tax expense, (b) operating results of our Consolidated Funds, (c) depreciation and amortization expense, (d) the effects of changes arising from corporate actions, (e) unrealized gains and losses related to performance income and investment performance and (e) certain other items that we believe are not indicative of our operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital transactions, underwriting costs and expenses incurred in connection with corporate reorganization. Beginning in 2018, placement fees are no longer excluded but are amortized to match the period over which management fees are recognized. This change had an immaterial impact to FRE and RI for the current period. Prior to the introduction of RI, management used distributable earnings for this evaluation. Management believes RI is a more appropriate metric to evaluate the Company's current business operations. Management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non‑consolidated funds. The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2018 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $28,417) $ 131,766 $ 49,887 $ 15,173 $ 196,826 $ — $ 196,826 Other fees 5,730 340 3 6,073 — 6,073 Compensation and benefits (50,280 ) (19,199 ) (7,639 ) (77,118 ) (30,606 ) (107,724 ) General, administrative and other expenses (9,629 ) (4,041 ) (2,432 ) (16,102 ) (18,616 ) (34,718 ) Fee related earnings 77,587 26,987 5,105 109,679 (49,222 ) 60,457 Performance income—realized 5,071 4,398 13,638 23,107 — 23,107 Performance income—unrealized 16,092 21,066 (2,040 ) 35,118 — 35,118 Performance related compensation—realized (3,088 ) (3,560 ) (8,221 ) (14,869 ) — (14,869 ) Performance related compensation—unrealized 7,176 (18,694 ) 509 (11,009 ) — (11,009 ) Net performance income 25,251 3,210 3,886 32,347 — 32,347 Investment income—realized 771 671 3,350 4,792 838 5,630 Investment income (loss)—unrealized (269 ) (4,150 ) (1,232 ) (5,651 ) 1,231 (4,420 ) Interest and other investment income 2,196 329 1,017 3,542 1,247 4,789 Interest expense (4,673 ) (1,228 ) (420 ) (6,321 ) (548 ) (6,869 ) Net investment income (loss) (1,975 ) (4,378 ) 2,715 (3,638 ) 2,768 (870 ) Performance related earnings 23,276 (1,168 ) 6,601 28,709 2,768 31,477 Economic net income $ 100,863 $ 25,819 $ 11,706 $ 138,388 $ (46,454 ) $ 91,934 Realized income $ 78,857 $ 27,327 $ 13,669 $ 119,853 $ (47,780 ) $ 72,073 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2017 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $33,257) $ 121,347 $ 39,819 $ 15,615 $ 176,781 $ — $ 176,781 Other fees 4,503 340 (9 ) 4,834 — 4,834 Compensation and benefits (51,703 ) (13,218 ) (9,736 ) (74,657 ) (25,953 ) (100,610 ) General, administrative and other expenses (8,041 ) (4,198 ) (2,731 ) (14,970 ) (19,313 ) (34,283 ) Fee related earnings 66,106 22,743 3,139 91,988 (45,266 ) 46,722 Performance income—realized 8,778 — 27 8,805 — 8,805 Performance income—unrealized 2,936 32,237 14,088 49,261 — 49,261 Performance related compensation—realized (5,285 ) — (16 ) (5,301 ) — (5,301 ) Performance related compensation—unrealized (1,458 ) (25,505 ) (8,438 ) (35,401 ) — (35,401 ) Net performance income 4,971 6,732 5,661 17,364 — 17,364 Investment income—realized 318 579 1,783 2,680 1,859 4,539 Investment income (loss)—unrealized 4,589 8,546 (444 ) 12,691 (1,407 ) 11,284 Interest and other investment income (expense) (19 ) 152 (181 ) (48 ) 874 826 Interest expense (2,458 ) (1,513 ) (432 ) (4,403 ) (476 ) (4,879 ) Net investment income 2,430 7,764 726 10,920 850 11,770 Performance related earnings 7,401 14,496 6,387 28,284 850 29,134 Economic net income $ 73,507 $ 37,239 $ 9,526 $ 120,272 $ (44,416 ) $ 75,856 Realized income $ 69,945 $ 22,345 $ 4,588 $ 96,878 $ (43,205 ) $ 53,673 The following table presents the components of the Company’s operating segments’ revenue, expenses and other income (expense): For the Three Months Ended 2018 2017 Segment Revenues Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) $ 196,826 $ 176,781 Other fees 6,073 4,834 Performance income—realized 23,107 8,805 Performance income—unrealized 35,118 49,261 Total segment revenues $ 261,124 $ 239,681 Segment Expenses Compensation and benefits $ 77,118 $ 74,657 General, administrative and other expenses 16,102 14,970 Performance related compensation—realized 14,869 5,301 Performance related compensation—unrealized 11,009 35,401 Total segment expenses $ 119,098 $ 130,329 Other Income (Expense) Investment income—realized $ 4,792 $ 2,680 Investment income (loss)—unrealized (5,651 ) 12,691 Interest and other investment income (expense) 3,542 (48 ) Interest expense (6,321 ) (4,403 ) Total other income (expense) $ (3,638 ) $ 10,920 The following table reconciles segment revenue to Ares consolidated revenues: For the Three Months Ended 2018 2017 Total segment revenue $ 261,124 $ 239,681 Revenue of Consolidated Funds eliminated in consolidation (5,110 ) (18,188 ) Administrative fees(1) 6,412 9,606 Performance income reclass(2) 975 (24 ) Principal investment income 2,708 13,169 Revenue of non-controlling interests in consolidated subsidiaries(3) (20 ) — Total consolidated adjustments and reconciling items 4,965 4,563 Total consolidated revenue $ 266,089 $ 244,244 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within other income (expense) in the Company’s Condensed Consolidated Statements of Operations. (3) Adjustments for administrative fees reimbursed attributable to certain of our joint venture partners. The following table reconciles segment expenses to Ares consolidated expenses: For the Three Months Ended 2018 2017 Total segment expenses $ 119,098 $ 130,329 Expenses of Consolidated Funds added in consolidation 8,629 10,509 Expenses of Consolidated Funds eliminated in consolidation (7,313 ) (6,598 ) Administrative fees(1) 6,412 9,606 OMG expenses 49,222 45,266 Acquisition and merger-related expenses (319 ) 275,336 Equity compensation expense 21,087 15,089 Placement fees and underwriting costs 1,664 3,439 Amortization of intangibles 3,287 5,275 Depreciation expense 3,889 3,216 Expenses of non-controlling interests in consolidated subsidiaries(2) 627 — Total consolidation adjustments and reconciling items 87,185 361,138 Total consolidated expenses $ 206,283 $ 491,467 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) 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 2018 2017 Total other income (expense) $ (3,638 ) $ 10,920 Other income from Consolidated Funds added in consolidation, net 7,252 38,445 Other expense from Consolidated Funds eliminated in consolidation, net (459 ) (23 ) Other income of non-controlling interests in consolidated subsidiaries 7 — OMG other expense 2,768 850 Performance income reclass(1) (975 ) 24 Principal investment income (2,708 ) (13,169 ) Changes in value of contingent consideration — 20,248 Other non-cash expense (7 ) — Offering costs — (660 ) Total consolidation adjustments and reconciling items 5,878 45,715 Total consolidated other income $ 2,240 $ 56,635 (1) Related to performance income 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, RI, FRE and PRE: For the Three Months Ended 2018 2017 Economic net income Income (loss) before taxes $ 62,046 $ (190,588 ) Adjustments: Amortization of intangibles 3,287 5,275 Depreciation expense 3,889 3,216 Equity compensation expenses 21,087 15,089 Acquisition and merger-related expenses (319 ) 255,088 Placement fees and underwriting costs 1,664 3,439 OMG expenses, net 46,454 44,416 Offering costs — 660 Other non-cash expense 7 — Expense of non-controlling interests in consolidated subsidiaries(1) 640 — (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations (367 ) (16,323 ) Total consolidation adjustments and reconciling items 76,342 310,860 Economic net income 138,388 120,272 Total performance income - unrealized (35,118 ) (49,261 ) Total performance related compensation - unrealized 11,009 35,401 Total investment (income) loss - unrealized 5,574 (9,534 ) Realized income 119,853 96,878 Total performance income - realized (23,107 ) (8,805 ) Total performance related compensation - realized 14,869 5,301 Total investment income - realized (1,936 ) (1,386 ) Fee related earnings 109,679 91,988 Performance related earnings Economic net income $ 138,388 $ 120,272 Less: fee related earnings (109,679 ) (91,988 ) Performance related earnings $ 28,709 $ 28,284 (1) Adjustments for administrative fees reimbursed and other revenue items attributable to certain of our joint venture partners. |
CONSOLIDATION
CONSOLIDATION | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, As of December 31, 2018 2017 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs $ 266,833 $ 251,376 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs $ 174,849 $ 175,620 Assets of consolidated VIEs $ 6,126,584 $ 6,231,245 Liabilities of consolidated VIEs $ 5,417,561 $ 5,538,054 For the Three Months Ended 2018 2017 Net income attributable to non-controlling interests related to consolidated VIEs $ 367 $ 15,855 CONSOLIDATING SCHEDULES The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of March 31, 2018 and December 31, 2017 and results from operations for the three months ended March 31, 2018 and 2017 . As of March 31, 2018 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 115,540 $ — $ — $ 115,540 Investments ($1,113,435 of accrued carried interest, and $17,575 of pledged collateral) 1,986,678 — (174,849 ) 1,811,829 Due from affiliates 177,601 — (8,791 ) 168,810 Deferred tax asset, net 50,986 — — 50,986 Other assets 105,187 — — 105,187 Intangible assets, net 37,178 — — 37,178 Goodwill 143,968 — — 143,968 Assets of Consolidated Funds Cash and cash equivalents — 532,470 — 532,470 Investments, at fair value — 5,479,136 — 5,479,136 Due from affiliates — 17,782 — 17,782 Dividends and interest receivable — 12,096 — 12,096 Receivable for securities sold — 83,718 — 83,718 Other assets — 1,382 — 1,382 Total assets $ 2,617,138 $ 6,126,584 $ (183,640 ) $ 8,560,082 Liabilities Accounts payable, accrued expenses and other liabilities $ 78,771 $ — $ — $ 78,771 Accrued compensation 49,944 — — 49,944 Due to affiliates 21,018 — — 21,018 Performance related compensation payable 856,421 — — 856,421 Debt obligations 590,169 — — 590,169 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 81,508 — 81,508 Due to affiliates — 8,791 (8,791 ) — Payable for securities purchased — 239,139 — 239,139 CLO loan obligations, at fair value — 4,947,470 (10,206 ) 4,937,264 Fund borrowings — 140,653 — 140,653 Total liabilities 1,596,323 5,417,561 (18,997 ) 6,994,887 Commitments and contingencies Preferred equity (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 709,023 (164,643 ) 544,380 Non-controlling interest in Ares Operating Group entities 348,820 — — 348,820 Controlling interest in Ares Management, L.P.: Shareholders' equity (97,514,500 shares issued and outstanding) 377,235 — — 377,235 Accumulated other comprehensive loss, net of tax (4,001 ) — — (4,001 ) Total controlling interest in Ares Management, L.P. 373,234 — — 373,234 Total equity 1,020,815 709,023 (164,643 ) 1,565,195 Total liabilities and equity $ 2,617,138 $ 6,126,584 $ (183,640 ) $ 8,560,082 As of December 31, 2017 As adjusted Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 118,929 $ — $ — $ 118,929 Investments ($1,077,236 of accrued carried interest, and $0 of pledged collateral) 1,900,191 — (175,620 ) 1,724,571 Due from affiliates 171,701 — (5,951 ) 165,750 Deferred tax asset, net 8,326 — — 8,326 Other assets 135,674 — (5,333 ) 130,341 Intangible assets, net 40,465 — — 40,465 Goodwill 143,895 — — 143,895 Assets of Consolidated Funds Cash and cash equivalents — 556,500 — 556,500 Investments, at fair value — 5,582,842 — 5,582,842 Due from affiliates — 15,884 — 15,884 Dividends and interest receivable — 12,568 — 12,568 Receivable for securities sold — 61,462 — 61,462 Other assets — 1,989 — 1,989 Total assets $ 2,519,181 $ 6,231,245 $ (186,904 ) $ 8,563,522 Liabilities Accounts payable, accrued expenses and other liabilities $ 81,955 $ — $ — $ 81,955 Accrued compensation 27,978 — — 27,978 Due to affiliates 14,642 — — 14,642 Performance related compensation payable 846,626 — — 846,626 Debt obligations 616,176 — — 616,176 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 64,316 — 64,316 Due to affiliates — 11,285 (11,285 ) — Payable for securities purchased — 350,145 — 350,145 CLO loan obligations, at fair value — 4,974,110 (10,916 ) 4,963,194 Fund borrowings — 138,198 — 138,198 Total liabilities 1,587,377 5,538,054 (22,201 ) 7,103,230 Commitments and contingencies Preferred equity (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 693,191 (164,703 ) 528,488 Non-controlling interest in Ares Operating Group entities 358,186 — — 358,186 Controlling interest in Ares Management, L.P.: Shareholders' equity (82,280,033 shares issued and outstanding) 279,065 — — 279,065 Accumulated other comprehensive loss, net of tax (4,208 ) — — (4,208 ) Total controlling interest in Ares Management, L.P. 274,857 — — 274,857 Total equity 931,804 693,191 (164,703 ) 1,460,292 Total liabilities and equity $ 2,519,181 $ 6,231,245 $ (186,904 ) $ 8,563,522 For the Three Months Ended March 31, 2018 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $28,417) $ 196,826 $ — $ (7,311 ) $ 189,515 Carried interest allocation 54,129 — — 54,129 Incentive fees 5,071 — — 5,071 Principal investment income 2,708 — 2,201 4,909 Administrative, transaction and other fees 12,465 — — 12,465 Total revenues 271,199 — (5,110 ) 266,089 Expenses Compensation and benefits 134,639 — — 134,639 Performance related compensation 25,878 — — 25,878 General, administrative and other expense 44,450 — — 44,450 Expenses of the Consolidated Funds — 8,629 (7,313 ) 1,316 Total expenses 204,967 8,629 (7,313 ) 206,283 Other income (expense) Net realized and unrealized loss on investments (1,178 ) — 339 (839 ) Interest and dividend income 3,347 — — 3,347 Interest expense (6,869 ) — — (6,869 ) Other income (expense), net 147 — (458 ) (311 ) Net realized and unrealized loss on investments of the Consolidated Funds — (12,452 ) (633 ) (13,085 ) Interest and other income of the Consolidated Funds — 64,422 — 64,422 Interest expense of the Consolidated Funds — (44,718 ) 293 (44,425 ) Total other income (expense) (4,553 ) 7,252 (459 ) 2,240 Income (loss) before taxes 61,679 (1,377 ) 1,744 62,046 Income tax benefit (12,375 ) — — (12,375 ) Net income (loss) 74,054 (1,377 ) 1,744 74,421 Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds — (1,377 ) 1,744 367 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 33,106 — — 33,106 Net income attributable to Ares Management, L.P. 40,948 — — 40,948 Less: Preferred equity dividend paid 5,425 — — 5,425 Net income attributable to Ares Management, L.P. common shareholders $ 35,523 $ — $ — $ 35,523 For the Three Months Ended March 31, 2017 As adjusted Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $33,257) $ 176,781 $ — $ (4,736 ) $ 172,045 Carried interest allocation 53,015 — (1,008 ) 52,007 Incentive fees 5,027 — (1,862 ) 3,165 Principal investment income 13,169 — (10,582 ) 2,587 Administrative, transaction and other fees 14,440 — — 14,440 Total revenues 262,432 — (18,188 ) 244,244 Expenses Compensation and benefits 124,339 — — 124,339 Performance related compensation 40,702 — — 40,702 General, administrative and other expense 47,338 — — 47,338 Transaction support expense 275,177 275,177 Expenses of the Consolidated Funds — 10,509 (6,598 ) 3,911 Total expenses 487,556 10,509 (6,598 ) 491,467 Other income (expense) Net realized and unrealized gain on investments 3,753 — (2,865 ) 888 Interest and dividend income 2,843 — (919 ) 1,924 Interest expense (4,879 ) — — (4,879 ) Other income, net 16,496 — — 16,496 Net realized and unrealized gain on investments of the Consolidated Funds — 30,439 1,597 32,036 Interest and other income of the Consolidated Funds — 41,492 — 41,492 Interest expense of Consolidated Funds — — (33,486 ) — 2,164 — (31,322 ) Total other income 18,213 38,445 (23 ) 56,635 Income (loss) before taxes (206,911 ) 27,936 (11,613 ) (190,588 ) Income tax expense (benefit) (34,732 ) 468 — (34,264 ) Net income (loss) (172,179 ) 27,468 (11,613 ) (156,324 ) Less: Net income attributable to non-controlling interests in Consolidated Funds — 27,468 (11,613 ) 15,855 Less: Net loss attributable to non-controlling interests in Ares Operating Group entities (131,045 ) — — (131,045 ) Net loss attributable to Ares Management, L.P. (41,134 ) — — (41,134 ) Less: Preferred equity dividend paid 5,425 — — 5,425 Net loss attributable to Ares Management, L.P. common shareholders $ (46,559 ) $ — $ — $ (46,559 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after March 31, 2018 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 April 2018 , the board of directors of the Company's general partner declared a quarterly dividend of $0.28 per common share to common shareholders of record at the close of business on June 15, 2018 , with a payment date of June 29, 2018 . In April 2018 , the board of directors of the Company's general partner declared a quarterly dividend of $0.4375 per preferred equity share to preferred equity shareholders of record at the close of business on June 15, 2018 , with a payment date of June 30, 2018 . In April 2018, the underwriters of the recently registered offering of common shares by the Company and ADIA, which closed on March 12, 2018, exercised a portion of their option to purchase 1,130,000 additional common shares from ADIA. The Company did not receive any of the proceeds from the underwriters' exercise. The expenses incurred by the Company related to the option exercise will be included in other income (expense), net in the Condensed Consolidated Statements of Operations. ADIA paid the underwriting discounts and commissions and/or similar charges incurred for the sale of the common shares. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 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. |
Adoption of ASC 606 and Recent Accounting Pronouncements | Adoption of ASC 606 Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers . The Company adopted ASC 606 to all applicable contracts under the modified retrospective approach using the practical expedient provided for within paragraph 606-10-65-1(f)(3); therefore, the presentation of prior year periods has not been adjusted. The Company recognized the cumulative effect of initially adopting ASC 606 as an adjustment to the opening balance of components of equity as of January 1, 2018. Pursuant to ASC 606, the Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Under this standard, revenue is based on a contract with a determinable transaction price and distinct performance obligations with probable collectability. Revenues cannot be recognized until the performance obligation(s) are satisfied and control is transferred to the customer. The Company's adoption of ASC 606 impacted the timing and recognition of incentive fees in the Company’s consolidated statements of operations. The adoption of ASC 606 did not have an impact on the Company’s management fees, administrative fees, transaction fees or other fees. The details of the significant changes and quantitative impact of the adoption of ASC 606 are further discussed below. Recent Accounting Pronouncements The Company considers the applicability and impact of all FASB ASUs issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on the Company's condensed consolidated financial statements. 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 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Public Law No. 115-97 (the “Tax Cuts and Jobs Act”). Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. This ASU also requires certain disclosures about stranded tax effects. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The guidance should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company adopted ASU 2018-02 in the the three months ended March 31, 2018. As a result of the adoption of ASU 2018-02, $1.2 million of stranded tax effects resulting from the Tax Cuts and Jobs Act were reclassified from accumulated other comprehensive income to shareholders' equity during the three months ended March 31, 2018. |
Performance Income | Performance Income Performance income consists of carried interest and incentive fees. Carried Interest In certain fund structures, typically in private equity and real estate equity funds, carried interest is allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s governing documents. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund's net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated, and may be subject to reversal to the extent that the amount allocated ultimately exceeds the amount due to the Company based on a fund’s cumulative investment returns. Carried interest is realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the specific hurdle rates as defined in the applicable governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally do not become realized until the end of a fund’s life. As of March 31, 2018 and December 31, 2017, the Company had no accrued contingent repayment obligations that would need to be paid if the funds were liquidated at fair value at the reporting dates. Prior to January 1, 2018, the Company accounted for carried interest under Method 2 described in ASC 605-20-S99-1, which provides guidance on accounting for incentive-based performance income, including carried interest. Since Method 2 is no longer available following the adoption of ASC 606, the Company has reassessed its accounting policy for carried interest, and has determined that carried interest is within scope of ASC 323, Investments-Equity Method and Joint Ventures, and out of scope under the scoping provision of ASC 606. Therefore, following the election of ASC 323, the Company accounted for carried interest, which represents a performance-based capital allocation from an investment fund to the Company, as earnings from financial assets within the scope of ASC 323. Accordingly, the Company recognizes carried interest allocation as a separate revenue line item in the Condensed Consolidated Statements of Operations. Uncollected carried interest as of the reporting date is recorded within investments in the Condensed Consolidated Statements of Financial Condition. The Company has applied the change in accounting principle on a full retrospective basis, and prior periods presented have been recast to conform with the current period's presentation. The change in accounting principle did not change the timing or the amount of carried interest recognized. Instead, the change in accounting principle resulted in reclassification from performance income to carried interest allocation, and therefore did not have any impact on net income. See the tables below for the impact of the change in accounting principle of carried interest under ASC 323 . Incentive Fees Incentive fees earned on the performance of certain fund structures, typically in credit funds, are recognized based on the fund’s performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. Incentive fees are realized at the end of a measurement period, typically annually. Once realized, such fees are no longer subject to reversal. Prior to January 1, 2018, the Company accounted for incentive fees under Method 2 as described above. However, the accounting for incentive fees is separate and distinct from the accounting for carried interest because the incentive fees are contractual fee arrangements and do not represent allocations of returns from partners' capital accounts. Upon the adoption of ASC 606, the Company accounts for incentive fees in accordance with ASC 606. Accordingly, the Company will recognize incentive fee revenue only when the amount is realized and no longer subject to reversal. Therefore, the Company will no longer recognize unrealized incentive fees in revenues in the condensed consolidated financial statements. The adoption of ASC 606 results in the delayed recognition of unrealized incentive fees in the condensed consolidated financial statements until they become realized at the end of the measurement period, which is typically annually. The Company adopted ASC 606 for incentive fees using the modified retrospective approach with effective date of January 1, 2018. The cumulative effect of the adoption resulted in the reversal of $22.6 million of unrealized incentive fees and is presented as a reduction to the opening balances of components of equity as of January 1, 2018. |
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 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. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements | The adoption of ASC 606 had the following impact on the Company’s revenue streams: Revenues of the Company Impact of ASC 606 Management fees No Impact - Management fees are recognized as revenue in the period advisory services are rendered. Performance income - Carried interest allocation No impact. See discussion below for change in accounting policy. Performance income - Incentive fees See discussion below for impact. Administrative, transaction and other fees No Impact - Administrative, transaction and other fees are recognized as revenue in the period in which the related services are rendered. The following tables present the adjustments made in connection with the Company's change in accounting principle related to carried interest under ASC 323, Investments-Equity Method and Joint Ventures on the financial statement line items for the periods presented in the condensed consolidated financial statements: Condensed Consolidated Statement of Financial Condition As of December 31, 2017 As Previously Reported Adjustments As Adjusted (audited) Assets Investments ($1,077,236 of accrued carried interest, and $0 of pledged collateral) $ 647,335 $ 1,077,236 $ 1,724,571 Performance income receivable 1,099,847 (1,099,847 ) — Other assets 107,730 22,611 (1) 130,341 (1) Unrealized incentive fees receivable balance as of December 31, 2017. Condensed Consolidated Statement of Operations For the Three Months Ended March 31, 2017 As Previously Reported Adjustments As Adjusted Revenues Performance fees $ 55,172 $ (55,172 ) $ — Carried interest allocation — 52,007 52,007 Incentive fees — 3,165 3,165 Principal investment income — 2,587 2,587 Total revenues 241,657 2,587 244,244 Other income (expense) Net realized and unrealized gain on investments 2,655 (1,767 ) 888 Interest and dividend income 2,744 (820 ) 1,924 The Company's change in accounting policy related to carried interest under ASC 323 did not impact the Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Changes in Equity or Condensed Consolidated Statements of Cash Flows for the year ended December 31, 2017. The following tables present the impact of incentive fees on the condensed consolidated financial statements upon the adoption of ASC 606 effective January 1, 2018: As of January 1, 2018 As adjusted December 31, 2017 Adjustments As Adjusted for ASC 606 adoption Investments $ 1,724,571 $ — $ 1,724,571 Other assets 130,341 (22,611 ) (1) 107,730 Total assets 8,563,522 (22,611 ) 8,540,911 Total liabilities 7,103,230 — 7,103,230 Cumulative effect adjustment to equity(2) — (22,611 ) (22,611 ) Total equity 1,460,292 (22,611 ) 1,437,681 Total liabilities, non-controlling interests and equity 8,563,522 (22,611 ) 8,540,911 (1) Unrealized incentive fees receivable balance as of December 31, 2017. (2) See detail below. Condensed Consolidated Statement of Changes in Equity Preferred Equity Shareholders' Capital Accumulated Other Comprehensive Loss Non-controlling interest in Ares Operating Group Entities Non-Controlling Interest in Consolidated Funds Total Equity Balance at December 31, 2017 $ 298,761 $ 279,065 $ (4,208 ) $ 358,186 $ 528,488 $ 1,460,292 Cumulative effect of the adoption of ASC 606 — (10,827 ) — (17,117 ) 5,333 (22,611 ) As adjusted balance at January 1, 2018 $ 298,761 $ 268,238 $ (4,208 ) $ 341,069 $ 533,821 $ 1,437,681 In accordance with the ASC 606 disclosure requirements, the following tables present the adjustments made by the Company to remove the effects of adopting ASC 606 on the condensed consolidated financial statements as of and for the three months ended March 31, 2018 : Condensed Consolidated Statement of Financial Condition As of March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Assets Deferred tax asset, net $ 50,986 $ (250 ) $ 50,736 Other assets 105,187 23,704 128,891 Total assets 8,560,082 23,454 8,583,536 Commitments and contingencies Non-controlling interest in Consolidated Funds 544,380 (7,052 ) 537,328 Non-controlling interest in Ares Operating Group entities 348,820 18,803 367,623 Controlling interest in Ares Management, L.P.: Shareholders' equity (97,514,500 shares issued and outstanding) 377,235 11,603 388,838 Accumulated other comprehensive loss, net of tax (4,001 ) 100 (3,901 ) Total controlling interest in Ares Management, L.P 373,234 11,703 384,937 Total equity 1,565,195 23,454 1,588,649 Total liabilities and equity 8,560,082 23,454 8,583,536 Condensed Consolidated Statement of Operations For the Three Months Ended March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Revenues Incentive fees $ 5,071 $ 856 $ 5,927 Total revenues 266,089 856 266,945 Other income (expense) Other income (expense), net (311 ) (12 ) (323 ) Total other income 2,240 (12 ) 2,228 Income before taxes 62,046 844 62,890 Income tax benefit (12,375 ) 250 (12,125 ) Net income 74,421 594 75,015 Net income attributable to Ares Management, L.P. 40,948 594 41,542 Net income attributable to Ares Management, L.P. common shareholders 35,523 594 36,117 Condensed Consolidated Statement of Comprehensive Income Three Months Ended March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Net income $ 74,421 $ 594 $ 75,015 Other comprehensive income: Foreign currency translation adjustments 5,485 249 5,734 Total comprehensive income 79,906 843 80,749 Less: Comprehensive income attributable to non-controlling interests in Consolidated Funds 3,542 (1,719 ) 1,823 Less: Comprehensive income attributable to non-controlling interests in Ares Operating Group entities 35,209 1,686 36,895 Comprehensive income attributable to Ares Management, L.P. $ 41,155 $ 876 $ 42,031 Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2018 As Reported Adjustments Balances without adoption of ASC 606 Cash flows from operating activities: Net income $ 74,421 $ 594 $ 75,015 Cash flows due to changes in operating assets and liabilities (37,718 ) (2,313 ) (40,031 ) Cash flows due to changes in operating assets and liabilities allocable to non-controlling interests in Consolidated Funds (88,592 ) 1,719 (86,873 ) |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 As of March 31, As of December 31, 2018 2017 Management contracts 2.2 years $ 42,335 $ 67,306 Client relationships 10.3 years 38,600 38,600 Trade name 4.3 years 3,200 3,200 Total intangible assets 84,135 109,106 Less: accumulated amortization (46,957 ) (68,641 ) Intangible assets, net $ 37,178 $ 40,465 |
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, 2017 $ 32,196 $ 58,600 $ 53,099 $ 143,895 Foreign currency translation — — 73 73 Balance as of March 31, 2018 $ 32,196 $ 58,600 $ 53,172 $ 143,968 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments In And Advances To Affiliates [Abstract] | |
Summary of investments held | Percentage of total investments March 31, December 31, March 31, December 31, 2018 2017 2018 2017 As adjusted As adjusted Private Investment Partnership Interests: Equity method private investment partnership interests - principal (1) $ 347,406 $ 340,354 19.2 % 19.7 % Equity method - carried interest (1) 1,113,435 1,077,236 61.4 % 62.5 % Equity method private investment partnership interests - other 69,342 74,439 3.8 % 4.3 % Other private investment partnership interests 37,266 35,748 2.1 % 2.1 % Total private investment partnership interests 1,567,449 1,527,777 86.5 % 88.6 % Collateralized loan obligations 242,984 195,158 13.4 % 11.3 % Common stock 1,396 1,636 0.1 % 0.1 % Total investments $ 1,811,829 $ 1,724,571 (1) Interest or portion of the interest is denominated in foreign currency and is translated into U.S. dollars at each reporting date. Investments held in the Consolidated Funds are summarized below: Fair value at Fair value as a percentage of total investments at March 31, December 31, March 31, December 31, 2018 2017 2018 2017 United States: Fixed income securities: Consumer discretionary $ 1,303,537 $ 1,295,732 24.1 % 23.2 % Consumer staples 56,917 55,073 1.0 % 1.0 % Energy 173,698 176,836 3.2 % 3.2 % Financials 270,317 270,520 4.9 % 4.8 % Healthcare, education and childcare 453,622 449,888 8.3 % 8.1 % Industrials 364,479 370,926 6.7 % 6.6 % Information technology 146,733 167,089 2.7 % 3.0 % Materials 170,309 185,170 3.1 % 3.3 % Telecommunication services 385,829 399,617 7.0 % 7.2 % Utilities 62,667 77,102 1.1 % 1.4 % Total fixed income securities (cost: $3,393,506 3,388,108 3,447,953 62.1 % 61.8 % Equity securities: Energy 60 126 0.0 % 0.0 % Total equity securities (cost: $2,265 and $2,265 at March 31, 2018 and December 31, 2017, respectively) 60 126 0.0 % 0.0 % Partnership and interests Partnership and interests 252,700 232,332 4.6 % 4.2 % Total partnership and LLC interests (cost: $200,000 and $190,000 at March 31, 2018 and December 31, 2017, respectively) 252,700 232,332 4.6 % 4.2 % Fair value at Fair value as a percentage of total investments at March 31, December 31, March 31, December 31, 2018 2017 2018 2017 Europe: Fixed income securities: Consumer discretionary $ 603,516 $ 604,608 11.0 % 10.8 % Energy 2,461 2,413 0.0 % 0.0 % Consumer staples 72,317 76,361 1.3 % 1.4 % Financials 116,836 81,987 2.1 % 1.5 % Healthcare, education and childcare 187,032 209,569 3.4 % 3.8 % Industrials 128,345 145,706 2.3 % 2.6 % Information technology 20,603 21,307 0.4 % 0.4 % Materials 184,625 213,395 3.4 % 3.8 % Telecommunication services 181,917 182,543 3.3 % 3.3 % Total fixed income securities (cost: $1,507,741 and $1,545,297 at March 31, 2018 and December 31, 2017, respectively) 1,497,652 1,537,889 27.2 % 27.6 % Equity securities: Healthcare, education and childcare 61,065 63,155 1.1 % 1.1 % Total equity securities (cost: $67,198 and $67,198 at March 31, 2018 and December 31, 2017, respectively) 61,065 63,155 1.1 % 1.1 % Asia and other: Fixed income securities: Consumer discretionary 2,019 2,008 0.0 % 0.0 % Financials 22,476 12,453 0.4 % 0.2 % Telecommunication services 21,679 21,848 0.4 % 0.4 % Total fixed income securities (cost: $46,287 and $36,180 at March 31, 2018 and December 31, 2017, respectively) 46,174 36,309 0.8 % 0.6 % Equity securities: Consumer discretionary 50,071 59,630 0.9 % 1.1 % Consumer staples 46,232 45,098 0.8 % 0.8 % Healthcare, education and childcare 44,637 44,637 0.8 % 0.8 % Industrials 16,578 16,578 0.3 % 0.3 % Total equity securities (cost: $122,418 and $122,418 at March 31, 2018 and December 31, 2017, respectively) 157,518 165,943 2.8 % 3.0 % Fair value at Fair value as a percentage of total investments at March 31, December 31, March 31, December 31, 2018 2017 2018 2017 Canada: Fixed income securities: Consumer discretionary $ 7,474 $ 6,757 0.1 % 0.1 % Consumer staples 19,364 15,351 0.4 % 0.3 % Energy 14,103 33,715 0.3 % 0.6 % Industrials 18,667 18,785 0.3 % 0.3 % Telecommunication services 6,045 6,189 0.1 % 0.1 % Total fixed income securities (cost: $65,501 and $80,201 at March 31, 2018 and December 31, 2017, respectively) 65,653 80,797 1.2 % 1.4 % Equity securities: Consumer discretionary — 5,912 — % 0.1 % Total equity securities (cost: $0 and $17,202 at March 31, 2018 and December 31, 2017, respectively) — 5,912 — % 0.1 % Australia: Fixed income securities: Consumer discretionary 8,587 10,863 0.2 % 0.2 % Energy 1,619 1,563 0.0 % 0.0 % Total fixed income securities (cost: $10,446 and $12,714 at March 31, 2018 and December 31, 2017, respectively) 10,206 12,426 0.2 % 0.2 % Total fixed income securities 5,007,793 5,115,374 91.5 % 91.6 % Total equity securities 218,643 235,136 3.9 % 4.2 % Total partnership interests 252,700 232,332 4.6 % 4.2 % Total investments, at fair value $ 5,479,136 $ 5,582,842 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income-collateralized loan obligations $ — $ — $ 242,984 $ — $ 242,984 Equity securities 377 1,019 — — 1,396 Partnership interests — — 44,769 37,266 82,035 Total investments, at fair value 377 1,019 287,753 37,266 326,415 Derivatives—foreign exchange contracts — 230 — — 230 Total assets, at fair value $ 377 $ 1,249 $ 287,753 $ 37,266 $ 326,645 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (4,229 ) $ — $ — $ (4,229 ) Total liabilities, at fair value $ — $ (4,229 ) $ — $ — $ (4,229 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 67,741 $ 6,570 $ 74,311 Loans — 4,648,235 234,193 4,882,428 Collateralized loan obligations — 51,054 — 51,054 Total fixed income investments — 4,767,030 240,763 5,007,793 Equity securities 58,221 — 160,422 218,643 Partnership interests — — 252,700 252,700 Total investments, at fair value 58,221 4,767,030 653,885 5,479,136 Derivatives: Asset swaps - other — — 834 834 Total assets, at fair value $ 58,221 $ 4,767,030 $ 654,719 $ 5,479,970 Liabilities, at fair value Asset swaps - other $ — $ — $ (748 ) $ (748 ) Loan obligations of CLOs — (4,937,264 ) — (4,937,264 ) Total liabilities, at fair value $ — $ (4,937,264 ) $ (748 ) $ (4,938,012 ) The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and Consolidated Funds as of December 31, 2017 : Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income-collateralized loan obligations $ — $ — $ 195,158 $ — $ 195,158 Equity securities 520 1,116 — — 1,636 Partnership interests — — 44,769 35,998 80,767 Total investments, at fair value 520 1,116 239,927 35,998 277,561 Derivatives—foreign exchange contracts — 498 — — 498 Total assets, at fair value $ 520 $ 1,614 $ 239,927 $ 35,998 $ 278,059 Liabilities, at fair value Derivatives—foreign exchange contracts $ — $ (2,639 ) $ — $ — $ (2,639 ) Total liabilities, at fair value $ — $ (2,639 ) $ — $ — $ (2,639 ) Financial Instruments of the Consolidated Funds Level I Level II Level III Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 82,151 $ 7,041 $ 89,192 Loans — 4,755,335 260,848 5,016,183 Collateralized loan obligations — 10,000 — 10,000 Total fixed income investments — 4,847,486 267,889 5,115,375 Equity securities 72,558 — 162,577 235,135 Partnership interests — — 232,332 232,332 Other — — — — Total investments, at fair value 72,558 4,847,486 662,798 5,582,842 Derivatives: Foreign exchange contracts — — — — Asset swaps - other — — 1,366 1,366 Total derivative assets, at fair value — — 1,366 1,366 Total assets, at fair value $ 72,558 $ 4,847,486 $ 664,164 $ 5,584,208 Liabilities, at fair value Asset swaps - other $ — $ — $ (462 ) $ (462 ) Loan obligations of CLOs — (4,963,194 ) — (4,963,194 ) Total liabilities, at fair value $ — $ (4,963,194 ) $ (462 ) $ (4,963,656 ) |
Summary of changes in the fair value of the Level III investments | The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2018 : Level III Assets Level III Assets and Liabilities of the Company Fixed Income Partnership Total Balance, beginning of period $ 195,158 $ 44,769 $ 239,927 Deconsolidation of fund 78 — 78 Purchases(1) 48,731 — 48,731 Sales/settlements(2) (827 ) — (827 ) Realized and unrealized depreciation, net (156 ) — (156 ) Balance, end of period $ 242,984 $ 44,769 $ 287,753 Decrease in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ (610 ) $ — $ (610 ) Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Derivatives, Net Total Balance, beginning of period $ 162,577 $ 267,889 $ 232,332 $ 904 $ 663,702 Deconsolidation of fund — (233 ) — — (233 ) Transfer in — 73,814 — — 73,814 Transfer out — (102,045 ) — — (102,045 ) Purchases(1) — 52,984 10,000 — 62,984 Sales(2) — (50,935 ) — — (50,935 ) Settlements, net — — — (177 ) (177 ) Amortized discounts/premiums — 96 — 7 103 Realized and unrealized appreciation (depreciation), net (2,155 ) (807 ) 10,368 (648 ) 6,758 Balance, end of period $ 160,422 $ 240,763 $ 252,700 $ 86 $ 653,971 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (2,156 ) $ (1,831 ) $ 10,368 $ (749 ) $ 5,632 (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 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) 20,442 169 20,611 — Sales/settlements(2) (1,917 ) — (1,917 ) — Realized and unrealized appreciation (depreciation), net 617 (169 ) 448 (20,247 ) Balance, end of period $ 108,253 $ 33,410 $ 141,663 $ 1,909 Increase in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 470 $ — $ 470 $ 30 Level III Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance, beginning of period $ 130,690 $ 242,253 $ 171,696 $ (2,708 ) $ 541,931 Transfer in — 86,197 — — 86,197 Transfer out (6,581 ) (66,805 ) — — (73,386 ) Purchases(1) 6,692 50,069 23,000 1,690 81,451 Sales(2) — (33,297 ) — 1,104 (32,193 ) Amortized discounts/premiums — 118 — 310 428 Realized and unrealized appreciation, net 11,557 294 1,994 449 14,294 Balance, end of period $ 142,358 $ 278,829 $ 196,690 $ 845 $ 618,722 Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (3,488 ) $ (42 ) $ 1,994 $ (125 ) $ (1,661 ) (1) Purchases include paid‑in‑kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. |
Summary of quantitative inputs and assumptions used for Level III inputs | The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of March 31, 2018 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 44,769 Other N/A N/A Collateralized loan obligations 242,984 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 287,753 The following table summarizes the quantitative inputs and assumptions used for the Company’s Level III measurements as of December 31, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Partnership interests $ 44,769 Other N/A N/A Collateralized loan obligations 195,158 Broker quotes and/or 3rd party pricing services N/A N/A Total $ 239,927 The following table summarizes the quantitative inputs and assumptions used for the Consolidated Funds’ Level III measurements as of March 31, 2018 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Assets Equity securities $ 61,065 Enterprise value market multiple analysis EBITDA multiple(2) 3.0x 3.0 61,216 Market approach (comparable companies) Net income multiple 24.2x - 35.8x 32.7 Illiquidity discount 25.0% 25.0% 60 Broker quotes and/or 3rd party pricing services N/A N/A N/A 38,081 Recent transaction price(1) N/A N/A N/A Partnership interest 252,700 Discounted cash flow Discount rate 17.0% 17.0% Fixed income securities 192,660 Broker quotes and/or 3rd party pricing services N/A N/A N/A 48,103 Income approach Yield 7.6% - 14.9% 11.1% Derivative instruments 834 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 654,719 Liabilities Derivatives instruments $ (748 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (748 ) (1) 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, 2017 : Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 63,155 Enterprise value market multiple analysis EBITDA multiple(2) 2.7x 2.7x 61,215 Market approach (comparable companies) Net income multiple 27.0x - 36.2x 33.7x 126 Broker quotes and/or 3rd party pricing services N/A N/A N/A 38,081 Recent Transaction price(1) N/A N/A N/A Partnership interest 232,332 Discounted cash flow Discount rate 19.0% 19.0% Fixed income securities 222,413 Broker quotes and/or 3rd party pricing services N/A N/A N/A 45,243 Income approach Yield 10.8% - 22.5% 12.1% 233 Market approach (comparable companies) EBITDA multiple(2) 6.5x 6.5x Derivative instruments 1,366 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 664,164 Liabilities Derivatives instruments $ (462 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (462 ) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. |
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 commitments are presented below: As of March 31, 2018 As of December 31, 2017 Segment Fair Value Unfunded Fair Value Unfunded Non-core investments(1) $ 37,266 $ 16,317 $ 35,998 $ 16,492 Total $ 37,266 $ 16,317 $ 35,998 $ 16,492 (1) Non-core investments are reported within the Company's Operations Management Group ( “ OMG ” ). |
DERIVATIVE FINANCIAL INSTRUME30
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value and notional amounts of derivative contracts by major product type on a gross basis | The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds as of March 31, 2018 and December 31, 2017 : As of March 31, 2018 As of December 31, 2017 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 $ 4,724 $ 230 $ 49,668 $ 4,229 $ 13,724 $ 498 $ 51,026 $ 2,639 Total derivatives, at fair value(2) $ 4,724 $ 230 $ 49,668 $ 4,229 $ 13,724 $ 498 $ 51,026 $ 2,639 As of March 31, 2018 As of December 31, 2017 Assets Liabilities Assets Liabilities Consolidated Funds Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Notional(1) Fair Value Asset swap - other 4,843 834 1,750 748 5,363 1,366 1,840 462 Total derivatives, at fair value(3) 4,843 834 1,750 748 5,363 1,366 1,840 462 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of March 31, 2018 and December 31, 2017 , the Company had the right to, but elected not to, offset $0.2 million and $0.5 million of its derivative assets and liabilities, respectively. (3) As of March 31, 2018 and December 31, 2017 , the Consolidated Funds offset $0.4 million and $0.4 million of their derivative assets and liabilities, respectively. |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings outstanding | The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of March 31, 2018 As of December 31, 2017 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility(1) Revolver 2/24/2022 N/A $ 140,000 3.38% $ 210,000 3.09% Senior Notes(2) 10/8/2014 10/8/2024 $ 250,000 245,469 4.21% 245,308 4.21% 2015 Term Loan(3) 9/2/2015 7/29/2026 35,205 35,042 3.24% 35,037 2.86% 2016 Term Loan(4) 12/21/2016 1/15/2029 26,376 25,959 3.44% 25,948 3.08% 2017 Term Loan A(4) 3/22/2017 1/22/2028 17,600 17,413 3.26% 17,407 2.90% 2017 Term Loan B(4) 5/10/2017 10/15/2029 35,198 35,066 3.26% 35,062 2.90% 2017 Term Loan C(4) 6/22/2017 7/30/2029 17,155 17,025 3.26% 17,078 2.88% 2017 Term Loan D(4) 11/16/2017 10/15/2030 30,450 30,339 3.07% 30,336 2.77% 2018 Term Loan A(4) 1/12/2018 1/15/2030 26,475 26,456 2.97% — N/A Repurchase Agreement Loan(5) 3/13/2018 4/20/2030 17,575 17,400 1.68% — N/A Total debt obligations $ 590,169 $ 616,176 (1) The AOG entities are borrowers under the Credit Facility, which provides a $1.065 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of March 31, 2018, 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, 2017 and 2018 Term Loans (“Term Loans”) were entered into by a subsidiary of the Company that acts as a manager to a CLO. 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 to cover the Term Loans, 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 ranging from 0.03% to 0.04% of a maximum investment amount. (5) See Repurchase Agreement below for details The followings are elements of the repurchase agreement as of March 31, 2018 : Amounts Securities transferred at carrying value $ 17,575 Estimated fair value of securities transferred(1) $ 17,575 Cash collateral received from counterparty(2) $ 17,575 (1) Included within the Company's investments. (2) Included within the Company's debt obligations. The following table presents the activity of the Company's debt issuance costs: Credit Facility Senior Notes Term Loans Repurchase Agreement Loan Unamortized debt issuance costs as of December 31, 2017 $ 6,543 $ 1,571 $ 1,171 $ — Debt issuance costs incurred — — 19 176 Amortization of debt issuance costs (393 ) (63 ) (32 ) (1 ) Unamortized debt issuance costs as of March 31, 2018 $ 6,150 $ 1,508 $ 1,158 $ 175 he Consolidated Funds had the following revolving bank credit facilities and term loan outstanding as of March 31, 2018 and December 31, 2017 : As of March 31, 2018 As of December 31, 2017 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 3.56% $ 12,942 2.88% 6/30/2018 49,194 49,194 1.55% (2) 48,042 1.55% (2) 3/7/2019 71,500 71,500 3.10% 71,500 2.88% Revolving Term Loan 1/31/2022 1,900 1,303 7.89% — —% 8/19/2019 11,429 5,714 8.91% 5,714 5.86% Total borrowings $ 140,653 $ 138,198 (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. s of March 31, 2018 and December 31, 2017 the following loan obligations were outstanding and classified as liabilities of the Company’s Consolidated CLOs: As of March 31, 2018 As of December 31, 2017 Loan Obligations Fair Value of Loan Obligations Weighted Loan Fair Value of Loan Obligations Weighted Average Remaining Maturity In Years Senior secured notes(1) $ 4,765,180 $ 4,758,121 10.39 $ 4,801,582 $ 4,776,883 10.57 Subordinated notes(2) 278,116 179,143 11.04 276,169 186,311 11.25 Total loan obligations of Consolidated CLOs $ 5,043,296 $ 4,937,264 $ 5,077,751 $ 4,963,194 (1) Original borrowings under the senior secured notes totaled $4.8 billion , with various maturity dates ranging from October 2024 to October 2030. The weighted average interest rate as of March 31, 2018 was 5.02% . (2) Original borrowings under the subordinated notes totaled $278.1 million , with various maturity dates ranging from October 2024 to October 2030. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO. |
Schedule of remaining contractual maturity | The following table shows cash collateral liability by security type: Remaining Contractual Maturity of the Agreement as of March 31, 2018 Less than 1 year 1 - 3 years 4 - 5 years Thereafter Total Collateralized loan obligations $ — $ — $ — $ 17,575 $ 17,575 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of amounts due from and to affiliates | The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of March 31, As of December 31, 2018 2017 Due from affiliates: Management fees receivable from non-consolidated funds $ 130,346 $ 126,506 Payments made on behalf of and amounts due from non-consolidated funds and employees 38,464 39,244 Due from affiliates—Company $ 168,810 $ 165,750 Amounts due from portfolio companies and non-consolidated funds $ 17,782 $ 15,884 Due from affiliates—Consolidated Funds $ 17,782 $ 15,884 Due to affiliates: Management fee rebate payable to non-consolidated funds $ 2,560 $ 5,213 Management fees received in advance 2,866 1,729 Tax receivable agreement liability 12,925 3,503 Payments made by non-consolidated funds on behalf of and payable by the Company 2,667 4,197 Due to affiliates—Company $ 21,018 $ 14,642 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | Supplemental information on an unaudited pro forma basis, as if the Company's election to be treated as a corporation for U.S. federal income tax purposes was effective for the three months ended March 31, 2017 is as follows: Three Months Ended March 31, 2017 2018 2017 Pro forma Provision for Income Taxes - The Company Income tax benefit of the Company $ (12,375 ) $ (34,733 ) $ (28,344 ) Provision for Income Taxes - Consolidated Funds Income tax expense of the Consolidated Funds — 469 469 Total Provision for Income Taxes $ (12,375 ) $ (34,264 ) $ (27,875 ) |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from earnings per common unit | The computation of diluted earnings per common share for the three months ended March 31, 2018 and 2017 excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive: For the Three Months Ended 2018 2017 Options 17,411,780 21,334,689 Restricted units 16,352,546 15,070,871 AOG Units — 130,403,174 |
Schedule of the computation of basic and diluted earnings per common unit | The following table presents the computation of basic and diluted earnings per common share: For the Three Months Ended 2018 2017 Net income (loss) attributable to Ares Management, L.P. common shareholders $ 35,523 $ (46,559 ) Earnings distributed to participating securities (restricted units) (1,899 ) (825 ) Net income (loss) available to common shareholders $ 33,624 $ (47,384 ) Basic weighted-average common shares 85,617,932 81,106,734 Basic earnings (loss) per common share $ 0.39 $ (0.58 ) Net income (loss) attributable to Ares Management, L.P. common shareholders $ 35,523 $ (46,559 ) Earnings distributed to participating securities (restricted units) (1,899 ) (825 ) Incremental net income from assumed exchange of AOG Units 26,606 — Net income (loss) available to common shareholders $ 60,230 $ (47,384 ) Effect of dilutive shares: AOG Units 128,234,996 — Diluted weighted-average common shares 213,852,928 81,106,734 Diluted earnings (loss) per common share $ 0.28 $ (0.58 ) |
EQUITY COMPENSATION (Tables)
EQUITY COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 2018 2017 Restricted units $ 18,030 $ 11,219 Options 2,664 3,482 Phantom units 393 388 Equity-based compensation expense $ 21,087 $ 15,089 |
Summary of unvested restricted units' activity | The following table presents unvested restricted units' activity during the three months ended March 31, 2018 : Restricted Units Weighted Average Grant Date Fair Value Per Unit Balance - January 1, 2018 13,751,888 $ 17.58 Granted 3,635,419 23.61 Vested (835,124 ) 15.33 Forfeited (199,637 ) 19.83 Balance - March 31, 2018 16,352,546 $ 18.98 |
Summary of unvested options activity | A summary of options activity during the three months ended March 31, 2018 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value Balance - January 1, 2018 20,495,025 $ 18.99 6.09 $ 20,611 Granted — — — Exercised — — — Expired (219,034 ) 19.00 — Forfeited (444,203 ) 19.00 — Balance - March 31, 2018 19,831,788 $ 18.99 5.84 $ 47,762 Exercisable at March 31, 2018 7,235,214 $ 18.99 5.38 $ 17,420 |
Summary of unvested phantom units activity | A summary of unvested phantom unit activity during the three months ended March 31, 2018 is presented below: Phantom Units Weighted Average Balance - January 1, 2018 156,153 $ 19.00 Vested — Forfeited (9,362 ) 19.00 Balance - March 31, 2018 146,791 $ 19.00 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $28,417) $ 131,766 $ 49,887 $ 15,173 $ 196,826 $ — $ 196,826 Other fees 5,730 340 3 6,073 — 6,073 Compensation and benefits (50,280 ) (19,199 ) (7,639 ) (77,118 ) (30,606 ) (107,724 ) General, administrative and other expenses (9,629 ) (4,041 ) (2,432 ) (16,102 ) (18,616 ) (34,718 ) Fee related earnings 77,587 26,987 5,105 109,679 (49,222 ) 60,457 Performance income—realized 5,071 4,398 13,638 23,107 — 23,107 Performance income—unrealized 16,092 21,066 (2,040 ) 35,118 — 35,118 Performance related compensation—realized (3,088 ) (3,560 ) (8,221 ) (14,869 ) — (14,869 ) Performance related compensation—unrealized 7,176 (18,694 ) 509 (11,009 ) — (11,009 ) Net performance income 25,251 3,210 3,886 32,347 — 32,347 Investment income—realized 771 671 3,350 4,792 838 5,630 Investment income (loss)—unrealized (269 ) (4,150 ) (1,232 ) (5,651 ) 1,231 (4,420 ) Interest and other investment income 2,196 329 1,017 3,542 1,247 4,789 Interest expense (4,673 ) (1,228 ) (420 ) (6,321 ) (548 ) (6,869 ) Net investment income (loss) (1,975 ) (4,378 ) 2,715 (3,638 ) 2,768 (870 ) Performance related earnings 23,276 (1,168 ) 6,601 28,709 2,768 31,477 Economic net income $ 100,863 $ 25,819 $ 11,706 $ 138,388 $ (46,454 ) $ 91,934 Realized income $ 78,857 $ 27,327 $ 13,669 $ 119,853 $ (47,780 ) $ 72,073 The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2017 : Credit Group Private Equity Group Real Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $33,257) $ 121,347 $ 39,819 $ 15,615 $ 176,781 $ — $ 176,781 Other fees 4,503 340 (9 ) 4,834 — 4,834 Compensation and benefits (51,703 ) (13,218 ) (9,736 ) (74,657 ) (25,953 ) (100,610 ) General, administrative and other expenses (8,041 ) (4,198 ) (2,731 ) (14,970 ) (19,313 ) (34,283 ) Fee related earnings 66,106 22,743 3,139 91,988 (45,266 ) 46,722 Performance income—realized 8,778 — 27 8,805 — 8,805 Performance income—unrealized 2,936 32,237 14,088 49,261 — 49,261 Performance related compensation—realized (5,285 ) — (16 ) (5,301 ) — (5,301 ) Performance related compensation—unrealized (1,458 ) (25,505 ) (8,438 ) (35,401 ) — (35,401 ) Net performance income 4,971 6,732 5,661 17,364 — 17,364 Investment income—realized 318 579 1,783 2,680 1,859 4,539 Investment income (loss)—unrealized 4,589 8,546 (444 ) 12,691 (1,407 ) 11,284 Interest and other investment income (expense) (19 ) 152 (181 ) (48 ) 874 826 Interest expense (2,458 ) (1,513 ) (432 ) (4,403 ) (476 ) (4,879 ) Net investment income 2,430 7,764 726 10,920 850 11,770 Performance related earnings 7,401 14,496 6,387 28,284 850 29,134 Economic net income $ 73,507 $ 37,239 $ 9,526 $ 120,272 $ (44,416 ) $ 75,856 Realized income $ 69,945 $ 22,345 $ 4,588 $ 96,878 $ (43,205 ) $ 53,673 |
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 2018 2017 Segment Revenues Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) $ 196,826 $ 176,781 Other fees 6,073 4,834 Performance income—realized 23,107 8,805 Performance income—unrealized 35,118 49,261 Total segment revenues $ 261,124 $ 239,681 Segment Expenses Compensation and benefits $ 77,118 $ 74,657 General, administrative and other expenses 16,102 14,970 Performance related compensation—realized 14,869 5,301 Performance related compensation—unrealized 11,009 35,401 Total segment expenses $ 119,098 $ 130,329 Other Income (Expense) Investment income—realized $ 4,792 $ 2,680 Investment income (loss)—unrealized (5,651 ) 12,691 Interest and other investment income (expense) 3,542 (48 ) Interest expense (6,321 ) (4,403 ) Total other income (expense) $ (3,638 ) $ 10,920 |
Schedule of segment revenues components | The following table reconciles segment revenue to Ares consolidated revenues: For the Three Months Ended 2018 2017 Total segment revenue $ 261,124 $ 239,681 Revenue of Consolidated Funds eliminated in consolidation (5,110 ) (18,188 ) Administrative fees(1) 6,412 9,606 Performance income reclass(2) 975 (24 ) Principal investment income 2,708 13,169 Revenue of non-controlling interests in consolidated subsidiaries(3) (20 ) — Total consolidated adjustments and reconciling items 4,965 4,563 Total consolidated revenue $ 266,089 $ 244,244 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within other income (expense) in the Company’s Condensed Consolidated Statements of Operations. (3) Adjustments for administrative fees reimbursed 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 2018 2017 Total segment expenses $ 119,098 $ 130,329 Expenses of Consolidated Funds added in consolidation 8,629 10,509 Expenses of Consolidated Funds eliminated in consolidation (7,313 ) (6,598 ) Administrative fees(1) 6,412 9,606 OMG expenses 49,222 45,266 Acquisition and merger-related expenses (319 ) 275,336 Equity compensation expense 21,087 15,089 Placement fees and underwriting costs 1,664 3,439 Amortization of intangibles 3,287 5,275 Depreciation expense 3,889 3,216 Expenses of non-controlling interests in consolidated subsidiaries(2) 627 — Total consolidation adjustments and reconciling items 87,185 361,138 Total consolidated expenses $ 206,283 $ 491,467 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) 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 2018 2017 Total other income (expense) $ (3,638 ) $ 10,920 Other income from Consolidated Funds added in consolidation, net 7,252 38,445 Other expense from Consolidated Funds eliminated in consolidation, net (459 ) (23 ) Other income of non-controlling interests in consolidated subsidiaries 7 — OMG other expense 2,768 850 Performance income reclass(1) (975 ) 24 Principal investment income (2,708 ) (13,169 ) Changes in value of contingent consideration — 20,248 Other non-cash expense (7 ) — Offering costs — (660 ) Total consolidation adjustments and reconciling items 5,878 45,715 Total consolidated other income $ 2,240 $ 56,635 (1) Related to performance income 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, RI, FRE and PRE: For the Three Months Ended 2018 2017 Economic net income Income (loss) before taxes $ 62,046 $ (190,588 ) Adjustments: Amortization of intangibles 3,287 5,275 Depreciation expense 3,889 3,216 Equity compensation expenses 21,087 15,089 Acquisition and merger-related expenses (319 ) 255,088 Placement fees and underwriting costs 1,664 3,439 OMG expenses, net 46,454 44,416 Offering costs — 660 Other non-cash expense 7 — Expense of non-controlling interests in consolidated subsidiaries(1) 640 — (Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations (367 ) (16,323 ) Total consolidation adjustments and reconciling items 76,342 310,860 Economic net income 138,388 120,272 Total performance income - unrealized (35,118 ) (49,261 ) Total performance related compensation - unrealized 11,009 35,401 Total investment (income) loss - unrealized 5,574 (9,534 ) Realized income 119,853 96,878 Total performance income - realized (23,107 ) (8,805 ) Total performance related compensation - realized 14,869 5,301 Total investment income - realized (1,936 ) (1,386 ) Fee related earnings 109,679 91,988 Performance related earnings Economic net income $ 138,388 $ 120,272 Less: fee related earnings (109,679 ) (91,988 ) Performance related earnings $ 28,709 $ 28,284 (1) |
CONSOLIDATION (Tables)
CONSOLIDATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, As of December 31, 2018 2017 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs $ 266,833 $ 251,376 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs $ 174,849 $ 175,620 Assets of consolidated VIEs $ 6,126,584 $ 6,231,245 Liabilities of consolidated VIEs $ 5,417,561 $ 5,538,054 For the Three Months Ended 2018 2017 Net income attributable to non-controlling interests related to consolidated VIEs $ 367 $ 15,855 |
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 March 31, 2018 and December 31, 2017 and results from operations for the three months ended March 31, 2018 and 2017 . As of March 31, 2018 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 115,540 $ — $ — $ 115,540 Investments ($1,113,435 of accrued carried interest, and $17,575 of pledged collateral) 1,986,678 — (174,849 ) 1,811,829 Due from affiliates 177,601 — (8,791 ) 168,810 Deferred tax asset, net 50,986 — — 50,986 Other assets 105,187 — — 105,187 Intangible assets, net 37,178 — — 37,178 Goodwill 143,968 — — 143,968 Assets of Consolidated Funds Cash and cash equivalents — 532,470 — 532,470 Investments, at fair value — 5,479,136 — 5,479,136 Due from affiliates — 17,782 — 17,782 Dividends and interest receivable — 12,096 — 12,096 Receivable for securities sold — 83,718 — 83,718 Other assets — 1,382 — 1,382 Total assets $ 2,617,138 $ 6,126,584 $ (183,640 ) $ 8,560,082 Liabilities Accounts payable, accrued expenses and other liabilities $ 78,771 $ — $ — $ 78,771 Accrued compensation 49,944 — — 49,944 Due to affiliates 21,018 — — 21,018 Performance related compensation payable 856,421 — — 856,421 Debt obligations 590,169 — — 590,169 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 81,508 — 81,508 Due to affiliates — 8,791 (8,791 ) — Payable for securities purchased — 239,139 — 239,139 CLO loan obligations, at fair value — 4,947,470 (10,206 ) 4,937,264 Fund borrowings — 140,653 — 140,653 Total liabilities 1,596,323 5,417,561 (18,997 ) 6,994,887 Commitments and contingencies Preferred equity (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 709,023 (164,643 ) 544,380 Non-controlling interest in Ares Operating Group entities 348,820 — — 348,820 Controlling interest in Ares Management, L.P.: Shareholders' equity (97,514,500 shares issued and outstanding) 377,235 — — 377,235 Accumulated other comprehensive loss, net of tax (4,001 ) — — (4,001 ) Total controlling interest in Ares Management, L.P. 373,234 — — 373,234 Total equity 1,020,815 709,023 (164,643 ) 1,565,195 Total liabilities and equity $ 2,617,138 $ 6,126,584 $ (183,640 ) $ 8,560,082 As of December 31, 2017 As adjusted Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 118,929 $ — $ — $ 118,929 Investments ($1,077,236 of accrued carried interest, and $0 of pledged collateral) 1,900,191 — (175,620 ) 1,724,571 Due from affiliates 171,701 — (5,951 ) 165,750 Deferred tax asset, net 8,326 — — 8,326 Other assets 135,674 — (5,333 ) 130,341 Intangible assets, net 40,465 — — 40,465 Goodwill 143,895 — — 143,895 Assets of Consolidated Funds Cash and cash equivalents — 556,500 — 556,500 Investments, at fair value — 5,582,842 — 5,582,842 Due from affiliates — 15,884 — 15,884 Dividends and interest receivable — 12,568 — 12,568 Receivable for securities sold — 61,462 — 61,462 Other assets — 1,989 — 1,989 Total assets $ 2,519,181 $ 6,231,245 $ (186,904 ) $ 8,563,522 Liabilities Accounts payable, accrued expenses and other liabilities $ 81,955 $ — $ — $ 81,955 Accrued compensation 27,978 — — 27,978 Due to affiliates 14,642 — — 14,642 Performance related compensation payable 846,626 — — 846,626 Debt obligations 616,176 — — 616,176 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 64,316 — 64,316 Due to affiliates — 11,285 (11,285 ) — Payable for securities purchased — 350,145 — 350,145 CLO loan obligations, at fair value — 4,974,110 (10,916 ) 4,963,194 Fund borrowings — 138,198 — 138,198 Total liabilities 1,587,377 5,538,054 (22,201 ) 7,103,230 Commitments and contingencies Preferred equity (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Non-controlling interest in Consolidated Funds — 693,191 (164,703 ) 528,488 Non-controlling interest in Ares Operating Group entities 358,186 — — 358,186 Controlling interest in Ares Management, L.P.: Shareholders' equity (82,280,033 shares issued and outstanding) 279,065 — — 279,065 Accumulated other comprehensive loss, net of tax (4,208 ) — — (4,208 ) Total controlling interest in Ares Management, L.P. 274,857 — — 274,857 Total equity 931,804 693,191 (164,703 ) 1,460,292 Total liabilities and equity $ 2,519,181 $ 6,231,245 $ (186,904 ) $ 8,563,522 |
Schedule of results from operations | For the Three Months Ended March 31, 2018 Consolidated Entities Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $28,417) $ 196,826 $ — $ (7,311 ) $ 189,515 Carried interest allocation 54,129 — — 54,129 Incentive fees 5,071 — — 5,071 Principal investment income 2,708 — 2,201 4,909 Administrative, transaction and other fees 12,465 — — 12,465 Total revenues 271,199 — (5,110 ) 266,089 Expenses Compensation and benefits 134,639 — — 134,639 Performance related compensation 25,878 — — 25,878 General, administrative and other expense 44,450 — — 44,450 Expenses of the Consolidated Funds — 8,629 (7,313 ) 1,316 Total expenses 204,967 8,629 (7,313 ) 206,283 Other income (expense) Net realized and unrealized loss on investments (1,178 ) — 339 (839 ) Interest and dividend income 3,347 — — 3,347 Interest expense (6,869 ) — — (6,869 ) Other income (expense), net 147 — (458 ) (311 ) Net realized and unrealized loss on investments of the Consolidated Funds — (12,452 ) (633 ) (13,085 ) Interest and other income of the Consolidated Funds — 64,422 — 64,422 Interest expense of the Consolidated Funds — (44,718 ) 293 (44,425 ) Total other income (expense) (4,553 ) 7,252 (459 ) 2,240 Income (loss) before taxes 61,679 (1,377 ) 1,744 62,046 Income tax benefit (12,375 ) — — (12,375 ) Net income (loss) 74,054 (1,377 ) 1,744 74,421 Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds — (1,377 ) 1,744 367 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 33,106 — — 33,106 Net income attributable to Ares Management, L.P. 40,948 — — 40,948 Less: Preferred equity dividend paid 5,425 — — 5,425 Net income attributable to Ares Management, L.P. common shareholders $ 35,523 $ — $ — $ 35,523 For the Three Months Ended March 31, 2017 As adjusted Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $33,257) $ 176,781 $ — $ (4,736 ) $ 172,045 Carried interest allocation 53,015 — (1,008 ) 52,007 Incentive fees 5,027 — (1,862 ) 3,165 Principal investment income 13,169 — (10,582 ) 2,587 Administrative, transaction and other fees 14,440 — — 14,440 Total revenues 262,432 — (18,188 ) 244,244 Expenses Compensation and benefits 124,339 — — 124,339 Performance related compensation 40,702 — — 40,702 General, administrative and other expense 47,338 — — 47,338 Transaction support expense 275,177 275,177 Expenses of the Consolidated Funds — 10,509 (6,598 ) 3,911 Total expenses 487,556 10,509 (6,598 ) 491,467 Other income (expense) Net realized and unrealized gain on investments 3,753 — (2,865 ) 888 Interest and dividend income 2,843 — (919 ) 1,924 Interest expense (4,879 ) — — (4,879 ) Other income, net 16,496 — — 16,496 Net realized and unrealized gain on investments of the Consolidated Funds — 30,439 1,597 32,036 Interest and other income of the Consolidated Funds — 41,492 — 41,492 Interest expense of Consolidated Funds — — (33,486 ) — 2,164 — (31,322 ) Total other income 18,213 38,445 (23 ) 56,635 Income (loss) before taxes (206,911 ) 27,936 (11,613 ) (190,588 ) Income tax expense (benefit) (34,732 ) 468 — (34,264 ) Net income (loss) (172,179 ) 27,468 (11,613 ) (156,324 ) Less: Net income attributable to non-controlling interests in Consolidated Funds — 27,468 (11,613 ) 15,855 Less: Net loss attributable to non-controlling interests in Ares Operating Group entities (131,045 ) — — (131,045 ) Net loss attributable to Ares Management, L.P. (41,134 ) — — (41,134 ) Less: Preferred equity dividend paid 5,425 — — 5,425 Net loss attributable to Ares Management, L.P. common shareholders $ (46,559 ) $ — $ — $ (46,559 ) |
ORGANIZATION (Details)
ORGANIZATION (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of investing groups | 3 |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Condensed Consolidated Statement of Financial Condition) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Investments, at fair value | $ 1,724,571 | ||
Other assets | 130,341 | ||
Total assets | $ 8,560,082 | 8,563,522 | |
Commitments and contingencies | |||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 377,235 | 279,065 | |
Accumulated other comprehensive loss, net of tax | (4,001) | (4,208) | |
Total controlling interest in Ares Management, L.P. | 373,234 | 274,857 | |
Total equity | 1,565,195 | 1,460,292 | |
Total liabilities and equity | $ 8,560,082 | $ 8,563,522 | |
Partners' Capital shares issued (in shares) | 97,514,500 | 82,280,033 | |
Partners' Capital shares outstanding (in shares) | 97,514,500 | 82,280,033 | |
Ares Management L.P | |||
Assets | |||
Investments, at fair value | $ 1,811,829 | $ 1,724,571 | |
Deferred tax asset, net | 50,986 | 8,326 | |
Other assets | 105,187 | 130,341 | |
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 377,235 | 279,065 | |
Accumulated other comprehensive loss, net of tax | (4,001) | (4,208) | |
Total controlling interest in Ares Management, L.P. | 373,234 | 274,857 | |
Ares Management L.P | Accrued Interest | |||
Assets | |||
Investments, at fair value | 1,113,435 | 1,077,236 | |
Ares Management L.P | Collateral Pledged | |||
Assets | |||
Investments, at fair value | 17,575 | 0 | |
Consolidated Funds | |||
Assets | |||
Investments, at fair value | 5,479,136 | 5,582,842 | |
Other assets | 1,382 | 1,989 | |
Non-controlling interest in Consolidated Funds | 544,380 | 528,488 | |
Non-controlling interest in Ares Operating Group entities | 544,380 | 528,488 | |
AOG | |||
Assets | |||
Non-controlling interest in Ares Operating Group entities | 348,820 | 358,186 | |
ASC 323 | Ares Management L.P | |||
Assets | |||
Investments, at fair value | 1,724,571 | ||
Performance income receivable | 0 | ||
Other assets | 130,341 | ||
ASC 323 | As Previously Reported | Ares Management L.P | |||
Assets | |||
Investments, at fair value | 647,335 | ||
Performance income receivable | 1,099,847 | ||
Other assets | 107,730 | ||
ASC 323 | Adjustments | Ares Management L.P | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of ASU adoption | 22,600 | ||
Assets | |||
Investments, at fair value | 1,077,236 | ||
Performance income receivable | (1,099,847) | ||
Other assets | $ 22,611 | ||
ASC 606 | Adjustments | |||
Assets | |||
Investments, at fair value | $ 0 | ||
Deferred tax asset, net | (250) | ||
Other assets | 23,704 | (22,611) | |
Total assets | 23,454 | (22,611) | |
Non-controlling interest in Consolidated Funds | (7,052) | ||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 11,603 | ||
Accumulated other comprehensive loss, net of tax | 100 | ||
Total controlling interest in Ares Management, L.P. | 11,703 | ||
Total equity | 23,454 | (22,611) | |
Total liabilities and equity | 23,454 | (22,611) | |
ASC 606 | Balances without adoption of ASC 606 | |||
Assets | |||
Investments, at fair value | 1,724,571 | ||
Other assets | 107,730 | ||
Total assets | 8,583,536 | 8,540,911 | |
Commitments and contingencies | |||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 388,838 | ||
Accumulated other comprehensive loss, net of tax | (3,901) | ||
Total controlling interest in Ares Management, L.P. | 384,937 | ||
Total equity | 1,588,649 | 1,437,681 | |
Total liabilities and equity | 8,583,536 | $ 8,540,911 | |
ASC 606 | Ares Management L.P | Balances without adoption of ASC 606 | |||
Assets | |||
Deferred tax asset, net | 50,736 | ||
Other assets | 128,891 | ||
ASC 606 | Consolidated Funds | Balances without adoption of ASC 606 | |||
Assets | |||
Non-controlling interest in Consolidated Funds | 537,328 | ||
ASC 606 | AOG | Adjustments | |||
Assets | |||
Non-controlling interest in Ares Operating Group entities | 18,803 | ||
ASC 606 | AOG | Balances without adoption of ASC 606 | |||
Assets | |||
Non-controlling interest in Ares Operating Group entities | $ 367,623 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Condensed Consolidated Statement of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Revenues | |||
Total revenues | $ 266,089 | $ 244,244 | |
Other income (expense) | |||
Total other income | 2,240 | 56,635 | |
Income (loss) before taxes | 62,046 | (190,588) | |
Income tax benefit | (12,375) | (34,264) | |
Net income (loss) | 74,421 | (156,324) | |
Net income (loss) attributable to Ares Management, L.P. | 40,948 | (41,134) | |
Net income (loss) attributable to Ares Management, L.P. common shareholders | 35,523 | (46,559) | |
Ares Management L.P | |||
Revenues | |||
Carried interest allocation | 54,129 | 52,007 | |
Incentive fees | 5,071 | 3,165 | |
Principal investment income | 4,909 | 2,587 | |
Total revenues | 266,089 | 244,244 | |
Other income (expense) | |||
Net realized and unrealized gain (loss) on investments | (839) | 888 | |
Interest and dividend income | 3,347 | 1,924 | |
Other income (expense), net | (311) | 16,496 | |
Income tax benefit | (12,375) | (34,733) | |
Consolidated Funds | |||
Other income (expense) | |||
Net realized and unrealized gain (loss) on investments | (13,085) | 32,036 | |
Interest and dividend income | 64,422 | 41,492 | |
Income tax benefit | 0 | $ 469 | |
ASC 323 | Ares Management L.P | |||
Revenues | |||
Performance fees | $ 0 | ||
Carried interest allocation | 52,007 | ||
Incentive fees | 3,165 | ||
Principal investment income | 2,587 | ||
Total revenues | 244,244 | ||
Other income (expense) | |||
Net realized and unrealized gain (loss) on investments | 888 | ||
Interest and dividend income | 1,924 | ||
ASC 323 | As Previously Reported | Ares Management L.P | |||
Revenues | |||
Performance fees | 55,172 | ||
Carried interest allocation | 0 | ||
Incentive fees | 0 | ||
Principal investment income | 0 | ||
Total revenues | 241,657 | ||
Other income (expense) | |||
Net realized and unrealized gain (loss) on investments | 2,655 | ||
Interest and dividend income | 2,744 | ||
ASC 323 | Adjustments | Ares Management L.P | |||
Revenues | |||
Performance fees | (55,172) | ||
Carried interest allocation | 52,007 | ||
Incentive fees | 3,165 | ||
Principal investment income | 2,587 | ||
Total revenues | 2,587 | ||
Other income (expense) | |||
Net realized and unrealized gain (loss) on investments | (1,767) | ||
Interest and dividend income | $ (820) | ||
ASC 606 | Adjustments | |||
Other income (expense) | |||
Total other income | (12) | ||
Income (loss) before taxes | 844 | ||
Income tax benefit | 250 | ||
Net income (loss) | 594 | ||
Net income (loss) attributable to Ares Management, L.P. | 594 | ||
Net income (loss) attributable to Ares Management, L.P. common shareholders | 594 | ||
ASC 606 | Balances without adoption of ASC 606 | |||
Other income (expense) | |||
Total other income | 2,228 | ||
Income (loss) before taxes | 62,890 | ||
Income tax benefit | (12,125) | ||
Net income (loss) | 75,015 | ||
Net income (loss) attributable to Ares Management, L.P. | 41,542 | ||
Net income (loss) attributable to Ares Management, L.P. common shareholders | 36,117 | ||
ASC 606 | Ares Management L.P | Adjustments | |||
Revenues | |||
Incentive fees | 856 | ||
Total revenues | 856 | ||
Other income (expense) | |||
Other income (expense), net | (12) | ||
ASC 606 | Ares Management L.P | Balances without adoption of ASC 606 | |||
Revenues | |||
Incentive fees | 5,927 | ||
Total revenues | 266,945 | ||
Other income (expense) | |||
Other income (expense), net | $ (323) |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Impact of Incentive Fees) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments | $ 1,724,571 | ||
Other assets | 130,341 | ||
Total assets | $ 8,560,082 | 8,563,522 | |
Total liabilities | 6,994,887 | 7,103,230 | |
Cumulative effect of the adoption of ASC 606 | 0 | ||
Total equity | 1,565,195 | 1,460,292 | |
Total liabilities and equity | 8,560,082 | 8,563,522 | |
ASC 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of the adoption of ASC 606 | $ (22,611) | ||
Adjustments | ASC 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments | $ 0 | ||
Other assets | 23,704 | (22,611) | |
Total assets | 23,454 | (22,611) | |
Total liabilities | 0 | ||
Cumulative effect of the adoption of ASC 606 | (22,611) | ||
Total equity | 23,454 | (22,611) | |
Total liabilities and equity | 23,454 | (22,611) | |
Balances without adoption of ASC 606 | ASC 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments | 1,724,571 | ||
Other assets | 107,730 | ||
Total assets | 8,583,536 | 8,540,911 | |
Total liabilities | 7,103,230 | ||
Cumulative effect of the adoption of ASC 606 | (22,611) | ||
Total equity | 1,588,649 | 1,437,681 | |
Total liabilities and equity | $ 8,583,536 | $ 8,540,911 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Condensed Consolidated Statement of Changes in Equity) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total equity | $ 1,565,195 | $ 1,460,292 |
Cumulative effect of the adoption of ASC 606 | 0 | |
As adjusted balance at January 1, 2018 | 1,437,681 | |
Ares Management L.P | Accumulated Other Comprehensive Loss | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total equity | (4,001) | (4,208) |
As adjusted balance at January 1, 2018 | (4,208) | |
AOG | Non-Controlling interest | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total equity | 348,820 | 358,186 |
As adjusted balance at January 1, 2018 | 341,069 | |
Consolidated Funds | Non-Controlling interest | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total equity | 544,380 | 528,488 |
As adjusted balance at January 1, 2018 | 533,821 | |
Partners' Capital | Ares Management L.P | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total equity | 377,235 | 279,065 |
As adjusted balance at January 1, 2018 | 268,238 | |
Partners' Capital | Preferred Partner | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total equity | $ 298,761 | 298,761 |
As adjusted balance at January 1, 2018 | 298,761 | |
ASC 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of the adoption of ASC 606 | (22,611) | |
ASC 606 | Ares Management L.P | Accumulated Other Comprehensive Loss | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of the adoption of ASC 606 | 0 | |
ASC 606 | AOG | Non-Controlling interest | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of the adoption of ASC 606 | (17,117) | |
ASC 606 | Consolidated Funds | Non-Controlling interest | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of the adoption of ASC 606 | 5,333 | |
ASC 606 | Partners' Capital | Ares Management L.P | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of the adoption of ASC 606 | (10,827) | |
ASC 606 | Partners' Capital | Preferred Partner | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of the adoption of ASC 606 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Condensed Consolidated Statement of Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net income (loss) | $ 74,421 | $ (156,324) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 6,687 | |
Ares Management L.P | ||
Other comprehensive income: | ||
Foreign currency translation adjustments | 5,485 | 3,442 |
Total comprehensive income (loss) | 79,906 | (152,882) |
Comprehensive income (loss) attributable to Ares Management, L.P. | 41,155 | (39,933) |
Consolidated Funds | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | 3,542 | 15,856 |
AOG | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | 35,209 | $ (128,805) |
Adjustments | ASC 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net income (loss) | 594 | |
Adjustments | Ares Management L.P | ASC 606 | ||
Other comprehensive income: | ||
Foreign currency translation adjustments | 249 | |
Total comprehensive income (loss) | 843 | |
Comprehensive income (loss) attributable to Ares Management, L.P. | 876 | |
Adjustments | Consolidated Funds | ASC 606 | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | (1,719) | |
Adjustments | AOG | ASC 606 | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | 1,686 | |
Balances without adoption of ASC 606 | ASC 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net income (loss) | 75,015 | |
Balances without adoption of ASC 606 | Ares Management L.P | ASC 606 | ||
Other comprehensive income: | ||
Foreign currency translation adjustments | 5,734 | |
Total comprehensive income (loss) | 80,749 | |
Comprehensive income (loss) attributable to Ares Management, L.P. | 42,031 | |
Balances without adoption of ASC 606 | Consolidated Funds | ASC 606 | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | 1,823 | |
Balances without adoption of ASC 606 | AOG | ASC 606 | ||
Other comprehensive income: | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | $ 36,895 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Condensed Consolidated Statement of Cash Flows) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 74,421 | $ (156,324) |
Cash flows due to changes in operating assets and liabilities | (37,718) | (135,303) |
Consolidated Funds | ||
Cash flows from operating activities: | ||
Cash flows due to changes in operating assets and liabilities | (88,592) | $ 100,086 |
ASC 606 | Adjustments | ||
Cash flows from operating activities: | ||
Net income (loss) | 594 | |
Cash flows due to changes in operating assets and liabilities | (2,313) | |
ASC 606 | Balances without adoption of ASC 606 | ||
Cash flows from operating activities: | ||
Net income (loss) | 75,015 | |
Cash flows due to changes in operating assets and liabilities | (40,031) | |
ASC 606 | Consolidated Funds | Adjustments | ||
Cash flows from operating activities: | ||
Cash flows due to changes in operating assets and liabilities | 1,719 | |
ASC 606 | Consolidated Funds | Balances without adoption of ASC 606 | ||
Cash flows from operating activities: | ||
Cash flows due to changes in operating assets and liabilities | $ (86,873) |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Recent Accounting Pronouncements) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |
Reclassification from accumulated other comprehensive income to shareholders' equity | $ 1.2 |
GOODWILL AND INTANGIBLE ASSET46
GOODWILL AND INTANGIBLE ASSETS (Carrying Value of Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Finite-lived intangible assets, net | |||
Total intangible assets | $ 84,135 | $ 109,106 | |
Less: accumulated amortization | (46,957) | (68,641) | |
Intangible assets, net | 37,178 | 40,465 | |
Fully-amortized intangibles, amount removed during the period | 25,000 | ||
General, administrative and other expense | |||
Finite-lived intangible assets, net | |||
Amortization expense | $ 3,300 | $ 5,300 | |
Management contracts | |||
Finite-lived intangible assets, net | |||
Weighted average amortization period | 2 years 2 months 12 days | ||
Intangible assets | $ 42,335 | 67,306 | |
Client relationships | |||
Finite-lived intangible assets, net | |||
Weighted average amortization period | 10 years 3 months 18 days | ||
Intangible assets | $ 38,600 | 38,600 | |
Trade name | |||
Finite-lived intangible assets, net | |||
Weighted average amortization period | 4 years 3 months 18 days | ||
Intangible assets | $ 3,200 | $ 3,200 |
GOODWILL AND INTANGIBLE ASSET47
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 143,895,000 | |
Foreign currency translation | 73,000 | |
Goodwill, ending balance | 143,968,000 | |
Goodwill impairment | 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 | 53,099,000 | |
Foreign currency translation | 73,000 | |
Goodwill, ending balance | $ 53,172,000 |
INVESTMENTS (Fair Value Investm
INVESTMENTS (Fair Value Investments, excluding Equity Method Investments Held at Fair Value) (Details) - Ares Management L.P - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments | ||
Fair value investments | $ 1,811,829 | $ 1,724,571 |
Partnership interests | ||
Investments | ||
Fair value investments | $ 1,567,449 | $ 1,527,777 |
Percentage of total investments | 86.50% | 88.60% |
Common Stock | ||
Investments | ||
Fair value investments | $ 1,396 | $ 1,636 |
Percentage of total investments | 0.10% | 0.10% |
Partnership interests | ||
Investments | ||
Fair value investments | $ 347,406 | $ 340,354 |
Percentage of total investments | 19.20% | 19.70% |
Equity method - carried interest | ||
Investments | ||
Fair value investments | $ 1,113,435 | $ 1,077,236 |
Percentage of total investments | 61.40% | 62.50% |
Equity method private investment partnership interests - other | ||
Investments | ||
Fair value investments | $ 69,342 | $ 74,439 |
Percentage of total investments | 3.80% | 4.30% |
Other private investment partnership Interests | ||
Investments | ||
Fair value investments | $ 37,266 | $ 35,748 |
Percentage of total investments | 2.10% | 2.10% |
Collateralized loan obligations | ||
Investments | ||
Fair value investments | $ 242,984 | $ 195,158 |
Percentage of total investments | 13.40% | 11.30% |
INVESTMENTS (Equity Method Inve
INVESTMENTS (Equity Method Investments) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investments In And Advances To Affiliates [Abstract] | ||
Equity method investments | $ 3.5 | $ 5.8 |
INVESTMENTS (Investments of the
INVESTMENTS (Investments of the Consolidated Funds) (Details) - Consolidated Funds $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($)issuer | Dec. 31, 2017USD ($)issuer | |
Investments | ||
Investments | $ 5,479,136 | $ 5,582,842 |
Number of single issuers above 5% | issuer | 0 | 0 |
Single issuer or investor threshold, as a percent | 5.00% | 5.00% |
Fixed Income | ||
Investments | ||
Investments | $ 5,007,793 | $ 5,115,374 |
Percentage of total investments | 91.50% | 91.60% |
Equity securities | ||
Investments | ||
Investments | $ 218,643 | $ 235,136 |
Percentage of total investments | 3.90% | 4.20% |
Partnership Interests | Partnership and interests | ||
Investments | ||
Investments | $ 252,700 | $ 232,332 |
Percentage of total investments | 4.60% | 4.20% |
United States | Fixed Income | ||
Investments | ||
Investments | $ 3,388,108 | $ 3,447,953 |
Percentage of total investments | 62.10% | 61.80% |
Investments, at cost | $ 3,393,506 | $ 3,459,318 |
United States | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments | $ 1,303,537 | $ 1,295,732 |
Percentage of total investments | 24.10% | 23.20% |
United States | Fixed Income | Consumer staples | ||
Investments | ||
Investments | $ 56,917 | $ 55,073 |
Percentage of total investments | 1.00% | 1.00% |
United States | Fixed Income | Energy | ||
Investments | ||
Investments | $ 173,698 | $ 176,836 |
Percentage of total investments | 3.20% | 3.20% |
United States | Fixed Income | Financials | ||
Investments | ||
Investments | $ 270,317 | $ 270,520 |
Percentage of total investments | 4.90% | 4.80% |
United States | Fixed Income | Healthcare, education and childcare | ||
Investments | ||
Investments | $ 453,622 | $ 449,888 |
Percentage of total investments | 8.30% | 8.10% |
United States | Fixed Income | Industrials | ||
Investments | ||
Investments | $ 364,479 | $ 370,926 |
Percentage of total investments | 6.70% | 6.60% |
United States | Fixed Income | Information technology | ||
Investments | ||
Investments | $ 146,733 | $ 167,089 |
Percentage of total investments | 2.70% | 3.00% |
United States | Fixed Income | Materials | ||
Investments | ||
Investments | $ 170,309 | $ 185,170 |
Percentage of total investments | 3.10% | 3.30% |
United States | Fixed Income | Telecommunication services | ||
Investments | ||
Investments | $ 385,829 | $ 399,617 |
Percentage of total investments | 7.00% | 7.20% |
United States | Fixed Income | Utilities | ||
Investments | ||
Investments | $ 62,667 | $ 77,102 |
Percentage of total investments | 1.10% | 1.40% |
United States | Equity securities | ||
Investments | ||
Investments | $ 60 | $ 126 |
Percentage of total investments | 0.00% | 0.00% |
Investments, at cost | $ 2,265 | $ 2,265 |
United States | Equity securities | Energy | ||
Investments | ||
Investments | $ 60 | $ 126 |
Percentage of total investments | 0.00% | 0.00% |
United States | Partnership Interests | ||
Investments | ||
Investments | $ 252,700 | $ 232,332 |
Percentage of total investments | 4.60% | 4.20% |
Investments, at cost | $ 200,000 | $ 190,000 |
United States | Partnership Interests | Partnership and interests | ||
Investments | ||
Investments | $ 252,700 | $ 232,332 |
Percentage of total investments | 4.60% | 4.20% |
Europe | Fixed Income | ||
Investments | ||
Investments | $ 1,497,652 | $ 1,537,889 |
Percentage of total investments | 27.20% | 27.60% |
Investments, at cost | $ 1,507,741 | $ 1,545,297 |
Europe | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments | $ 603,516 | $ 604,608 |
Percentage of total investments | 11.00% | 10.80% |
Europe | Fixed Income | Consumer staples | ||
Investments | ||
Investments | $ 72,317 | $ 76,361 |
Percentage of total investments | 1.30% | 1.40% |
Europe | Fixed Income | Energy | ||
Investments | ||
Investments | $ 2,461 | $ 2,413 |
Percentage of total investments | 0.00% | 0.00% |
Europe | Fixed Income | Financials | ||
Investments | ||
Investments | $ 116,836 | $ 81,987 |
Percentage of total investments | 2.10% | 1.50% |
Europe | Fixed Income | Healthcare, education and childcare | ||
Investments | ||
Investments | $ 187,032 | $ 209,569 |
Percentage of total investments | 3.40% | 3.80% |
Europe | Fixed Income | Industrials | ||
Investments | ||
Investments | $ 128,345 | $ 145,706 |
Percentage of total investments | 2.30% | 2.60% |
Europe | Fixed Income | Information technology | ||
Investments | ||
Investments | $ 20,603 | $ 21,307 |
Percentage of total investments | 0.40% | 0.40% |
Europe | Fixed Income | Materials | ||
Investments | ||
Investments | $ 184,625 | $ 213,395 |
Percentage of total investments | 3.40% | 3.80% |
Europe | Fixed Income | Telecommunication services | ||
Investments | ||
Investments | $ 181,917 | $ 182,543 |
Percentage of total investments | 3.30% | 3.30% |
Europe | Equity securities | ||
Investments | ||
Investments | $ 61,065 | $ 63,155 |
Percentage of total investments | 1.10% | 1.10% |
Investments, at cost | $ 67,198 | $ 67,198 |
Europe | Equity securities | Healthcare, education and childcare | ||
Investments | ||
Investments | $ 61,065 | $ 63,155 |
Percentage of total investments | 1.10% | 1.10% |
Asia and other | Fixed Income | ||
Investments | ||
Investments | $ 46,174 | $ 36,309 |
Percentage of total investments | 0.80% | 0.60% |
Investments, at cost | $ 46,287 | $ 36,180 |
Asia and other | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments | $ 2,019 | $ 2,008 |
Percentage of total investments | 0.00% | 0.00% |
Asia and other | Fixed Income | Financials | ||
Investments | ||
Investments | $ 22,476 | $ 12,453 |
Percentage of total investments | 0.40% | 0.20% |
Asia and other | Fixed Income | Telecommunication services | ||
Investments | ||
Investments | $ 21,679 | $ 21,848 |
Percentage of total investments | 0.40% | 0.40% |
Asia and other | Equity securities | ||
Investments | ||
Investments | $ 157,518 | $ 165,943 |
Percentage of total investments | 2.80% | 3.00% |
Investments, at cost | $ 122,418 | $ 122,418 |
Asia and other | Equity securities | Consumer discretionary | ||
Investments | ||
Investments | $ 50,071 | $ 59,630 |
Percentage of total investments | 0.90% | 1.10% |
Asia and other | Equity securities | Consumer staples | ||
Investments | ||
Investments | $ 46,232 | $ 45,098 |
Percentage of total investments | 0.80% | 0.80% |
Asia and other | Equity securities | Healthcare, education and childcare | ||
Investments | ||
Investments | $ 44,637 | $ 44,637 |
Percentage of total investments | 0.80% | 0.80% |
Asia and other | Equity securities | Industrials | ||
Investments | ||
Investments | $ 16,578 | $ 16,578 |
Percentage of total investments | 0.30% | 0.30% |
Canada | Fixed Income | ||
Investments | ||
Investments | $ 65,653 | $ 80,797 |
Percentage of total investments | 1.20% | 1.40% |
Investments, at cost | $ 65,501 | $ 80,201 |
Canada | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments | $ 7,474 | $ 6,757 |
Percentage of total investments | 0.10% | 0.10% |
Canada | Fixed Income | Consumer staples | ||
Investments | ||
Investments | $ 19,364 | $ 15,351 |
Percentage of total investments | 0.40% | 0.30% |
Canada | Fixed Income | Energy | ||
Investments | ||
Investments | $ 14,103 | $ 33,715 |
Percentage of total investments | 0.30% | 0.60% |
Canada | Fixed Income | Industrials | ||
Investments | ||
Investments | $ 18,667 | $ 18,785 |
Percentage of total investments | 0.30% | 0.30% |
Canada | Fixed Income | Telecommunication services | ||
Investments | ||
Investments | $ 6,045 | $ 6,189 |
Percentage of total investments | 0.10% | 0.10% |
Canada | Equity securities | ||
Investments | ||
Investments | $ 0 | $ 5,912 |
Percentage of total investments | 0.00% | 0.10% |
Investments, at cost | $ 0 | $ 17,202 |
Canada | Equity securities | Energy | ||
Investments | ||
Investments | $ 0 | $ 5,912 |
Percentage of total investments | 0.00% | 0.10% |
Australia | Fixed Income | ||
Investments | ||
Investments | $ 10,206 | $ 12,426 |
Percentage of total investments | 0.20% | 0.20% |
Investments, at cost | $ 10,446 | $ 12,714 |
Australia | Fixed Income | Consumer discretionary | ||
Investments | ||
Investments | $ 8,587 | $ 10,863 |
Percentage of total investments | 0.20% | 0.20% |
Australia | Fixed Income | Energy | ||
Investments | ||
Investments | $ 1,619 | $ 1,563 |
Percentage of total investments | 0.00% | 0.00% |
FAIR VALUE (Assets and Liabilit
FAIR VALUE (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets, at fair value | ||
Investments Measured at NAV | $ 37,266 | $ 35,998 |
Ares Management L.P | ||
Assets, at fair value | ||
Investments | 326,415 | 277,561 |
Investments Measured at NAV | 37,266 | 35,998 |
Total assets, at fair value | 326,645 | 278,059 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | (2,639) | |
Total liabilities, at fair value | (4,229) | (2,639) |
Ares Management L.P | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 230 | 498 |
Liabilities, at fair value | ||
Derivative liabilities | (4,229) | |
Ares Management L.P | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 242,984 | 195,158 |
Ares Management L.P | Equity securities | ||
Assets, at fair value | ||
Investments | 1,396 | 1,636 |
Ares Management L.P | Partnership interests | ||
Assets, at fair value | ||
Investments | 82,035 | 80,767 |
Investments Measured at NAV | 37,266 | 35,998 |
Ares Management L.P | Level I | ||
Assets, at fair value | ||
Investments | 377 | 520 |
Total assets, at fair value | 377 | 520 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level I | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level I | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Ares Management L.P | Level I | Equity securities | ||
Assets, at fair value | ||
Investments | 377 | 520 |
Ares Management L.P | Level I | Partnership interests | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Ares Management L.P | Level II | ||
Assets, at fair value | ||
Investments | 1,019 | 1,116 |
Total assets, at fair value | 1,249 | 1,614 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | (2,639) | |
Total liabilities, at fair value | (4,229) | (2,639) |
Ares Management L.P | Level II | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 230 | 498 |
Liabilities, at fair value | ||
Derivative liabilities | (4,229) | |
Ares Management L.P | Level II | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Ares Management L.P | Level II | Equity securities | ||
Assets, at fair value | ||
Investments | 1,019 | 1,116 |
Ares Management L.P | Level II | Partnership interests | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Ares Management L.P | Level III | ||
Assets, at fair value | ||
Investments | 287,753 | 239,927 |
Total assets, at fair value | 287,753 | 239,927 |
Liabilities, at fair value | ||
Derivatives—foreign exchange contracts | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level III | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 242,984 | 195,158 |
Ares Management L.P | Level III | Equity securities | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Ares Management L.P | Level III | Partnership interests | ||
Assets, at fair value | ||
Investments | 44,769 | 44,769 |
Consolidated Funds | ||
Assets, at fair value | ||
Investments | 5,479,136 | 5,582,842 |
Total derivative assets, at fair value | 1,366 | |
Total assets, at fair value | 5,479,970 | 5,584,208 |
Liabilities, at fair value | ||
Loan obligations of CLOs | (4,937,264) | (4,963,194) |
Total liabilities, at fair value | (4,938,012) | (4,963,656) |
Consolidated Funds | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | |
Consolidated Funds | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 834 | 1,366 |
Liabilities, at fair value | ||
Derivative liabilities | (748) | (462) |
Consolidated Funds | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 51,054 | 10,000 |
Consolidated Funds | Equity securities | ||
Assets, at fair value | ||
Investments | 218,643 | 235,135 |
Consolidated Funds | Partnership interests | ||
Assets, at fair value | ||
Investments | 252,700 | 232,332 |
Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Investments | 74,311 | 89,192 |
Consolidated Funds | Loans | ||
Assets, at fair value | ||
Investments | 4,882,428 | 5,016,183 |
Consolidated Funds | Fixed Income | ||
Assets, at fair value | ||
Investments | 5,007,793 | 5,115,375 |
Consolidated Funds | Other | ||
Assets, at fair value | ||
Investments | 0 | |
Consolidated Funds | Level I | ||
Assets, at fair value | ||
Investments | 58,221 | 72,558 |
Total derivative assets, at fair value | 0 | |
Total assets, at fair value | 58,221 | 72,558 |
Liabilities, at fair value | ||
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Consolidated Funds | Level I | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | |
Consolidated Funds | Level I | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Level I | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level I | Equity securities | ||
Assets, at fair value | ||
Investments | 58,221 | 72,558 |
Consolidated Funds | Level I | Partnership interests | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level I | Bonds | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level I | Loans | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level I | Fixed Income | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level I | Other | ||
Assets, at fair value | ||
Investments | 0 | |
Consolidated Funds | Level II | ||
Assets, at fair value | ||
Investments | 4,767,030 | 4,847,486 |
Total derivative assets, at fair value | 0 | |
Total assets, at fair value | 4,767,030 | 4,847,486 |
Liabilities, at fair value | ||
Loan obligations of CLOs | (4,937,264) | (4,963,194) |
Total liabilities, at fair value | (4,937,264) | (4,963,194) |
Consolidated Funds | Level II | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | |
Consolidated Funds | Level II | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Level II | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 51,054 | 10,000 |
Consolidated Funds | Level II | Equity securities | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level II | Partnership interests | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level II | Bonds | ||
Assets, at fair value | ||
Investments | 67,741 | 82,151 |
Consolidated Funds | Level II | Loans | ||
Assets, at fair value | ||
Investments | 4,648,235 | 4,755,335 |
Consolidated Funds | Level II | Fixed Income | ||
Assets, at fair value | ||
Investments | 4,767,030 | 4,847,486 |
Consolidated Funds | Level II | Other | ||
Assets, at fair value | ||
Investments | 0 | |
Consolidated Funds | Level III | ||
Assets, at fair value | ||
Investments | 653,885 | 662,798 |
Total derivative assets, at fair value | 1,366 | |
Total assets, at fair value | 654,719 | 664,164 |
Liabilities, at fair value | ||
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (748) | (462) |
Consolidated Funds | Level III | Foreign exchange contracts | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 0 | |
Consolidated Funds | Level III | Asset swaps - other | ||
Assets, at fair value | ||
Total derivative assets, at fair value | 834 | 1,366 |
Liabilities, at fair value | ||
Derivative liabilities | (748) | (462) |
Consolidated Funds | Level III | Fixed income-collateralized loan obligations | ||
Assets, at fair value | ||
Investments | 0 | 0 |
Consolidated Funds | Level III | Equity securities | ||
Assets, at fair value | ||
Investments | 160,422 | 162,577 |
Consolidated Funds | Level III | Partnership interests | ||
Assets, at fair value | ||
Investments | 252,700 | 232,332 |
Consolidated Funds | Level III | Bonds | ||
Assets, at fair value | ||
Investments | 6,570 | 7,041 |
Consolidated Funds | Level III | Loans | ||
Assets, at fair value | ||
Investments | 234,193 | 260,848 |
Consolidated Funds | Level III | Fixed Income | ||
Assets, at fair value | ||
Investments | $ 240,763 | 267,889 |
Consolidated Funds | Level III | Other | ||
Assets, at fair value | ||
Investments | $ 0 |
FAIR VALUE (Changes in Fair Val
FAIR VALUE (Changes in Fair Value of Level III Measurements) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Ares Management L.P | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | $ 239,927 | $ 122,521 |
Deconsolidation of fund | 78 | |
Purchases | 48,731 | 20,611 |
Sales | (827) | (1,917) |
Realized and unrealized appreciation (depreciation), net | (156) | 448 |
Balance, end of period | 287,753 | 141,663 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (610) | 470 |
Contingent Considerations | ||
Balance, beginning of period | 22,156 | |
Purchases | 0 | |
Sales/settlement | 0 | |
Realized and unrealized depreciation, net | (20,247) | |
Balance, end of period | 1,909 | |
Decrease in unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date | 30 | |
Ares Management L.P | Fixed Income | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 195,158 | 89,111 |
Deconsolidation of fund | 78 | |
Purchases | 48,731 | 20,442 |
Sales | (827) | (1,917) |
Realized and unrealized appreciation (depreciation), net | (156) | 617 |
Balance, end of period | 242,984 | 108,253 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (610) | 470 |
Ares Management L.P | Partnership interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 44,769 | 33,410 |
Deconsolidation of fund | 0 | |
Purchases | 0 | 169 |
Sales | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 0 | (169) |
Balance, end of period | 44,769 | 33,410 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 0 | 0 |
Consolidated Funds | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 663,702 | 541,931 |
Deconsolidation of fund | (233) | |
Transfer in | 73,814 | 86,197 |
Transfer out | (102,045) | (73,386) |
Purchases | 62,984 | 81,451 |
Sales | (50,935) | (32,193) |
Settlements, net | (177) | |
Amortized discounts/premiums | 103 | 428 |
Realized and unrealized appreciation (depreciation), net | 6,758 | 14,294 |
Balance, end of period | 653,971 | 618,722 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 5,632 | (1,661) |
Consolidated Funds | Equity securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 162,577 | 130,690 |
Deconsolidation of fund | 0 | |
Transfer in | 0 | 0 |
Transfer out | 0 | (6,581) |
Purchases | 0 | 6,692 |
Sales | 0 | 0 |
Settlements, net | 0 | |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | (2,155) | 11,557 |
Balance, end of period | 160,422 | 142,358 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (2,156) | (3,488) |
Consolidated Funds | Fixed Income | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 267,889 | 242,253 |
Deconsolidation of fund | (233) | |
Transfer in | 73,814 | 86,197 |
Transfer out | (102,045) | (66,805) |
Purchases | 52,984 | 50,069 |
Sales | (50,935) | (33,297) |
Settlements, net | 0 | |
Amortized discounts/premiums | 96 | 118 |
Realized and unrealized appreciation (depreciation), net | (807) | 294 |
Balance, end of period | 240,763 | 278,829 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (1,831) | (42) |
Consolidated Funds | Partnership interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 232,332 | 171,696 |
Deconsolidation of fund | 0 | |
Transfer in | 0 | 0 |
Transfer out | 0 | 0 |
Purchases | 10,000 | 23,000 |
Sales | 0 | 0 |
Settlements, net | 0 | |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 10,368 | 1,994 |
Balance, end of period | 252,700 | 196,690 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 10,368 | 1,994 |
Consolidated Funds | Derivatives, Net | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 904 | (2,708) |
Deconsolidation of fund | 0 | |
Transfer in | 0 | 0 |
Transfer out | 0 | 0 |
Purchases | 0 | 1,690 |
Sales | 0 | 1,104 |
Settlements, net | (177) | |
Amortized discounts/premiums | 7 | 310 |
Realized and unrealized appreciation (depreciation), net | (648) | 449 |
Balance, end of period | 86 | 845 |
Increase (decrease) in unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | $ (749) | $ (125) |
FAIR VALUE (Valuation Technique
FAIR VALUE (Valuation Techniques) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Ares Management L.P | ||
FAIR VALUE | ||
Assets, at fair value | $ 326,645 | $ 278,059 |
Liabilities, at fair value | (4,229) | (2,639) |
Ares Management L.P | Level III | ||
FAIR VALUE | ||
Assets, at fair value | 287,753 | 239,927 |
Liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Partnership interests | Other Valuation Technique | ||
FAIR VALUE | ||
Assets, at fair value | 44,769 | 44,769 |
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 | 242,984 | 195,158 |
Consolidated Funds | ||
FAIR VALUE | ||
Assets, at fair value | 5,479,970 | 5,584,208 |
Liabilities, at fair value | (4,938,012) | (4,963,656) |
Consolidated Funds | Level III | ||
FAIR VALUE | ||
Assets, at fair value | 654,719 | 664,164 |
Liabilities, at fair value | (748) | (462) |
Consolidated Funds | Level III | Derivatives liabilities of Consolidated Funds | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Liabilities, at fair value | 748 | (462) |
Consolidated Funds | Level III | Partnership interests | Discounted cash flow | ||
FAIR VALUE | ||
Assets, at fair value | 252,700 | $ 232,332 |
Unobservable Input | ||
Discount rate | 19.00% | |
Consolidated Funds | Level III | Partnership interests | Discounted cash flow | Weighted Average | ||
Unobservable Input | ||
Discount rate | 19.00% | |
Consolidated Funds | Level III | Equity securities | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 60 | $ 126 |
Consolidated Funds | Level III | Equity securities | Enterprise value market multiple analysis | ||
FAIR VALUE | ||
Assets, at fair value | $ 61,065 | $ 63,155 |
Unobservable Input | ||
EBITDA multiple | 3 | 2.7 |
Consolidated Funds | Level III | Equity securities | Enterprise value market multiple analysis | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 2.97 | 2.7 |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | ||
FAIR VALUE | ||
Assets, at fair value | $ 61,216 | $ 61,215 |
Unobservable Input | ||
Illiquidity discount (as a percent) | 25.00% | 25.00% |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | Minimum | ||
Unobservable Input | ||
Net income multiple | 24.2 | 27 |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | Maximum | ||
Unobservable Input | ||
Net income multiple | 35.8 | 36.2 |
Consolidated Funds | Level III | Equity securities | Market approach (comparable companies) | Weighted Average | ||
Unobservable Input | ||
Net income multiple | 32.7 | 33.7 |
Illiquidity discount (as a percent) | 25.00% | 25.00% |
Consolidated Funds | Level III | Equity securities | Discounted cash flow | ||
Unobservable Input | ||
Discount rate | 17.00% | |
Consolidated Funds | Level III | Equity securities | Discounted cash flow | Weighted Average | ||
Unobservable Input | ||
Discount rate | 17.00% | |
Consolidated Funds | Level III | Equity securities | Transaction price | ||
FAIR VALUE | ||
Assets, at fair value | $ 38,081 | $ 38,081 |
Consolidated Funds | Level III | Fixed Income | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | 192,660 | 222,413 |
Consolidated Funds | Level III | Fixed Income | Market approach (comparable companies) | ||
FAIR VALUE | ||
Assets, at fair value | 233 | |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | ||
FAIR VALUE | ||
Assets, at fair value | $ 48,103 | $ 45,243 |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | Minimum | ||
Unobservable Input | ||
Yield | 7.60% | 10.80% |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | Maximum | ||
Unobservable Input | ||
Yield | 14.90% | 22.50% |
Consolidated Funds | Level III | Fixed Income | Income approach, Yield | Weighted Average | ||
Unobservable Input | ||
Yield | 11.10% | 12.10% |
Consolidated Funds | Level III | Fixed Income | Market approach | ||
Unobservable Input | ||
EBITDA multiple | 6.5 | |
Consolidated Funds | Level III | Fixed Income | Market approach | Weighted Average | ||
Unobservable Input | ||
EBITDA multiple | 6.5 | |
Consolidated Funds | Level III | Derivative Financial Instruments | Broker quotes and/or 3rd party pricing services | ||
FAIR VALUE | ||
Assets, at fair value | $ 834 | $ 1,366 |
FAIR VALUE (Investments Using N
FAIR VALUE (Investments Using NAV per Share) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
FAIR VALUE | ||
Fair Value | $ 37,266 | $ 35,998 |
Unfunded Commitments | 16,317 | 16,492 |
Non-core investments | ||
FAIR VALUE | ||
Fair Value | 37,266 | 35,998 |
Unfunded Commitments | $ 16,317 | $ 16,492 |
DERIVATIVE FINANCIAL INSTRUME55
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Liabilities | ||
Derivative asset, amount not offset | $ 200 | $ 200 |
Derivative liability, amount not offset | 500 | 500 |
Ares Management L.P | ||
Assets | ||
Notional amount, Assets | 4,724 | 13,724 |
Fair Value, Assets | 230 | 498 |
Liabilities | ||
Notional amount, Liabilities | 49,668 | 51,026 |
Fair Value, Liabilities | 4,229 | 2,639 |
Ares Management L.P | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 4,724 | 13,724 |
Fair Value, Assets | 230 | 498 |
Liabilities | ||
Notional amount, Liabilities | 49,668 | 51,026 |
Fair Value, Liabilities | 4,229 | 2,639 |
Consolidated Funds | ||
Assets | ||
Notional amount, Assets | 4,843 | 5,363 |
Fair Value, Assets | 834 | 1,366 |
Liabilities | ||
Notional amount, Liabilities | 1,750 | 1,840 |
Fair Value, Liabilities | 748 | 462 |
Derivative asset, amount offset | 400 | 400 |
Derivative liability, amount offset | 400 | 400 |
Consolidated Funds | Asset swap - other | ||
Assets | ||
Notional amount, Assets | 4,843 | 5,363 |
Fair Value, Assets | 834 | 1,366 |
Liabilities | ||
Notional amount, Liabilities | 1,750 | 1,840 |
Fair Value, Liabilities | $ 748 | $ 462 |
DEBT (Debt Obligations) (Detail
DEBT (Debt Obligations) (Details) - Ares Management L.P - USD ($) | 1 Months Ended | 3 Months Ended | |
Oct. 31, 2014 | Mar. 31, 2018 | Dec. 31, 2017 | |
DEBT | |||
Carrying Value | $ 590,169,000 | $ 616,176,000 | |
Credit Facility | |||
DEBT | |||
Carrying Value | $ 140,000,000 | $ 210,000,000 | |
Interest Rate | 3.38% | 3.09% | |
Maximum borrowing capacity | $ 1,065,000,000 | ||
Unused commitment fees | 0.20% | ||
Interest rate | 0.00% | ||
Credit Facility | Base rate | |||
DEBT | |||
Interest rate spread | 0.50% | ||
Credit Facility | LIBOR | |||
DEBT | |||
Interest rate spread | 1.50% | ||
Senior Notes | |||
DEBT | |||
Original Borrowing Amount | $ 250,000,000 | ||
Carrying Value | $ 245,469,000 | $ 245,308,000 | |
Interest Rate | 4.21% | 4.21% | |
Term Loan 2015 | |||
DEBT | |||
Original Borrowing Amount | $ 35,205,000 | ||
Carrying Value | $ 35,042,000 | $ 35,037,000 | |
Interest Rate | 3.24% | 2.86% | |
Commitment fee percentage | 0.025% | ||
Term Loan 2016 | |||
DEBT | |||
Original Borrowing Amount | $ 26,376,000 | ||
Carrying Value | $ 25,959,000 | $ 25,948,000 | |
Interest Rate | 3.44% | 3.08% | |
Term Loan 2016 | Minimum | |||
DEBT | |||
Commitment fee percentage | 0.03% | ||
Term Loan 2016 | Maximum | |||
DEBT | |||
Commitment fee percentage | 0.04% | ||
Term Loan 2017 | Minimum | |||
DEBT | |||
Commitment fee percentage | 0.03% | ||
Term Loan 2017 | Maximum | |||
DEBT | |||
Commitment fee percentage | 0.04% | ||
Term Loan 2017 Due January 2028 | |||
DEBT | |||
Original Borrowing Amount | $ 17,600,000 | ||
Carrying Value | $ 17,413,000 | $ 17,407,000 | |
Interest Rate | 3.26% | 2.90% | |
Term Loan 2017 Due October 2029 | |||
DEBT | |||
Original Borrowing Amount | $ 35,198,000 | ||
Carrying Value | $ 35,066,000 | $ 35,062,000 | |
Interest Rate | 3.26% | 2.90% | |
Term Loan 2017 Due July 2029 | |||
DEBT | |||
Original Borrowing Amount | $ 17,155,000 | ||
Carrying Value | $ 17,025,000 | $ 17,078,000 | |
Interest Rate | 3.26% | 2.88% | |
Term Loan 2017 Due October 2030 | |||
DEBT | |||
Original Borrowing Amount | $ 30,450,000 | ||
Carrying Value | $ 30,339,000 | $ 30,336,000 | |
Interest Rate | 3.07% | 2.77% | |
Term Loan 2018 | Minimum | |||
DEBT | |||
Commitment fee percentage | 0.03% | ||
Term Loan 2018 | Maximum | |||
DEBT | |||
Commitment fee percentage | 0.04% | ||
Term Loan 2018 Due January 2030 | |||
DEBT | |||
Original Borrowing Amount | $ 26,475,000 | ||
Carrying Value | $ 26,456,000 | ||
Interest Rate | 2.97% | ||
Repurchase Agreement Loan | |||
DEBT | |||
Original Borrowing Amount | $ 17,575,000 | ||
Carrying Value | $ 17,400,000 | ||
Interest Rate | 1.68% | ||
AFC Notes | |||
DEBT | |||
Debt issuance percentage | 98.268% |
DEBT (Debt Issuance Costs) (Det
DEBT (Debt Issuance Costs) (Details) - Ares Management L.P $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Credit Facility | |
Debt Issuance Costs [Roll Forward] | |
Unamortized debt issuance costs as of December 31, 2017 | $ 6,543 |
Debt issuance costs incurred | 0 |
Amortization of debt issuance costs | (393) |
Unamortized debt issuance costs as of March 31, 2018 | 6,150 |
Senior Notes | |
Debt Issuance Costs [Roll Forward] | |
Unamortized debt issuance costs as of December 31, 2017 | 1,571 |
Debt issuance costs incurred | 0 |
Amortization of debt issuance costs | (63) |
Unamortized debt issuance costs as of March 31, 2018 | 1,508 |
Term Loans | |
Debt Issuance Costs [Roll Forward] | |
Unamortized debt issuance costs as of December 31, 2017 | 1,171 |
Debt issuance costs incurred | 19 |
Amortization of debt issuance costs | (32) |
Unamortized debt issuance costs as of March 31, 2018 | 1,158 |
Repurchase Agreement Loan | |
Debt Issuance Costs [Roll Forward] | |
Unamortized debt issuance costs as of December 31, 2017 | 0 |
Debt issuance costs incurred | 176 |
Amortization of debt issuance costs | (1) |
Unamortized debt issuance costs as of March 31, 2018 | $ 175 |
DEBT (Repurchase Agreement) (De
DEBT (Repurchase Agreement) (Details) - Ares Management L.P - Repurchase Agreement Loan $ in Thousands | Mar. 31, 2018USD ($) |
DEBT | |
Securities transferred at carrying value | $ 17,575 |
Estimated fair value of securities transferred | 17,575 |
Cash collateral received from counterparty | $ 17,575 |
DEBT (Cash Collateral Liability
DEBT (Cash Collateral Liability by Security) (Details) - Repurchase Agreement Loan - Ares Management L.P $ in Thousands | Mar. 31, 2018USD ($) |
DEBT | |
Collateralized loan obligations | $ 17,575 |
Collateralized loan obligations | |
DEBT | |
Collateralized loan obligations | 17,575 |
Less than 1 year | Collateralized loan obligations | |
DEBT | |
Collateralized loan obligations | 0 |
1 - 3 years | Collateralized loan obligations | |
DEBT | |
Collateralized loan obligations | 0 |
4 - 5 years | Collateralized loan obligations | |
DEBT | |
Collateralized loan obligations | 0 |
Thereafter | Collateralized loan obligations | |
DEBT | |
Collateralized loan obligations | $ 17,575 |
DEBT (Loan Obligations of the C
DEBT (Loan Obligations of the Consolidated CLOs) (Details) - Consolidated Funds - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
DEBT | ||
Fair Value of Loan Obligations | $ 4,937,264,000 | $ 4,963,194,000 |
Fixed income-collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 5,043,296,000 | 5,077,751,000 |
Fair Value of Loan Obligations | 4,937,264,000 | 4,963,194,000 |
Senior secured notes | Fixed income-collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 4,765,180,000 | 4,801,582,000 |
Fair Value of Loan Obligations | $ 4,758,121,000 | $ 4,776,883,000 |
Weighted Average Remaining Maturity In Years | 10 years 4 months 20 days | 10 years 6 months 25 days |
Debt instrument face amount | $ 4,800,000,000 | |
Weighted average interest rate (as a percent) | 5.02% | |
Subordinated notes / preferred shares | Fixed income-collateralized loan obligations | ||
DEBT | ||
Loan Obligations | $ 278,116,000 | $ 276,169,000 |
Fair Value of Loan Obligations | $ 179,143,000 | $ 186,311,000 |
Weighted Average Remaining Maturity In Years | 11 years 14 days | 11 years 3 months |
Debt instrument face amount | $ 278,100,000 |
DEBT (Credit Facilities of the
DEBT (Credit Facilities of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
DEBT | ||
Total borrowings | $ 140,653 | $ 138,198 |
Credit facility with maturity 1/1/2023 | ||
DEBT | ||
Total Capacity | 18,000 | |
Outstanding Loan | $ 12,942 | $ 12,942 |
Effective Rate | 3.56% | 2.88% |
Credit facility with maturity 06/30/2018 | ||
DEBT | ||
Total Capacity | $ 49,194 | |
Outstanding Loan | $ 49,194 | $ 48,042 |
Effective Rate | 1.55% | 1.55% |
Interest rate | 0.00% | 0.00% |
Credit facility with maturity 03/07/2018 | ||
DEBT | ||
Total Capacity | $ 71,500 | |
Outstanding Loan | $ 71,500 | $ 71,500 |
Effective Rate | 3.10% | 2.88% |
Revolving Term Loan | ||
DEBT | ||
Total Capacity | $ 1,900 | |
Outstanding Loan | $ 1,303 | $ 0 |
Effective Rate | 7.89% | 0.00% |
Credit facility with maturity 08/19/2019 | ||
DEBT | ||
Total Capacity | $ 11,429 | |
Outstanding Loan | $ 5,714 | $ 5,714 |
Effective Rate | 8.91% | 5.86% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |||
Unfunded capital commitments | $ 291,300,000 | $ 285,700,000 | |
Performance Income | |||
Performance Income | |||
Performance income subject to potential clawback provision | 479,400,000 | 476,100,000 | |
Performance income subject to potential claw back provision that are reimbursable by professionals | 372,400,000 | 370,000,000 | |
Kayne Anderson Capital Advisors L.P. | |||
COMMITMENTS AND CONTINGENCIES | |||
Unfunded capital commitments | $ 16,300,000 | 16,500,000 | |
American Capital Ltd | ARCC | |||
COMMITMENTS AND CONTINGENCIES | |||
Maximum fees waived | $ 10,000,000 | ||
Term of fee waiver | 30 months | ||
Maximum amount shortfall that will not carryover | $ 10,000,000 | ||
Remaining term | 18 months | ||
Remaining fees waived | $ 60,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Ares Management L.P | ||
Due from affiliates: | ||
Due from affiliates | $ 168,810 | $ 165,750 |
Due to affiliates: | ||
Due to affiliates | 21,018 | 14,642 |
Ares Management L.P | Affiliated entity | ||
Due from affiliates: | ||
Management fees receivable from non-consolidated funds | 130,346 | 126,506 |
Payments made on behalf of and amounts due from non-consolidated funds and employees | 38,464 | 39,244 |
Due to affiliates: | ||
Management fee rebate payable to non-consolidated funds | 2,560 | 5,213 |
Management fees received in advance | 2,866 | 1,729 |
Tax receivable agreement liability | 12,925 | 3,503 |
Payments made by non-consolidated funds on behalf of and payable by the Company | 2,667 | 4,197 |
Consolidated Funds | ||
Due from affiliates: | ||
Due from affiliates | 17,782 | 15,884 |
Due to affiliates: | ||
Due to affiliates | 0 | 0 |
Consolidated Funds | Affiliated entity | ||
Due from affiliates: | ||
Due from affiliates | $ 17,782 | $ 15,884 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ (12,375) | $ (34,264) |
INCOME TAXES (Provision for Inc
INCOME TAXES (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Provision for income taxes | ||
Income tax expense (benefit) | $ (12,375) | $ (34,264) |
Pro Forma | ||
Provision for income taxes | ||
Income tax expense (benefit) | (27,875) | |
Ares Management L.P | ||
Provision for income taxes | ||
Income tax expense (benefit) | (12,375) | (34,733) |
Ares Management L.P | Pro Forma | ||
Provision for income taxes | ||
Income tax expense (benefit) | (28,344) | |
Consolidated Funds | ||
Provision for income taxes | ||
Income tax expense (benefit) | $ 0 | 469 |
Consolidated Funds | Pro Forma | ||
Provision for income taxes | ||
Income tax expense (benefit) | $ 469 |
EARNINGS PER COMMON SHARE (Anti
EARNINGS PER COMMON SHARE (Antidilutive) (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
AOG | ||
Earnings per common unit | ||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 0 | 130,403,174 |
Options | ||
Earnings per common unit | ||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 17,411,780,000 | 21,334,689 |
Restricted units | ||
Earnings per common unit | ||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 16,352,546,000 | 15,070,871 |
EARNINGS PER COMMON SHARE (Comp
EARNINGS PER COMMON SHARE (Computation of Basic and Diluted Earnings Per Common Unit) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic | ||
Net income (loss) attributable to Ares Management, L.P. common shareholders | $ 35,523 | $ (46,559) |
Earnings distributed to participating securities (restricted units) | (1,899) | (825) |
Net income (loss) available to common shareholders | $ 33,624 | $ (47,384) |
Basic weighted-average common shares (in shares) | 85,617,932 | 81,106,734 |
Earnings per common share, basic (in dollars per share) | $ 0.39 | $ (0.58) |
Diluted | ||
Earnings distributed to participating securities (restricted units) | $ (1,899) | $ (825) |
Incremental net income from assumed exchange of AOG Units | 26,606 | 0 |
Net income (loss) available to common shareholders | $ 60,230 | $ (47,384) |
Effect of dilutive shares: | ||
Diluted weighted-average common shares (in shares) | 213,852,928 | 81,106,734 |
Diluted earnings (loss) per common share (in dollars per share) | $ 0.28 | $ (0.58) |
AOG | ||
Effect of dilutive shares: | ||
AOG units (in shares) | 128,234,996 | 0 |
EQUITY COMPENSATION (Equity Inc
EQUITY COMPENSATION (Equity Incentive Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | |
Equity compensation | |||
Equity compensation expenses | $ 21,087 | $ 15,089 | |
Restricted units | |||
Equity compensation | |||
Equity compensation expenses | 18,030 | 11,219 | |
Options | |||
Equity compensation | |||
Equity compensation expenses | 2,664 | 3,482 | |
Phantom units | |||
Equity compensation | |||
Equity compensation expenses | $ 393 | $ 388 | |
Ares Management L.P | |||
Equity compensation | |||
Total number of units available for grant under the Equity Incentive Plan (in units) | 28,637,981 | 31,853,504 |
EQUITY COMPENSATION (Restricted
EQUITY COMPENSATION (Restricted Units) (Details) - Restricted units $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Equity compensation | |
Distribution equivalents made to holders | $ | $ 6.6 |
Units | |
Balance at the beginning of the period (in units) | shares | 13,751,888 |
Granted (in units) | shares | 3,635,419 |
Vested (in units) | shares | (835,124) |
Forfeited (in units) | shares | (199,637) |
Balance at the end of the period (in units) | shares | 16,352,546 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 17.58 |
Granted (in dollars per share) | $ / shares | 23.61 |
Vested (in dollars per share) | $ / shares | 15.33 |
Forfeited (in dollars per share) | $ / shares | 19.83 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 18.98 |
Unrecognized compensation expenses | $ | $ 233.3 |
Weighted average period of compensation expense expected to be recognized | 3 years 8 months 12 days |
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 ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Options | ||
Balance at the beginning of the period (in units) | 20,495,025 | |
Granted (in units) | 0 | |
Exercised (in units) | 0 | |
Expired (in units) | (219,034) | |
Forfeited (in units) | (444,203) | |
Balance at the end of the period (in units) | 19,831,788 | 20,495,025 |
Exercisable at the end of the period (in units) | 7,235,214 | |
Weighted Average Exercise Price | ||
Balance at the beginning of the period (in dollars per unit) | $ 18.99 | |
Granted (in dollars per unit) | 0 | |
Exercised (in dollars per unit) | 0 | |
Expired (in dollars per unit) | 19 | |
Forfeited (in dollars per unit) | 19 | |
Balance at the end of the period (in dollars per unit) | 18.99 | $ 18.99 |
Exercisable at the end of the period (in dollars per unit) | $ 18.99 | |
Weighted Average Remaining Life | ||
Weighted average remaining life | 6 years 1 month 2 days | |
Expected to vest at the end of the period | 5 years 10 months 2 days | |
Exercisable at the end of the period | 5 years 4 months 17 days | |
Aggregate Intrinsic Value | ||
Balance (in dollars) | $ 47,762 | $ 20,611 |
Exercisable at end of the period (in dollars) | 17,420 | |
Unrecognized compensation expenses | $ 16,600,000 | |
Weighted average period of compensation expense expected to be recognized | 1 year 1 month 9 days |
EQUITY COMPENSATION (Phantom Un
EQUITY COMPENSATION (Phantom Units) (Details) - Phantom Shares | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Units | |
Balance at the beginning of the period (in units) | shares | 156,153 |
Vested (in units) | shares | 0 |
Forfeited (in units) | shares | (9,362) |
Balance at the end of the period (in units) | shares | 146,791 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ 19 |
Vested (in dollars per share) | |
Forfeited (in dollars per share) | 19 |
Balance at the end of the period (in dollars per share) | 19 |
Share price (USD per share) | $ 21.4 |
Unrecognized compensation expenses | $ | $ 1,700,000 |
Weighted average period of compensation expense expected to be recognized | 1 year 1 month 2 days |
Cash used to settle awards | $ | $ 0 |
EQUITY (Details)
EQUITY (Details) - USD ($) | Mar. 12, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
AOG Units (in units) | 217,841,163 | 212,356,696 | ||
Direct Ownership Interest | 100.00% | 100.00% | ||
Dividend rate, percentage | 7.00% | |||
Redemption price (dollars per unit) | $ 25 | |||
Preferred Equity | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Issuance of common shares (in shares) | 12,400,000 | 12,400,000 | ||
Ares Management, L.P. | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
AOG Units (in units) | 97,514,500 | 82,280,033 | ||
Direct Ownership Interest | 44.76% | 38.75% | ||
Daily Average Ownership | 40.04% | 38.35% | ||
Ares Management, L.P. | Affiliate of Alleghany Corporation | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Shares converted (in shares) | 9,750,000 | |||
Ares Owners Holding L.P. | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
AOG Units (in units) | 117,576,663 | 117,576,663 | ||
Direct Ownership Interest | 53.98% | 55.36% | ||
Daily Average Ownership | 54.98% | 55.74% | ||
Affiliate of Alleghany Corporation | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
AOG Units (in units) | 2,750,000 | 12,500,000 | ||
Direct Ownership Interest | 1.26% | 5.89% | ||
Daily Average Ownership | 4.98% | 5.91% | ||
Ares Management L.P | Affiliate of Alleghany Corporation | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Shares issued (in shares) | 9,750,000 | |||
Secondary Offering | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Number of units sold (in units) | 15,000,000 | |||
Fees related to secondary offering | $ 500,000 | |||
Secondary Offering | ADIA | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Number of units sold (in units) | 10,000,000 | |||
Proceeds from sale of equity | $ 0 | |||
Secondary Offering | Ares Management L.P | ||||
STOCKHOLDERS' EQUITY AND MEMBERS' CAPITAL | ||||
Number of units sold (in units) | 5,000,000 | |||
Proceeds from sale of equity | $ 105,900,000 |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) $ in Billions | 3 Months Ended |
Mar. 31, 2018USD ($)segmentgroupfund | |
Segment reporting | |
Number operating segments | segment | 3 |
Ares Management L.P | Credit Group | |
Segment reporting | |
Assets under management | $ | $ 77.3 |
Number of funds managed | 145 |
Ares Management L.P | Private Equity | |
Segment reporting | |
Assets under management | $ | $ 24.3 |
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 | $ | $ 10.9 |
Number of funds managed | 41 |
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 | 3 |
SEGMENT REPORTING (Operating Se
SEGMENT REPORTING (Operating Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment reporting | ||
Other fees | $ 0 | $ 0 |
Operating segment | ||
Segment reporting | ||
Fee related earnings | 109,679 | 91,988 |
Performance income—realized | 23,107 | 8,805 |
Performance income—unrealized | 35,118 | 49,261 |
Total performance related compensation - realized | (14,869) | (5,301) |
Investment income (loss)—unrealized | (5,574) | 9,534 |
Net investment income (loss) | 1,936 | 1,386 |
Performance related earnings | 28,709 | 28,284 |
Economic net income | 138,388 | 120,272 |
Realized income | 119,853 | 96,878 |
OMG | ||
Segment reporting | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 0 | 0 |
Other fees | 0 | 0 |
Compensation and benefits | (30,606) | (25,953) |
General, administrative and other expenses | (18,616) | (19,313) |
Fee related earnings | (49,222) | (45,266) |
Performance income—realized | 0 | 0 |
Performance income—unrealized | 0 | 0 |
Total performance related compensation - realized | 0 | 0 |
Performance related compensation—unrealized | 0 | 0 |
Net performance income | 0 | 0 |
Investment income (loss)—realized | 838 | 1,859 |
Investment income (loss)—unrealized | 1,231 | (1,407) |
Interest and other investment income (expense) | 1,247 | 874 |
Interest expense | (548) | (476) |
Net investment income (loss) | 2,768 | 850 |
Performance related earnings | 2,768 | 850 |
Economic net income | (46,454) | (44,416) |
Realized income | (47,780) | (43,205) |
Total | ||
Segment reporting | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 196,826 | 176,781 |
Other fees | 6,073 | 4,834 |
Compensation and benefits | (107,724) | (100,610) |
General, administrative and other expenses | (34,718) | (34,283) |
Fee related earnings | 60,457 | 46,722 |
Performance income—realized | 23,107 | 8,805 |
Performance income—unrealized | 35,118 | 49,261 |
Total performance related compensation - realized | (14,869) | (5,301) |
Performance related compensation—unrealized | (11,009) | (35,401) |
Net performance income | 32,347 | 17,364 |
Investment income (loss)—realized | 5,630 | 4,539 |
Investment income (loss)—unrealized | (4,420) | 11,284 |
Interest and other investment income (expense) | 4,789 | 826 |
Interest expense | (6,869) | (4,879) |
Net investment income (loss) | (870) | 11,770 |
Performance related earnings | 31,477 | 29,134 |
Economic net income | 91,934 | 75,856 |
Realized income | 72,073 | 53,673 |
Ares Management L.P | ||
Segment reporting | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 189,515 | 172,045 |
Other fees | 12,465 | 14,440 |
Compensation and benefits | (134,639) | (124,339) |
General, administrative and other expenses | (44,450) | (47,338) |
Interest and other investment income (expense) | 54,129 | 52,007 |
Ares Management L.P | Affiliated entity | ARCC | ||
Segment reporting | ||
Management fees, part I fees | 28,417 | 33,257 |
Ares Management L.P | Operating segment | ||
Segment reporting | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 196,826 | 176,781 |
Other fees | 6,073 | 4,834 |
Compensation and benefits | (77,118) | (74,657) |
General, administrative and other expenses | (16,102) | (14,970) |
Fee related earnings | 109,679 | 91,988 |
Performance income—realized | 23,107 | 8,805 |
Performance income—unrealized | 35,118 | 49,261 |
Total performance related compensation - realized | (14,869) | (5,301) |
Performance related compensation—unrealized | (11,009) | (35,401) |
Net performance income | 32,347 | 17,364 |
Investment income (loss)—realized | 4,792 | 2,680 |
Investment income (loss)—unrealized | (5,651) | 12,691 |
Interest and other investment income (expense) | 3,542 | (48) |
Interest expense | (6,321) | (4,403) |
Net investment income (loss) | (3,638) | 10,920 |
Performance related earnings | 28,709 | 28,284 |
Economic net income | 138,388 | 120,272 |
Realized income | 119,853 | 96,878 |
Ares Management L.P | Operating segment | Credit Group | ||
Segment reporting | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 131,766 | 121,347 |
Other fees | 5,730 | 4,503 |
Compensation and benefits | (50,280) | (51,703) |
General, administrative and other expenses | (9,629) | (8,041) |
Fee related earnings | 77,587 | 66,106 |
Performance income—realized | 5,071 | 8,778 |
Performance income—unrealized | 16,092 | 2,936 |
Total performance related compensation - realized | (3,088) | (5,285) |
Performance related compensation—unrealized | 7,176 | (1,458) |
Net performance income | 25,251 | 4,971 |
Investment income (loss)—realized | 771 | 318 |
Investment income (loss)—unrealized | (269) | 4,589 |
Interest and other investment income (expense) | 2,196 | (19) |
Interest expense | (4,673) | (2,458) |
Net investment income (loss) | (1,975) | 2,430 |
Performance related earnings | 23,276 | 7,401 |
Economic net income | 100,863 | 73,507 |
Realized income | 78,857 | 69,945 |
Ares Management L.P | Operating segment | Private Equity | ||
Segment reporting | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 49,887 | 39,819 |
Other fees | 340 | 340 |
Compensation and benefits | (19,199) | (13,218) |
General, administrative and other expenses | (4,041) | (4,198) |
Fee related earnings | 26,987 | 22,743 |
Performance income—realized | 4,398 | 0 |
Performance income—unrealized | 21,066 | 32,237 |
Total performance related compensation - realized | (3,560) | 0 |
Performance related compensation—unrealized | (18,694) | (25,505) |
Net performance income | 3,210 | 6,732 |
Investment income (loss)—realized | 671 | 579 |
Investment income (loss)—unrealized | (4,150) | 8,546 |
Interest and other investment income (expense) | 329 | 152 |
Interest expense | (1,228) | (1,513) |
Net investment income (loss) | (4,378) | 7,764 |
Performance related earnings | (1,168) | 14,496 |
Economic net income | 25,819 | 37,239 |
Realized income | 27,327 | 22,345 |
Ares Management L.P | Operating segment | Real Estate | ||
Segment reporting | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 15,173 | 15,615 |
Other fees | 3 | (9) |
Compensation and benefits | (7,639) | (9,736) |
General, administrative and other expenses | (2,432) | (2,731) |
Fee related earnings | 5,105 | 3,139 |
Performance income—realized | 13,638 | 27 |
Performance income—unrealized | (2,040) | 14,088 |
Total performance related compensation - realized | (8,221) | (16) |
Performance related compensation—unrealized | 509 | (8,438) |
Net performance income | 3,886 | 5,661 |
Investment income (loss)—realized | 3,350 | 1,783 |
Investment income (loss)—unrealized | (1,232) | (444) |
Interest and other investment income (expense) | 1,017 | (181) |
Interest expense | (420) | (432) |
Net investment income (loss) | 2,715 | 726 |
Performance related earnings | 6,601 | 6,387 |
Economic net income | 11,706 | 9,526 |
Realized income | $ 13,669 | $ 4,588 |
SEGMENT REPORTING (Revenue, Exp
SEGMENT REPORTING (Revenue, Expenses and Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment revenues | ||
Other fees | $ 0 | $ 0 |
Total revenues | 266,089 | 244,244 |
Segment expenses | ||
Total expenses | 206,283 | 491,467 |
Segment other income | ||
Total other income | 2,240 | 56,635 |
Operating segment | ||
Segment revenues | ||
Performance income—realized | 23,107 | 8,805 |
Performance income—unrealized | 35,118 | 49,261 |
Segment expenses | ||
Total performance related compensation - realized | 14,869 | 5,301 |
Segment other income | ||
Investment income (loss)—unrealized | (5,574) | 9,534 |
Ares Management L.P | ||
Segment revenues | ||
Management fees | 189,515 | 172,045 |
Other fees | 12,465 | 14,440 |
Total revenues | 266,089 | 244,244 |
Segment expenses | ||
Compensation and benefits | 134,639 | 124,339 |
General, administrative and other expenses | 44,450 | 47,338 |
Segment other income | ||
Interest and other investment income (expense) | 54,129 | 52,007 |
Ares Management L.P | Operating segment | ||
Segment revenues | ||
Management fees | 196,826 | 176,781 |
Other fees | 6,073 | 4,834 |
Performance income—realized | 23,107 | 8,805 |
Performance income—unrealized | 35,118 | 49,261 |
Total revenues | 261,124 | 239,681 |
Segment expenses | ||
Compensation and benefits | 77,118 | 74,657 |
General, administrative and other expenses | 16,102 | 14,970 |
Total performance related compensation - realized | 14,869 | 5,301 |
Total performance fee compensation - unrealized | 11,009 | 35,401 |
Total expenses | 119,098 | 130,329 |
Segment other income | ||
Investment income (loss)—realized | 4,792 | 2,680 |
Investment income (loss)—unrealized | (5,651) | 12,691 |
Interest and other investment income (expense) | 3,542 | (48) |
Interest expense | (6,321) | (4,403) |
Total other income | $ (3,638) | $ 10,920 |
SEGMENT REPORTING (Revenue Reco
SEGMENT REPORTING (Revenue Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue adjustment | ||
Revenues | $ 266,089 | $ 244,244 |
Administrative, transaction and other fees | 0 | 0 |
Reconciling items | ||
Revenue adjustment | ||
Revenues | 4,965 | 4,563 |
Administrative, transaction and other fees | 6,412 | 9,606 |
Principal investment income | 2,708 | 13,169 |
Reconciling items | Non-Controlling interest | Subsidiaries | ||
Revenue adjustment | ||
Revenues | (20) | 0 |
Reconciling items | Equity method private investment partnership interests(1) | ||
Revenue adjustment | ||
Performance fee reclass | 975 | (24) |
Ares Management L.P | ||
Revenue adjustment | ||
Revenues | 266,089 | 244,244 |
Administrative, transaction and other fees | 12,465 | 14,440 |
Principal investment income | 4,909 | 2,587 |
Ares Management L.P | Operating segment | ||
Revenue adjustment | ||
Revenues | 261,124 | 239,681 |
Administrative, transaction and other fees | 6,073 | 4,834 |
Consolidated Funds | Reconciling items | ||
Revenue adjustment | ||
Revenues | $ (5,110) | $ (18,188) |
SEGMENT REPORTING (Expenses) (D
SEGMENT REPORTING (Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | $ 206,283 | $ 491,467 |
Equity compensation expenses | 21,087 | 15,089 |
Ares Management L.P | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Acquisition and merger-related expenses | 0 | 275,177 |
Operating segment | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Acquisition and merger-related expenses | (319) | 255,088 |
Equity compensation expenses | 21,087 | 15,089 |
Placement fees and underwriting costs | 1,664 | 3,439 |
Amortization of intangibles | 3,287 | 5,275 |
Depreciation expense | 3,889 | 3,216 |
Operating segment | Ares Management L.P | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | 119,098 | 130,329 |
Reconciling items | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | 87,185 | 361,138 |
Administrative fees | 6,412 | 9,606 |
Acquisition and merger-related expenses | (319) | 275,336 |
Equity compensation expenses | 21,087 | 15,089 |
Placement fees and underwriting costs | 1,664 | 3,439 |
Amortization of intangibles | 3,287 | 5,275 |
Depreciation expense | 3,889 | 3,216 |
Reconciling items | Non-Controlling interest | Subsidiaries | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | 627 | 0 |
Reconciling items | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | 8,629 | 10,509 |
Eliminations | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | (7,313) | (6,598) |
Eliminations | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | (7,313) | (6,598) |
OMG | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Expenses | $ 49,222 | $ 45,266 |
SEGMENT REPORTING (Other Income
SEGMENT REPORTING (Other Income (Expense)) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | $ 2,240 | $ 56,635 |
Ares Management L.P | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Principal investment income | (4,909) | (2,587) |
Operating segment | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Other non-cash expense | (7) | 0 |
Offering costs | 0 | (660) |
Operating segment | Ares Management L.P | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | (3,638) | 10,920 |
Reconciling items | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | 5,878 | 45,715 |
Principal investment income | (2,708) | (13,169) |
Changes in value of contingent consideration | 0 | 20,248 |
Other non-cash expense | (7) | 0 |
Offering costs | 0 | (660) |
Reconciling items | Subsidiaries | Non-Controlling interest | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | 7 | 0 |
Reconciling items | Equity method private investment partnership interests(1) | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Performance fee reclass | (975) | 24 |
Reconciling items | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | 7,252 | 38,445 |
Eliminations | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | (459) | (23) |
Principal investment income | (2,201) | 10,582 |
Eliminations | Consolidated Funds | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | (459) | (23) |
OMG | ||
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Total consolidated other income | $ 2,768 | $ 850 |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation of Income Before Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Economic net income | ||
Income (loss) before taxes | $ 62,046 | $ (190,588) |
Adjustments: | ||
Equity compensation expenses | 21,087 | 15,089 |
Operating segment | ||
Economic net income | ||
Income (loss) before taxes | 62,046 | (190,588) |
Adjustments: | ||
Amortization of intangibles | 3,287 | 5,275 |
Depreciation expense | 3,889 | 3,216 |
Equity compensation expenses | 21,087 | 15,089 |
Acquisition and merger-related expenses | (319) | 255,088 |
Placement fees and underwriting costs | 1,664 | 3,439 |
Offering costs | 0 | 660 |
Other non-cash expense | 7 | 0 |
Economic net income | 138,388 | 120,272 |
Total performance income - unrealized | (35,118) | (49,261) |
Total performance related compensation - unrealized | 11,009 | 35,401 |
Total investment (income) loss - unrealized | 5,574 | (9,534) |
Realized income | 119,853 | 96,878 |
Total performance income - realized | (23,107) | (8,805) |
Total performance related compensation - realized | 14,869 | 5,301 |
Total investment income - realized | (1,936) | (1,386) |
Fee related earnings | 109,679 | 91,988 |
Economic net income | 138,388 | 120,272 |
Performance related earnings | 28,709 | 28,284 |
Operating segment | Subsidiaries | ||
Adjustments: | ||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 640 | 0 |
Reconciling items | ||
Adjustments: | ||
Amortization of intangibles | 3,287 | 5,275 |
Depreciation expense | 3,889 | 3,216 |
Equity compensation expenses | 21,087 | 15,089 |
Acquisition and merger-related expenses | (319) | 275,336 |
Placement fees and underwriting costs | 1,664 | 3,439 |
Offering costs | 0 | 660 |
Other non-cash expense | 7 | 0 |
Total consolidation adjustments and reconciling items | 76,342 | 310,860 |
OMG | ||
Adjustments: | ||
OMG expenses, net | 46,454 | 44,416 |
Economic net income | (46,454) | (44,416) |
Total performance income - unrealized | 0 | 0 |
Total investment (income) loss - unrealized | (1,231) | 1,407 |
Realized income | (47,780) | (43,205) |
Total performance income - realized | 0 | 0 |
Total performance related compensation - realized | 0 | 0 |
Total investment income - realized | (2,768) | (850) |
Fee related earnings | (49,222) | (45,266) |
Economic net income | (46,454) | (44,416) |
Performance related earnings | 2,768 | 850 |
Consolidated Funds | ||
Adjustments: | ||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 367 | 15,855 |
Total investment income - realized | (64,422) | (41,492) |
Consolidated Funds | Operating segment | ||
Adjustments: | ||
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations | $ (367) | $ (16,323) |
CONSOLIDATION (Variable Interes
CONSOLIDATION (Variable Interest Entities) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | |||
Assets of consolidated VIEs | $ 8,560,082 | $ 8,563,522 | |
Liabilities of consolidated VIEs | 6,994,887 | 7,103,230 | |
Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Net income attributable to non-controlling interests related to consolidated VIEs | 367 | $ 15,855 | |
Non-Consolidated Variable Interest Entities | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 266,833 | 251,376 | |
Consolidated VIEs | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 174,849 | 175,620 | |
Consolidated VIEs | Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated VIEs | 6,126,584 | 6,231,245 | |
Liabilities of consolidated VIEs | $ 5,417,561 | $ 5,538,054 |
CONSOLIDATION (Balance Sheet) (
CONSOLIDATION (Balance Sheet) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Assets | ||||
Investments, at fair value | $ 1,724,571 | |||
Other assets | 130,341 | |||
Goodwill | $ 143,968 | 143,895 | ||
Total assets | 8,560,082 | 8,563,522 | ||
Liabilities | ||||
Total liabilities | 6,994,887 | 7,103,230 | ||
Commitments and contingencies | ||||
Preferred equity (12,400,000 shares issued and outstanding at March 31, 2018 and December 31, 2017) | 298,761 | 298,761 | ||
Controlling interest in Ares Management, L.P.: | ||||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 377,235 | 279,065 | ||
Accumulated other comprehensive loss, net of tax | (4,001) | (4,208) | ||
Total controlling interest in Ares Management, L.P. | 373,234 | 274,857 | ||
Total equity | 1,565,195 | 1,460,292 | ||
Total liabilities and equity | $ 8,560,082 | $ 8,563,522 | ||
Preferred equity, shares issued (in shares) | 12,400,000 | 12,400,000 | ||
Preferred equity, shares outstanding (in shares) | 12,400,000 | 12,400,000 | ||
Partners' Capital shares issued (in shares) | 97,514,500 | 82,280,033 | ||
Partners' Capital shares outstanding (in shares) | 97,514,500 | 82,280,033 | ||
Reportable legal entity | ||||
Liabilities | ||||
Preferred equity (12,400,000 shares issued and outstanding at March 31, 2018 and December 31, 2017) | $ 298,761 | $ 298,761 | ||
Eliminations | ||||
Assets | ||||
Total assets | (183,640) | (186,904) | ||
Liabilities | ||||
Total liabilities | (18,997) | (22,201) | ||
Commitments and contingencies | ||||
Preferred equity (12,400,000 shares issued and outstanding at March 31, 2018 and December 31, 2017) | 0 | 0 | ||
Controlling interest in Ares Management, L.P.: | ||||
Total equity | (164,643) | (164,703) | ||
Total liabilities and equity | (183,640) | (186,904) | ||
Ares Management L.P | ||||
Assets | ||||
Cash and cash equivalents | 115,540 | 118,929 | $ 103,989 | $ 342,861 |
Investments, at fair value | 1,811,829 | 1,724,571 | ||
Due from affiliates | 168,810 | 165,750 | ||
Deferred tax asset, net | 50,986 | 8,326 | ||
Other assets | 105,187 | 130,341 | ||
Intangible assets, net | 37,178 | 40,465 | ||
Goodwill | 143,968 | 143,895 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 78,771 | 81,955 | ||
Accrued compensation | 49,944 | 27,978 | ||
Due to affiliates | 21,018 | 14,642 | ||
Performance related compensation payable | 856,421 | 846,626 | ||
Debt obligations | 590,169 | 616,176 | ||
Controlling interest in Ares Management, L.P.: | ||||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 377,235 | 279,065 | ||
Accumulated other comprehensive loss, net of tax | (4,001) | (4,208) | ||
Total controlling interest in Ares Management, L.P. | 373,234 | 274,857 | ||
Investments | 326,415 | 277,561 | ||
Ares Management L.P | Reportable legal entity | ||||
Assets | ||||
Cash and cash equivalents | 115,540 | 118,929 | ||
Investments, at fair value | 1,986,678 | 1,900,191 | ||
Due from affiliates | 177,601 | 171,701 | ||
Deferred tax asset, net | 50,986 | 8,326 | ||
Other assets | 105,187 | 135,674 | ||
Intangible assets, net | 37,178 | 40,465 | ||
Goodwill | 143,968 | 143,895 | ||
Total assets | 2,617,138 | 2,519,181 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 78,771 | 81,955 | ||
Accrued compensation | 49,944 | 27,978 | ||
Due to affiliates | 21,018 | 14,642 | ||
Performance related compensation payable | 856,421 | 846,626 | ||
Debt obligations | 590,169 | 616,176 | ||
Total liabilities | 1,596,323 | 1,587,377 | ||
Commitments and contingencies | ||||
Controlling interest in Ares Management, L.P.: | ||||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 377,235 | 279,065 | ||
Accumulated other comprehensive loss, net of tax | (4,001) | (4,208) | ||
Total controlling interest in Ares Management, L.P. | 373,234 | 274,857 | ||
Total equity | 1,020,815 | 931,804 | ||
Total liabilities and equity | 2,617,138 | 2,519,181 | ||
Ares Management L.P | Eliminations | ||||
Assets | ||||
Cash and cash equivalents | 0 | |||
Investments, at fair value | (174,849) | (175,620) | ||
Due from affiliates | (8,791) | (5,951) | ||
Deferred tax asset, net | 0 | 0 | ||
Other assets | 0 | (5,333) | ||
Intangible assets, net | 0 | |||
Goodwill | 0 | |||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 0 | |||
Accrued compensation | 0 | |||
Due to affiliates | 0 | |||
Performance related compensation payable | 0 | |||
Debt obligations | 0 | |||
Controlling interest in Ares Management, L.P.: | ||||
Shareholders' equity (97,514,500 shares and 82,280,033 shares issued and outstanding at March 31, 2018 and at December 31, 2017, 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 | 532,470 | 556,500 | ||
Investments, at fair value | 5,479,136 | 5,582,842 | ||
Due from affiliates | 17,782 | 15,884 | ||
Other assets | 1,382 | 1,989 | ||
Dividends and interest receivable | 12,096 | 12,568 | ||
Receivable for securities sold | 83,718 | 61,462 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 81,508 | 64,316 | ||
Due to affiliates | 0 | 0 | ||
Payable for securities purchased | 239,139 | 350,145 | ||
CLO loan obligations, at fair value | 4,937,264 | 4,963,194 | ||
Fund borrowings | 140,653 | 138,198 | ||
Non-controlling interest in Ares Operating Group entities | 544,380 | 528,488 | ||
Controlling interest in Ares Management, L.P.: | ||||
Investments | 5,479,136 | 5,582,842 | ||
Consolidated Funds | Reportable legal entity | ||||
Assets | ||||
Cash and cash equivalents | 532,470 | 556,500 | ||
Investments, at fair value | 5,479,136 | 5,582,842 | ||
Due from affiliates | 17,782 | 15,884 | ||
Other assets | 1,382 | 1,989 | ||
Dividends and interest receivable | 12,096 | 12,568 | ||
Receivable for securities sold | 83,718 | 61,462 | ||
Total assets | 6,126,584 | 6,231,245 | ||
Liabilities | ||||
Accounts payable, accrued expenses and other liabilities | 81,508 | 64,316 | ||
Due to affiliates | 8,791 | 11,285 | ||
Payable for securities purchased | 239,139 | 350,145 | ||
CLO loan obligations, at fair value | 4,947,470 | 4,974,110 | ||
Fund borrowings | 140,653 | 138,198 | ||
Total liabilities | 5,417,561 | 5,538,054 | ||
Commitments and contingencies | ||||
Non-controlling interest in Ares Operating Group entities | 709,023 | 693,191 | ||
Controlling interest in Ares Management, L.P.: | ||||
Total equity | 709,023 | 693,191 | ||
Total liabilities and equity | 6,126,584 | 6,231,245 | ||
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 | (8,791) | (11,285) | ||
Payable for securities purchased | 0 | 0 | ||
CLO loan obligations, at fair value | (10,206) | (10,916) | ||
Fund borrowings | 0 | 0 | ||
Non-controlling interest in Ares Operating Group entities | (164,643) | (164,703) | ||
AOG | ||||
Liabilities | ||||
Non-controlling interest in Ares Operating Group entities | 348,820 | 358,186 | ||
AOG | Reportable legal entity | ||||
Liabilities | ||||
Non-controlling interest in Ares Operating Group entities | 348,820 | 358,186 | ||
Accrued Interest | Ares Management L.P | ||||
Assets | ||||
Investments, at fair value | 1,113,435 | 1,077,236 | ||
Collateral Pledged | Ares Management L.P | ||||
Assets | ||||
Investments, at fair value | $ 17,575 | $ 0 |
CONSOLIDATION (Income Statement
CONSOLIDATION (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Administrative, transaction and other fees | $ 0 | $ 0 |
Total revenues | 266,089 | 244,244 |
Expenses | ||
Total expenses | 206,283 | 491,467 |
Other income (expense) | ||
Total other income | 2,240 | 56,635 |
Income (loss) before taxes | 62,046 | (190,588) |
Income tax expense (benefit) | (12,375) | (34,264) |
Net income (loss) | 74,421 | (156,324) |
Net income (loss) attributable to Ares Management, L.P. | 40,948 | (41,134) |
Less: Preferred equity dividend paid | 5,425 | 5,425 |
Net income (loss) attributable to Ares Management, L.P. common shareholders | 35,523 | (46,559) |
Eliminations | ||
Revenues | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | (7,311) | (4,736) |
Carried interest allocation | 0 | (1,008) |
Incentive fees | (1,862) | |
Principal investment income | 2,201 | (10,582) |
Administrative, transaction and other fees | 0 | 0 |
Total revenues | (5,110) | (18,188) |
Expenses | ||
Compensation and benefits | 0 | |
Performance related compensation | 0 | |
General, administrative and other expenses | 0 | |
Total expenses | (7,313) | (6,598) |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | 339 | (2,865) |
Interest and dividend income | 0 | (919) |
Interest expense | 0 | |
Other income (expense), net | (458) | |
Total other income | (459) | (23) |
Income (loss) before taxes | 1,744 | (11,613) |
Income tax expense (benefit) | 0 | |
Net income (loss) | 1,744 | (11,613) |
Less: Preferred equity dividend paid | 0 | 0 |
Net income (loss) attributable to Ares Management, L.P. common shareholders | 0 | 0 |
Ares Management L.P | ||
Revenues | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 189,515 | 172,045 |
Carried interest allocation | 54,129 | 52,007 |
Incentive fees | 5,071 | 3,165 |
Principal investment income | 4,909 | 2,587 |
Administrative, transaction and other fees | 12,465 | 14,440 |
Total revenues | 266,089 | 244,244 |
Expenses | ||
Compensation and benefits | 134,639 | 124,339 |
Performance related compensation | 25,878 | 40,702 |
General, administrative and other expenses | 44,450 | 47,338 |
Transaction support expense | 0 | 275,177 |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | (839) | 888 |
Interest and dividend income | 3,347 | 1,924 |
Interest expense | (6,869) | (4,879) |
Other income (expense), net | (311) | 16,496 |
Income tax expense (benefit) | (12,375) | (34,733) |
Ares Management L.P | Affiliated entity | ARCC | ||
Statements of Operations | ||
Management fees, part I fees | 28,417 | 33,257 |
Ares Management L.P | Reportable legal entity | ||
Revenues | ||
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively) | 196,826 | 176,781 |
Carried interest allocation | 54,129 | 53,015 |
Incentive fees | 5,071 | 5,027 |
Principal investment income | 2,708 | 13,169 |
Administrative, transaction and other fees | 12,465 | 14,440 |
Total revenues | 271,199 | 262,432 |
Expenses | ||
Compensation and benefits | 134,639 | 124,339 |
Performance related compensation | 25,878 | 40,702 |
General, administrative and other expenses | 44,450 | 47,338 |
Transaction support expense | 275,177 | |
Total expenses | 204,967 | 487,556 |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | (1,178) | 3,753 |
Interest and dividend income | 3,347 | 2,843 |
Interest expense | (6,869) | (4,879) |
Other income (expense), net | 147 | 16,496 |
Total other income | (4,553) | 18,213 |
Income (loss) before taxes | 61,679 | (206,911) |
Income tax expense (benefit) | (12,375) | (34,732) |
Net income (loss) | 74,054 | (172,179) |
Net income (loss) attributable to Ares Management, L.P. | 40,948 | (41,134) |
Less: Preferred equity dividend paid | 5,425 | 5,425 |
Net income (loss) attributable to Ares Management, L.P. common shareholders | 35,523 | (46,559) |
Consolidated Funds | ||
Expenses | ||
Expenses of Consolidated Funds | 1,316 | 3,911 |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | (13,085) | 32,036 |
Interest and dividend income | 64,422 | 41,492 |
Interest expense | (44,425) | (31,322) |
Investment income and net interest income (expense) | 64,422 | 41,492 |
Income tax expense (benefit) | 0 | 469 |
Net income attributable to non-controlling interests related to consolidated VIEs | 367 | 15,855 |
Consolidated Funds | Reportable legal entity | ||
Expenses | ||
Expenses of Consolidated Funds | 8,629 | 10,509 |
Total expenses | 8,629 | 10,509 |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | (12,452) | 30,439 |
Interest expense | (44,718) | (33,486) |
Investment income and net interest income (expense) | 64,422 | 41,492 |
Total other income | 7,252 | 38,445 |
Income (loss) before taxes | (1,377) | 27,936 |
Income tax expense (benefit) | 0 | 468 |
Net income (loss) | (1,377) | 27,468 |
Net income attributable to non-controlling interests related to consolidated VIEs | (1,377) | 27,468 |
Net income (loss) attributable to Ares Management, L.P. | 0 | |
Net income (loss) attributable to Ares Management, L.P. common shareholders | 0 | |
Consolidated Funds | Eliminations | ||
Expenses | ||
Expenses of Consolidated Funds | (7,313) | (6,598) |
Total expenses | (7,313) | (6,598) |
Other income (expense) | ||
Net realized and unrealized gain (loss) on investments | (633) | 1,597 |
Interest expense | 293 | 2,164 |
Investment income and net interest income (expense) | 0 | 0 |
Total other income | (459) | (23) |
Net income attributable to non-controlling interests related to consolidated VIEs | 1,744 | (11,613) |
AOG | ||
Other income (expense) | ||
Net income attributable to non-controlling interests related to consolidated VIEs | 33,106 | (131,045) |
AOG | Reportable legal entity | ||
Other income (expense) | ||
Net income attributable to non-controlling interests related to consolidated VIEs | 33,106 | $ (131,045) |
AOG | Eliminations | ||
Other income (expense) | ||
Net income attributable to non-controlling interests related to consolidated VIEs | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event | 1 Months Ended |
Apr. 30, 2018$ / sharesshares | |
Subsequent events | |
Quarterly distribution declared (in dollars per unit) | $ 0.28 |
Preferred equity quarterly distribution (in dollars per unit) | $ 0.4375 |
Underwriting | Ares Management L.P | |
Subsequent events | |
Number of units sold (in units) | shares | 1,130,000 |