Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 18, 2021 | Jun. 30, 2020 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-36429 | ||
Entity Registrant Name | ARES MANAGEMENT CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 80-0962035 | ||
Entity Address, Address Line One | 2000 Avenue of the Stars | ||
Entity Address, Address Line Two | 12th Floor | ||
Entity Address, City or Town | Los Angeles | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90067 | ||
City Area Code | 310 | ||
Local Phone Number | 201-4100 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4,469,964,167 | ||
Entity Central Index Key | 0001176948 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | Part III of this Form 10-K incorporates by reference information from the registrant’s definitive proxy statement related to the 2021 annual meeting of stockholders | ||
Class A common stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Class A common stock, par value $0.01 per share | ||
Trading Symbol | ARES | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 149,539,441 | ||
Series A Preferred Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | 7.00% Series A Preferred Stock, par value $0.01 per share | ||
Trading Symbol | ARES.PRA | ||
Security Exchange Name | NYSE | ||
Class B common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 1,000 | ||
Class C common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 112,447,618 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | |||||
Total assets | $ 15,168,992 | $ 12,014,196 | |||
Liabilities | |||||
Operating lease liabilities | 180,236 | ||||
Total liabilities | 12,596,852 | 10,155,598 | |||
Commitments and contingencies | |||||
Stockholders' Equity | |||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at December 31, 2020 and 2019, respectively) | 298,761 | 298,761 | |||
Additional paid-in-capital | 1,043,669 | 525,244 | |||
Retained earnings | (151,824) | (50,820) | |||
Accumulated other comprehensive income (loss), net of tax | 483 | (6,047) | |||
Total stockholders' equity | 1,193,685 | 768,290 | |||
Total equity | 2,471,774 | 1,858,598 | $ 1,394,341 | $ 1,437,681 | |
Total liabilities, redeemable interest, non-controlling interests and equity | $ 15,168,992 | 12,014,196 | |||
Finance lease, liability, extensible list | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | ||||
Class A common stock | |||||
Stockholders' Equity | |||||
Common stock | $ 1,472 | 1,152 | |||
Class B common stock | |||||
Stockholders' Equity | |||||
Common stock | 0 | 0 | |||
Class C common stock | |||||
Stockholders' Equity | |||||
Common stock | 1,124 | 0 | |||
Consolidated Funds | |||||
Assets | |||||
Cash and cash equivalents | 522,377 | 606,321 | |||
Investments, at fair value | 10,877,097 | 8,727,947 | |||
Due from affiliates | 17,172 | 6,192 | |||
Other assets | 35,502 | 30,081 | |||
Receivable for securities sold | 121,225 | 88,809 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 46,824 | 61,857 | |||
Due to affiliates | 0 | 0 | |||
Payable for securities purchased | 514,946 | 500,146 | |||
CLO loan obligations, at fair value | 9,958,076 | 7,973,748 | |||
Fund borrowings | 121,909 | 107,244 | |||
Non-controlling interests in Consolidated Funds | 539,720 | 618,020 | |||
AOG | |||||
Liabilities | |||||
Redeemable interest in Ares Operating Group entities | 100,366 | $ 99,804 | 0 | ||
Non-controlling interests in Ares Operating Group entities | 738,369 | 472,288 | |||
Ares Management L.P | |||||
Assets | |||||
Cash and cash equivalents | 539,812 | 138,384 | |||
Investments, at fair value | 1,682,759 | 1,663,664 | |||
Due from affiliates | 405,887 | 267,130 | |||
Other assets | 812,419 | 342,262 | |||
Right-of-use operating lease assets | 154,742 | 143,406 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 115,289 | 88,173 | |||
Accrued compensation | 103,010 | 37,795 | |||
Due to affiliates | 100,186 | 71,445 | |||
Performance related compensation payable | 813,378 | 829,764 | |||
Debt obligations | 642,998 | 316,609 | |||
Operating lease liabilities | 180,236 | 168,817 | |||
Stockholders' Equity | |||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at December 31, 2020 and 2019, respectively) | 298,761 | 298,761 | |||
Additional paid-in-capital | 1,043,669 | 525,244 | |||
Retained earnings | (151,824) | (50,820) | |||
Accumulated other comprehensive income (loss), net of tax | 483 | (6,047) | |||
Total stockholders' equity | 1,193,685 | 768,290 | |||
Ares Management L.P | Class A common stock | |||||
Stockholders' Equity | |||||
Common stock | 1,472 | 1,152 | |||
Ares Management L.P | Class B common stock | |||||
Stockholders' Equity | |||||
Common stock | 0 | 0 | |||
Ares Management L.P | Class C common stock | |||||
Stockholders' Equity | |||||
Common stock | $ 1,124 | $ 0 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Preferred stock, shares issued (in shares) | 12,400,000 | 12,400,000 |
Preferred stock, shares outstanding (in shares) | 12,400,000 | 12,400,000 |
Common stock, shares outstanding (in shares) | 259,631,180 | 115,243,029 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 147,182,562 | 115,242,028 |
Common stock, shares outstanding (in shares) | 147,182,562 | 115,242,028 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, shares issued (in shares) | 1,000 | 1,000 |
Common stock, shares outstanding (in shares) | 1,000 | 1,000 |
Class C common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 499,999,000 | |
Common stock, shares issued (in shares) | 112,447,618 | 1 |
Common stock, shares outstanding (in shares) | 112,447,618 | 1 |
Ares Management L.P | ||
Equity method investments | $ 1,682,759 | $ 1,663,664 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||
Total revenues | $ 1,764,046 | $ 1,765,438 | $ 958,461 |
Expenses | |||
Total expenses | 1,450,486 | 1,462,797 | 870,362 |
Other income (expense) | |||
Total other income | 65,918 | 122,539 | 96,242 |
Income before taxes | 379,478 | 425,180 | 184,341 |
Income tax expense | 54,993 | 52,376 | 32,202 |
Net income | 324,485 | 372,804 | 152,139 |
Net income attributable to Ares Management Corporation | 152,142 | 148,884 | 57,020 |
Less: Series A Preferred Stock dividends paid | 21,700 | 21,700 | 21,700 |
Net income attributable to Ares Management Corporation Class A common stockholders | $ 130,442 | $ 127,184 | $ 35,320 |
Class A common stock | |||
Net income per share of Class A common stock: | |||
Basic (in dollars per share) | $ 0.89 | $ 1.11 | $ 0.30 |
Diluted (in dollars per share) | $ 0.87 | $ 1.06 | $ 0.30 |
Weighted-average shares of Class A common stock: | |||
Basic (in shares) | 135,065,436 | 107,914,953 | 96,023,147 |
Diluted (in shares) | 149,508,498 | 119,877,429 | 96,023,147 |
Consolidated Funds | |||
Expenses | |||
Expenses of Consolidated Funds | $ 20,119 | $ 42,045 | $ 53,764 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (96,864) | 15,136 | (1,583) |
Interest expense | (286,316) | (277,745) | (222,895) |
Interest and other income of Consolidated Funds | 463,652 | 395,599 | 337,875 |
Net income attributable to non-controlling interests | 28,085 | 39,704 | 20,512 |
AOG | |||
Other income (expense) | |||
Net income | 296,400 | 333,100 | 131,627 |
Net income attributable to non-controlling interests | 145,234 | 184,216 | 74,607 |
Less: Net loss attributable to redeemable interest in Ares Operating Group entities | (976) | 0 | 0 |
Ares Management L.P | |||
Revenues | |||
Total revenues | 1,764,046 | 1,765,438 | 958,461 |
Expenses | |||
Compensation and benefits | 767,252 | 653,352 | 570,380 |
Performance related compensation | 404,116 | 497,181 | 30,254 |
General, administrative and other expenses | 258,999 | 270,219 | 215,964 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (9,008) | 9,554 | (1,884) |
Interest and dividend income | 8,071 | 7,506 | 7,028 |
Interest expense | (24,908) | (19,671) | (21,448) |
Other income (expense), net | 11,291 | (7,840) | (851) |
Income tax expense | 54,875 | 52,906 | 32,071 |
Management fees | Ares Management L.P | |||
Revenues | |||
Total revenues | 1,150,608 | 979,417 | 802,502 |
Carried interest allocation | |||
Revenues | |||
Total revenues | 505,608 | ||
Carried interest allocation | Ares Management L.P | |||
Revenues | |||
Total revenues | 505,608 | 621,872 | 42,410 |
Incentive fees | Ares Management L.P | |||
Revenues | |||
Total revenues | 37,902 | 69,197 | 63,380 |
Principal investment income | Ares Management L.P | |||
Revenues | |||
Total revenues | 28,552 | 56,555 | (1,455) |
Administrative, transaction and other fees | |||
Revenues | |||
Total revenues | 0 | ||
Administrative, transaction and other fees | Ares Management L.P | |||
Revenues | |||
Total revenues | $ 41,376 | $ 38,397 | $ 51,624 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Ares Management L.P | Affiliated entity | ARCC | |||
Management fees, part I fees | $ 184,141 | $ 164,396 | $ 128,805 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net income | $ 324,485 | $ 372,804 | $ 152,139 |
AOG | |||
Net income | 296,400 | 333,100 | 131,627 |
Other comprehensive income: | |||
Less: Comprehensive income attributable to redeemable interest in Ares Operating Group entities | 562 | 0 | 0 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 150,795 | 186,896 | 70,670 |
Consolidated Funds | |||
Other comprehensive income: | |||
Less: Comprehensive income (loss) attributable to non-controlling interests | 43,184 | 37,869 | 15,575 |
Ares Management L.P | |||
Other comprehensive income: | |||
Foreign currency translation adjustments, net of tax | 28,728 | 3,322 | (13,190) |
Total comprehensive income | 353,213 | 376,126 | 138,949 |
Comprehensive income attributable to Ares Management Corporation | $ 158,672 | $ 151,361 | $ 52,704 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Revision of Prior Period, Accounting Standards Update, Adjustment | Partners' CapitalPreferred Partner | Ares Management L.PPartners' Capital | Ares Management L.PPartners' CapitalRevision of Prior Period, Accounting Standards Update, Adjustment | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Revision of Prior Period, Accounting Standards Update, Adjustment | Non-Controlling interestAOG | Non-Controlling interestConsolidated Funds | Preferred Class A | Class A common stock | Class A common stockCommon Stock | Class C common stockCommon Stock |
Beginning balance at Dec. 31, 2017 | $ 1,437,681 | $ 0 | $ 298,761 | $ 268,238 | $ 1,202 | $ 0 | $ 0 | $ (4,208) | $ (1,202) | $ 341,069 | $ 533,821 | $ 0 | $ 0 | $ 0 | |
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Changes in ownership interests and related tax benefits | (1,211) | (26,712) | 9,140 | 16,361 | |||||||||||
Consolidation of a new fund | 42,942 | 42,942 | |||||||||||||
Capital contributions | 180,420 | 106,283 | 3,128 | 71,009 | |||||||||||
Dividends/Distributions | (494,056) | (16,275) | (104,501) | (30,348) | (177,797) | (159,710) | (5,425) | ||||||||
Net income | 152,139 | 16,275 | 34,308 | 1,012 | 74,607 | 20,512 | 5,425 | ||||||||
Currency translation adjustment, net of tax | (11,988) | (3,114) | (3,937) | (4,937) | |||||||||||
Equity compensation | 88,414 | 36,245 | 2,820 | 49,349 | |||||||||||
Reclassifications resulting from conversion to a corporation | 0 | (298,761) | (315,063) | 314,047 | 298,761 | 1,016 | |||||||||
Ending balance at Dec. 31, 2018 | $ 1,394,341 | 0 | 0 | 326,007 | (29,336) | (8,524) | 302,780 | 503,637 | 298,761 | 1,016 | 0 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Accounting standards update extensible list | us-gaap:AccountingStandardsUpdate201802Member | ||||||||||||||
Changes in ownership interests and related tax benefits | $ (28,613) | 0 | (133,976) | 105,341 | 22 | ||||||||||
Capital contributions | 381,432 | 0 | 206,635 | 1,876 | 172,851 | 70 | |||||||||
Dividends/Distributions | (441,649) | 0 | 0 | (148,668) | (174,999) | (96,282) | (21,700) | ||||||||
Net income | 372,804 | 0 | 0 | 127,184 | 184,216 | 39,704 | 21,700 | ||||||||
Currency translation adjustment, net of tax | 3,322 | 2,477 | 2,680 | (1,835) | |||||||||||
Equity compensation | 96,954 | 0 | 46,560 | 50,394 | |||||||||||
Relinquished with deconsolidation of funds | (55) | (55) | |||||||||||||
Repurchases of Class A common stock | (10,449) | (10,445) | $ (10,400) | (4) | |||||||||||
Stock option exercises | 90,511 | 90,463 | 48 | ||||||||||||
Ending balance at Dec. 31, 2019 | 1,858,598 | 0 | 0 | 525,244 | (50,820) | (6,047) | 472,288 | 618,020 | 298,761 | 1,152 | 0 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Changes in ownership interests and related tax benefits | (99,145) | (328,419) | 229,229 | 73 | (28) | ||||||||||
Issuances of common stock | 688,492 | 687,142 | 198 | 1,152 | |||||||||||
Capital contributions | 177,710 | 481 | 44,799 | 132,430 | |||||||||||
Dividends/Distributions | (719,987) | (231,446) | (215,334) | (251,507) | (21,700) | ||||||||||
Net income | 325,461 | 0 | 0 | 130,442 | 145,234 | 28,085 | 21,700 | ||||||||
Currency translation adjustment, net of tax | 27,190 | 6,530 | 5,561 | 15,099 | |||||||||||
Equity compensation | 122,986 | 0 | 66,394 | 56,592 | |||||||||||
Relinquished with deconsolidation of funds | (2,407) | (2,407) | |||||||||||||
Stock option exercises | 92,876 | 92,827 | 49 | ||||||||||||
Ending balance at Dec. 31, 2020 | $ 2,471,774 | $ 0 | $ 0 | $ 1,043,669 | $ (151,824) | $ 483 | $ 738,369 | $ 539,720 | $ 298,761 | $ 1,472 | $ 1,124 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 324,485 | $ 372,804 | $ 152,139 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net cash used in operating activities | (425,659) | (2,083,021) | (1,417,058) |
Cash flows from investing activities: | |||
Net cash used in investing activities | (136,764) | (16,796) | (18,419) |
Allocable to non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | 943,895 | 2,122,330 | 1,405,295 |
Effect of exchange rate changes | 19,956 | 5,624 | 21,500 |
Net change in cash and cash equivalents | 401,428 | 28,137 | (8,682) |
Cash and cash equivalents, beginning of period | 138,384 | 110,247 | 118,929 |
Cash and cash equivalents, end of period | 539,812 | 138,384 | 110,247 |
Supplemental disclosure of non-cash financing activities: | |||
Issuance of Class A common stock in connection with acquisitions | 305,338 | 0 | 0 |
Cash paid during the period for interest | 257,132 | 233,090 | 184,951 |
Cash paid during the period for income taxes | 38,174 | 35,625 | 27,482 |
Consolidated Funds | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized gains (losses) on investments | 96,864 | (15,136) | 1,583 |
Other (income) expense, net | (34,297) | (8,383) | (4,519) |
Investments purchased | (6,615,732) | (5,216,931) | (4,919,118) |
Proceeds from sale of investments | 5,502,325 | 3,077,755 | 2,756,924 |
Change in cash and cash equivalents held at Consolidated Funds | 83,944 | (221,677) | 171,856 |
Net cash acquired (relinquished) with consolidation/deconsolidation of Consolidated Funds | 60,895 | (81,059) | 11,915 |
Change in other assets and receivables held at Consolidated Funds | (33,298) | (54,834) | 11,962 |
Change in other liabilities and payables held at Consolidated Funds | 10,787 | 88,467 | 137,545 |
Allocable to non-controlling interests in Consolidated Funds: | |||
Contributions from non-controlling interests in Consolidated Funds | 132,430 | 172,851 | 71,009 |
Distributions to non-controlling interests in Consolidated Funds | (251,507) | (96,282) | (159,710) |
Borrowings under loan obligations by Consolidated Funds | 1,013,291 | 3,341,837 | 2,901,633 |
Repayments under loan obligations by Consolidated Funds | (190,055) | (1,035,710) | (1,027,649) |
Ares Management L.P | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Equity compensation expense | 122,986 | 97,691 | 89,724 |
Depreciation and amortization | 41,248 | 39,459 | 28,517 |
Net realized and unrealized gains (losses) on investments | (8,039) | (53,092) | 12,935 |
Other (income) expense, net | 0 | 0 | 10 |
Investments purchased | (90,851) | (278,798) | (248,460) |
Proceeds from sale of investments | 174,679 | 284,810 | 381,703 |
Net performance income receivable | (24,351) | (103,962) | 29,578 |
Due to/from affiliates | (76,185) | (75,138) | 33,023 |
Other assets | (36,693) | 26,684 | (66,795) |
Accrued compensation and benefits | 54,539 | 7,650 | 114 |
Accounts payable, accrued expenses and other liabilities | 21,035 | 30,669 | 2,306 |
Cash flows from investing activities: | |||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (15,942) | (16,796) | (18,419) |
Acquisitions, net of cash acquired | (120,822) | 0 | 0 |
Cash flows from financing activities: | |||
Net proceeds from issuance of Class A common stock | 383,154 | 206,705 | 105,333 |
Proceeds from credit facility | 790,000 | 335,000 | 680,000 |
Proceeds from senior notes | 399,084 | 0 | 0 |
Proceeds from term notes | 0 | 0 | 44,050 |
Repayments of credit facility | (860,000) | (500,000) | (655,000) |
Repayments of term notes | 0 | 0 | (206,089) |
Dividends and distributions | (446,780) | (323,667) | (312,646) |
Series A Preferred Stock dividends | (21,700) | (21,700) | (21,700) |
Repurchases of Class A common stock | 0 | (10,449) | 0 |
Stock option exercises | 92,877 | 90,511 | 950 |
Taxes paid related to net share settlement of equity awards | (95,368) | (33,554) | (18,014) |
Other financing activities | (1,531) | (3,212) | $ 3,128 |
Allocable to non-controlling interests in Consolidated Funds: | |||
Cash and cash equivalents, beginning of period | 138,384 | ||
Cash and cash equivalents, end of period | $ 539,812 | $ 138,384 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | 1. ORGANIZATION Ares Management Corporation (the “Company”), a Delaware corporation, together with its subsidiaries, is a leading global alternative investment manager operating integrated groups across Credit, Private Equity, Real Estate and Strategic Initiatives. Beginning in the third quarter of 2020, the Company began reflecting a new Strategic Initiatives category, which represents operating segments and strategic investments that are seeking to broaden the Company's distribution channels or expand its access to global markets. Information about segments should be read together with “Note 15. Segment Reporting.” Subsidiaries of the Company serve as the general partners and/or investment managers to various investment funds and managed accounts within each investment group (the “Ares Funds”). These subsidiaries provide investment advisory services to the Ares Funds in exchange for management fees. Ares is managed and operated by its Board of Directors and Executive Management Committee. Unless the context requires otherwise, references to “Ares” or the “Company” refer to Ares Management, L.P., together with its subsidiaries prior to November 26, 2018 and thereafter to Ares Management Corporation, together with its subsidiaries. See “Note 14. Equity and Redeemable Interest", for detailed description of the Company's ownership structure and relevant changes. The accompanying audited financial statements include the consolidated results of the Company and its subsidiaries. The Company is a holding company, and the Company's assets include equity interests in Ares Holdings Inc., Ares Offshore Holdings, Ltd., and Ares AI Holdings L.P. In this annual report, the following of the Company’s subsidiaries are collectively referred to as the “Ares Operating Group” or “AOG”: 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. In addition, certain Ares funds, co-investment entities and collateralized loan obligations (“CLOs”) (collectively, the “Consolidated Funds”) managed by Ares Management LLC (“AM LLC”) and its wholly owned subsidiaries have been consolidated in the accompanying financial statements as described in “Note 2. Summary of Significant Accounting Policies”. Including the results of the Consolidated Funds significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows in the accompanying consolidated financial statements; however, the Consolidated Funds results included herein have no direct effect on the net income attributable to Ares Management Corporation or to Stockholders' Equity. Instead, economic ownership interests of the investors in the Consolidated Funds are reflected as non-controlling interests in Consolidated Funds. Further, cash flows allocable to non-controlling interest in Consolidated Funds are specifically identifiable in the Consolidated Statements of Cash Flows. Redeemable Interest and Non-Controlling Interests in Ares Operating Group Entities The non-controlling interests in AOG entities represents a component of equity and net income attributable to the owners of the Ares Operating Group Units (“AOG Units”) that are not held directly or indirectly by the Company. These owners consist predominantly of Ares Owners Holdings L.P. but also include other strategic distribution partnerships with whom the Company has established joint ventures. Non-controlling interests in AOG entities are adjusted for contributions to and distributions from AOG during the reporting period and are allocated income from the AOG entities based on their historical ownership percentage for the proportional number of days in the reporting period. On February 21, 2020, the Company completed its acquisition (“Crestline Acquisition”) of the Class A membership interests (the “Class A membership interests”) in Crestline Denali Capital LLC (“Crestline Denali”). The Class A membership interests entitle the Company to the fees associated with managing seven collateral management contracts. The Class B membership interests of Crestline Denali (the “Class B membership interests”) were retained by the former owners of Crestline Denali and represent the financial interests in the subordinated notes of the collateralized loan obligations. In connection with the Company's control over Crestline Denali, the Company also consolidates investments and financial results that are attributable to the Class B membership interests to which the Company has no economic rights or obligations. Equity and income (loss) attributable to the Class B membership interests is included within non-controlling interests in AOG entities. On July 1, 2020, the Company completed its acquisition of a majority interest in SSG Capital Holdings Limited and its operating subsidiaries (“SSG”) in accordance with the purchase agreement entered into on January 21, 2020 (“SSG Acquisition”). Following the acquisition, SSG began operating under the Ares SSG brand. Ares SSG is an alternative investment manager in the Asia Pacific that is focused on leveraging its broad Pan-Asian presence, extensive infrastructure and local origination network to make credit, private equity and special situation investments across Asia and Australia. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”). The Company’s Consolidated Funds are investment companies under GAAP based on the following characteristics: the Consolidated Funds obtain funds from one or more investors and provide investment management services and the Consolidated Funds’ business purpose and substantive activities are investing funds for returns from capital appreciation and/or investment income. Therefore, investments of Consolidated Funds are recorded at fair value and the unrealized appreciation (depreciation) in an investment’s fair value is recognized on a current basis in the Consolidated Statements of Operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the investment company accounting for the Consolidated Funds under GAAP. All of the investments held and CLO loan obligations issued by the Consolidated Funds are presented at their estimated fair values in the Company’s Consolidated Statements of Financial Condition. Net income attributable to holders of subordinated notes of the CLOs is included in net income attributable to non-controlling interests in consolidated funds in the Consolidated Statements of Operations. The Company has reclassified certain prior period amounts to conform to the current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and other income (expense) during the reporting periods. Assumptions and estimates regarding the valuation of investments involve a high degree of judgment and complexity and may have a significant impact on net income. Actual results could differ from these estimates and such differences could be material to the consolidated financial statements. The outbreak of the coronavirus pandemic (“COVID-19”) has caused uncertainty and disruption in the global economy and financial markets. As a result, management's estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period. Principles of Consolidation The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that the Company concludes are variable interest entities (“VIEs”) in which the Company has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which the Company is deemed to be the primary beneficiary. The Company determines whether an entity should be consolidated by first evaluating whether it holds a variable interest in the entity. Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests, including proportionate interests through related parties, to determine if fees are considered a variable interest. As the Company’s interests in funds are primarily management fees, performance income, and/or insignificant direct or indirect equity interests through related parties, the Company is not considered to have a variable interest in many of these entities. Entities that are not VIEs are further evaluated for consolidation under the voting interest model (“VOE”). Variable Interest Model The Company considers an entity to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. The Company consolidates all VIEs for which it is the primary beneficiary. The Company determines it is the primary beneficiary when it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders the conclusion. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. The consolidation analysis is generally performed qualitatively, however, if the primary beneficiary is not readily determinable, a quantitative analysis may also be performed. This analysis requires judgment. These judgments include: (1) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity, (3) determining whether two or more parties' equity interests should be aggregated, (4) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity and (5) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary. Consolidated CLOs As of December 31, 2020 and 2019, the Company consolidated 21 and 16 CLOs, respectively. The Company has determined that the fair value of the financial assets of the consolidated CLOs, which are mostly Level II assets within the GAAP fair value hierarchy, are more observable than the fair value of the financial liabilities of its consolidated CLOs, which are mostly Level III liabilities within the GAAP fair value hierarchy. As a result, the financial assets of consolidated CLOs are measured at fair value and the financial liabilities of the consolidated CLOs are measured in consolidation as: (1) the sum of the fair value of the financial assets, and the carrying value of any nonfinancial assets held temporarily, less (2) the sum of the fair value of any beneficial interests retained by the Company (other than those that represent compensation for services), and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interests retained by the Company). The loan obligations issued by the CLOs are collateralized by diversified asset portfolios and by structured debt or equity. In exchange for managing the collateral for the CLOs, the Company typically earns a variety of management fees, including senior and subordinated management fees, and in some cases, contingent incentive fee income. In cases where the Company earns fees from a CLO that it consolidates, those fees have been eliminated as intercompany transactions. The Company's holdings in these CLOs are generally subordinated to other interests in the entities and entitle the Company to receive a pro rata portion of the residual cash flows, if any, from the entities. Additionally, the Company may invest in other senior secured notes, which are repaid based on available cash flows subject to priority of payments under each consolidated CLO's governing documents. Investors in the CLOs generally have no recourse against the Company for any losses sustained in the capital structure of each CLO. Fair Value Measurements GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rate, yield curve, volatility, prepayment risk, loss severity, credit risk and default rate. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available. In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period (see “Note 5. Fair Value” for further detail). Cash and Cash Equivalents Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds. At December 31, 2020 and 2019, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions. Investments The Company has retained the specialized investment company accounting guidance under GAAP with respect to its Consolidated Funds, which hold a substantial majority of its investments. Thus, the consolidated investments are reflected in the Consolidated Statements of Financial Condition at fair value, with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit price). Equity Method Investments The Company accounts for its investments in which it has or is otherwise presumed to have significant influence, including investments in unconsolidated funds, strategic investments and carried interest, using the equity method of accounting. The carrying amounts of equity method investments are reflected in investments in the Consolidated Statements of Financial Condition. Certain of the Company's equity method investments are reported at fair value. Management's determination of fair value includes various valuation techniques. These techniques may include market approach, recent transaction price, net asset value approach, discounted cash flows, acreage valuation and may use one or more significant unobservable inputs such as EBITDA or revenue multiples, discount rates, weighted average cost of capital, exit multiples, terminal growth rates and other unobservable inputs. Alternatively, the carrying value of investments accounted for using equity method accounting is determined based on amounts invested by the Company, adjusted for the equity in earnings or losses of the investee allocated based on the respective partnership agreements, less distributions received. The Company evaluates the equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Except for carried interest, the Company’s share of the investee’s income and expenses for the Company’s equity method investments is included within principal investment income (loss) and net realized and unrealized gains (losses) on investments within the Consolidated Statements of Operations. Carried interest allocation is presented separately as a revenue line item within the Consolidated Statements of Operations, and the accrued but unpaid carried interest as of the reporting date is reported in within investments in the Consolidated Statements of Financial Condition. Derivative Instruments The Company recognizes all derivatives as either assets or liabilities in the Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively, and reports them at fair value. Goodwill and Intangible Assets The Company's finite-lived intangible assets consists primarily of contractual rights to earn future management fees from the acquired management contracts. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from approximately 2.0 to 13.5 years. The purchase price of an acquired management contract is treated as an intangible asset and is amortized over the life of the contract. Amortization is included as part of general, administrative and other expenses in the Consolidated Statements of Operations. The Company tests finite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. The Company evaluates impairment by comparing the estimated fair value attributable to the intangible asset being evaluated with its carrying amount. If an impairment is determined to exist by management, the Company accelerates amortization expense so that the carrying amount represents fair value. The Company estimates fair value using undiscounted future cash flow. Goodwill represents the excess cost over identifiable net assets of an acquired business. The Company tests goodwill annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of goodwill impairment as the excess of the carrying amount of the reporting unit over its fair value. The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that is more likely than not to reduce the fair value of the reporting unit below its carrying amount. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and market valuations, and assumptions about the Company’s strategic plans with regard to its operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates . The Company's intangible assets and goodwill are included within other assets on the Company’s Consolidated Statements of Financial Condition. Fixed Assets Fixed assets, consisting of furniture, fixtures and equipment, leasehold improvements, computer hardware and internal-use software, are recorded at cost, less accumulated depreciation and amortization. Fixed assets are included within other assets on the Company’s Consolidated Statements of Financial Condition. Direct costs associated with developing, purchasing or otherwise acquiring software for internal use (“Internal-Use Software”) are capitalized and amortized on a straight-line basis over the expected useful life of the software, beginning when the software is ready for its intended purpose. Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Fixed assets are depreciated or amortized on a straight-line basis over an asset's estimated useful life, with the corresponding depreciation and amortization expense included within general, administrative and other expenses on the Company’s Consolidated Statements of Operations. The estimated useful life for leasehold improvements is the lesser of the lease term or the life of the asset while other fixed assets and internal-use software are generally depreciated between three Redeemable Interest in Ares Operating Group Entities Redeemable interest in AOG entities represents the ownership interest that the former owners of SSG retained in connection with the SSG Acquisition. Redeemable interest in AOG entities was initially recorded at fair value on the date of acquisition within mezzanine equity in the Consolidated Statements of Financial Condition. Income (loss) is allocated based on the ownership percentage attributable to the redeemable interest. The Company determined that the redemption of the redeemable interest is probable as of the date of acquisition. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount, as defined in accordance with the terms of a contractual arrangement between the Company and the former owners of SSG, to the extent that the redemption amount exceeds the initial measurement on the date of acquisition. The Company recognizes changes in the redemption amount with corresponding adjustments against retained earnings, or additional paid-in-capital in the absence of retained earnings, within stockholders' equity in the Consolidated Statements of Financial Condition. Revenue Recognition Revenues consist of management fees, carried interest allocation, incentive fees, principal investment income and administrative, transaction and other fees. The Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenue is based on contracts with a determinable transaction price and distinct performance obligations with probable collectability. Revenues are not recognized until the performance obligation(s) are satisfied. Management Fees Management fees are generally based on a defined percentage of fair value of assets, total commitments, invested capital, net asset value (“NAV”), net investment income, total assets or par value of the investment portfolios managed by the Company. Principally all management fees are earned from affiliated funds of the Company. The contractual terms of management fees vary by fund structure and investment strategy. Management fees are recognized as revenue in the period advisory services are rendered, subject to the Company’s assessment of collectability. Management fees also include a quarterly incentive fee based on the net investment income (“ARCC Part I Fees”) from Ares Capital Corporation (NASDAQ: ARCC) (“ARCC”), a publicly traded business development company registered under the Investment Company Act and managed by a subsidiary of the Company. ARCC Part I Fees are equal to 20.0% of its net investment income (before ARCC Part I Fees and incentive fees payable based on capital gains), subject to a fixed “hurdle rate” of 1.75% per quarter, or 7.0% per annum. No fee is recognized until ARCC's net investment income exceeds a 1.75% hurdle rate, with a “catch-up” provision to ensure that the Company receives 20% of ARCC's net investment income from the first dollar earned. Performance Income Performance income revenues consist of carried interest allocation and incentive fees. Performance income is based on certain specific hurdle rates as defined in the applicable investment management agreements or governing documents. Substantially all performance income is earned from affiliated funds of the Company. Carried Interest Allocation 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 investment management agreement. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund's net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated, and may be subject to reversal to the extent that the amount allocated exceeds the amount due to the general partner or investment manager based on a fund’s cumulative investment returns. As the fair value of underlying assets varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (i) positive performance resulting in an increase in the carried interest allocated to the Company or (ii) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a reversal of previously recognized carried interest allocated to the Company. Accrued but unpaid carried interest as of the reporting date is recorded within investments in the Consolidated Statements of Financial Condition. 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 investment management agreements or governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally does not become realized until the end of a fund’s life. As of December 31, 2020 and 2019, if the funds were liquidated at their fair values, there would have been no repayment obligation or liability. The Company accounts for carried interest, which represents a performance-based capital allocation from an investment fund to the Company, as earnings from financial assets within the scope of ASC 323, Investments-Equity Method and Joint Ventures . The Company recognizes carried interest allocation as a separate revenue line item in the Consolidated Statements of Operations with uncollected carried interest as of the reporting date reported within investments in the Consolidated Statements of Financial Condition. 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. Principal Investment Income Principal investment income consists of interest and dividend income and net realized and unrealized gain (loss) from the equity method investments that the Company manages. Administrative, Transaction and Other Fees The Company provides administrative services to certain of its affiliated funds that are reported within administrative and other fees. The administrative fees generally represent expense reimbursements for a portion of overhead and other expenses incurred by certain professionals directly attributable to performing services for a fund but may also be based on a fund’s NAV. The Company also receives transaction fees from certain affiliated funds for activities related to fund transactions, such as loan originations. These fees are recognized as other revenue in the period in which the administrative services and the transaction related services are rendered. Equity-Based Compensation The Company recognizes expense related to equity-based compensation in which it receives employee services in exchange for (a) equity instruments of the Company, (b) derivatives based on the Company’s Class A common stock or (c) liabilities that are based on the fair value of the Company’s equity instruments. Equity-based compensation expense represents expenses associated with restricted units, options and phantom shares granted under 2014 Equity Incentive Plan, as amended and restated on March 1, 2018 and as further amended and restated effective November 26, 2018 (the “Equity Incentive Plan”). Equity-based compensation expense for restricted units and options is determined based on the fair value of the respective equity award on the grant date and is recognized on a straight-line basis over the requisite service period, with a corresponding increase in additional paid-in-capital. Grant date fair value of the restricted units is determined by the most recent closing price of shares of the Company's Class A common stock. The Company recognizes share-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. The reduction in compensation expense is determined based on the specific awards forfeited during that period. The Company records deferred tax assets or liabilities for equity compensation plan awards based on deductions for income tax purposes of equity-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company is expected to receive a tax deduction. In addition, differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company’s income tax returns are recorded as adjustments to additional paid-in-capital. If the tax deduction is less than the deferred tax asset, the calculated shortfall reduces the pool of excess tax benefits. If the pool of excess tax benefits is reduced to zero, then subsequent shortfalls would increase the income tax expense. Equity-based compensation expense is presented within compensation and benefits in the Consolidated Statements of Operations. Performance Related Compensation The Company has agreed to pay a portion of the performance income earned from certain funds, including income from Consolidated Funds that is eliminated in consolidation, to certain professionals. Depending on the nature of each fund, the performance income allocation may be structured as a fixed percentage subject to vesting based on continued employment or service (generally over a period of four Performance related compensation payable represents the amounts payable to professionals who are entitled to a proportionate share of performance income in one or more funds. The liability is calculated based upon the changes to realized and unrealized performance income but not payable until the performance income itself is realized. Net Realized and Unrealized Gains (Losses) on Investments Realized gain (loss) occurs when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized appreciation (depreciation) results from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations. Also, the Company’s share of the investee’s income and expenses for the Company’s equity method investments is included within net realized and unrealized gains (losses) on investments. Interest and Dividend Income Interest, dividends and other investment income are included in interest and dividend income. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established . Foreign Currency The U.S. dollar is the Company's functional currency; however, certain transactions of the Company may not be denominated in U.S. dollars. Foreign exchange revaluation arising from these transactions is recognized within other income (expense) in the Consolidated Statements of Operations. For the year ended December 31, 2020, the Company recognized $13.1 million in transaction gains related to foreign currencies revaluation. For the years ended December 31, 2019 and 2018, the Company recognized $8.5 million and $0.1 million, respectively, in transaction losses related to foreign currencies revaluation. In addition, the combined and consolidated results include certain foreign subsidiaries and Consolidated Funds that use functional currencies other than the U.S. dollar. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rates as of the reporting date. Income and expense and gain and loss transactions denominated in foreign currencies are generally translated into U.S. dollars monthly using the average exchange rates during the respective transaction period. Translation adjustments resulting from this process are recorded to currency translation adjustment in accumulated other comprehensive income. Income Taxes Since the Company’s election to be taxed as a corporation (effective March 1, 2018), all earnings allocated to the Company are subject to U.S. corporate income taxes. A provision for corporate level income taxes imposed on unrealized gains and income items as well as taxes imposed on certain subsidiaries’ earnings is included in the consolidated tax provision. Also included in the consolidated tax provision are entity level income taxes incurred by certain affiliated funds and co-investment entities that are consolidated in these financial statements. The portion of consolidated earnings not allocated to the Company flows through to owners of the Ares Operating Group entities without being taxed at the corporate level. Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequ |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 3. GOODWILL AND INTANGIBLE ASSETS Finite Lived Intangible Assets, Net The following table summarizes the carrying value, net of accumulated amortization, of the Company's intangible assets that are included within other assets in the Consolidated Statements of Financial Condition: Weighted Average Amortization Period as of December 31, 2020 As of December 31, 2020 2019 Management contracts 5.4 years $ 210,857 $ 12,498 Client relationships 9.1 years 25,141 6,341 Trade name 9.4 years 11,079 378 Intangible assets 247,077 19,217 Foreign currency translation 3,093 — Total intangible assets 250,170 19,217 Less: accumulated amortization (28,082) (11,242) Intangible assets, net $ 222,088 $ 7,975 In connection with the SSG Acquisition during the third quarter of 2020, the Company allocated $171.7 million, $18.8 million and $10.7 million of the purchase price to the fair value of the acquired management contracts, client relationships and trade name, respectively. The acquired management contracts, client relationships and trade name had a weighted average amortization period from the date of acquisition of 5.8 years, 10.0 years and 10.0 years, respectively. In connection with the Crestline Acquisition during the first quarter of 2020, the Company allocated $34.7 million of the purchase price to the fair value of the acquired collateral management contracts. The acquired management contracts had a weighted average amortization period from the date of acquisition of 6.6 years. Amortization expense associated with intangible assets, excluding impairment charges, was $24.5 million, $3.4 million and $9.0 million for the years ended December 31, 2020, 2019 and 2018, respectively, and is presented within general, administrative and other expenses within the Consolidated Statements of Operations. During the first quarter of 2020, the Company removed $4.7 million of intangible assets that were fully amortized. During the year ended December 31, 2019, the Company recorded a non-cash impairment charge of $20.0 million to general, administrative and other expenses within the Condensed Consolidated Statements of Operations related to certain intangible assets recorded in connection with the Company’s acquisition of Energy Investors Funds (“EIF”). The primary indicators of impairment were lower legacy EIF investor commitments into successor funds from the Company’s original projections and the Company’s decision to no longer introduce successor funds under its EIF trade name. As a result, the Company expects a decrease in the future expected cash flows from management fees generated by EIF’s existing client relationships and a decrease in royalties attributed to EIF’s trade name. The Company determined that the carrying value of these intangible assets exceeded the expected undiscounted future cash flows and recorded an impairment charge equal to the difference between its carrying value of each asset and the asset’s estimated fair value, as calculated using a discounted cash flow methodology. Following the recognition of the impairment charge, the Company removed $35.1 million of the client relationships and trade name intangible assets to reflect the adjusted carrying value to be amortized over the remaining useful life. At December 31, 2020, future annual amortization of finite-lived intangible assets for the years 2021 through 2025 and thereafter is estimated to be: Year Amortization 2021 $ 42,424 2022 42,040 2023 38,946 2024 33,144 2025 26,834 Thereafter 38,700 Total $ 222,088 Goodwill The following table summarizes the carrying value of the Company's goodwill assets that are included within other assets in the Consolidated Statements of Financial Condition: Credit Group Private Real Strategic Initiatives Total Balance as of December 31, 2018 $ 32,196 $ 58,600 $ 52,990 $ — $ 143,786 Foreign currency translation — — 69 — 69 Balance as of December 31, 2019 $ 32,196 $ 58,600 $ 53,059 $ — $ 143,855 Acquisitions — — — 224,601 224,601 Foreign currency translation — — 61 2,530 2,591 Balance as of December 31, 2020 $ 32,196 $ 58,600 $ 53,120 $ 227,131 $ 371,047 In connection with the SSG Acquisition during the third quarter of 2020, the Company's assessment resulted in an allocation of the purchase price to goodwill of $224.6 million. There was no impairment of goodwill recorded during the years ended December 31, 2020 and 2019. The impact of foreign currency translation is reflected within other comprehensive income. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Investments in and Advances to Affiliates [Abstract] | |
INVESTMENTS | 4. INVESTMENTS The Company’s investments are comprised of the following: Percentage of total investments As of December 31, As of December 31, 2020 2019 2020 2019 Equity method investments: Equity method private investment partnership interests - principal (1) $ 366,471 $ 390,407 21.8 % 23.5 % Equity method - carried interest (1) 1,145,853 1,134,967 68.1 68.2 Equity method private investment partnership interests and other (held at fair value) (1) 92,196 51,528 5.5 3.1 Equity method private investment partnership interests and other (1) 23,883 16,536 1.4 1.0 Total equity method investments 1,628,403 1,593,438 96.8 95.8 Collateralized loan obligations (2) 31,766 22,265 1.9 1.3 Other fixed income 21,583 46,918 1.3 2.8 Collateralized loan obligations and other fixed income, at fair value 53,349 69,183 3.2 4.1 Common stock, at fair value 1,007 1,043 0.1 0.1 Total investments $ 1,682,759 $ 1,663,664 (1) Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date. (2) As of December 31, 2020, includes $3.4 million of collateralized loan obligations that are attributable to the Crestline Denali Class B membership interests. Equity Method Investments The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant as defined by guidance from the SEC. As of and for the years ended December 31, 2020, 2019 and 2018 , no individual equity method investment held by the Company met the significance criteria. The following tables present summarized financial information for the Company's equity method investments, which are primarily funds managed by the Company, for the years ended December 31, 2020, 2019 and 2018. As of December 31, 2020 and the Year then Ended Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total Statement of Financial Condition Investments $ 12,406,944 $ 8,259,168 $ 5,320,711 $ 66,875 $ 26,053,698 Total assets 13,416,800 8,591,385 5,780,472 70,998 27,859,655 Total liabilities 3,884,603 1,415,383 975,057 11,711 6,286,754 Total equity 9,532,197 7,176,002 4,805,415 59,287 21,572,901 Statement of Operations Revenues $ 940,450 $ 263,335 $ 191,543 $ 2,656 $ 1,397,984 Expenses (221,083) (112,325) (81,071) (5,585) (420,064) Net realized and unrealized gains (losses) from investments (210,881) 1,218,362 11,923 2,324 1,021,728 Income tax benefit (expense) (1,693) 57,935 346 — 56,588 Net income (loss) $ 506,793 $ 1,427,307 $ 122,741 $ (605) $ 2,056,236 As of December 31, 2019 and the Year then Ended Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total Statement of Financial Condition Investments $ 10,937,224 $ 9,700,725 $ 4,939,245 $ — $ 25,577,194 Total assets 11,625,699 10,077,149 5,314,908 — 27,017,756 Total liabilities 3,416,429 534,965 958,020 — 4,909,414 Total equity 8,209,270 9,542,184 4,356,888 — 22,108,342 Statement of Operations Revenues $ 871,168 $ 325,529 $ 205,274 $ — $ 1,401,971 Expenses (211,984) (112,610) (120,467) — (445,061) Net realized and unrealized gains from investments 5,040 1,674,002 382,383 — 2,061,425 Income tax expense (1,537) (27,887) (926) — (30,350) Net income $ 662,687 $ 1,859,034 $ 466,264 $ — $ 2,987,985 For the Year Ended December 31, 2018 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total Statement of Operations Revenues $ 766,009 $ 264,376 $ 144,706 $ — $ 1,175,091 Expenses (189,432) (85,801) (96,353) — (371,586) Net realized and unrealized gains (losses) from investments (67,477) (892,800) 417,974 — (542,303) Income tax expense (2,526) (20,554) (4,075) — (27,155) Net income (loss) $ 506,574 $ (734,779) $ 462,252 $ — $ 234,047 The Company recognized net gains of $22.5 million and $57.4 million related to its equity method investments for the years ended December 31, 2020 and 2019 respectively. The Company recognized a net loss related to its equity method investments of $3.8 million for the year ended December 31, 2018. The net gains and net loss were included within principal investment income, net realized and unrealized gains (losses) on investments, and interest and dividend income within the Consolidated Statements of Operations. With respect to the Company's equity method investments, the material assets are expected to generate either long-term capital appreciation and/or interest income, the material liabilities are debt instruments collateralized by, or related to, the financing of the assets and net income is materially comprised of the changes in fair value of these net assets. Investments of the Consolidated Funds Investments held in the Consolidated Funds are summarized below: Fair Value at Percentage of total investments as of December 31, December 31, December 31, December 31, 2020 2019 2020 2019 Fixed income investments: Bonds $ 397,494 $ 212,376 3.6 % 2.4% Loans 10,012,948 8,062,740 92.1 92.4 Investments in CLO warehouse — 44,435 — 0.5 Total fixed income investments 10,410,442 8,319,551 95.7 95.3 Equity securities 227,031 112,384 2.1 1.3 Partnership interests 239,624 296,012 2.2 3.4 Total investments, at fair value $ 10,877,097 $ 8,727,947 At December 31, 2020 and 2019 , 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 | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 5. FAIR VALUE Financial Instrument Valuations The valuation techniques used by the Company to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The valuation techniques applied to investments held by the Company and by the Consolidated Funds vary depending on the nature of the investment. CLOs and CLO loan obligations: The fair value of CLOs held by the Company are estimated based on either a third-party pricing service or broker quote and are classified as Level III. The Company measures its CLO loan obligations of the Consolidated Funds by first determining whether the fair values of the financial assets or financial liabilities of its consolidated CLOs are more observable. Corporate debt, bonds, bank loans and derivative instruments: The fair value of corporate debt, bonds, bank loans and derivative instruments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs. These investments are generally classified as Level II. The Company obtains prices from independent pricing services that generally utilize broker quotes and may use various other pricing techniques, which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. If management is only able to obtain a single broker quote, or utilizes a pricing model, such securities will generally be classified as Level III. Equity and equity-related securities: Securities traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. Securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. Partnership interests: The Company generally values its investments using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value or estimates based on various valuation models of third-party pricing services, as well as internal models. The Company does not categorize within the fair value hierarchy investments where fair value is measured using the net asset value per share practical expedient. Certain investments of the Company are valued at NAV per share of the fund. In limited circumstances, the Company may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Company will estimate the fair value in good faith and in a manner that it reasonably chooses. As of December 31, 2020 and 2019, NAV per share represents the fair value of the investments for the Company and discounted cash flow analysis is used to determine the fair value for an investment held by the Consolidated Funds. The substantial majority of the Company's private commingled funds are closed-ended, and accordingly, do not permit investors to redeem their interests other than in limited circumstances that are beyond the control of the Company, such as instances in which retaining the interest could cause the investor to violate a law, regulation or rule. The Company also has open-ended and evergreen funds where investors have the right to withdraw their capital, subject to the terms of the respective constituent documents, over periods generally ranging from one month to three years. In addition, the Company has minority investments in vehicles that may only have a single other investor that may allow such investors to terminate the fund pursuant to the terms of the applicable constituent documents of such vehicle. Fair Value of Financial Instruments Held by the Company and Consolidated Funds The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2020: Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 53,349 $ — $ 53,349 Common stock and other equity securities — 1,007 88,412 — 89,419 Partnership interests — — 2,575 1,209 3,784 Total investments, at fair value — 1,007 144,336 1,209 146,552 Derivatives-foreign exchange contracts — 1,440 — — 1,440 Total assets, at fair value $ — $ 2,447 $ 144,336 $ 1,209 $ 147,992 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (1,565) $ — $ — $ (1,565) Total liabilities, at fair value $ — $ (1,565) $ — $ — $ (1,565) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 397,485 $ 9 $ — $ 397,494 Loans — 9,470,651 542,297 — 10,012,948 Investments in CLO warehouse — — — — — Total fixed income investments — 9,868,136 542,306 — 10,410,442 Equity securities 5,749 239 221,043 — 227,031 Partnership interests — — 231,857 7,767 239,624 Total investments, at fair value 5,749 9,868,375 995,206 7,767 10,877,097 Derivatives-asset swaps-other — — 1,104 — 1,104 Total assets, at fair value $ 5,749 $ 9,868,375 $ 996,310 $ 7,767 $ 10,878,201 Liabilities, at fair value Derivatives-asset swaps-other $ — $ — $ (44) $ — $ (44) Loan obligations of CLOs — (9,958,076) — — (9,958,076) Total liabilities, at fair value $ — $ (9,958,076) $ (44) $ — $ (9,958,120) The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2019: Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 69,183 $ — $ 69,183 Common stock and other equity securities — 1,043 14,704 — 15,747 Partnership interests — — 35,192 1,632 36,824 Total investments, at fair value — 1,043 119,079 1,632 121,754 Derivatives-foreign exchange contracts — 4,023 — — 4,023 Total assets, at fair value $ — $ 5,066 $ 119,079 $ 1,632 $ 125,777 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (113) $ — $ — $ (113) Total liabilities, at fair value $ — $ (113) $ — $ — $ (113) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 207,966 $ 4,410 $ — $ 212,376 Loans — 7,728,014 334,726 — 8,062,740 Investments in CLO warehouse — 44,435 — — 44,435 Total fixed income investments — 7,980,415 339,136 — 8,319,551 Equity securities 26,396 — 85,988 — 112,384 Partnership interests — — 296,012 — 296,012 Total investments, at fair value 26,396 7,980,415 721,136 — 8,727,947 Derivatives-foreign exchange contracts — 667 — — 667 Total assets, at fair value $ 26,396 $ 7,981,082 $ 721,136 $ — $ 8,728,614 Liabilities, at fair value Derivatives: Foreign exchange contracts $ — $ (670) $ — $ — $ (670) Asset swaps-other — — (4,106) — (4,106) Total derivative liabilities, at fair value — (670) (4,106) — (4,776) Loan obligations of CLOs — (7,973,748) — — (7,973,748) Total liabilities, at fair value $ — $ (7,974,418) $ (4,106) $ — $ (7,978,524) The following tables set forth a summary of changes in the fair value of the Level III measurements for the year ended December 31, 2020: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 14,704 $ 69,183 $ 35,192 $ 119,079 Transfer in due to changes in consolidation 72,967 6,294 — 79,261 Purchases (1) — 12,970 — 12,970 Sales/settlements (3) — (37,058) (32,430) (69,488) Realized and unrealized appreciation (depreciation), net 741 1,960 (187) 2,514 Balance, end of period $ 88,412 $ 53,349 $ 2,575 $ 144,336 Change in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ 741 $ 4,227 $ 5,511 $ 10,479 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Derivatives, Net Total Balance, beginning of period $ 85,988 $ 339,136 $ 296,012 $ (4,106) $ 717,030 Transfer in (out) due to changes in consolidation (635) 403,751 — — 403,116 Transfer in 32 127,633 — — 127,665 Transfer out — (286,294) — — (286,294) Purchases (1) 186,881 340,475 66,000 — 593,356 Sales/settlements (2) (10,997) (370,966) (141,025) (911) (523,899) Amortized discounts/premiums — 1,049 — 389 1,438 Realized and unrealized appreciation (depreciation), net (40,226) (12,478) 10,870 5,688 (36,146) Balance, end of period $ 221,043 $ 542,306 $ 231,857 $ 1,060 $ 996,266 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (44,877) $ (5,736) $ 10,870 $ 3,595 $ (36,148) (1) Purchases include paid-in-kind interest and securities received in connection with restructuring. (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 year ended December 31, 2019: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 10,397 $ 60,824 $ 35,192 $ 106,413 Transfer in due to changes in consolidation — 10,021 — 10,021 Purchases (1) 3,000 27,795 — 30,795 Sales/settlements (2) — (31,387) — (31,387) Realized and unrealized appreciation, net 1,307 1,930 — 3,237 Balance, end of period $ 14,704 $ 69,183 $ 35,192 $ 119,079 Change in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ 1,307 $ 1,365 $ — $ 2,672 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 150,752 $ 547,958 $ 271,447 $ 680 $ 970,837 Transfer out due to changes in consolidation — (184,919) — — (184,919) Transfer in — 56,914 — — 56,914 Transfer out — (187,925) — — (187,925) Purchases (1) 1,363 432,760 13,000 — 447,123 Sales/settlements (2) (40,857) (333,220) (22,000) (431) (396,508) Amortized discounts/premiums — 361 — (129) 232 Realized and unrealized appreciation (depreciation), net (25,270) 7,207 33,565 (4,226) 11,276 Balance, end of period $ 85,988 $ 339,136 $ 296,012 $ (4,106) $ 717,030 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (24,690) $ 783 $ 33,565 $ (4,400) $ 5,258 (1) Purchases include paid-in-kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service. The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2020: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 14,704 Transaction price (1) N/A N/A 32,905 Discounted Cash Flow Discount Rates 14.0% - 20.0% 40,803 Market Approach Multiple of Book Value 1.6x Partnership interests 2,575 Other N/A N/A Collateralized loan obligations 31,766 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 21,583 Other N/A N/A Total $ 144,336 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 438 Market approach EBITDA multiple (2) 2.9x - 19.5x 13.4x 32,528 Other Net income multiple 30.0x 30.0x Illiquidity discount 25.0% 25.0% 33 Broker quotes and/or 3rd party pricing services N/A N/A N/A 188,044 Transaction price (1) N/A N/A N/A Partnership interest 231,857 Discounted cash flow Discount rate 23.8% 23.8% Fixed income securities 384,419 Broker quotes and/or 3rd party pricing services N/A N/A N/A 6,605 Market approach EBITDA multiple (2) 6.5x - 7.8x 6.9x 122,962 Income approach Yield 2.7% - 48.1% 7.9% 28,320 Other N/A N/A N/A Derivative instruments 1,104 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 996,310 Liabilities Derivatives instruments $ (44) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (44) (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 tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2019: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 14,704 Transaction price (1) N/A N/A Partnership interests 32,661 Transaction price (1) N/A N/A 2,531 Other N/A N/A Collateralized loan obligations 22,265 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 46,918 Other N/A N/A Total $ 119,079 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 431 Market approach EBITDA multiple (2) 8.2x - 21.3x 16.1x 40,745 Other Net income multiple 36.2x 36.2x Illiquidity discount 25.0% 25.0% 44,812 Transaction price (1) N/A N/A N/A Partnership interests 296,012 Discounted cash flow Discount rate 19.6% 19.6% Fixed income securities 271,919 Broker quotes and/or 3rd party pricing services N/A N/A N/A 67,217 Income approach Yield 4.8% - 14.3% 9.7% Total assets $ 721,136 Liabilities Derivatives instruments $ (4,106) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (4,106) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 6. 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 Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management. By using derivatives, the Company and the Consolidated Funds are exposed to counterparty credit risk if counterparties to the derivative contracts do not perform as expected. If a counterparty fails to perform, the Company's counterparty credit risk is equal to the amount reported as a derivative asset in the Consolidated Statements of Financial Condition. The Company minimizes counterparty credit risk through credit approvals, limits, monitoring procedures, executing master netting arrangements and obtaining collateral, where appropriate. To the extent the master netting arrangements and other criteria meet the applicable requirements, which includes determining the legal enforceability of the arrangements, the Company may choose to offset the derivative assets and liabilities in the same currency by specific derivative type, or in the event of default by the counterparty, offset derivative assets and liabilities with the same counterparty. The Company generally presents derivative and other financial instruments on a gross basis within the Consolidated Statements of Financial Condition with certain instruments subject to enforceable master netting arrangements that could allow for the derivative and other financial instruments to be offset. The Consolidated Funds present derivative and other financial instruments on a net basis. This election is determined at management's discretion on a fund by fund basis. The Company has retained the Consolidated Fund's election upon consolidation. Qualitative Disclosures of Derivative Financial Instruments Derivative instruments are marked-to-market daily based upon quotations from pricing services or by the Company and the change in value, if any, is recorded as an unrealized gain (loss) within net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations. Upon settlement of the instrument, the Company records the realized gain (loss) within net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations. Significant derivative instruments utilized by the Company and the Consolidated Funds during the reporting periods presented include the following: Forward Foreign Currency Contracts: The Company and the Consolidated Funds enter into foreign currency forward exchange contracts to hedge against foreign currency exchange rate risk on certain non-U.S. dollar denominated cash flows. When entering into a forward currency contract, the Company and the Consolidated Funds agree to receive and/or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed-upon future date. Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected in the Consolidated Statements of Financial Condition. The Company and the Consolidated Funds bear the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. In addition, the potential inability of the counterparties to meet the terms of their contracts poses a risk to the Company and the Consolidated Funds. Asset Swap: The Consolidated Funds enter into asset swap contracts to hedge against foreign currency exchange rate risk on certain non-Euro denominated loans. Assets swap contracts provide the Consolidated Funds with the opportunity to purchase or sell an underlying asset that is not denominated in Euros at a pre-agreed exchange rate and receives Euro interest payments from the swap counter party in exchange for non-Euro interest payments pegged to the currency of the underlying loan and applicable interest rates. The swap contracts can be optionally cancelled at any time, normally due the disposal or redemption of the underlying asset, however in the absence of sale or redemption the swap contracts maturity matches that of the underlying asset. By entering into asset swap contracts to exchange interest payments and principal on equally valued loans denominated in a different currency than that of the underlying assets the Consolidated Funds can mitigate the risk of exposure to foreign currency fluctuations. Generally, the fair value of asset swap contracts are calculated using a model that utilizes the spread between the fair value of the underlying asset and the exercise value of the contract, as well as any other relevant inputs. Broker quotes may also be used to calculate the fair value of asset swaps, if available. Quantitative Disclosures of Derivative Financial Instruments The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds: As of December 31, 2020 As of December 31, 2019 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 $ 30,040 $ 1,440 $ 39,362 $ 1,565 $ 67,930 $ 4,023 $ 10,846 $ 113 Total derivatives, at fair value (2) $ 30,040 $ 1,440 $ 39,362 $ 1,565 $ 67,930 $ 4,023 $ 10,846 $ 113 As of December 31, 2020 As of December 31, 2019 Assets Liabilities Assets Liabilities Consolidated Funds Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Foreign exchange contracts $ — $ — $ — $ — $ 667 $ 667 $ 667 $ 670 Asset swap - other 7,600 1,104 540 44 8,863 — 1,223 4,106 Total derivatives, at fair value (3) $ 7,600 $ 1,104 $ 540 $ 44 $ 9,530 $ 667 $ 1,890 $ 4,776 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of December 31, 2020 and 2019, the Company had the right to, but elected not to, offset $1.6 million and $0.1 million of its derivative liabilities. (3) As of December 31, 2020 and 2019, the Consolidated Funds offset $0.4 million and $0.1 million of their derivative assets and liabilities, respectively. The following tables present a summary of net realized gains (losses) and unrealized appreciation (depreciation) on the Company's and Consolidated Funds' derivative instruments that are included within net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations: For the Year Ended December 31, The Company 2020 2019 2018 Net realized gains (losses) on derivatives Foreign currency forward contracts 277 2,284 (1,197) Net realized gains (losses) on derivatives $ 277 $ 2,284 $ (1,197) Net change in unrealized appreciation (depreciation) on derivatives Foreign currency forward contracts (4,060) 3,713 2,338 Net change in unrealized appreciation (depreciation) on derivatives $ (4,060) $ 3,713 $ 2,338 For the Year Ended December 31, Consolidated Funds 2020 2019 2018 Net realized gains (losses) on derivatives of Consolidated Funds Foreign currency forward contracts 5 8 96 Asset swap - other (687) (1,197) (795) Net realized losses on derivatives of Consolidated Funds $ (682) $ (1,189) $ (699) Net change in unrealized appreciation (depreciation) on derivatives of Consolidated Funds Foreign currency forward contracts 3 (20) 15 Asset swap - other 5,171 (4,751) (183) Net change in unrealized appreciation (depreciation) on derivatives of Consolidated Funds $ 5,174 $ (4,771) $ (168) . |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | 7. DEBT The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of December 31, 2020 2019 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolver 3/30/2025 N/A $ — —% $ 70,000 3.06% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 247,285 4.21 246,609 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 395,713 3.28 — — Total debt obligations $ 642,998 $ 316,609 (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. On March 30, 2020, the Company amended the Credit Facility to, among other things, extend the maturity date from March 2024 to March 2025 and to reduce borrowing costs on the undrawn amounts. As of December 31, 2020, base rate loans bear interest calculated based on the base rate plus 0.125% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.125%. The unused commitment fee is 0.10% per annum. There is a base rate and LIBOR floor of zero. (2) The 2024 Senior Notes were issued in October 2014 by Ares Finance Co. LLC, an indirect subsidiary of the Company, at 98.27% of the face amount with interest paid semi-annually. The Company may redeem the 2024 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2024 Notes. (3) The 2030 Senior Notes were issued in June 2020 by Ares Finance Co. II LLC, an indirect subsidiary of the Company, at 99.77% of the face amount with interest paid semi-annually. The Company may redeem the 2030 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2030 Notes. As of December 31, 2020, the Company and its subsidiaries were in compliance with all covenants under the debt obligations. The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the 2024 and 2030 Senior Notes (the “Senior Notes”) are recorded as a reduction of the corresponding debt obligation, and debt issuance costs related to the Credit Facility are included in other assets in the Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the remaining term of the related obligation. The following table presents the activity of the Company's debt issuance costs: Credit Facility Senior Notes Unamortized debt issuance costs as of December 31, 2018 $ 4,972 $ 1,334 Debt issuance costs incurred 1,594 — Amortization of debt issuance costs (1,311) (232) Unamortized debt issuance costs as of December 31, 2019 $ 5,255 $ 1,102 Debt issuance costs incurred 1,217 3,624 Amortization of debt issuance costs (1,240) (443) Unamortized debt issuance costs as of December 31, 2020 $ 5,232 $ 4,283 Loan Obligations of the Consolidated CLOs Loan obligations of the Consolidated Funds that are CLOs (“Consolidated CLOs”) represent amounts due to holders of debt securities issued by the Consolidated CLOs. The Company measures the loan obligations of the Consolidated CLOs using the fair value of the financial assets of its Consolidated CLOs. The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of December 31, 2020 2019 Loan Fair Value of Weighted Loan Fair Value of Loan Obligations Weighted Senior secured notes (1) $ 9,796,442 $ 9,665,804 10.1 $ 7,738,337 $ 7,700,038 11.0 Subordinated notes (2) 482,391 292,272 10.2 449,877 273,710 11.0 Total loan obligations of Consolidated CLOs $ 10,278,833 $ 9,958,076 $ 8,188,214 $ 7,973,748 (1) Original borrowings under the senior secured notes totaled $9.8 billion, with various maturity dates ranging from July 2028 to October 2033. The weighted average interest rate as of December 31, 2020 was 1.89%. (2) Original borrowings under the subordinated notes totaled $482.4 million, with various maturity dates ranging from July 2028 to October 2033. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO. Loan obligations of the Consolidated CLOs are collateralized by the assets held by the Consolidated CLOs, consisting of cash and cash equivalents, corporate loans, corporate bonds and other securities. The assets of one Consolidated CLO may not be used to satisfy the liabilities of another Consolidated CLO. Loan obligations of the Consolidated CLOs include floating rate notes, deferrable floating rate notes, revolving lines of credit and subordinated notes. Amounts borrowed under the notes are repaid based on available cash flows subject to priority of payments under each Consolidated CLO’s governing documents. Based on the terms of these facilities, the creditors of the facilities have no recourse to the Company. Credit Facilities of the Consolidated Funds Certain Consolidated Funds maintain credit facilities to fund investments between capital drawdowns. These facilities generally are collateralized by the unfunded capital commitments of the Consolidated Funds’ limited partners, bear an annual commitment fee based on unfunded commitments and contain various affirmative and negative covenants and reporting obligations, including restrictions on additional indebtedness, liens, margin stock, affiliate transactions, dividends and distributions, release of capital commitments and portfolio asset dispositions. The creditors of these facilities have no recourse to the Company and only have recourse to a subsidiary of the Company to the extent the debt is guaranteed by such subsidiary. As of December 31, 2020 and 2019, 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 December 31, 2020 2019 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate Credit Facilities: 3/5/2021 $ 71,500 $ 71,500 1.59% $ 71,500 3.14% 1/1/2023 18,000 17,909 1.75 17,550 3.44 10/14/2021 75,000 32,500 2.75 17,000 4.75 Revolving Term Loan 2/9/2022 (2) — — — 1,194 7.70 Total borrowings of Consolidated Funds $ 121,909 $ 107,244 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. (2) On July 15, 2020, the revolving term loan was terminated at the Consolidated Fund's discretion. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
OTHER ASSETS | OTHER ASSETS The components of other assets were as follows: As of December 31, 2020 2019 Other assets of the Company: Accounts and interest receivable $ 45,494 $ 47,368 Fixed assets, net 60,874 62,883 Deferred tax assets, net 70,026 46,364 Goodwill 371,047 143,855 Intangible assets, net 222,088 7,975 Other assets 42,890 33,817 Total other assets of the Company $ 812,419 $ 342,262 Other assets of Consolidated Funds: Dividends and interest receivable $ 30,413 $ 26,030 Income tax and other receivables 5,089 4,051 Total other assets of Consolidated Funds $ 35,502 $ 30,081 Fixed Assets, Net The components of fixed assets were as follows: As of December 31, 2020 2019 Furniture $ 10,402 $ 9,484 Office and computer equipment 17,666 19,963 Internal-use software 47,456 36,966 Leasehold improvements 57,505 56,619 Fixed assets, at cost 133,029 123,032 Less: accumulated depreciation (72,155) (60,149) Fixed assets, net $ 60,874 $ 62,883 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES Indemnification Arrangements Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the Consolidated Statements of Financial Condition. As of December 31, 2020, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. Commitments As of December 31, 2020 and 2019, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $784.2 million and $387.4 million, respectively. Guarantees The Company has entered into agreements with financial institutions to guarantee credit facilities held by certain funds. In the ordinary course of business, the guarantee of credit facilities held by funds may indicate control and result in consolidation of the fund. The total amount guaranteed was not material as of December 31, 2020 and 2019. Performance Income Performance income is affected by changes in the fair values of the underlying investments in the funds that we advise. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, public equity market volatility, industry trading multiples and interest rates. Generally, if at the termination of a fund (and increasingly at interim points in the life of a fund), the fund has not achieved investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company will be obligated to repay carried interest that was received by the Company in excess of the amounts to which the Company is entitled. This contingent obligation is normally reduced by income taxes paid by the Company related to its carried interest. Senior professionals of the Company who have received carried interest distributions are responsible for funding their proportionate share of any contingent repayment obligations. However, the governing agreements of certain of the Company's funds provide that if a current or former professional does not fund his or her respective share for such fund, then the Company may have to fund additional amounts beyond what was received in carried interest, although the Company will generally retain the right to pursue any remedies under such governing agreements against those carried interest recipients who fail to fund their obligations. Additionally, at the end of the life of the funds there could be a payment due to a fund by the Company if the Company has recognized more performance income than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund. At December 31, 2020 and 2019, if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $326.4 million and $233.4 million, respectively, of which approximately $252.4 million and $175.1 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 December 31, 2020 and 2019, if the funds were liquidated at their fair values, there would be no contingent repayment obligation or liability. Litigation From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows. Leases The Company leases office space and certain office equipment. The Company's leases have remaining lease terms of one As of December 31, Classification 2020 2019 Operating lease assets Right-of-use operating lease assets $ 154,742 $ 143,406 Finance lease assets Other assets (1) 1,386 1,787 Total lease assets $ 156,128 $ 145,193 Operating lease liabilities Operating lease liabilities $ 180,236 $ 168,817 Finance lease obligations Accounts payable, accrued expenses and other liabilities 1,273 1,651 Total lease liabilities $ 181,509 $ 170,468 (1) Finance lease assets are recorded net of accumulated amortization of $1.0 million and $0.6 million as of December 31, 2020 and 2019 respectively. Maturity of lease liabilities Operating Leases Finance Leases 2021 $ 34,304 $ 519 2022 36,079 486 2023 32,248 158 2024 29,477 156 2025 28,969 7 After 2025 38,713 — Total future payments 199,790 1,326 Less: interest 19,554 53 Total lease liabilities $ 180,236 $ 1,273 Year ended December 31, Classification 2020 2019 2018 Operating lease expense General, administrative and other expenses $ 31,713 $ 28,814 $ 30,497 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 469 304 260 Interest on finance lease liabilities Interest expense 43 39 39 Total lease expense $ 32,225 $ 29,157 $ 30,796 Year ended December 31, Other information 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 32,121 $ 31,509 Operating cash flows for finance leases 53 58 Financing cash flows for finance leases 460 311 Leased assets obtained in exchange for new finance lease liabilities — 778 Leased assets obtained in exchange for new operating lease liabilities 36,935 49,833 As of December 31, Lease term and discount rate 2020 2019 Weighted-average remaining lease terms (in years): Operating leases 6.0 6.5 Finance leases 2.6 3.3 Weighted-average discount rate: Operating leases 3.59 % 4.00 % Finance leases 3.26 % 3.39 % |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS Substantially all of the Company’s revenue is earned from its affiliates, including management fees, carried interest allocation, incentive fees, principal investment income and administrative expense reimbursements. The related accounts receivable are included within due from affiliates within the Consolidated Statements of Financial Condition, except that accrued carried interest allocations, which is predominantly due from affiliated funds, is presented separately within investments in the Consolidated Statements of Financial Condition. The Company has investment management agreements with the Ares Funds that it manages. In accordance with these agreements, these Ares Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Ares Funds. The Company also has entered into agreements to be reimbursed for its expenses incurred for providing administrative services to certain 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 generally invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These co-investment vehicles generally do not require these individuals to pay management or performance income. Performance income from the funds can be distributed to professionals or their related entities on a current basis, subject, in the case of carried interest programs, to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several, and not joint, and are limited to distributions received by the relevant recipient. The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of December 31, 2020 2019 Due from affiliates: Management fees receivable from non-consolidated funds $ 308,581 $ 183,579 Incentive fee receivable from non-consolidated funds 21,495 19,006 Payments made on behalf of and amounts due from non-consolidated funds and employees 75,811 64,545 Due from affiliates—Company $ 405,887 $ 267,130 Amounts due from portfolio companies and non-consolidated funds $ 17,172 $ 6,192 Due from affiliates—Consolidated Funds $ 17,172 $ 6,192 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 4,808 $ 5,432 Tax receivable agreement liability 62,505 26,542 Undistributed carried interest and incentive fees 27,322 28,086 Payments made by non-consolidated funds on behalf of and payable by the Company 5,551 11,385 Due to affiliates—Company $ 100,186 $ 71,445 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. ARCC Investment Advisory and Management Agreement In connection with ARCC's board approval of the modification of the asset coverage requirement applicable to senior securities from 200% to 150% effective on June 21, 2019, the investment advisory and management agreement was amended effective June 6, 2019 to reduce the annual base management fee paid to the Company from 1.5% to 1.0% on all assets financed using leverage over 1.0 times debt to equity. ARCC Fee Waiver In conjunction with ARCC's acquisition of American Capital, Ltd., the Company agreed to waive up to $10.0 million per quarter of ARCC's Part I Fees for ten calendar quarters, which began in the second quarter of 2017 and ended during the third quarter of 2019. ARCC Part I Fees are reported net of the fee waiver. For the years ended December 31, 2019 and 2018, the Company waived $30.0 million and $40.0 million, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES Effective March 1, 2018, the Company elected to be treated as a corporation for U.S. federal and state income tax purposes. Upon the effectiveness of this election, all earnings allocated to the Company are subject to U.S. federal, state and local corporate income taxes and certain of its foreign subsidiaries are subject to foreign income taxes (for which a foreign tax credit can generally offset U.S. corporate taxes imposed on the same income, subject to applicable limitations). Prior to March 1, 2018, a substantial portion of the Company's share of carried interest and investment income flowed through to investors without being subject to corporate level income taxes. Consequently, the Company did not reflect a provision for income taxes on such income except those for foreign, state and local income taxes incurred at the entity level. Beginning March 1, 2018, the Company's share of unrealized gains and income items became subject to U.S. corporate tax. The Company’s effective income tax rate is dependent on many factors, including the estimated nature and amounts of income and expenses allocated to the non-controlling interests without being subject to federal, state and local income taxes at the corporate level. Additionally, the Company’s effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment entities that are consolidated in the Company's consolidated financial statements. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. With limited exceptions, the Company is no longer subject to income tax audits by taxing authorities for any years prior to 2016. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s consolidated financial statements. The provision for income taxes attributable to the Company and the Consolidated Funds, consisted of the following for the years ended December 31, 2020, 2019 and 2018. For the Year Ended December 31, Provision for Income Taxes 2020 2019 2018 The Company Current: U.S. federal income tax expense $ 23,845 $ 32,012 $ 16,859 State and local income tax expense 6,714 6,940 4,306 Foreign income tax expense 9,141 6,103 6,607 39,700 45,055 27,772 Deferred: U.S. federal income tax expense 12,451 8,820 10,572 State and local income tax expense (benefit) 1,952 1,001 (4,789) Foreign income tax expense (benefit) 772 (1,970) (1,484) 15,175 7,851 4,299 Total: U.S. federal income tax expense 36,296 40,832 27,431 State and local income tax expense (benefit) 8,666 7,941 (483) Foreign income tax expense 9,913 4,133 5,123 Income tax expense 54,875 52,906 32,071 Consolidated Funds Current: Foreign income tax expense (benefit) 118 (530) 131 Income tax expense (benefit) 118 (530) 131 Total Provision for Income Taxes Total current income tax expense 39,818 44,525 27,903 Total deferred income tax expense 15,175 7,851 4,299 Income tax expense $ 54,993 $ 52,376 $ 32,202 The effective income tax rate differed from the federal statutory rate for the following reasons for the years ended December 31, 2020, 2019 and 2018. For the Year Ended December 31, 2020 2019 2018 Income tax expense at federal statutory rate 21.0 % 21.0 % 21.0 % Income passed through to non-controlling interests (8.2) (10.4) (9.9) State and local taxes, net of federal benefit 1.8 1.9 2.1 Foreign taxes 0.3 0.3 0.3 Permanent items (0.5) (0.4) (0.8) Tax Cuts and Jobs Act — — (0.4) Corporate conversion expense — — 5.4 Other, net (0.2) (0.1) (0.3) Valuation allowance 0.3 — 0.1 Total effective rate 14.5 % 12.3 % 17.5 % Deferred Taxes The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows as of December 31, 2020 and 2019. Deferred tax assets, net are included within other assets on the Consolidated Statements of Financial Condition. As of December 31, Deferred Tax Assets and Liabilities of the Company 2020 2019 Deferred tax assets Amortizable tax basis for AOG unit exchanges $ 67,571 $ 25,994 Investment in partnerships — 12,841 Net operating losses 1,292 367 Other, net 6,563 7,216 Total gross deferred tax assets 75,426 46,418 Valuation allowance (1,010) (54) Total deferred tax assets, net $ 74,416 $ 46,364 Deferred tax liabilities Investment in partnerships (4,390) — Total deferred tax liabilities (4,390) — Net deferred tax assets $ 70,026 $ 46,364 As of December 31, Deferred Tax Assets and Liabilities of the Consolidated Funds 2020 2019 Deferred tax assets Net operating loss $ — $ 5,391 Other, net — 2,173 Total gross deferred tax assets — 7,564 Valuation allowance — (7,564) Total deferred tax assets, net $ — $ — In assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred taxes are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. Valuation allowances are provided to reduce the amounts of deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. The Company’s income tax provision includes corporate income taxes and other entity level income taxes, as well as income taxes incurred by certain affiliated funds that are consolidated in these financial statements. In connection with its election to be taxed as a corporation effective March 1, 2018, the Company recorded a significant one-time deferred tax liability arising from the embedded net unrealized gains of both carried interest and the investment portfolio that were not previously subject to corporate taxes. Cash taxes will be paid only on gains to the extent realized. The valuation allowance for deferred tax assets decreased by $6.6 million in 2020 due to the deconsolidation of a fund. The deferred tax assets related to operating losses in foreign jurisdictions do not meet the more likely than not threshold and have a valuation allowance recorded for the net balance. The valuation allowance for deferred tax assets decreased by $0.1 million in 2019 due to the utilization of certain operating losses in foreign jurisdictions. The deferred tax assets related to these operating losses do not meet the more likely than not threshold and continue to have a valuation allowance recorded for the net balance. As of, and for the three years ended December 31, 2020, 2019 and 2018, the Company had no significant uncertain tax positions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 12. EARNINGS PER SHARE Basic earnings per share of Class A common stock is computed by using the two-class method. Diluted earnings per share of Class A common stock is computed using the more dilutive method of either the two-class method or the treasury stock method. The treasury stock method is used to determine potentially dilutive securities resulting from options and unvested restricted units granted under the Equity Incentive Plan. The two-class method is an earnings allocation method under which earnings per share is calculated for shares of Class A common stock and participating securities considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Because the holders of unvested restricted units have the right to participate in dividends when declared, the unvested restricted units are considered participating securities to the extent they are expected to vest. For the years ended December 31, 2020 and 2019, the treasury stock method was the more dilutive method. For the year ended December 31, 2018, the two-class method was the more dilutive method. No participating securities had rights to undistributed earnings during any period presented. The computation of diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 excludes the following restricted units and AOG Units, as their effect would have been anti-dilutive: Year ended December 31, 2020 2019 2018 Restricted units 16,599 82 — AOG Units 115,126,565 116,802,160 — The following table presents the computation of basic and diluted earnings per common share: Year ended December 31, 2020 2019 2018 Basic earnings per share of Class A common stock: Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ 127,184 $ 35,320 Distributions on unvested restricted units (10,454) (7,670) (6,948) Net income available to Class A common stockholders $ 119,988 $ 119,514 $ 28,372 Basic weighted-average shares of Class A common stock 135,065,436 107,914,953 96,023,147 Basic earnings per share of Class A common stock $ 0.89 $ 1.11 $ 0.30 Diluted earnings per share of Class A common stock: Net income available to Class A common stockholders $ 130,442 $ 127,184 $ 35,320 Distributions on unvested restricted units — — (6,948) Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ 127,184 $ 28,372 Effect of dilutive shares: Restricted units 9,207,639 7,838,200 — Options 5,235,423 4,124,276 — Diluted weighted-average shares of Class A common stock 149,508,498 119,877,429 96,023,147 Diluted earnings per share of Class A common stock $ 0.87 $ 1.06 $ 0.30 Dividend declared and paid per Class A common stock $ 1.60 $ 1.28 $ 1.33 |
EQUITY COMPENSATION
EQUITY COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
EQUITY COMPENSATION | 13. EQUITY COMPENSATION Equity Incentive Plan Equity-based compensation is granted under the Equity Incentive Plan. The total number of shares available to be issued under the Equity Incentive Plan resets based on a formula defined in the Equity Incentive Plan and may increase on January 1 of each year. On January 1, 2020, the total number of shares available for issuance under the Equity Incentive Plan reset to 37,528,029 shares, and as of December 31, 2020, 33,861,117 shares remain available for issuance. Generally, unvested 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, recorded by the Company is included in the following table: Year ended December 31, 2020 2019 2018 Restricted units $ 115,680 $ 88,979 $ 74,441 Restricted units with a market condition 7,263 3,613 1,524 Options 43 4,362 12,449 Phantom shares — 737 1,310 Equity-based compensation expense $ 122,986 $ 97,691 $ 89,724 Restricted Units During July 2018, the Company granted 2,000,000 restricted units to an executive of which 1,333,334 restricted units are subject to vesting based on the future price of shares of the Company's Class A common stock (described in greater detail below under the heading “Restricted Unit Awards with a Market Condition”) and 666,666 restricted units that vest subject to the executive's continued service on terms similar to those described below. Each restricted unit represents an unfunded, unsecured right of the holder to receive a share of the Company's Class A common stock on a specific date. The restricted units generally vest and are settled in shares of Class A common stock either (i) at a rate of one-third per year, beginning on the third anniversary of the grant date, (ii) in their entirety on the fifth anniversary of the grant date, (iii) at a rate of one quarter per year, beginning on the second anniversary of the grant date or the holder's employment commencement date, or (iv) at a rate of one third per year, beginning on the first anniversary of the grant date in each case generally subject to the holder’s continued employment as of the applicable vesting date (subject to accelerated vesting upon certain qualifying terminations of employment or retirement eligibility provisions). Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award. Restricted units are delivered net of the holder's payroll related taxes upon vesting. For the year ended December 31, 2020, 5.5 million restricted units vested and 3.1 million shares of Class A common stock were delivered to the holders. For the year ended December 31, 2019, 3.7 million restricted units vested and 2.1 million shares of Class A common stock were delivered to the holders. The holders of restricted units, other than the market condition awards described below, generally have the right to receive as current compensation an amount in cash equal to (i) the amount of any dividend paid with respect to a share of Class A common stock multiplied by (ii) the number of restricted units held at the time such dividends are declared (“Dividend Equivalent”). During the year ended December 31, 2020, the Company declared dividends of $0.40 per share to Class A common stockholders at the close of business on March 17, 2020, June 16, 2020 and September 16, 2020 and December 17, 2020, respectively. For the year ended December 31, 2020, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $26.0 million, respectively, which are presented as dividends within the Consolidated Statements of Changes in Equity. When units are forfeited, the cumulative amount of Dividend Equivalents previously paid is reclassified to compensation and benefits expense in the Consolidated Statements of Operations. The following table presents unvested restricted units' activity: Restricted Units Weighted Average Balance - January 1, 2020 16,810,473 $ 20.07 Granted 3,984,695 36.91 Vested (4,201,333) 19.62 Forfeited (294,171) 24.85 Balance - December 31, 2020 16,299,664 $ 24.30 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $228.6 million as of December 31, 2020 and is expected to be recognized over the remaining weighted average period of 2.8 years. Restricted Unit Awards with a Market Condition In July 2018, the Company granted certain restricted units with a vesting condition based upon the volume-weighted, average closing price of shares of the Company’s Class A common stock meeting or exceeding a stated price for 30 consecutive calendar days on or prior to January 1, 2028, referred to as a market condition. 666,667 restricted units with a market condition of $35.00 per share (“Tranche I”) and 666,667 restricted units with a market condition of $45.00 per share (“Tranche II”) were granted. Vesting is also generally subject to continued employment at the time such market condition is achieved. Under the terms of the awards, if the price target is not achieved by the close of business on January 1, 2028, the unvested market condition awards will be automatically canceled and forfeited. Restricted units subject to a market condition are not eligible to receive a Dividend Equivalent. The grant date fair values for Tranche I and Tranche II awards were $10.92 and $7.68 per share, respectively, based on a probability distributed Monte-Carlo simulation. Due to the existence of the market condition, the vesting period for the awards is not explicit, and as such, compensation expense is recognized on a straight-line basis over the median vesting period derived from the positive iterations of the Monte Carlo simulations where the market condition was achieved. The median vesting period is 3.0 years and 4.3 years for Tranche I and Tranche II, respectively. Below is a summary of the significant assumptions used to estimate the grant date fair value of the market condition awards. There were no new market condition awards granted during the year ended December 31, 2020. 2018 Closing price of the Company's common shares as of valuation date $ 20.95 Risk-free interest rate 2.95 % Volatility 30.0 % Dividend yield 5.0 % Cost of equity 10.0 % The following table presents the unvested market condition awards' activity: Market Condition Awards Units Weighted Average Balance - January 1, 2020 1,333,334 $ 9.30 Granted — — Vested (1,333,334) 9.30 Forfeited — — Balance - December 31, 2020 — $ — For the year ended December 31, 2020, the market-priced vesting condition was met for both Tranche I and Tranche II of the market condition awards and compensation expense of $6.1 million was accelerated. Options Each option entitles the holders to purchase from the Company, upon exercise thereof, one share of Class A common stock at the stated exercise price. The term of the options is generally ten years, beginning on the grant date. As of December 31, 2020, all of the options issued by the Company have vested. Compensation expense associated with these options was being recognized on a straight-line basis over the requisite service period of the respective award. Net cash proceeds from exercises of stock options were $92.9 million for the year ended December 31, 2020. The Company realized tax benefits of approximately $13.1 million from those exercises. A summary of options activity during the year ended December 31, 2020 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - January 1, 2020 13,426,870 $ 18.99 4.3 $ 224,260 Granted — — — — Exercised (5,114,667) 18.99 — — Expired — — — — Forfeited — — — — Balance - December 31, 2020 8,312,203 $ 18.99 3.4 $ 233,251 Exercisable at December 31, 2020 8,312,203 $ 18.99 3.4 $ 233,251 Aggregate intrinsic value represents the value of the Company’s closing share price of Class A common stock on the last trading day of the period in excess of the weighted-average exercise price multiplied by the number of options exercisable or expected to vest. The fair value of each option granted was measured on the date of the grant using the Black Scholes option pricing model. The fair value of an award is affected by the Company’s share price of Class A common stock on the date of grant as well as other assumptions including the estimated volatility of the Company’s share price of Class A common stock over the term of the awards and the estimated period of time that management expects employees to hold their unit options. The estimated period of time that management expects employees to hold their options was estimated as the midpoint between the vesting date and maturity date. No new options have been granted since 2014. |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
EQUITY AND REDEEMABLE INTEREST | 14. EQUITY AND REDEEMABLE INTEREST Common Stock The Company's common stock consists of Class A, Class B, Class C and non-voting common stock, each $0.01 par value per share. The Class B common stock and Class C common stock are non-economic and holders are not entitled to dividends from the Company or to receive any assets of the Company in the event of any dissolution, liquidation or winding up of the Company. Ares Management GP LLC is the sole holder of the Class B common stock and Ares Voting LLC (“Ares Voting”) is the sole holder of the Class C common stock. Except as otherwise expressly provided in the Company’s Certificate of Incorporation (the “Certificate of Incorporation”), the Company’s common stockholders are entitled to vote on all matters on which stockholders of a corporation are generally entitled to vote under the Delaware General Corporation Law (the “DGCL”), including the election of the Company’s board of directors. Holders of shares of the Company’s Class A common stock are entitled to one vote per share of the Company’s Class A common stock. On any date on which the Ares Ownership Condition (as defined in the Certificate of Incorporation) is satisfied, holders of shares of the Company’s Class B common stock are, in the aggregate, entitled to a number of votes equal to (x) four times the aggregate number of votes attributable to the Company’s Class A common stock minus (y) the aggregate number of votes attributable to the Company’s Class C common stock. On any date on which the Ares Ownership Condition is not satisfied, holders of shares of the Company’s Class B common stock are not entitled to vote on any matter submitted to a vote of the Company’s stockholders. The holder of shares of the Company’s Class C common stock is generally entitled to a number of votes equal to the number of Ares Operating Group Units (as defined in the Certificate of Incorporation) held of record by each Ares Operating Group Limited Partner (as defined in the Certificate of Incorporation) other than the Company and its subsidiaries. In February 2019, the Company's board of directors authorized the repurchase of up to $150 million of shares of Class A common stock. Under this stock repurchase program, shares may be repurchased from time to time in open market purchases, privately negotiated transactions or otherwise, including in reliance on Rule 10b5-1 of the Securities Act. In February 2020, the board of directors approved the renewal of the program and reset the repurchase amount back to $150 million. The renewed program is scheduled to expire in March 2021. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the year ended December 31, 2020, the Company did not repurchase any shares as part of the stock repurchase program. During the year ended December 31, 2019, the Company repurchased 0.4 million shares as part of the stock repurchase program at a total cost of $10.4 million. On March 31, 2020, the Company issued and sold 12,130,540 shares of new Class A common stock in a private offering (the “Offering”) to Sumitomo Mitsui Banking Corporation (“SMBC”) in connection with a share purchase agreement. The Company received $383.8 million in gross proceeds and incurred approximately $0.7 million of expenses in connection with the Offering. The expenses have been recorded as a reduction in the proceeds received and are presented on a net basis together with contributions in additional paid-in-capital within the Consolidated Statements of Changes in Equity. In connection with the Offering, the Company approved the amendment to its certificate of incorporation to, among other things, establish a new series of non-voting common stock, par value $0.01 per share, that has the same economic rights as the Class A common stock. SMBC may exchange all or a portion of the Class A common stock for an equivalent amount of the newly established non-voting common stock pursuant to certain terms set forth in an investor rights agreement entered into between the Company and SMBC. As of December 31, 2020, the Company had authorized 500,000,000 shares of the non-voting common stock with no shares issued. To satisfy a condition related to the Offering, the Company also issued 115,199,620 shares of its Class C common stock to Ares Voting on March 30, 2020. The issuance of the Class C units did not change the aggregate voting power of Ares Voting, and Ares Voting will continue to be entitled to the number of votes equal to the number of AOG Units held by each Ares Operating Group limited partner, other than the Company and its subsidiaries, that does not own a share of Class C common stock. The following table presents the changes in each class of common stock Class A Common Stock Class B Common Stock Class C Common Stock Total Balance - January 1, 2020 115,242,028 1,000 1 115,243,029 Issuance of stock (1) 19,854,764 — 115,199,620 135,054,384 Exchanges of AOG Units (2) 4,062,425 — (2,686,003) 1,376,422 Redemptions of AOG Units — — (66,000) (66,000) Stock option exercises, net of shares withheld for tax 4,948,742 — — 4,948,742 Vesting of restricted stock awards, net of shares withheld for tax 3,074,603 — — 3,074,603 Balance Outstanding - December 31, 2020 147,182,562 1,000 112,447,618 259,631,180 (1) On July 1, 2020, the Company issued 7,724,224 shares of new Class A common stock in connection with the SSG Acquisition. (2) Effective March 30, 2020, Class C common stock activity represents redemptions to correspond with exchanges of AOG Units. The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities, as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities: Daily Average Ownership As of December 31, 2020 As of December 31, 2019 Year ended December 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2020 2019 2018 Ares Management Corporation 147,182,562 56.69 % 115,242,028 49.70 % 53.98 % 48.02 % 44.19 % Ares Owners Holding L.P. 112,447,618 43.31 116,641,833 50.30 46.02 51.98 53.99 Affiliate of Alleghany Corporation — — — — — — 1.82 Total 259,630,180 100.00 % 231,883,861 100.00 % The Company’s ownership percentage of the AOG Units will continue to change upon: (i) the vesting of restricted units and exercise of options that were granted under the Equity Incentive Plan; (ii) the exchange of AOG Units for shares of Class A common stock; (iii) the cancellation of AOG Units in connection with certain individuals’ forfeiture of AOG Units upon termination of employment and (iv) the issuance of new AOG Units, including in connection with acquisitions, among other reasons. Holders of the AOG Units, subject to any applicable transfer restrictions, may up to four times each year (subject to the terms of the exchange agreement) exchange their AOG Units for shares of Class A common stock on a one-for-one basis. Equity is reallocated among partners upon a change in ownership to ensure each partners’ capital account properly reflects their respective claim on the residual value of the Company. This change is reflected as either a reallocation of interest or as dilution in the Consolidated Statements of Changes in Equity. Preferred Stock As of December 31, 2020 and 2019, the Company had 12,400,000 shares of the Series A Preferred Stock outstanding. When, as and if declared by the Company’s board of directors, dividends on the Series A Preferred Stock are payable quarterly at a rate per annum equal to 7.00%. The Series A Preferred Stock 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 per share of $25.00. In connection with the Series A Preferred Stock issuance, the Ares Operating Group issued mirror preferred units (“GP Mirror Units”) paying the same 7.00% rate per annum to wholly owned subsidiaries of the Company including AHI. Although income allocated in respect of distributions on the GP Mirror Units may be subject to tax, cash dividends to our Series A Preferred stockholders will not be reduced on account of any income taxes owed by us. As a result, the amounts of dividend ultimately paid by us to our Class A common stockholders may be reduced by any corporate taxes imposed on us or AHI. Except as provided in the Certificate of Incorporation and the Company’s Bylaws and under the DGCL and the rules of the NYSE, shares of the Series A Preferred Stock are generally non-voting. Redeemable Interest The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities that was established in connection with the SSG Acquisition: Total Opening balance at July 1, 2020 $ 99,804 Net loss (976) Currency translation adjustment, net of tax 1,538 Balance at December 31, 2020 $ 100,366 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 15. SEGMENT REPORTING The Company operates through its distinct operating segments that are summarized below: Credit Group: The Credit Group manages credit strategies across the liquid and illiquid spectrum from syndicated loans, high yield bonds, multi-asset credit, alternative credit investments to direct lending. Private Equity Group: The Private Equity Group manages investment strategies broadly categorized as corporate private equity, infrastructure and power and special opportunities. Real Estate Group: The Real Estate Group manages comprehensive real estate equity and debt strategies. Strategic Initiatives: Strategic Initiatives represents an all-other category that includes operating segments and strategic investments that are seeking to broaden the Company's distribution channels or expand its access to global markets and includes the results of Ares SSG subsequent to the completion of the SSG Acquisition on July 1, 2020. The OMG consists of shared resource groups to support the Company’s operating segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, strategy and relationship management, 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 reportable segments but the Company does consider the cost structure of the OMG when evaluating its financial performance. Segment Profit Measures: These measures supplement and should be considered in addition to, and not in lieu of, the Consolidated Statements of Operations prepared in accordance with GAAP. Fee related earnings (“FRE”) is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it 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. Realized income (“RI”) is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and expenses, which may or may not be eventually realized at the levels presented and whose realizations depend more on future outcomes than current business operations. RI differs from income before taxes by excluding (a) operating results of the Consolidated Funds, (b) depreciation and amortization expense, (c) the effects of changes arising from corporate actions, (d) unrealized gains and losses related to performance income and investment performance and (e) certain other items that the Company believes are not indicative of operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital transactions, underwriting costs and expenses incurred in connection with corporate reorganization. Management believes RI is a more appropriate metric to evaluate the Company's current business operations. Management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non-consolidated funds. Total assets by segments is not disclosed because such information is not used by the Company’s chief operating decision maker in evaluating the segments. Many of the Ares Funds managed by the Company have mandates that allow for investing across different geographic regions, including North America, Europe and Asia. The primary geographic region in which the Company invests in is North America and the majority of its revenues are generated in North America. The following tables present the financial results for the Company’s operating segments, as well as the OMG: Year ended December 31, 2020 Credit Group Private Equity Group Real Strategic Initiatives Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $184,141) $ 841,138 $ 221,160 $ 97,680 $ 26,587 $ 1,186,565 $ — $ 1,186,565 Other fees 18,644 178 974 152 19,948 — 19,948 Compensation and benefits (304,412) (90,129) (53,004) (6,442) (453,987) (155,979) (609,966) General, administrative and other expenses (53,997) (22,145) (12,251) (2,926) (91,319) (80,778) (172,097) Fee related earnings 501,373 109,064 33,399 17,371 661,207 (236,757) 424,450 Performance income—realized 92,308 392,635 62,273 — 547,216 — 547,216 Performance related compensation—realized (60,281) (315,905) (39,482) — (415,668) — (415,668) Realized net performance income 32,027 76,730 22,791 — 131,548 — 131,548 Investment income (loss)—realized (2,309) 29,100 3,146 13 29,950 (5,698) 24,252 Interest and other investment income (expense) —realized 16,314 5,987 4,056 996 27,353 (739) 26,614 Interest expense (8,722) (8,186) (5,200) (1,465) (23,573) (1,335) (24,908) Realized net investment income (loss) 5,283 26,901 2,002 (456) 33,730 (7,772) 25,958 Realized income $ 538,683 $ 212,695 $ 58,192 $ 16,915 $ 826,485 $ (244,529) $ 581,956 Year ended December 31, 2019 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $164,396) $ 713,853 $ 211,614 $ 87,063 $ — $ 1,012,530 $ — $ 1,012,530 Other fees 17,124 162 792 — 18,078 — 18,078 Compensation and benefits (261,662) (78,259) (49,124) — (389,045) (139,162) (528,207) General, administrative and other expenses (55,103) (19,098) (13,249) — (87,450) (91,292) (178,742) Fee related earnings 414,212 114,419 25,482 — 554,113 (230,454) 323,659 Performance income—realized 104,442 264,439 33,637 — 402,518 — 402,518 Performance related compensation—realized (61,641) (211,550) (17,191) — (290,382) — (290,382) Realized net performance income 42,801 52,889 16,446 — 112,136 — 112,136 Investment income—realized 2,457 47,696 8,020 — 58,173 — 58,173 Interest and other investment income (expense) —realized 18,670 5,046 5,633 — 29,349 (160) 29,189 Interest expense (6,497) (7,486) (3,824) — (17,807) (1,864) (19,671) Realized net investment income (loss) 14,630 45,256 9,829 — 69,715 (2,024) 67,691 Realized income $ 471,643 $ 212,564 $ 51,757 $ — $ 735,964 $ (232,478) $ 503,486 Year ended December 31, 2018 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total OMG Total Management fees (includes ARCC Part I Fees of $128,805) $ 564,899 $ 198,182 $ 73,663 $ — $ 836,744 $ — $ 836,744 Other fees 23,247 1,008 33 — 24,288 — 24,288 Compensation and benefits (218,148) (74,672) (38,623) — (331,443) (124,812) (456,255) General, administrative and other expenses (44,845) (18,482) (11,123) — (74,450) (75,015) (149,465) Fee related earnings 325,153 106,036 23,950 — 455,139 (199,827) 255,312 Performance income—realized 121,270 139,820 96,117 — 357,207 — 357,207 Performance related compensation—realized (75,541) (111,764) (64,292) — (251,597) — (251,597) Realized net performance income 45,729 28,056 31,825 — 105,610 — 105,610 Investment income—realized 2,492 17,816 11,409 — 31,717 4,790 36,507 Interest and other investment income —realized 10,350 4,624 2,257 — 17,231 2,184 19,415 Interest expense (11,386) (6,000) (1,836) — (19,222) (2,226) (21,448) Realized net investment income 1,456 16,440 11,830 — 29,726 4,748 34,474 Realized income $ 372,338 $ 150,532 $ 67,605 $ — $ 590,475 $ (195,079) $ 395,396 The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: Year ended December 31, 2020 2019 2018 Segment revenues Management fees (includes ARCC Part I Fees of $184,141, $164,396 and $128,805 for the years ended December 31, 2020, 2019 and 2018, respectively) $ 1,186,565 $ 1,012,530 $ 836,744 Other fees 19,948 18,078 24,288 Performance income—realized 547,216 402,518 357,207 Total segment revenues $ 1,753,729 $ 1,433,126 $ 1,218,239 Segment expenses Compensation and benefits $ 453,987 $ 389,045 $ 331,443 General, administrative and other expenses 91,319 87,450 74,450 Performance related compensation—realized 415,668 290,382 251,597 Total segment expenses $ 960,974 $ 766,877 $ 657,490 Segment realized net investment income Investment income—realized $ 29,950 $ 58,173 $ 31,717 Interest and other investment income —realized 27,353 29,349 17,231 Interest expense (23,573) (17,807) (19,222) Total segment realized net investment income $ 33,730 $ 69,715 $ 29,726 The following table reconciles the Company's consolidated revenues to segment revenue: Year ended December 31, 2020 2019 2018 Total consolidated revenue $ 1,764,046 $ 1,765,438 $ 958,461 Performance (income) loss-unrealized 7,554 (303,142) 247,212 Management fees of Consolidated Funds eliminated in consolidation 45,268 34,920 34,242 Incentive fees of Consolidated Funds eliminated in consolidation 141 13,851 4,000 Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 15,824 12,641 — Administrative fees (1) (36,512) (31,629) (27,380) Performance income (loss) reclass (2) (3,726) 740 205 Principal investment (income) loss, net of eliminations (28,552) (56,555) 1,455 Net (income) expense of non-controlling interests in consolidated subsidiaries (10,314) (3,138) 44 Total consolidation adjustments and reconciling items (10,317) (332,312) 259,778 Total segment revenue $ 1,753,729 $ 1,433,126 $ 1,218,239 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Consolidated Statements of Operations. The following table reconciles the Company's consolidated expenses to segment expenses: Year ended December 31, 2020 2019 2018 Total consolidated expenses $ 1,450,486 $ 1,462,797 $ 870,362 Performance related compensation-unrealized 11,552 (206,799) 221,343 Expenses of Consolidated Funds added in consolidation (65,527) (90,816) (92,006) Expenses of Consolidated Funds eliminated in consolidation 45,408 48,771 38,242 Administrative fees (1) (36,512) (31,629) (27,380) OMG expenses (236,757) (230,454) (199,827) Acquisition and merger-related expense (11,124) (16,266) (2,936) Equity compensation expense (122,986) (97,691) (89,724) Deferred placement fees (19,329) (24,306) (20,343) Depreciation and amortization expense (40,662) (40,602) (25,087) Other expense (2) — — (11,836) Expense of non-controlling interests in consolidated subsidiaries (13,575) (6,128) (3,318) Total consolidation adjustments and reconciling items (489,512) (695,920) (212,872) Total segment expenses $ 960,974 $ 766,877 $ 657,490 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) 2018 period includes an $11.8 million payment to ARCC for rent and utilities for the first quarter of 2018 and the years ended 2017, 2016, 2015 and 2014. The following table reconciles the Company's consolidated other income to segment realized net investment income: Year ended December 31, 2020 2019 2018 Total consolidated other income $ 65,918 $ 122,539 $ 96,242 Investment loss—unrealized 47,317 26,620 49,241 Interest and other investment (income) loss—unrealized (12,134) 9,061 233 Other income from Consolidated Funds added in consolidation, net (70,994) (117,405) (114,286) Other expense from Consolidated Funds eliminated in consolidation, net (14,053) (12,991) (865) OMG other income (927) (1,190) (3,315) Performance (income) loss reclass (1) 3,726 (740) (205) Principal investment income 4,044 44,320 1,047 Other (income) expense, net (2) 10,277 (460) 1,653 Other (income) loss of non-controlling interests in consolidated subsidiaries 556 (39) (19) Total consolidation adjustments and reconciling items (32,188) (52,824) (66,516) Total segment realized net investment income $ 33,730 $ 69,715 $ 29,726 (1) Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Consolidated Statements of Operations. (2) The year ended December 31, 2020 includes a $10.2 million non-cash unrealized guarantee expense. The following table presents the reconciliation of income before taxes as reported in the Consolidated Statements of Operations to segment results of RI and FRE: Year ended December 31, 2020 2019 2018 Income before taxes $ 379,478 $ 425,180 $ 184,341 Adjustments: Depreciation and amortization expense 40,662 40,602 25,087 Equity compensation expense 122,986 97,691 89,724 Acquisition and merger-related expense 11,194 16,266 2,936 Deferred placement fees 19,329 24,306 20,343 OMG expense, net 235,830 229,264 196,512 Other (income) expense, net (1) 10,207 (460) 13,489 Net expense of non-controlling interests in consolidated subsidiaries 3,817 2,951 3,343 Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (28,203) (39,174) (20,643) Total performance (income) loss-unrealized 7,554 (303,142) 247,212 Total performance related compensation - unrealized (11,552) 206,799 (221,343) Total investment loss-unrealized 35,183 35,681 49,474 Realized income 826,485 735,964 590,475 Total performance income - realized (547,216) (402,518) (357,207) Total performance related compensation - realized 415,668 290,382 251,597 Total investment income - realized (33,730) (69,715) (29,726) Fee related earnings $ 661,207 $ 554,113 $ 455,139 |
CONSOLIDATION
CONSOLIDATION | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
CONSOLIDATION | 16. CONSOLIDATION Deconsolidated Funds Certain funds that have historically been consolidated in the financial statements that are no longer consolidated because, as of the reporting period: (a) such funds have been liquidated or dissolved; or (b) the Company is no longer deemed to be the primary beneficiary of the VIEs as it no longer has a significant economic interest. During the year ended December 31, 2020, one entity was liquidated/dissolved and one CLO experienced a significant change in ownership that resulted in deconsolidation of the entity during the period. During the year ended December 31, 2019, two entities were liquidated/dissolved and two entities experienced a significant change in ownership or control that resulted in deconsolidation during each of the periods. During the year ended December 31, 2018 one entity was liquidated/dissolved and no entities experienced a significant change in ownership that resulted in deconsolidation of the fund or CLO during the period. For deconsolidated funds, the Company will continue to serve as the general partner and/or investment manager until such funds are fully liquidated. Investments in Consolidated Variable Interest Entities The Company consolidates entities in which the Company has a variable interest and as the general partner or investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at fair value and represent the Company’s maximum exposure to loss. Investments in Non-Consolidated Variable Interest Entities The Company holds interests in certain VIEs that are not consolidated as the Company is not the primary beneficiary. The Company's interest in such entities generally is in the form of direct equity interests, fixed fee arrangements or both. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. Investments in the non-consolidated VIEs are carried at fair value. The Company's interests in consolidated and non-consolidated VIEs, as presented in the Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of December 31, 2020 2019 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs (1) $ 224,203 $ 260,520 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs (1) 391,963 181,856 Assets of consolidated VIEs 11,580,003 9,454,572 Liabilities of consolidated VIEs 10,716,438 8,679,869 (1) As of December 31, 2020 and 2019, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $107.7 million and $104.7 million, respectively. Year ended December 31, 2020 2019 2018 Net income attributable to non-controlling interests related to consolidated VIEs $ 28,085 $ 39,704 $ 20,512 Consolidating Schedules The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows: As of December 31, 2020 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 539,812 $ — $ — $ 539,812 Investments (includes $1,145,853 of accrued carried interest) 2,064,517 — (381,758) 1,682,759 Due from affiliates 426,021 — (20,134) 405,887 Other assets 812,630 — (211) 812,419 Right-of-use operating lease assets 154,742 — — 154,742 Assets of Consolidated Funds Cash and cash equivalents — 522,377 — 522,377 Investments, at fair value — 10,873,522 3,575 10,877,097 Due from affiliates — 27,377 (10,205) 17,172 Receivable for securities sold — 121,225 — 121,225 Other assets — 35,502 — 35,502 Total assets $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 Liabilities Accounts payable, accrued expenses and other liabilities $ 125,494 $ — $ (10,205) $ 115,289 Accrued compensation 103,010 — — 103,010 Due to affiliates 100,186 — — 100,186 Performance related compensation payable 813,378 — — 813,378 Debt obligations 642,998 — — 642,998 Operating lease liabilities 180,236 — — 180,236 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 46,824 — 46,824 Due to affiliates — 16,770 (16,770) — Payable for securities purchased — 514,946 — 514,946 CLO loan obligations, at fair value — 10,015,989 (57,913) 9,958,076 Fund borrowings — 121,909 — 121,909 Total liabilities 1,965,302 10,716,438 (84,888) 12,596,852 Commitments and contingencies Redeemable interest in Ares Operating Group entities 100,366 — — 100,366 Non-controlling interest in Consolidated Funds — 863,565 (323,845) 539,720 Non-controlling interest in Ares Operating Group entities 738,369 — — 738,369 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (147,182,562 shares issued and outstanding) 1,472 — — 1,472 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (112,447,618 shares issued and outstanding) 1,124 — — 1,124 Additional paid-in-capital 1,043,669 — — 1,043,669 Retained earnings (151,824) — — (151,824) Accumulated other comprehensive loss, net of tax 483 — — 483 Total stockholders' equity 1,193,685 — — 1,193,685 Total equity 1,932,054 863,565 (323,845) 2,471,774 Total liabilities, redeemable interest, non-controlling interests and equity $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 As of December 31, 2019 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 138,384 $ — $ — $ 138,384 Investments (includes $1,134,967 of accrued carried interest) 1,845,520 — (181,856) 1,663,664 Due from affiliates 281,228 — (14,098) 267,130 Other assets 344,643 — (2,381) 342,262 Right-of-use operating lease assets 143,406 — — 143,406 Assets of Consolidated Funds Cash and cash equivalents — 606,321 — 606,321 Investments, at fair value — 8,723,169 4,778 8,727,947 Due from affiliates — 6,192 — 6,192 Receivable for securities sold — 88,809 — 88,809 Other assets — 30,081 — 30,081 Total assets $ 2,753,181 $ 9,454,572 $ (193,557) $ 12,014,196 Liabilities Accounts payable, accrued expenses and other liabilities $ 88,173 $ — $ — $ 88,173 Accrued compensation 37,795 — — 37,795 Due to affiliates 71,445 — — 71,445 Performance related compensation payable 829,764 — — 829,764 Debt obligations 316,609 — — 316,609 Operating lease liabilities 168,817 — — 168,817 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 61,857 — 61,857 Due to affiliates — 11,700 (11,700) — Payable for securities purchased — 500,146 — 500,146 CLO loan obligations — 7,998,922 (25,174) 7,973,748 Fund borrowings — 107,244 — 107,244 Total liabilities 1,512,603 8,679,869 (36,874) 10,155,598 Commitments and contingencies Non-controlling interest in Consolidated Funds — 774,703 (156,683) 618,020 Non-controlling interest in Ares Operating Group entities 472,288 — — 472,288 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (115,242,028 shares issued and outstanding) 1,152 — — 1,152 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding) — — — — Additional paid-in-capital 525,244 — — 525,244 Retained earnings (50,820) — — (50,820) Accumulated other comprehensive loss, net of tax (6,047) — — (6,047) Total stockholders' equity 768,290 — — 768,290 Total equity 1,240,578 774,703 (156,683) 1,858,598 Total liabilities, non-controlling interests and equity $ 2,753,181 $ 9,454,572 $ (193,557) $ 12,014,196 Year ended December 31, 2020 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $184,141) $ 1,195,876 $ — $ (45,268) $ 1,150,608 Carried interest allocation 505,608 — — 505,608 Incentive fees 38,043 — (141) 37,902 Principal investment income 4,044 — 24,508 28,552 Administrative, transaction and other fees 57,200 — (15,824) 41,376 Total revenues 1,800,771 — (36,725) 1,764,046 Expenses Compensation and benefits 767,252 — — 767,252 Performance related compensation 404,116 — — 404,116 General, administrative and other expense 258,999 — — 258,999 Expenses of the Consolidated Funds — 65,527 (45,408) 20,119 Total expenses 1,430,367 65,527 (45,408) 1,450,486 Other income (expense) Net realized and unrealized losses on investments (8,720) — (288) (9,008) Interest and dividend income 11,641 — (3,570) 8,071 Interest expense (24,908) — — (24,908) Other income, net 2,858 — 8,433 11,291 Net realized and unrealized losses on investments of the Consolidated Funds — (109,387) 12,523 (96,864) Interest and other income of the Consolidated Funds — 473,857 (10,205) 463,652 Interest expense of the Consolidated Funds — (293,476) 7,160 (286,316) Total other income (expense) (19,129) 70,994 14,053 65,918 Income before taxes 351,275 5,467 22,736 379,478 Income tax expense 54,875 118 — 54,993 Net income 296,400 5,349 22,736 324,485 Less: Net income attributable to non-controlling interests in Consolidated Funds — 5,349 22,736 28,085 Net income attributable to Ares Operating Group entities 296,400 — — 296,400 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (976) — — (976) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 145,234 — — 145,234 Net income attributable to Ares Management Corporation 152,142 — — 152,142 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ — $ — $ 130,442 Year ended December 31, 2019 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $164,396) $ 1,014,337 $ — $ (34,920) $ 979,417 Carried interest allocation 621,872 — — 621,872 Incentive fees 83,048 — (13,851) 69,197 Principal investment income 44,320 — 12,235 56,555 Administrative, transaction and other fees 51,038 — (12,641) 38,397 Total revenues 1,814,615 — (49,177) 1,765,438 Expenses Compensation and benefits 653,352 — — 653,352 Performance related compensation 497,181 — — 497,181 General, administrative and other expense 270,219 — — 270,219 Expenses of the Consolidated Funds — 90,816 (48,771) 42,045 Total expenses 1,420,752 90,816 (48,771) 1,462,797 Other income (expense) Net realized and unrealized gains on investments 10,405 — (851) 9,554 Interest and dividend income 9,599 — (2,093) 7,506 Interest expense (19,671) — — (19,671) Other expense, net (8,190) — 350 (7,840) Net realized and unrealized gains on investments of the Consolidated Funds — 3,312 11,824 15,136 Interest and other income of the Consolidated Funds — 395,599 — 395,599 Interest expense of the Consolidated Funds — (281,506) 3,761 (277,745) Total other income (expense) (7,857) 117,405 12,991 122,539 Income before taxes 386,006 26,589 12,585 425,180 Income tax expense (benefit) 52,906 (530) — 52,376 Net income 333,100 27,119 12,585 372,804 Less: Net income attributable to non-controlling interests in Consolidated Funds — 27,119 12,585 39,704 Net income attributable to Ares Operating Group entities 333,100 — — 333,100 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 184,216 — — 184,216 Net income attributable to Ares Management Corporation 148,884 — — 148,884 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 127,184 $ — $ — $ 127,184 Year ended December 31, 2018 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $128,805) $ 836,744 $ — $ (34,242) $ 802,502 Carried interest allocation 42,410 — — 42,410 Incentive fees 67,380 — (4,000) 63,380 Principal investment income 1,047 — (2,502) (1,455) Administrative, transaction and other fees 51,624 — — 51,624 Total revenues 999,205 — (40,744) 958,461 Expenses Compensation and benefits 570,380 — — 570,380 Performance related compensation 30,254 — — 30,254 General, administrative and other expense 215,964 — — 215,964 Expenses of the Consolidated Funds — 92,006 (38,242) 53,764 Total expenses 816,598 92,006 (38,242) 870,362 Other income (expense) Net realized and unrealized losses on investments (2,867) — 983 (1,884) Interest and dividend income 7,121 — (93) 7,028 Interest expense (21,448) — — (21,448) Other expense, net (1,715) — 864 (851) Net realized and unrealized gains (losses) on investments of the Consolidated Funds — 664 (2,247) (1,583) Interest and other income of the Consolidated Funds — 337,875 — 337,875 Interest expense of the Consolidated Funds — (224,253) 1,358 (222,895) Total other income (expense) (18,909) 114,286 865 96,242 Income before taxes 163,698 22,280 (1,637) 184,341 Income tax expense 32,071 131 — 32,202 Net income 131,627 22,149 (1,637) 152,139 Less: Net income attributable to non-controlling interests in Consolidated Funds — 22,149 (1,637) 20,512 Net income attributable to Ares Operating Group entities 131,627 — — 131,627 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 74,607 — — 74,607 Net income attributable to Ares Management Corporation 57,020 — — 57,020 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 35,320 $ — $ — $ 35,320 Year ended December 31, 2020 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 296,400 $ 5,349 $ 22,736 $ 324,485 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 122,986 — — 122,986 Depreciation and amortization 41,248 — — 41,248 Net realized and unrealized (gains) losses on investments 20,651 — (28,690) (8,039) Investments purchased (352,750) — 261,899 (90,851) Proceeds from sale of investments 207,986 — (33,307) 174,679 Adjustments to reconcile net income to net cash provided by (used) in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized losses on investments — 109,387 (12,523) 96,864 Other non-cash amounts — (34,297) — (34,297) Investments purchased — (6,580,784) (34,948) (6,615,732) Proceeds from sale of investments — 5,502,325 — 5,502,325 Cash flows due to changes in operating assets and liabilities : Net performance income receivable (24,351) — — (24,351) Due to/from affiliates (82,222) — 6,037 (76,185) Other assets (34,523) — (2,170) (36,693) Accrued compensation and benefits 54,539 — — 54,539 Accounts payable, accrued expenses and other liabilities 31,240 — (10,205) 21,035 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 83,944 83,944 Net cash acquired with consolidation/deconsolidation of Consolidated Funds — 60,895 — 60,895 Change in other assets and receivables held at Consolidated Funds — (55,461) 22,163 (33,298) Change in other liabilities and payables held at Consolidated Funds — 10,787 — 10,787 Net cash provided by (used in) operating activities 281,204 (981,799) 274,936 (425,659) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (15,942) — — (15,942) Acquisitions, net of cash acquired (120,822) — — (120,822) Net cash used in investing activities (136,764) — — (136,764) Cash flows from financing activities: Net proceeds from issuance of Class A common stock 383,154 — — 383,154 Proceeds from credit facility 790,000 — — 790,000 Proceeds from senior notes 399,084 — — 399,084 Repayments of credit facility (860,000) — — (860,000) Dividends and distributions (446,780) — — (446,780) Series A Preferred Stock dividends (21,700) — — (21,700) Stock option exercises 92,877 — — 92,877 Taxes paid related to net share settlement of equity awards (95,368) — — (95,368) Other financing activities (1,531) — — (1,531) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 359,381 (226,951) 132,430 Distributions to non-controlling interests in Consolidated Funds — (287,467) 35,960 (251,507) Borrowings under loan obligations by Consolidated Funds — 1,013,291 — 1,013,291 Repayments under loan obligations by Consolidated Funds — (190,055) — (190,055) Net cash provided by financing activities 239,736 895,150 (190,991) 943,895 Effect of exchange rate changes 17,252 2,704 — 19,956 Net change in cash and cash equivalents 401,428 (83,945) 83,945 401,428 Cash and cash equivalents, beginning of period 138,384 606,321 (606,321) 138,384 Cash and cash equivalents, end of period $ 539,812 $ 522,376 $ (522,376) $ 539,812 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisitions $ 305,338 $ — $ — $ 305,338 Supplemental information of cash flow information: Cash paid during the period for interest $ 22,127 $ 235,005 $ — $ 257,132 Cash paid during the period for income taxes $ 38,005 $ 169 $ — $ 38,174 Year ended December 31, 2019 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 333,100 $ 27,119 $ 12,585 $ 372,804 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 97,691 — — 97,691 Depreciation and amortization 39,459 — — 39,459 Net realized and unrealized gains on investments (37,211) — (15,881) (53,092) Investments purchased (401,266) — 122,468 (278,798) Proceeds from sale of investments 395,997 — (111,187) 284,810 Adjustments to reconcile net income to net cash provided by (used in) operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — (3,312) (11,824) (15,136) Other non-cash amounts — (8,383) — (8,383) Investments purchased — (5,310,296) 93,365 (5,216,931) Proceeds from sale of investments — 3,077,755 — 3,077,755 Cash flows due to changes in operating assets and liabilities: Net performance income receivable (103,962) — — (103,962) Due to/from affiliates (80,689) — 5,551 (75,138) Other assets 24,303 — 2,381 26,684 Accrued compensation and benefits 7,650 — — 7,650 Accounts payable, accrued expenses and other liabilities 30,669 — — 30,669 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — (221,677) (221,677) Cash relinquished with deconsolidation of Consolidated Funds — (81,059) — (81,059) Change in other assets and receivables held at Consolidated Funds — (51,681) (3,153) (54,834) Change in other liabilities and payables held at Consolidated Funds — 88,467 — 88,467 Net cash provided by (used in) operating activities 305,741 (2,261,390) (127,372) (2,083,021) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (16,796) — — (16,796) Net cash used in investing activities (16,796) — — (16,796) Cash flows from financing activities: Proceeds from issuance of Class A common stock 206,705 — — 206,705 Proceeds from credit facility 335,000 — — 335,000 Repayments of credit facility (500,000) — — (500,000) Dividends and distributions (323,667) — — (323,667) Series A Preferred Stock dividends (21,700) — — (21,700) Repurchases of Class A common stock (10,449) — — (10,449) Stock option exercises 90,511 — — 90,511 Taxes paid related to net share settlement of equity awards (33,554) — — (33,554) Other financing activities (3,212) — — (3,212) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 290,677 (117,826) 172,851 Distributions to non-controlling interests in Consolidated Funds — (117,599) 21,317 (96,282) Borrowings under loan obligations by Consolidated Funds — 3,349,654 (7,817) 3,341,837 Repayments under loan obligations by Consolidated Funds — (1,045,731) 10,021 (1,035,710) Net cash provided by (used in) financing activities (260,366) 2,477,001 (94,305) 2,122,330 Effect of exchange rate changes (442) 6,066 — 5,624 Net change in cash and cash equivalents 28,137 221,677 (221,677) 28,137 Cash and cash equivalents, beginning of period 110,247 384,644 (384,644) 110,247 Cash and cash equivalents, end of period $ 138,384 $ 606,321 $ (606,321) $ 138,384 Supplemental information of cash flow information: Cash paid during the period for interest $ 17,922 $ 215,168 $ — $ 233,090 Cash paid during the period for income taxes $ 35,021 $ 604 $ — $ 35,625 Year ended December 31, 2018 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 131,627 $ 22,149 $ (1,637) $ 152,139 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 89,724 — — 89,724 Depreciation and amortization 28,517 — — 28,517 Net realized and unrealized losses on investments 15,938 — (3,003) 12,935 Other non-cash amounts 10 — — 10 Investments purchased (283,514) — 35,054 (248,460) Proceeds from sale of investments 415,894 — (34,191) 381,703 Adjustments to reconcile net income to net cash provided by (used in) operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized (gains) losses on investments — (665) 2,248 1,583 Other non-cash amounts — (4,519) — (4,519) Investments purchased — (4,919,118) — (4,919,118) Proceeds from sale of investments — 2,756,924 — 2,756,924 Cash flows due to changes in operating assets and liabilities: Net performance income receivable 34,911 — (5,333) 29,578 Due to/from affiliates 30,429 — 2,594 33,023 Other assets (66,795) — — (66,795) Accrued compensation and benefits 114 — — 114 Accounts payable, accrued expenses and other liabilities 2,306 — — 2,306 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 171,856 171,856 Cash acquired with consolidation of Consolidated Funds — 11,915 — 11,915 Change in other assets and receivables held at Consolidated Funds — 9,224 2,738 11,962 Change in other liabilities and payables held at Consolidated Funds — 137,545 — 137,545 Net cash provided by (used in) operating activities 399,161 (1,986,545) 170,326 (1,417,058) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (18,419) — — (18,419) Net cash used in investing activities (18,419) — — (18,419) Cash flows from financing activities: Proceeds from issuance of Class A common stock 105,333 — — 105,333 Proceeds from credit facility 680,000 — — 680,000 Repayments of term notes (206,089) — — (206,089) Proceeds from term notes 44,050 — — 44,050 Repayments of credit facility (655,000) — — (655,000) Dividends and distributions (312,646) — — (312,646) Series A Preferred Stock dividends (21,700) — — (21,700) Stock option exercises 950 — — 950 Taxes paid related to net share settlement of equity awards (18,014) — — (18,014) Other financing activities 3,128 — — 3,128 Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 85,681 (14,672) 71,009 Distributions to non-controlling interests in Consolidated Funds — (195,438) 35,728 (159,710) Borrowings under loan obligations by Consolidated Funds — 2,921,159 (19,526) 2,901,633 Repayments under loan obligations by Consolidated Funds — (1,027,649) — (1,027,649) Net cash provided by (used in) financing activities (379,988) 1,783,753 1,530 1,405,295 Effect of exchange rate changes (9,436) 30,936 — 21,500 Net change in cash and cash equivalents (8,682) (171,855) 171,855 (8,682) Cash and cash equivalents, beginning of period 118,929 556,500 (556,500) 118,929 Cash and cash equivalents, end of period $ 110,247 $ 384,644 $ (384,644) $ 110,247 Supplemental information: Cash paid during the period for interest $ 19,881 $ 165,070 $ — $ 184,951 Cash paid during the period for income taxes $ 26,740 $ 742 $ — $ 27,482 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after December 31, 2020 through the date the consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure: In February 2021, the Company's board of directors declared a quarterly dividend of $0.47 per share of Class A common stock payable on March 31, 2021 to common stockholders of record at the close of business on March 17, 2021. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”). The Company’s Consolidated Funds are investment companies under GAAP based on the following characteristics: the Consolidated Funds obtain funds from one or more investors and provide investment management services and the Consolidated Funds’ business purpose and substantive activities are investing funds for returns from capital appreciation and/or investment income. Therefore, investments of Consolidated Funds are recorded at fair value and the unrealized appreciation (depreciation) in an investment’s fair value is recognized on a current basis in the Consolidated Statements of Operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the investment company accounting for the Consolidated Funds under GAAP. All of the investments held and CLO loan obligations issued by the Consolidated Funds are presented at their estimated fair values in the Company’s Consolidated Statements of Financial Condition. Net income attributable to holders of subordinated notes of the CLOs is included in net income attributable to non-controlling interests in consolidated funds in the Consolidated Statements of Operations. |
Reclassifications | The Company has reclassified certain prior period amounts to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and other income (expense) during the reporting periods. Assumptions and estimates regarding the valuation of investments involve a high degree of judgment and complexity and may have a significant impact on net income. Actual results could differ from these estimates and such differences could be material to the consolidated financial statements. The outbreak of the coronavirus pandemic (“COVID-19”) has caused uncertainty and disruption in the global economy and financial markets. As a result, management's estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period. |
Principles of Consolidation | Principles of Consolidation The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. As such, the Company consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that the Company concludes are variable interest entities (“VIEs”) in which the Company has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which the Company is deemed to be the primary beneficiary. The Company determines whether an entity should be consolidated by first evaluating whether it holds a variable interest in the entity. Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests, including proportionate interests through related parties, to determine if fees are considered a variable interest. As the Company’s interests in funds are primarily management fees, performance income, and/or insignificant direct or indirect equity interests through related parties, the Company is not considered to have a variable interest in many of these entities. Entities that are not VIEs are further evaluated for consolidation under the voting interest model (“VOE”). Variable Interest Model The Company considers an entity to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. The Company consolidates all VIEs for which it is the primary beneficiary. The Company determines it is the primary beneficiary when it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. |
Consolidated CLOs | Consolidated CLOs As of December 31, 2020 and 2019, the Company consolidated 21 and 16 CLOs, respectively. The Company has determined that the fair value of the financial assets of the consolidated CLOs, which are mostly Level II assets within the GAAP fair value hierarchy, are more observable than the fair value of the financial liabilities of its consolidated CLOs, which are mostly Level III liabilities within the GAAP fair value hierarchy. As a result, the financial assets of consolidated CLOs are measured at fair value and the financial liabilities of the consolidated CLOs are measured in consolidation as: (1) the sum of the fair value of the financial assets, and the carrying value of any nonfinancial assets held temporarily, less (2) the sum of the fair value of any beneficial interests retained by the Company (other than those that represent compensation for services), and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interests retained by the Company). The loan obligations issued by the CLOs are collateralized by diversified asset portfolios and by structured debt or equity. In exchange for managing the collateral for the CLOs, the Company typically earns a variety of management fees, including senior and subordinated management fees, and in some cases, contingent incentive fee income. In cases where the Company earns fees from a CLO that it consolidates, those fees have been eliminated as intercompany transactions. The Company's holdings in these CLOs are generally subordinated to other interests in the entities and entitle the Company to receive a pro rata portion of the residual cash flows, if any, from the entities. Additionally, the Company may invest in other senior secured notes, which are repaid based on available cash flows subject to priority of payments under each consolidated CLO's governing documents. Investors in the CLOs generally have no recourse against the Company for any losses sustained in the capital structure of each CLO. |
Fair Value Measurements | Fair Value Measurements GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rate, yield curve, volatility, prepayment risk, loss severity, credit risk and default rate. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available. In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period (see “Note 5. Fair Value” for further detail). |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds. |
Investments | Investments The Company has retained the specialized investment company accounting guidance under GAAP with respect to its Consolidated Funds, which hold a substantial majority of its investments. Thus, the consolidated investments are reflected in the Consolidated Statements of Financial Condition at fair value, with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations. Fair value is the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit price). |
Equity Method Investments | Equity Method Investments The Company accounts for its investments in which it has or is otherwise presumed to have significant influence, including investments in unconsolidated funds, strategic investments and carried interest, using the equity method of accounting. The carrying amounts of equity method investments are reflected in investments in the Consolidated Statements of Financial Condition. Certain of the Company's equity method investments are reported at fair value. Management's determination of fair value includes various valuation techniques. These techniques may include market approach, recent transaction price, net asset value approach, discounted cash flows, acreage valuation and may use one or more significant |
Derivative Instruments | Derivative Instruments The Company recognizes all derivatives as either assets or liabilities in the Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively, and reports them at fair value. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company's finite-lived intangible assets consists primarily of contractual rights to earn future management fees from the acquired management contracts. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from approximately 2.0 to 13.5 years. The purchase price of an acquired management contract is treated as an intangible asset and is amortized over the life of the contract. Amortization is included as part of general, administrative and other expenses in the Consolidated Statements of Operations. The Company tests finite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. The Company evaluates impairment by comparing the estimated fair value attributable to the intangible asset being evaluated with its carrying amount. If an impairment is determined to exist by management, the Company accelerates amortization expense so that the carrying amount represents fair value. The Company estimates fair value using undiscounted future cash flow. Goodwill represents the excess cost over identifiable net assets of an acquired business. The Company tests goodwill annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of goodwill impairment as the excess of the carrying amount of the reporting unit over its fair value. The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that is more likely than not to reduce the fair value of the reporting unit below its carrying amount. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and market valuations, and assumptions about the Company’s strategic plans with regard to its operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates . The Company's intangible assets and goodwill are included within other assets on the Company’s Consolidated Statements of Financial Condition. |
Fixed Assets | Fixed Assets Fixed assets, consisting of furniture, fixtures and equipment, leasehold improvements, computer hardware and internal-use software, are recorded at cost, less accumulated depreciation and amortization. Fixed assets are included within other assets on the Company’s Consolidated Statements of Financial Condition. Direct costs associated with developing, purchasing or otherwise acquiring software for internal use (“Internal-Use Software”) are capitalized and amortized on a straight-line basis over the expected useful life of the software, beginning when the software is ready for its intended purpose. Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Fixed assets are depreciated or amortized on a straight-line basis over an asset's estimated useful life, with the corresponding depreciation and amortization expense included within general, administrative and other expenses on the Company’s Consolidated Statements of Operations. The estimated useful life for leasehold improvements is the lesser of the lease term or the life of the asset while other fixed assets and internal-use software are generally depreciated between three Redeemable Interest in Ares Operating Group Entities Redeemable interest in AOG entities represents the ownership interest that the former owners of SSG retained in connection with the SSG Acquisition. Redeemable interest in AOG entities was initially recorded at fair value on the date of acquisition within mezzanine equity in the Consolidated Statements of Financial Condition. Income (loss) is allocated based on the ownership percentage attributable to the redeemable interest. The Company determined that the redemption of the redeemable interest is probable as of the date of acquisition. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount, as defined in accordance with the terms of a contractual arrangement between the Company and the former owners of SSG, to the extent that the redemption amount exceeds the initial measurement on the date of acquisition. The Company recognizes changes in the redemption amount with corresponding adjustments against retained earnings, or additional paid-in-capital in the absence of retained earnings, within stockholders' equity in the Consolidated Statements of Financial Condition. |
Revenue Recognition | Revenue Recognition Revenues consist of management fees, carried interest allocation, incentive fees, principal investment income and administrative, transaction and other fees. The Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenue is based on contracts with a determinable transaction price and distinct performance obligations with probable collectability. Revenues are not recognized until the performance obligation(s) are satisfied. Management Fees Management fees are generally based on a defined percentage of fair value of assets, total commitments, invested capital, net asset value (“NAV”), net investment income, total assets or par value of the investment portfolios managed by the Company. Principally all management fees are earned from affiliated funds of the Company. The contractual terms of management fees vary by fund structure and investment strategy. Management fees are recognized as revenue in the period advisory services are rendered, subject to the Company’s assessment of collectability. Management fees also include a quarterly incentive fee based on the net investment income (“ARCC Part I Fees”) from Ares Capital Corporation (NASDAQ: ARCC) (“ARCC”), a publicly traded business development company registered under the Investment Company Act and managed by a subsidiary of the Company. ARCC Part I Fees are equal to 20.0% of its net investment income (before ARCC Part I Fees and incentive fees payable based on capital gains), subject to a fixed “hurdle rate” of 1.75% per quarter, or 7.0% per annum. No fee is recognized until ARCC's net investment income exceeds a 1.75% hurdle rate, with a “catch-up” provision to ensure that the Company receives 20% of ARCC's net investment income from the first dollar earned. Performance Income Performance income revenues consist of carried interest allocation and incentive fees. Performance income is based on certain specific hurdle rates as defined in the applicable investment management agreements or governing documents. Substantially all performance income is earned from affiliated funds of the Company. Carried Interest Allocation 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 investment management agreement. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund's net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated, and may be subject to reversal to the extent that the amount allocated exceeds the amount due to the general partner or investment manager based on a fund’s cumulative investment returns. As the fair value of underlying assets varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either (i) positive performance resulting in an increase in the carried interest allocated to the Company or (ii) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a reversal of previously recognized carried interest allocated to the Company. Accrued but unpaid carried interest as of the reporting date is recorded within investments in the Consolidated Statements of Financial Condition. 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 investment management agreements or governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally does not become realized until the end of a fund’s life. As of December 31, 2020 and 2019, if the funds were liquidated at their fair values, there would have been no repayment obligation or liability. The Company accounts for carried interest, which represents a performance-based capital allocation from an investment fund to the Company, as earnings from financial assets within the scope of ASC 323, Investments-Equity Method and Joint Ventures . The Company recognizes carried interest allocation as a separate revenue line item in the Consolidated Statements of Operations with uncollected carried interest as of the reporting date reported within investments in the Consolidated Statements of Financial Condition. 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. Principal Investment Income Principal investment income consists of interest and dividend income and net realized and unrealized gain (loss) from the equity method investments that the Company manages. Administrative, Transaction and Other Fees |
Equity-Based Compensation | Equity-Based Compensation The Company recognizes expense related to equity-based compensation in which it receives employee services in exchange for (a) equity instruments of the Company, (b) derivatives based on the Company’s Class A common stock or (c) liabilities that are based on the fair value of the Company’s equity instruments. Equity-based compensation expense represents expenses associated with restricted units, options and phantom shares granted under 2014 Equity Incentive Plan, as amended and restated on March 1, 2018 and as further amended and restated effective November 26, 2018 (the “Equity Incentive Plan”). Equity-based compensation expense for restricted units and options is determined based on the fair value of the respective equity award on the grant date and is recognized on a straight-line basis over the requisite service period, with a corresponding increase in additional paid-in-capital. Grant date fair value of the restricted units is determined by the most recent closing price of shares of the Company's Class A common stock. The Company recognizes share-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. The reduction in compensation expense is determined based on the specific awards forfeited during that period. The Company records deferred tax assets or liabilities for equity compensation plan awards based on deductions for income tax purposes of equity-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company is expected to receive a tax deduction. In addition, differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company’s income tax returns are recorded as adjustments to additional paid-in-capital. If the tax deduction is less than the deferred tax asset, the calculated shortfall reduces the pool of excess tax benefits. If the pool of excess tax benefits is reduced to zero, then subsequent shortfalls would increase the income tax expense. Equity-based compensation expense is presented within compensation and benefits in the Consolidated Statements of Operations. |
Performance Related Compensation | Performance Related Compensation The Company has agreed to pay a portion of the performance income earned from certain funds, including income from Consolidated Funds that is eliminated in consolidation, to certain professionals. Depending on the nature of each fund, the performance income allocation may be structured as a fixed percentage subject to vesting based on continued employment or service (generally over a period of four |
Net Realized and Unrealized Gains (Losses) on Investments | Net Realized and Unrealized Gains (Losses) on InvestmentsRealized gain (loss) occurs when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized appreciation (depreciation) results from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations. Also, the Company’s share of the investee’s income and expenses for the Company’s equity method investments is included within net realized and unrealized gains (losses) on investments. |
Interest and Dividend Income | Interest and Dividend Income Interest, dividends and other investment income are included in interest and dividend income. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established . |
Foreign Currency | Foreign Currency The U.S. dollar is the Company's functional currency; however, certain transactions of the Company may not be denominated in U.S. dollars. Foreign exchange revaluation arising from these transactions is recognized within other income (expense) in the Consolidated Statements of Operations. For the year ended December 31, 2020, the Company recognized $13.1 million in transaction gains related to foreign currencies revaluation. For the years ended December 31, 2019 and 2018, the Company recognized $8.5 million and $0.1 million, respectively, in transaction losses related to foreign currencies revaluation. In addition, the combined and consolidated results include certain foreign subsidiaries and Consolidated Funds that use functional currencies other than the U.S. dollar. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rates as of the reporting date. Income and expense and gain and loss transactions denominated in foreign currencies are generally translated into U.S. dollars monthly using the average exchange rates during the respective transaction period. Translation adjustments resulting from this process are recorded to currency translation adjustment in accumulated other comprehensive income. |
Income Taxes | Income Taxes Since the Company’s election to be taxed as a corporation (effective March 1, 2018), all earnings allocated to the Company are subject to U.S. corporate income taxes. A provision for corporate level income taxes imposed on unrealized gains and income items as well as taxes imposed on certain subsidiaries’ earnings is included in the consolidated tax provision. Also included in the consolidated tax provision are entity level income taxes incurred by certain affiliated funds and co-investment entities that are consolidated in these financial statements. The portion of consolidated earnings not allocated to the Company flows through to owners of the Ares Operating Group entities without being taxed at the corporate level. Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized as income, in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current and deferred tax liabilities are reported on a net basis and included within other assets in the Consolidated Statements of Financial Condition. The Company analyzes its tax filing positions in all U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns for all open tax years in these jurisdictions. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits (“UTBs”) is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. Both accrued interest and penalties, where appropriate, related to UTBs are shown in general, administrative and other expenses in the Consolidated Statements of Operations. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. The Company reviews its tax positions quarterly and adjusts its tax balances as new legislation is passed or new information becomes available. |
Income Allocation | Income AllocationIncome (loss) before taxes is allocated based on each partner’s average daily ownership of the Ares Operating Group entities for each year presented. |
Earnings Per Share | Earnings Per Share Basic earnings per share of Class A common stock is computed by dividing income available to Class A common stockholders by the weighted-average number shares of Class A common stock outstanding during the period. Income available to Class A common stockholders represents net income attributable to Ares Management Corporation after giving effect to the Series A Preferred stock dividends paid. Diluted earnings per share of Class A common stock is computed by dividing income available to Class A common stockholders by the weighted-average number of shares of Class A common stock outstanding during the period, increased to include the number of additional shares of Class A common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding options to acquire shares of Class A common stock, unvested restricted units and AOG Units exchangeable for shares of Class A common stock. The effect of potentially dilutive securities is reflected in diluted earnings per share of Class A common stock using the more dilutive result of the treasury stock method or the two-class method. Unvested share-based payment awards that contain non-forfeitable rights to dividend or dividend equivalents (whether paid or unpaid) are participating securities and are considered in the computation of earnings per share of Class A common stock pursuant to the two-class method. Unvested restricted units that pay dividend equivalents are deemed participating securities and are included in basic and diluted earnings per share of Class A common stock calculation under the two-class method. |
Comprehensive Income (Loss) | Comprehensive Income Comprehensive income consists of net income and other appreciation (depreciation) affecting stockholders' equity that, under GAAP, are excluded from net income. The Company's other comprehensive income includes foreign currency translation adjustments. |
Recent Accounting Pronouncements | Adoption of ASC 842 Effective January 1, 2019, the Company adopted the Financial Accounting Standards Board (“FASB”) Topic 842 (“ASC 842”), Leases . The Company adopted ASC 842 under the modified retrospective approach using the practical expedient provided for within paragraph 842-10-65-1; therefore, the presentation of prior year periods has not been adjusted. There is no cumulative effect upon adoption because no adjustment to the opening balances of the components of equity was necessary. The Company has entered into operating and finance leases for corporate offices and certain equipment and makes the determination if an arrangement constitutes a lease at inception. Operating leases are included in right-of-use operating lease assets and operating lease liabilities in the Company's Consolidated Statements of Financial Condition. Finance leases are included in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the Consolidated Statements of Financial Condition. Right-of-use operating lease assets represent the Company's right to use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and corresponding lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses the its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The right-of-use operating lease asset also includes any lease prepayments and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Lease expense is primarily recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. However, for certain equipment leases where the non-lease components are not material, the Company accounts for the lease and non-lease components as a single lease component. Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update related to separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. The Company has concluded this guidance will not have a material impact on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this update clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update should be applied on a prospective basis. The Company has concluded this guidance will not have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance was effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying value for the Company's intangible assets | The following table summarizes the carrying value, net of accumulated amortization, of the Company's intangible assets that are included within other assets in the Consolidated Statements of Financial Condition: Weighted Average Amortization Period as of December 31, 2020 As of December 31, 2020 2019 Management contracts 5.4 years $ 210,857 $ 12,498 Client relationships 9.1 years 25,141 6,341 Trade name 9.4 years 11,079 378 Intangible assets 247,077 19,217 Foreign currency translation 3,093 — Total intangible assets 250,170 19,217 Less: accumulated amortization (28,082) (11,242) Intangible assets, net $ 222,088 $ 7,975 |
Schedule of estimated future annual amortization of finite-lived intangible assets | At December 31, 2020, future annual amortization of finite-lived intangible assets for the years 2021 through 2025 and thereafter is estimated to be: Year Amortization 2021 $ 42,424 2022 42,040 2023 38,946 2024 33,144 2025 26,834 Thereafter 38,700 Total $ 222,088 |
Schedule of goodwill rollforward | The following table summarizes the carrying value of the Company's goodwill assets that are included within other assets in the Consolidated Statements of Financial Condition: Credit Group Private Real Strategic Initiatives Total Balance as of December 31, 2018 $ 32,196 $ 58,600 $ 52,990 $ — $ 143,786 Foreign currency translation — — 69 — 69 Balance as of December 31, 2019 $ 32,196 $ 58,600 $ 53,059 $ — $ 143,855 Acquisitions — — — 224,601 224,601 Foreign currency translation — — 61 2,530 2,591 Balance as of December 31, 2020 $ 32,196 $ 58,600 $ 53,120 $ 227,131 $ 371,047 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments in and Advances to Affiliates [Abstract] | |
Summary of investments held | The Company’s investments are comprised of the following: Percentage of total investments As of December 31, As of December 31, 2020 2019 2020 2019 Equity method investments: Equity method private investment partnership interests - principal (1) $ 366,471 $ 390,407 21.8 % 23.5 % Equity method - carried interest (1) 1,145,853 1,134,967 68.1 68.2 Equity method private investment partnership interests and other (held at fair value) (1) 92,196 51,528 5.5 3.1 Equity method private investment partnership interests and other (1) 23,883 16,536 1.4 1.0 Total equity method investments 1,628,403 1,593,438 96.8 95.8 Collateralized loan obligations (2) 31,766 22,265 1.9 1.3 Other fixed income 21,583 46,918 1.3 2.8 Collateralized loan obligations and other fixed income, at fair value 53,349 69,183 3.2 4.1 Common stock, at fair value 1,007 1,043 0.1 0.1 Total investments $ 1,682,759 $ 1,663,664 (1) Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date. (2) As of December 31, 2020, includes $3.4 million of collateralized loan obligations that are attributable to the Crestline Denali Class B membership interests. Investments held in the Consolidated Funds are summarized below: Fair Value at Percentage of total investments as of December 31, December 31, December 31, December 31, 2020 2019 2020 2019 Fixed income investments: Bonds $ 397,494 $ 212,376 3.6 % 2.4% Loans 10,012,948 8,062,740 92.1 92.4 Investments in CLO warehouse — 44,435 — 0.5 Total fixed income investments 10,410,442 8,319,551 95.7 95.3 Equity securities 227,031 112,384 2.1 1.3 Partnership interests 239,624 296,012 2.2 3.4 Total investments, at fair value $ 10,877,097 $ 8,727,947 |
Summary of equity method investments | The following tables present summarized financial information for the Company's equity method investments, which are primarily funds managed by the Company, for the years ended December 31, 2020, 2019 and 2018. As of December 31, 2020 and the Year then Ended Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total Statement of Financial Condition Investments $ 12,406,944 $ 8,259,168 $ 5,320,711 $ 66,875 $ 26,053,698 Total assets 13,416,800 8,591,385 5,780,472 70,998 27,859,655 Total liabilities 3,884,603 1,415,383 975,057 11,711 6,286,754 Total equity 9,532,197 7,176,002 4,805,415 59,287 21,572,901 Statement of Operations Revenues $ 940,450 $ 263,335 $ 191,543 $ 2,656 $ 1,397,984 Expenses (221,083) (112,325) (81,071) (5,585) (420,064) Net realized and unrealized gains (losses) from investments (210,881) 1,218,362 11,923 2,324 1,021,728 Income tax benefit (expense) (1,693) 57,935 346 — 56,588 Net income (loss) $ 506,793 $ 1,427,307 $ 122,741 $ (605) $ 2,056,236 As of December 31, 2019 and the Year then Ended Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total Statement of Financial Condition Investments $ 10,937,224 $ 9,700,725 $ 4,939,245 $ — $ 25,577,194 Total assets 11,625,699 10,077,149 5,314,908 — 27,017,756 Total liabilities 3,416,429 534,965 958,020 — 4,909,414 Total equity 8,209,270 9,542,184 4,356,888 — 22,108,342 Statement of Operations Revenues $ 871,168 $ 325,529 $ 205,274 $ — $ 1,401,971 Expenses (211,984) (112,610) (120,467) — (445,061) Net realized and unrealized gains from investments 5,040 1,674,002 382,383 — 2,061,425 Income tax expense (1,537) (27,887) (926) — (30,350) Net income $ 662,687 $ 1,859,034 $ 466,264 $ — $ 2,987,985 For the Year Ended December 31, 2018 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total Statement of Operations Revenues $ 766,009 $ 264,376 $ 144,706 $ — $ 1,175,091 Expenses (189,432) (85,801) (96,353) — (371,586) Net realized and unrealized gains (losses) from investments (67,477) (892,800) 417,974 — (542,303) Income tax expense (2,526) (20,554) (4,075) — (27,155) Net income (loss) $ 506,574 $ (734,779) $ 462,252 $ — $ 234,047 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of valuation of investments and other financial instruments by fair value hierarchy levels | The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2020: Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 53,349 $ — $ 53,349 Common stock and other equity securities — 1,007 88,412 — 89,419 Partnership interests — — 2,575 1,209 3,784 Total investments, at fair value — 1,007 144,336 1,209 146,552 Derivatives-foreign exchange contracts — 1,440 — — 1,440 Total assets, at fair value $ — $ 2,447 $ 144,336 $ 1,209 $ 147,992 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (1,565) $ — $ — $ (1,565) Total liabilities, at fair value $ — $ (1,565) $ — $ — $ (1,565) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 397,485 $ 9 $ — $ 397,494 Loans — 9,470,651 542,297 — 10,012,948 Investments in CLO warehouse — — — — — Total fixed income investments — 9,868,136 542,306 — 10,410,442 Equity securities 5,749 239 221,043 — 227,031 Partnership interests — — 231,857 7,767 239,624 Total investments, at fair value 5,749 9,868,375 995,206 7,767 10,877,097 Derivatives-asset swaps-other — — 1,104 — 1,104 Total assets, at fair value $ 5,749 $ 9,868,375 $ 996,310 $ 7,767 $ 10,878,201 Liabilities, at fair value Derivatives-asset swaps-other $ — $ — $ (44) $ — $ (44) Loan obligations of CLOs — (9,958,076) — — (9,958,076) Total liabilities, at fair value $ — $ (9,958,076) $ (44) $ — $ (9,958,120) The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2019: Financial Instruments of the Company Level I Level II Level III Investments Total Assets, at fair value Investments: Collateralized loan obligations and other fixed income $ — $ — $ 69,183 $ — $ 69,183 Common stock and other equity securities — 1,043 14,704 — 15,747 Partnership interests — — 35,192 1,632 36,824 Total investments, at fair value — 1,043 119,079 1,632 121,754 Derivatives-foreign exchange contracts — 4,023 — — 4,023 Total assets, at fair value $ — $ 5,066 $ 119,079 $ 1,632 $ 125,777 Liabilities, at fair value Derivatives-foreign exchange contracts $ — $ (113) $ — $ — $ (113) Total liabilities, at fair value $ — $ (113) $ — $ — $ (113) Financial Instruments of the Consolidated Funds Level I Level II Level III Investments Total Assets, at fair value Investments: Fixed income investments: Bonds $ — $ 207,966 $ 4,410 $ — $ 212,376 Loans — 7,728,014 334,726 — 8,062,740 Investments in CLO warehouse — 44,435 — — 44,435 Total fixed income investments — 7,980,415 339,136 — 8,319,551 Equity securities 26,396 — 85,988 — 112,384 Partnership interests — — 296,012 — 296,012 Total investments, at fair value 26,396 7,980,415 721,136 — 8,727,947 Derivatives-foreign exchange contracts — 667 — — 667 Total assets, at fair value $ 26,396 $ 7,981,082 $ 721,136 $ — $ 8,728,614 Liabilities, at fair value Derivatives: Foreign exchange contracts $ — $ (670) $ — $ — $ (670) Asset swaps-other — — (4,106) — (4,106) Total derivative liabilities, at fair value — (670) (4,106) — (4,776) Loan obligations of CLOs — (7,973,748) — — (7,973,748) Total liabilities, at fair value $ — $ (7,974,418) $ (4,106) $ — $ (7,978,524) |
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 year ended December 31, 2020: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 14,704 $ 69,183 $ 35,192 $ 119,079 Transfer in due to changes in consolidation 72,967 6,294 — 79,261 Purchases (1) — 12,970 — 12,970 Sales/settlements (3) — (37,058) (32,430) (69,488) Realized and unrealized appreciation (depreciation), net 741 1,960 (187) 2,514 Balance, end of period $ 88,412 $ 53,349 $ 2,575 $ 144,336 Change in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ 741 $ 4,227 $ 5,511 $ 10,479 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Derivatives, Net Total Balance, beginning of period $ 85,988 $ 339,136 $ 296,012 $ (4,106) $ 717,030 Transfer in (out) due to changes in consolidation (635) 403,751 — — 403,116 Transfer in 32 127,633 — — 127,665 Transfer out — (286,294) — — (286,294) Purchases (1) 186,881 340,475 66,000 — 593,356 Sales/settlements (2) (10,997) (370,966) (141,025) (911) (523,899) Amortized discounts/premiums — 1,049 — 389 1,438 Realized and unrealized appreciation (depreciation), net (40,226) (12,478) 10,870 5,688 (36,146) Balance, end of period $ 221,043 $ 542,306 $ 231,857 $ 1,060 $ 996,266 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (44,877) $ (5,736) $ 10,870 $ 3,595 $ (36,148) (1) Purchases include paid-in-kind interest and securities received in connection with restructuring. (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 year ended December 31, 2019: Level III Assets Level III Assets of the Company Equity Fixed Income Partnership Interests Total Balance, beginning of period $ 10,397 $ 60,824 $ 35,192 $ 106,413 Transfer in due to changes in consolidation — 10,021 — 10,021 Purchases (1) 3,000 27,795 — 30,795 Sales/settlements (2) — (31,387) — (31,387) Realized and unrealized appreciation, net 1,307 1,930 — 3,237 Balance, end of period $ 14,704 $ 69,183 $ 35,192 $ 119,079 Change in net unrealized appreciation included in earnings related to financial assets still held at the reporting date $ 1,307 $ 1,365 $ — $ 2,672 Level III Net Assets of Consolidated Funds Equity Fixed Partnership Interests Derivatives, Net Total Balance, beginning of period $ 150,752 $ 547,958 $ 271,447 $ 680 $ 970,837 Transfer out due to changes in consolidation — (184,919) — — (184,919) Transfer in — 56,914 — — 56,914 Transfer out — (187,925) — — (187,925) Purchases (1) 1,363 432,760 13,000 — 447,123 Sales/settlements (2) (40,857) (333,220) (22,000) (431) (396,508) Amortized discounts/premiums — 361 — (129) 232 Realized and unrealized appreciation (depreciation), net (25,270) 7,207 33,565 (4,226) 11,276 Balance, end of period $ 85,988 $ 339,136 $ 296,012 $ (4,106) $ 717,030 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ (24,690) $ 783 $ 33,565 $ (4,400) $ 5,258 (1) Purchases include paid-in-kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings. |
Summary of quantitative inputs and assumptions used for Level III inputs | The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2020: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 14,704 Transaction price (1) N/A N/A 32,905 Discounted Cash Flow Discount Rates 14.0% - 20.0% 40,803 Market Approach Multiple of Book Value 1.6x Partnership interests 2,575 Other N/A N/A Collateralized loan obligations 31,766 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 21,583 Other N/A N/A Total $ 144,336 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 438 Market approach EBITDA multiple (2) 2.9x - 19.5x 13.4x 32,528 Other Net income multiple 30.0x 30.0x Illiquidity discount 25.0% 25.0% 33 Broker quotes and/or 3rd party pricing services N/A N/A N/A 188,044 Transaction price (1) N/A N/A N/A Partnership interest 231,857 Discounted cash flow Discount rate 23.8% 23.8% Fixed income securities 384,419 Broker quotes and/or 3rd party pricing services N/A N/A N/A 6,605 Market approach EBITDA multiple (2) 6.5x - 7.8x 6.9x 122,962 Income approach Yield 2.7% - 48.1% 7.9% 28,320 Other N/A N/A N/A Derivative instruments 1,104 Broker quotes and/or 3rd party pricing services N/A N/A N/A Total assets $ 996,310 Liabilities Derivatives instruments $ (44) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (44) (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 tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2019: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Assets Equity securities $ 14,704 Transaction price (1) N/A N/A Partnership interests 32,661 Transaction price (1) N/A N/A 2,531 Other N/A N/A Collateralized loan obligations 22,265 Broker quotes and/or 3rd party pricing services N/A N/A Other fixed income 46,918 Other N/A N/A Total $ 119,079 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 431 Market approach EBITDA multiple (2) 8.2x - 21.3x 16.1x 40,745 Other Net income multiple 36.2x 36.2x Illiquidity discount 25.0% 25.0% 44,812 Transaction price (1) N/A N/A N/A Partnership interests 296,012 Discounted cash flow Discount rate 19.6% 19.6% Fixed income securities 271,919 Broker quotes and/or 3rd party pricing services N/A N/A N/A 67,217 Income approach Yield 4.8% - 14.3% 9.7% Total assets $ 721,136 Liabilities Derivatives instruments $ (4,106) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ (4,106) (1) Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions. (2) “EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 As of December 31, 2019 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 $ 30,040 $ 1,440 $ 39,362 $ 1,565 $ 67,930 $ 4,023 $ 10,846 $ 113 Total derivatives, at fair value (2) $ 30,040 $ 1,440 $ 39,362 $ 1,565 $ 67,930 $ 4,023 $ 10,846 $ 113 As of December 31, 2020 As of December 31, 2019 Assets Liabilities Assets Liabilities Consolidated Funds Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Notional (1) Fair Value Foreign exchange contracts $ — $ — $ — $ — $ 667 $ 667 $ 667 $ 670 Asset swap - other 7,600 1,104 540 44 8,863 — 1,223 4,106 Total derivatives, at fair value (3) $ 7,600 $ 1,104 $ 540 $ 44 $ 9,530 $ 667 $ 1,890 $ 4,776 (1) Represents the total contractual amount of derivative assets and liabilities outstanding. (2) As of December 31, 2020 and 2019, the Company had the right to, but elected not to, offset $1.6 million and $0.1 million of its derivative liabilities. (3) As of December 31, 2020 and 2019, the Consolidated Funds offset $0.4 million and $0.1 million of their derivative assets and liabilities, respectively. The following tables present a summary of net realized gains (losses) and unrealized appreciation (depreciation) on the Company's and Consolidated Funds' derivative instruments that are included within net realized and unrealized gains (losses) on investments in the Consolidated Statements of Operations: For the Year Ended December 31, The Company 2020 2019 2018 Net realized gains (losses) on derivatives Foreign currency forward contracts 277 2,284 (1,197) Net realized gains (losses) on derivatives $ 277 $ 2,284 $ (1,197) Net change in unrealized appreciation (depreciation) on derivatives Foreign currency forward contracts (4,060) 3,713 2,338 Net change in unrealized appreciation (depreciation) on derivatives $ (4,060) $ 3,713 $ 2,338 For the Year Ended December 31, Consolidated Funds 2020 2019 2018 Net realized gains (losses) on derivatives of Consolidated Funds Foreign currency forward contracts 5 8 96 Asset swap - other (687) (1,197) (795) Net realized losses on derivatives of Consolidated Funds $ (682) $ (1,189) $ (699) Net change in unrealized appreciation (depreciation) on derivatives of Consolidated Funds Foreign currency forward contracts 3 (20) 15 Asset swap - other 5,171 (4,751) (183) Net change in unrealized appreciation (depreciation) on derivatives of Consolidated Funds $ 5,174 $ (4,771) $ (168) . |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings outstanding | The following table summarizes the Company’s and its subsidiaries’ debt obligations: As of December 31, 2020 2019 Debt Origination Date Maturity Original Borrowing Amount Carrying Interest Rate Carrying Interest Rate Credit Facility (1) Revolver 3/30/2025 N/A $ — —% $ 70,000 3.06% 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 247,285 4.21 246,609 4.21 2030 Senior Notes (3) 6/15/2020 6/15/2030 400,000 395,713 3.28 — — Total debt obligations $ 642,998 $ 316,609 (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. On March 30, 2020, the Company amended the Credit Facility to, among other things, extend the maturity date from March 2024 to March 2025 and to reduce borrowing costs on the undrawn amounts. As of December 31, 2020, base rate loans bear interest calculated based on the base rate plus 0.125% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.125%. The unused commitment fee is 0.10% per annum. There is a base rate and LIBOR floor of zero. (2) The 2024 Senior Notes were issued in October 2014 by Ares Finance Co. LLC, an indirect subsidiary of the Company, at 98.27% of the face amount with interest paid semi-annually. The Company may redeem the 2024 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2024 Notes. (3) The 2030 Senior Notes were issued in June 2020 by Ares Finance Co. II LLC, an indirect subsidiary of the Company, at 99.77% of the face amount with interest paid semi-annually. The Company may redeem the 2030 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2030 Notes. The following table presents the activity of the Company's debt issuance costs: Credit Facility Senior Notes Unamortized debt issuance costs as of December 31, 2018 $ 4,972 $ 1,334 Debt issuance costs incurred 1,594 — Amortization of debt issuance costs (1,311) (232) Unamortized debt issuance costs as of December 31, 2019 $ 5,255 $ 1,102 Debt issuance costs incurred 1,217 3,624 Amortization of debt issuance costs (1,240) (443) Unamortized debt issuance costs as of December 31, 2020 $ 5,232 $ 4,283 The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of December 31, 2020 2019 Loan Fair Value of Weighted Loan Fair Value of Loan Obligations Weighted Senior secured notes (1) $ 9,796,442 $ 9,665,804 10.1 $ 7,738,337 $ 7,700,038 11.0 Subordinated notes (2) 482,391 292,272 10.2 449,877 273,710 11.0 Total loan obligations of Consolidated CLOs $ 10,278,833 $ 9,958,076 $ 8,188,214 $ 7,973,748 (1) Original borrowings under the senior secured notes totaled $9.8 billion, with various maturity dates ranging from July 2028 to October 2033. The weighted average interest rate as of December 31, 2020 was 1.89%. (2) Original borrowings under the subordinated notes totaled $482.4 million, with various maturity dates ranging from July 2028 to October 2033. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO. The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding: As of December 31, 2020 2019 Consolidated Funds' Debt Facilities Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate Credit Facilities: 3/5/2021 $ 71,500 $ 71,500 1.59% $ 71,500 3.14% 1/1/2023 18,000 17,909 1.75 17,550 3.44 10/14/2021 75,000 32,500 2.75 17,000 4.75 Revolving Term Loan 2/9/2022 (2) — — — 1,194 7.70 Total borrowings of Consolidated Funds $ 121,909 $ 107,244 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. (2) On July 15, 2020, the revolving term loan was terminated at the Consolidated Fund's discretion. |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
Schedule of Other Assets | The components of other assets were as follows: As of December 31, 2020 2019 Other assets of the Company: Accounts and interest receivable $ 45,494 $ 47,368 Fixed assets, net 60,874 62,883 Deferred tax assets, net 70,026 46,364 Goodwill 371,047 143,855 Intangible assets, net 222,088 7,975 Other assets 42,890 33,817 Total other assets of the Company $ 812,419 $ 342,262 Other assets of Consolidated Funds: Dividends and interest receivable $ 30,413 $ 26,030 Income tax and other receivables 5,089 4,051 Total other assets of Consolidated Funds $ 35,502 $ 30,081 |
Property, Plant and Equipment | The components of fixed assets were as follows: As of December 31, 2020 2019 Furniture $ 10,402 $ 9,484 Office and computer equipment 17,666 19,963 Internal-use software 47,456 36,966 Leasehold improvements 57,505 56,619 Fixed assets, at cost 133,029 123,032 Less: accumulated depreciation (72,155) (60,149) Fixed assets, net $ 60,874 $ 62,883 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease | The tables below present certain supplemental quantitative disclosures regarding the Company's leases: As of December 31, Classification 2020 2019 Operating lease assets Right-of-use operating lease assets $ 154,742 $ 143,406 Finance lease assets Other assets (1) 1,386 1,787 Total lease assets $ 156,128 $ 145,193 Operating lease liabilities Operating lease liabilities $ 180,236 $ 168,817 Finance lease obligations Accounts payable, accrued expenses and other liabilities 1,273 1,651 Total lease liabilities $ 181,509 $ 170,468 (1) Finance lease assets are recorded net of accumulated amortization of $1.0 million and $0.6 million as of December 31, 2020 and 2019 respectively. Year ended December 31, Classification 2020 2019 2018 Operating lease expense General, administrative and other expenses $ 31,713 $ 28,814 $ 30,497 Finance lease expense: Amortization of finance lease assets General, administrative and other expenses 469 304 260 Interest on finance lease liabilities Interest expense 43 39 39 Total lease expense $ 32,225 $ 29,157 $ 30,796 Year ended December 31, Other information 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 32,121 $ 31,509 Operating cash flows for finance leases 53 58 Financing cash flows for finance leases 460 311 Leased assets obtained in exchange for new finance lease liabilities — 778 Leased assets obtained in exchange for new operating lease liabilities 36,935 49,833 As of December 31, Lease term and discount rate 2020 2019 Weighted-average remaining lease terms (in years): Operating leases 6.0 6.5 Finance leases 2.6 3.3 Weighted-average discount rate: Operating leases 3.59 % 4.00 % Finance leases 3.26 % 3.39 % |
Operating Lease, Liability, Maturity | Maturity of lease liabilities Operating Leases Finance Leases 2021 $ 34,304 $ 519 2022 36,079 486 2023 32,248 158 2024 29,477 156 2025 28,969 7 After 2025 38,713 — Total future payments 199,790 1,326 Less: interest 19,554 53 Total lease liabilities $ 180,236 $ 1,273 |
Finance Lease, Liability, Maturity | Maturity of lease liabilities Operating Leases Finance Leases 2021 $ 34,304 $ 519 2022 36,079 486 2023 32,248 158 2024 29,477 156 2025 28,969 7 After 2025 38,713 — Total future payments 199,790 1,326 Less: interest 19,554 53 Total lease liabilities $ 180,236 $ 1,273 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of amounts due from and to affiliates | The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following: As of December 31, 2020 2019 Due from affiliates: Management fees receivable from non-consolidated funds $ 308,581 $ 183,579 Incentive fee receivable from non-consolidated funds 21,495 19,006 Payments made on behalf of and amounts due from non-consolidated funds and employees 75,811 64,545 Due from affiliates—Company $ 405,887 $ 267,130 Amounts due from portfolio companies and non-consolidated funds $ 17,172 $ 6,192 Due from affiliates—Consolidated Funds $ 17,172 $ 6,192 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 4,808 $ 5,432 Tax receivable agreement liability 62,505 26,542 Undistributed carried interest and incentive fees 27,322 28,086 Payments made by non-consolidated funds on behalf of and payable by the Company 5,551 11,385 Due to affiliates—Company $ 100,186 $ 71,445 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes attributable to the Company and the Consolidated Funds, consisted of the following for the years ended December 31, 2020, 2019 and 2018. For the Year Ended December 31, Provision for Income Taxes 2020 2019 2018 The Company Current: U.S. federal income tax expense $ 23,845 $ 32,012 $ 16,859 State and local income tax expense 6,714 6,940 4,306 Foreign income tax expense 9,141 6,103 6,607 39,700 45,055 27,772 Deferred: U.S. federal income tax expense 12,451 8,820 10,572 State and local income tax expense (benefit) 1,952 1,001 (4,789) Foreign income tax expense (benefit) 772 (1,970) (1,484) 15,175 7,851 4,299 Total: U.S. federal income tax expense 36,296 40,832 27,431 State and local income tax expense (benefit) 8,666 7,941 (483) Foreign income tax expense 9,913 4,133 5,123 Income tax expense 54,875 52,906 32,071 Consolidated Funds Current: Foreign income tax expense (benefit) 118 (530) 131 Income tax expense (benefit) 118 (530) 131 Total Provision for Income Taxes Total current income tax expense 39,818 44,525 27,903 Total deferred income tax expense 15,175 7,851 4,299 Income tax expense $ 54,993 $ 52,376 $ 32,202 |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate differed from the federal statutory rate for the following reasons for the years ended December 31, 2020, 2019 and 2018. For the Year Ended December 31, 2020 2019 2018 Income tax expense at federal statutory rate 21.0 % 21.0 % 21.0 % Income passed through to non-controlling interests (8.2) (10.4) (9.9) State and local taxes, net of federal benefit 1.8 1.9 2.1 Foreign taxes 0.3 0.3 0.3 Permanent items (0.5) (0.4) (0.8) Tax Cuts and Jobs Act — — (0.4) Corporate conversion expense — — 5.4 Other, net (0.2) (0.1) (0.3) Valuation allowance 0.3 — 0.1 Total effective rate 14.5 % 12.3 % 17.5 % |
Schedule of Deferred Tax Assets and Liabilities | The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows as of December 31, 2020 and 2019. Deferred tax assets, net are included within other assets on the Consolidated Statements of Financial Condition. As of December 31, Deferred Tax Assets and Liabilities of the Company 2020 2019 Deferred tax assets Amortizable tax basis for AOG unit exchanges $ 67,571 $ 25,994 Investment in partnerships — 12,841 Net operating losses 1,292 367 Other, net 6,563 7,216 Total gross deferred tax assets 75,426 46,418 Valuation allowance (1,010) (54) Total deferred tax assets, net $ 74,416 $ 46,364 Deferred tax liabilities Investment in partnerships (4,390) — Total deferred tax liabilities (4,390) — Net deferred tax assets $ 70,026 $ 46,364 As of December 31, Deferred Tax Assets and Liabilities of the Consolidated Funds 2020 2019 Deferred tax assets Net operating loss $ — $ 5,391 Other, net — 2,173 Total gross deferred tax assets — 7,564 Valuation allowance — (7,564) Total deferred tax assets, net $ — $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from earnings per common unit | Year ended December 31, 2020 2019 2018 Restricted units 16,599 82 — AOG Units 115,126,565 116,802,160 — |
Schedule of the computation of basic and diluted earnings per common unit | The following table presents the computation of basic and diluted earnings per common share: Year ended December 31, 2020 2019 2018 Basic earnings per share of Class A common stock: Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ 127,184 $ 35,320 Distributions on unvested restricted units (10,454) (7,670) (6,948) Net income available to Class A common stockholders $ 119,988 $ 119,514 $ 28,372 Basic weighted-average shares of Class A common stock 135,065,436 107,914,953 96,023,147 Basic earnings per share of Class A common stock $ 0.89 $ 1.11 $ 0.30 Diluted earnings per share of Class A common stock: Net income available to Class A common stockholders $ 130,442 $ 127,184 $ 35,320 Distributions on unvested restricted units — — (6,948) Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ 127,184 $ 28,372 Effect of dilutive shares: Restricted units 9,207,639 7,838,200 — Options 5,235,423 4,124,276 — Diluted weighted-average shares of Class A common stock 149,508,498 119,877,429 96,023,147 Diluted earnings per share of Class A common stock $ 0.87 $ 1.06 $ 0.30 Dividend declared and paid per Class A common stock $ 1.60 $ 1.28 $ 1.33 |
EQUITY COMPENSATION (Tables)
EQUITY COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of equity-based compensation expense, net of assumed forfeitures | Equity-based compensation expense, net of forfeitures, recorded by the Company is included in the following table: Year ended December 31, 2020 2019 2018 Restricted units $ 115,680 $ 88,979 $ 74,441 Restricted units with a market condition 7,263 3,613 1,524 Options 43 4,362 12,449 Phantom shares — 737 1,310 Equity-based compensation expense $ 122,986 $ 97,691 $ 89,724 |
Summary of unvested restricted units' activity | The following table presents unvested restricted units' activity: Restricted Units Weighted Average Balance - January 1, 2020 16,810,473 $ 20.07 Granted 3,984,695 36.91 Vested (4,201,333) 19.62 Forfeited (294,171) 24.85 Balance - December 31, 2020 16,299,664 $ 24.30 Market Condition Awards Units Weighted Average Balance - January 1, 2020 1,333,334 $ 9.30 Granted — — Vested (1,333,334) 9.30 Forfeited — — Balance - December 31, 2020 — $ — |
Schedule of weighted average assumptions used for fair value | Below is a summary of the significant assumptions used to estimate the grant date fair value of the market condition awards. There were no new market condition awards granted during the year ended December 31, 2020. 2018 Closing price of the Company's common shares as of valuation date $ 20.95 Risk-free interest rate 2.95 % Volatility 30.0 % Dividend yield 5.0 % Cost of equity 10.0 % |
Summary of unvested options activity | A summary of options activity during the year ended December 31, 2020 is presented below: Options Weighted Average Exercise Price Weighted Average Aggregate Intrinsic Value Balance - January 1, 2020 13,426,870 $ 18.99 4.3 $ 224,260 Granted — — — — Exercised (5,114,667) 18.99 — — Expired — — — — Forfeited — — — — Balance - December 31, 2020 8,312,203 $ 18.99 3.4 $ 233,251 Exercisable at December 31, 2020 8,312,203 $ 18.99 3.4 $ 233,251 |
EQUITY AND REDEEMABLE INTEREST
EQUITY AND REDEEMABLE INTEREST (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock by Class | The following table presents the changes in each class of common stock Class A Common Stock Class B Common Stock Class C Common Stock Total Balance - January 1, 2020 115,242,028 1,000 1 115,243,029 Issuance of stock (1) 19,854,764 — 115,199,620 135,054,384 Exchanges of AOG Units (2) 4,062,425 — (2,686,003) 1,376,422 Redemptions of AOG Units — — (66,000) (66,000) Stock option exercises, net of shares withheld for tax 4,948,742 — — 4,948,742 Vesting of restricted stock awards, net of shares withheld for tax 3,074,603 — — 3,074,603 Balance Outstanding - December 31, 2020 147,182,562 1,000 112,447,618 259,631,180 (1) On July 1, 2020, the Company issued 7,724,224 shares of new Class A common stock in connection with the SSG Acquisition. (2) Effective March 30, 2020, Class C common stock activity represents redemptions to correspond with exchanges of AOG Units. |
Schedule of Ownership Interests | The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities, as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities: Daily Average Ownership As of December 31, 2020 As of December 31, 2019 Year ended December 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2020 2019 2018 Ares Management Corporation 147,182,562 56.69 % 115,242,028 49.70 % 53.98 % 48.02 % 44.19 % Ares Owners Holding L.P. 112,447,618 43.31 116,641,833 50.30 46.02 51.98 53.99 Affiliate of Alleghany Corporation — — — — — — 1.82 Total 259,630,180 100.00 % 231,883,861 100.00 % |
Schedule of Redeemable Interests | Redeemable Interest The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities that was established in connection with the SSG Acquisition: Total Opening balance at July 1, 2020 $ 99,804 Net loss (976) Currency translation adjustment, net of tax 1,538 Balance at December 31, 2020 $ 100,366 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of financial results for Company's operating segments, as well as the OMG | The following tables present the financial results for the Company’s operating segments, as well as the OMG: Year ended December 31, 2020 Credit Group Private Equity Group Real Strategic Initiatives Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $184,141) $ 841,138 $ 221,160 $ 97,680 $ 26,587 $ 1,186,565 $ — $ 1,186,565 Other fees 18,644 178 974 152 19,948 — 19,948 Compensation and benefits (304,412) (90,129) (53,004) (6,442) (453,987) (155,979) (609,966) General, administrative and other expenses (53,997) (22,145) (12,251) (2,926) (91,319) (80,778) (172,097) Fee related earnings 501,373 109,064 33,399 17,371 661,207 (236,757) 424,450 Performance income—realized 92,308 392,635 62,273 — 547,216 — 547,216 Performance related compensation—realized (60,281) (315,905) (39,482) — (415,668) — (415,668) Realized net performance income 32,027 76,730 22,791 — 131,548 — 131,548 Investment income (loss)—realized (2,309) 29,100 3,146 13 29,950 (5,698) 24,252 Interest and other investment income (expense) —realized 16,314 5,987 4,056 996 27,353 (739) 26,614 Interest expense (8,722) (8,186) (5,200) (1,465) (23,573) (1,335) (24,908) Realized net investment income (loss) 5,283 26,901 2,002 (456) 33,730 (7,772) 25,958 Realized income $ 538,683 $ 212,695 $ 58,192 $ 16,915 $ 826,485 $ (244,529) $ 581,956 Year ended December 31, 2019 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total OMG Total Management fees (Credit Group includes ARCC Part I Fees of $164,396) $ 713,853 $ 211,614 $ 87,063 $ — $ 1,012,530 $ — $ 1,012,530 Other fees 17,124 162 792 — 18,078 — 18,078 Compensation and benefits (261,662) (78,259) (49,124) — (389,045) (139,162) (528,207) General, administrative and other expenses (55,103) (19,098) (13,249) — (87,450) (91,292) (178,742) Fee related earnings 414,212 114,419 25,482 — 554,113 (230,454) 323,659 Performance income—realized 104,442 264,439 33,637 — 402,518 — 402,518 Performance related compensation—realized (61,641) (211,550) (17,191) — (290,382) — (290,382) Realized net performance income 42,801 52,889 16,446 — 112,136 — 112,136 Investment income—realized 2,457 47,696 8,020 — 58,173 — 58,173 Interest and other investment income (expense) —realized 18,670 5,046 5,633 — 29,349 (160) 29,189 Interest expense (6,497) (7,486) (3,824) — (17,807) (1,864) (19,671) Realized net investment income (loss) 14,630 45,256 9,829 — 69,715 (2,024) 67,691 Realized income $ 471,643 $ 212,564 $ 51,757 $ — $ 735,964 $ (232,478) $ 503,486 Year ended December 31, 2018 Credit Group Private Equity Group Real Estate Group Strategic Initiatives Total OMG Total Management fees (includes ARCC Part I Fees of $128,805) $ 564,899 $ 198,182 $ 73,663 $ — $ 836,744 $ — $ 836,744 Other fees 23,247 1,008 33 — 24,288 — 24,288 Compensation and benefits (218,148) (74,672) (38,623) — (331,443) (124,812) (456,255) General, administrative and other expenses (44,845) (18,482) (11,123) — (74,450) (75,015) (149,465) Fee related earnings 325,153 106,036 23,950 — 455,139 (199,827) 255,312 Performance income—realized 121,270 139,820 96,117 — 357,207 — 357,207 Performance related compensation—realized (75,541) (111,764) (64,292) — (251,597) — (251,597) Realized net performance income 45,729 28,056 31,825 — 105,610 — 105,610 Investment income—realized 2,492 17,816 11,409 — 31,717 4,790 36,507 Interest and other investment income —realized 10,350 4,624 2,257 — 17,231 2,184 19,415 Interest expense (11,386) (6,000) (1,836) — (19,222) (2,226) (21,448) Realized net investment income 1,456 16,440 11,830 — 29,726 4,748 34,474 Realized income $ 372,338 $ 150,532 $ 67,605 $ — $ 590,475 $ (195,079) $ 395,396 |
Schedule of segment’ revenue, expenses and other income (expense) | The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: Year ended December 31, 2020 2019 2018 Segment revenues Management fees (includes ARCC Part I Fees of $184,141, $164,396 and $128,805 for the years ended December 31, 2020, 2019 and 2018, respectively) $ 1,186,565 $ 1,012,530 $ 836,744 Other fees 19,948 18,078 24,288 Performance income—realized 547,216 402,518 357,207 Total segment revenues $ 1,753,729 $ 1,433,126 $ 1,218,239 Segment expenses Compensation and benefits $ 453,987 $ 389,045 $ 331,443 General, administrative and other expenses 91,319 87,450 74,450 Performance related compensation—realized 415,668 290,382 251,597 Total segment expenses $ 960,974 $ 766,877 $ 657,490 Segment realized net investment income Investment income—realized $ 29,950 $ 58,173 $ 31,717 Interest and other investment income —realized 27,353 29,349 17,231 Interest expense (23,573) (17,807) (19,222) Total segment realized net investment income $ 33,730 $ 69,715 $ 29,726 |
Schedule of segment revenues components | The following table reconciles the Company's consolidated revenues to segment revenue: Year ended December 31, 2020 2019 2018 Total consolidated revenue $ 1,764,046 $ 1,765,438 $ 958,461 Performance (income) loss-unrealized 7,554 (303,142) 247,212 Management fees of Consolidated Funds eliminated in consolidation 45,268 34,920 34,242 Incentive fees of Consolidated Funds eliminated in consolidation 141 13,851 4,000 Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 15,824 12,641 — Administrative fees (1) (36,512) (31,629) (27,380) Performance income (loss) reclass (2) (3,726) 740 205 Principal investment (income) loss, net of eliminations (28,552) (56,555) 1,455 Net (income) expense of non-controlling interests in consolidated subsidiaries (10,314) (3,138) 44 Total consolidation adjustments and reconciling items (10,317) (332,312) 259,778 Total segment revenue $ 1,753,729 $ 1,433,126 $ 1,218,239 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Consolidated Statements of Operations. |
Schedule of segment expenses components | The following table reconciles the Company's consolidated expenses to segment expenses: Year ended December 31, 2020 2019 2018 Total consolidated expenses $ 1,450,486 $ 1,462,797 $ 870,362 Performance related compensation-unrealized 11,552 (206,799) 221,343 Expenses of Consolidated Funds added in consolidation (65,527) (90,816) (92,006) Expenses of Consolidated Funds eliminated in consolidation 45,408 48,771 38,242 Administrative fees (1) (36,512) (31,629) (27,380) OMG expenses (236,757) (230,454) (199,827) Acquisition and merger-related expense (11,124) (16,266) (2,936) Equity compensation expense (122,986) (97,691) (89,724) Deferred placement fees (19,329) (24,306) (20,343) Depreciation and amortization expense (40,662) (40,602) (25,087) Other expense (2) — — (11,836) Expense of non-controlling interests in consolidated subsidiaries (13,575) (6,128) (3,318) Total consolidation adjustments and reconciling items (489,512) (695,920) (212,872) Total segment expenses $ 960,974 $ 766,877 $ 657,490 (1) Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) 2018 period includes an $11.8 million payment to ARCC for rent and utilities for the first quarter of 2018 and the years ended 2017, 2016, 2015 and 2014. |
Schedule of segment other income (expense) components | The following table reconciles the Company's consolidated other income to segment realized net investment income: Year ended December 31, 2020 2019 2018 Total consolidated other income $ 65,918 $ 122,539 $ 96,242 Investment loss—unrealized 47,317 26,620 49,241 Interest and other investment (income) loss—unrealized (12,134) 9,061 233 Other income from Consolidated Funds added in consolidation, net (70,994) (117,405) (114,286) Other expense from Consolidated Funds eliminated in consolidation, net (14,053) (12,991) (865) OMG other income (927) (1,190) (3,315) Performance (income) loss reclass (1) 3,726 (740) (205) Principal investment income 4,044 44,320 1,047 Other (income) expense, net (2) 10,277 (460) 1,653 Other (income) loss of non-controlling interests in consolidated subsidiaries 556 (39) (19) Total consolidation adjustments and reconciling items (32,188) (52,824) (66,516) Total segment realized net investment income $ 33,730 $ 69,715 $ 29,726 (1) Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Consolidated Statements of Operations. (2) The year ended December 31, 2020 includes a $10.2 million non-cash unrealized guarantee expense. |
Reconciliation of segment results to the Company's income before taxes and total assets | The following table presents the reconciliation of income before taxes as reported in the Consolidated Statements of Operations to segment results of RI and FRE: Year ended December 31, 2020 2019 2018 Income before taxes $ 379,478 $ 425,180 $ 184,341 Adjustments: Depreciation and amortization expense 40,662 40,602 25,087 Equity compensation expense 122,986 97,691 89,724 Acquisition and merger-related expense 11,194 16,266 2,936 Deferred placement fees 19,329 24,306 20,343 OMG expense, net 235,830 229,264 196,512 Other (income) expense, net (1) 10,207 (460) 13,489 Net expense of non-controlling interests in consolidated subsidiaries 3,817 2,951 3,343 Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (28,203) (39,174) (20,643) Total performance (income) loss-unrealized 7,554 (303,142) 247,212 Total performance related compensation - unrealized (11,552) 206,799 (221,343) Total investment loss-unrealized 35,183 35,681 49,474 Realized income 826,485 735,964 590,475 Total performance income - realized (547,216) (402,518) (357,207) Total performance related compensation - realized 415,668 290,382 251,597 Total investment income - realized (33,730) (69,715) (29,726) Fee related earnings $ 661,207 $ 554,113 $ 455,139 |
CONSOLIDATION (Tables)
CONSOLIDATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of interest in VIEs | The Company's interests in consolidated and non-consolidated VIEs, as presented in the Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows: As of December 31, 2020 2019 Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs (1) $ 224,203 $ 260,520 Maximum exposure to loss attributable to the Company's investment in consolidated VIEs (1) 391,963 181,856 Assets of consolidated VIEs 11,580,003 9,454,572 Liabilities of consolidated VIEs 10,716,438 8,679,869 (1) As of December 31, 2020 and 2019, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $107.7 million and $104.7 million, respectively. Year ended December 31, 2020 2019 2018 Net income attributable to non-controlling interests related to consolidated VIEs $ 28,085 $ 39,704 $ 20,512 |
Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition | Consolidating Schedules The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows: As of December 31, 2020 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 539,812 $ — $ — $ 539,812 Investments (includes $1,145,853 of accrued carried interest) 2,064,517 — (381,758) 1,682,759 Due from affiliates 426,021 — (20,134) 405,887 Other assets 812,630 — (211) 812,419 Right-of-use operating lease assets 154,742 — — 154,742 Assets of Consolidated Funds Cash and cash equivalents — 522,377 — 522,377 Investments, at fair value — 10,873,522 3,575 10,877,097 Due from affiliates — 27,377 (10,205) 17,172 Receivable for securities sold — 121,225 — 121,225 Other assets — 35,502 — 35,502 Total assets $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 Liabilities Accounts payable, accrued expenses and other liabilities $ 125,494 $ — $ (10,205) $ 115,289 Accrued compensation 103,010 — — 103,010 Due to affiliates 100,186 — — 100,186 Performance related compensation payable 813,378 — — 813,378 Debt obligations 642,998 — — 642,998 Operating lease liabilities 180,236 — — 180,236 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 46,824 — 46,824 Due to affiliates — 16,770 (16,770) — Payable for securities purchased — 514,946 — 514,946 CLO loan obligations, at fair value — 10,015,989 (57,913) 9,958,076 Fund borrowings — 121,909 — 121,909 Total liabilities 1,965,302 10,716,438 (84,888) 12,596,852 Commitments and contingencies Redeemable interest in Ares Operating Group entities 100,366 — — 100,366 Non-controlling interest in Consolidated Funds — 863,565 (323,845) 539,720 Non-controlling interest in Ares Operating Group entities 738,369 — — 738,369 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (147,182,562 shares issued and outstanding) 1,472 — — 1,472 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (112,447,618 shares issued and outstanding) 1,124 — — 1,124 Additional paid-in-capital 1,043,669 — — 1,043,669 Retained earnings (151,824) — — (151,824) Accumulated other comprehensive loss, net of tax 483 — — 483 Total stockholders' equity 1,193,685 — — 1,193,685 Total equity 1,932,054 863,565 (323,845) 2,471,774 Total liabilities, redeemable interest, non-controlling interests and equity $ 3,997,722 $ 11,580,003 $ (408,733) $ 15,168,992 As of December 31, 2019 Consolidated Consolidated Eliminations Consolidated Assets Cash and cash equivalents $ 138,384 $ — $ — $ 138,384 Investments (includes $1,134,967 of accrued carried interest) 1,845,520 — (181,856) 1,663,664 Due from affiliates 281,228 — (14,098) 267,130 Other assets 344,643 — (2,381) 342,262 Right-of-use operating lease assets 143,406 — — 143,406 Assets of Consolidated Funds Cash and cash equivalents — 606,321 — 606,321 Investments, at fair value — 8,723,169 4,778 8,727,947 Due from affiliates — 6,192 — 6,192 Receivable for securities sold — 88,809 — 88,809 Other assets — 30,081 — 30,081 Total assets $ 2,753,181 $ 9,454,572 $ (193,557) $ 12,014,196 Liabilities Accounts payable, accrued expenses and other liabilities $ 88,173 $ — $ — $ 88,173 Accrued compensation 37,795 — — 37,795 Due to affiliates 71,445 — — 71,445 Performance related compensation payable 829,764 — — 829,764 Debt obligations 316,609 — — 316,609 Operating lease liabilities 168,817 — — 168,817 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 61,857 — 61,857 Due to affiliates — 11,700 (11,700) — Payable for securities purchased — 500,146 — 500,146 CLO loan obligations — 7,998,922 (25,174) 7,973,748 Fund borrowings — 107,244 — 107,244 Total liabilities 1,512,603 8,679,869 (36,874) 10,155,598 Commitments and contingencies Non-controlling interest in Consolidated Funds — 774,703 (156,683) 618,020 Non-controlling interest in Ares Operating Group entities 472,288 — — 472,288 Stockholders' Equity Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding) 298,761 — — 298,761 Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (115,242,028 shares issued and outstanding) 1,152 — — 1,152 Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding) — — — — Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding) — — — — Additional paid-in-capital 525,244 — — 525,244 Retained earnings (50,820) — — (50,820) Accumulated other comprehensive loss, net of tax (6,047) — — (6,047) Total stockholders' equity 768,290 — — 768,290 Total equity 1,240,578 774,703 (156,683) 1,858,598 Total liabilities, non-controlling interests and equity $ 2,753,181 $ 9,454,572 $ (193,557) $ 12,014,196 |
Schedule of results from operations | Year ended December 31, 2020 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $184,141) $ 1,195,876 $ — $ (45,268) $ 1,150,608 Carried interest allocation 505,608 — — 505,608 Incentive fees 38,043 — (141) 37,902 Principal investment income 4,044 — 24,508 28,552 Administrative, transaction and other fees 57,200 — (15,824) 41,376 Total revenues 1,800,771 — (36,725) 1,764,046 Expenses Compensation and benefits 767,252 — — 767,252 Performance related compensation 404,116 — — 404,116 General, administrative and other expense 258,999 — — 258,999 Expenses of the Consolidated Funds — 65,527 (45,408) 20,119 Total expenses 1,430,367 65,527 (45,408) 1,450,486 Other income (expense) Net realized and unrealized losses on investments (8,720) — (288) (9,008) Interest and dividend income 11,641 — (3,570) 8,071 Interest expense (24,908) — — (24,908) Other income, net 2,858 — 8,433 11,291 Net realized and unrealized losses on investments of the Consolidated Funds — (109,387) 12,523 (96,864) Interest and other income of the Consolidated Funds — 473,857 (10,205) 463,652 Interest expense of the Consolidated Funds — (293,476) 7,160 (286,316) Total other income (expense) (19,129) 70,994 14,053 65,918 Income before taxes 351,275 5,467 22,736 379,478 Income tax expense 54,875 118 — 54,993 Net income 296,400 5,349 22,736 324,485 Less: Net income attributable to non-controlling interests in Consolidated Funds — 5,349 22,736 28,085 Net income attributable to Ares Operating Group entities 296,400 — — 296,400 Less: Net loss attributable to redeemable interest in Ares Operating Group entities (976) — — (976) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 145,234 — — 145,234 Net income attributable to Ares Management Corporation 152,142 — — 152,142 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 130,442 $ — $ — $ 130,442 Year ended December 31, 2019 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $164,396) $ 1,014,337 $ — $ (34,920) $ 979,417 Carried interest allocation 621,872 — — 621,872 Incentive fees 83,048 — (13,851) 69,197 Principal investment income 44,320 — 12,235 56,555 Administrative, transaction and other fees 51,038 — (12,641) 38,397 Total revenues 1,814,615 — (49,177) 1,765,438 Expenses Compensation and benefits 653,352 — — 653,352 Performance related compensation 497,181 — — 497,181 General, administrative and other expense 270,219 — — 270,219 Expenses of the Consolidated Funds — 90,816 (48,771) 42,045 Total expenses 1,420,752 90,816 (48,771) 1,462,797 Other income (expense) Net realized and unrealized gains on investments 10,405 — (851) 9,554 Interest and dividend income 9,599 — (2,093) 7,506 Interest expense (19,671) — — (19,671) Other expense, net (8,190) — 350 (7,840) Net realized and unrealized gains on investments of the Consolidated Funds — 3,312 11,824 15,136 Interest and other income of the Consolidated Funds — 395,599 — 395,599 Interest expense of the Consolidated Funds — (281,506) 3,761 (277,745) Total other income (expense) (7,857) 117,405 12,991 122,539 Income before taxes 386,006 26,589 12,585 425,180 Income tax expense (benefit) 52,906 (530) — 52,376 Net income 333,100 27,119 12,585 372,804 Less: Net income attributable to non-controlling interests in Consolidated Funds — 27,119 12,585 39,704 Net income attributable to Ares Operating Group entities 333,100 — — 333,100 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 184,216 — — 184,216 Net income attributable to Ares Management Corporation 148,884 — — 148,884 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 127,184 $ — $ — $ 127,184 Year ended December 31, 2018 Consolidated Consolidated Eliminations Consolidated Revenues Management fees (includes ARCC Part I Fees of $128,805) $ 836,744 $ — $ (34,242) $ 802,502 Carried interest allocation 42,410 — — 42,410 Incentive fees 67,380 — (4,000) 63,380 Principal investment income 1,047 — (2,502) (1,455) Administrative, transaction and other fees 51,624 — — 51,624 Total revenues 999,205 — (40,744) 958,461 Expenses Compensation and benefits 570,380 — — 570,380 Performance related compensation 30,254 — — 30,254 General, administrative and other expense 215,964 — — 215,964 Expenses of the Consolidated Funds — 92,006 (38,242) 53,764 Total expenses 816,598 92,006 (38,242) 870,362 Other income (expense) Net realized and unrealized losses on investments (2,867) — 983 (1,884) Interest and dividend income 7,121 — (93) 7,028 Interest expense (21,448) — — (21,448) Other expense, net (1,715) — 864 (851) Net realized and unrealized gains (losses) on investments of the Consolidated Funds — 664 (2,247) (1,583) Interest and other income of the Consolidated Funds — 337,875 — 337,875 Interest expense of the Consolidated Funds — (224,253) 1,358 (222,895) Total other income (expense) (18,909) 114,286 865 96,242 Income before taxes 163,698 22,280 (1,637) 184,341 Income tax expense 32,071 131 — 32,202 Net income 131,627 22,149 (1,637) 152,139 Less: Net income attributable to non-controlling interests in Consolidated Funds — 22,149 (1,637) 20,512 Net income attributable to Ares Operating Group entities 131,627 — — 131,627 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 74,607 — — 74,607 Net income attributable to Ares Management Corporation 57,020 — — 57,020 Less: Series A Preferred Stock dividends paid 21,700 — — 21,700 Net income attributable to Ares Management Corporation Class A common stockholders $ 35,320 $ — $ — $ 35,320 |
Schedule of cash flows | Year ended December 31, 2020 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 296,400 $ 5,349 $ 22,736 $ 324,485 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 122,986 — — 122,986 Depreciation and amortization 41,248 — — 41,248 Net realized and unrealized (gains) losses on investments 20,651 — (28,690) (8,039) Investments purchased (352,750) — 261,899 (90,851) Proceeds from sale of investments 207,986 — (33,307) 174,679 Adjustments to reconcile net income to net cash provided by (used) in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized losses on investments — 109,387 (12,523) 96,864 Other non-cash amounts — (34,297) — (34,297) Investments purchased — (6,580,784) (34,948) (6,615,732) Proceeds from sale of investments — 5,502,325 — 5,502,325 Cash flows due to changes in operating assets and liabilities : Net performance income receivable (24,351) — — (24,351) Due to/from affiliates (82,222) — 6,037 (76,185) Other assets (34,523) — (2,170) (36,693) Accrued compensation and benefits 54,539 — — 54,539 Accounts payable, accrued expenses and other liabilities 31,240 — (10,205) 21,035 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 83,944 83,944 Net cash acquired with consolidation/deconsolidation of Consolidated Funds — 60,895 — 60,895 Change in other assets and receivables held at Consolidated Funds — (55,461) 22,163 (33,298) Change in other liabilities and payables held at Consolidated Funds — 10,787 — 10,787 Net cash provided by (used in) operating activities 281,204 (981,799) 274,936 (425,659) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (15,942) — — (15,942) Acquisitions, net of cash acquired (120,822) — — (120,822) Net cash used in investing activities (136,764) — — (136,764) Cash flows from financing activities: Net proceeds from issuance of Class A common stock 383,154 — — 383,154 Proceeds from credit facility 790,000 — — 790,000 Proceeds from senior notes 399,084 — — 399,084 Repayments of credit facility (860,000) — — (860,000) Dividends and distributions (446,780) — — (446,780) Series A Preferred Stock dividends (21,700) — — (21,700) Stock option exercises 92,877 — — 92,877 Taxes paid related to net share settlement of equity awards (95,368) — — (95,368) Other financing activities (1,531) — — (1,531) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 359,381 (226,951) 132,430 Distributions to non-controlling interests in Consolidated Funds — (287,467) 35,960 (251,507) Borrowings under loan obligations by Consolidated Funds — 1,013,291 — 1,013,291 Repayments under loan obligations by Consolidated Funds — (190,055) — (190,055) Net cash provided by financing activities 239,736 895,150 (190,991) 943,895 Effect of exchange rate changes 17,252 2,704 — 19,956 Net change in cash and cash equivalents 401,428 (83,945) 83,945 401,428 Cash and cash equivalents, beginning of period 138,384 606,321 (606,321) 138,384 Cash and cash equivalents, end of period $ 539,812 $ 522,376 $ (522,376) $ 539,812 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisitions $ 305,338 $ — $ — $ 305,338 Supplemental information of cash flow information: Cash paid during the period for interest $ 22,127 $ 235,005 $ — $ 257,132 Cash paid during the period for income taxes $ 38,005 $ 169 $ — $ 38,174 Year ended December 31, 2019 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 333,100 $ 27,119 $ 12,585 $ 372,804 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 97,691 — — 97,691 Depreciation and amortization 39,459 — — 39,459 Net realized and unrealized gains on investments (37,211) — (15,881) (53,092) Investments purchased (401,266) — 122,468 (278,798) Proceeds from sale of investments 395,997 — (111,187) 284,810 Adjustments to reconcile net income to net cash provided by (used in) operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — (3,312) (11,824) (15,136) Other non-cash amounts — (8,383) — (8,383) Investments purchased — (5,310,296) 93,365 (5,216,931) Proceeds from sale of investments — 3,077,755 — 3,077,755 Cash flows due to changes in operating assets and liabilities: Net performance income receivable (103,962) — — (103,962) Due to/from affiliates (80,689) — 5,551 (75,138) Other assets 24,303 — 2,381 26,684 Accrued compensation and benefits 7,650 — — 7,650 Accounts payable, accrued expenses and other liabilities 30,669 — — 30,669 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — (221,677) (221,677) Cash relinquished with deconsolidation of Consolidated Funds — (81,059) — (81,059) Change in other assets and receivables held at Consolidated Funds — (51,681) (3,153) (54,834) Change in other liabilities and payables held at Consolidated Funds — 88,467 — 88,467 Net cash provided by (used in) operating activities 305,741 (2,261,390) (127,372) (2,083,021) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (16,796) — — (16,796) Net cash used in investing activities (16,796) — — (16,796) Cash flows from financing activities: Proceeds from issuance of Class A common stock 206,705 — — 206,705 Proceeds from credit facility 335,000 — — 335,000 Repayments of credit facility (500,000) — — (500,000) Dividends and distributions (323,667) — — (323,667) Series A Preferred Stock dividends (21,700) — — (21,700) Repurchases of Class A common stock (10,449) — — (10,449) Stock option exercises 90,511 — — 90,511 Taxes paid related to net share settlement of equity awards (33,554) — — (33,554) Other financing activities (3,212) — — (3,212) Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 290,677 (117,826) 172,851 Distributions to non-controlling interests in Consolidated Funds — (117,599) 21,317 (96,282) Borrowings under loan obligations by Consolidated Funds — 3,349,654 (7,817) 3,341,837 Repayments under loan obligations by Consolidated Funds — (1,045,731) 10,021 (1,035,710) Net cash provided by (used in) financing activities (260,366) 2,477,001 (94,305) 2,122,330 Effect of exchange rate changes (442) 6,066 — 5,624 Net change in cash and cash equivalents 28,137 221,677 (221,677) 28,137 Cash and cash equivalents, beginning of period 110,247 384,644 (384,644) 110,247 Cash and cash equivalents, end of period $ 138,384 $ 606,321 $ (606,321) $ 138,384 Supplemental information of cash flow information: Cash paid during the period for interest $ 17,922 $ 215,168 $ — $ 233,090 Cash paid during the period for income taxes $ 35,021 $ 604 $ — $ 35,625 Year ended December 31, 2018 Consolidated Consolidated Eliminations Consolidated Cash flows from operating activities: Net income $ 131,627 $ 22,149 $ (1,637) $ 152,139 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 89,724 — — 89,724 Depreciation and amortization 28,517 — — 28,517 Net realized and unrealized losses on investments 15,938 — (3,003) 12,935 Other non-cash amounts 10 — — 10 Investments purchased (283,514) — 35,054 (248,460) Proceeds from sale of investments 415,894 — (34,191) 381,703 Adjustments to reconcile net income to net cash provided by (used in) operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized (gains) losses on investments — (665) 2,248 1,583 Other non-cash amounts — (4,519) — (4,519) Investments purchased — (4,919,118) — (4,919,118) Proceeds from sale of investments — 2,756,924 — 2,756,924 Cash flows due to changes in operating assets and liabilities: Net performance income receivable 34,911 — (5,333) 29,578 Due to/from affiliates 30,429 — 2,594 33,023 Other assets (66,795) — — (66,795) Accrued compensation and benefits 114 — — 114 Accounts payable, accrued expenses and other liabilities 2,306 — — 2,306 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 171,856 171,856 Cash acquired with consolidation of Consolidated Funds — 11,915 — 11,915 Change in other assets and receivables held at Consolidated Funds — 9,224 2,738 11,962 Change in other liabilities and payables held at Consolidated Funds — 137,545 — 137,545 Net cash provided by (used in) operating activities 399,161 (1,986,545) 170,326 (1,417,058) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals (18,419) — — (18,419) Net cash used in investing activities (18,419) — — (18,419) Cash flows from financing activities: Proceeds from issuance of Class A common stock 105,333 — — 105,333 Proceeds from credit facility 680,000 — — 680,000 Repayments of term notes (206,089) — — (206,089) Proceeds from term notes 44,050 — — 44,050 Repayments of credit facility (655,000) — — (655,000) Dividends and distributions (312,646) — — (312,646) Series A Preferred Stock dividends (21,700) — — (21,700) Stock option exercises 950 — — 950 Taxes paid related to net share settlement of equity awards (18,014) — — (18,014) Other financing activities 3,128 — — 3,128 Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 85,681 (14,672) 71,009 Distributions to non-controlling interests in Consolidated Funds — (195,438) 35,728 (159,710) Borrowings under loan obligations by Consolidated Funds — 2,921,159 (19,526) 2,901,633 Repayments under loan obligations by Consolidated Funds — (1,027,649) — (1,027,649) Net cash provided by (used in) financing activities (379,988) 1,783,753 1,530 1,405,295 Effect of exchange rate changes (9,436) 30,936 — 21,500 Net change in cash and cash equivalents (8,682) (171,855) 171,855 (8,682) Cash and cash equivalents, beginning of period 118,929 556,500 (556,500) 118,929 Cash and cash equivalents, end of period $ 110,247 $ 384,644 $ (384,644) $ 110,247 Supplemental information: Cash paid during the period for interest $ 19,881 $ 165,070 $ — $ 184,951 Cash paid during the period for income taxes $ 26,740 $ 742 $ — $ 27,482 |
ORGANIZATION (Details)
ORGANIZATION (Details) | Feb. 21, 2020contract |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of collateral management contracts acquired | 7 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)entity | Dec. 31, 2019USD ($)entity | Dec. 31, 2018USD ($) | |
Consolidated CLOs | |||
Number of CLOs consolidated | entity | 21 | 16 | |
Foreign Currency | |||
Foreign currency transaction loss | $ | $ 13.1 | $ 8.5 | $ 0.1 |
ARCC | |||
Management Fees | |||
Management fees as a percentage of net investment income | 20.00% | ||
Hurdle rate per quarter | 1.75% | ||
Hurdle rate per annum | 7.00% | ||
Percentage of net investment income received from first dollar earned | 20.00% | ||
Minimum | |||
Goodwill and Intangible Assets | |||
Estimated useful lives, intangible assets | 2 years | ||
Management Fees | |||
Performance fee compensation, employment or service period | 4 years | ||
Minimum | Property Plant And Equipment Other Than Leasehold Improvements And Internal Use Software | |||
Fixed Assets | |||
Estimated useful life | 3 years | ||
Maximum | |||
Goodwill and Intangible Assets | |||
Estimated useful lives, intangible assets | 13 years 6 months | ||
Management Fees | |||
Performance fee compensation, employment or service period | 6 years | ||
Maximum | Property Plant And Equipment Other Than Leasehold Improvements And Internal Use Software | |||
Fixed Assets | |||
Estimated useful life | 7 years |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Carrying Value of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-lived intangible assets, net | ||
Intangible assets | $ 247,077 | $ 19,217 |
Foreign currency translation | 3,093 | 0 |
Total intangible assets | 250,170 | 19,217 |
Less: accumulated amortization | (28,082) | (11,242) |
Intangible assets, net | $ 222,088 | 7,975 |
Management contracts | ||
Finite-lived intangible assets, net | ||
Estimated useful lives, intangible assets | 5 years 4 months 24 days | |
Intangible assets | $ 210,857 | 12,498 |
Client relationships | ||
Finite-lived intangible assets, net | ||
Estimated useful lives, intangible assets | 9 years 1 month 6 days | |
Intangible assets | $ 25,141 | 6,341 |
Trade name | ||
Finite-lived intangible assets, net | ||
Estimated useful lives, intangible assets | 9 years 4 months 24 days | |
Intangible assets | $ 11,079 | $ 378 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 247,077,000 | $ 19,217,000 | |||
Amortization expense | $ 9,000,000 | ||||
Fully-amortized intangibles, amount removed during the period | $ 4,700,000 | ||||
Acquisitions | 224,601,000 | ||||
Goodwill impairment | 0 | 0 | |||
Strategic Initiatives | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquisitions | $ 224,600,000 | 224,601,000 | |||
General, administrative and other expense | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 24,500,000 | 3,400,000 | |||
Crestline Denali | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful lives, intangible assets | 6 years 7 months 6 days | ||||
Finite-lived intangible assets acquired | $ 34,700,000 | ||||
Energy Investors Funds | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment charge | 20,000,000 | ||||
Management contracts | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 210,857,000 | 12,498,000 | |||
Estimated useful lives, intangible assets | 5 years 4 months 24 days | ||||
Management contracts | SSG Capital Holdings | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 171,700,000 | ||||
Estimated useful lives, intangible assets | 5 years 9 months 18 days | ||||
Client relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 25,141,000 | 6,341,000 | |||
Estimated useful lives, intangible assets | 9 years 1 month 6 days | ||||
Client relationships | SSG Capital Holdings | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 18,800,000 | ||||
Estimated useful lives, intangible assets | 10 years | ||||
Trade name | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 11,079,000 | $ 378,000 | |||
Estimated useful lives, intangible assets | 9 years 4 months 24 days | ||||
Trade name | SSG Capital Holdings | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 10,700,000 | ||||
Estimated useful lives, intangible assets | 10 years | ||||
Client Relationships and Trade Names | Energy Investors Funds | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets removed | $ 35,100,000 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Future Amortization) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 42,424 | |
2022 | 42,040 | |
2023 | 38,946 | |
2024 | 33,144 | |
2025 | 26,834 | |
Thereafter | 38,700 | |
Intangible assets, net | $ 222,088 | $ 7,975 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 143,855 | ||
Goodwill acquired during period | 224,601 | ||
Foreign currency translation | 2,591 | $ 69 | |
Goodwill, ending balance | 371,047 | 143,786 | |
Credit Group | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 32,196 | ||
Goodwill acquired during period | 0 | ||
Foreign currency translation | 0 | 0 | |
Goodwill, ending balance | 32,196 | 32,196 | |
Private Equity Group | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 58,600 | ||
Goodwill acquired during period | 0 | ||
Foreign currency translation | 0 | 0 | |
Goodwill, ending balance | 58,600 | 58,600 | |
Real Estate Group | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 53,059 | ||
Goodwill acquired during period | 0 | ||
Foreign currency translation | 61 | 69 | |
Goodwill, ending balance | 53,120 | 52,990 | |
Strategic Initiatives | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 0 | ||
Goodwill acquired during period | $ 224,600 | 224,601 | |
Foreign currency translation | 2,530 | 0 | |
Goodwill, ending balance | $ 227,131 | $ 0 |
INVESTMENTS (Fair Value Investm
INVESTMENTS (Fair Value Investments, excluding Equity Method Investments Held at Fair Value) (Details) - Ares Management L.P - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Equity method investments | $ 1,682,759 | $ 1,663,664 |
Partnership interests | 3,784 | 36,824 |
Total equity method investments | 146,552 | 121,754 |
Collateralized loan obligations | 31,766 | 22,265 |
Equity securities | $ 89,419 | $ 15,747 |
Percentage of total investments | 1.90% | 1.30% |
Crestline Denali Class B Interests | ||
Investments | ||
Collateralized loan obligations | $ 3,400 | |
Partnership interests | ||
Investments | ||
Total equity method investments | $ 1,628,403 | $ 1,593,438 |
Percentage of total investments | 96.80% | 95.80% |
Other fixed income | ||
Investments | ||
Total equity method investments | $ 21,583 | $ 46,918 |
Percentage of total investments | 1.30% | 2.80% |
Collateralized loan obligations | ||
Investments | ||
Collateralized loan obligations | $ 53,349 | $ 69,183 |
Percentage of total investments | 3.20% | 4.10% |
Common Stock | ||
Investments | ||
Equity securities | $ 1,007 | $ 1,043 |
Percentage of total investments | 0.10% | 0.10% |
Partnership interests | ||
Investments | ||
Equity method investments | $ 366,471 | $ 390,407 |
Percentage of total investments | 21.80% | 23.50% |
Carried interest allocation | ||
Investments | ||
Equity method investments | $ 1,145,853 | $ 1,134,967 |
Percentage of total investments | 68.10% | 68.20% |
Equity method private investment partnership interests and other (held at fair value)(1) | ||
Investments | ||
Equity method investments | $ 92,196 | $ 51,528 |
Percentage of total investments | 5.50% | 3.10% |
Equity method private investment partnership interests and other(1) | ||
Investments | ||
Partnership interests | $ 23,883 | $ 16,536 |
Percentage of total investments | 1.40% | 1.00% |
INVESTMENTS (Equity Method Inve
INVESTMENTS (Equity Method Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Financial Condition | ||||
Assets | $ 15,168,992 | $ 12,014,196 | ||
Liabilities | 12,596,852 | 10,155,598 | ||
Total equity | 2,471,774 | 1,858,598 | $ 1,394,341 | $ 1,437,681 |
Statement of Operations | ||||
Total revenues | 1,764,046 | 1,765,438 | 958,461 | |
Expenses | (1,450,486) | (1,462,797) | (870,362) | |
Income tax expense | (54,993) | (52,376) | (32,202) | |
Net income | 324,485 | 372,804 | 152,139 | |
Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Investments, at fair value | 26,053,698 | 25,577,194 | ||
Assets | 27,859,655 | 27,017,756 | ||
Liabilities | 6,286,754 | 4,909,414 | ||
Total equity | 21,572,901 | 22,108,342 | ||
Statement of Operations | ||||
Total revenues | 1,397,984 | 1,401,971 | 1,175,091 | |
Expenses | 420,064 | (445,061) | (371,586) | |
Net realized and unrealized gains (losses) on investments | 1,021,728 | 2,061,425 | (542,303) | |
Income tax expense | (56,588) | (30,350) | (27,155) | |
Net income | 2,056,236 | 2,987,985 | 234,047 | |
Credit Group | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Investments, at fair value | 12,406,944 | 10,937,224 | ||
Assets | 13,416,800 | 11,625,699 | ||
Liabilities | 3,884,603 | 3,416,429 | ||
Total equity | 9,532,197 | 8,209,270 | ||
Statement of Operations | ||||
Total revenues | 940,450 | 871,168 | 766,009 | |
Expenses | 221,083 | (211,984) | (189,432) | |
Net realized and unrealized gains (losses) on investments | (210,881) | 5,040 | (67,477) | |
Income tax expense | 1,693 | (1,537) | (2,526) | |
Net income | 506,793 | 662,687 | 506,574 | |
Private Equity Group | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Investments, at fair value | 8,259,168 | 9,700,725 | ||
Assets | 8,591,385 | 10,077,149 | ||
Liabilities | 1,415,383 | 534,965 | ||
Total equity | 7,176,002 | 9,542,184 | ||
Statement of Operations | ||||
Total revenues | 263,335 | 325,529 | 264,376 | |
Expenses | 112,325 | (112,610) | (85,801) | |
Net realized and unrealized gains (losses) on investments | 1,218,362 | 1,674,002 | (892,800) | |
Income tax expense | (57,935) | (27,887) | (20,554) | |
Net income | 1,427,307 | 1,859,034 | (734,779) | |
Real Estate Group | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Investments, at fair value | 5,320,711 | 4,939,245 | ||
Assets | 5,780,472 | 5,314,908 | ||
Liabilities | 975,057 | 958,020 | ||
Total equity | 4,805,415 | 4,356,888 | ||
Statement of Operations | ||||
Total revenues | 191,543 | 205,274 | 144,706 | |
Expenses | 81,071 | (120,467) | (96,353) | |
Net realized and unrealized gains (losses) on investments | 11,923 | 382,383 | 417,974 | |
Income tax expense | (346) | (926) | (4,075) | |
Net income | 122,741 | 466,264 | 462,252 | |
Strategic Initiatives | Equity Method Investment, Nonconsolidated Investee | ||||
Statement of Financial Condition | ||||
Investments, at fair value | 66,875 | 0 | ||
Assets | 70,998 | 0 | ||
Liabilities | 11,711 | 0 | ||
Total equity | 59,287 | 0 | ||
Statement of Operations | ||||
Total revenues | 2,656 | 0 | 0 | |
Expenses | 5,585 | 0 | 0 | |
Net realized and unrealized gains (losses) on investments | 2,324 | 0 | 0 | |
Income tax expense | 0 | 0 | 0 | |
Net income | $ (605) | $ 0 | $ 0 |
INVESTMENTS (Narrative) (Detail
INVESTMENTS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments in and Advances to Affiliates [Abstract] | |||
Equity method investments gain (loss) | $ 22,500 | $ 57,400 | $ (3,800) |
INVESTMENTS (Investments of the
INVESTMENTS (Investments of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Total investments | $ 10,877,097 | $ 8,727,947 |
Percent of total assets | 5.00% | 5.00% |
Fixed Income Securities | ||
Investments | ||
Total investments | $ 10,410,442 | $ 8,319,551 |
Percentage of total investments as of | 95.70% | 95.30% |
Fixed Income Securities | Bonds | ||
Investments | ||
Total investments | $ 397,494 | $ 212,376 |
Percentage of total investments as of | 3.60% | 2.40% |
Fixed Income Securities | Loans | ||
Investments | ||
Total investments | $ 10,012,948 | $ 8,062,740 |
Percentage of total investments as of | 92.10% | 92.40% |
Fixed Income Securities | Collateralized loan obligations | ||
Investments | ||
Total investments | $ 0 | $ 44,435 |
Percentage of total investments as of | 0.00% | 0.50% |
Equity Securities | ||
Investments | ||
Total investments | $ 227,031 | $ 112,384 |
Percentage of total investments as of | 2.10% | 1.30% |
Partnership Interests | ||
Investments | ||
Total investments | $ 239,624 | $ 296,012 |
Percentage of total investments as of | 2.20% | 3.40% |
FAIR VALUE (Assets and Liabilit
FAIR VALUE (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Funds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | $ 10,410,442 | $ 8,319,551 |
Common stock and other equity securities | 227,031 | 112,384 |
Partnership interests | 239,624 | 296,012 |
Total investments, at fair value | 10,877,097 | 8,727,947 |
Derivatives-foreign exchange contracts | 1,104 | |
Total derivative assets, at fair value | 10,878,201 | 8,728,614 |
Liabilities, at fair value | ||
Derivative liabilities | (4,776) | |
Loan obligations of CLOs | (9,958,076) | (7,973,748) |
Total liabilities, at fair value | (9,958,120) | (7,978,524) |
Consolidated Funds | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 667 | |
Liabilities, at fair value | ||
Derivative liabilities | (670) | |
Consolidated Funds | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 1,104 | |
Liabilities, at fair value | ||
Derivative liabilities | (44) | (4,106) |
Consolidated Funds | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 44,435 |
Consolidated Funds | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 397,494 | 212,376 |
Consolidated Funds | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 10,012,948 | 8,062,740 |
Consolidated Funds | Level I | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Common stock and other equity securities | 5,749 | 26,396 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 5,749 | 26,396 |
Derivatives-foreign exchange contracts | 0 | |
Total derivative assets, at fair value | 5,749 | 26,396 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | 0 | 0 |
Consolidated Funds | Level I | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level I | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Level I | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Level I | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Level I | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Level II | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9,868,136 | 7,980,415 |
Common stock and other equity securities | 239 | 0 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 9,868,375 | 7,980,415 |
Derivatives-foreign exchange contracts | 0 | |
Total derivative assets, at fair value | 9,868,375 | 7,981,082 |
Liabilities, at fair value | ||
Derivative liabilities | (670) | |
Loan obligations of CLOs | (9,958,076) | (7,973,748) |
Total liabilities, at fair value | (9,958,076) | (7,974,418) |
Consolidated Funds | Level II | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 667 | |
Liabilities, at fair value | ||
Derivative liabilities | (670) | |
Consolidated Funds | Level II | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | 0 |
Consolidated Funds | Level II | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 44,435 |
Consolidated Funds | Level II | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 397,485 | 207,966 |
Consolidated Funds | Level II | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9,470,651 | 7,728,014 |
Consolidated Funds | Level III | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 542,306 | 339,136 |
Common stock and other equity securities | 221,043 | 85,988 |
Partnership interests | 231,857 | 296,012 |
Total investments, at fair value | 995,206 | 721,136 |
Derivatives-foreign exchange contracts | 1,104 | |
Total derivative assets, at fair value | 996,310 | 721,136 |
Liabilities, at fair value | ||
Derivative liabilities | (4,106) | |
Loan obligations of CLOs | 0 | 0 |
Total liabilities, at fair value | (44) | (4,106) |
Consolidated Funds | Level III | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 0 | |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Consolidated Funds | Level III | Derivatives-asset swaps-other | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 1,104 | |
Liabilities, at fair value | ||
Derivative liabilities | (44) | (4,106) |
Consolidated Funds | Level III | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Consolidated Funds | Level III | Bonds | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 9 | 4,410 |
Consolidated Funds | Level III | Loans | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 542,297 | 334,726 |
Consolidated Funds | Investments Measured at NAV | ||
Assets, at fair value | ||
Partnership interests | 7,767 | 0 |
Total investments, at fair value | 7,767 | 0 |
Total derivative assets, at fair value | 7,767 | 0 |
Ares Management L.P | ||
Assets, at fair value | ||
Common stock and other equity securities | 89,419 | 15,747 |
Partnership interests | 3,784 | 36,824 |
Total investments, at fair value | 146,552 | 121,754 |
Total derivative assets, at fair value | 147,992 | 125,777 |
Liabilities, at fair value | ||
Derivative liabilities | (113) | |
Total liabilities, at fair value | (1,565) | (113) |
Ares Management L.P | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 1,440 | 4,023 |
Liabilities, at fair value | ||
Derivative liabilities | (1,565) | |
Ares Management L.P | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 53,349 | 69,183 |
Ares Management L.P | Level I | ||
Assets, at fair value | ||
Common stock and other equity securities | 0 | 0 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 0 | 0 |
Total derivative assets, at fair value | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level I | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level I | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Ares Management L.P | Level II | ||
Assets, at fair value | ||
Common stock and other equity securities | 1,007 | 1,043 |
Partnership interests | 0 | 0 |
Total investments, at fair value | 1,007 | 1,043 |
Total derivative assets, at fair value | 2,447 | 5,066 |
Liabilities, at fair value | ||
Derivative liabilities | (113) | |
Total liabilities, at fair value | (1,565) | (113) |
Ares Management L.P | Level II | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 1,440 | 4,023 |
Liabilities, at fair value | ||
Derivative liabilities | (1,565) | |
Ares Management L.P | Level II | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 0 | 0 |
Ares Management L.P | Level III | ||
Assets, at fair value | ||
Common stock and other equity securities | 88,412 | 14,704 |
Partnership interests | 2,575 | 35,192 |
Total investments, at fair value | 144,336 | 119,079 |
Total derivative assets, at fair value | 144,336 | 119,079 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Derivatives-foreign exchange contracts | ||
Assets, at fair value | ||
Derivatives-foreign exchange contracts | 0 | 0 |
Liabilities, at fair value | ||
Derivative liabilities | 0 | |
Ares Management L.P | Level III | Collateralized loan obligations | ||
Assets, at fair value | ||
Collateralized loan obligations and other fixed income | 53,349 | 69,183 |
Ares Management L.P | Investments Measured at NAV | ||
Assets, at fair value | ||
Partnership interests | 1,209 | 1,632 |
Total investments, at fair value | 1,209 | 1,632 |
Total derivative assets, at fair value | $ 1,209 | $ 1,632 |
Minimum | ||
FAIR VALUE | ||
Right to withdraw period | 1 month | |
Maximum | ||
FAIR VALUE | ||
Right to withdraw period | 3 years |
FAIR VALUE (Changes in Fair Val
FAIR VALUE (Changes in Fair Value of Level III Measurements) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Funds | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | $ 717,030 | $ 970,837 |
Transfer out due to changes in consolidation | 403,116 | (184,919) |
Purchases | 593,356 | 447,123 |
Transfer in | 127,665 | 56,914 |
Transfer out | (286,294) | (187,925) |
Sales/settlements | (523,899) | (396,508) |
Amortized discounts/premiums | 1,438 | 232 |
Realized and unrealized appreciation (depreciation), net | (36,146) | 11,276 |
Balance, end of period | 996,266 | 717,030 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (36,148) | 5,258 |
Consolidated Funds | Equity Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 85,988 | 150,752 |
Transfer out due to changes in consolidation | (635) | 0 |
Purchases | 186,881 | 1,363 |
Transfer in | 32 | 0 |
Transfer out | 0 | 0 |
Sales/settlements | (10,997) | (40,857) |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | (40,226) | (25,270) |
Balance, end of period | 221,043 | 85,988 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (44,877) | (24,690) |
Consolidated Funds | Fixed Income Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 339,136 | 547,958 |
Transfer out due to changes in consolidation | 403,751 | (184,919) |
Purchases | 340,475 | 432,760 |
Transfer in | 127,633 | 56,914 |
Transfer out | (286,294) | (187,925) |
Sales/settlements | (370,966) | (333,220) |
Amortized discounts/premiums | 1,049 | 361 |
Realized and unrealized appreciation (depreciation), net | (12,478) | 7,207 |
Balance, end of period | 542,306 | 339,136 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | (5,736) | 783 |
Consolidated Funds | Partnership interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 296,012 | 271,447 |
Transfer out due to changes in consolidation | 0 | 0 |
Purchases | 66,000 | 13,000 |
Transfer in | 0 | 0 |
Transfer out | 0 | 0 |
Sales/settlements | (141,025) | (22,000) |
Amortized discounts/premiums | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 10,870 | 33,565 |
Balance, end of period | 231,857 | 296,012 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 10,870 | 33,565 |
Consolidated Funds | Derivatives, Net | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | (4,106) | 680 |
Transfer out due to changes in consolidation | 0 | 0 |
Purchases | 0 | 0 |
Transfer in | 0 | 0 |
Transfer out | 0 | 0 |
Sales/settlements | (911) | (431) |
Amortized discounts/premiums | 389 | (129) |
Realized and unrealized appreciation (depreciation), net | 5,688 | (4,226) |
Balance, end of period | 1,060 | (4,106) |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 3,595 | (4,400) |
Ares Management L.P | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 119,079 | 106,413 |
Transfer out due to changes in consolidation | 79,261 | 10,021 |
Purchases | 12,970 | 30,795 |
Sales/settlements | (69,488) | (31,387) |
Realized and unrealized appreciation (depreciation), net | 2,514 | 3,237 |
Balance, end of period | 144,336 | 119,079 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 10,479 | 2,672 |
Ares Management L.P | Equity Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 14,704 | 10,397 |
Transfer out due to changes in consolidation | 72,967 | 0 |
Purchases | 0 | 3,000 |
Sales/settlements | 0 | 0 |
Realized and unrealized appreciation (depreciation), net | 741 | 1,307 |
Balance, end of period | 88,412 | 14,704 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 741 | 1,307 |
Ares Management L.P | Fixed Income Securities | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 69,183 | 60,824 |
Transfer out due to changes in consolidation | 6,294 | 10,021 |
Purchases | 12,970 | 27,795 |
Sales/settlements | (37,058) | (31,387) |
Realized and unrealized appreciation (depreciation), net | 1,960 | 1,930 |
Balance, end of period | 53,349 | 69,183 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | 4,227 | 1,365 |
Ares Management L.P | Partnership interests | ||
Changes in the fair value of the Level III investments | ||
Balance, beginning of period | 35,192 | 35,192 |
Transfer out due to changes in consolidation | 0 | 0 |
Purchases | 0 | 0 |
Sales/settlements | (32,430) | 0 |
Realized and unrealized appreciation (depreciation), net | (187) | 0 |
Balance, end of period | 2,575 | 35,192 |
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date | $ 5,511 | $ 0 |
FAIR VALUE (Valuation Technique
FAIR VALUE (Valuation Techniques) (Details) $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Consolidated Funds | ||
Assets | ||
Equity securities | $ 227,031 | $ 112,384 |
Partnership interests | 239,624 | 296,012 |
Collateralized loan obligations | 9,958,076 | 7,973,748 |
Other fixed income | 10,410,442 | 8,319,551 |
Derivative instruments | 1,104 | |
Total derivative assets, at fair value | 10,878,201 | 8,728,614 |
Liabilities | ||
Derivatives instruments | (4,776) | |
Total liabilities, at fair value | (9,958,120) | (7,978,524) |
Consolidated Funds | Level III | ||
Assets | ||
Equity securities | 221,043 | 85,988 |
Partnership interests | 231,857 | 296,012 |
Collateralized loan obligations | 0 | 0 |
Other fixed income | 542,306 | 339,136 |
Derivative instruments | 1,104 | |
Total derivative assets, at fair value | 996,310 | 721,136 |
Liabilities | ||
Derivatives instruments | (4,106) | |
Total liabilities, at fair value | (44) | (4,106) |
Consolidated Funds | Level III | Transaction price | ||
Assets | ||
Equity securities | 188,044 | 44,812 |
Consolidated Funds | Level III | Discounted Cash Flow | ||
Assets | ||
Partnership interests | $ 231,857 | $ 296,012 |
Consolidated Funds | Level III | Discounted Cash Flow | Discount rate | ||
Unobservable Input | ||
Partnership interest | 0.238 | 0.196 |
Consolidated Funds | Level III | Discounted Cash Flow | Discount rate | Weighted Average | ||
Unobservable Input | ||
Partnership interest | 0.238 | 0.196 |
Consolidated Funds | Level III | Market Approach | ||
Assets | ||
Equity securities | $ 438 | $ 431 |
Other fixed income | $ 6,605 | |
Consolidated Funds | Level III | Market Approach | EBITDA multiple | Minimum | ||
Unobservable Input | ||
Equity securities | 2.9 | 8.2 |
Fixed income securities | 6.5 | |
Consolidated Funds | Level III | Market Approach | EBITDA multiple | Maximum | ||
Unobservable Input | ||
Equity securities | 19.5 | 21.3 |
Fixed income securities | 7.8 | |
Consolidated Funds | Level III | Market Approach | EBITDA multiple | Weighted Average | ||
Unobservable Input | ||
Equity securities | 13.4 | 16.1 |
Fixed income securities | 6.9 | |
Consolidated Funds | Level III | Other | ||
Assets | ||
Equity securities | $ 32,528 | $ 40,745 |
Other fixed income | $ 28,320 | |
Consolidated Funds | Level III | Other | Net income multiple | ||
Unobservable Input | ||
Equity securities | 30 | 36.2 |
Consolidated Funds | Level III | Other | Net income multiple | Weighted Average | ||
Unobservable Input | ||
Equity securities | 30 | 36.2 |
Consolidated Funds | Level III | Other | Illiquidity discount | ||
Unobservable Input | ||
Equity securities | 0.250 | 0.250 |
Consolidated Funds | Level III | Other | Illiquidity discount | Weighted Average | ||
Unobservable Input | ||
Equity securities | 0.250 | 0.250 |
Consolidated Funds | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Equity securities | $ 33 | |
Other fixed income | 384,419 | $ 271,919 |
Derivative instruments | 1,104 | |
Liabilities | ||
Derivatives instruments | (44) | (4,106) |
Consolidated Funds | Level III | Income approach | ||
Assets | ||
Other fixed income | $ 122,962 | $ 67,217 |
Consolidated Funds | Level III | Income approach | Yield | Minimum | ||
Unobservable Input | ||
Fixed income securities | 0.027 | 0.048 |
Consolidated Funds | Level III | Income approach | Yield | Maximum | ||
Unobservable Input | ||
Fixed income securities | 0.481 | 0.143 |
Consolidated Funds | Level III | Income approach | Yield | Weighted Average | ||
Unobservable Input | ||
Fixed income securities | 0.079 | 0.097 |
Ares Management L.P | ||
Assets | ||
Equity securities | $ 89,419 | $ 15,747 |
Partnership interests | 3,784 | 36,824 |
Total derivative assets, at fair value | 147,992 | 125,777 |
Liabilities | ||
Derivatives instruments | (113) | |
Total liabilities, at fair value | (1,565) | (113) |
Ares Management L.P | Level III | ||
Assets | ||
Equity securities | 88,412 | 14,704 |
Partnership interests | 2,575 | 35,192 |
Total derivative assets, at fair value | 144,336 | 119,079 |
Liabilities | ||
Derivatives instruments | 0 | |
Total liabilities, at fair value | 0 | 0 |
Ares Management L.P | Level III | Transaction price | ||
Assets | ||
Equity securities | 14,704 | 14,704 |
Partnership interests | 32,661 | |
Ares Management L.P | Level III | Discounted Cash Flow | ||
Assets | ||
Equity securities | $ 32,905 | |
Ares Management L.P | Level III | Discounted Cash Flow | Discount rate | Minimum | ||
Unobservable Input | ||
Equity securities | 0.140 | |
Ares Management L.P | Level III | Discounted Cash Flow | Discount rate | Maximum | ||
Unobservable Input | ||
Equity securities | 0.200 | |
Ares Management L.P | Level III | Market Approach | ||
Assets | ||
Equity securities | $ 40,803 | |
Ares Management L.P | Level III | Market Approach | Multiple of Book Value | ||
Unobservable Input | ||
Equity securities | 0.016 | |
Ares Management L.P | Level III | Other | ||
Assets | ||
Partnership interests | $ 2,575 | 2,531 |
Other fixed income | 21,583 | 46,918 |
Ares Management L.P | Level III | Broker quotes and/or 3rd party pricing services | ||
Assets | ||
Collateralized loan obligations | $ 31,766 | $ 22,265 |
FAIR VALUE (Investments Using N
FAIR VALUE (Investments Using NAV per Share) (Details) - Investments Measured at NAV - Non-core investments - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
FAIR VALUE | ||
Fair Value | $ 1,200,000 | $ 1,600,000 |
Unfunded commitments | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Consolidated Funds | ||
Assets | ||
Notional amount, Assets | $ 7,600 | $ 9,530 |
Fair Value, Assets | 1,104 | 667 |
Liabilities | ||
Notional amount, Liabilities | 540 | 1,890 |
Fair Value, Liabilities | 44 | 4,776 |
Derivative asset, amount offset | 400 | 100 |
Derivative liability, amount offset | (400) | (100) |
Consolidated Funds | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 0 | 667 |
Fair Value, Assets | 0 | 667 |
Liabilities | ||
Notional amount, Liabilities | 0 | 667 |
Fair Value, Liabilities | 0 | 670 |
Consolidated Funds | Asset swap - other | ||
Assets | ||
Notional amount, Assets | 7,600 | 8,863 |
Fair Value, Assets | 1,104 | 0 |
Liabilities | ||
Notional amount, Liabilities | 540 | 1,223 |
Fair Value, Liabilities | 44 | 4,106 |
Ares Management L.P | ||
Assets | ||
Notional amount, Assets | 30,040 | 67,930 |
Fair Value, Assets | 1,440 | 4,023 |
Liabilities | ||
Notional amount, Liabilities | 39,362 | 10,846 |
Fair Value, Liabilities | 1,565 | 113 |
Derivative liability, amount offset | (1,600) | (100) |
Ares Management L.P | Foreign exchange contracts | ||
Assets | ||
Notional amount, Assets | 30,040 | 67,930 |
Fair Value, Assets | 1,440 | 4,023 |
Liabilities | ||
Notional amount, Liabilities | 39,362 | 10,846 |
Fair Value, Liabilities | $ 1,565 | $ 113 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS (Net Realized Gain/Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Funds | Investment Income | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Realized Investment Gains (Losses) | $ (682) | $ (1,189) | $ (699) |
Consolidated Funds | Net Change In Unrealized Appreciation Depreciation On Investments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Unrealized Gain (Loss) on Derivatives and Commodity Contracts | 5,174 | (4,771) | (168) |
Consolidated Funds | Derivatives-foreign exchange contracts | Foreign currency forward contracts | Investment Income | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Realized Investment Gains (Losses) | 5 | 8 | 96 |
Consolidated Funds | Derivatives-foreign exchange contracts | Foreign currency forward contracts | Net Change In Unrealized Appreciation Depreciation On Investments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Unrealized Gain (Loss) on Derivatives and Commodity Contracts | 3 | (20) | 15 |
Consolidated Funds | Derivatives-asset swaps-other | Asset swap - other | Investment Income | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Realized Investment Gains (Losses) | (687) | (1,197) | (795) |
Consolidated Funds | Derivatives-asset swaps-other | Asset swap - other | Net Change In Unrealized Appreciation Depreciation On Investments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Unrealized Gain (Loss) on Derivatives and Commodity Contracts | 5,171 | (4,751) | (183) |
Ares Management L.P | Investment Income | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Realized Investment Gains (Losses) | 277 | 2,284 | (1,197) |
Ares Management L.P | Net Change In Unrealized Appreciation Depreciation On Investments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Unrealized Gain (Loss) on Derivatives and Commodity Contracts | (4,060) | 3,713 | 2,338 |
Ares Management L.P | Derivatives-foreign exchange contracts | Foreign currency forward contracts | Investment Income | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Realized Investment Gains (Losses) | 277 | 2,284 | (1,197) |
Ares Management L.P | Derivatives-foreign exchange contracts | Foreign currency forward contracts | Net Change In Unrealized Appreciation Depreciation On Investments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Unrealized Gain (Loss) on Derivatives and Commodity Contracts | $ (4,060) | $ 3,713 | $ 2,338 |
DEBT (Debt Obligations) (Detail
DEBT (Debt Obligations) (Details) - Ares Management L.P - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Oct. 31, 2014 | Dec. 31, 2020 | Dec. 31, 2019 | |
DEBT | ||||
Carrying Value | $ 642,998,000 | $ 316,609,000 | ||
Credit Facility | ||||
DEBT | ||||
Carrying Value | $ 0 | $ 70,000,000 | ||
Interest Rate | 0.00% | 3.06% | ||
Maximum borrowing capacity | $ 1,065,000,000 | |||
Unused commitment fees | 0.10% | |||
Interest rate | 0.00% | |||
Credit Facility | Base rate | ||||
DEBT | ||||
Interest rate spread | 0.125% | |||
Credit Facility | LIBOR | ||||
DEBT | ||||
Interest rate spread | 1.125% | |||
Senior Notes 2024 | ||||
DEBT | ||||
Original Borrowing Amount | $ 250,000,000 | |||
Carrying Value | $ 247,285,000 | $ 246,609,000 | ||
Interest Rate | 4.21% | 4.21% | ||
Debt issuance rate | 98.27% | |||
Senior Notes 2030 | ||||
DEBT | ||||
Original Borrowing Amount | $ 400,000,000 | |||
Carrying Value | $ 395,713,000 | $ 0 | ||
Interest Rate | 3.28% | 0.00% | ||
Debt issuance rate | 99.77% |
DEBT (Debt Issuance Costs) (Det
DEBT (Debt Issuance Costs) (Details) - Ares Management L.P - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Credit Facility | ||
Debt Issuance Costs | ||
Unamortized debt issuance costs | $ 5,255 | $ 4,972 |
Debt issuance costs incurred | 1,217 | 1,594 |
Amortization of debt issuance costs | (1,240) | (1,311) |
Unamortized debt issuance costs | 5,232 | 5,255 |
Senior Notes | ||
Debt Issuance Costs | ||
Unamortized debt issuance costs | 1,102 | 1,334 |
Debt issuance costs incurred | 3,624 | 0 |
Amortization of debt issuance costs | (443) | (232) |
Unamortized debt issuance costs | $ 4,283 | $ 1,102 |
DEBT (Loan Obligations of the C
DEBT (Loan Obligations of the Consolidated CLOs) (Details) - Consolidated Funds - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
DEBT | ||
Fair Value of Loan Obligations | $ 9,958,076 | $ 7,973,748 |
Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 10,278,833 | 8,188,214 |
Fair Value of Loan Obligations | 9,958,076 | 7,973,748 |
Senior secured notes | Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | 9,796,442 | 7,738,337 |
Fair Value of Loan Obligations | $ 9,665,804 | $ 7,700,038 |
Weighted Average Remaining Maturity In Years | 10 years 1 month 6 days | 11 years |
Debt instrument face amount | $ 9,800,000 | |
Weighted average interest rate (as a percent) | 1.89% | |
Subordinated notes / preferred shares | Collateralized loan obligations | ||
DEBT | ||
Loan Obligations | $ 482,391 | $ 449,877 |
Fair Value of Loan Obligations | $ 292,272 | $ 273,710 |
Weighted Average Remaining Maturity In Years | 10 years 2 months 12 days | 11 years |
Debt instrument face amount | $ 482,400 |
DEBT (Credit Facilities of the
DEBT (Credit Facilities of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
DEBT | ||
Total borrowings of Consolidated Funds | $ 121,909,000 | $ 107,244,000 |
Credit Facility Maturing 3/5/2021 | ||
DEBT | ||
Maximum borrowing capacity | 71,500,000 | |
Outstanding Loan | $ 71,500,000 | $ 71,500,000 |
Effective Rate | 1.59% | 3.14% |
Credit Facility Maturing 1/1/2023 | ||
DEBT | ||
Maximum borrowing capacity | $ 18,000,000 | |
Outstanding Loan | $ 17,909,000 | $ 17,550,000 |
Effective Rate | 1.75% | 3.44% |
Credit Facility Maturing 7/15/2028 | ||
DEBT | ||
Maximum borrowing capacity | $ 75,000,000 | |
Outstanding Loan | $ 32,500,000 | $ 17,000,000 |
Effective Rate | 2.75% | 4.75% |
Revolving Term Loan | ||
DEBT | ||
Maximum borrowing capacity | $ 0 | |
Outstanding Loan | $ 0 | $ 1,194,000 |
Effective Rate | 0.00% | 7.70% |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Other Assets [Line Items] | |||
Goodwill | $ 371,047 | $ 143,855 | $ 143,786 |
Consolidated Funds | |||
Other Assets [Line Items] | |||
Dividends and interest receivable | 30,413 | 26,030 | |
Income tax and other receivables | 5,089 | 4,051 | |
Other assets | 35,502 | 30,081 | |
Ares Management L.P | |||
Other Assets [Line Items] | |||
Accounts and interest receivable | 45,494 | 47,368 | |
Fixed assets, net | 60,874 | 62,883 | |
Deferred tax assets, net | 70,026 | 46,364 | |
Goodwill | 371,047 | 143,855 | |
Intangible assets, net | 222,088 | 7,975 | |
Other assets | 42,890 | 33,817 | |
Other assets | $ 812,419 | $ 342,262 |
OTHER ASSETS (Depreciable asset
OTHER ASSETS (Depreciable assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 19,000 | $ 17,100 | $ 16,100 |
Fully depreciated | 7,200 | ||
Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 133,029 | 123,032 | |
Less: accumulated depreciation | (72,155) | (60,149) | |
Fixed assets, net | 60,874 | 62,883 | |
Furniture | Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 10,402 | 9,484 | |
Office and computer equipment | Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 17,666 | 19,963 | |
Internal-use software | Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 47,456 | 36,966 | |
Leasehold improvements | Ares Management L.P | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 57,505 | $ 56,619 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
COMMITMENTS AND CONTINGENCIES | ||
Unfunded capital commitments | $ 784,200,000 | $ 387,400,000 |
Performance Income | ||
Carried interest, contingent repayment obligations | 0 | 0 |
Performance Income | ||
Performance Income | ||
Performance income subject to potential clawback provision | 326,400,000 | 233,400,000 |
Performance income subject to potential claw back provision that are reimbursable by professionals | $ 252,400,000 | $ 175,100,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Leases: Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities | $ 180,236 | |
Finance lease obligations | 1,273 | |
Accumulated amortization | $ (1,000) | $ (600) |
Finance lease assets, extensible list | us-gaap:OtherAssets | |
Finance lease, liability, extensible list | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | |
Ares Management L.P | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease assets | $ 154,742 | 143,406 |
Finance lease assets | 1,386 | 1,787 |
Total lease assets | 156,128 | 145,193 |
Operating lease liabilities | 180,236 | 168,817 |
Finance lease obligations | 1,273 | 1,651 |
Total lease liabilities | $ 181,509 | $ 170,468 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 10 years |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Leases: Maturity of Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Operating Leases | |
2021 | $ 34,304 |
2022 | 36,079 |
2023 | 32,248 |
2024 | 29,477 |
2025 | 28,969 |
After 2025 | 38,713 |
Total future payments | 199,790 |
Less: interest | 19,554 |
Operating lease liabilities | 180,236 |
Finance Leases | |
2021 | 519 |
2022 | 486 |
2023 | 158 |
2024 | 156 |
2025 | 7 |
After 2025 | 0 |
Total future payments | 1,326 |
Less: interest | 53 |
Total lease liabilities | $ 1,273 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Leases: Lease Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expense | $ 31,713 | $ 28,814 | $ 30,497 |
Amortization of finance lease assets | 469 | 304 | 260 |
Interest on finance lease liabilities | 43 | 39 | 39 |
Total lease expense | $ 32,225 | $ 29,157 | $ 30,796 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Leases: Other Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows for operating leases | $ 32,121 | $ 31,509 |
Operating cash flows for finance leases | 53 | 58 |
Financing cash flows for finance leases | 460 | 311 |
Leased assets obtained in exchange for new finance lease liabilities | 0 | 778 |
Leased assets obtained in exchange for new operating lease liabilities | $ 36,935 | $ 49,833 |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES (Leases: Lease Term and Discount Rate) (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted-average remaining lease terms, operating lease | 6 years | 6 years 6 months |
Weighted-average remaining lease terms, finance lease | 2 years 7 months 6 days | 3 years 3 months 18 days |
Weighted-average discount rate, operating lease | 3.59% | 4.00% |
Weighted-average discount rate, finance lease | 3.26% | 3.39% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Consolidated Funds | ||
Due from affiliates: | ||
Due from affiliates | $ 17,172 | $ 6,192 |
Due to affiliates: | ||
Due to affiliates | 0 | 0 |
Consolidated Funds | Affiliated entity | ||
Due from affiliates: | ||
Due from affiliates | 17,172 | 6,192 |
Ares Management L.P | ||
Due from affiliates: | ||
Due from affiliates | 405,887 | 267,130 |
Due to affiliates: | ||
Due to affiliates | 100,186 | 71,445 |
Ares Management L.P | Affiliated entity | ||
Due from affiliates: | ||
Management fees receivable from non-consolidated funds | 308,581 | 183,579 |
Incentive Fee Receivable, Related Parties | 21,495 | 19,006 |
Payments made on behalf of and amounts due from non-consolidated funds and employees | 75,811 | 64,545 |
Due to affiliates: | ||
Management fee received in advance and rebates payable to non-consolidated funds | 4,808 | 5,432 |
Tax receivable agreement liability | 62,505 | 26,542 |
Undistributed carried interest and incentive fees | 27,322 | 28,086 |
Payments made by non-consolidated funds on behalf of and payable by the Company | $ 5,551 | $ 11,385 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - ARCC - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 21, 2019 | |
Ares Management L.P | ||||
RELATED PARTY TRANSACTIONS | ||||
Asset coverage percentage | 200.00% | 150.00% | ||
Annual base management fee percentage | 1.50% | 1.00% | ||
Debt to equity ratio | 1 | |||
American Capital Ltd. | ||||
RELATED PARTY TRANSACTIONS | ||||
Maximum fees waived | $ 10,000,000 | $ 30,000,000 | $ 40,000,000 |
INCOME TAXES (Provision for Inc
INCOME TAXES (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Total current income tax expense (benefit) | $ 39,818 | $ 44,525 | $ 27,903 |
Deferred: | |||
Total deferred income tax expense (benefit) | 15,175 | 7,851 | 4,299 |
Total: | |||
Income tax expense (benefit) | 54,993 | 52,376 | 32,202 |
Consolidated Funds | |||
Current: | |||
Foreign income tax expense | 118 | (530) | 131 |
Total current income tax expense (benefit) | 118 | (530) | 131 |
Ares Management L.P | |||
Current: | |||
U.S. federal income tax expense | 23,845 | 32,012 | 16,859 |
State and local income tax expense | 6,714 | 6,940 | 4,306 |
Foreign income tax expense | 9,141 | 6,103 | 6,607 |
Total current income tax expense (benefit) | 39,700 | 45,055 | 27,772 |
Deferred: | |||
U.S. federal income tax expense | 12,451 | 8,820 | 10,572 |
State and local income tax expense (benefit) | 1,952 | 1,001 | (4,789) |
Foreign income tax expense (benefit) | 772 | (1,970) | (1,484) |
Total deferred income tax expense (benefit) | 15,175 | 7,851 | 4,299 |
Total: | |||
U.S. federal income tax expense | 36,296 | 40,832 | 27,431 |
State and local income tax expense (benefit) | 8,666 | 7,941 | (483) |
Foreign income tax expense | 9,913 | 4,133 | 5,123 |
Income tax expense (benefit) | $ 54,875 | $ 52,906 | $ 32,071 |
INCOME TAXES (Effective Income
INCOME TAXES (Effective Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at federal statutory rate | 21.00% | 21.00% | 21.00% |
Income passed through to non-controlling interests | (8.20%) | (10.40%) | (9.90%) |
State and local taxes, net of federal benefit | 1.80% | 1.90% | 2.10% |
Foreign taxes | 0.30% | 0.30% | 0.30% |
Permanent items | (0.50%) | (0.40%) | (0.80%) |
Tax Cuts and Jobs Act | 0.00% | 0.00% | (0.40%) |
Corporate conversion expense | 0.00% | 0.00% | 5.40% |
Other, net | (0.20%) | (0.10%) | (0.30%) |
Valuation allowance | 0.30% | 0.00% | 0.10% |
Total effective rate | 14.50% | 12.30% | 17.50% |
INCOME TAXES (Deferred Taxes) (
INCOME TAXES (Deferred Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Consolidated Funds | ||
Deferred tax assets | ||
Net operating losses | $ 0 | $ 5,391 |
Other, net | 0 | 2,173 |
Total gross deferred tax assets | 0 | 7,564 |
Valuation allowance | 0 | (7,564) |
Total deferred tax assets, net | 0 | 0 |
Ares Management L.P | ||
Deferred tax assets | ||
Amortizable tax basis for AOG unit exchanges | 67,571 | 25,994 |
Investment in partnerships | 0 | 12,841 |
Net operating losses | 1,292 | 367 |
Other, net | 6,563 | 7,216 |
Total gross deferred tax assets | 75,426 | 46,418 |
Valuation allowance | (1,010) | (54) |
Total deferred tax assets, net | 74,416 | 46,364 |
Deferred tax liabilities | ||
Investment in partnerships | (4,390) | 0 |
Total deferred tax liabilities | (4,390) | 0 |
Net deferred tax assets | $ 70,026 | $ 46,364 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance, decrease | $ (6.6) | $ 0.1 |
EARNINGS PER SHARE (Antidilutiv
EARNINGS PER SHARE (Antidilutive) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOG | |||
Earnings per common unit | |||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 115,126,565 | 116,802,160 | 0 |
Restricted units | |||
Earnings per common unit | |||
Antidilutive securities excluded from calculation of earnings per common unit (in units) | 16,599 | 82 | 0 |
EARNINGS PER SHARE (Computation
EARNINGS PER SHARE (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 17, 2020 | Sep. 16, 2020 | Jun. 16, 2020 | Mar. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Basic | |||||||
Net income attributable to Ares Management Corporation Class A common stockholders | $ 130,442 | $ 127,184 | $ 35,320 | ||||
Distributions on unvested restricted units | (10,454) | (7,670) | (6,948) | ||||
Net income available to Class A common stockholders | 119,988 | 119,514 | 28,372 | ||||
Distributions on unvested restricted units | 0 | 0 | (6,948) | ||||
Net income attributable to Ares Management Corporation Class A common stockholders | $ 130,442 | $ 127,184 | $ 28,372 | ||||
Diluted | |||||||
Dividend declared and paid per Class A common stock (in dollar per share) | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | |||
Class A common stock | |||||||
Basic | |||||||
Basic weighted-average shares of Class A common stock (in shares) | 135,065,436 | 107,914,953 | 96,023,147 | ||||
Basic earnings per share of Class A common stock (in dollars per share) | $ 0.89 | $ 1.11 | $ 0.30 | ||||
Diluted | |||||||
Diluted weighted-average shares of Class A common stock (in shares) | 149,508,498 | 119,877,429 | 96,023,147 | ||||
Diluted earnings per share of Class A common stock (in dollars per share) | $ 0.87 | $ 1.06 | $ 0.30 | ||||
Dividend declared and paid per Class A common stock (in dollar per share) | $ 1.60 | $ 1.28 | $ 1.33 | ||||
Restricted units | |||||||
Diluted | |||||||
Effect of dilutive shares (in shares) | 9,207,639 | 7,838,200 | 0 | ||||
Options | |||||||
Diluted | |||||||
Effect of dilutive shares (in shares) | 5,235,423 | 4,124,276 | 0 |
EQUITY COMPENSATION (Equity Inc
EQUITY COMPENSATION (Equity Incentive Plan) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2020 | |
Equity compensation | ||||
Equity compensation expenses | $ 122,986 | $ 97,691 | $ 89,724 | |
Restricted units | ||||
Equity compensation | ||||
Equity compensation expenses | 115,680 | 88,979 | 74,441 | |
Restricted units with a market condition | ||||
Equity compensation | ||||
Equity compensation expenses | 7,263 | 3,613 | 1,524 | |
Options | ||||
Equity compensation | ||||
Equity compensation expenses | 43 | 4,362 | 12,449 | |
Phantom shares | ||||
Equity compensation | ||||
Equity compensation expenses | $ 0 | $ 737 | $ 1,310 | |
Ares Management L.P | ||||
Equity compensation | ||||
Total number of shares available for grant under the Equity Incentive Plan (in shares) | 33,861,117 | 37,528,029 |
EQUITY COMPENSATION (Restricted
EQUITY COMPENSATION (Restricted Units) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 17, 2020 | Sep. 16, 2020 | Jun. 16, 2020 | Mar. 17, 2020 | Jul. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Equity compensation | ||||||||
Dividend declared and paid per share of Class A common stock (in dollar per share) | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | ||||
Distribution equivalents made to holders | $ 26,000 | |||||||
Class A common stock | ||||||||
Equity compensation | ||||||||
Shares delivered in period | 3,100,000 | 2,100,000 | ||||||
Dividend declared and paid per share of Class A common stock (in dollar per share) | $ 1.60 | $ 1.28 | $ 1.33 | |||||
Restricted units | ||||||||
Equity compensation | ||||||||
Shares delivered in period | 5,500,000 | 3,700,000 | ||||||
Units | ||||||||
Balance at the beginning of the period (in units or shares) | 16,810,473 | |||||||
Granted (in units) | 2,000,000 | 3,984,695 | ||||||
Vested (in units) | (4,201,333) | |||||||
Forfeited (in units) | (294,171) | |||||||
Balance at the end of the period (in units or shares) | 16,299,664 | 16,810,473 | ||||||
Weighted Average Grant Date Fair Value | ||||||||
Balance at the beginning of the period (in dollars per share) | $ 20.07 | |||||||
Granted (in dollars per share) | 36.91 | |||||||
Vested (in dollars per share) | 19.62 | |||||||
Forfeited (in dollars per share) | 24.85 | |||||||
Balance at the end of the period (in dollars per share) | $ 24.30 | $ 20.07 | ||||||
Unrecognized compensation expenses | $ 228,600 | |||||||
Weighted average period of compensation expense expected to be recognized | 2 years 9 months 18 days | |||||||
Contingent vesting units awards member | ||||||||
Units | ||||||||
Granted (in units) | 1,333,334 | |||||||
Restricted units with a market condition | ||||||||
Equity compensation | ||||||||
Annual award vesting percentage | 10.00% | |||||||
Units | ||||||||
Balance at the beginning of the period (in units or shares) | 1,333,334 | |||||||
Granted (in units) | 666,666 | 0 | ||||||
Vested (in units) | (1,333,334) | |||||||
Forfeited (in units) | 0 | |||||||
Balance at the end of the period (in units or shares) | 0 | 1,333,334 | ||||||
Weighted Average Grant Date Fair Value | ||||||||
Balance at the beginning of the period (in dollars per share) | $ 9.30 | |||||||
Granted (in dollars per share) | 0 | |||||||
Vested (in dollars per share) | 9.30 | |||||||
Forfeited (in dollars per share) | 0 | |||||||
Balance at the end of the period (in dollars per share) | $ 0 | $ 9.30 | ||||||
Unrecognized compensation expenses | $ 6,100 | |||||||
Third Anniversary of Grant Date | Restricted units | ||||||||
Equity compensation | ||||||||
Annual award vesting percentage | 33.33% | |||||||
Third Anniversary of Grant Date | Restricted units with a market condition | ||||||||
Units | ||||||||
Granted (in units) | 666,667 | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Balance at the end of the period (in dollars per share) | $ 10.92 | |||||||
First Anniversary of Grant Date | Restricted units | ||||||||
Equity compensation | ||||||||
Annual award vesting percentage | 25.00% | |||||||
First Anniversary of Grant Date | Restricted units with a market condition | ||||||||
Units | ||||||||
Granted (in units) | 666,667 | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Balance at the end of the period (in dollars per share) | $ 7.68 | |||||||
First Anniversary | Restricted units | ||||||||
Equity compensation | ||||||||
Annual award vesting percentage | 33.33% |
EQUITY COMPENSATION (Restrict_2
EQUITY COMPENSATION (Restricted Units Awards with a Market Condition) (Details) - Restricted units with a market condition - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | |
Fair Value | ||||
Closing price of the Company's common shares as of valuation date (USD per share) | $ 20.95 | |||
Risk-free interest rate | 2.95% | |||
Volatility | 30.00% | |||
Dividend yield | 5.00% | |||
Cost of equity | 10.00% | |||
Units | ||||
Balance at the beginning of the period (in units or shares) | 1,333,334 | |||
Granted (in units) | 666,666 | 0 | ||
Vested (in units) | (1,333,334) | |||
Forfeited (in units) | 0 | |||
Balance at the end of the period (in units or shares) | 0 | |||
Weighted Average Grant Date Fair Value | ||||
Weighted average grant date fair value (USD per share) | $ 0 | $ 9.30 | ||
Granted (in dollars per share) | 0 | |||
Vested (in dollars per share) | 9.30 | |||
Forfeited (in dollars per share) | $ 0 | |||
Unrecognized compensation expenses | $ 6,100 | |||
Tranche I | ||||
Equity compensation | ||||
Weighted average price of shares purchased (USD per share) | $ 35 | |||
Vesting period | 3 years | |||
Units | ||||
Granted (in units) | 666,667 | |||
Weighted Average Grant Date Fair Value | ||||
Weighted average grant date fair value (USD per share) | $ 10.92 | |||
Tranche II | ||||
Equity compensation | ||||
Weighted average price of shares purchased (USD per share) | $ 45 | |||
Vesting period | 4 years 3 months 18 days | |||
Units | ||||
Granted (in units) | 666,667 | |||
Weighted Average Grant Date Fair Value | ||||
Weighted average grant date fair value (USD per share) | $ 7.68 |
EQUITY COMPENSATION (Options) (
EQUITY COMPENSATION (Options) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity compensation | ||
Net cash proceeds from exercises of stock options | $ 92,900 | |
Options | ||
Exercised (in units) | (4,948,742) | |
Options | ||
Equity compensation | ||
Shares purchased (in shares) | 1 | |
Term | ten years | |
Tax benefits of exercises | $ 13,100 | |
Options | ||
Balance at the beginning of the period (in units) | 13,426,870 | |
Granted (in units) | 0 | |
Exercised (in units) | (5,114,667) | |
Expired (in units) | 0 | |
Forfeited (in units) | 0 | |
Balance at the end of the period (in units) | 8,312,203 | 13,426,870 |
Exercisable at the end of the period (in units) | 8,312,203 | |
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) | 18.99 | |
Expired (in dollars per unit) | 0 | |
Forfeited (in dollars per unit) | 0 | |
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 | 4 years 3 months 18 days | |
Expected to vest at the end of the period | 3 years 4 months 24 days | |
Exercisable at the end of the period | 3 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Beginning balance | $ 233,251 | $ 224,260 |
Ending balance | 233,251 | $ 224,260 |
Exercisable | $ 233,251 |
EQUITY AND REDEEMABLE INTERES_2
EQUITY AND REDEEMABLE INTEREST (Common Stock) (Details) - USD ($) | Jul. 01, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 29, 2020 | Feb. 28, 2019 |
Class of Stock [Line Items] | ||||||
Stock repurchased | $ 10,449,000 | |||||
Proceeds from sale of shares | $ 383,800,000 | |||||
Fees related to stock issuance | $ 700,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Balance (in shares) | 115,243,029 | |||||
Issuance of stock (in shares) | 135,054,384 | |||||
Stock option exercises (in shares) | 4,948,742 | |||||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 3,074,603 | |||||
Balance (in shares) | 259,631,180 | 115,243,029 | ||||
AOG | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exchanges of AOG Units (in shares) | 1,376,422 | |||||
Redemptions of AOG Units (in shares) | (66,000) | |||||
Class A common stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Authorized amount | $ 150,000,000 | $ 150,000,000 | ||||
Stock repurchased (shares) | 400,000 | |||||
Stock repurchased | $ 10,400,000 | |||||
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Balance (in shares) | 115,242,028 | |||||
Issuance of stock (in shares) | 19,854,764 | |||||
Stock option exercises (in shares) | 4,948,742 | |||||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 3,074,603 | |||||
Balance (in shares) | 147,182,562 | 115,242,028 | ||||
Class A common stock | SSG Capital Holdings | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of stock (in shares) | 7,724,224 | |||||
Class A common stock | AOG | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exchanges of AOG Units (in shares) | 4,062,425 | |||||
Redemptions of AOG Units (in shares) | 0 | |||||
Class A common stock | Underwritten | ||||||
Class of Stock [Line Items] | ||||||
Number of shares sold (in shares) | 12,130,540 | |||||
Class B common stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Common stock, shares authorized (in shares) | 1,000 | 1,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Balance (in shares) | 1,000 | |||||
Issuance of stock (in shares) | 0 | |||||
Stock option exercises (in shares) | 0 | |||||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 0 | |||||
Balance (in shares) | 1,000 | 1,000 | ||||
Class B common stock | AOG | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exchanges of AOG Units (in shares) | 0 | |||||
Redemptions of AOG Units (in shares) | 0 | |||||
Class C common stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Number of shares sold (in shares) | 115,199,620 | |||||
Common stock, shares authorized (in shares) | 499,999,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Balance (in shares) | 1 | |||||
Issuance of stock (in shares) | 115,199,620 | |||||
Stock option exercises (in shares) | 0 | |||||
Vesting of restricted stock awards, net of shares withheld for tax (shares) | 0 | |||||
Balance (in shares) | 112,447,618 | 1 | ||||
Class C common stock | AOG | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exchanges of AOG Units (in shares) | (2,686,003) | |||||
Redemptions of AOG Units (in shares) | (66,000) | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
EQUITY AND REDEEMABLE INTERES_3
EQUITY AND REDEEMABLE INTEREST (Common Stock Offering) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||
AOG Units (in units) | 259,630,180 | 231,883,861 | |
AOG | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 100.00% | 100.00% | |
Ares Owners Holdings, L.P. | |||
Class of Stock [Line Items] | |||
AOG Units (in units) | 112,447,618 | 116,641,833 | |
Daily Average Ownership | 46.02% | 51.98% | 53.99% |
Ares Owners Holdings, L.P. | AOG | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 43.31% | 50.30% | |
Alleghany | |||
Class of Stock [Line Items] | |||
AOG Units (in units) | 0 | 0 | |
Daily Average Ownership | 0.00% | 0.00% | 1.82% |
Alleghany | AOG | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 0.00% | 0.00% | |
AOG | |||
Class of Stock [Line Items] | |||
AOG Units (in units) | 147,182,562 | 115,242,028 | |
Daily Average Ownership | 53.98% | 48.02% | 44.19% |
AOG | AOG | |||
Class of Stock [Line Items] | |||
Direct Ownership Interest | 56.69% | 49.70% |
EQUITY AND REDEEMABLE INTERES_4
EQUITY AND REDEEMABLE INTEREST (Preferred Stock) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||
Dividend rate, percentage | 7.00% | |
Redemption price (in dollars per share) | $ 25 | |
Preferred Equity | ||
Class of Stock [Line Items] | ||
Partners' capital (in shares) | 12,400,000 | 12,400,000 |
EQUITY AND REDEEMABLE INTERES_5
EQUITY AND REDEEMABLE INTEREST (Redeemable Interests) (Details) - AOG $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Temporary Equity [Line Items] | |
Opening balance at July 1, 2020 | $ 0 |
Net loss | (976) |
Currency translation adjustment, net of tax | 1,538 |
Balance at December 31, 2020 | $ 99,804 |
SEGMENT REPORTING (Operating Se
SEGMENT REPORTING (Operating Segments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment reporting | |||
Total revenues | $ 1,764,046 | $ 1,765,438 | $ 958,461 |
Operating segment | |||
Segment reporting | |||
Fee related earnings | 661,207 | 554,113 | 455,139 |
Performance income—realized | 547,216 | 402,518 | 357,207 |
Performance related compensation—realized | (415,668) | (290,382) | (251,597) |
Realized net investment income (loss) | 33,730 | 69,715 | 29,726 |
Realized Income (Loss) | (826,485) | (735,964) | (590,475) |
OMG | |||
Segment reporting | |||
Compensation and benefits | (155,979) | (139,162) | (124,812) |
General, administrative and other expenses | (80,778) | (91,292) | (75,015) |
Fee related earnings | (236,757) | (230,454) | (199,827) |
Performance income—realized | 0 | 0 | 0 |
Performance related compensation—realized | 0 | 0 | 0 |
Realized net performance income | 0 | 0 | 0 |
Investment income (loss)—realized | (5,698) | 0 | 4,790 |
Interest and other investment income (expense) —realized | (739) | (160) | 2,184 |
Interest expense | (1,335) | (1,864) | (2,226) |
Realized net investment income (loss) | (7,772) | (2,024) | 4,748 |
Realized Income (Loss) | (244,529) | (232,478) | (195,079) |
Total | |||
Segment reporting | |||
Compensation and benefits | (609,966) | (528,207) | (456,255) |
General, administrative and other expenses | (172,097) | (178,742) | (149,465) |
Fee related earnings | 424,450 | 323,659 | 255,312 |
Performance income—realized | 547,216 | 402,518 | 357,207 |
Performance related compensation—realized | (415,668) | (290,382) | (251,597) |
Realized net performance income | 131,548 | 112,136 | 105,610 |
Investment income (loss)—realized | 24,252 | 58,173 | 36,507 |
Interest and other investment income (expense) —realized | 26,614 | 29,189 | 19,415 |
Interest expense | (24,908) | (19,671) | (21,448) |
Realized net investment income (loss) | 25,958 | 67,691 | 34,474 |
Realized Income (Loss) | 581,956 | 503,486 | 395,396 |
Ares Management L.P | |||
Segment reporting | |||
Total revenues | 1,764,046 | 1,765,438 | 958,461 |
Compensation and benefits | (767,252) | (653,352) | (570,380) |
General, administrative and other expenses | (258,999) | (270,219) | (215,964) |
Ares Management L.P | Affiliated entity | ARCC | |||
Segment reporting | |||
Management fees, part I fees | 184,141 | 164,396 | 128,805 |
Ares Management L.P | Operating segment | |||
Segment reporting | |||
Compensation and benefits | (453,987) | (389,045) | (331,443) |
General, administrative and other expenses | (91,319) | (87,450) | (74,450) |
Fee related earnings | 661,207 | 554,113 | 455,139 |
Performance income—realized | 547,216 | 402,518 | 357,207 |
Performance related compensation—realized | (415,668) | (290,382) | (251,597) |
Realized net performance income | 131,548 | 112,136 | 105,610 |
Investment income (loss)—realized | 29,950 | 58,173 | 31,717 |
Interest and other investment income (expense) —realized | 27,353 | 29,349 | 17,231 |
Interest expense | (23,573) | (17,807) | (19,222) |
Realized net investment income (loss) | 33,730 | 69,715 | 29,726 |
Realized Income (Loss) | 826,485 | 735,964 | 590,475 |
Ares Management L.P | Operating segment | Credit Group | |||
Segment reporting | |||
Compensation and benefits | (304,412) | (261,662) | (218,148) |
General, administrative and other expenses | (53,997) | (55,103) | (44,845) |
Fee related earnings | 501,373 | 414,212 | 325,153 |
Performance income—realized | 92,308 | 104,442 | 121,270 |
Performance related compensation—realized | (60,281) | (61,641) | (75,541) |
Realized net performance income | 32,027 | 42,801 | 45,729 |
Investment income (loss)—realized | (2,309) | 2,457 | 2,492 |
Interest and other investment income (expense) —realized | 16,314 | 18,670 | 10,350 |
Interest expense | (8,722) | (6,497) | (11,386) |
Realized net investment income (loss) | 5,283 | 14,630 | 1,456 |
Realized Income (Loss) | 538,683 | 471,643 | 372,338 |
Ares Management L.P | Operating segment | Private Equity Group | |||
Segment reporting | |||
Compensation and benefits | (90,129) | (78,259) | (74,672) |
General, administrative and other expenses | (22,145) | (19,098) | (18,482) |
Fee related earnings | 109,064 | 114,419 | 106,036 |
Performance income—realized | 392,635 | 264,439 | 139,820 |
Performance related compensation—realized | (315,905) | (211,550) | (111,764) |
Realized net performance income | 76,730 | 52,889 | 28,056 |
Investment income (loss)—realized | 29,100 | 47,696 | 17,816 |
Interest and other investment income (expense) —realized | 5,987 | 5,046 | 4,624 |
Interest expense | (8,186) | (7,486) | (6,000) |
Realized net investment income (loss) | 26,901 | 45,256 | 16,440 |
Realized Income (Loss) | 212,695 | 212,564 | 150,532 |
Ares Management L.P | Operating segment | Real Estate Group | |||
Segment reporting | |||
Compensation and benefits | (53,004) | (49,124) | (38,623) |
General, administrative and other expenses | (12,251) | (13,249) | (11,123) |
Fee related earnings | 33,399 | 25,482 | 23,950 |
Performance income—realized | 62,273 | 33,637 | 96,117 |
Performance related compensation—realized | (39,482) | (17,191) | (64,292) |
Realized net performance income | 22,791 | 16,446 | 31,825 |
Investment income (loss)—realized | 3,146 | 8,020 | 11,409 |
Interest and other investment income (expense) —realized | 4,056 | 5,633 | 2,257 |
Interest expense | (5,200) | (3,824) | (1,836) |
Realized net investment income (loss) | 2,002 | 9,829 | 11,830 |
Realized Income (Loss) | 58,192 | 51,757 | 67,605 |
Ares Management L.P | Operating segment | Strategic Initiatives | |||
Segment reporting | |||
Compensation and benefits | (6,442) | 0 | 0 |
General, administrative and other expenses | (2,926) | 0 | 0 |
Fee related earnings | 17,371 | 0 | 0 |
Performance income—realized | 0 | 0 | 0 |
Performance related compensation—realized | 0 | 0 | 0 |
Realized net performance income | 0 | 0 | 0 |
Investment income (loss)—realized | 13 | 0 | 0 |
Interest and other investment income (expense) —realized | 996 | 0 | 0 |
Interest expense | (1,465) | 0 | 0 |
Realized net investment income (loss) | (456) | 0 | 0 |
Realized Income (Loss) | 16,915 | 0 | 0 |
Management fees | OMG | |||
Segment reporting | |||
Total revenues | 0 | 0 | 0 |
Management fees | Total | |||
Segment reporting | |||
Total revenues | 1,186,565 | 1,012,530 | 836,744 |
Management fees | Ares Management L.P | |||
Segment reporting | |||
Total revenues | 1,150,608 | 979,417 | 802,502 |
Management fees | Ares Management L.P | Operating segment | |||
Segment reporting | |||
Total revenues | 1,186,565 | 1,012,530 | 836,744 |
Management fees | Ares Management L.P | Operating segment | Credit Group | |||
Segment reporting | |||
Total revenues | 841,138 | 713,853 | 564,899 |
Management fees | Ares Management L.P | Operating segment | Private Equity Group | |||
Segment reporting | |||
Total revenues | 221,160 | 211,614 | 198,182 |
Management fees | Ares Management L.P | Operating segment | Real Estate Group | |||
Segment reporting | |||
Total revenues | 97,680 | 87,063 | 73,663 |
Management fees | Ares Management L.P | Operating segment | Strategic Initiatives | |||
Segment reporting | |||
Total revenues | 26,587 | 0 | 0 |
Other fees | OMG | |||
Segment reporting | |||
Total revenues | 0 | 0 | 0 |
Other fees | Total | |||
Segment reporting | |||
Total revenues | 19,948 | 18,078 | 24,288 |
Other fees | Ares Management L.P | Operating segment | |||
Segment reporting | |||
Total revenues | 19,948 | 18,078 | 24,288 |
Other fees | Ares Management L.P | Operating segment | Credit Group | |||
Segment reporting | |||
Total revenues | 18,644 | 17,124 | 23,247 |
Other fees | Ares Management L.P | Operating segment | Private Equity Group | |||
Segment reporting | |||
Total revenues | 178 | 162 | 1,008 |
Other fees | Ares Management L.P | Operating segment | Real Estate Group | |||
Segment reporting | |||
Total revenues | 974 | 792 | 33 |
Other fees | Ares Management L.P | Operating segment | Strategic Initiatives | |||
Segment reporting | |||
Total revenues | $ 152 | $ 0 | $ 0 |
SEGMENT REPORTING (Revenue, Exp
SEGMENT REPORTING (Revenue, Expenses and Other Income (Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment revenues | |||
Total revenues | $ 1,764,046 | $ 1,765,438 | $ 958,461 |
Total segment revenues | 1,753,729 | 1,433,126 | 1,218,239 |
Segment expenses | |||
Total expenses | 1,450,486 | 1,462,797 | 870,362 |
Segment other income | |||
Total other income | 65,918 | 122,539 | 96,242 |
Operating segment | |||
Segment revenues | |||
Performance income—realized | 547,216 | 402,518 | 357,207 |
Segment expenses | |||
Total performance related compensation - realized | 415,668 | 290,382 | 251,597 |
Ares Management L.P | |||
Segment revenues | |||
Total revenues | 1,764,046 | 1,765,438 | 958,461 |
Segment expenses | |||
Compensation and benefits | 767,252 | 653,352 | 570,380 |
General, administrative and other expenses | 258,999 | 270,219 | 215,964 |
Ares Management L.P | ARCC | Affiliated entity | |||
Segment other income | |||
Management fees, part I fees | 184,141 | 164,396 | 128,805 |
Ares Management L.P | Management fees | |||
Segment revenues | |||
Total revenues | 1,150,608 | 979,417 | 802,502 |
Ares Management L.P | Operating segment | |||
Segment revenues | |||
Performance income—realized | 547,216 | 402,518 | 357,207 |
Total segment revenues | 1,753,729 | 1,433,126 | 1,218,239 |
Segment expenses | |||
Compensation and benefits | 453,987 | 389,045 | 331,443 |
General, administrative and other expenses | 91,319 | 87,450 | 74,450 |
Total performance related compensation - realized | 415,668 | 290,382 | 251,597 |
Total expenses | 960,974 | 766,877 | 657,490 |
Segment other income | |||
Investment income—realized | 29,950 | 58,173 | 31,717 |
Interest and other investment income—realized | 27,353 | 29,349 | 17,231 |
Interest expense | (23,573) | (17,807) | (19,222) |
Total other income | 33,730 | 69,715 | 29,726 |
Ares Management L.P | Operating segment | Management fees | |||
Segment revenues | |||
Total revenues | 1,186,565 | 1,012,530 | 836,744 |
Ares Management L.P | Operating segment | Other fees | |||
Segment revenues | |||
Total revenues | $ 19,948 | $ 18,078 | $ 24,288 |
SEGMENT REPORTING (Revenue Reco
SEGMENT REPORTING (Revenue Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue adjustment | |||
Total revenues | $ 1,764,046 | $ 1,765,438 | $ 958,461 |
Principal investment income | (33,730) | (69,715) | (29,726) |
Total segment revenue | 1,753,729 | 1,433,126 | 1,218,239 |
Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 1,764,046 | 1,765,438 | 958,461 |
Operating segment | Ares Management L.P | |||
Revenue adjustment | |||
Performance (income) loss-unrealized | 7,554 | (303,142) | 247,212 |
Total segment revenue | 1,753,729 | 1,433,126 | 1,218,239 |
Reconciling items | |||
Revenue adjustment | |||
Principal investment income | (4,044) | (44,320) | (1,047) |
Total segment revenue | (10,317) | (332,312) | 259,778 |
Reconciling items | Non-Controlling interest | Subsidiaries | |||
Revenue adjustment | |||
Total segment revenue | (10,314) | (3,138) | 44 |
Reconciling items | Performance income reclass | |||
Revenue adjustment | |||
Performance fee reclass | (3,726) | 740 | 205 |
Management fees | Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 1,150,608 | 979,417 | 802,502 |
Management fees | Operating segment | Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 1,186,565 | 1,012,530 | 836,744 |
Management fees | Consolidated Funds | Eliminations | |||
Revenue adjustment | |||
Total segment revenue | 45,268 | 34,920 | 34,242 |
Incentive fees | Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 37,902 | 69,197 | 63,380 |
Incentive fees | Consolidated Funds | Eliminations | |||
Revenue adjustment | |||
Total revenues | 141 | 13,851 | 4,000 |
Administrative, transaction and other fees | |||
Revenue adjustment | |||
Total revenues | 0 | ||
Administrative, transaction and other fees | Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 41,376 | 38,397 | 51,624 |
Administrative, transaction and other fees | Reconciling items | |||
Revenue adjustment | |||
Total revenues | (36,512) | (31,629) | (27,380) |
Administrative, transaction and other fees | Consolidated Funds | Reconciling items | |||
Revenue adjustment | |||
Total revenues | 15,824 | 12,641 | 0 |
Principal investment income | Ares Management L.P | |||
Revenue adjustment | |||
Total revenues | 28,552 | 56,555 | (1,455) |
Principal investment income | Reconciling items | |||
Revenue adjustment | |||
Principal investment income | $ (28,552) | $ (56,555) | $ 1,455 |
SEGMENT REPORTING (Expenses) (D
SEGMENT REPORTING (Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses | $ 1,450,486 | $ 1,462,797 | $ 870,362 |
Equity compensation expense | 122,986 | 97,691 | 89,724 |
Depreciation and amortization expense | 9,000 | ||
Ares Management L.P | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Due to affiliates | 100,186 | 71,445 | |
Ares Management L.P | Rent and Other Occupancy Expenses | ARCC | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Due to affiliates | 11,800 | ||
Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Due to affiliates | 0 | 0 | |
Operating segment | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Transaction support expense | 11,194 | 16,266 | 2,936 |
Equity compensation expense | 122,986 | 97,691 | 89,724 |
Deferred placement fees | 19,329 | 24,306 | 20,343 |
Depreciation and amortization expense | 40,662 | 40,602 | 25,087 |
Operating segment | Ares Management L.P | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses | 960,974 | 766,877 | 657,490 |
Performance related compensation-unrealized | 11,552 | (206,799) | 221,343 |
Operating segment | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses | 1,450,486 | 1,462,797 | 870,362 |
Reconciling items | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses | (489,512) | (695,920) | (212,872) |
Administrative fees | (36,512) | (31,629) | (27,380) |
Transaction support expense | (11,124) | (16,266) | (2,936) |
Equity compensation expense | (122,986) | (97,691) | (89,724) |
Deferred placement fees | (19,329) | (24,306) | (20,343) |
Depreciation and amortization expense | (40,662) | (40,602) | (25,087) |
Other expenses | 0 | 0 | (11,836) |
Reconciling items | Non-Controlling interest | Subsidiaries | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses | (13,575) | (6,128) | (3,318) |
Reconciling items | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses of Consolidated Funds added in consolidation | (65,527) | (90,816) | (92,006) |
Expenses of Consolidated Funds eliminated in consolidation | 45,408 | 48,771 | 38,242 |
OMG | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Expenses | $ 236,757 | $ 230,454 | $ 199,827 |
SEGMENT REPORTING (Other Income
SEGMENT REPORTING (Other Income (Expense)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total segment realized net investment income | $ 65,918 | $ 122,539 | $ 96,242 |
Principal investment income | 33,730 | 69,715 | 29,726 |
Non-cash unrealized guarantee expense | 10,200 | ||
Ares Management L.P | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other income (expense), net | 11,291 | (7,840) | (851) |
Other (income) expense, net | 0 | 0 | (10) |
Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other (income) expense, net | 34,297 | 8,383 | 4,519 |
Operating segment | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Investment loss—unrealized | (35,183) | (35,681) | (49,474) |
Other (income) expense, net | (10,207) | 460 | (13,489) |
Operating segment | Ares Management L.P | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total segment realized net investment income | 33,730 | 69,715 | 29,726 |
Investment loss—unrealized | 47,317 | 26,620 | 49,241 |
Interest and other investment (income) loss—unrealized | (12,134) | 9,061 | 233 |
Operating segment | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total segment realized net investment income | 65,918 | 122,539 | 96,242 |
Reconciling items | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total segment realized net investment income | (32,188) | (52,824) | (66,516) |
Principal investment income | 4,044 | 44,320 | 1,047 |
Other (income) expense, net | 10,277 | (460) | 1,653 |
Reconciling items | Subsidiaries | Non-Controlling interest | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total segment realized net investment income | 556 | (39) | (19) |
Reconciling items | Performance income reclass | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Performance fee reclass | 3,726 | (740) | (205) |
Reconciling items | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other income from Consolidated Funds added in consolidation, net | (70,994) | (117,405) | (114,286) |
Eliminations | Consolidated Funds | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Other income (expense), net | (14,053) | (12,991) | (865) |
OMG | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total segment realized net investment income | $ (927) | $ (1,190) | $ (3,315) |
SEGMENT REPORTING (Reconciliati
SEGMENT REPORTING (Reconciliation of Income Before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Economic net income | |||
Income before taxes | $ 379,478 | $ 425,180 | $ 184,341 |
Adjustments: | |||
Depreciation and amortization expense | 9,000 | ||
Equity compensation expense | 122,986 | 97,691 | 89,724 |
Non-cash unrealized guarantee expense | 10,200 | ||
Consolidated Funds | |||
Adjustments: | |||
Other (income) expense, net | (34,297) | (8,383) | (4,519) |
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | 28,085 | 39,704 | 20,512 |
Total investment income - realized | (463,652) | (395,599) | (337,875) |
Operating segment | |||
Economic net income | |||
Income before taxes | 379,478 | 425,180 | 184,341 |
Adjustments: | |||
Depreciation and amortization expense | 40,662 | 40,602 | 25,087 |
Equity compensation expense | 122,986 | 97,691 | 89,724 |
Transaction support expense | 11,194 | 16,266 | 2,936 |
Deferred placement fees | 19,329 | 24,306 | 20,343 |
Other (income) expense, net | 10,207 | (460) | 13,489 |
Total performance (income) loss-unrealized | 7,554 | (303,142) | 247,212 |
Total performance related compensation - unrealized | (11,552) | 206,799 | (221,343) |
Total investment loss-unrealized | 35,183 | 35,681 | 49,474 |
Realized income | 826,485 | 735,964 | 590,475 |
Total performance income - realized | (547,216) | (402,518) | (357,207) |
Total performance related compensation - realized | 415,668 | 290,382 | 251,597 |
Total investment income - realized | (33,730) | (69,715) | (29,726) |
Fee related earnings | 661,207 | 554,113 | 455,139 |
Operating segment | Consolidated Funds | |||
Adjustments: | |||
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (28,203) | (39,174) | (20,643) |
OMG | |||
Adjustments: | |||
OMG expense, net | 235,830 | 229,264 | 196,512 |
Realized income | 244,529 | 232,478 | 195,079 |
Total performance income - realized | 0 | 0 | 0 |
Total performance related compensation - realized | 0 | 0 | 0 |
Total investment income - realized | 7,772 | 2,024 | (4,748) |
Fee related earnings | (236,757) | (230,454) | (199,827) |
Subsidiaries | Operating segment | |||
Adjustments: | |||
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | $ 3,817 | $ 2,951 | $ 3,343 |
CONSOLIDATION (Variable Interes
CONSOLIDATION (Variable Interest Entities) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)cLOentity | Dec. 31, 2019USD ($)entity | Dec. 31, 2018USD ($)entity | |
Variable Interest Entity [Line Items] | |||
Number of entities liquidated or dissolved | entity | 1 | 2 | 1 |
Number of entities that experienced a significant change In ownership or control | 1 | 2 | |
Assets of consolidated VIEs | $ 15,168,992 | $ 12,014,196 | |
Liabilities of consolidated VIEs | 12,596,852 | 10,155,598 | |
Collateralized loan obligations | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 107,700 | 104,700 | |
Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Net income attributable to non-controlling interests | 28,085 | 39,704 | $ 20,512 |
Non-Consolidated Variable Interest Entities | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 224,203 | 260,520 | |
Consolidated VIEs | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss attributable to the Company's investment in VIEs | 391,963 | 181,856 | |
Consolidated VIEs | Consolidated Funds | |||
Variable Interest Entity [Line Items] | |||
Assets of consolidated VIEs | 11,580,003 | 9,454,572 | |
Liabilities of consolidated VIEs | $ 10,716,438 | $ 8,679,869 |
CONSOLIDATION (Balance Sheet) (
CONSOLIDATION (Balance Sheet) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | |||||
Total assets | $ 15,168,992 | $ 12,014,196 | |||
Liabilities | |||||
Operating lease liabilities | 180,236 | ||||
Total liabilities | 12,596,852 | 10,155,598 | |||
Commitments and contingencies | |||||
Stockholders' Equity | |||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at December 31, 2020 and 2019, respectively) | 298,761 | 298,761 | |||
Additional paid-in-capital | 1,043,669 | 525,244 | |||
Retained earnings | (151,824) | (50,820) | |||
Accumulated other comprehensive loss, net of tax | 483 | (6,047) | |||
Total stockholders' equity | 1,193,685 | 768,290 | |||
Total equity | 2,471,774 | 1,858,598 | $ 1,394,341 | $ 1,437,681 | |
Total liabilities, redeemable interest, non-controlling interests and equity | $ 15,168,992 | $ 12,014,196 | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |||
Preferred stock, shares issued (in shares) | 12,400,000 | 12,400,000 | |||
Preferred stock, shares outstanding (in shares) | 12,400,000 | 12,400,000 | |||
Common stock, shares outstanding (in shares) | 259,631,180 | 115,243,029 | |||
Class A common stock | |||||
Stockholders' Equity | |||||
Common stock | $ 1,472 | $ 1,152 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 | |||
Common stock, shares issued (in shares) | 147,182,562 | 115,242,028 | |||
Common stock, shares outstanding (in shares) | 147,182,562 | 115,242,028 | |||
Class B common stock | |||||
Stockholders' Equity | |||||
Common stock | $ 0 | $ 0 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized (in shares) | 1,000 | 1,000 | |||
Common stock, shares issued (in shares) | 1,000 | 1,000 | |||
Common stock, shares outstanding (in shares) | 1,000 | 1,000 | |||
Class C common stock | |||||
Stockholders' Equity | |||||
Common stock | $ 1,124 | $ 0 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized (in shares) | 499,999,000 | ||||
Common stock, shares issued (in shares) | 112,447,618 | 1 | |||
Common stock, shares outstanding (in shares) | 112,447,618 | 1 | |||
Eliminations | |||||
Assets | |||||
Total assets | $ (408,733) | $ (193,557) | |||
Liabilities | |||||
Total liabilities | (84,888) | (36,874) | |||
Commitments and contingencies | |||||
Stockholders' Equity | |||||
Total equity | (323,845) | (156,683) | |||
Total liabilities, redeemable interest, non-controlling interests and equity | (408,733) | (193,557) | |||
Consolidated Funds | |||||
Assets | |||||
Cash and cash equivalents | 522,377 | 606,321 | |||
Investments, at fair value | 10,877,097 | 8,727,947 | |||
Due from affiliates | 17,172 | 6,192 | |||
Other assets | 35,502 | 30,081 | |||
Receivable for securities sold | 121,225 | 88,809 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 46,824 | 61,857 | |||
Due to affiliates | 0 | 0 | |||
Payable for securities purchased | 514,946 | 500,146 | |||
CLO loan obligations, at fair value | 9,958,076 | 7,973,748 | |||
Fund borrowings | 121,909 | 107,244 | |||
Non-controlling interests in Consolidated Funds | 539,720 | 618,020 | |||
Consolidated Funds | Reportable legal entity | |||||
Assets | |||||
Cash and cash equivalents | 522,377 | 606,321 | |||
Investments, at fair value | 10,873,522 | 8,723,169 | |||
Due from affiliates | 27,377 | 6,192 | |||
Other assets | 35,502 | 30,081 | |||
Receivable for securities sold | 121,225 | 88,809 | |||
Total assets | 11,580,003 | 9,454,572 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 46,824 | 61,857 | |||
Due to affiliates | 16,770 | 11,700 | |||
Payable for securities purchased | 514,946 | 500,146 | |||
CLO loan obligations, at fair value | 10,015,989 | 7,998,922 | |||
Fund borrowings | 121,909 | 107,244 | |||
Total liabilities | 10,716,438 | 8,679,869 | |||
Commitments and contingencies | |||||
Non-controlling interests in Consolidated Funds | 863,565 | 774,703 | |||
Stockholders' Equity | |||||
Total equity | 863,565 | 774,703 | |||
Total liabilities, redeemable interest, non-controlling interests and equity | 11,580,003 | 9,454,572 | |||
Consolidated Funds | Eliminations | |||||
Assets | |||||
Cash and cash equivalents | 0 | 0 | |||
Investments, at fair value | 3,575 | 4,778 | |||
Due from affiliates | (10,205) | 0 | |||
Other assets | 0 | 0 | |||
Receivable for securities sold | 0 | 0 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 0 | 0 | |||
Due to affiliates | (16,770) | (11,700) | |||
Payable for securities purchased | 0 | 0 | |||
CLO loan obligations, at fair value | (57,913) | (25,174) | |||
Fund borrowings | 0 | 0 | |||
Non-controlling interests in Consolidated Funds | (323,845) | (156,683) | |||
AOG | |||||
Liabilities | |||||
Redeemable interest in Ares Operating Group entities | 100,366 | $ 99,804 | 0 | ||
Non-controlling interests in Ares Operating Group entities | 738,369 | 472,288 | |||
AOG | Reportable legal entity | |||||
Liabilities | |||||
Non-controlling interests in Ares Operating Group entities | 738,369 | 472,288 | |||
AOG | Eliminations | |||||
Liabilities | |||||
Non-controlling interests in Ares Operating Group entities | 0 | 0 | |||
Ares Management L.P | |||||
Assets | |||||
Cash and cash equivalents | 539,812 | 138,384 | |||
Investments, at fair value | 1,682,759 | 1,663,664 | |||
Due from affiliates | 405,887 | 267,130 | |||
Other assets | 812,419 | 342,262 | |||
Right-of-use operating lease assets | 154,742 | 143,406 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 115,289 | 88,173 | |||
Accrued compensation | 103,010 | 37,795 | |||
Due to affiliates | 100,186 | 71,445 | |||
Performance related compensation payable | 813,378 | 829,764 | |||
Debt obligations | 642,998 | 316,609 | |||
Operating lease liabilities | 180,236 | 168,817 | |||
Stockholders' Equity | |||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at December 31, 2020 and 2019, respectively) | 298,761 | 298,761 | |||
Additional paid-in-capital | 1,043,669 | 525,244 | |||
Retained earnings | (151,824) | (50,820) | |||
Accumulated other comprehensive loss, net of tax | 483 | (6,047) | |||
Total stockholders' equity | 1,193,685 | 768,290 | |||
Equity method investments | 1,682,759 | 1,663,664 | |||
Ares Management L.P | Class A common stock | |||||
Stockholders' Equity | |||||
Common stock | 1,472 | 1,152 | |||
Ares Management L.P | Class B common stock | |||||
Stockholders' Equity | |||||
Common stock | 0 | 0 | |||
Ares Management L.P | Class C common stock | |||||
Stockholders' Equity | |||||
Common stock | 1,124 | 0 | |||
Ares Management L.P | Reportable legal entity | |||||
Assets | |||||
Cash and cash equivalents | 539,812 | 138,384 | |||
Investments, at fair value | 2,064,517 | 1,845,520 | |||
Due from affiliates | 426,021 | 281,228 | |||
Other assets | 812,630 | 344,643 | |||
Right-of-use operating lease assets | 154,742 | 143,406 | |||
Total assets | 3,997,722 | 2,753,181 | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | 125,494 | 88,173 | |||
Accrued compensation | 103,010 | 37,795 | |||
Due to affiliates | 100,186 | 71,445 | |||
Performance related compensation payable | 813,378 | 829,764 | |||
Debt obligations | 642,998 | 316,609 | |||
Operating lease liabilities | 180,236 | 168,817 | |||
Total liabilities | 1,965,302 | 1,512,603 | |||
Commitments and contingencies | |||||
Stockholders' Equity | |||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at December 31, 2020 and 2019, respectively) | 298,761 | 298,761 | |||
Additional paid-in-capital | 1,043,669 | 525,244 | |||
Retained earnings | (151,824) | (50,820) | |||
Accumulated other comprehensive loss, net of tax | 483 | (6,047) | |||
Total stockholders' equity | 1,193,685 | 768,290 | |||
Total equity | 1,932,054 | 1,240,578 | |||
Total liabilities, redeemable interest, non-controlling interests and equity | 3,997,722 | 2,753,181 | |||
Ares Management L.P | Reportable legal entity | Class A common stock | |||||
Stockholders' Equity | |||||
Common stock | 1,472 | 1,152 | |||
Ares Management L.P | Reportable legal entity | Class C common stock | |||||
Stockholders' Equity | |||||
Common stock | 1,124 | 0 | |||
Ares Management L.P | Eliminations | |||||
Assets | |||||
Cash and cash equivalents | 0 | 0 | |||
Investments, at fair value | (381,758) | (181,856) | |||
Due from affiliates | (20,134) | (14,098) | |||
Other assets | (211) | (2,381) | |||
Liabilities | |||||
Accounts payable, accrued expenses and other liabilities | (10,205) | 0 | |||
Accrued compensation | 0 | 0 | |||
Due to affiliates | 0 | 0 | |||
Performance related compensation payable | 0 | 0 | |||
Debt obligations | 0 | 0 | |||
Stockholders' Equity | |||||
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at December 31, 2020 and 2019, respectively) | 0 | 0 | |||
Accumulated other comprehensive loss, net of tax | 0 | 0 | |||
Total stockholders' equity | 0 | 0 | |||
Ares Management L.P | Eliminations | Class A common stock | |||||
Stockholders' Equity | |||||
Common stock | $ 0 | ||||
Ares Management L.P | AOG | Reportable legal entity | |||||
Liabilities | |||||
Redeemable interest in Ares Operating Group entities | $ 100,366 |
CONSOLIDATION (Income Statement
CONSOLIDATION (Income Statement) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||
Total revenues | $ 1,764,046 | $ 1,765,438 | $ 958,461 |
Expenses | |||
Total expenses | 1,450,486 | 1,462,797 | 870,362 |
Other income (expense) | |||
Total other income | 65,918 | 122,539 | 96,242 |
Income before taxes | 379,478 | 425,180 | 184,341 |
Income tax expense (benefit) | 54,993 | 52,376 | 32,202 |
Net income | 324,485 | 372,804 | 152,139 |
Net income attributable to Ares Management Corporation | 152,142 | 148,884 | 57,020 |
Less: Series A Preferred Stock dividends paid | 21,700 | 21,700 | 21,700 |
Net income attributable to Ares Management Corporation Class A common stockholders | 130,442 | 127,184 | 35,320 |
Eliminations | |||
Revenues | |||
Total revenues | (36,725) | (49,177) | (40,744) |
Expenses | |||
Compensation and benefits | 0 | 0 | 0 |
Performance related compensation | 0 | 0 | 0 |
General, administrative and other expenses | 0 | 0 | 0 |
Total expenses | (45,408) | (48,771) | (38,242) |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (288) | (851) | 983 |
Interest and dividend income | (3,570) | (2,093) | (93) |
Other income (expense), net | 8,433 | 350 | 864 |
Total other income | 14,053 | 12,991 | 865 |
Income before taxes | 22,736 | 12,585 | (1,637) |
Income tax expense (benefit) | 0 | 0 | 0 |
Net income | 22,736 | 12,585 | (1,637) |
Less: Series A Preferred Stock dividends paid | 0 | 0 | 0 |
Net income attributable to Ares Management Corporation Class A common stockholders | 0 | 0 | 0 |
Consolidated Funds | |||
Expenses | |||
Expenses of Consolidated Funds | 20,119 | 42,045 | 53,764 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (96,864) | 15,136 | (1,583) |
Interest expense | (286,316) | (277,745) | (222,895) |
Interest and other income of Consolidated Funds | 463,652 | 395,599 | 337,875 |
Net income attributable to non-controlling interests | 28,085 | 39,704 | 20,512 |
Consolidated Funds | Reportable legal entity | |||
Expenses | |||
Expenses of Consolidated Funds | 65,527 | 90,816 | 92,006 |
Total expenses | 65,527 | 90,816 | 92,006 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (109,387) | 3,312 | 664 |
Interest expense | (293,476) | (281,506) | (224,253) |
Interest and other income of Consolidated Funds | 473,857 | 395,599 | 337,875 |
Total other income | 70,994 | 117,405 | 114,286 |
Income before taxes | 5,467 | 26,589 | 22,280 |
Income tax expense (benefit) | 118 | (530) | 131 |
Net income | 5,349 | 27,119 | 22,149 |
Net income attributable to non-controlling interests | 5,349 | 27,119 | 22,149 |
Consolidated Funds | Eliminations | |||
Expenses | |||
Expenses of Consolidated Funds | (45,408) | (48,771) | (38,242) |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | 12,523 | 11,824 | (2,247) |
Interest expense | 7,160 | 3,761 | 1,358 |
Interest and other income of Consolidated Funds | (10,205) | 0 | 0 |
Net income attributable to non-controlling interests | 22,736 | 12,585 | (1,637) |
AOG | |||
Other income (expense) | |||
Net income | 296,400 | 333,100 | 131,627 |
Less: Net loss attributable to redeemable interest in Ares Operating Group entities | (976) | 0 | 0 |
Net income attributable to non-controlling interests | 145,234 | 184,216 | 74,607 |
AOG | Reportable legal entity | |||
Other income (expense) | |||
Net income attributable to non-controlling interests | 145,234 | 184,216 | 74,607 |
AOG | Eliminations | |||
Other income (expense) | |||
Net income attributable to non-controlling interests | 0 | 0 | 0 |
Ares Management L.P | |||
Revenues | |||
Total revenues | 1,764,046 | 1,765,438 | 958,461 |
Expenses | |||
Compensation and benefits | 767,252 | 653,352 | 570,380 |
Performance related compensation | 404,116 | 497,181 | 30,254 |
General, administrative and other expenses | 258,999 | 270,219 | 215,964 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (9,008) | 9,554 | (1,884) |
Interest and dividend income | 8,071 | 7,506 | 7,028 |
Interest expense | (24,908) | (19,671) | (21,448) |
Other income (expense), net | 11,291 | (7,840) | (851) |
Income tax expense (benefit) | 54,875 | 52,906 | 32,071 |
Ares Management L.P | Affiliated entity | ARCC | |||
Other income (expense) | |||
Management fees, part I fees | 184,141 | 164,396 | 128,805 |
Ares Management L.P | Reportable legal entity | |||
Revenues | |||
Total revenues | 1,800,771 | 1,814,615 | 999,205 |
Expenses | |||
Compensation and benefits | 767,252 | 653,352 | 570,380 |
Performance related compensation | 404,116 | 497,181 | 30,254 |
General, administrative and other expenses | 258,999 | 270,219 | 215,964 |
Expenses of Consolidated Funds | 0 | ||
Total expenses | 1,430,367 | 1,420,752 | 816,598 |
Other income (expense) | |||
Net realized and unrealized gains (losses) on investments | (8,720) | 10,405 | (2,867) |
Interest and dividend income | 11,641 | 9,599 | 7,121 |
Interest expense | (24,908) | (19,671) | (21,448) |
Other income (expense), net | 2,858 | (8,190) | (1,715) |
Total other income | (19,129) | (7,857) | (18,909) |
Income before taxes | 351,275 | 386,006 | 163,698 |
Income tax expense (benefit) | 54,875 | 52,906 | 32,071 |
Net income | 296,400 | 333,100 | 131,627 |
Net income attributable to Ares Management Corporation | 152,142 | 148,884 | 57,020 |
Less: Series A Preferred Stock dividends paid | 21,700 | 21,700 | 21,700 |
Net income attributable to Ares Management Corporation Class A common stockholders | 130,442 | 127,184 | 35,320 |
Ares Management L.P | AOG | Reportable legal entity | |||
Other income (expense) | |||
Net income | 296,400 | 333,100 | 131,627 |
Less: Net loss attributable to redeemable interest in Ares Operating Group entities | (976) | ||
Management fees | Eliminations | |||
Revenues | |||
Total revenues | (45,268) | (34,920) | (34,242) |
Management fees | Ares Management L.P | |||
Revenues | |||
Total revenues | 1,150,608 | 979,417 | 802,502 |
Management fees | Ares Management L.P | Reportable legal entity | |||
Revenues | |||
Total revenues | 1,195,876 | 1,014,337 | 836,744 |
Carried interest allocation | |||
Revenues | |||
Total revenues | 505,608 | ||
Carried interest allocation | Eliminations | |||
Revenues | |||
Total revenues | 0 | 0 | 0 |
Carried interest allocation | Ares Management L.P | |||
Revenues | |||
Total revenues | 505,608 | 621,872 | 42,410 |
Carried interest allocation | Ares Management L.P | Reportable legal entity | |||
Revenues | |||
Total revenues | 505,608 | 621,872 | 42,410 |
Incentive fees | Eliminations | |||
Revenues | |||
Total revenues | (141) | (13,851) | (4,000) |
Incentive fees | Ares Management L.P | |||
Revenues | |||
Total revenues | 37,902 | 69,197 | 63,380 |
Incentive fees | Ares Management L.P | Reportable legal entity | |||
Revenues | |||
Total revenues | 38,043 | 83,048 | 67,380 |
Principal investment income | Eliminations | |||
Revenues | |||
Total revenues | 24,508 | 12,235 | (2,502) |
Principal investment income | Ares Management L.P | |||
Revenues | |||
Total revenues | 28,552 | 56,555 | (1,455) |
Principal investment income | Ares Management L.P | Reportable legal entity | |||
Revenues | |||
Total revenues | 4,044 | 44,320 | 1,047 |
Administrative, transaction and other fees | |||
Revenues | |||
Total revenues | 0 | ||
Administrative, transaction and other fees | Eliminations | |||
Revenues | |||
Total revenues | (15,824) | (12,641) | 0 |
Administrative, transaction and other fees | Ares Management L.P | |||
Revenues | |||
Total revenues | 41,376 | 38,397 | 51,624 |
Administrative, transaction and other fees | Ares Management L.P | Reportable legal entity | |||
Revenues | |||
Total revenues | $ 57,200 | $ 51,038 | $ 51,624 |
CONSOLIDATION (Cash Flow Statem
CONSOLIDATION (Cash Flow Statement) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 324,485 | $ 372,804 | $ 152,139 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net cash used in operating activities | (425,659) | (2,083,021) | (1,417,058) |
Cash flows from investing activities: | |||
Net cash used in investing activities | (136,764) | (16,796) | (18,419) |
Allocable to non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | 943,895 | 2,122,330 | 1,405,295 |
Effect of exchange rate changes | 19,956 | 5,624 | 21,500 |
Net change in cash and cash equivalents | 401,428 | 28,137 | (8,682) |
Cash and cash equivalents, beginning of period | 138,384 | 110,247 | 118,929 |
Cash and cash equivalents, end of period | 539,812 | 138,384 | 110,247 |
Supplemental disclosure of non-cash financing activities: | |||
Issuance of Class A common stock in connection with acquisitions | 305,338 | 0 | 0 |
Cash paid during the period for interest | 257,132 | 233,090 | 184,951 |
Cash paid during the period for income taxes | 38,174 | 35,625 | 27,482 |
Eliminations | |||
Cash flows from operating activities: | |||
Net income | 22,736 | 12,585 | (1,637) |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Equity compensation expense | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 |
Net realized and unrealized gains (losses) on investments | (28,690) | (15,881) | (3,003) |
Other (income) expense, net | 0 | ||
Investments purchased | 261,899 | 122,468 | 35,054 |
Proceeds from sale of investments | (33,307) | (111,187) | (34,191) |
Net performance income receivable | 0 | 0 | (5,333) |
Due to/from affiliates | 6,037 | 5,551 | 2,594 |
Other assets | (2,170) | 2,381 | 0 |
Accrued compensation and benefits | 0 | 0 | 0 |
Accounts payable, accrued expenses and other liabilities | (10,205) | 0 | 0 |
Allocable to non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | (190,991) | (94,305) | 1,530 |
Effect of exchange rate changes | 0 | 0 | 0 |
Net change in cash and cash equivalents | 83,945 | (221,677) | 171,855 |
Cash and cash equivalents, beginning of period | (606,321) | (384,644) | (556,500) |
Cash and cash equivalents, end of period | (522,376) | (606,321) | (384,644) |
Consolidated Funds | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized gains (losses) on investments | 96,864 | (15,136) | 1,583 |
Other (income) expense, net | (34,297) | (8,383) | (4,519) |
Investments purchased | (6,615,732) | (5,216,931) | (4,919,118) |
Proceeds from sale of investments | 5,502,325 | 3,077,755 | 2,756,924 |
Change in cash and cash equivalents held at Consolidated Funds | 83,944 | (221,677) | 171,856 |
Net cash acquired (relinquished) with consolidation/deconsolidation of Consolidated Funds | 60,895 | (81,059) | 11,915 |
Change in other assets and receivables held at Consolidated Funds | (33,298) | (54,834) | 11,962 |
Change in other liabilities and payables held at Consolidated Funds | 10,787 | 88,467 | 137,545 |
Allocable to non-controlling interests in Consolidated Funds: | |||
Contributions | 132,430 | 172,851 | 71,009 |
Distributions to non-controlling interests in Consolidated Funds | (251,507) | (96,282) | (159,710) |
Borrowings under loan obligations by Consolidated Funds | 1,013,291 | 3,341,837 | 2,901,633 |
Repayments under loan obligations by Consolidated Funds | (190,055) | (1,035,710) | (1,027,649) |
Consolidated Funds | Reportable legal entity | |||
Cash flows from operating activities: | |||
Net income | 5,349 | 27,119 | 22,149 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized gains (losses) on investments | 109,387 | (3,312) | (665) |
Other (income) expense, net | (34,297) | (8,383) | (4,519) |
Investments purchased | (6,580,784) | (5,310,296) | (4,919,118) |
Proceeds from sale of investments | 5,502,325 | 3,077,755 | 2,756,924 |
Change in cash and cash equivalents held at Consolidated Funds | 0 | 0 | 0 |
Net cash acquired (relinquished) with consolidation/deconsolidation of Consolidated Funds | 60,895 | (81,059) | 11,915 |
Change in other assets and receivables held at Consolidated Funds | (55,461) | (51,681) | 9,224 |
Change in other liabilities and payables held at Consolidated Funds | 10,787 | 88,467 | 137,545 |
Net cash used in operating activities | (981,799) | (2,261,390) | (1,986,545) |
Allocable to non-controlling interests in Consolidated Funds: | |||
Contributions | 359,381 | 290,677 | 85,681 |
Distributions to non-controlling interests in Consolidated Funds | (287,467) | (117,599) | (195,438) |
Borrowings under loan obligations by Consolidated Funds | 1,013,291 | 3,349,654 | 2,921,159 |
Repayments under loan obligations by Consolidated Funds | (190,055) | (1,045,731) | (1,027,649) |
Net cash provided by financing activities | 895,150 | 2,477,001 | 1,783,753 |
Effect of exchange rate changes | 2,704 | 6,066 | 30,936 |
Net change in cash and cash equivalents | (83,945) | 221,677 | (171,855) |
Cash and cash equivalents, beginning of period | 606,321 | 384,644 | 556,500 |
Cash and cash equivalents, end of period | 522,376 | 606,321 | 384,644 |
Supplemental disclosure of non-cash financing activities: | |||
Cash paid during the period for interest | 235,005 | 215,168 | 165,070 |
Cash paid during the period for income taxes | 169 | 604 | 742 |
Consolidated Funds | Eliminations | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Net realized and unrealized gains (losses) on investments | (12,523) | (11,824) | 2,248 |
Other (income) expense, net | 0 | 0 | 0 |
Investments purchased | (34,948) | 93,365 | 0 |
Proceeds from sale of investments | 0 | 0 | 0 |
Change in cash and cash equivalents held at Consolidated Funds | 83,944 | (221,677) | 171,856 |
Net cash acquired (relinquished) with consolidation/deconsolidation of Consolidated Funds | 0 | 0 | 0 |
Change in other assets and receivables held at Consolidated Funds | 22,163 | (3,153) | 2,738 |
Change in other liabilities and payables held at Consolidated Funds | 0 | 0 | 0 |
Net cash used in operating activities | 274,936 | (127,372) | 170,326 |
Allocable to non-controlling interests in Consolidated Funds: | |||
Contributions | (226,951) | (117,826) | (14,672) |
Distributions to non-controlling interests in Consolidated Funds | 35,960 | 21,317 | 35,728 |
Borrowings under loan obligations by Consolidated Funds | (7,817) | (19,526) | |
Repayments under loan obligations by Consolidated Funds | 10,021 | 0 | |
Ares Management L.P | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||
Equity compensation expense | 122,986 | 97,691 | 89,724 |
Depreciation and amortization | 41,248 | 39,459 | 28,517 |
Net realized and unrealized gains (losses) on investments | (8,039) | (53,092) | 12,935 |
Other (income) expense, net | 0 | 0 | 10 |
Investments purchased | (90,851) | (278,798) | (248,460) |
Proceeds from sale of investments | 174,679 | 284,810 | 381,703 |
Net performance income receivable | (24,351) | (103,962) | 29,578 |
Due to/from affiliates | (76,185) | (75,138) | 33,023 |
Other assets | (36,693) | 26,684 | (66,795) |
Accrued compensation and benefits | 54,539 | 7,650 | 114 |
Accounts payable, accrued expenses and other liabilities | 21,035 | 30,669 | 2,306 |
Cash flows from investing activities: | |||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (15,942) | (16,796) | (18,419) |
Acquisitions, net of cash acquired | (120,822) | 0 | 0 |
Cash flows from financing activities: | |||
Net proceeds from issuance of Class A common stock | 383,154 | 206,705 | 105,333 |
Proceeds from credit facility | 790,000 | 335,000 | 680,000 |
Proceeds from senior notes | 399,084 | 0 | 0 |
Repayments of term notes | 0 | 0 | (206,089) |
Proceeds from term notes | 0 | 0 | 44,050 |
Repayments of credit facility | (860,000) | (500,000) | (655,000) |
Dividends and distributions | (446,780) | (323,667) | (312,646) |
Series A Preferred Stock dividends | (21,700) | (21,700) | (21,700) |
Repurchases of Class A common stock | 0 | (10,449) | 0 |
Stock option exercises | 92,877 | 90,511 | 950 |
Taxes paid related to net share settlement of equity awards | (95,368) | (33,554) | (18,014) |
Other financing activities | (1,531) | (3,212) | 3,128 |
Allocable to non-controlling interests in Consolidated Funds: | |||
Cash and cash equivalents, beginning of period | 138,384 | ||
Cash and cash equivalents, end of period | 539,812 | 138,384 | |
Ares Management L.P | Reportable legal entity | |||
Cash flows from operating activities: | |||
Net income | 296,400 | 333,100 | 131,627 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Equity compensation expense | 122,986 | 97,691 | 89,724 |
Depreciation and amortization | 41,248 | 39,459 | 28,517 |
Net realized and unrealized gains (losses) on investments | 20,651 | (37,211) | 15,938 |
Other (income) expense, net | 10 | ||
Investments purchased | (352,750) | (401,266) | (283,514) |
Proceeds from sale of investments | 207,986 | 395,997 | 415,894 |
Net performance income receivable | (24,351) | (103,962) | 34,911 |
Due to/from affiliates | (82,222) | (80,689) | 30,429 |
Other assets | (34,523) | 24,303 | (66,795) |
Accrued compensation and benefits | 54,539 | 7,650 | 114 |
Accounts payable, accrued expenses and other liabilities | 31,240 | 30,669 | 2,306 |
Net cash used in operating activities | 281,204 | 305,741 | 399,161 |
Cash flows from investing activities: | |||
Purchase of furniture, equipment and leasehold improvements, net of disposals | (15,942) | (16,796) | (18,419) |
Acquisitions, net of cash acquired | (120,822) | ||
Net cash used in investing activities | (136,764) | (16,796) | (18,419) |
Cash flows from financing activities: | |||
Net proceeds from issuance of Class A common stock | 383,154 | 206,705 | 105,333 |
Proceeds from credit facility | 790,000 | 335,000 | 680,000 |
Proceeds from senior notes | 399,084 | ||
Repayments of term notes | (206,089) | ||
Proceeds from term notes | 44,050 | ||
Repayments of credit facility | (860,000) | (500,000) | (655,000) |
Dividends and distributions | (446,780) | (323,667) | (312,646) |
Series A Preferred Stock dividends | (21,700) | (21,700) | (21,700) |
Repurchases of Class A common stock | (10,449) | ||
Stock option exercises | 92,877 | 90,511 | 950 |
Taxes paid related to net share settlement of equity awards | (95,368) | (33,554) | (18,014) |
Other financing activities | (1,531) | (3,212) | 3,128 |
Allocable to non-controlling interests in Consolidated Funds: | |||
Net cash provided by financing activities | 239,736 | (260,366) | (379,988) |
Effect of exchange rate changes | 17,252 | (442) | (9,436) |
Net change in cash and cash equivalents | 401,428 | 28,137 | (8,682) |
Cash and cash equivalents, beginning of period | 138,384 | 110,247 | 118,929 |
Cash and cash equivalents, end of period | 539,812 | 138,384 | 110,247 |
Supplemental disclosure of non-cash financing activities: | |||
Issuance of Class A common stock in connection with acquisitions | 305,338 | ||
Cash paid during the period for interest | 22,127 | 17,922 | 19,881 |
Cash paid during the period for income taxes | $ 38,005 | $ 35,021 | $ 26,740 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event | 1 Months Ended |
Feb. 28, 2021$ / shares | |
Subsequent events | |
Quarterly distribution declared (in dollars per unit) | $ 0.47 |
Preferred equity quarterly distribution (in dollars per unit) | $ 0.4375 |