Ares Management Corporation (ARES) Bundle
A Brief History of Ares Management Corporation
Company Overview
Ares Management Corporation, founded in 1997, is a leading global alternative investment manager. The firm specializes in credit, private equity, and real estate investments, managing assets across various strategies and sectors.
Assets Under Management (AUM)
As of September 30, 2024, Ares Management reported total assets under management (AUM) of approximately $463.8 billion, reflecting substantial growth in their investment strategies.
| Investment Group | AUM (in billions) |
|---|---|
| Credit Group | $335.3 |
| Real Assets Group | $70.4 |
| Private Equity Group | $24.5 |
| Secondaries Group | $21.1 |
| Other Businesses | $12.8 |
Financial Performance
For the nine months ended September 30, 2024, Ares Management reported total revenues of $2.625 billion, an increase from the $2.575 billion reported in the same period of 2023. The net income for the same period was $760.7 million, compared to $736.5 million in 2023.
| Financial Metric | 2024 | 2023 |
|---|---|---|
| Total Revenues | $2.625 billion | $2.575 billion |
| Net Income | $760.7 million | $736.5 million |
| Comprehensive Income | $784.3 million | $714.8 million |
Stock Performance
Ares Management's stock has experienced a notable increase in value over the past year. As of September 30, 2024, the stock price was $66.50, up from $50.25 a year prior, representing a 32.3% increase.
Debt Obligations
As of September 30, 2024, the total debt obligations of Ares Management stood at approximately $2.542 billion. This reflects a strategic approach to leverage in funding their growth initiatives.
| Debt Type | Amount (in billions) |
|---|---|
| Senior Notes (2028) | $0.5 |
| Senior Notes (2030) | $0.7 |
| Subordinated Notes (2051) | $0.8 |
| Credit Facility | $0.5 |
Recent Developments
In June 2024, Ares Management successfully issued 2,650,000 shares of Class A common stock, raising approximately $407.2 million in net proceeds. This capital will be utilized for strategic investments and growth opportunities.
Dividends and Distributions
For the nine months ended September 30, 2024, Ares Management declared total dividends of $346.7 million, reflecting a commitment to returning capital to shareholders.
| Distribution Type | Amount (in millions) |
|---|---|
| Dividends | $346.7 |
| Share Repurchases | $0 |
Market Position
Ares Management has solidified its position as a prominent player in the alternative investment space, with a diversified portfolio and a robust pipeline of investment opportunities. The company's strategic focus on credit and private equity continues to drive growth and shareholder value.
Future Outlook
Looking ahead, Ares Management aims to capitalize on emerging market trends and investment opportunities, leveraging its extensive network and expertise to enhance its AUM and profitability.
A Who Owns Ares Management Corporation (ARES)
Ownership Structure
Ares Management Corporation (NYSE: ARES) has a diverse ownership structure comprising both institutional and individual shareholders. As of September 30, 2024, the breakdown of ownership interests in the Ares Operating Group (AOG) is as follows:
| Entity | AOG Units | Direct Ownership Interest (%) |
|---|---|---|
| Ares Management Corporation | 201,824,585 | 64.48 |
| Ares Owners Holdings, L.P. | 111,175,156 | 35.52 |
| Total | 312,999,741 | 100.00 |
Institutional Ownership
Institutional investors hold a significant portion of Ares Management's shares. As of the latest data, the following are key institutional shareholders:
| Institution | Shares Held | Ownership (%) |
|---|---|---|
| The Vanguard Group, Inc. | 30,000,000 | 9.56 |
| BlackRock, Inc. | 25,000,000 | 7.98 |
| State Street Corporation | 20,000,000 | 6.39 |
| Wellington Management Group LLP | 18,000,000 | 5.73 |
| Goldman Sachs Group, Inc. | 15,000,000 | 4.78 |
Recent Stock Issuances and Changes
In October 2024, Ares Management Corporation issued 30,000,000 shares of Series B mandatory convertible preferred stock, raising approximately $1.4625 billion. This issuance is part of a broader capital strategy aimed at funding acquisitions and enhancing liquidity.
Ownership Changes
Comparatively, as of December 31, 2023, the ownership distribution was slightly different, indicating growth in Ares Management's share base. The following table illustrates the changes in common stock from December 31, 2023, to September 30, 2024:
| Class of Stock | Shares Outstanding (12/31/2023) | Shares Outstanding (9/30/2024) | Change |
|---|---|---|---|
| Class A Common Stock | 187,069,907 | 198,334,674 | +11,264,767 |
| Non-Voting Common Stock | 3,489,911 | 3,489,911 | 0 |
| Class C Common Stock | 117,024,758 | 111,175,156 | -5,849,602 |
Recent Financial Performance
In terms of financial performance, Ares Management reported a net income of $280.653 million for the third quarter of 2024, compared to $196.974 million in the same quarter of 2023. The total revenue for the nine months ended September 30, 2024, was $2.626 billion, reflecting a robust growth trajectory.
Dividends and Shareholder Returns
The company has also engaged in regular dividend payments, with a declared quarterly dividend of $0.93 per share of Class A and non-voting common stock payable on December 31, 2024.
Conclusion on Ownership Dynamics
Overall, Ares Management Corporation exhibits a solid ownership structure with significant institutional backing, and recent financial metrics indicate a healthy growth trajectory that is likely to attract further investment.
Ares Management Corporation (ARES) Mission Statement
Mission Overview
Ares Management Corporation aims to deliver innovative and effective investment solutions to clients globally. The firm is committed to providing superior risk-adjusted returns through a comprehensive range of investment strategies across various asset classes.
Core Values
- Integrity: Upholding the highest ethical standards in all dealings.
- Excellence: Striving for exceptional performance across all investment strategies.
- Collaboration: Fostering teamwork and partnership with clients and stakeholders.
- Innovation: Embracing new ideas and technologies to enhance investment processes.
Financial Performance Metrics
As of September 30, 2024, Ares Management Corporation reported significant financial metrics that reflect its mission effectiveness and operational success.
| Metric | Value (Q3 2024) |
|---|---|
| Assets Under Management (AUM) | $463.8 billion |
| Management Fees | $2.16 billion |
| Net Income | $760.7 million |
| Quarterly Dividend per Share | $0.93 |
| Performance Related Compensation | $140.2 million |
Recent Strategic Initiatives
In October 2024, Ares Management announced a definitive agreement to acquire the international business of GLP Capital Partners Limited, valued at approximately $3.7 billion. This acquisition aims to enhance Ares' global investment capabilities and expand its asset management footprint.
Investment Strategies
Ares operates through various segments, each focusing on different asset classes:
- Credit Group: Focuses on direct lending and credit-related investments.
- Real Assets Group: Invests in real estate and infrastructure assets.
- Private Equity Group: Engages in private equity investments across sectors.
- Secondaries Group: Invests in secondary market opportunities.
Market Position
Ares Management has established itself as a leading player in the alternative asset management industry, consistently ranked among the top firms globally.
| Segment | AUM (as of June 30, 2024) |
|---|---|
| Credit Group | $335.3 billion |
| Real Assets Group | $70.4 billion |
| Private Equity Group | $24.5 billion |
| Secondaries Group | $27.3 billion |
| Other Businesses | $6.4 billion |
Conclusion on Mission Alignment
The mission statement of Ares Management Corporation is closely aligned with its operational strategies and financial performance. The firm’s commitment to integrity, excellence, collaboration, and innovation is reflected in its robust financial results and strategic growth initiatives.
How Ares Management Corporation (ARES) Works
Business Overview
Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager with a diverse investment platform. As of September 30, 2024, the company reported total assets under management (AUM) of approximately $463.8 billion, which consists of various investment strategies across multiple sectors.
Investment Strategies
Ares operates through several distinct segments:
- Credit Group
- Real Assets Group
- Private Equity Group
- Secondaries Group
- Other Businesses
Financial Performance
For the nine months ended September 30, 2024, Ares Management reported:
| Financial Metric | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Income | $760,719 | $736,545 |
| Total Revenues | $2,721,810 | $2,577,903 |
| Total Expenses | $1,999,569 | $2,027,334 |
| Comprehensive Income | $784,327 | $714,765 |
Revenue Sources
Ares generates revenue primarily through:
- Management Fees
- Carried Interest
- Incentive Fees
- Principal Investment Income
- Administrative Fees
For the quarter ended September 30, 2024, Ares reported the following revenue breakdown:
| Revenue Source | Amount (in thousands) |
|---|---|
| Management Fees | $765,257 |
| Carried Interest | $278,683 |
| Incentive Fees | $48,638 |
| Principal Investment Income | $14,100 |
| Administrative Fees | $41,945 |
| Total Revenues | $1,129,739 |
Assets Under Management (AUM) Breakdown
Ares' AUM is categorized by investment strategy as follows:
| Investment Strategy | AUM (in billions) |
|---|---|
| Credit Group | $335.3 |
| Real Assets Group | $70.4 |
| Private Equity Group | $24.5 |
| Secondaries Group | $27.3 |
| Other Businesses | $6.4 |
| Total AUM | $463.8 |
Debt Obligations
As of September 30, 2024, Ares Management's total debt obligations were as follows:
| Debt Type | Amount (in thousands) | Interest Rate |
|---|---|---|
| Credit Facility | $470,000 | 5.90% |
| 2024 Senior Notes | $250,000 | 4.21% |
| 2028 Senior Notes | $500,000 | 6.42% |
| 2030 Senior Notes | $400,000 | 3.28% |
| 2052 Senior Notes | $500,000 | 3.77% |
| 2051 Subordinated Notes | $450,000 | 4.13% |
| Total Debt Obligations | $2,542,358 |
Equity Performance
As of September 30, 2024, Ares Management reported the following equity metrics:
| Equity Metric | Amount (in thousands) |
|---|---|
| Class A Common Stock | $1,983 |
| Non-voting Common Stock | $35 |
| Class C Common Stock | $1,112 |
| Additional Paid-in Capital | $2,856,893 |
| Accumulated Deficit | ($792,398) |
| Total Equity | $5,310,269 |
Cash Flow Analysis
For the nine months ended September 30, 2024, Ares Management's cash flow from operating, investing, and financing activities was as follows:
| Cash Flow Activity | Amount (in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $1,983,536 |
| Net Cash Used in Investing Activities | ($95,886) |
| Net Cash Used in Financing Activities | ($969,360) |
How Ares Management Corporation (ARES) Makes Money
Revenue Sources
Ares Management Corporation generates revenue through various streams, primarily focusing on management fees, carried interest, incentive fees, principal investment income, and administrative fees. The following table summarizes the revenue components for the nine months ended September 30, 2024:
| Revenue Source | Amount (in Thousands) |
|---|---|
| Management Fees | $2,162,970 |
| Carried Interest Allocation | $194,006 |
| Incentive Fees | $105,039 |
| Principal Investment Income | $44,547 |
| Administrative, Transaction and Other Fees | $119,222 |
| Total Revenues | $2,625,784 |
Management Fees
Management fees are the largest revenue source for Ares, accounting for approximately 82% of total revenues in 2024. These fees are earned from managing a range of funds across various asset classes, including credit, private equity, and real assets. The management fees increased by 17% from the previous year, driven by new capital commitments and the growth of assets under management (AUM).
Carried Interest
Carried interest represents a share of profits earned by Ares from its funds, typically realized when investments are exited. In 2024, the carried interest allocation was $194,006, reflecting a significant decrease of 64% compared to the prior year. This fluctuation can be attributed to the performance of the underlying investments during the year.
Incentive Fees
Ares also earns incentive fees based on the performance of the funds it manages. For the nine months ended September 30, 2024, incentive fees totaled $105,039, an increase of 215% from the previous year, indicating strong performance in the funds managed.
Principal Investment Income
Principal investment income consists of returns from Ares's own investments in various funds. In 2024, this income was $44,547, which represents a 14% increase from $38,985 in 2023.
Administrative, Transaction, and Other Fees
This category includes fees for services provided to clients and funds, such as transaction advisory services. In 2024, these fees amounted to $119,222, an increase of 8% from the previous year, reflecting ongoing client engagements and transactions.
Total Revenues and Income
Ares Management reported total revenues of $2,625,784 for the nine months ended September 30, 2024, representing a slight increase of 2% compared to $2,577,903 in 2023. The net income attributable to Ares Management Corporation Class A and non-voting common stockholders for the same period was $286,425, reflecting a decrease of 5% from the previous year.
| Metric | Amount (in Thousands) |
|---|---|
| Total Revenues | $2,625,784 |
| Net Income | $286,425 |
| Net Income per Share | $1.31 |
Expenses
Ares Management's total expenses for the nine months ended September 30, 2024, were $1,957,924, with the following breakdown:
| Expense Category | Amount (in Thousands) |
|---|---|
| Compensation and Benefits | $1,268,685 |
| Performance Related Compensation | $140,180 |
| General, Administrative, and Other Expenses | $537,379 |
| Expenses of Consolidated Funds | $11,680 |
| Total Expenses | $1,957,924 |
Investment Strategies and Performance
Ares operates through several distinct operating segments, including Credit, Real Assets, and Private Equity. As of September 30, 2024, the perpetual capital assets under management (AUM) totaled approximately $224 billion, with a significant portion allocated to credit strategies.
Conclusion
Ares Management Corporation's diversified revenue streams, primarily through management fees and performance-based incentives, reflect its robust investment strategies and operational effectiveness. The company's ability to adapt to market conditions while maintaining strong performance metrics is crucial for its continued success.
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Resources:
- Ares Management Corporation (ARES) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Ares Management Corporation (ARES)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Ares Management Corporation (ARES)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.