Ares Management Corporation · NYSE:ARES
Ares Management — Q4 2024 Earnings Presentation
46 slides from Ares Management's earnings presentation, Feb 5, 2025
Slide 1: Earnings Presentation Fourth Quarter and Full Year 2024
Earnings Presentation Fourth Quarter and Full Year 2024 Exhibit 99.2
Slide 2: Important Notice
2 Important Notice This presentation is prepared for Ares Management Corporation (“Aresˮ) (NYSE: ARES) for the benefit of its public stockholders. This presentation is solely for information purposes in connection with evaluating the business, operations and financial results of Ares and certain of
Slide 3: Fourth Quarter and Full Year 2024 Highlights
3 Q4-24 and FY-24 Financial Results Assets Under Management Corporate Actions Recent Developments Fourth Quarter and Full Year 2024 Highlights 1. Unconsolidated management fees includes $10.5 million and $46.6 million from Consolidated Funds that are eliminated upon consolidation for Q4-24 and FY-24
Slide 4: GAAP Financial Results
4 Quarter ended December 31, Year ended December 31, $ in thousands, except share data 2024 2023 2024 2023 Revenues Management fees $779,156 $697,846 $2,942,126 $2,551,150 Carried interest allocation 196,174 76,751 390,180 618,579 Incentive fees 239,118 243,300 344,157 276,627 Principal investment i
Slide 5: RI and Other Measures Financial Summary
5 RI and Other Measures Financial Summary Quarter ended December 31, Year ended December 31, $ in thousands, except share data (and as otherwise noted) 2024 2023 % Change 2024 2023 % Change Management fees(1) $780,692 $703,493 11% $2,957,430 $2,571,513 15% Fee related performance revenues 161,984 17
Slide 6: Capital Raised by Strategy
6 $ in billions Q4 2024 FY 2024 Full Year Commentary Credit Group U.S. Direct Lending $6.0 $24.2 Equity and debt commitments to various funds, including equity commitments of $7.0 billion and debt commitments of $5.7 billion to Ares Senior Direct Lending Fund III, L.P. (“SDL IIIˮ), bringing total eq
Slide 7: Assets Under Management
7 Q4-23 Q3-24 Q4-24 Assets Under Management 1. AUM amounts include vehicles managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of ARCC and a SEC-registered investment adviser (“IHAMˮ). AUM as of December 31, 2024 was $484.4 billion, an increase of 16% from prior year(1) • T
Slide 8: Perpetual Capital
8 Q4-23 Q3-24 Q4-24 $2.4 $0.9 Perpetual Capital Perpetual Capital AUM Perpetual Capital as of December 31, 2024 was $133.6 billion, an increase of 28% from prior year • The increase of $29.3 billion was primarily driven by: ◦ commitments to certain funds and SMAs in our alternative credit and U.S. a
Slide 9: AUM and Management Fees by Type
9 8% 7% 7% 5% 59% 14% 13% 25% 5% 5% 47% 5% AUM and Management Fees by Type 86% 1. Long-dated funds generally have a contractual life of five years or more at inception. For the year ended December 31, 2024: • 86% of assets under management were perpetual capital or long-dated funds • 95% of manageme
Slide 10: Available Capital and AUM Not Yet Paying Fees
10 Q4-23 Q3-24 Q4-24 Available Capital and AUM Not Yet Paying Fees Available Capital as of December 31, 2024 was $133.1 billion, an increase of 19% from prior year • The increase of $21.7 billion was primarily driven by: ◦ commitments to the U.S. and European direct lending and real estate debt stra
Slide 11: AUM Not Yet Paying Fees
11 $81.0 $12.8 $1.2 $70.5 $6.7 $1.7 $2.1 AUM Not Yet Paying Fees Available for Future Deployment AUM Not Yet Paying Fees As of December 31, 2024, AUM Not Yet Paying Fees includes $81.0 billion of AUM available for future deployment that could generate approximately $728.8 million in potential increm
Slide 12: Incentive Eligible AUM and Incentive Generating AUM
12 Q4-23 Q3-24 Q4-24 $19.1 Incentive Eligible AUM and Incentive Generating AUM ($ in billions) ($ in billions) Credit Real Assets Private Equity Secondaries Other Businesses Total Incentive Generating AUM $87.3 $18.1 $8.7 $9.7 $1.1 $124.9 + Uninvested IEAUM 69.7 12.1 3.8 7.9 0.6 94.1 + IEAUM below h
Slide 13: Fee Related Performance Revenues
13 Fee Related Performance Revenues Fee related performance revenues were $231.5 million during FY-24, generated primarily in our U.S. and European direct lending and private equity secondaries strategies U.S. Direct Lending European Direct Lending Alternative Credit Private Equity Secondaries North
Slide 14: Capital Deployment
14 $25.8 $3.1 $0.1 $1.9 $1.2 Q4-24 Gross Capital Deployment Capital Deployment ($ in billions) Capital Deployment in Drawdown Funds ($ in billions) Total Gross Capital Deployment during Q4-24 was $32.1 billion compared to $24.0 billion during Q4-23 • Deployment by our drawdown funds was $14.0 billio
Slide 15: Credit Group
15 Note: Past performance is not indicative of future results. Please refer to the endnotes on slide 38 for additional information. Credit Group(1) Alternative Credit 3.3% / 11.2% $ in thousands Q4-24 Q4-23 % Change FY-24 FY-23 % Change Management and other fees $585,643 $514,722 14% $2,219,635 $1,8
Slide 16: Real Assets Group
16 Note: Past performance is not indicative of future results. Please refer to the endnotes on slide 39 for additional information. Financial Summary and Highlights North American Real Estate Equity 2.2% / 7.9% Strategy Performance Highlights European Real Estate Equity 1.7% / 1.0% Infrastructure De
Slide 17: Private Equity Group
17 Corporate Private Equity 0.2% / 2.4% Note: Past performance is not indicative of future results. Please refer to the endnotes on slide 41 for additional information. Financial Summary and Highlights Strategy Performance Highlights Q4-24 / FY-24 gross returns(3) Private Equity Group(1) • Managemen
Slide 18: Secondaries Group
18 Note: Past performance is not indicative of future results. Please refer to the endnotes on slide 42 for additional information. Financial Summary and Highlights Private Equity Secondaries 0.9% / (5.6)% Strategy Performance Highlights Real Estate Secondaries (0.5)% / (4.6)% Q4-24 / FY-24 gross re
Slide 19: Supplemental Details
Supplemental Details
Slide 20: Financial Details – Segments (Quarter)
20 Financial Details – Segments 1. Includes results of the reportable segments on a combined basis together with the Operations Management Group. Please refer to “GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basisˮ on slides 36-37. 2. Includes fee related performance compensation of $9
Slide 21: Financial Details – Segments (Year)
21 Year ended December 31, 2024 $ in thousands Credit Group Real Assets Group Private Equity Group Secondaries Group Other Operations Management Group Total(1) Management fees $2,177,816 $401,968 $137,130 $197,287 $43,229 $— $2,957,430 Fee related performance revenues 202,703 — — 28,834 — — 231,537
Slide 22: Realized Income per Share Data
22 Realized Income per Share Data Quarter ended December 31, Year ended December 31, $ in thousands, except share data 2024 2023 2024 2023 After-tax Realized Income Realized Income before taxes $476,050 $434,573 $1,467,120 $1,265,528 Entity level foreign, state and local taxes (6,152) (9,808) (28,45
Slide 23: Weighted-Average Shares
23 Weighted-Average Shares 1. Represents proportional dilutive impact based upon the weighted average percentage of Ares Operating Group owned by Ares Management Corporation (64.71% and 61.75% as of December 31, 2024 and 2023, respectively). 2. Represents units exchangeable for shares of Class A com
Slide 24: Balance Sheet
24 Substantial balance sheet value related to investments primarily in Ares managed vehicles and net accrued performance income as of December 31, 2024 Balance Sheet 1. Unconsolidated investments includes $793.2 million of investments in Consolidated Funds that are eliminated upon consolidation for
Slide 25: Balance Sheet Investments by Strategy
25 Balance Sheet Investments by Strategy(1) $ in millions As of December 31, 2024 As of December 31, 2023 Credit Liquid Credit $139.8 $127.3 Alternative Credit 25.5 37.8 Opportunistic Credit 36.8 42.8 U.S. Direct Lending 93.6 84.6 European Direct Lending 40.3 55.7 APAC Credit 10.1 32.9 Credit $346.1
Slide 26: AUM Rollforward
26 Credit • AUM increased by 17% from Q4-23, primarily driven by commitments to SDL III, ACE VI and our third opportunistic credit fund, and by capital raised by our BDCs and by our open-ended European direct lending fund Real Assets • AUM increased by 15% from Q4-23 primarily driven by commitments
Slide 27: FPAUM Rollforward
27 Credit • FPAUM increased by 13% from Q4-23, primarily driven by deployment of capital in funds across our U.S. and European direct lending and alternative credit strategies, and by capital raised by our BDCs Real Assets • FPAUM increased by 7% from Q4-23 primarily driven by the acquisition of WSM
Slide 28: AUM and FPAUM by Strategy
28 AUM and FPAUM by Strategy As of December 31, 2024 $ in billions AUM % AUM FPAUM % FPAUM Credit Liquid Credit $46.9 13% $44.6 21% Alternative Credit 41.5 12 29.4 14 Opportunistic Credit 14.9 4 7.9 4 U.S. Direct Lending(1) 159.1 46 86.4 41 European Direct Lending 74.6 21 35.8 17 APAC Credit 11.5 3
Slide 29: Credit Group Fund Performance Metrics
29 Credit Group Fund Performance Metrics The following table presents the performance data for funds that are not drawdown funds as of December 31, 2024: Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the
Slide 30: Credit Group Fund Performance Metrics (cont'd)
30 Credit Group Fund Performance Metrics (cont'd) Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not b
Slide 31: Real Assets Group Fund Performance Metrics
31 Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not be considered meaningful due to the limited time
Slide 32: Private Equity Group Fund Performance Metrics
32 Private Equity Group Fund Performance Metrics Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not be
Slide 33: Secondaries Group Fund Performance Metrics
33 Secondaries Group Fund Performance Metrics Note: Past performance is not indicative of future results. Return information presented may not reflect actual returns earned by investors in the applicable fund. Fund performance metrics for significant funds may be marked as “NMˮ as they may not be co
Slide 34: Reconciliation and Disclosures
0 42 65 155 112 42 4 94 109 127 127 127 0 42 65 2 87 133 71 126 163 120 163 198 Credit Private Equity Real Estate Strategic Initiative s BUSINESS SECTOR PALETTE GENERAL PALETTE Reconciliation and Disclosures
Slide 35: Corporate Data
35 Corporate Data Board of Directors Michael Arougheti Co-Founder and Chief Executive Officer of Ares Ashish Bhutani Former Chairman and Chief Executive Officer of Lazard Asset Management and Former Vice Chairman of Lazard Ltd Antoinette Bush Senior Advisor to News Corp Kipp deVeer Co-President Paul
Slide 36: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis
36 GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis Quarter ended December 31, Year ended December 31, $ in thousands 2024 2023 2024 2023 Realized Income and Fee Related Earnings: Income before taxes $399,873 $483,100 $1,275,352 $1,333,063 Adjustments: Amortization of intangibles 29,
Slide 37: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd)
37 GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd) Note: These tables reconcile consolidated carried interest allocation and incentive fees reported in accordance with GAAP to unconsolidated realized performance income and consolidated GAAP other income to unconsolidated re
Slide 38: Investment Group Highlights and Fund Performance Endnotes: Credit Group
38 The tables for each of the investment group highlights on slides 15-18 are a financial summary only and segment results are shown before the unallocated support costs of the Operations Management Group. Please refer to “Financial Details - Segmentsˮ on slides 20-21 for complete financial results.
Slide 39: Credit Group Endnotes (cont'd)
39 Credit Group (cont’d) 13. ACE V is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE V (E) Unlevered, ACE V (G) Unlevered, ACE V (E) Levered, and ACE V (G) Levered, and two feeder funds: ACE V (D) Levered and ACE V (Y) Unlevered. ACE V (E) Levered
Slide 40: Investment Group Highlights and Fund Performance Endnotes (cont'd)
40 Investment Group Highlights and Fund Performance Endnotes (cont'd) Real Assets Group (cont’d) 5. Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. S
Slide 41: Real Assets Group Endnotes (cont'd)
41 Real Assets Group (cont’d) 16. EF V is made up of two parallel funds, one denominated in U.S. dollars and one denominated in Euros. The gross and net IRR and MoIC presented in the table are for the Euro denominated parallel fund. The gross and net MoIC for the U.S. Dollar denominated parallel fun
Slide 42: Secondaries Group Endnotes
42 Secondaries Group 1. The Secondaries Group had ~100 investment and investor relations professionals, ~885 underlying limited partnership interests and ~85 active funds as of December 31, 2024. 2. Gross time-weighted returns do not reflect the deduction of management fees, carried interest, or oth
Slide 43: Glossary
43 Glossary Ares Operating Group Entities Ares Operating Group entities or an “AOG Entityˮ refers to, collectively, Ares Holdings, L.P. (“Ares Holdingsˮ) and any future entity designated by our board of directors in its sole discretion as an Ares Operating Group entity. Ares Operating Group Unit Are
Slide 44: Glossary (Cont'd)
44 Glossary (Cont'd) Fee Paying AUM Fee Paying AUM or “FPAUMˮ refers to the AUM from which we directly earn management fees. FPAUM is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees. For our funds other than CLOs, our FPAUM represents the
Slide 45: Glossary (Cont'd)
45 Glossary (Cont'd) Management Fees Management Fees refers to fees we earn for advisory services provided to our funds, which are generally based on a defined percentage of fair value of assets, total commitments, invested capital, net asset value, net investment income, total assets or par value o
Slide 46: Glossary (Cont'd)
46 Glossary (Cont'd) Perpetual Capital Perpetual Capital refers to the AUM of: (i) our publicly-traded vehicles, including ARCC, Ares Commercial Real Estate Corporation (NYSE: ACRE) (“ACREˮ) and Ares Dynamic Credit Allocation Fund, Inc. (NYSE: ARDC) (“ARDCˮ); (ii) our non-listed retail vehicles, inc