Ares Management Corporation · NYSE:ARES
Ares Management — Investor Day (2021)
26 slides from Ares Management's investor day presentation, 2021
Slide 1: Secondary Solutions Overview & Outlook
Secondary Solutions Overview & Outlook Francisco Borges Co-Head of Secondary Solutions Group Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 2: Important Notice
Important Notice This presentation is prepared for Ares Management Corporation (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 Management Corporation (“A
Slide 3: Important Notice (Dated information)
Important Notice Dated information: This video may contain dated information. Viewers are cautioned that this video and the associated presentation is maintained here solely for the purposes of providing historical background about Ares Management Corporation. As the video may contain dated informat
Slide 4: Ares Secondary Solutions
Ares Secondary Solutions The recent acquisition of Landmark Partners moves Ares into a leadership position in the rapidly growing secondaries market $19.5B Key Differentiators & Advantages: In Secondary Solutions AUM One of the most experienced secondary investors Real Estate 29% Private Equity A hi
Slide 5: Landmark Partners Leadership and Team
Landmark Partners Leadership and Team Long-tenured team with deep and broad experience across alternative asset classes Private Equity Real Estate Infrastructure Secondary Investing Secondary Investing Secondary Investing Since 1990 Since 1996 Since 2015 11 Partners & Managing Directors with 9 Partn
Slide 6: Secondaries Can Offer an Attractive Investment Opportunity
Secondaries Can Offer an Attractive Investment Opportunity Buyers in secondary transactions can benefit from alternatives exposure with potential accelerated return of capital Potential Benefits from Investment in Secondary Transactions Exposure to attractive Acquire seasoned Reduced risk vs. assets
Slide 7: Sellers Pursue Secondary Transactions for a Variety of Reasons
Sellers Pursue Secondary Transactions for a Variety of Reasons Secondaries may offer various liquidity solutions to both LP & GP counterparties LP-Led Transactions GP-Led Transactions Portfolio Management Continuation Fund Regulatory Pressure Fund Level Preferred Equity Non-Core Asset Minority Equit
Slide 8: We Believe the Secondaries Market is Attractive and Growing
We Believe the Secondaries Market is Attractive and Growing Secondary transaction volumes have seen notable increases over the past 5 years Private Equity Real Estate Infrastructure Secondary Transaction Volume Secondary Transaction Volume Secondary Transaction Volume ($ in billions) ($ in billions)
Slide 9: Secondary Solutions Are Just Scratching the Surface with Huge End Markets
Secondary Solutions Are Just Scratching the Surface with Huge End Markets Secondaries transaction volumes represent a fraction of the addressable markets Secondary Private Equity Secondary Real Estate Secondary Infrastructure ($ in billions) ($ in billions) ($ in billions) $4,200 $1,200 $800 Seconda
Slide 10: Investment Transaction Types in Landmark Partners' Most Recent Vintage Funds
Investment Transaction Types in Landmark Partners’ Most Recent Vintage Funds Flexible suite of solutions spanning a wide variety of transaction types Private Equity Secondary Fund: Real Estate Secondary Fund: Infrastructure Secondary Fund: Landmark Equity Partners XVI Landmark Real Estate Fund VIII
Slide 11: Landmark Partners Track Record
Landmark Partners Track Record Landmark Partners’ strong track record on over $22 Billion invested since 1990 Secondary Private Equity Secondary Real Estate Secondary Infrastructure ($ in billions) ($ in billions) ($ in millions) $6.4 $17.2 $489.1 $11.2 17% $4.7 25% $357.7 10% Net IRR Net IRR Net IR
Slide 12: Landmark Partners Fundraising is Growing and Expanding
Landmark Partners Fundraising is Growing and Expanding Landmark Partners has a history of larger successor funds and expanding into new industry verticals Private Equity Fund Growth Real Estate Fund Growth Infrastructure Fund Growth $3.3 $0.9 $4.9 $3.3 +48% +106% +83% $0.5 $1.6 $2.0 +65% $0.7 +123%
Slide 13: Key Drivers of Future Growth in the Secondaries Market
Key Drivers of Future Growth in the Secondaries Market Secondaries market innovation should drive increased volumes through higher asset turnover and greater liquidity in private markets Expansion of Leads To Step Functions Creates Increased Private Markets in Innovation Trading Volumes Private mark
Slide 14: Long-Term Product Expansion Opportunities
Long-Term Product Expansion Opportunities There are exciting product expansion opportunities for the business Innovation In New Markets Retail High Net Worth & Geographies Secondaries Products Insurance Products Grow Size of Future Vintage Funds Ares Management Corporation Investor Day 2021 - Not fo
Slide 15: Appendix
Appendix Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 16: GAAP Statement Of Operations
GAAP Statement Of Operations Year Ended December 31, $ in thousands, except share data Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Revenues Management fees $1,307,451 $1,150,608 $979,417 $802,502 $722,419 $642,068 $634,399 $486,477 Carried interest allocation 1,583,262 505,608 621,872 42,410 620,45
Slide 17: RI and Other Measures Financial Summary
RI and Other Measures Financial Summary Year Ended December 31, $ in thousands, except share data (and as otherwise noted) Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Management fees(1) $1,335,413 $1,186,565 $1,012,530 $836,744 $744,825 $659,451 $650,918 $598,046 Other fees 25,993 19,948 18,078 24,
Slide 18: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis
GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis Year Ended December 31, $ in thousands Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Realized Income and Fee Related Earnings: Income before taxes $944,635 $379,478 $425,180 $184,341 $149,859 $297,920 $81,484 $556,915 Adjustments: Amort
Slide 19: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd)
GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd) Year Ended December 31, $ in thousands Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Performance income and net investment income reconciliation: Carried interest allocation $1,583,262 $505,608 $621,872 $42,410 $620,454 $494,58
Slide 20: Glossary
Glossary Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 21: Glossary
Glossary ARCC Part II Fees ARCC Part II Fees refers to fees that are paid in arrears as of the end of each calendar year when the cumulative aggregate realized capital gains exceed the cumulative aggregate realized capital losses and aggregate unrealized capital depreciation, less the aggregate amou
Slide 22: Glossary
Glossary Fee Related Earnings Fee Related Earnings or “FRE”, a non-GAAP measure, 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
Slide 23: Glossary
Glossary Our Funds Our Funds refers to the funds, alternative asset companies, co-investment vehicles and other entities and accounts that are managed or co-managed by the Ares Operating Group, and which are structured to pay fees. It also includes funds managed by Ivy Hill Asset Management, L.P., a
Slide 24: Endnotes – Secondary Solutions Overview & Outlook
Endnotes – Secondary Solutions Overview & Outlook Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 25: Secondary Solutions Overview & Outlook Endnotes
Secondary Solutions Overview & Outlook Endnotes Capital Contributed : Represents equity capital contributed to the funds. Total Value: Represents Gross Distributions, defined as distributions made to the partners from the funds, including carried interest and investment management fees as applicable
Slide 26: Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution