Slide 1: Earnings Presentation Fourth Quarter and Full Year 2022
Earnings Presentation Fourth Quarter and Full Year 2022 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 2022 Highlights
3 Assets Under Management Q4-22 and FY-22 Financial Results Corporate Actions Fourth Quarter and Full Year 2022 Highlights 1. Net inflows of capital represents gross capital commitments less redemptions. 2. Unconsolidated management fees includes $11.8 million and $46.3 million from Consolidated Fun
Slide 4: Gross New Capital Commitments
4 Gross New Capital Commitments(1) 1. Represents gross new capital commitments during the period presented, including equity and debt commitments and gross inflows into our open-ended managed accounts and sub-advised accounts. Commitments denominated in currencies other than U.S. dollar have been co
Slide 5: Assets Under Management
5 $117.4 $134.3 $145.2 $16.7 $19.0 $18.5 $28.6 $40.2 $41.6 $18.3 $17.7 $17.7 $6.8 $7.4 $8.1 $187.8 $218.6 $231.1 Q4-21 Q3-22 Q4-22 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 investm
Slide 6: Perpetual Capital
6 Perpetual Capital 1. Commingled funds refers to publicly managed funds, non-registered funds, illiquid funds and insurance strategies. 2. CLOs are a type of closed end vehicle. Perpetual Capital AUM Perpetual Capital as of December 31, 2022 was $92.7 billion, an increase of 21% from prior year • T
Slide 7: AUM and Management Fees by Type
7 20% 6% 62% 12% 37% 6% 52% 5% AUM and Management Fees by Type 88% 1. Long-dated funds generally have a contractual life of five years or more at inception. For the year ended December 31, 2022: • 88% of assets under management were perpetual capital or long-dated funds • 95% of management fees were
Slide 8: Available Capital and AUM Not Yet Paying Fees
8 $43.2 $34.2 $31.5 $6.7 $6.6 $5.6 $3.5 $7.8 $7.4 $1.3 $3.5 $3.4 $3.2 $3.2 $3.2 $57.9 $55.3 $51.1 Q4-21 Q3-22 Q4-22 Available Capital and AUM Not Yet Paying Fees Available Capital as of December 31, 2022 was $84.6 billion, a decrease of 6% from prior year • The decrease of $5.8 billion was primarily
Slide 9: AUM Not Yet Paying Fees Available for Future Deployment
9 $41.8 $8.8 $0.5 $27.3 $5.5 $5.9 $0.7 $2.4 AUM Not Yet Paying Fees Available for Future Deployment AUM Not Yet Paying Fees As of December 31, 2022, AUM Not Yet Paying Fees includes $41.8 billion of AUM available for future deployment which could generate approximately $410.9 million in potential in
Slide 10: Incentive Eligible AUM and Incentive Generating AUM
10 Q4-21 Q3-22 Q4-22 Incentive Eligible AUM and Incentive Generating AUM ($ in billions) ($ in billions) Credit Private Equity Real Assets Secondaries Strategic Initiatives Total Incentive Generating AUM $50.7 $20.9 $26.6 $6.1 $1.1 $105.4 + Uninvested IEAUM 32.0 9.5 11.6 6.9 3.9 63.9 + IEAUM below h
Slide 11: Fee Related Performance Revenues
11 Fee Related Performance Revenues 1. Fee related performance revenues by strategy is presented net of the associated fee related performance compensation. 2. Represents 50% of the fee related performance revenues earned in FY-21 due to the one-time contingent consideration recorded in connection w
Slide 12: Capital Deployment
12 $17.3 $0.7 $1.8 $0.8 $1.2 Q4-22 Gross Capital Deployment Capital Deployment(1) ($ in billions) 1. Capital deployment figures include deployment from perpetual capital vehicles. Capital Deployment in Drawdown Funds ($ in billions) Total Gross Invested Capital during FY-22 was $79.8 billion compare
Slide 13: Consolidated Statements of Operations
13 Quarter ended December 31, Year ended December 31, $ in thousands, except share data 2022 2021 2022 2021 Revenues Management fees $590,083 $475,226 $2,136,433 $1,611,047 Carried interest allocation 40,233 462,844 458,012 2,073,551 Incentive fees 271,208 313,456 301,187 332,876 Principal investmen
Slide 14: RI and Other Measures Financial Summary
14 RI and Other Measures Financial Summary l e Quarter ended December 31, Year ended December 31, $ in thousands, except share data (and as otherwise noted) 2022 2021 % Change 2022 2021 % Change Management fees(1) $592,958 $481,029 23% $2,152,528 $1,635,277 32% Fee related performance revenues 224,3
Slide 15: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis
15 GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis Quarter ended December 31, Year ended December 31, $ in thousands 2022 2021 2022 2021 Realized Income and Fee Related Earnings: Income before taxes $342,809 $308,861 $510,806 $1,065,690 Adjustments: Amortization of intangibles(1) 30
Slide 16: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd)
16 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 17: Credit Group
17 Credit Group(1) 1. This table is 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 slide 26-27 for complete financial results. 2. Performance for the U.S. senior direct
Slide 18: Private Equity Group
18 Private Equity Group(1) Note: Past performance is not indicative of future results. The Private Equity Group had ~95 investment professionals, ~45 portfolio companies and ~10 active funds and related co-investment vehicles as of December 31, 2022. 1. This table is a financial summary only and seg
Slide 19: Real Assets Group
19 Real Assets Group(1) Note: Past performance is not indicative of future results. The Real Assets Group had ~290 investment professionals, ~510 properties, ~55 infrastructure and power assets and ~60 active funds and related co- investment vehicles as of December 31, 2022. 1. This table is a finan
Slide 20: Secondaries Group
20 Secondaries Group(1) Note: Past performance is not indicative of future results. The Secondaries Group had ~65 investment professionals, ~875 limited partnership interests and ~65 active funds and related co- investment vehicles as of December 31, 2022. 1. This table is a financial summary only a
Slide 21: Strategic Initiatives
21 Strategic Initiatives(1) • Management and other fees increased by 13% and 9% for Q4-22 and FY-22, respectively, compared to Q4-21 and FY-21, primarily driven by additional commitments to our sixth Asian special situations fund • Fee Related Earnings increased by 67% for Q4-22 compared to Q4-21, p
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 2022 2021 2022 2021 After-tax Realized Income Realized Income before taxes $418,323 $340,321 $1,131,027 $882,937 Entity level foreign, state and local taxes (4,913) (5,080) (17,237)
Slide 23: Balance Sheet
23 29% 45% 21% 5% Substantial balance sheet value related to investments primarily in Ares managed vehicles and net accrued performance income • As of December 31, 2022, our balance sheet included $390.0 million in cash and cash equivalents and $2,273.9 million in debt obligations, including $700.0
Slide 24: Corporate Data
24 Corporate Data Board of Directors Michael Arougheti Co-Founder, Chief Executive Officer and President 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 Head o
Slide 25: Appendix
Appendix
Slide 26: Financial Details – Segments
26 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 15-16. 2. Includes fee related performance compensation of $3
Slide 27: Financial Details – Segments, Year ended December 31, 2022
27 Year ended December 31, 2022 $ in thousands Credit Group Private Equity Group Real Assets Group Secondaries Group Strategic Initiatives Operations Management Group Total(1) Management fees $1,355,975 $199,837 $347,808 $176,694 $72,214 $— $2,152,528 Fee related performance revenues 71,497 — 167,69
Slide 28: Weighted Average Shares
28 Weighted Average Shares 1. Represents proportional dilutive impact based upon the weighted average percentage of Ares Operating Group owned by Ares Management Corporation (60.12% and 59.10% as of December 31, 2022 and 2021, respectively). 2. Represents units exchangeable for shares of Class A com
Slide 29: AUM Rollforward
29 AUM Rollforward Credit • AUM increased by 11% from Q4-21, primarily driven by additional capital raised by U.S. direct lending funds, fundraising from our open-end core alternative credit fund and by issuances of new CLOs in the syndicated loans strategy Private Equity • AUM increased by 4% from
Slide 30: FPAUM Rollforward
30 FPAUM Rollforward Credit • FPAUM increased by 24% from Q4-21, primarily driven by deployment in U.S. and European direct lending and alternative credit, as well as by issuances of new CLOs in the syndicated loans strategy Private Equity • FPAUM increased by 11% from Q4-21, primarily driven by dep
Slide 31: AUM and FPAUM by Strategy
31 AUM and FPAUM by Strategy 1. AUM includes ARCC, IHAM and Senior Direct Lending Program ("SDLP") AUM of $25.8 billion, $10.4 billion and $4.1 billion, respectively. ARCC’s wholly owned portfolio company, IHAM, an SEC- registered investment adviser, manages 21 vehicles and serves as the sub-manager
Slide 32: Balance Sheet Investments by Strategy
32 Balance Sheet Investments by Strategy(1) $ in millions December 31, 2022 December 31, 2021 Credit Syndicated Loans(2) $82.0 $103.8 Multi-Asset Credit 11.0 12.0 Alternative Credit 54.6 27.5 U.S. Direct Lending 111.9 116.8 European Direct Lending 33.4 33.0 Credit $292.9 $293.1 Private Equity Corpor
Slide 33: Significant Fund Performance Metrics
33 Significant Fund Performance Metrics The following table presents the performance data for the significant funds that are not drawdown funds: Note: Past performance is not indicative of future results. AUM and net returns are as of December 31, 2022 unless otherwise noted. The above table include
Slide 34: Significant Fund Performance Metrics (cont'd)
34 Significant Fund Performance Metrics (cont’d) Note: Past performance is not indicative of future results. AUM and net returns are as of December 31, 2022 unless otherwise noted. The above table includes fund performance metrics for significant funds which includes commingled funds that contribute
Slide 35: Significant Fund Performance Metrics (cont'd)
35 Note: Past performance is not indicative of future results. AUM and net returns are as of December 31, 2022 unless otherwise noted. The above table includes fund performance metrics for significant funds which includes commingled funds that contributed at least 1% of total management fees or comp
Slide 36: Significant Fund Performance Metrics Endnotes – Credit
36 Credit 1. Since inception returns are annualized. 2. Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Net returns are calculated using the fund's NAV and assu
Slide 37: Significant Fund Performance Metrics Endnotes – Private Equity
37 Significant Fund Performance Metrics Endnotes (cont’d) Private Equity 1. Realized value represents the sum of all cash dividends, interest income, other fees and cash proceeds from realizations of interests in portfolio investments. Realized value excludes any proceeds related to bridge financing
Slide 38: Significant Fund Performance Metrics Endnotes – Real Assets
38 Real Assets 1. Since inception returns are annualized. 2. 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. Shares of other classes may have lower r
Slide 39: Significant Fund Performance Metrics Endnotes – Secondaries
39 Significant Fund Performance Metrics Endnotes (cont’d) Secondaries 1. Realized value represents the sum of all cash distributions to all limited partners and if applicable, exclude tax and incentive distributions made to the general partner. 2. Unrealized value represents the limited partners' sh
Slide 40: Supplemental Performance Metrics
40 Supplemental Performance Metrics The following table presents the performance data for a non-drawdown fund that was previously reported as a significant fund: Note: Past performance is not indicative of future results. AUM and net returns are as of December 31, 2022 unless otherwise noted. Please
Slide 41: Supplemental Performance Metrics (cont'd)
41 Supplemental Performance Metrics (cont'd) The following table presents the performance data for commingled funds that were previously reported as significant funds: As of December 31, 2022 Year of Inception Original Capital Commitments Capital Invested to Date Realized Value(1) Unrealized Value(2
Slide 42: Supplemental Performance Metrics (cont'd)
42 Supplemental Performance Metrics (cont'd) The following table presents the performance data for commingled funds that were previously reported as significant funds: As of December 31, 2022 Year of Inception Original Capital Commitments Capital Invested to Date Realized Value(1) Unrealized Value(2
Slide 43: Supplemental Performance Metrics Endnotes – Credit
43 Supplemental Performance Metrics Endnotes Credit 1. Since inception returns are annualized. 2. Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Gross returns
Slide 44: Supplemental Performance Metrics Endnotes – Real Assets
44 Supplemental Performance Metrics Endnotes (cont’d) Real Assets 1. For the infrastructure opportunities funds, realized proceeds represent the sum of all cash dividends, interest income, other fees and cash proceeds from realizations of interests in portfolio investments. Realized proceeds exclude
Slide 45: Supplemental Performance Metrics Endnotes – Secondaries
45 Supplemental Performance Metrics Endnotes (cont’d) Secondaries 1. Realized value represents the sum of all cash distributions to all limited partners and if applicable, exclude tax and incentive distributions made to the general partner. 2. Unrealized value represents the limited partners' share
Slide 46: Glossary
46 Glossary ARCC Part II Fees ARCC Part II Fees refers to fees from Ares Capital Corporation (NASDAQ: ARCC) (“ARCCˮ) 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
Slide 47: Glossary (cont'd)
47 Glossary (cont’d) Fee Related Earnings Fee Related Earnings or “FREˮ, a non-GAAP measure, is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees and fee related performance revenues, is sufficient to cover operating expenses
Slide 48: Glossary (cont'd)
48 Glossary (cont’d) Operations Management Group In addition to our reportable segments, we have an Operations Management Group (the “OMGˮ) that consists of shared resource groups to support our reportable segments by providing infrastructure and administrative support in the areas of accounting/fin
Slide 49: Glossary (cont'd)
49 Glossary (cont’d) Realized Income Realized Income or “RIˮ, a non-GAAP measure, is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuation