Ares Management Corporation

Company Overview

Business Model: Ares Management Corporation is a global alternative investment manager founded in 1997. The firm manages $622.5 billion in assets as of December 31, 2025, across distinct but complementary investment groups: Credit, Real Assets, Secondaries, and Private Equity. Its investment approach is rigorous and credit-oriented, leveraging proprietary research and insights from a broad portfolio of investments. Revenue is primarily generated through management fees, carried interest allocations, and incentive fees from its diverse investment vehicles.

Market Position: Ares Management Corporation is positioned as a market leader within each of its core investment groups. The firm has demonstrated significant growth, with Assets Under Management (AUM) expanding from $94.0 billion a decade prior to $622.5 billion, representing a compound annual growth rate (CAGR) of 26% over the past five years and 21% over the past 10 years. It serves over 2,850 direct institutional relationships and a significant retail investor base, supported by over 4,250 professionals globally.

Recent Strategic Developments:

• GCP International Acquisition: On March 1, 2025, Ares Management Corporation completed the acquisition of GLP Capital Partners Limited's international business (GCP International) and existing capital commitments to certain managed funds. This acquisition enhanced the firm's logistics and digital infrastructure investment capabilities and expanded its geographic presence in Japan, Brazil, Vietnam, Europe, and the U.S.
• Capital Markets Restructuring: In 2025, the firm restructured and expanded its capital markets professionals and formalized its Capital Solutions Group.
• SPAC Business Combination: In September 2025, Ares Acquisition Corporation II (AAC II), a SPAC sponsored by Ares Management Corporation, completed a business combination with Kodiak Robotics, Inc., and was subsequently renamed Kodiak AI, Inc.

Geographic Footprint: Ares Management Corporation operates in over 55 offices across more than 25 countries. Its primary operational regions include the Americas, Europe, and APAC. The firm's relationship management team, comprising over 200 professionals, is strategically located across North America, Europe, APAC, and the Middle East, with ongoing initiatives to expand its presence in Latin America and Australia.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Net Margin: 29.3% (2025) vs. 64.7% (2024)

Investment in Growth:

• Strategic Investments: The acquisition of GCP International in 2025 significantly expanded capabilities and geographic reach. This acquisition contributed $157.2 million to administrative, transaction, and other fees, $48.5 million to cash compensation, $71.3 million to contingent earnout compensation, and $170.5 million to employment-related costs in 2025.

Business Segment Analysis

Credit Group

Financial Performance:

• Revenue: $2.059 billion (+21.9% YoY)
• Fee Related Earnings (FRE) Margin: 88.6% (2025) vs. 92.9% (2024)
• Key Growth Drivers: Management fees increased by $351.5 million, driven by $172.8 million from publicly-traded/perpetual wealth vehicles and $112.5 million from private funds. Part I Fees increased by $74.5 million from key funds including ASIF, an open-ended European direct lending fund, an open-ended core infrastructure fund, and CADC. Product Portfolio: Manages $406.9 billion AUM across over 305 funds. Includes Liquid Credit, Alternative Credit, Opportunistic Credit, Direct Lending (U.S. and European), and APAC Credit strategies. Market Dynamics: The largest segment by AUM, with a broad range of credit-focused investment vehicles. Sub-segment Breakdown:
• Liquid Credit: $53.1 billion AUM in over 115 funds/SMAs.
• Alternative Credit: $48.1 billion AUM in over 25 private funds/SMAs.
• Opportunistic Credit: $19.8 billion AUM in seven funds.
• Direct Lending: $274.3 billion AUM in over 105 vehicles, including U.S. Direct Lending ($189.6 billion AUM) and European Direct Lending ($84.7 billion AUM).
• APAC Credit: $11.5 billion AUM in over 20 funds.

Real Assets Group

Financial Performance:

• Revenue: $895.1 million (+108.5% YoY)
• Fee Related Earnings (FRE) Margin: 51.9% (2025) vs. 49.4% (2024)
• Key Growth Drivers: AUM increased from $75.3 billion in 2024 to $139.1 billion in 2025, with $45.3 billion from acquisitions, primarily the GCP Acquisition. Other fees increased by $143.1 million from the GCP Acquisition (development, property management, leasing fees). Excluding GCP, other fees increased by $10.3 million (37.8%) due to internalized property management services. Product Portfolio: Manages $139.1 billion AUM across over 110 investment vehicles, focusing on Real Estate and Infrastructure. Market Dynamics: Significant growth driven by strategic acquisition, expanding capabilities in logistics and digital infrastructure. Sub-segment Breakdown:
• Real Estate: $113.8 billion AUM in over 85 vehicles (including Marq Logistics).
• Infrastructure: $25.3 billion AUM in over 25 vehicles (including Ada Infrastructure).

Secondaries Group

Financial Performance:

• Revenue: $338.2 million (+49.4% YoY)
• Fee Related Earnings (FRE) Margin: 61.6% (2025) vs. 55.8% (2024)
• Key Growth Drivers: Management fees increased by $79.0 million, fee related performance revenues increased by $26.5 million, and other fees increased by $6.4 million. Product Portfolio: Manages $42.1 billion AUM across over 90 funds, specializing in Private Equity, Real Estate, Infrastructure, and Credit Secondaries. Market Dynamics: Strong growth in revenue and profitability, indicating robust activity in secondary markets. Sub-segment Breakdown:
• Private Equity Secondaries: $22.1 billion AUM in over 40 funds.
• Real Estate Secondaries: $8.2 billion AUM in over 25 funds.
• Infrastructure Secondaries: $6.9 billion AUM in over 15 funds.
• Credit Secondaries: $4.9 billion AUM in five funds.

Private Equity Group

Financial Performance:

• Revenue: $106.3 million (-0.3% YoY)
• Fee Related Earnings (FRE) Margin: 54.9% (2025) vs. 56.8% (2024)
• Key Growth Drivers: Management fees decreased by $2.4 million. Product Portfolio: Manages $25.3 billion AUM across over 60 funds, including Corporate Private Equity and APAC Private Equity strategies. Market Dynamics: Relatively stable revenue with a slight decline in 2025. Sub-segment Breakdown:
• Corporate Private Equity: Professionals based in Los Angeles and London.
• APAC Private Equity: Focuses on structured growth equity investments.

Other Businesses

Financial Performance:

• Revenue: $74.3 million (+65.2% YoY)
• Fee Related Earnings (FRE) Margin: 36.9% (2025) vs. 34.8% (2024)
• Key Growth Drivers: Management fees increased by $28.3 million. Product Portfolio: Includes Ares Insurance Solutions (AIS), Ares Acquisition Corporation II (AAC II), and Venture Capital. Market Dynamics: Strong revenue growth, driven by the expansion of Ares Insurance Solutions. Sub-segment Breakdown:
• Ares Insurance Solutions (AIS): Manages $25.9 billion AUM, with $16.9 billion sub-advised by Ares Management Corporation vehicles. Acts as investment manager, capital solutions, and corporate development partner to Aspida Life Insurance Company and Aspida Life Re Limited.
• Ares Acquisition Corporation II (AAC II): A SPAC that completed a business combination with Kodiak Robotics, Inc. in September 2025, renamed Kodiak AI, Inc.
• Venture Capital: Focuses on fund strategies for growth-stage companies and applied artificial intelligence.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: None reported for the period.
• Dividend Payments:
  • Series B mandatory convertible preferred stock: $101.3 million paid in 2025 ($3.375 per share annually), up from $22.8 million in 2024. A quarterly dividend of $0.84375 per share was declared for Q1 2026.
  • Class A and Non-Voting Common Stock: $985.5 million paid in 2025 ($4.48 per share annually), up from $743.0 million in 2024. A quarterly dividend of $1.35 per share was declared for Q1 2026.
• Future Capital Return Commitments: Ares Management Corporation intends to pay $1.35 per share per quarter in 2026 and retain realized net performance income to fund future growth and potential stock repurchases. Balance Sheet Position:
• Total Debt: $3.980 billion as of December 31, 2025, comprising $1.380 billion under the Credit Facility, $2.150 billion in senior notes, and $450.0 million in subordinated notes.
• Debt Maturity Profile: The Credit Facility matures in April 2030. Senior notes mature between November 2028 and October 2054. Subordinated notes mature in June 2051. Approximately 86% of debt assets within the Credit Group were floating rate instruments as of December 31, 2025.

Operational Excellence

Production & Service Model: Ares Management Corporation operates as a global alternative investment manager, employing a rigorous, credit-oriented investment approach. This is supported by extensive proprietary research and insights derived from a vast portfolio of investments. The Operations Management Group (OMG) provides centralized infrastructure and administrative support, encompassing accounting, finance, operations, IT, legal, compliance, HR, strategy, relationship management, and distribution services.

Key Suppliers & Partners:

• Insurance Partners: Aspida Life Insurance Company and Aspida Life Re Limited (Ares Insurance Solutions acts as investment manager, capital solutions, and corporate development partner).

Facility Network:

• Principal Executive Offices: Leased at 1800 Avenue of the Stars, Suite 1400, Los Angeles, California.
• Other Offices: Leases additional office space in New York, London, and other global cities. Ares Management Corporation does not own any real property.

Operational Metrics:

• Assets Under Management (AUM): $622.5 billion as of December 31, 2025.
• Fundraising: Raised $113.2 billion in gross new capital commitments in 2025 across over 190 investment vehicles.
• Capital Deployment: Invested $145.8 billion in 2025, compared to $106.7 billion in 2024.
• Available Capital (Dry Powder): $156.0 billion as of December 31, 2025, up from $133.1 billion in 2024.
• Shadow AUM: $88.1 billion as of December 31, 2025, representing $78.8 billion available for future deployment and $4.3 billion of development assets not yet stabilized. This shadow AUM has the potential to generate $730.4 million in incremental annual management fees, indicating a 23% embedded growth rate in 2025 base management fees.
• Management Fees by Fund Type: 93% of management fees in 2025 were derived from perpetual capital vehicles or long-dated funds (95% in 2024), indicating a stable revenue base.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Engages with over 2,850 direct institutional relationships.
• Channel Partners: Ares Wealth Management Solutions (AWMS), through its registered broker-dealer subsidiary Ares Management Capital Markets LLC, facilitates product development, distribution, marketing, and client management for global wealth management.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: Over 2,850 direct institutional relationships, with 79% of direct institutional fundraising in 2025 originating from existing investors.
• Strategic Partnerships: Ares Insurance Solutions partners with Aspida Life Insurance Company and Aspida Life Re Limited.
• Customer Concentration: AUM from investors committed to more than one fund grew from $100.0 billion in 2020 to $300.0 billion in 2025, indicating a diversified and deepening investor base.

Geographic Revenue Distribution:

• Americas: Accounts for $282.0 billion (60%) of direct institutional AUM.
• Europe: Accounts for $105.0 billion (22%) of direct institutional AUM.
• APAC: Accounts for $60.0 billion (13%) of direct institutional AUM.
• Middle East & Africa: Accounts for $23.1 billion (5%) of direct institutional AUM.
• Growth Markets: Strategic initiatives are focused on expanding presence in Latin America and Australia.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The firm operates within the global alternative investment management industry, characterized by significant AUM growth. Ares Management Corporation's AUM has grown at a 26% CAGR over the past five years and 21% over the past 10 years.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: Not explicitly named in the filing. Emerging Competitive Threats: Not explicitly named in the filing. Competitive Response Strategy: The firm's strategy includes rigorous, credit-oriented investment, proprietary research, and strategic acquisitions such as GCP International to expand capabilities and geographic reach.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Technology Disruption: While not explicitly stated as a risk, the firm's Venture Capital segment focuses on growth-stage companies and applied artificial intelligence, indicating awareness of technological shifts.

Financial & Regulatory Risks

Regulatory & Compliance Risks:

• Industry Regulation: Ares Management Corporation is subject to extensive regulation by governmental agencies and self-regulatory organizations in the U.S. (SEC, FINRA, Investment Company Act, Commodity Exchange Act, ERISA) and foreign jurisdictions (CSSF, FCA, AIFMD, MiFID II, SFC, MAS, BMA). Key regulatory changes include AIFMD II (effective April 16, 2026), the EU Digital Operational Resilience Act (DORA) (applicable January 2025), and the EU Artificial Intelligence Act (phased application from 2025).
• Export Controls: An August 2023 Executive Order established an outbound investment screening regime for U.S. persons in advanced technology sectors in China, with final regulations effective January 2, 2025.
• Data Privacy: The firm's cybersecurity program aligns with the National Institute of Standards and Technology Cybersecurity Framework, prioritizing detection, analysis, response, risk management, and resilience.

Geopolitical & External Risks

Geopolitical Exposure:

• Geographic Dependencies: The Hong Kong National Security Law (June 30, 2020) and Safeguarding National Security Ordinance (March 23, 2024) apply to Hong Kong, impacting operations in that region.
• Trade Relations: The outbound investment screening regime for U.S. persons in advanced technology sectors in China may impact investment activities.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Applied Artificial Intelligence: The Venture Capital segment focuses on fund strategies for growth-stage companies and applied artificial intelligence.

Leadership & Governance

Executive Leadership Team

Board Composition: The board is divided into Class I and Class II directors. Mr. Antony P. Ressler, a Holdco Member, is the sole Class I director and holds a veto right over all board actions. Ares Management Corporation is classified as a "controlled company" under NYSE standards, electing not to comply with certain corporate governance requirements.

Human Capital Strategy

Workforce Composition:

• Total Employees: Over 4,250 professionals as of December 31, 2025. Full-time equivalent headcount increased by 34% to 3,967 professionals in 2025 from 2,971 in 2024, with the GCP Acquisition adding 805 professionals (690 full-time equivalents).
• Geographic Distribution: Employees are located across over 55 offices in more than 25 countries.
• Skill Mix: The workforce comprises over 1,650 investment professionals and over 2,550 operations management professionals. Senior investment professionals average approximately 25 years of experience.

Talent Management: Acquisition & Retention:

• Hiring Strategy: The GCP Acquisition significantly contributed to headcount growth in 2025.
• Employee Value Proposition: Compensation includes base salary, annual performance-based bonuses, and equity and carried interest participation. The firm offers a formal internship program, mentoring, training, and an Education Sponsorship Program.

Diversity & Development:

• Diversity Metrics: Ares Management Corporation has a global Diversity, Equity and Inclusion Council that implements a strategic framework for talent and supports DEI efforts in investments and communities.
• Development Programs: Includes mentoring, training, and an Education Sponsorship Program.

Environmental & Social Impact

Social Impact Initiatives:

• Community Investment:
  • Ares Charitable Foundation: A 501(c)(3) organization launched in 2021, funding initiatives for career preparation, reskilling, entrepreneurship, and financial literacy. It donates a portion of annualized, realized net performance income from select Ares Management Corporation funds.
  • Pathfinder Funds: Ares Management Corporation has committed to donate a minimum of 10% of carried interest from Ares Pathfinder Fund, L.P. (Pathfinder I) and Ares Pathfinder Fund II, L.P. (Pathfinder II), and 5% of incentive fees from an open-ended core alternative credit fund, to global health and educational charities.
  • Ares in Motion (AIM): Launched in 2012, this global community engagement program fosters volunteerism and philanthropy, hosting over 100 volunteer events annually and offering matching programs.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• U.S. Regulation: Ares Management Corporation is subject to oversight by the SEC (for registered investment advisers and broker-dealers), FINRA, and various acts including the Securities Act, Exchange Act, Investment Company Act (for BDCs and registered closed-end management investment companies), Commodity Exchange Act, and ERISA. It also operates REITs. Recent changes include amended Form PF reporting requirements (compliance extended to October 2026) and Regulation Best Interest for broker-dealer recommendations.
• International Compliance: Ares Management Luxembourg is regulated by the CSSF. Ares Management Limited and Ares Management U.K. Limited are regulated by the U.K. Financial Conduct Authority (FCA). These entities are AIFMs under AIFMD, with AIFMD II effective April 16, 2026. The EU Digital Operational Resilience Act (DORA) became applicable in January 2025, and the EU Artificial Intelligence Act applies on a phased basis from 2025. Ares Management Asia (Holdings) Limited subsidiaries are regulated by the Securities and Futures Commission of Hong Kong and the Monetary Authority of Singapore. The Bermuda Monetary Authority (BMA) regulates Ares Management Corporation as a "shareholder controller" of Aspida Re.
• Insurance Regulation: New Bermuda legislation became operative March 31, 2024. The NAIC adopted changes to its Financial Analysis Handbook in 2024 and revisions to risk-based capital (RBC) formulas and Actuarial Guideline LV (AG 55) in 2024 and 2025 (AG 55 effective year-end 2025).
• Energy Sector Regulation: Power, infrastructure, and energy companies within Ares Management Corporation's portfolio are subject to regulation by the Federal Energy Regulatory Commission (FERC) and public utility commissions.

Trade & Export Controls:

• Export Restrictions: An August 2023 Executive Order established an outbound investment screening regime for U.S. persons in advanced technology sectors in China, with final regulations issued in October 2024 and effective January 2, 2025.
• Sanctions Compliance: The firm must comply with restrictions related to sanctioned entities and export controls.

Legal Proceedings: Ares Management Corporation, its officers, directors, and funds are subject to legal proceedings and regulatory investigations, which incur significant costs.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: The effective tax rate was 15.4% in 2025 (income tax expense of $198.5 million on income before taxes of $1.287 billion), compared to 12.9% in 2024.
• Geographic Tax Planning: Tax distributions to Ares Operating Group partners are computed at the highest effective marginal combined U.S. federal, state, and local income tax rate for Los Angeles, CA or New York, NY.
• Tax Reform Impact: The One Big Beautiful Bill Act (OBBBA), enacted July 2025, extends TCJA provisions. The American Rescue Plan Act of 2021 (ARPA) expanded Section 162(m) disallowance for compensation, effective for tax years beginning after December 31, 2026. The Inflation Reduction Act (IRA) introduced a 15% minimum tax (CAMT) for corporations and a 1% excise tax on stock repurchases after December 31, 2022.

Tax Receivable Agreement (TRA): Ares Management Corporation pays TRA Recipients 85% of cash tax savings from tax basis increases and other benefits. Upon a change of control or early termination, estimated aggregate TRA payments would be approximately $2.4 billion on 105 million Ares Operating Group Units.

Carried Interest Tax Treatment: The U.K. government announced an intent to implement a new carried interest regime from April 2026, and the rate of carried interest for U.K. investment professionals increased on April 6, 2025.

Interest Expense Deduction: Deduction of net business interest expenses is generally limited to 30% of "adjusted taxable income."