Ares Management Corporation (NYSE:ARES) Q2 2022 Earnings Conference Call July 28, 2022 12:00 PM ET Company Participants Carl Drake - Head, Public Markets, Investor Relations Michael Arougheti - Chief Executive Officer Jarrod Phillips - Chief Financial Officer Bill Benjamin - Global Head, Real Estate Conference Call Participants Craig Siegenthaler - Bank of America Alex Blostein - Goldman Sachs Gerry O'Hara - Jefferies Patrick Davitt - Autonomous Research Finian O'Shea - Wells Fargo Robert Lee - KBW Adam Be ...

Ares Management Corporation (NYSE:ARES) Q1 2022 Earnings Conference Call April 28, 2022 11:00 AM ET Company Participants Carl Drake - Head, Public Markets, Investor Relations Michael Arougheti - Chief Executive Officer Jarrod Phillips - Chief Financial Officer Kipp deVeer - Director, Partner, Head of Credit Group Conference Call Participants Craig Siegenthaler - Bank of America Robert Lee - KBW Alex Blostein - Goldman Sachs Kenneth Lee - RBC Capital Markets Finian O'Shea - Wells Fargo Securities Adam Beatt ...

Financial Data and Key Metrics Changes - The company ended the year with over $300 billion in Assets Under Management (AUM), a 55% increase from nearly $200 billion at the end of 2020 [10] - The company generated record results across nearly every key financial metric, with a nearly 50% year-over-year increase in fee-paying AUM and a 65% increase in full-year fee-related earnings [12][34] - The quarterly dividend was increased by 30% to $0.61 per share, reflecting strong growth prospects [6][36] Business Line Data and Key Metrics Changes - The company raised a record $77 billion in gross fundraising for the year, including $25 billion in the fourth quarter alone [10][18] - Fee-related performance revenues (FRPR) for the full year totaled $137.9 million, significantly up from $23 million in 2020, driven by strong performance in U.S. and European direct lending [32] - The company invested over $80 billion across more than 25 different strategies globally, with significant deployment in health care, software, technology, and renewable energy [24][25] Market Data and Key Metrics Changes - Fundraising from retail channels increased over 150% year-over-year to $14.5 billion, while fundraising from insurance clients increased over 100% to $11.7 billion [19] - The company’s retail and high net worth channel AUM stood at more than $50 billion at year-end [19] - The company’s available capital reached a record high of $90.4 billion, an increase of over 61% year-over-year [38] Company Strategy and Development Direction - The company is focused on expanding its global platform and gaining market share through scale, product, and geographic expansion [9] - The company plans to reorient its reporting segments to better align with its platform expansion, combining real estate with the newly expanded Infrastructure Debt and Equity platform [41] - The company aims to reach over $500 billion in AUM by 2025, with a target of 20% or more compound annual growth in fee-related earnings and dividends per share through 2025 [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to navigate market volatility and capitalize on growth opportunities, particularly in alternative investments [13][14] - The company is well-positioned to take advantage of market opportunities with significant available capital and AUM not yet earning fees [38] - Management highlighted the importance of ESG and DEI initiatives as part of the company’s growth strategy [44] Other Important Information - The company’s FRE margins approached 40% in the fourth quarter, an improvement of over 250 basis points year-on-year [12] - The company’s flagship U.S. direct lending fund generated strong net returns of 4.6% in the fourth quarter and 22% for the year [27] - The company’s secondary strategy generated gross returns of 18.7% for the quarter and 49.7% over the trailing 12 months [26] Q&A Session Summary Question: Comments on Black Creek's fundraising and distribution platforms - Management noted the importance of leveraging existing client service organizations to expand distribution and fundraising opportunities [46][47] Question: Launching a private BDC to supplement the public BDC - Management acknowledged the interest in non-traded BDC products and the potential for growth in that area [50][51] Question: Deployment dynamics and market activity - Management indicated that while deployment was strong in 2021, the market environment in early 2022 was more uncertain, with seasonal trends affecting activity [52][54] Question: Non-sponsored lending growth and ambitions - Management highlighted a significant non-sponsored business focused on direct corporate lending, which is expected to grow [56][64] Question: Tax rate outlook for 2022 and 2023 - Management was asked to clarify expectations regarding the tax rate moving forward [73]

Asset Management and Growth - Ares Management Corporation reported a significant increase in assets under management (AUM), reaching $200 billion, representing a 15% year-over-year growth[12]. - Ares Management Corporation anticipates continued growth in AUM, projecting an increase of 10% for the upcoming fiscal year[12]. - Net inflows of capital during the quarter totaled $5 billion, reflecting robust demand for the company's investment strategies[14]. - The effective management fee rate was reported at 1.2%, consistent with the previous quarter, demonstrating stable fee generation[14]. - The company is actively pursuing market expansion, with plans to enter two new international markets by the end of the year[12]. - Ares has allocated $50 million towards research and development of new investment technologies aimed at enhancing operational efficiency[12]. Financial Performance - The company achieved fee-related earnings (FRE) of $150 million for the quarter, up 20% compared to the previous year, indicating strong core operating performance[14]. - Total revenues for the three months ended September 30, 2021, were $948.719 million, a 93.7% increase from $489.866 million in the same period of 2020[23]. - Net income for the three months ended September 30, 2021, was $216.713 million, compared to $141.327 million for the same period in 2020, representing a 53.3% increase[25]. - Net income attributable to Ares Management Corporation for the three months ended September 30, 2021, was $84.726 million, compared to $42.120 million in the same period of 2020, a 100.0% increase[23]. - Basic net income per share for Class A and non-voting common stock was $0.49 for the three months ended September 30, 2021, compared to $0.27 for the same period in 2020, a 81.5% increase[23]. - Total comprehensive income for the three months ended September 30, 2021, was $205.389 million, compared to $158.220 million in the same period of 2020, a 30.0% increase[25]. Expenses and Liabilities - Total expenses for the three months ended September 30, 2021, were $813.267 million, up from $392.580 million in the same period of 2020, reflecting a 107.0% increase[23]. - Total liabilities rose to $15,295,223, compared to $12,596,852, indicating an increase of around 21.4%[21]. - Performance-related compensation payable increased significantly to $1,895,343 from $813,378, a rise of approximately 132.5%[21]. - Cash and cash equivalents decreased to $295,704 from $539,812, a decline of about 45.2%[21]. Acquisitions and Strategic Initiatives - Ares Management Corporation is exploring strategic acquisitions to bolster its service offerings and expand its market presence[12]. - The Company completed the acquisition of Landmark Partners for a total consideration of $1.1 billion, which included $803.8 million in cash and $299.6 million in equity[52]. - The Company completed an internal reorganization on April 1, 2021, simplifying its organizational structure by merging Ares Offshore and Ares Investments with Ares Holdings[37]. - On July 1, 2021, the Company completed the acquisition of 100% equity interests of Black Creek Group, a leading real estate investment management firm[62]. Equity and Stock Performance - The total number of shares available for issuance under the Equity Incentive Plan as of January 1, 2021, was reset to 44,510,451 shares, with 38,972,964 shares remaining available for issuance as of September 30, 2021[173]. - The company declared dividends of $0.47 per share to Class A common stockholders during the nine months ended September 30, 2021, compared to $1.20 for the same period in 2020[172]. - The company issued approximately $250.0 million of common stock to Sumitomo Mitsui Banking Corporation, closing the private placement on April 8, 2021[194]. - A public offering of 10,925,000 shares of Class A common stock resulted in gross proceeds of approximately $578.2 million before offering expenses[195]. Investments and Asset Valuation - The Company’s total investments as of September 30, 2021, reached $3.32 billion, up from $1.68 billion as of December 31, 2020[73]. - The Company recognized net gains of $18.9 million from equity method investments for Q3 2021, compared to $8.9 million for Q3 2020[74]. - The fair value of management contracts and client relationships acquired from Landmark was $425.9 million and $197.2 million, respectively, with a weighted average amortization period of 7.4 years and 11.8 years[57]. - The company holds equity securities valued at $264,202 million and partnership interests totaling $239,624 million[87]. Tax and Deferred Assets - For the three months ended September 30, 2021, the company recorded an income tax expense of $30.3 million, compared to $18.3 million for the same period in 2020, representing a 65.5% increase[164]. - The net deferred tax asset as of September 30, 2021, was $29.9 million, down from $70.0 million as of December 31, 2020, indicating a decrease of 57.0%[166]. Cash Flow and Financing Activities - Cash flows from operating activities showed a net cash used of $(1,843,751) for the nine months ended September 30, 2021, compared to $12,462 in the prior year[32]. - Net cash provided by financing activities was $2,692,984 for the nine months ended September 30, 2021, compared to $827,550 in the prior year[32]. - The Company incurred debt issuance costs of $1.3 million related to the Credit Facility and Senior Notes, with unamortized costs totaling $5.6 million as of September 30, 2021[126].

Ares Management Corporation (NYSE:ARES) Q3 2021 Earnings Conference Call October 27, 2021 12:00 PM ET Company Participants Carl Drake - Head, Public Company, IR Michael Arougheti - CEO Jarrod Phillips - CFO Kipp deVeer - Head, Ares Credit Group Conference Call Participants Alex Blostein - Goldman Sachs Gerry O'Hara - Jefferies Robert Lee - KBW Michael Cyprys - Morgan Stanley Kenneth Lee - RBC Adam Beatty - UBS Chris Kotowski - Oppenheimer Operator Welcome to Ares Management Corporation's Third Quarter Earni ...