Ares(US:ARES)2021-11-04 16:00Asset 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].