RELATED PARTY TRANSACTIONS (Ares Holdings, Inc. and Ares Investments LLC)

3 Months Ended

Mar. 31, 2014

Ares Holdings, Inc. and Ares Investments LLC

RELATED PARTY TRANSACTIONS

10. RELATED PARTY TRANSACTIONS

        Substantially all of the Company's revenue is earned from its affiliates, including management fees, performance fees, administrative expense reimbursements and service fees. The related accounts receivable are included within due from affiliates within the Combined and Consolidated Statements of Financial Condition, except that performance fees receivable, which are entirely due from affiliated funds, are presented separately within the Combined and Consolidated Statements of Financial Condition.

        The Company has investment management agreements with various funds and accounts that it manages. In accordance with these agreements, the Consolidated Funds bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Consolidated Funds. In addition, the Company has agreements to provide administrative services to various entities.

        The Company also has entered into agreements to provide administrative services in exchange for a fee to related parties, including Ares Capital Corporation (Nasdaq: ARCC) ("ARCC"), Ares Commercial Real Estate Corporation (NYSE: ACRE) ("ACRE"), Ares Dynamic Credit Allocation Fund, Inc. (NYSE: ARDC), Ares Multi-Strategy Credit Fund, Inc. (NYSE: ARMF), Ivy Hill Asset Management, L.P. and European Senior Secured Loan Programme S.à.r.l.

        Employees and other related parties may be permitted to participate in co-investment vehicles that generally invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These co-investment vehicles generally do not require these individuals to pay management or performance fees.

        Performance fees from the funds can be distributed to professionals on a current basis, subject to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several and not joint and are limited to distributions received by the relevant recipient.

        The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were comprised of the following:

	March 31, 2014		December 31, 2013
Due from affiliates:
Management fees receivable from non-consolidated funds	$	97,853	$	91,917
Payments made on behalf of non-consolidated funds		21,477		17,003
Due from affiliates—Company	$	119,330	$	108,920
Amounts due from non-consolidated funds	$	9,930	$	2,010
Due from affiliates—Consolidated Funds	$	9,930	$	2,010
Due to affiliates:
Management fee rebate payable to non-consolidated funds	$	12,183	$	28,715
Payments made by non-consolidated funds on behalf of Company		11,129		3,975
Due to affiliates—Company	$	23,312	$	32,690
Amounts due to non-consolidated funds	$	2,530	$	2,695
Due to affiliates—Consolidated Funds	$	2,530	$	2,695

Due from Ares Funds and Portfolio Companies

        In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional travel and other costs associated with particular portfolio company holdings, are reimbursed by the portfolio companies.