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CONSOLIDATION (Tables)

9 Months Ended

Sep. 30, 2020

Condensed Financial Information Disclosure [Abstract]

The Company's interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows:


	As of September 30,		As of December 31,
	2020		2019
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs(1)	$	233,394	$	260,520
Maximum exposure to loss attributable to the Company's investment in consolidated VIEs(1)	168,603		181,856
Assets of consolidated VIEs	11,217,650		9,454,572
Liabilities of consolidated VIEs	10,568,273		8,679,869

(1)As of September 30, 2020 and December 31, 2019, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $94.0 million and $104.7 million, respectively.


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	$	42,627	$	15,908	$	(38,593)	$	41,878

Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition

Consolidating Schedules

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows:


	As of September 30, 2020
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	868,752	$	—	$	—	$	868,752
Investments (includes $1,063,570 of accrued carried interest)	1,761,000		—		(159,084)		1,601,916
Due from affiliates	347,067		—		(19,008)		328,059
Other assets	781,295		—		—		781,295
Right-of-use operating lease assets	136,392		—		—		136,392
Assets of Consolidated Funds
Cash and cash equivalents	—		365,185		—		365,185
Investments, at fair value	—		10,600,408		4,448		10,604,856
Due from affiliates	—		18,203		(9,519)		8,684
Receivable for securities sold	—		197,518		—		197,518
Other assets	—		36,336		—		36,336
Total assets	$	3,894,506	$	11,217,650	$	(183,163)	$	14,928,993
Liabilities
Accounts payable, accrued expenses and other liabilities	$	135,632	$	—	$	(9,519)	$	126,113
Accrued compensation	215,765		—		—		215,765
Due to affiliates	63,853		—		—		63,853
Performance related compensation payable	741,635		—		—		741,635
Debt obligations	642,665		—		—		642,665

Operating lease liabilities	161,737		—		—		161,737
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		51,454		—		51,454
Due to affiliates	—		14,560		(14,560)		—
Payable for securities purchased	—		684,591		—		684,591
CLO loan obligations, at fair value	—		9,654,935		(46,808)		9,608,127
Fund borrowings	—		162,733		—		162,733
Total liabilities	1,961,287		10,568,273		(70,887)		12,458,673
Commitments and contingencies
Redeemable interest in Ares Operating Group entities	99,439		—		—		99,439
Non-controlling interest in Consolidated Funds	—		649,377		(112,276)		537,101
Non-controlling interest in Ares Operating Group entities	691,609		—		—		691,609
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (143,826,710 shares issued and outstanding)	1,438		—		—		1,438

Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (114,618,803 shares issued and outstanding)	1,146		—		—		1,146
Additional paid-in-capital	1,011,697		—		—		1,011,697
Retained earnings	(164,084)		—		—		(164,084)
Accumulated other comprehensive loss, net of tax	(6,787)		—		—		(6,787)
Total stockholders' equity	1,142,171		—		—		1,142,171
Total equity	1,833,780		649,377		(112,276)		2,370,881
Total liabilities, redeemable interest, non-controlling interests and equity	$	3,894,506	$	11,217,650	$	(183,163)	$	14,928,993


	As of December 31, 2019
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	138,384	$	—	$	—	$	138,384
Investments (includes $1,134,967 of accrued carried interest)	1,845,520		—		(181,856)		1,663,664
Due from affiliates	282,197		—		(14,098)		268,099
Other assets	343,674		—		(2,381)		341,293
Right-of-use operating lease assets	143,406		—		—		143,406
Assets of Consolidated Funds
Cash and cash equivalents	—		606,321		—		606,321
Investments, at fair value	—		8,723,169		4,778		8,727,947
Due from affiliates	—		6,192		—		6,192
Receivable for securities sold	—		88,809		—		88,809
Other assets	—		30,081		—		30,081
Total assets	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196
Liabilities
Accounts payable, accrued expenses and other liabilities	$	88,173	$	—	$	—	$	88,173
Accrued compensation	37,795		—		—		37,795
Due to affiliates	71,445		—		—		71,445
Performance related compensation payable	829,764		—		—		829,764
Debt obligations	316,609		—		—		316,609
Operating lease liabilities	168,817		—		—		168,817
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		61,857		—		61,857
Due to affiliates	—		11,700		(11,700)		—
Payable for securities purchased	—		500,146		—		500,146
CLO loan obligations	—		7,998,922		(25,174)		7,973,748
Fund borrowings	—		107,244		—		107,244
Total liabilities	1,512,603		8,679,869		(36,874)		10,155,598
Commitments and contingencies
Non-controlling interest in Consolidated Funds	—		774,703		(156,683)		618,020
Non-controlling interest in Ares Operating Group entities	472,288		—		—		472,288
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (115,242,028 shares issued and outstanding)	1,152		—		—		1,152
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding)	—		—		—		—
Additional paid-in-capital	525,244		—		—		525,244
Retained earnings	(50,820)		—		—		(50,820)
Accumulated other comprehensive loss, net of tax	(6,047)		—		—		(6,047)
Total stockholders' equity	768,290		—		—		768,290
Total equity	1,240,578		774,703		(156,683)		1,858,598
Total liabilities, non-controlling interests and equity	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196

Schedule of results from operations


	Three months ended September 30, 2020
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $41,643)	$	304,153	$	—	$	(11,719)	$	292,434
Carried interest allocation	168,978		—		—		168,978
Incentive fees	7,194		—		—		7,194
Principal investment income	18,080		—		(6,672)		11,408
Administrative, transaction and other fees	14,300		—		(4,448)		9,852
Total revenues	512,705		—		(22,839)		489,866
Expenses
Compensation and benefits	194,267		—		—		194,267
Performance related compensation	122,356		—		—		122,356
General, administrative and other expense	69,938		—		—		69,938
Expenses of the Consolidated Funds	—		17,737		(11,718)		6,019
Total expenses	386,561		17,737		(11,718)		392,580
Other income (expense)
Net realized and unrealized gains (losses) on investments	2,303		—		(4,910)		(2,607)
Interest and dividend income	1,602		—		(258)		1,344
Interest expense	(6,815)		—		—		(6,815)
Other income (expense), net	(6,337)		—		8,540		2,203
Net realized and unrealized gains on investments of the Consolidated Funds	—		9,850		8,121		17,971
Interest and other income of the Consolidated Funds	—		126,100		(9,519)		116,581
Interest expense of the Consolidated Funds	—		(67,818)		1,496		(66,322)
Total other income (expense)	(9,247)		68,132		3,470		62,355
Income before taxes	116,897		50,395		(7,651)		159,641
Income tax expense	18,197		117		—		18,314
Net income	98,700		50,278		(7,651)		141,327
Less: Net loss attributable to redeemable interest in Ares Operating Group entities	(1,007)		—		—		(1,007)
Less: Net income attributable to non-controlling interests in Consolidated Funds	—		50,278		(7,651)		42,627
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	52,162		—		—		52,162
Net income attributable to Ares Management Corporation	47,545		—		—		47,545
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net income attributable to Ares Management Corporation Class A common stockholders	$	42,120	$	—	$	—	$	42,120


	Three months ended September 30, 2019
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $38,786)	$	260,371	$	—	$	(8,780)	$	251,591
Carried interest allocation	186,803		—		—		186,803
Incentive fees	1,712		—		—		1,712
Principal investment income	13,865		—		(2,476)		11,389
Administrative, transaction and other fees	14,995		—		—		14,995
Total revenues	477,746		—		(11,256)		466,490
Expenses
Compensation and benefits	166,216		—		—		166,216
Performance related compensation	139,216		—		—		139,216
General, administrative and other expense	79,385		—		—		79,385
Expenses of the Consolidated Funds	—		19,664		(8,780)		10,884
Total expenses	384,817		19,664		(8,780)		395,701
Other income (expense)
Net realized and unrealized gains (losses) on investments	(522)		—		2,044		1,522
Interest and dividend income	2,800		—		(770)		2,030
Interest expense	(4,691)		—		—		(4,691)
Other expense, net	(2,994)		—		1,124		(1,870)
Net realized and unrealized gains (losses) on investments of the Consolidated Funds	—		1,399		(2,391)		(992)
Interest and other income of the Consolidated Funds	—		107,922		—		107,922
Interest expense of the Consolidated Funds	—		(72,251)		1,117		(71,134)
Total other income (expense)	(5,407)		37,070		1,124		32,787
Income before taxes	87,522		17,406		(1,352)		103,576
Income tax expense	11,555		146		—		11,701
Net income	75,967		17,260		(1,352)		91,875
Less: Net income attributable to non-controlling interests in Consolidated Funds	—		17,260		(1,352)		15,908
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	42,636		—		—		42,636
Net income attributable to Ares Management Corporation	33,331		—		—		33,331
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net income attributable to Ares Management Corporation Class A common stockholders	$	27,906	$	—	$	—	$	27,906


	Nine months ended September 30, 2020
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $126,872)	$	856,751	$	—	$	(33,601)	$	823,150
Carried interest allocation	241,380		—		—		241,380
Incentive fees	4,206		—		70		4,276
Principal investment income (loss)	(24,951)		—		33,281		8,330
Administrative, transaction and other fees	41,146		—		(12,249)		28,897
Total revenues	1,118,532		—		(12,499)		1,106,033
Expenses
Compensation and benefits	559,482		—		—		559,482
Performance related compensation	191,565		—		—		191,565
General, administrative and other expense	190,353		—		—		190,353
Expenses of the Consolidated Funds	—		50,237		(33,531)		16,706
Total expenses	941,400		50,237		(33,531)		958,106
Other income (expense)
Net realized and unrealized losses on investments	(25,360)		—		15,009		(10,351)
Interest and dividend income	8,102		—		(2,990)		5,112
Interest expense	(18,203)		—		—		(18,203)
Other income, net	1,100		—		8,748		9,848
Net realized and unrealized losses on investments of the Consolidated Funds	—		(148,826)		(4,442)		(153,268)
Interest and other income of the Consolidated Funds	—		355,639		(9,519)		346,120
Interest expense of the Consolidated Funds	—		(227,532)		4,672		(222,860)
Total other expense	(34,361)		(20,719)		11,478		(43,602)
Income (loss) before taxes	142,771		(70,956)		32,510		104,325
Income tax expense	21,972		147		—		22,119
Net income (loss)	120,799		(71,103)		32,510		82,206
Less: Net loss attributable to redeemable interest in Ares Operating Group entities	(1,007)		—		—		(1,007)
Less: Net loss attributable to non-controlling interests in Consolidated Funds	—		(71,103)		32,510		(38,593)
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	48,926		—		—		48,926
Net income attributable to Ares Management Corporation	72,880		—		—		72,880
Less: Series A Preferred Stock dividends paid	16,275		—		—		16,275
Net income attributable to Ares Management Corporation Class A common stockholders	$	56,605	$	—	$	—	$	56,605


	Nine months ended September 30, 2019
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $116,336)	$	740,024	$	—	$	(25,928)	$	714,096
Carried interest allocation	503,808		—		—		503,808
Incentive fees	33,931		—		(5,184)		28,747
Principal investment income	45,336		—		656		45,992
Administrative, transaction and other fees	35,866		—		—		35,866
Total revenues	1,358,965		—		(30,456)		1,328,509
Expenses
Compensation and benefits	485,232		—		—		485,232
Performance related compensation	388,424		—		—		388,424
General, administrative and other expense	195,988		—		—		195,988
Expenses of the Consolidated Funds	—		61,977		(31,112)		30,865
Total expenses	1,069,644		61,977		(31,112)		1,100,509
Other income (expense)
Net realized and unrealized gains on investments	4,829		—		690		5,519
Interest and dividend income	7,448		—		(1,922)		5,526
Interest expense	(16,073)		—		—		(16,073)
Other expense, net	(2,784)		—		1,214		(1,570)
Net realized and unrealized gains on investments of the Consolidated Funds	—		4,661		(1,405)		3,256
Interest and other income of the Consolidated Funds	—		303,312		—		303,312
Interest expense of the Consolidated Funds	—		(206,688)		2,637		(204,051)
Total other income (expense)	(6,580)		101,285		1,214		95,919
Income before taxes	282,741		39,308		1,870		323,919
Income tax expense (benefit)	36,290		(700)		—		35,590
Net income	246,451		40,008		1,870		288,329
Less: Net income attributable to non-controlling interests in Consolidated Funds	—		40,008		1,870		41,878
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	136,032		—		—		136,032
Net income attributable to Ares Management Corporation	110,419		—		—		110,419
Less: Series A Preferred Stock dividends paid	16,275		—		—		16,275
Net income attributable to Ares Management Corporation Class A common stockholders	$	94,144	$	—	$	—	$	94,144

Schedule of cash flows


	Nine months ended September 30, 2020
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net income (loss)	$	120,799	$	(71,103)	$	32,510	$	82,206
Adjustments to reconcile net income to net cash used in operating activities	207,358		—		(22,772)		184,586







Adjustments to reconcile net loss to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds	—		(733,607)		(32,792)		(766,399)





Cash flows due to changes in operating assets and liabilities	152,691		—		(6,989)		145,702





Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:	—		105,992		260,375		366,367




Net cash provided by (used in) operating activities	480,848		(698,718)		230,332		12,462
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(8,608)		—		—		(8,608)
Acquisitions, net of cash acquired	(117,829)		—		—		(117,829)
Net cash used in investing activities	(126,437)		—		—		(126,437)
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,154		—		—		383,154
Proceeds from credit facility	790,000		—		—		790,000
Proceeds from senior notes	399,084		—		—		399,084
Repayments of credit facility	(860,000)		—		—		(860,000)

Dividends and distributions	(334,957)		—		—		(334,957)
Series A Preferred Stock dividends	(16,275)		—		—		(16,275)


Stock option exercises	78,959		—		—		78,959

Taxes paid related to net share settlement of equity awards	(75,657)		—		—		(75,657)

Other financing activities	(4,137)		—		—		(4,137)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		138,760		(15,047)		123,713
Distributions to non-controlling interests in Consolidated Funds	—		(195,598)		25,851		(169,747)
Borrowings under loan obligations by Consolidated Funds	—		618,207		—		618,207
Repayments under loan obligations by Consolidated Funds	—		(104,794)		—		(104,794)
Net cash provided by financing activities	360,171		456,575		10,804		827,550
Effect of exchange rate changes	15,786		1,007		—		16,793
Net change in cash and cash equivalents	730,368		(241,136)		241,136		730,368
Cash and cash equivalents, beginning of period	138,384		606,321		(606,321)		138,384
Cash and cash equivalents, end of period	$	868,752	$	365,185	$	(365,185)	$	868,752
Supplemental disclosure of non-cash financing activities
Issuance of Class A common stock in connection with acquisitions	$	305,338	$	—	$	—	$	305,338


	Nine months ended September 30, 2019
	Consolidated Company Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	246,451	$	40,008	$	1,870	$	288,329
Adjustments to reconcile net income to net cash used in operating activities	49,996		—		9,740		59,736







Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds	—		(1,913,517)		86,907		(1,826,610)





Cash flows due to changes in operating assets and liabilities	18,855		—		183		19,038





Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:	—		(29,418)		(191,159)		(220,577)




Net cash provided by (used in) operating activities	315,302		(1,902,927)		(92,459)		(1,680,084)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(12,073)		—		—		(12,073)

Net cash used in investing activities	(12,073)		—		—		(12,073)
Cash flows from financing activities:
Proceeds from issuance of Class A common stock	206,705		—		—		206,705
Proceeds from credit facility	265,000		—		—		265,000

Repayments of credit facility	(500,000)		—		—		(500,000)
Dividends and distributions	(238,301)		—		—		(238,301)
Series A Preferred Stock dividends	(16,275)		—		—		(16,275)
Repurchases of Class A common stock	(10,449)		—		—		(10,449)
Stock option exercises	83,090		—		—		83,090
Taxes paid related to net share settlement of equity awards	(32,022)		—		—		(32,022)
Other financing activities	(3,240)		—		—		(3,240)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		281,305		(116,415)		164,890
Distributions to non-controlling interests in Consolidated Funds	—		(78,220)		12,645		(65,575)
Borrowings under loan obligations by Consolidated Funds	—		2,487,112		(4,771)		2,482,341
Repayments under loan obligations by Consolidated Funds	—		(595,517)		10,021		(585,496)
Net cash provided by (used in) financing activities	(245,492)		2,094,680		(98,520)		1,750,668
Effect of exchange rate changes	(15,781)		(774)		—		(16,555)
Net change in cash and cash equivalents	41,956		190,979		(190,979)		41,956
Cash and cash equivalents, beginning of period	110,247		384,644		(384,644)		110,247
Cash and cash equivalents, end of period	$	152,203	$	575,623	$	(575,623)	$	152,203

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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