RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2021

10. RELATED PARTY TRANSACTIONS

Substantially all of the Company’s revenue is earned from its affiliates, including management fees, carried interest allocation, incentive fees, principal investment income and administrative expense reimbursements. The related accounts receivable are included within due from affiliates within the Condensed Consolidated Statements of Financial Condition, except that accrued carried interest allocations, which is predominantly due from affiliated funds, is presented separately within investments in the Condensed Consolidated Statements of Financial Condition.

The Company has investment management agreements with the Ares Funds that it manages. In accordance with these agreements, these Ares Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Ares Funds.

The Company also has entered into agreements to be reimbursed for its expenses incurred for providing administrative services to certain related parties, including ARCC, ACRE, ARDC, Ivy Hill Asset Management, L.P., ACF FinCo I L.P. and

CION Ares Diversified Credit Fund. As a result of the Black Creek Acquisition, the Company is party to agreements with each Black Creek fund to provide various services, such as administration, acquisition, development and property management, among others.

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 fees or performance income.

Performance income from the funds can be distributed to professionals or their related entities on a current basis, subject, in the case of carried interest programs, 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 composed of the following:


	As of September 30,		As of December 31,

	2021		2020
Due from affiliates:
Management fees receivable from non-consolidated funds	$	347,078	$	308,581
Incentive fee receivable from non-consolidated funds	579		21,495
Payments made on behalf of and amounts due from non-consolidated funds and employees	145,754		75,811
Due from affiliates—Company	$	493,411	$	405,887
Amounts due from portfolio companies and non-consolidated funds	$	9,059	$	17,172
Due from affiliates—Consolidated Funds	$	9,059	$	17,172
Due to affiliates:
Management fee received in advance and rebates payable to non-consolidated funds	$	7,959	$	4,808
Tax receivable agreement liability	97,698		62,505
Undistributed carried interest and incentive fees	64,675		27,322
Payments made by non-consolidated funds on behalf of and payable by the Company	32,106		5,551
Due to affiliates—Company	$	202,438	$	100,186

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 services, travel and other costs associated with particular portfolio company holdings, are subject to reimbursement by the portfolio companies.