EQUITY AND REDEEMABLE INTEREST

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

EQUITY AND REDEEMABLE INTEREST

13. EQUITY AND REDEEMABLE INTEREST

Common Stock

The Company’s common stock consists of Class A, Class B, Class C and non-voting common stock, each $0.01 par value per share. The non-voting common stock has the same economic rights as the Class A common stock. Sumitomo Mitsui Banking Corporation (“SMBC”) is the sole holder of the non-voting common stock. The Class B common stock and Class C common stock are non-economic and holders are not entitled to dividends from the Company or to receive any assets of the Company in the event of any dissolution, liquidation or winding up of the Company. Ares Management GP LLC is the sole holder of the Class B common stock and Ares Voting LLC (“Ares Voting”) is the sole holder of the Class C common stock.

Except as otherwise expressly provided in the Company’s Certificate of Incorporation (the “Certificate of Incorporation”), the Company’s common stockholders are entitled to vote on all matters on which stockholders of a corporation are generally entitled to vote under the Delaware General Corporation Law (the “DGCL”), including the election of the Company’s board of directors. Holders of shares of the Company’s Class A common stock are entitled to one vote per share of

the Company’s Class A common stock. On any date on which the Ares Ownership Condition (as defined in the Certificate of Incorporation) is satisfied, holders of shares of the Company’s Class B common stock are, in the aggregate, entitled to a number of votes equal to (x) four times the aggregate number of votes attributable to the Company’s Class A common stock minus (y) the aggregate number of votes attributable to the Company’s Class C common stock. On any date on which the Ares Ownership Condition is not satisfied, holders of shares of the Company’s Class B common stock are not entitled to vote on any matter submitted to a vote of the Company’s stockholders. The holder of shares of the Company’s Class C common stock is generally entitled to a number of votes equal to the number of AOG Units (as defined in the Certificate of Incorporation) held of record by each Ares Operating Group Limited Partner (as defined in the Certificate of Incorporation) other than the Company and its subsidiaries.

The Company has a stock repurchase program that allows for the repurchase of up to $150.0 million of shares of Class A common stock. Under the program, shares may be repurchased from time to time in open market purchases, privately negotiated transactions or otherwise, including in reliance on Rule 10b5-1 of the Securities Act. The renewal of the program is subject to authorization by the Company’s board of directors on an annual basis. As of December 31, 2023, the program was scheduled to expire in March 2024, and the renewal was subsequently authorized by the Company’s board of directors and will expire in March 2025. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the years ended December 31, 2023, 2022 and 2021, the Company did not repurchase any shares as part of the stock repurchase program.

The following table presents the changes in each class of common stock:

	Class A Common Stock	Non-Voting Common Stock	Class B Common Stock	Class C Common Stock	Total
Balance as of December 31, 2022	173,892,036	3,489,911	1,000	117,231,288	294,614,235
Issuance of stock	2,591,432	—	—	—	2,591,432
Issuance of AOG Units(1)	—	—	—	3,473,026	3,473,026
Exchanges of AOG Units	3,679,556	—	—	(3,679,556)	—
Stock option exercises, net of shares withheld for tax	4,742,044	—	—	—	4,742,044
Vesting of restricted stock awards, net of shares withheld for tax	2,164,839	—	—	—	2,164,839
Balance as of December 31, 2023	187,069,907	3,489,911	1,000	117,024,758	307,585,576

(1) Represents issuance of AOG Units to the recipients of the management incentive program from the acquisition of Black Creek Group’s real estate investment advisory and distribution business (the “Black Creek Acquisition”), which relieved the associated liability following the maximum contingent payment being met as of December 31, 2022. Pursuant to an agreement with the recipients of the Black Creek Acquisition management incentive program, a portion of such AOG Units were issued in lieu of cash consideration which was payable pursuant to the Black Creek Acquisition management incentive program. Issuances of Class C Common stock corresponds with increases in Ares Owners Holdings L.P.’s ownership interest in the AOG entities.

The following table presents each partner’s AOG Units and corresponding ownership interest in each of the AOG entities, as well as its daily average ownership of AOG Units in each of the AOG entities:

					Daily Average Ownership
	As of December 31, 2023		As of December 31, 2022			Year ended December 31,
	AOG Units	Direct Ownership Interest	AOG Units	Direct Ownership Interest		2023	2022	2021
Ares Management Corporation	190,559,818	61.95%	177,381,947	60.21%		60.83%	59.76%	58.48%
Ares Owners Holdings, L.P.	117,024,758	38.05	117,231,288	39.79		39.17	40.24	41.52
Total	307,584,576	100.00%	294,613,235	100.00%

The Company’s ownership percentage of the AOG Units will continue to change upon: (i) the vesting of restricted units and exercise of options that were granted under the Equity Incentive Plan; (ii) the exchange of AOG Units for shares of Class A common stock; (iii) the cancellation of AOG Units in connection with certain individuals’ forfeiture of AOG Units upon termination of employment; and (iv) the issuance of new AOG Units, including in connection with acquisitions, among other strategic reasons. Holders of the AOG Units, subject to any applicable transfer restrictions, may up to four times each year (subject to the terms of the exchange agreement) exchange their AOG Units for shares of Class A common stock on a one-for-one basis. Equity is reallocated among partners upon a change in ownership to ensure each partners’ capital account properly reflects their respective claim on the residual value of the Company. This change is reflected as either a reallocation of interest or as dilution within the Consolidated Statements of Changes in Equity.

Redeemable Interest

On July 1, 2020, the Company completed its acquisition of a majority interest in SSG Capital Holdings Limited and its operating subsidiaries (“SSG” and subsequently rebranded as “Ares SSG”) (the “SSG Acquisition”). In connection with the SSG Acquisition, the former owners of SSG retained a 20% ownership interest in the operations acquired by the Company. In certain circumstances, the Company had the ability to acquire full ownership of SSG pursuant to a contractual arrangement to be initiated by the Company or by the former owners of SSG. Since the acquisition of the remaining interest in SSG was not within the Company's sole discretion, the ownership interest held by the former owners of SSG was classified as a redeemable interest and represented mezzanine equity.

In connection with a merger agreement to acquire the remaining 20% ownership interest in the Ares SSG fee-generating business that was retained by the former owners of SSG (the “SSG Buyout”), a portion of the redeemable interest in AOG entities was purchased on March 31, 2023, and the Company now owns 100% of Ares SSG’s fee-generating business. The SSG Buyout was effectuated through newly issued shares of Class A common stock. The remaining redeemable interest in AOG entities represents ownership in certain investments that were not included in the SSG Buyout and continues to be presented at the redemption amount within mezzanine equity within the Consolidated Statements of Financial Condition.

During the year ended December 31, 2023, the shareholders of Ares Acquisition Corporation (formerly NYSE: AAC) (“AAC I”) elected to redeem the remaining amount of AAC I’s trust account following the extensions of the period to complete a business combination and the subsequent determination that it would not complete a business combination. On April 25, 2023, Ares Acquisition Corporation II (NYSE: AACT) (“AAC II”), the Company’s second sponsored SPAC, consummated its initial public offering and generated gross proceeds of $500.0 million. As of December 31, 2023, the 50,000,000 AAC II Class A ordinary shares are presented at the redemption amount within mezzanine equity within the Consolidated Statements of Financial Condition.

The following table summarizes the activities associated with the redeemable interest in AOG entities:

	Total
Balance as of December 31, 2020	$	100,366
Distributions	(2,390)
Net loss	(1,341)
Currency translation adjustment, net of tax	(627)
Balance as of December 31, 2021	96,008
Distributions	(1,887)
Net loss	(851)
Currency translation adjustment, net of tax	(426)
Equity compensation	285
Balance as of December 31, 2022	93,129
Changes in ownership interests and related tax benefits	(66,507)
Distributions	(2,883)
Net income	226
Currency translation adjustment, net of tax	(41)
Equity compensation	174
Balance as of December 31, 2023	$	24,098

The following table summarizes the activities associated with the redeemable interest in Consolidated Funds:

	Total
Balance as of December 31, 2021	$	1,000,000
Change in redemption value	13,282
Balance as of December 31, 2022	1,013,282
Gross proceeds from the initial public offering of AAC II	500,000
Change in redemption value	55,530
Redemptions from Class A ordinary shares of AAC I	(1,045,874)
Balance as of December 31, 2023	$	522,938