SEGMENT REPORTING

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

SEGMENT REPORTING

14. SEGMENT REPORTING

The Company operates through its distinct operating segments. On January 1, 2024, the Company changed its segment composition. The special opportunities strategy, historically part of the Private Equity Group, is now referred to as opportunistic credit and is presented within the Credit Group. The Company has modified historical results to conform with its current presentation. The Company operating segments are summarized below:

Credit Group: The Credit Group manages credit strategies across the liquid and illiquid spectrum, including liquid credit, alternative credit, opportunistic credit, direct lending and Asia-Pacific (“APAC”) credit.

Real Assets Group: The Real Assets Group manages comprehensive equity and debt strategies across real estate and infrastructure investments.

Private Equity Group: The Private Equity Group broadly categorizes its investment strategies as corporate private equity and APAC private equity.

Secondaries Group: The Secondaries Group invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate, infrastructure and credit.

Other: Other represents a compilation of operating segments and strategic investments that seek to expand the Company’s reach and its scale in new and existing global markets but individually do not meet reporting thresholds. These results include activities from: (i) Ares Insurance Solutions (“AIS”), the Company’s insurance platform that provides solutions to insurance clients including asset management, capital solutions and corporate development; (ii) the SPACs sponsored by the Company; and (iii) a venture capital business with fund strategies that are focused on applied artificial intelligence, among others.

The Operations Management Group (the “OMG”) consists of shared resource groups to support the Company’s operating segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, legal, compliance, human resources, strategy, relationship management, and distribution, including Ares Wealth Management Solutions, LLC (“AWMS”). AWMS facilitates the product development, distribution, marketing and client management activities for investment offerings in the global wealth management channel. Additionally, the OMG provides services to certain of the Company’s managed funds and vehicles, which may reimburse the OMG for expenses either equal to the costs of services provided or as a percentage of invested capital. The OMG’s revenues and expenses are not allocated to the Company’s operating segments but the Company does consider the financial results of the OMG when evaluating its financial performance.

Segment Profit Measure: Realized income (“RI”), which includes fee related earnings (“FRE”) as a component, supplements and should be considered in addition to, and not in lieu of, the Consolidated Statements of Operations prepared in accordance with GAAP.

RI, a non-GAAP measure, is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and expenses, which may or may not be eventually realized at the levels presented and whose realizations depend more on future outcomes than current business operations. RI differs from income before taxes by excluding: (i) operating results of the Consolidated Funds; (ii) depreciation and amortization expense; (iii) the effects of changes arising from corporate actions; (iv) unrealized gains and losses related to carried interest, incentive fees and investment performance; and adjusts for certain other items that the Company believes are not indicative of operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital activities, underwriting costs and expenses incurred in connection with corporate reorganization. Placement fee adjustment represents the net portion of either expense deferral or amortization of upfront fees to placement agents that is presented to match the timing of expense recognition with the period over which management fees are expected to be earned from the associated fund for segment purposes but have been expensed in advance in accordance with GAAP. For periods in which the amortization of upfront fees for segment purposes is higher than the GAAP expense, the placement fee adjustment is presented as a reduction to RI. Management believes RI is a more appropriate metric to evaluate the Company’s current business operations.

FRE, a non-GAAP measure that is a component of RI, is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees and fee related performance revenues, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes net performance income, investment income from Ares Funds and adjusts for certain other items that the Company believes are not indicative of its core operating performance. Fee related performance revenues, together with fee related performance compensation, is presented within FRE because it represents incentive fees from perpetual capital vehicles that is measured and eligible to be received on a recurring basis and not dependent on realization events from the underlying investments.

The Company’s CODM is its Chief Executive Officer. The CODM makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non-consolidated funds. Total assets by segments is not disclosed because such information is not used by the Company’s CODM in evaluating the segments.

Many of the Ares Funds managed by the Company have mandates that allow for investing across different geographic regions, including North America, Europe, APAC and the Middle East. The primary geographic region in which the Company invests in is North America and the majority of its revenues are generated in North America.

The following tables present the financial results for the Company’s operating segments, as well as the OMG:

	Year ended December 31, 2024
	Credit Group		Real Assets Group		Private Equity Group		Secondaries Group		Other		Total Segments		OMG		Total
Management fees	$	2,177,816	$	401,968	$	137,130	$	197,287	$	43,229	$	2,957,430	$	—	$	2,957,430
Fee related performance revenues	202,703		—		—		28,834		—		231,537		—		231,537
Other fees	41,819		27,263		1,695		222		523		71,522		20,357		91,879
Compensation and benefits	(692,309)		(160,357)		(56,830)		(66,290)		(21,482)		(997,268)		(421,268)		(1,418,536)
General, administrative and other expenses	(161,872)		(56,768)		(21,449)		(33,881)		(6,584)		(280,554)		(220,019)		(500,573)
Fee related earnings	1,568,157		212,106		60,546		126,172		15,686		1,982,667		(620,930)		1,361,737
Performance income—realized	326,202		60,317		43,299		361		—		430,179		—		430,179
Performance related compensation—realized	(207,794)		(37,283)		(36,334)		110		—		(281,301)		—		(281,301)
Realized net performance income	118,408		23,034		6,965		471		—		148,878		—		148,878
Investment income (loss)—realized	21,159		5,184		1,926		2,565		9,467		40,301		(650)		39,651
Interest income	11,671		7,649		1,970		972		35,810		58,072		1,723		59,795
Interest expense	(34,578)		(24,131)		(22,632)		(10,240)		(50,659)		(142,240)		(701)		(142,941)
Realized net investment income (loss)	(1,748)		(11,298)		(18,736)		(6,703)		(5,382)		(43,867)		372		(43,495)
Realized income	$	1,684,817	$	223,842	$	48,775	$	119,940	$	10,304	$	2,087,678	$	(620,558)	$	1,467,120
	Year ended December 31, 2023
	Credit Group		Real Assets Group		Private Equity Group		Secondaries Group		Other		Total Segments		OMG		Total
Management fees	$	1,853,326	$	389,437	$	126,721	$	174,942	$	27,087	$	2,571,513	$	—	$	2,571,513
Fee related performance revenues	167,333		334		—		12,782		—		180,449		—		180,449
Other fees	36,640		29,695		1,693		22		374		68,424		23,685		92,109
Compensation and benefits	(624,741)		(153,870)		(58,408)		(62,160)		(15,812)		(914,991)		(361,124)		(1,276,115)
General, administrative and other expenses	(115,546)		(46,789)		(16,949)		(21,199)		(3,119)		(203,602)		(200,613)		(404,215)
Fee related earnings	1,317,012		218,807		53,057		104,387		8,530		1,701,793		(538,052)		1,163,741
Performance income—realized	323,733		20,990		65,716		5,460		—		415,899		—		415,899
Performance related compensation—realized	(211,976)		(12,768)		(52,984)		(4,678)		—		(282,406)		—		(282,406)
Realized net performance income	111,757		8,222		12,732		782		—		133,493		—		133,493
Investment income (loss)—realized	36,490		3,392		(712)		4,523		2,962		46,655		(470)		46,185
Interest income	9,788		3,165		38		344		13,831		27,166		1,218		28,384
Interest expense	(29,732)		(16,391)		(18,990)		(8,980)		(32,026)		(106,119)		(156)		(106,275)
Realized net investment income (loss)	16,546		(9,834)		(19,664)		(4,113)		(15,233)		(32,298)		592		(31,706)
Realized income	$	1,445,315	$	217,195	$	46,125	$	101,056	$	(6,703)	$	1,802,988	$	(537,460)	$	1,265,528

	Year ended December 31, 2022
	Credit Group		Real Assets Group		Private Equity Group		Secondaries Group		Other		Total Segments		OMG		Total
Management fees	$	1,490,674	$	347,808	$	125,681	$	176,694	$	11,671	$	2,152,528	$	—	$	2,152,528
Fee related performance revenues	71,497		167,693		—		235		—		239,425		—		239,425
Other fees	32,637		35,879		1,243		—		274		70,033		24,529		94,562
Compensation and benefits	(483,167)		(240,015)		(66,075)		(53,743)		(12,108)		(855,108)		(317,396)		(1,172,504)
General, administrative and other expenses	(93,715)		(39,739)		(16,416)		(12,685)		(2,089)		(164,644)		(155,017)		(319,661)
Fee related earnings	1,017,926		271,626		44,433		110,501		(2,252)		1,442,234		(447,884)		994,350
Performance income—realized	237,839		133,130		42,896		4,156		—		418,021		—		418,021
Performance related compensation—realized	(153,538)		(83,105)		(34,383)		(3,515)		—		(274,541)		—		(274,541)
Realized net performance income	84,301		50,025		8,513		641		—		143,480		—		143,480
Investment income (loss)—realized	27,831		9,898		4,001		3,640		1,850		47,220		(1,678)		45,542
Interest income	8,290		2,262		222		43		8,141		18,958		53		19,011
Interest expense	(18,401)		(11,346)		(13,484)		(5,660)		(21,781)		(70,672)		(684)		(71,356)
Realized net investment income (loss)	17,720		814		(9,261)		(1,977)		(11,790)		(4,494)		(2,309)		(6,803)
Realized income	$	1,119,947	$	322,465	$	43,685	$	109,165	$	(14,042)	$	1,581,220	$	(450,193)	$	1,131,027

The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income (loss):

	Year ended December 31,
	2024		2023		2022
Segment revenues
Management fees	$	2,957,430	$	2,571,513	$	2,152,528
Fee related performance revenues	231,537		180,449		239,425
Other fees	71,522		68,424		70,033
Performance income—realized	430,179		415,899		418,021
Total segment revenues	$	3,690,668	$	3,236,285	$	2,880,007
Segment expenses
Compensation and benefits	$	997,268	$	914,991	$	855,108
General, administrative and other expenses	280,554		203,602		164,644
Performance related compensation—realized	281,301		282,406		274,541
Total segment expenses	$	1,559,123	$	1,400,999	$	1,294,293
Segment realized net investment income (loss)
Investment income—realized	$	40,301	$	46,655	$	47,220
Interest income	58,072		27,166		18,958
Interest expense	(142,240)		(106,119)		(70,672)
Total segment realized net investment loss	$	(43,867)	$	(32,298)	$	(4,494)

The following table reconciles the Company’s consolidated revenues to segment revenue:

	Year ended December 31,
	2024		2023		2022
Total consolidated revenue	$	3,884,781	$	3,631,884	$	3,055,443
Performance income—unrealized	(109,533)		(305,370)		(107,153)
Management fees of Consolidated Funds eliminated in consolidation	46,597		48,201		46,324
Performance income of Consolidated Funds eliminated in consolidation	28,135		13,672		11,529
Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation	525		7,166		17,013
Administrative fees(1)	(70,363)		(63,144)		(69,414)
OMG revenue	(20,357)		(23,685)		(24,354)
Principal investment income, net of eliminations	(45,424)		(36,516)		(12,278)
Net revenue of non-controlling interests in consolidated subsidiaries	(23,693)		(35,923)		(37,103)
Total consolidation adjustments and reconciling items	(194,113)		(395,599)		(175,436)
Total segment revenue	$	3,690,668	$	3,236,285	$	2,880,007

(1)Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.

The following table reconciles the Company’s consolidated expenses to segment expenses:

	Year ended December 31,
	2024		2023		2022
Total consolidated expenses	$	2,938,691	$	2,797,858	$	2,749,085
Performance related compensation-unrealized	(36,823)		(206,923)		(88,502)
Expenses of Consolidated Funds added in consolidation	(69,320)		(93,167)		(86,988)
Expenses of Consolidated Funds eliminated in consolidation	48,441		50,108		50,833
Administrative fees(1)	(70,363)		(62,773)		(68,255)
OMG expenses	(641,287)		(561,737)		(472,413)
Acquisition and merger-related expense	(57,360)		(12,000)		(15,197)
Equity compensation expense	(352,851)		(255,790)		(200,106)
Acquisition-related compensation expense(2)	(38,150)		(7,334)		(206,252)
Placement fee adjustment	(5,715)		5,819		(2,088)
Depreciation and amortization expense	(157,341)		(233,185)		(335,083)
Expense of non-controlling interests in consolidated subsidiaries	1,201		(19,877)		(30,741)
Total consolidation adjustments and reconciling items	(1,379,568)		(1,396,859)		(1,454,792)
Total segment expenses	$	1,559,123	$	1,400,999	$	1,294,293

(1)Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.

(2)Represents bonus payments and contingent liabilities (“earnouts”) resulting from the acquisitions that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Consolidated Statements of Operations. See “Note 8. Commitments and Contingencies” for a further description of the contingent liabilities related to the various acquisitions.

The following table reconciles the Company’s consolidated other income to segment realized net investment loss:

	Year ended December 31,
	2024		2023		2022
Total consolidated other income	$	329,262	$	499,037	$	204,448
Investment income—unrealized	(5,613)		(178,481)		(12,834)
Other income, net from Consolidated Funds added in consolidation	(379,090)		(492,848)		(250,144)
Other expense, net from Consolidated Funds eliminated in consolidation	(12,835)		(16,485)		(16,484)
OMG other (income) expense	(4,413)		1,074		14,419
Principal investment income	38,367		155,632		48,223
Other (income) expense, net	(12,172)		976		1,873
Other (income) loss of non-controlling interests in consolidated subsidiaries	2,627		(1,203)		6,005
Total consolidation adjustments and reconciling items	(373,129)		(531,335)		(208,942)
Total segment realized net investment loss	$	(43,867)	$	(32,298)	$	(4,494)

The following table presents the reconciliation of income before taxes as reported in the Consolidated Statements of Operations to segment results of RI and FRE:

	Year ended December 31,
	2024		2023		2022
Income before taxes	$	1,275,352	$	1,333,063	$	510,806
Adjustments:
Depreciation and amortization expense	157,341		233,185		335,083
Equity compensation expense	352,851		255,419		198,948
Acquisition-related compensation expense(1)	38,150		7,334		206,252
Acquisition and merger-related expense	57,360		12,000		15,197
Placement fee adjustment	5,715		(5,819)		2,088
OMG expense, net	616,517		539,126		462,478
Other (income) expense, net	(12,172)		976		1,874
Income before taxes of non-controlling interests in consolidated subsidiaries	(22,267)		(17,249)		(357)
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations	(302,846)		(278,119)		(119,664)
Total performance income—unrealized	(109,533)		(305,370)		(107,153)
Total performance related compensation—unrealized	36,823		206,923		88,502
Total net investment income—unrealized	(5,613)		(178,481)		(12,834)
Realized income	2,087,678		1,802,988		1,581,220
Total performance income—realized	(430,179)		(415,899)		(418,021)
Total performance related compensation—realized	281,301		282,406		274,541
Total net investment loss—realized	43,867		32,298		4,494
Fee related earnings	$	1,982,667	$	1,701,793	$	1,442,234

(1)Represents bonus payments and earnouts resulting from the acquisitions that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Consolidated Statements of Operations. See “Note 8. Commitments and Contingencies” for a further description of the contingent liabilities related to the various acquisitions.