Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Ares Management Corporation is a Delaware corporation. Unless the context otherwise requires, references to “Ares,” “we,” “us,” “our,” and the “Company” are intended to mean the business and operations of Ares Management Corporation and its consolidated subsidiaries. The following discussion analyzes the financial condition and results of operations of the Company. “Consolidated Funds” refers collectively to certain Ares funds, co-investment vehicles, CLOs and SPACs that are required under U.S. GAAP to be consolidated in our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Additional terms used by the Company are defined in the Glossary and throughout the Management’s Discussion and Analysis in this Quarterly Report on Form 10-Q.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements of Ares Management Corporation and the related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and the related notes included in the 2023 Annual Report on Form 10-K of Ares Management Corporation.

Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and consequently, totals may not appear to sum. In addition, illustrative charts may not be presented at scale.

Period-over-period analysis of current year compared to prior year may be deemed to be not meaningful and is designated as “NM” within the discussion and analysis of financial condition and results of operations.

Trends Affecting Our Business

We believe that our disciplined investment philosophy across our distinct but complementary investment groups contributes to the stability of our performance throughout market cycles. For the three months ended June 30, 2024, 95% of our management fees were derived from perpetual capital vehicles or long-dated funds. Our funds have a stable base of committed capital enabling us to invest in assets with a long-term focus over different points in a market cycle and to take advantage of market volatility. However, our results from operations, including the fair value of our AUM, are affected by a variety of factors. Conditions in the global financial markets and economic and political environments may impact our business, particularly in the U.S., Europe and Asia-Pacific (“APAC”).

The following table presents returns of selected market indices:

																		Returns (%)
Type of Index						Name of Index						Region						Three months ended June 30, 2024						Six months ended June 30, 2024
High yield bonds						ICE BAML High Yield Master II Index						U.S.						1.1						2.6
High yield bonds						ICE BAML European Currency High Yield Index						Europe						1.5						3.2
Leveraged loans						Credit Suisse Leveraged Loan Index (“CSLLI”)						U.S.						1.9						4.4
Leveraged loans						Credit Suisse Western European Leveraged Loan Index						Europe						2.1						4.1
Equities						S&P 500 Index						U.S.						4.3						15.3
Equities						MSCI All Country World Ex-U.S. Index						Non-U.S.						1.0						5.7
Real estate equities						FTSE NAREIT All Equity REITs Index						U.S.						(1.9)						(4.1)
Real estate equities						FTSE EPRA/NAREIT Developed Europe Index						Europe						(1.7)						(5.2)

Global markets continued to perform positively in the second quarter amid modest inflation and optimistic signaling by central banks. Despite the headwinds and ongoing conflicts in the Middle East and Ukraine, U.S. and European high yield bonds and leveraged loans returned positive performance with stable demand and improved capital markets access. The Asian-Pacific markets experienced mixed performance as the region overall continued to show growth, primarily driven by resilient demand in Southeast Asia, India and Australia. Opportunities within China continue to be limited, with muted deal activity driven by uncertainty in the economy and more specifically within the property sector. Globally, reduced lending activity by banks and limited capital accessibility continued to support private credit growth.

While the public equity markets continued their positive momentum in the second quarter, the private markets continued to experience challenges with downward pressure on valuations and muted opportunities for realizations. The private equity markets continue to experience a prolonged slowdown in deal activity, and we believe potential liquidity constraints from investors have increased the need for flexible capital solutions. Businesses have continued to struggle to navigate this challenging growth and uncertain macroeconomic environment, which we believe has heightened the need for partnerships with

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value-add managers. This environment underscores the importance of investing in resilient industries where we have the ability to drive fundamental business growth and deliver a systematic approach to long-term value creation.

The commercial real estate markets continued to be impacted by the macroeconomic environment. European and U.S. real estate deal activity remained subdued with limited transactional liquidity. Given the higher interest rate environment, property valuations remain soft, though capitalization rate yields continue to stabilize following the sustained widening seen in 2023. We believe certain of these market trends will be offset by continued strong fundamentals, such as occupancy and rental rates, in property types that include multifamily and industrial.

The current market environment has had a more pronounced negative impact on certain industries, including energy, which is an industry in which few of our funds have made investments. As of June 30, 2024, 1% of our total AUM was invested in debt and equity investments in the energy sector (of which less than 1% of our total AUM was invested in midstream investments and also includes oil and gas exploration) and less than 1% of our total AUM was invested in renewable energy investments.

We believe our portfolios across all strategies are well positioned for a fluctuating interest rate environment. On a market value basis, approximately 85% of our debt assets and 56% of our total assets were floating rate instruments as of June 30, 2024.

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Managing Business Performance

Operating Metrics

We measure our business performance using certain operating metrics that are common to the alternative asset management industry, which are discussed below.

Assets Under Management

AUM refers to the assets we manage and is viewed as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital.

The tables below present rollforwards of our total AUM by segment ($ in millions):

						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total AUM
Balance at 3/31/2024						$	308,639					$	64,104					$	24,476					$	25,641					$	5,479					$	428,339
Net new par/equity commitments						11,200						2,491						15						866						1,097						15,669
Net new debt commitments						8,592						1,703						—						—						—						10,295
Capital reductions						(5,110)						(207)						(2)						—						—						(5,319)
Distributions						(2,817)						(736)						(29)						(285)						(238)						(4,105)
Redemptions						(655)						(291)						—						—						—						(946)
Net allocations among investment strategies						610						—						—						—						(610)						—
Change in fund value						2,664						628						120						81						(194)						3,299
Balance at 6/30/2024						$	323,123					$	67,692					$	24,580					$	26,303					$	5,534					$	447,232
						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total AUM
Balance at 3/31/2023						$	249,134					$	64,114					$	20,656					$	22,894					$	3,497					$	360,295
Net new par/equity commitments						9,936						1,824						—						142						2,493						14,395
Net new debt commitments						2,835						150						—						—						—						2,985
Capital reductions						(352)						(1)						(2)						—						—						(355)
Distributions						(1,970)						(1,314)						(385)						(129)						(112)						(3,910)
Redemptions						(434)						(418)						—						—						—						(852)
Net allocations among investment strategies						1,739						—						—						—						(1,739)						—
Change in fund value						3,665						416						772						95						67						5,015
Balance at 6/30/2023						$	264,553					$	64,771					$	21,041					$	23,002					$	4,206					$	377,573
						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total AUM
Balance at 12/31/2023						$	299,350					$	65,413					$	24,551					$	24,760					$	4,772					$	418,846
Acquisitions						—						—						—						—						71						71
Net new par/equity commitments						18,933						2,899						330						1,835						2,612						26,609
Net new debt commitments						14,704						1,703						—						—						—						16,407
Capital reductions						(6,595)						(335)						(4)						—						—						(6,934)
Distributions						(6,381)						(1,582)						(64)						(449)						(373)						(8,849)
Redemptions						(3,171)						(725)						(2)						—						—						(3,898)
Net allocations among investment strategies						1,325						—						(47)						—						(1,278)						—
Change in fund value						4,958						319						(184)						157						(270)						4,980
Balance at 6/30/2024						$	323,123					$	67,692					$	24,580					$	26,303					$	5,534					$	447,232
						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total AUM
Balance at 12/31/2022						$	239,299					$	66,061					$	21,029					$	21,961					$	3,647					$	351,997
Net new par/equity commitments						18,977						2,589						50						1,389						4,139						27,144
Net new debt commitments						4,258						150						—						—						—						4,408
Capital reductions						(2,433)						(405)						(5)						—						—						(2,843)
Distributions						(3,558)						(2,976)						(651)						(554)						(198)						(7,937)
Redemptions						(1,810)						(956)						—						—						(539)						(3,305)
Net allocations among investment strategies						2,554						—						—						—						(2,554)						—
Change in fund value						7,266						308						618						206						(289)						8,109
Balance at 6/30/2023						$	264,553					$	64,771					$	21,041					$	23,002					$	4,206					$	377,573

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The components of our AUM are presented below ($ in billions):

			AUM: $447.2						AUM: $377.6

			FPAUM						Non-fee paying(1)						AUM not yet paying fees

(1) Includes $14.4 billion and $14.9 billion of AUM of funds from which we indirectly earn management fees as of June 30, 2024 and 2023, respectively, and includes $4.2 billion and $3.6 billion of non-fee paying AUM from our general partner and employee commitments as of June 30, 2024 and 2023, respectively.

Please refer to “— Results of Operations by Segment” for a more detailed presentation of AUM by segment for each of the periods presented.

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Fee Paying Assets Under Management

FPAUM refers to AUM from which we directly earn management fees and is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees.

The tables below present rollforwards of our total FPAUM by segment ($ in millions):

						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total
Balance at 3/31/2024						$	189,826					$	40,836					$	12,565					$	19,891					$	3,998					$	267,116
Commitments						6,081						1,224						—						606						1,081						8,992
Deployment/subscriptions/increase in leverage						7,185						865						25						40						154						8,269
Capital reductions						(3,111)						—						—						—						—						(3,111)
Distributions						(4,033)						(563)						—						(132)						(238)						(4,966)
Redemptions						(1,173)						(291)						—						—						—						(1,464)
Net allocations among investment strategies						613						—						—						—						(613)						—
Change in fund value						787						(38)						(9)						3						31						774
Change in fee basis						913						(410)						(316)						53						(1)						239
Balance at 6/30/2024						$	197,088					$	41,623					$	12,265					$	20,461					$	4,412					$	275,849
						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total
Balance at 3/31/2023						$	161,218					$	40,928					$	11,281					$	17,747					$	2,735					$	233,909
Commitments						1,444						870						—						136						1,975						4,425
Deployment/subscriptions/increase in leverage						7,216						988						—						193						(118)						8,279
Capital reductions						(347)						(50)						—						—						—						(397)
Distributions						(2,624)						(1,096)						—						(73)						(104)						(3,897)
Redemptions						(473)						(431)						—						—						—						(904)
Net allocations among investment strategies						1,770						—						—						—						(1,770)						—
Change in fund value						1,224						(173)						—						(220)						57						888
Change in fee basis						—						98						(4)						12						—						106
Balance at 6/30/2023						$	169,428					$	41,134					$	11,277					$	17,795					$	2,775					$	242,409
						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total
Balance at 12/31/2023						$	185,280					$	41,338					$	13,124					$	19,040					$	3,575					$	262,357
Acquisitions						—						—						—						—						55						55
Commitments						9,859						1,520						—						1,506						2,402						15,287
Deployment/subscriptions/increase in leverage						14,409						1,729						25						102						154						16,419
Capital reductions						(5,875)						(12)						—						—						—						(5,887)
Distributions						(7,696)						(867)						—						(231)						(373)						(9,167)
Redemptions						(3,322)						(725)						(2)						—						—						(4,049)
Net allocations among investment strategies						1,499						—						—						—						(1,499)						—
Change in fund value						1,328						(446)						(28)						—						99						953
Change in fee basis						1,606						(914)						(854)						44						(1)						(119)
Balance at 6/30/2024						$	197,088					$	41,623					$	12,265					$	20,461					$	4,412					$	275,849
						Credit Group						Real Assets Group						Private Equity Group						Secondaries Group						Other Businesses						Total
Balance at 12/31/2022						$	158,441					$	41,607					$	11,281					$	17,668					$	2,064					$	231,061
Commitments						2,526						1,467						—						243						3,621						7,857
Deployment/subscriptions/increase in leverage						12,199						1,210						—						299						49						13,757
Capital reductions						(1,881)						(329)						—						—						—						(2,210)
Distributions						(5,159)						(1,730)						—						(266)						(190)						(7,345)
Redemptions						(1,850)						(969)						—						—						—						(2,819)
Net allocations among investment strategies						2,586						—						—						—						(2,586)						—
Change in fund value						2,566						(220)						—						(112)						(183)						2,051
Change in fee basis						—						98						(4)						(37)						—						57
Balance at 6/30/2023						$	169,428					$	41,134					$	11,277					$	17,795					$	2,775					$	242,409

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The charts below present FPAUM by its fee bases ($ in billions):

			FPAUM: $275.8						FPAUM: $242.4

			Invested capital/other(1)						Market value(2)						Collateral balances (at par)						Capital commitments

(1)Other consists of ACRE’s FPAUM, which is based on ACRE’s stockholders’ equity.

(2)Includes $64.6 billion and $56.2 billion from funds that primarily invest in illiquid strategies as of June 30, 2024 and 2023, respectively. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.

Please refer to “— Results of Operations by Segment” for detailed information by segment of the activity affecting total FPAUM for each of the periods presented.

Perpetual Capital Assets Under Management

The chart below presents our perpetual capital AUM by segment and type ($ in billions):

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Management Fees By Type

We view the duration of funds we manage as a metric to measure the stability of our future management fees. For both the three months ended June 30, 2024 and 2023, 95% of management fees were earned from perpetual capital or long-dated funds.

The charts below present the composition of our segment management fees by the initial fund duration:

			Perpetual Capital - Publicly-Traded Vehicles						Perpetual Capital - Non-Traded Vehicles						Perpetual Capital - Managed Accounts						Perpetual Capital - Private Commingled Vehicles						Long-Dated Funds(1)						Other

(1) Long-dated funds generally have a contractual life of five years or more at inception.

Available Capital and Assets Under Management Not Yet Paying Fees

The charts below present our available capital and AUM not yet paying fees by segment ($ in billions):

			Credit						Real Assets						Private Equity						Secondaries						Other Businesses

As of June 30, 2024, AUM Not Yet Paying Fees includes $70.8 billion of AUM available for future deployment that could generate approximately $674.7 million in potential incremental annual management fees. As of June 30, 2023, AUM Not

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Yet Paying Fees included $55.6 billion of AUM available for future deployment that could generate approximately $551.6 million in potential incremental annual management fees.

Incentive Eligible Assets Under Management and Incentive Generating Assets Under Management

The charts below present our IEAUM and IGAUM by segment ($ in billions):

			Credit						Real Assets						Private Equity						Secondaries						Other Businesses

Fee related performance revenues are not recognized by us until such fees are crystallized and no longer subject to reversal. As of June 30, 2024, perpetual capital IGAUM that could generate fee related performance revenues totaled $19.8 billion, composed of $18.3 billion within the Credit Group and $1.5 billion within the Secondaries Group. As of June 30, 2023, perpetual capital IGAUM from which we could generate fee related performance revenues totaled $14.8 billion, composed of $13.7 billion within the Credit Group, $0.7 billion within the Real Assets Group and $0.4 billion within the Secondaries Group. As of June 30, 2024 and 2023, IGAUM included $39.6 billion and $32.9 billion, respectively, of AUM from funds generating incentive income that is not recognized by Ares until such fees are crystallized or no longer subject to reversal.

Fund Performance Metrics

Fund performance information for our funds considered to be “significant funds” is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented. Our significant funds are commingled funds that either contributed at least 1% of our total management fees or comprised at least 1% of the Company’s total FPAUM for the past two consecutive quarters. In addition to management fees, each of our significant funds may generate carried interest or incentive fees upon the achievement of performance hurdles. The fund performance information reflected in this discussion and analysis is not indicative of our overall performance. An investment in Ares is not an investment in any of our funds. Past performance is not indicative of future results. As with any investment, there is always the potential for gains as well as the possibility of losses. There can be no assurance that any of these funds or our other existing and future funds will achieve similar returns.

Fund performance metrics for significant funds may be marked as “NM” as they may not be considered meaningful due to the limited time since the initial investment and/or early stage of capital deployment.

To further facilitate an understanding of the impact a significant fund may have on our results, we present our drawdown funds as either harvesting investments or deploying capital to indicate the fund’s stage in its life cycle. A fund harvesting investments is generally not seeking to deploy capital into new investment opportunities, while a fund deploying capital is generally seeking new investment opportunities.

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Consolidation and Deconsolidation of Ares Funds

Consolidated Funds represented approximately 4% of our AUM as of June 30, 2024 and less than 1% of total revenues for the six months ended June 30, 2024. As of June 30, 2024, we consolidated 28 CLOs, 10 private funds and one SPAC, and as of June 30, 2023, we consolidated 26 CLOs, nine private funds and two SPACs.

The activity of the Consolidated Funds is reflected within the unaudited condensed consolidated financial statement line items indicated by reference thereto. The impact of consolidation also typically will decrease management fees, carried interest allocation and incentive fees reported under GAAP to the extent these amounts are eliminated upon consolidation.

The assets and liabilities of our Consolidated Funds are held within separate legal entities and, as a result, the liabilities of our Consolidated Funds are typically non-recourse to us. Generally, the consolidation of our Consolidated Funds has a significant gross-up effect on our assets, liabilities and cash flows but has no net effect on the net income attributable to us or our stockholders’ equity, except where accounting for a redemption or liquidation preference requires the reallocation of ownership based on specific terms of a profit sharing agreement. The net economic ownership interests of our Consolidated Funds, to which we have no economic rights, are reflected as redeemable and non-controlling interests in the Consolidated Funds within our unaudited condensed consolidated financial statements. Redeemable interest in Consolidated Funds represent the shares issued by our SPACs that are redeemable for cash by the public shareholders in the event that the SPAC does not complete a business combination or tender offer associated with shareholder approval provisions.

We generally deconsolidate funds and CLOs when we are no longer deemed to have a controlling interest in the entity. During the six months ended June 30, 2024, we did not deconsolidate any entities. During the six months ended June 30, 2023, we deconsolidated one private fund as a result of significant change in ownership.

The performance of our Consolidated Funds is not necessarily consistent with, or representative of, the combined performance trends of all of our funds.

For the actual impact that consolidation had on our results and further discussion on consolidation and deconsolidation of funds, see “Note 14. Consolidation” within our unaudited condensed consolidated financial statements included herein.

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Segment Analysis

For segment reporting purposes, revenues and expenses are presented before giving effect to the results of our Consolidated Funds and the results attributable to non-controlling interests of joint ventures that we consolidate. As a result, segment revenues from management fees, fee related performance revenues, performance income and investment income are different than those presented on a consolidated basis in accordance with GAAP. Revenues recognized from Consolidated Funds are eliminated in consolidation and those attributable to the non-controlling interests of joint ventures have been excluded by us. Furthermore, expenses and the effects of other income (expense) are different than related amounts presented on a consolidated basis in accordance with GAAP due to the exclusion of the results of Consolidated Funds and the non-controlling interests of joint ventures.

Non-GAAP Financial Measures

We use the following non-GAAP measures to make operating decisions, assess performance and allocate resources:

• Fee Related Earnings (“FRE”)

• Realized Income (“RI”)

These non-GAAP financial measures supplement and should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “—Components of Consolidated Results of Operations” and are prepared in accordance with GAAP. We operate through our distinct operating segments. On January 1, 2024, we changed our 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. Historical results have been modified to conform with the current presentation.

The following table sets forth FRE and RI by reportable segment and the OMG ($ in thousands):

						Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
						2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Fee Related Earnings:
Credit Group						$	368,281					$	300,606					$	67,675					23%						$	720,698					$	592,246					$	128,452					22%
Real Assets Group						51,643						55,918						(4,275)						(8)						98,161						109,580						(11,419)						(10)
Private Equity Group						14,454						13,229						1,225						9						29,825						22,352						7,473						33
Secondaries Group						33,641						21,314						12,327						58						59,246						46,744						12,502						27
Other						3,297						2,709						588						22						5,360						3,990						1,370						34
Operations Management Group						(146,800)						(127,630)						(19,170)						(15)						(287,104)						(254,129)						(32,975)						(13)
Fee Related Earnings						$	324,516					$	266,146					58,370						22						$	626,186					$	520,783					105,403						20
Realized Income:
Credit Group						$	407,898					$	347,697					$	60,201					17%						$	763,866					$	640,855					$	123,011					19%
Real Assets Group						42,216						53,725						(11,509)						(21)						87,612						105,868						(18,256)						(17)
Private Equity Group						10,309						19,261						(8,952)						(46)						20,639						28,044						(7,405)						(26)
Secondaries Group						31,682						19,827						11,855						60						54,799						44,177						10,622						24
Other						17,318						(987)						18,305						NM						11,555						1,488						10,067						NM
Operations Management Group						(146,265)						(127,313)						(18,952)						(15)						(286,157)						(253,930)						(32,227)						(13)
Realized Income						$	363,158					$	312,210					50,948						16						$	652,314					$	566,502					85,812						15

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Income before provision for income taxes is the GAAP financial measure most comparable to RI and FRE. The following table presents the reconciliation of income before taxes as reported within the Condensed Consolidated Statements of Operations to RI and FRE of the reportable segments and the OMG ($ in thousands):

			Three months ended June 30,												Six months ended June 30,
			2024						2023						2024						2023
Income before taxes			$	317,325					$	381,969					$	548,373					$	623,091
Adjustments:
Depreciation and amortization expense			36,251						42,991						72,895						88,650
Equity compensation expense			88,234						62,284						180,655						130,988
Acquisition-related compensation expense(1)			5,435						600						10,939						1,242
Acquisition and merger-related expense			3,650						2,757						14,228						7,712
Placement fee adjustment			(230)						(3,744)						5,310						(6,976)
Other (income) expense, net			(11,430)						212						(11,299)						303
(Income) loss before taxes of non-controlling interests in consolidated subsidiaries			(3,942)						3,786						(7,604)						(1,885)
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations			(110,481)						(67,762)						(176,067)						(94,933)
Total performance (income) loss—unrealized			122,318						(288,220)						167,794						(415,933)
Total performance related compensation—unrealized			(107,182)						215,496						(171,696)						300,646
Total net investment (income) loss—unrealized			23,210						(38,159)						18,786						(66,403)
Realized Income			363,158						312,210						652,314						566,502
Total performance income—realized			(109,642)						(140,635)						(132,823)						(171,771)
Total performance related compensation—realized			68,996						99,109						82,152						122,968
Total investment (income) loss—realized			2,004						(4,538)						24,543						3,084
Fee Related Earnings			$	324,516					$	266,146					$	626,186					$	520,783

(1)Represents contingent obligations (“earnouts”) in connection with the acquisition of AMP Capital’s infrastructure debt platform (“Infrastructure Debt Acquisition”) and the Crescent Point Acquisition that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Condensed Consolidated Statements of Operations.

For the specific components and calculations of these non-GAAP measures, as well as additional reconciliations to the most comparable measures in accordance with GAAP, see “Note 13. Segment Reporting” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Discussed below are our results of operations for our reportable segments and the OMG.

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Results of Operations

Consolidated Results of Operations

Although the consolidated results presented below include the results of our operations together with those of the Consolidated Funds and other joint ventures, we separate our analysis of those items primarily impacting the Company from those of the Consolidated Funds.

The following table presents our summarized consolidated results of operations ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Total revenues			$	788,682					$	1,093,286					$	(304,604)					(28)%						$	1,496,045					$	1,906,648					$	(410,603)					(22)%
Total expenses			(564,544)						(837,738)						273,194						33						(1,103,037)						(1,466,374)						363,337						25
Total other income, net			93,187						126,421						(33,234)						(26)						155,365						182,817						(27,452)						(15)
Less: Income tax expense			41,074						49,714						8,640						17						68,307						83,520						15,213						18
Net income			276,251						332,255						(56,004)						(17)						480,066						539,571						(59,505)						(11)
Less: Net income attributable to non-controlling interests in Consolidated Funds			105,489						67,681						37,808						56						172,205						94,374						77,831						82
Net income attributable to Ares Operating Group entities			170,762						264,574						(93,812)						(35)						307,861						445,197						(137,336)						(31)
Less: Net income (loss) attributable to redeemable interest in Ares Operating Group entities			(387)						734						(1,121)						NM						(314)						(1,090)						776						71
Less: Net income attributable to non-controlling interests in Ares Operating Group entities			76,211						119,326						(43,115)						(36)						140,210						207,734						(67,524)						(33)
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders			$	94,938					$	144,514					(49,576)						(34)						$	167,965					$	238,553					(70,588)						(30)

Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Consolidated Results of Operations of the Company

The following discussion sets forth information regarding our consolidated results of operations:

Revenues

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Revenues
Management fees			$	721,681					$	615,271					$	106,410					17%						$	1,409,373					$	1,215,787					$	193,586					16%
Carried interest allocation			(51,167)						418,466						(469,633)						NM						(83,645)						569,954						(653,599)						NM
Incentive fees			47,734						7,950						39,784						NM						56,401						16,873						39,528						234
Principal investment income			29,461						6,888						22,573						NM						36,511						29,646						6,865						23
Administrative, transaction and other fees			40,973						44,711						(3,738)						(8)						77,405						74,388						3,017						4
Total revenues			$	788,682					$	1,093,286					(304,604)						(28)						$	1,496,045					$	1,906,648					(410,603)						(22)

Management Fees. Capital deployment in direct lending, alternative credit and opportunistic credit funds within the Credit Group led to a rise in FPAUM and additional management fees of $59.8 million and $114.7 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Part I Fees increased by $29.1 million and $52.0 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increases in Part I Fees were primarily due to: (i) the increases in pre-incentive fee net investment income generated by ARCC and CADC, driven by an increase in the average size of their portfolios and the impact of rising interest rates, given their primarily floating-rate loan portfolios; and (ii) ASIF and AESIF that began generating Part I Fees after the second quarter of 2023. Within the Private Equity Group, funds that we manage as a result of the acquisition of the investment management business and related operating entities collectively doing business as Crescent Point Capital (“Crescent Point”) (the “Crescent Point Acquisition”), which was completed on October 2, 2023, generated additional fees of $7.2 million and $14.6 million for the three and six months ended June 30, 2024, respectively. For detail regarding the fluctuations of management fees within each of our segments, see “—Results of Operations by Segment.”

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Carried Interest Allocation. The activity was principally composed of the following ($ in millions):

			Three months ended June 30, 2024			Primary Drivers			Three months ended June 30, 2023			Primary Drivers
Credit funds			$	35.4		Primarily from five direct lending funds, one opportunistic credit fund and two alternative credit funds with $35.8 billion of IGAUM generating returns in excess of their hurdle rates. Ares Capital Europe V, L.P. (“ACE V”) and our sixth European direct lending fund generated carried interest allocation of $43.0 million and $13.7 million, respectively, driven by net investment income on an increasing invested capital base. Ares Private Credit Solutions II, L.P. (“PCS II”), Ares Capital Europe IV, L.P. (“ACE IV”) and Ares Private Credit Solutions, L.P. (“PCS I”) generated carried interest allocation of $17.5 million, $16.4 million and $5.4 million, respectively, primarily driven by net investment income during the period. Our direct lending funds have benefited from rising interest rates on predominately floating-rate loans. Within our opportunistic credit funds, Ares Special Opportunities Fund II, L.P. (“ASOF II”) generated carried interest allocation of $26.9 million, driven by improving operating performance metrics from portfolio companies that operate in the services and retail industries. Within our alternative credit funds, Ares Pathfinder Fund, L.P. (“Pathfinder I”) and Ares Pathfinder Fund II, L.P. (“Pathfinder II”) generated carried interest allocation of $19.1 million and $14.0 million, respectively, driven by market appreciation of certain investments and net investment income during the period. The activity was partially offset by the reversal of unrealized carried interest allocation within our opportunistic credit funds of $82.5 million and $43.2 million, respectively, from Ares Special Situations Fund IV, L.P. (“SSF IV”) and Ares Special Opportunities Fund, L.P.’s (“ASOF I”), primarily due to the market depreciation of their investments in Savers Value Village, Inc. (“SVV”), driven by its lower stock price.			$	235.1		Primarily from two opportunistic credit funds, three direct lending funds and one alternative credit fund with $27.5 billion of IGAUM generating returns in excess of their hurdle rates. Appreciation of SSF IV and ASOF I investments, predominately in SVV following its initial public offering, generated carried interest allocation of $68.8 million and $60.1 million, respectively. ACE V generated carried interest allocation of $33.9 million driven by net investment income on an increasing invested capital base. ACE IV and PCS I generated carried interest allocation of $16.1 million and $7.9 million, respectively, primarily driven by net investment income during the period. Our direct lending funds have benefited from rising interest rates on predominately floating-rate loans. Pathfinder I generated carried interest allocation of $31.2 million driven by market appreciation of certain investments and net investment income during the period.
Real assets funds			50.5			Appreciation of certain investments within our infrastructure opportunities funds, generated carried interest allocation of $44.8 million, including $19.9 million from Ares Energy Investors Fund V, L.P. (“EIF V”) and $14.8 million from Ares Climate Infrastructure Partners, L.P. (“ACIP”). Ares Infrastructure Debt Fund V, L.P. (“IDF V”) also generated carried interest allocation of $16.8 million, driven by net investment income during the period. Appreciation from properties within real estate equity funds, driven by increasing operating income primarily from industrial and multifamily property investments, collectively generated carried interest allocation of $5.6 million from U.S. Real Estate Fund X, L.P. (“US X”) and U.S. Real Estate Fund IX, L.P. (“US IX”). The appreciation was partially offset by the reversal of unrealized carried interest allocation of $12.7 million from Ares European Real Estate Fund IV, L.P. (“EF IV”), primarily driven by the lower valuation of a residential property investment.			37.3			Appreciation from properties within real estate equity funds, driven by increasing operating income primarily from industrial and multifamily property investments, generated carried interest allocation of $6.4 million from Ares European Property Enhancement Partners III, SCSp. (“EPEP III”), $4.8 million from US IX, $4.5 million from Ares U.S. Real Estate Opportunity Fund III, L.P. (“AREOF III”) and $3.5 million from US X. IDF V and EIF V also generated carried interest allocation of $8.3 million and $4.4 million, respectively, driven by net investment income during the period.
Private equity funds			(129.4)			Reversal of unrealized carried interest allocation of $230.6 million from Ares Corporate Opportunities Fund V, L.P. (“ACOF V”) was primarily due to the market depreciation of its investment in SVV, driven by its lower stock price. The reversal was partially offset by carried interest allocation of $90.0 million from Ares Corporate Opportunities Fund VI, L.P. (“ACOF VI”), driven by improving operating performance metrics from portfolio companies that primarily operate in the healthcare, services, industrial and retail industries.			146.8			ACOF V generated carried interest allocation of $86.3 million, primarily due to appreciation of its investment in SVV following its initial public offering. In addition, ACOF VI generated carried interest allocation of $70.9 million, driven by improving operating performance metrics from portfolio companies that primarily operate in the retail and healthcare industries and market appreciation of an investment in a services company. The appreciation was partially offset by the reversal of unrealized carried interest allocation of $10.4 million from Ares Corporate Opportunities Fund IV, L.P. (“ACOF IV”), primarily driven by lower operating performance metrics of a portfolio company that operates in the healthcare industry and the lower stock price of a publicly-traded portfolio company that operates in the retail industry.
Secondaries funds			(7.7)			Reversal of unrealized carried interest of $14.4 million from Landmark Real Estate Fund VIII, L.P. (“LREF VIII”), primarily driven by the lower valuation of certain investments with underlying interests in multifamily portfolios and of $7.3 million from Landmark Equity Partners XVI, L.P. (“LEP XVI”), due to lower net investment income. The reversal was partially offset by carried interest allocation of $15.6 million, primarily driven by the appreciation of certain portfolio investments within our third infrastructure secondaries fund and within two private equity secondaries funds.			(0.7)			Reversal of unrealized carried interest from LEP XVI, driven primarily by market depreciation of certain portfolio investments.
Carried interest allocation			$	(51.2)					$	418.5

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			Six months ended June 30, 2024			Primary Drivers			Six months ended June 30, 2023			Primary Drivers
Credit funds			$	255.0		Primarily from four direct lending funds, one alternative credit fund and one opportunistic credit fund with $32.8 billion of IGAUM generating returns in excess of their hurdle rates. PCS II, ACE V and our sixth European direct lending fund generated carried interest allocation of $88.8 million, $82.7 million and $21.4 million, respectively, driven by net investment income on an increasing invested capital base. ACE IV generated carried interest allocation of $32.1 million driven by net investment income during the period. Our direct lending funds have benefited from rising interest rates on predominately floating-rate loans. Pathfinder I generated carried interest allocation of $26.8 million driven by market appreciation of certain investments and net investment income during the period. In addition, ASOF II generated carried interest allocation of $57.3 million, driven by improving operating performance of portfolio companies that operate in the retail, healthcare and services industries. This activity was partially offset by reversal of carried interest allocation of $52.7 million and $30.8 million, respectively, from SSF IV and ASOF I, primarily due to market depreciation of their investments in SVV, driven by its lower stock price.			$	430.1		Primarily from three direct lending funds, one alternative credit fund and two opportunistic credit funds with $27.5 billion of IGAUM generating returns in excess of their hurdle rates. Appreciation of SSF IV and ASOF I’s investments, predominately in SVV following its initial public offering, generated carried interest allocation of $121.9 million and $85.4 million, respectively. ACE V generated carried interest allocation of $78.7 million driven by net investment income on an increasing invested capital base. ACE IV and PCS I generated carried interest allocation of $40.2 million and $22.5 million, respectively, primarily driven by net investment income during the period. Our direct lending funds have benefited from rising interest rates on predominately floating-rate loans. Pathfinder I generated carried interest allocation of $34.7 million driven by market appreciation of certain investments and net investment income during the period.
Real assets funds			43.6			IDF V generated carried interest allocation of $29.6 million driven by net investment income during the period. EIF V also generated $21.7 million of carried interest allocation, driven by appreciation of certain investments. Appreciation from properties within real estate equity funds, driven by increasing operating income primarily from industrial and multifamily investments, generated carried interest allocation of $5.7 million from US X and $4.4 million from US IX. The appreciation was partially offset by the reversal of unrealized carried interest allocation of $17.1 million from EF IV, primarily driven by the lower valuation of residential and retail property investments.			24.6			IDF V generated carried interest allocation of $14.6 million driven by net investment income. Appreciation from properties within real estate equity funds, driven by increasing operating income primarily from industrial and multifamily property investments, generated carried interest allocation of $9.5 million from two U.S. real estate equity funds, $5.6 million from AREOF III and $2.4 million from US X. The appreciation was partially offset by the reversal of unrealized carried interest allocation of $9.6 million from two European real estate equity funds primarily driven by market depreciation of certain property investments.
Private equity funds			(365.8)			Reversal of unrealized carried interest allocation of $474.9 million from ACOF V was primarily due to the market depreciation of its investment in SVV, driven by its lower stock price. The reversal was partially offset by carried interest allocation generated from ACOF VI of $118.0 million, driven by improving operating performance metrics from portfolio companies that primarily operate in the healthcare, services, industrial and retail industries.			116.5			ACOF VI generated carried interest allocation of $81.0 million, driven by improving operating performance of portfolio companies that primarily operate in the retail and healthcare industries and market appreciation of an investment in a services company. In addition, ACOF V generated carried interest allocation of $49.9 million, primarily due to appreciation of its investment in SVV following its initial public offering. The appreciation was partially offset by the reversal of unrealized carried interest allocation of $10.6 million from ACOF IV primarily driven by lower operating performance metrics and market depreciation of a portfolio company that operates in the healthcare industry and lower stock price of a publicly-traded portfolio company that operates in the retail industry.
Secondaries funds			(16.4)			Reversal of unrealized carried interest of $15.8 million from LREF VIII, primarily driven by the lower valuation of certain investments with underlying interests in multifamily portfolios and of $12.0 million from LEP XVI, due to lower net investment income. The reversal was partially offset by carried interest allocation of $15.6 million, primarily driven by the appreciation of certain portfolio investments within our third infrastructure secondaries fund and within two private equity secondaries funds.			(1.2)			Reversal of unrealized carried interest from LEP XVI of $8.2 million, driven primarily by market depreciation of certain portfolio investments. The reversal was partially offset by appreciation of certain investments of LREF VIII, which generated carried interest allocation of $6.8 million.
Carried interest allocation			$	(83.6)					$	570.0

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Incentive Fees. The activity was principally composed of the following ($ in millions). For detail regarding the fluctuations of incentive fees within each of our segments, see discussion of fee related performance revenues and realized net performance income within “—Results of Operations by Segment”:

			Three months ended June 30, 2024			Primary Drivers			Three months ended June 30, 2023			Primary Drivers
Credit funds			$	31.1		Incentive fees generated from two alternative credit funds and two direct lending funds.			$	5.8		Incentive fees generated from two alternative credit funds.
Real assets funds			1.0			Incentive fees generated from an open-ended industrial real estate fund.			1.9			Incentive fees generated from an open-ended industrial real estate fund and ACRE.
Secondaries funds			15.6			Incentive fees generated from APMF.			0.3			Incentive fees generated from APMF.
Incentive fees			$	47.7					$	8.0
			Six months ended June 30, 2024			Primary Drivers			Six months ended June 30, 2023			Primary Drivers
Credit funds			$	33.2		Incentive fees generated from two alternative credit funds and two direct lending funds.			$	7.0		Incentive fees generated from two alternative credit funds.
Real assets funds			4.7			Incentive fees generated from an open-ended industrial real estate fund.			6.3			Incentive fees generated from an open-ended industrial real estate fund and ACRE.
Secondaries funds			18.5			Incentive fees generated from APMF.			3.6			Incentive fees generated from APMF.
Incentive fees			$	56.4					$	16.9

Principal Investment Income. The activity for the three and six months ended June 30, 2024 was primarily composed of: (i) interest income earned from new investors subsequently committed to an insurance fund, where capital account balances are reallocated from existing investors in exchange for interest to compensate for carrying costs; (ii) appreciation of certain investments in funds within our infrastructure opportunities and European direct lending strategies; (iii) dividend income from certain investments in funds within our European real estate and European direct lending strategies; and partially offset by (iv) unrealized losses from our investment in an opportunistic credit fund. The activity for the six months ended June 30, 2024 also included: (i) appreciation of certain investments in funds within our U.S. and European direct lending and alternative credit strategies; and partially offset by (ii) unrealized losses from certain investments in funds within our real estate secondaries and APAC credit strategies.

The activity for the three and six months ended June 30, 2023 was primarily composed of: (i) appreciation of certain investments in funds within our corporate private equity and opportunistic credit strategies; (ii) dividend income from various investments in opportunistic credit funds; and partially offset by (iii) unrealized losses from our investment in LREF VIII. The six months ended June 30, 2023 also included appreciation of certain investments in funds within our European direct lending strategy.

Administrative, Transaction and Other Fees. The decrease for the three months ended June 30, 2024 compared to the same period in 2023 was primarily driven by: (i) lower credit transaction fees from the infrastructure debt strategy of $5.4 million, which are generated periodically; (ii) lower asset-based, net distribution fees associated with our non-traded REITs of $1.7 million; and partially offset by (iii) higher administrative service fees of $2.1 million that are based on invested capital and are primarily from certain private funds within our Credit Group.

The increase for the six months ended June 30, 2024 compared to the same period in 2023 was driven by: (i) higher administrative service fees of $9.7 million primarily from private funds within our Credit Group that are based on invested capital and from our non-traded vehicles; (ii) higher administrative fees of $4.7 million from a commercial finance fund that were previously eliminated when this fund was consolidated into our results until the second quarter of 2023; and partially offset by (iii) lower credit transaction fees of $8.4 million, primarily from the infrastructure debt strategy where fees are generated periodically and lower loan origination income earned from certain managed accounts within the U.S. direct lending strategy, driven by a lower capacity of investable capital; (iv) lower asset-based, net distribution fees associated with our non-traded REITs of $2.6 million; and (v) lower development fees of $2.0 million, resulting from a reduction in property-related activities within certain industrial U.S. real estate equity funds.

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Expenses

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Expenses
Compensation and benefits			$	419,858					$	367,550					$	(52,308)					(14)%						$	832,809					$	728,331					$	(104,478)					(14)%
Performance related compensation			(28,985)						315,780						344,765						NM						(79,517)						427,438						506,955						NM
General, administrative and other expenses			169,432						141,153						(28,279)						(20)						340,360						289,498						(50,862)						(18)
Expenses of Consolidated Funds			4,239						13,255						9,016						68						9,385						21,107						11,722						56
Total expenses			$	564,544					$	837,738					(273,194)						(33)						$	1,103,037					$	1,466,374					(363,337)						(25)

Compensation and Benefits. The increases in compensation and benefits for the three and six months ended June 30, 2024 compared to the same periods in 2023 were primarily driven by increases in equity-based compensation expense of $26.0 million and $49.1 million, respectively. The number of unvested restricted units being amortized has increased as has the value of these units with our rising stock price. In addition, the immediate vesting of certain awards occurs annually in the first quarter as a retirement benefit for eligible recipients and accelerated expense of $17.4 million and $10.0 million for the six months ended June 30, 2024 and 2023, respectively.

The increases in compensation and benefits were also driven by the performance-based, acquisition-related compensation arrangement that was established in connection with the Crescent Point Acquisition in the fourth quarter of 2023. The associated compensation expense of $5.0 million and $10.0 million was recognized during the three and six months ended June 30, 2024, respectively. See “Note 7. Commitments and Contingencies” for a further description of the contingent liabilities related to the Crescent Point Acquisition arrangement.

In addition, the increases in compensation and benefits for the three and six months ended June 30, 2024 compared to the same periods in 2023 were driven by: (i) increases in salary expense of $13.5 million and $27.2 million, respectively, primarily attributable to headcount growth to support the expansion of our business; (ii) higher Part I Fee compensation of $12.4 million and $23.5 million, respectively; and partially offset by (iii) lower incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year. The increase for the six months ended June 30, 2024 compared to the same period in 2023 was also attributable to an increase in payroll related taxes of $10.5 million primarily due to the higher stock price associated with our restricted units that vested during the first quarter of 2024.

Average headcount increased by 12% to 2,879 professionals for the year-to-date period in 2024 from 2,577 professionals for the same period in 2023.

For detail regarding the fluctuations of compensation and benefits within each of our segments see “—Results of Operations by Segment.”

Performance Related Compensation. Changes in performance related compensation are directly associated with the changes in carried interest allocation and incentive fees described above and include associated payroll related taxes as well as carried interest and incentive fees allocated to charitable organizations as part of our philanthropic initiatives. Performance related compensation generally represents 60% to 80% of carried interest allocation and incentive fees recognized before giving effect to payroll taxes and will vary based on the mix of funds generating carried interest allocation and incentive fees for that period.

General, Administrative and Other Expenses. The increases in general, administrative and other expenses were primarily due to costs incurred to support fundraising for our funds and distribution of shares in our non-traded vehicles. Supplemental distribution fees increased by $13.8 million and $22.1 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. These fees will fluctuate with sales volumes and assets under management of our non-traded vehicles. We expect to incur higher supplemental distribution fees in future periods as we continue to develop our distribution relationships and expand our retail product offerings. Additionally, placement fees increased by $5.0 million and $13.7 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to new commitments to Ares Senior Direct Lending Fund III, L.P. (“SDL III”). Marketing expenses for the comparative periods have also increased by $7.5 million and $7.6 million, respectively, driven by company sponsorships and investor events held during the second quarter of 2024, including our first firmwide annual general meeting with investors (“AGM”). In prior years, each of our business lines have hosted separate events for their investors, and as a result of holding a consolidated, firmwide AGM event this quarter, we expect the general, administrative and other expenses in the second half of the year will benefit from fewer event expenses.

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In addition, certain expenses increased during the current period, including occupancy costs, information services and information technology costs. These expenses collectively increased by $9.3 million and $19.5 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 to support our growing headcount and the expansion of our business, including costs for our new corporate headquarters that we will occupy beginning in the third quarter of 2024.

The increases in general, administrative and other expenses were partially offset by the decreases in amortization expense for intangible assets of $6.5 million and $18.7 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, largely the result of non-cash impairment charges recognized in the prior year periods and the corresponding decrease in amortization expense of those intangible assets in subsequent periods as we no longer amortize them.

Other Income (Expense)

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Other income (expense)
Net realized and unrealized gains on investments			$	8,339					$	5,481					$	2,858					52%						$	18,855					$	6,996					$	11,859					170%
Interest and dividend income			7,017						2,690						4,327						161						12,399						6,529						5,870						90
Interest expense			(37,500)						(25,839)						(11,661)						(45)						(75,324)						(50,825)						(24,499)						(48)
Other expense, net			(938)						(5,887)						4,949						84						(668)						(6,810)						6,142						90
Net realized and unrealized gains on investments of Consolidated Funds			93,523						98,426						(4,903)						(5)						127,947						109,126						18,821						17
Interest and other income of Consolidated Funds			240,359						234,454						5,905						3						497,635						457,392						40,243						9
Interest expense of Consolidated Funds			(217,613)						(182,904)						(34,709)						(19)						(425,479)						(339,591)						(85,888)						(25)
Total other income, net			$	93,187					$	126,421					(33,234)						(26)						$	155,365					$	182,817					(27,452)						(15)

Net Realized and Unrealized Gains on Investments. The activity for the three and six months ended June 30, 2024 was primarily attributable to: (i) unrealized gains from the appreciation of our investments in APMF, in the subordinated notes of U.S. CLOs, and in a European liquid credit vehicle that is invested in the subordinated notes of European CLOs, as well as in a company that manages real estate owned properties; and partially offset by (ii) unrealized losses from our strategic investment in a non-core insurance related investment and a company that manages portfolios of non-performing loans. The activity for the six months ended June 30, 2024 also included net unrealized gains from the appreciation of our strategic investments in a U.S. energy company.

The activity for the three and six months ended June 30, 2023 was primarily attributable to: (i) unrealized gains from the appreciation of our investments in APMF and certain strategic investments in companies that manage real estate owned properties and portfolios of non-performing loans; and partially offset by (ii) unrealized losses from our investments in the subordinated notes of U.S. CLOs.

Interest Expense. Interest expense increased for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to the issuance of the 2028 Senior Notes in November 2023 that increased interest expense by $8.2 million and $16.5 million, respectively. In addition, higher average SOFR rates and a higher average outstanding balance of the Credit Facility also contributed to the increases over the comparative periods.

Other Expense, Net. The activity for the three and six months ended June 30, 2024 and 2023 primarily included transaction gains (losses) associated with currency fluctuations impacting the revaluation of assets and liabilities denominated in foreign currencies other than an entity’s functional currency. Transaction losses for the three and six months ended June 30, 2024 were primarily attributable to the U.S. dollar strengthening against the Euro, while the transaction losses for the six months ended June 30, 2023 were primarily attributable to the British pound strengthening against the Euro and U.S. dollar.

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Income Tax Expense

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Income before taxes			$	317,325					$	381,969					$	(64,644)					(17)%						$	548,373					$	623,091					$	(74,718)					(12)%
Less: Income tax expense			41,074						49,714						8,640						17						68,307						83,520						15,213						18
Net income			$	276,251					$	332,255					(56,004)						(17)						$	480,066					$	539,571					(59,505)						(11)

The decreases in income tax expense were attributable to lower pre-tax income allocable to AMC for the three and six months ended June 30, 2024 compared to the same periods in 2023 as the income attributed to redeemable and non-controlling interests is generally passed through to partners and not subject to corporate income taxes. The calculation of income taxes is also sensitive to any changes in weighted average daily ownership.

The following table summarizes weighted average daily ownership:

						Three months ended June 30,												Six months ended June 30,
						2024						2023						2024						2023
AMC common stockholders						63.21		%				60.37		%				62.77		%				60.25		%
Non-controlling AOG unitholders						36.79						39.63						37.23						39.75

The changes in ownership for the comparative periods were primarily driven by the exchanges of AOG Units, issuance of Class A common stock in connection with the public offering that closed in June 2024 (the “Offering”), stock option exercises, vesting of restricted stock awards and the Crescent Point Acquisition.

Redeemable and Non-Controlling Interests

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Net income			$	276,251					$	332,255					$	(56,004)					(17)%						$	480,066					$	539,571					$	(59,505)					(11)%
Less: Net income attributable to non-controlling interests in Consolidated Funds			105,489						67,681						37,808						56						172,205						94,374						77,831						82
Net income attributable to Ares Operating Group entities			170,762						264,574						(93,812)						(35)						307,861						445,197						(137,336)						(31)
Less: Net income (loss) attributable to redeemable interest in Ares Operating Group entities			(387)						734						(1,121)						NM						(314)						(1,090)						776						71
Less: Net income attributable to non-controlling interests in Ares Operating Group entities			76,211						119,326						(43,115)						(36)						140,210						207,734						(67,524)						(33)
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders			$	94,938					$	144,514					(49,576)						(34)						$	167,965					$	238,553					(70,588)						(30)

The change in net income attributable to non-controlling interests in AOG entities over the comparative periods was a result of the respective changes in income before taxes and weighted average daily ownership, as presented above.

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Consolidated Results of Operations of the Consolidated Funds

The following table presents the results of operations of the Consolidated Funds ($ in thousands):

						Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,																								Favorable (Unfavorable)
						2024						2023						$ Change						% Change						2024						2023																								$ Change						% Change
Expenses of the Consolidated Funds						$	(4,239)					$	(13,255)					$	9,016					68%						$	(9,385)					$	(21,107)																							$	11,722					56%
Net realized and unrealized gains on investments of Consolidated Funds						93,523						98,426						(4,903)						(5)						127,947						109,126																								18,821						17
Interest and other income of Consolidated Funds						240,359						234,454						5,905						3						497,635						457,392																								40,243						9
Interest expense of Consolidated Funds						(217,613)						(182,904)						(34,709)						(19)						(425,479)						(339,591)																								(85,888)						(25)
Income before taxes						112,030						136,721						(24,691)						(18)						190,718						205,820																								(15,102)						(7)
Less: Income tax expense of Consolidated Funds						4,992						81						(4,911)						NM						3,862						559																								(3,303)						NM
Net income						107,038						136,640						(29,602)						(22)						186,856						205,261																								(18,405)						(9)
Less: Revenues attributable to Ares Management Corporation eliminated upon consolidation						(5,161)						76,440						(81,601)						NM						3,615						109,128																								(105,513)						(97)
Other expense (income), net attributable to Ares Management Corporation eliminated upon consolidation						(6,710)						7,450						14,160						NM						(11,469)						(2,133)																								9,336						NM
General, administrative and other expense attributable to Ares Management Corporation eliminated upon consolidation						—						31						31						100						433						374																								(59)						(16)
Net income attributable to non-controlling interests in Consolidated Funds						$	105,489					$	67,681					37,808						56						$	172,205					$	94,374																							77,831						82

The results of operations of the Consolidated Funds primarily represent activities from certain funds that we are deemed to control. When a fund is consolidated, we reflect the revenues and expenses of the entity on a gross basis, subject to eliminations from consolidation. Substantially all of our results of operations related to the Consolidated Funds are attributable to ownership interests that third parties hold in those funds. The Consolidated Funds are not necessarily the same funds in each year presented due to changes in ownership, changes in limited partners’ or investor rights, and the creation or termination of funds and entities. Accordingly, such amounts may not be comparable for the periods presented, and in any event have no material impact on net income attributable to Ares Management Corporation.

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Results of Operations by Segment

Credit Group—Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Fee Related Earnings

The following table presents the components of the Credit Group’s FRE ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Management fees			$	534,664					$	448,358					$	86,306					19%						$	1,045,630					$	878,825					$	166,805					19%
Fee related performance revenues			6,404						222						6,182						NM						7,159						822						6,337						NM
Other fees			10,481						9,459						1,022						11						20,392						18,608						1,784						10
Compensation and benefits			(142,658)						(129,857)						(12,801)						(10)						(277,507)						(251,757)						(25,750)						(10)
General, administrative and other expenses			(40,610)						(27,576)						(13,034)						(47)						(74,976)						(54,252)						(20,724)						(38)
Fee Related Earnings			$	368,281					$	300,606					67,675						23						$	720,698					$	592,246					128,452						22

Management Fees. The chart below presents Credit Group management fees and effective management fee rates ($ in millions):

Management fees from existing funds increased over the comparative periods primarily from the deployment of capital in direct lending and alternative credit funds and separately managed accounts (“SMAs”). Ares Senior Direct Lending Fund II, L.P. (“SDL II”), ASOF II, Pathfinder I and an open-ended core alternative credit fund collectively generated additional management fees of $16.6 million and $34.8 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Management fees from our sixth European direct lending fund and Pathfinder II, which both launched during the second quarter of 2023, also contributed increases of $11.3 million and $22.3 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.

Management fees from ARCC, ASIF and CADC, excluding Part I Fees described below, collectively increased by $25.7 million and $42.2 million for the three and six months ended June 30, 2024, respectively, compared to the same periods

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in 2023, primarily due to an increase in the average size of ARCC’s and CADC’s portfolio and to additional capital raised in ASIF.

Part I Fees increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily due to an increase in pre-incentive fee net investment income generated by ARCC and CADC, driven by an increase in the average size of their portfolios and by the impact of rising interest rates, given their primarily floating-rate loan portfolios. Additionally, ASIF and AESIF, collectively contributed $10.4 million and $17.4 million for the three and six months ended June 30, 2024, respectively, to the increase in Part I Fees as both funds began generating Part I Fees after the second quarter of 2023.

Management fees from SDL III, which launched subsequent to the second quarter of 2023, contributed fees of $9.0 million and $14.9 million for the three and six months ended June 30, 2024, respectively. Management fees from CLOs contributed to the increase in fees for the three and six months ended June 30, 2024 compared to the same periods in 2023, primarily due to the net addition of eight CLOs since June 30, 2023.

Conversely, management fees from Ares Capital Europe III, L.P. (“ACE III”) and ASOF I, collectively decreased by $7.5 million and $14.0 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily due to the reduction in fee rates.

The increases in effective management fee rate for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by the increase in Part I Fees’ contribution to the effective management fee rate.

Fee Related Performance Revenues. The increases for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily attributable to incentive fees earned from a U.S. direct lending fund in connection with the asset redemption.

Other Fees. The increases in other fees for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by higher administrative service fees of $2.0 million and $4.1 million, respectively, which were earned from certain private funds that pay on invested capital. The increases in other fees were partially offset by decreases in transaction fees of $1.1 million and $2.7 million when compared to the prior year periods, primarily due to lower loan origination income earned from certain managed accounts within the U.S. direct lending strategy, driven by a lower capacity of investable capital.

Compensation and Benefits. The increases in compensation and benefits for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by: (i) higher Part I Fee compensation of $12.4 million and $23.5 million, respectively, corresponding to the increases in Part I Fees, and reduced by a portion of supplemental distribution fees we paid to distribution partners; (ii) higher fee related performance compensation of $3.9 million and $3.7 million, respectively, corresponding to the increases in fee related performance revenues; and (iii) increases in salary expense of $2.4 million and $6.2 million, respectively, primarily attributable to headcount growth to support the expansion of our business.

The increase in compensation and benefits for the six months ended June 30, 2024 compared to the same period in 2023 was also driven by an increase in payroll related taxes of $3.8 million, primarily due to the higher stock price associated with our restricted units that vested during the first quarter of 2024. The increases in compensation and benefits over the comparative periods were partially offset by lower incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year.

Average headcount increased by 17% to 654 investment and investment support professionals for the year-to-date period in 2024 from 561 professionals for the same period in 2023 as we continued to add professionals, primarily to support our growing direct lending and alternative credit platforms.

General, Administrative and Other Expenses. The increases in general, administrative and other expenses were primarily due to costs incurred to support fundraising for our funds and distribution of shares in our non-traded vehicles. As we develop our distribution relationships and expand our retail product offerings, supplemental distribution fees increased by $6.5 million and $10.2 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Such supplemental distribution fees are expected to fluctuate with sales volumes and managed assets of our non-traded vehicles. We reduce the Part I Fee compensation by a portion of the supplemental distribution fees paid to the extent that Part I

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Fees are earned. Travel and marketing costs have also increased by $3.5 million and $4.1 million, respectively, over the comparative periods, driven by investor events held during the second quarter of 2024, including our firmwide AGM event.

Additionally, certain expenses increased during the current period, including occupancy costs, information services and information technology costs. These expenses collectively increased by $1.6 million and $3.8 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 to support our growing headcount and the expansion of our business, including costs for our new corporate headquarters that we will occupy beginning in the third quarter of 2024.

Realized Income

The following table presents the components of the Credit Group’s RI ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Fee Related Earnings			$	368,281					$	300,606					$	67,675					23%						$	720,698					$	592,246					$	128,452					22%
Performance income—realized			98,256						86,529						11,727						14						115,022						93,939						21,083						22
Performance related compensation—realized			(60,942)						(55,730)						(5,212)						(9)						(69,676)						(61,611)						(8,065)						(13)
Realized net performance income			37,314						30,799						6,515						21						45,346						32,328						13,018						40
Investment income (loss)—realized			(519)						17,565						(18,084)						NM						(917)						18,071						(18,988)						NM
Interest and other investment income—realized			11,596						7,344						4,252						58						16,526						15,457						1,069						7
Interest expense			(8,774)						(8,617)						(157)						(2)						(17,787)						(17,247)						(540)						(3)
Realized net investment income (loss)			2,303						16,292						(13,989)						(86)						(2,178)						16,281						(18,459)						NM
Realized Income			$	407,898					$	347,697					60,201						17						$	763,866					$	640,855					123,011						19

Realized net performance income for the three and six months ended June 30, 2024 and 2023 primarily included (i) tax distributions from ACE IV, ACE V, PCS I, ASOF I; and (ii) incentive fees earned from two alternative credit funds whose annual measurement period was as of the second quarter. Realized net performance income for the three and six months ended June 30, 2024 also included tax distribution from an alternative credit fund, while the realized net performance income for the three and six months ended June 30, 2023 included tax distribution from ACE III.

Realized net investment income for the three and six months ended June 30, 2024 and 2023 included interest income generated from our CLO investments, where we earned a similar level of income from 15 CLO investments for both the six months ended June 30, 2024 and 2023. The activity for the three and six months ended June 30, 2024 also included income recognized in connection with distributions from our investment in a U.S. direct lending fund. The activity for the three and six months ended June 30, 2023 also included distributions from our investment in a commercial finance fund that was sold during the second quarter of 2023.

Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023, and to higher average SOFR rates and a higher average outstanding balance of our Credit Facility.

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Credit Group—Performance Income

The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Credit Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in thousands):

			As of June 30, 2024																		As of December 31, 2023
			Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income						Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income
Pathfinder I			$	181,949					$	154,657					$	27,292					$	155,136					$	131,866					$	23,270
ASOF I			321,098						225,027						96,071						357,016						250,198						106,818
ASOF II			138,254						96,799						41,455						80,926						56,648						24,278
PCS I			131,668						77,804						53,864						123,979						73,258						50,721
PCS II			128,490						75,863						52,627						38,128						22,573						15,555
ACE IV			164,887						107,060						57,827						149,584						97,123						52,461
ACE V			272,057						171,222						100,835						232,201						146,219						85,982
Sixth European direct lending fund			38,018						23,786						14,232						16,575						9,945						6,630
Other credit funds			338,177						211,594						126,583						397,743						253,636						144,107
Total Credit Group			$	1,714,598					$	1,143,812					$	570,786					$	1,551,288					$	1,041,466					$	509,822

The following table presents the change in accrued performance income for the Credit Group ($ in thousands):

												As of December 31, 2023						Activity during the period																		As of June 30, 2024
						Waterfall Type						Accrued Performance Income						Change in Unrealized						Realized						Other Adjustments						Accrued Performance Income
Accrued Carried Interest
Pathfinder I						European						$	155,136					$	26,813					$	—					$	—					$	181,949
ASOF I						European						357,016						(30,824)						(5,094)						—						321,098
ASOF II						European						80,926						57,328						—						—						138,254
PCS I						European						123,979						13,519						(5,943)						113						131,668
PCS II						European						38,128						88,817						—						1,545						128,490
ACE IV						European						149,584						32,088						(16,911)						126						164,887
ACE V						European						232,201						82,746						(43,189)						299						272,057
Sixth European direct lending fund						European						16,575						21,443						—						—						38,018
Other credit funds						European						373,312						(42,480)						(14,900)						(7,559)						308,373
Other credit funds						American						24,431						5,540						(2,913)						2,746						29,804
Total accrued carried interest												1,551,288						254,990						(88,950)						(2,730)						1,714,598
Other credit funds						Incentive						—						26,072						(26,072)						—						—
Total Credit Group												$	1,551,288					$	281,062					$	(115,022)					$	(2,730)					$	1,714,598

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Credit Group—Assets Under Management

The tables below present rollforwards of AUM for the Credit Group ($ in millions):

									Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit						Other**(1)**						Total Credit Group
Balance at 3/31/2024									$	46,247					$	36,481					$	14,556					$	129,181					$	70,201					$	11,663					$	310					$	308,639
Net new par/equity commitments									666						900						—						7,875						1,489						257						13						11,200
Net new debt commitments									2,656						—						—						5,936						—						—						—						8,592
Capital reductions									(2,534)						—						(1,022)						(1,553)						(1)						—						—						(5,110)
Distributions									(152)						(225)						(180)						(1,390)						(743)						(127)						—						(2,817)
Redemptions									(532)						—						—						(108)						(15)						—						—						(655)
Net allocations among investment strategies									(18)						628						—						25						—						—						(25)						610
Change in fund value									239						628						(154)						1,228						547						173						3						2,664
Balance at 6/30/2024									$	46,572					$	38,412					$	13,200					$	141,194					$	71,478					$	11,966					$	301					$	323,123
									Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit						Other**(1)**						Total Credit Group
Balance at 3/31/2023									$	44,496					$	23,817					$	13,991					$	100,212					$	55,034					$	11,334					$	250					$	249,134
Net new par/equity commitments									383						2,013						—						2,387						5,013						65						75						9,936
Net new debt commitments									—						341						—						2,494						—						—						—						2,835
Capital reductions									(203)						—						—						(149)						—						—						—						(352)
Distributions									(59)						(434)						(88)						(766)						(453)						(170)						—						(1,970)
Redemptions									(220)						(136)						—						(78)						—						—						—						(434)
Net allocations among investment strategies									(33)						1,772						—						—						—						—						—						1,739
Change in fund value									354						441						509						1,343						891						127						—						3,665
Balance at 6/30/2023									$	44,718					$	27,814					$	14,412					$	105,443					$	60,485					$	11,356					$	325					$	264,553
									Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit						Other**(1)**						Total Credit Group
Balance at 12/31/2023									$	47,299					$	33,886					$	14,554					$	123,073					$	68,264					$	11,920					$	354					$	299,350
Net new par/equity commitments									1,361						2,728						—						10,337						4,180						257						70						18,933
Net new debt commitments									3,650						—						—						10,772						662						(380)						—						14,704
Capital reductions									(3,668)						—						(1,022)						(2,106)						50						151						—						(6,595)
Distributions									(197)						(663)						(469)						(2,878)						(1,942)						(232)						—						(6,381)
Redemptions									(2,227)						—						—						(828)						(116)						—						—						(3,171)
Net allocations among investment strategies									(18)						1,296						—						25						150						—						(128)						1,325
Change in fund value									372						1,165						137						2,799						230						250						5						4,958
Balance at 6/30/2024									$	46,572					$	38,412					$	13,200					$	141,194					$	71,478					$	11,966					$	301					$	323,123
									Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit						Other**(1)**						Total Credit Group
Balance at 12/31/2022									$	43,864					$	21,363					$	13,720					$	98,327					$	50,642					$	11,383					$	—					$	239,299
Net new par/equity commitments									785						4,302						—						4,163						9,337						65						325						18,977
Net new debt commitments									466						341						—						3,234						217						—						—						4,258
Capital reductions									(265)						—						—						(987)						(1,181)						—						—						(2,433)
Distributions									(201)						(682)						(149)						(1,470)						(851)						(205)						—						(3,558)
Redemptions									(764)						(876)						—						(170)						—						—						—						(1,810)
Net allocations among investment strategies									(30)						2,584						—						—						—						—						—						2,554
Change in fund value									863						782						841						2,346						2,321						113						—						7,266
Balance at 6/30/2023									$	44,718					$	27,814					$	14,412					$	105,443					$	60,485					$	11,356					$	325					$	264,553
(1) Activity within Other represents equity commitments to the platform that either have not yet been allocated to an investment strategy or have been allocated in a subsequent period as commitments to an investment strategy.

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The components of our AUM for the Credit Group are presented below ($ in billions):

			AUM: $323.1						AUM: $264.6

						FPAUM						AUM not yet paying fees						Non-fee paying(1)

(1) Includes $14.4 billion and $14.9 billion of AUM of funds from which we indirectly earn management fees as of June 30, 2024 and 2023, respectively, and includes $1.7 billion and $1.5 billion of non-fee paying AUM from our general partner and employee commitments as of June 30, 2024 and 2023, respectively.

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Credit Group—Fee Paying AUM

The tables below present rollforwards of fee paying AUM for the Credit Group ($ in millions):

						Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit												Total Credit Group
Balance at 3/31/2024						$	45,022					$	24,986					$	8,584					$	70,387					$	35,271					$	5,576											$	189,826
Commitments						2,569						—						—						3,498						7						7												6,081
Deployment/subscriptions/increase in leverage						58						583						427						4,338						1,487						292												7,185
Capital reductions						(2,534)						—						—						(497)						(80)						—												(3,111)
Distributions						(158)						(146)						(588)						(2,392)						(446)						(303)												(4,033)
Redemptions						(532)						—						—						(110)						(531)						—												(1,173)
Net allocations among investment strategies						(18)						631						—						—						—						—												613
Change in fund value						373						37						—						743						(64)						(302)												787
Change in fee basis						—						—						—						—						913						—												913
Balance at 6/30/2024						$	44,780					$	26,091					$	8,423					$	75,967					$	36,557					$	5,270											$	197,088
						Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit												Total Credit Group
Balance at 3/31/2023						$	42,632					$	16,261					$	7,469					$	57,899					$	31,206					$	5,751											$	161,218
Commitments						883						40						—						456						—						65												1,444
Deployment/subscriptions/increase in leverage						27						2,082						901						2,497						1,100						609												7,216
Capital reductions						(203)						—						—						(54)						(87)						(3)												(347)
Distributions						(92)						(232)						(693)						(694)						(122)						(791)												(2,624)
Redemptions						(223)						(136)						—						(78)						(36)						—												(473)
Net allocations among investment strategies						(34)						1,804						—						—						—						—												1,770
Change in fund value						458						84						—						420						262						—												1,224
Balance at 6/30/2023						$	43,448					$	19,903					$	7,677					$	60,446					$	32,323					$	5,631											$	169,428
						Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit												Total Credit Group
Balance at 12/31/2023						$	46,140					$	23,218					$	8,490					$	67,596					$	34,246					$	5,590											$	185,280
Commitments						3,792						—						—						6,047						13						7												9,859
Deployment/subscriptions/increase in leverage						59						1,817						767						7,812						3,363						591												14,409
Capital reductions						(3,501)						—						—						(1,821)						(535)						(18)												(5,875)
Distributions						(204)						(519)						(834)						(4,816)						(696)						(627)												(7,696)
Redemptions						(2,226)						—						—						(199)						(897)						—												(3,322)
Net allocations among investment strategies						(18)						1,517						—						—						—						—												1,499
Change in fund value						738						58						—						1,348						(543)						(273)												1,328
Change in fee basis						—						—						—						—						1,606						—												1,606
Balance at 6/30/2024						$	44,780					$	26,091					$	8,423					$	75,967					$	36,557					$	5,270											$	197,088
						Liquid Credit						Alternative Credit						Opportunistic Credit						U.S. Direct Lending						European Direct Lending						APAC Credit												Total Credit Group
Balance at 12/31/2022						$	42,191					$	15,904					$	7,166					$	57,568					$	29,561					$	6,051											$	158,441
Commitments						1,299						65						—						1,097						—						65												2,526
Deployment/subscriptions/increase in leverage						281						3,069						1,604						3,912						2,458						875												12,199
Capital reductions						(265)						—						—						(1,333)						(91)						(192)												(1,881)
Distributions						(197)						(1,110)						(1,093)						(1,432)						(162)						(1,165)												(5,159)
Redemptions						(767)						(792)						—						(170)						(121)						—												(1,850)
Net allocations among investment strategies						(30)						2,616						—						—						—						—												2,586
Change in fund value						936						151						—						804						678						(3)												2,566
Balance at 6/30/2023						$	43,448					$	19,903					$	7,677					$	60,446					$	32,323					$	5,631											$	169,428

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The charts below present FPAUM for the Credit Group by its fee bases ($ in billions):

			FPAUM: $197.1						FPAUM: $169.4

			Invested capital						Market value(1)						Collateral balances (at par)						Capital commitments

(1)Includes $40.6 billion and $32.1 billion from funds that primarily invest in illiquid strategies as of June 30, 2024 and 2023, respectively. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.

Credit Group—Fund Performance Metrics as of June 30, 2024

ARCC contributed approximately 34% of the Credit Group’s total management fees for the six months ended June 30, 2024. In addition, the Credit Group’s other significant funds, which are presented in the tables below, collectively contributed approximately 36% of the Credit Group’s management fees for the six months ended June 30, 2024.

The following table presents the performance data for our significant funds that are not drawdown funds in the Credit Group as of June 30, 2024 ($ in millions):

																		Returns(%)
						Year of Inception						AUM						Current Quarter												Year-To-Date												Since Inception**(1)**												Primary Investment Strategy
Fund												Gross						Net						Gross						Net						Gross						Net
ARCC(2)						2004						$	29,991					N/A						2.9						N/A						7.0						N/A						12.1						U.S. Direct Lending
CADC(3)						2017						5,868						N/A						2.3						N/A						5.2						N/A						6.7						U.S. Direct Lending
Open-ended core alternative credit fund(4)						2021						5,029						3.4						2.6						6.5						4.8						10.8						8.0						Alternative Credit
ASIF(3)						2023						7,921						N/A						2.9						N/A						5.7						N/A						12.0						U.S. Direct Lending

(1)Since inception returns are annualized.

(2)Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Net returns are calculated using the fund’s NAV and assume dividends are reinvested at the closest quarter-end NAV to the relevant quarterly ex-dividend dates. Additional information related to ARCC can be found in its filings with the SEC, which are not part of this report.

(3)Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Net returns are calculated using the fund’s NAV and assume distributions are reinvested at the NAV on the date of distribution. Additional information related to CADC and ASIF can be found in its filings with the SEC, which are not part of this report.

(4)Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. The fund is made up of a Main Class (“Class M”) and a Constrained Class (“Class C”). Class M includes investors electing to participate in all investments and Class C includes investors electing to be excluded from exposure to liquid investments. Returns presented in the table are for onshore Class M. The current quarter gross and net returns for Class M (offshore) are 3.1% and 2.0%, respectively. The year-to-date gross and net returns for Class M (offshore) are 6.3% and 4.3%, respectively. The since inception gross and net returns for Class M (offshore) are 10.6% and 7.5%, respectively. The current quarter gross and net returns for Class C (offshore) are 3.2% and 2.3%, respectively. The year-to-date gross and net returns for Class C (offshore) are 5.6% and 4.0%, respectively. The since inception gross and net returns for Class C (offshore) are 10.6% and 7.5%, respectively.

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The following table presents the performance data of the Credit Group’s significant drawdown funds as of June 30, 2024 ($ in millions):

			Year of Inception						AUM						Original Capital Commitments						Capital Invested to Date						Realized Value**(1)**						Unrealized Value**(2)**						Total Value						MoIC												IRR(%)												Primary Investment Strategy
Fund																								Gross**(3)**						Net**(4)**						Gross**(5)**						Net**(6)**
Funds Harvesting Investments
Ares Senior Direct Lending Fund, L.P. (“SDL I”) Unlevered			2018						$	4,061					$	922					$	872					$	507					$	573					$	1,080					1.3x						1.2x						9.2						7.1						U.S. Direct Lending
SDL I Levered									2,045						2,022						1,458						1,295						2,753						1.5x						1.4x						15.2						11.4
ACE IV Unlevered(7)			2018						9,935						2,851						2,253						972						1,897						2,869						1.4x						1.3x						8.2						5.9						European Direct Lending
ACE IV Levered(7)									4,819						3,820						2,253						3,018						5,271						1.5x						1.4x						11.5						8.2
ASOF I			2019						3,915						3,518						3,135						2,136						2,854						4,990						1.8x						1.6x						22.5						17.2						Opportunistic Credit
Pathfinder I			2020						4,312						3,683						3,177						320						3,598						3,918						1.3x						1.2x						16.1						11.6						Alternative Credit
Funds Deploying Capital
PCS II			2020						5,795						5,114						3,522						538						3,702						4,240						1.2x						1.2x						11.8						7.9						U.S. Direct Lending
ACE V Unlevered(8)			2020						16,791						7,026						5,349						933						5,411						6,344						1.2x						1.2x						11.5						8.6						European Direct Lending
ACE V Levered(8)									6,376						4,848						1,229						4,943						6,172						1.4x						1.3x						16.8						12.2
ASOF II			2021						7,901						7,128						4,725						13						5,370						5,383						1.2x						1.1x						15.4						10.5						Opportunistic Credit
SDL II Unlevered			2021						16,117						1,989						1,422						199						1,444						1,643						1.2x						1.2x						12.5						9.9						U.S. Direct Lending
SDL II Levered									6,047						4,047						910						4,144						5,054						1.3x						1.2x						20.4						15.5
Sixth European direct lending fund unlevered(9)			2022						15,455						5,343						814						1						874						875						1.1x						1.1x						NM						NM						European Direct Lending
Sixth European direct lending fund levered(9)									7,940						1,899						19						2,037						2,056						1.1x						1.1x						NM						NM
SDL III Unlevered			2023						19,506						2,511						—						—						9						9						NM						NM						NM						NM						U.S. Direct Lending
SDL III Levered									10,974						—						—						62						62						NM						NM						NM						NM

(1)For funds other than our opportunistic credit funds, realized value represent the sum of all cash distributions to all partners and if applicable, exclude tax and incentive distributions made to the general partner. For our opportunistic credit funds, realized value represent the sum of all cash distributions to the fee-paying limited partners and if applicable, exclude tax and incentive distributions made to the general partner.

(2)Unrealized value represents the fund's NAV reduced by the accrued incentive allocation, if applicable. There can be no assurance that unrealized values will be realized at the valuations indicated. For funds other than our opportunistic credit funds, the unrealized value is based on all partners. For our opportunistic credit funds, the unrealized value is based on the fee-paying limited partners.

(3)The gross multiple of invested capital (“MoIC”) is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The gross MoIC is before giving effect to management fees, carried interest and other expenses, as applicable, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(4)The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes those interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The net MoIC is after giving effect to management fees and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(5)The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRR reflects returns to the fee-paying limited partners and, if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(6)The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and, if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the net IRR calculations are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(7)ACE IV is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE IV (E) Unlevered, ACE IV (G) Unlevered, ACE IV (E) Levered and ACE IV (G) Levered and one feeder fund: ACE IV (D) Levered. ACE IV (E) Levered includes the ACE IV (D) Levered feeder fund. The gross and net IRR and MoIC presented in the table are for ACE IV (E) Unlevered and ACE IV (E) Levered. Metrics for ACE IV (E) Levered exclude the U.S. dollar denominated feeder fund. The gross and net IRR for ACE IV (G) Unlevered are 9.8% and 7.1%, respectively. The gross and net MoIC for ACE IV (G) Unlevered are 1.4x and 1.3x, respectively. The gross and net IRR for ACE IV (G) Levered are 12.8% and 9.1%, respectively. The gross and net MoIC for ACE IV (G) Levered are 1.6x and 1.4x, respectively. The gross and net IRR for ACE IV (D) Levered are 13.0% and 9.5%, respectively. The gross and net MoIC for ACE IV (D) Levered are 1.6x and 1.4x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund’s closing. All other values for ACE IV Unlevered and ACE IV Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

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(8)ACE V is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE V (E) Unlevered, ACE V (G) Unlevered, ACE V (E) Levered, and ACE V (G) Levered, and two feeder funds: ACE V (D) Levered and ACE V (Y) Unlevered. ACE V (E) Levered includes the ACE V (D) Levered feeder fund and ACE V (E) Unlevered includes the ACE V (Y) Unlevered feeder fund. The gross and net IRR and gross and net MoIC presented in the table are for ACE V (E) Unlevered and ACE V (E) Levered. Metrics for ACE V (E) Levered exclude the ACE V (D) Levered feeder fund and metrics for ACE V (E) Unlevered exclude the ACE V (Y) Unlevered feeder fund. The gross and net IRR for ACE V (G) Unlevered are 13.2% and 9.9%, respectively. The gross and net MoIC for ACE V (G) Unlevered are 1.3x and 1.2x, respectively. The gross and net IRR for ACE V (G) Levered are 17.6% and 12.9%, respectively. The gross and net MoIC for ACE V (G) Levered are 1.4x and 1.3x, respectively. The gross and net IRR for ACE V (D) Levered are 16.1% and 12.1%, respectively. The gross and net MoIC for ACE V (D) Levered are 1.3x and 1.3x, respectively. The gross and net IRR for ACE V (Y) Unlevered are 12.6% and 9.3%, respectively. The gross and net MoIC for ACE V (Y) Unlevered are 1.3x and 1.2x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund's closing. All other values for ACE V Unlevered and ACE V Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

(9)Our sixth European direct lending fund is made up of six parallel funds, four denominated in Euros and two denominated in pound sterling: sixth European direct lending fund (E) unlevered, sixth European direct lending fund (E) II unlevered, sixth European direct lending fund (G) unlevered, sixth European direct lending fund (E) levered, sixth European direct lending fund (E) II levered, and sixth European direct lending fund (G) levered, and three feeder funds: sixth European direct lending fund (D) levered, sixth European direct lending fund (Y) unlevered and sixth European direct lending fund (D) rated notes. Sixth European direct lending fund (E) II levered includes sixth European direct lending fund (D) levered feeder fund and sixth European direct lending fund (E) II unlevered includes sixth European direct lending fund (Y) unlevered and sixth European direct lending fund (D) rated notes feeder funds. The gross and net MoIC presented in the table are for sixth European direct lending fund (E) unlevered and sixth European direct lending fund (E) levered. Metrics for sixth European direct lending fund (E) II levered exclude the sixth European direct lending fund (D) levered feeder fund and metrics for sixth European direct lending fund (E) II unlevered exclude the sixth European direct lending fund (Y) unlevered and sixth European direct lending fund (D) rated notes feeder funds. The gross and net MoIC for sixth European direct lending fund (G) unlevered are 1.1x and 1.1x, respectively. The gross and net MoIC for sixth European direct lending fund (G) levered are 1.1x and 1.0x, respectively. The gross and net MoIC for sixth European direct lending fund (E) II unlevered are 1.1x and 1.1x, respectively. The gross and net MoIC for sixth European direct lending fund (E) II levered are 1.1x and 1.1x, respectively. The gross and net MoIC for sixth European direct lending fund (D) levered are 1.1x and 1.1x, respectively. The gross and net MoIC for sixth European direct lending fund (Y) unlevered are 1.1x and 1.1x, respectively. The gross and net MoIC for sixth European direct lending fund (D) rated notes are 1.1x and 1.1x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund's closing. All other values for sixth European direct lending fund unlevered and sixth European direct lending fund levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

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Real Assets Group—Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Fee Related Earnings

The following table presents the components of the Real Assets Group’s FRE ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Management fees			$	99,609					$	95,239					$	4,370					5%						$	193,423					$	192,709					$	714					0%
Fee related performance revenues			—						334						(334)						(100)						—						334						(334)						(100)
Other fees			6,445						11,846						(5,401)						(46)						11,520						18,308						(6,788)						(37)
Compensation and benefits			(39,125)						(40,638)						1,513						4						(77,043)						(78,624)						1,581						2
General, administrative and other expenses			(15,286)						(10,863)						(4,423)						(41)						(29,739)						(23,147)						(6,592)						(28)
Fee Related Earnings			$	51,643					$	55,918					(4,275)						(8)						$	98,161					$	109,580					(11,419)						(10)

Management Fees. The chart below presents Real Assets Group management fees and effective management fee rates ($ in millions):

Excluding the impact of catch-up fees, management fees increased by $5.6 million and $11.0 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 primarily due to new capital commitments for our fourth U.S. opportunistic real estate equity fund and our second climate infrastructure fund. Management fees from IDF V also increased over the comparative periods by $2.7 million and $5.4 million, respectively, driven by the deployment of capital.

The increases for the three and six months ended June 30, 2024 compared to the same periods in 2023 were partially offset by decreases of: (i) $2.5 million and $4.7 million, respectively, from Ares Industrial Real Estate Income Trust, Inc. (“AIREIT”), driven by a decrease in NAV due to lower valuations of certain properties; (ii) $2.0 million and $3.7 million, respectively, from Infrastructure Debt Fund IV, L.P. (“IDF IV”) due to loan paydowns that reduced the fee base as the fund is past its investment period; and (iii) $1.3 million and $2.6 million, respectively, from AREOF III due to a contractual reduction in the fee base that was triggered at the expiration of the fund’s investment period at the end of the fourth quarter of 2023.

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Management fees for the six months ended June 30, 2024 compared to the same period in 2023 also decreased by: (i) $3.3 million due to make-whole termination fees that were recognized during the six months ended June 30, 2023 from the early termination of the advisory agreements of two U.S. industrial real estate equity funds; and (ii) $1.8 million from Ares Energy Investors Fund IV, L.P. (“EIF IV”) due to a decrease in invested capital.

The increases in effective management fee rate for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by the deployment of capital within our real estate equity funds. Certain of our private real estate equity funds pay a fee on committed capital that increases once that capital is invested. As a result, our effective management fee rate increases as capital is deployed.

Other Fees. The decreases in other fees for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily attributable to lower credit transaction fees from the infrastructure debt strategy that are generated periodically. In addition, the decrease in other fees for the six months ended June 30, 2024 compared to the same period in 2023 was also driven by lower development fees resulting from a reduction in property-related activities within certain industrial U.S. real estate equity funds.

Compensation and Benefits. The decreases in compensation and benefits for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by: (i) lower incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year; and (ii) higher administrative fees reimbursement for expenses for the current year periods. Such decreases were partially offset by increases in salary expenses of $2.0 million and $3.5 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily attributable to headcount growth to support the expansion of our business. In addition, the decrease in compensation and benefits for the six months ended June 30, 2024 compared to the same period in 2023 was further offset by an increase in payroll related taxes of $2.3 million, primarily due to the higher stock price associated with our restricted units that vested during the first quarter of 2024.

Average headcount increased by 9% to 381 investment and investment support professionals for the year-to-date period in 2024 from 348 professionals for the same period in 2023.

General, Administrative and Other Expenses. The increases in general, administrative and other expenses were primarily due to marketing and fundraising activities, including supplemental distribution fees charged in connection with an amended servicing arrangement with a distribution partner. These fees increased by $1.8 million and $2.0 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Marketing expenses for the comparative periods also increased by $1.5 million and $2.1 million, respectively, driven by: (i) investor events held during the second quarter of 2024, including our firmwide AGM event; and (ii) non-reimbursable fund formation costs for our fourth U.S. opportunistic real estate equity fund. Additionally, we incurred non-recurring legal expenses of $1.5 million during the six months ended June 30, 2024.

Realized Income

The following table presents the components of the Real Assets Group’s RI ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Fee Related Earnings			$	51,643					$	55,918					$	(4,275)					(8)%						$	98,161					$	109,580					$	(11,419)					(10)%
Performance income—realized			5,206						2,737						2,469						90						8,883						8,823						60						1
Performance related compensation—realized			(3,503)						(1,668)						(1,835)						(110)						(5,731)						(5,426)						(305)						(6)
Realized net performance income			1,703						1,069						634						59						3,152						3,397						(245)						(7)
Investment income (loss)—realized			125						(1,549)						1,674						NM						(332)						(3,321)						2,989						90
Interest and other investment income (loss)—realized			(4,526)						2,393						(6,919)						NM						(691)						4,214						(4,905)						NM
Interest expense			(6,729)						(4,106)						(2,623)						(64)						(12,678)						(8,002)						(4,676)						(58)
Realized net investment loss			(11,130)						(3,262)						(7,868)						241						(13,701)						(7,109)						(6,592)						(93)
Realized Income			$	42,216					$	53,725					(11,509)						(21)						$	87,612					$	105,868					(18,256)						(17)

Realized net performance income for the three and six months ended June 30, 2024 and 2023 was primarily attributable to incentive fees generated from an open-ended industrial real estate fund that varies due to a three-year measurement period calculated by each fund investor and to the fund’s performance during those periods. Realized net

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performance income for the three and six months ended June 30, 2024 also included realizations from US Real Estate Fund VIII, L.P. (“US VIII”) driven by multifamily property sales.

Realized net investment loss for the three and six months ended June 30, 2024 and 2023 was primarily attributable to interest expense exceeding investment income during these periods. Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023, and to higher average SOFR rates and a higher average outstanding balance of our Credit Facility.

In addition, the activity for the three and six months ended June 30, 2024 included a realized loss associated with a guarantee of a credit facility provided in connection with a historical acquisition. The realized investment losses during these periods were partially offset by dividend income from funds within our European real estate strategy.

The activity for the three and six months ended June 30, 2023 included realized losses from a real estate debt vehicle, where interest expense was incurred with no associated investment income during the periods. These realized losses are not expected to recur in 2024 as we restructured the arrangement in the fourth quarter of 2023. Realized net investment loss for the prior year periods were partially offset by distributions of net investment income from multiple real estate equity and real estate debt vehicles.

Real Assets Group—Performance Income

The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Real Assets Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in thousands):

			As of June 30, 2024																		As of December 31, 2023
			Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income						Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income
US VIII			$	27,793					$	17,825					$	9,968					$	32,199					$	20,651					$	11,548
US IX			94,347						58,495						35,852						89,958						55,774						34,184
AREOF III			32,665						19,599						13,066						35,715						21,429						14,286
EF IV			32,091						19,255						12,836						49,150						29,490						19,660
EIF V			115,329						86,213						29,116						93,598						69,969						23,629
IDF V			83,750						50,749						33,001						56,065						33,677						22,388
Other real assets funds			148,325						97,833						50,492						140,167						92,468						47,699
Total Real Assets Group			$	534,300					$	349,969					$	184,331					$	496,852					$	323,458					$	173,394

The following table presents the change in accrued performance income for the Real Assets Group ($ in thousands):

												As of December 31, 2023						Activity during the period																		As of June 30, 2024
						Waterfall Type						Accrued Performance Income						Change in Unrealized						Realized						Other Adjustments						Accrued Performance Income
Accrued Carried Interest
US VIII						European						$	32,199					$	(1,377)					$	(3,029)					$	—					$	27,793
US IX						European						89,958						4,389						—						—						94,347
AREOF III						European						35,715						(3,050)						—						—						32,665
EF IV						American						49,150						(17,059)						—						—						32,091
EIF V						European						93,598						21,731						—						—						115,329
IDF V						European						56,065						29,610						—						(1,925)						83,750
Other real assets funds						European						112,477						18,588						—						(18)						131,047
Other real assets funds						American						27,690						(9,219)						(1,172)						(21)						17,278
Total accrued carried interest												496,852						43,613						(4,201)						(1,964)						534,300
Other real assets funds						Incentive						—						4,682						(4,682)						—						—
Total Real Assets Group												$	496,852					$	48,295					$	(8,883)					$	(1,964)					$	534,300

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Real Assets Group—Assets Under Management

The tables below present rollforwards of AUM for the Real Assets Group ($ in millions):

			U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 3/31/2024			$	28,669					$	9,214					$	10,870					$	6,299					$	9,052					$	64,104
Net new par/equity commitments			782						815						223						143						528						2,491
Net new debt commitments			—						803						900						—						—						1,703
Capital reductions			—						—						(207)						—						—						(207)
Distributions			(233)						(81)						(55)						(21)						(346)						(736)
Redemptions			(251)						—						(40)						—						—						(291)
Change in fund value			116						(27)						29						387						123						628
Balance at 6/30/2024			$	29,083					$	10,724					$	11,720					$	6,808					$	9,357					$	67,692
			U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 3/31/2023			$	29,838					$	8,533					$	10,826					$	5,175					$	9,742					$	64,114
Net new par/equity commitments			1,055						—						313						456						—						1,824
Net new debt commitments			—						—						150						—						—						150
Capital reductions			—						—						(1)						—						—						(1)
Distributions			(958)						(59)						(69)						(186)						(42)						(1,314)
Redemptions			(298)						—						(120)						—						—						(418)
Change in fund value			(190)						118						26						59						403						416
Balance at 6/30/2023			$	29,447					$	8,592					$	11,125					$	5,504					$	10,103					$	64,771
			U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 12/31/2023			$	29,177					$	9,386					$	11,152					$	6,248					$	9,450					$	65,413
Net new par/equity commitments			1,079						815						235						143						627						2,899
Net new debt commitments			—						803						900						—						—						1,703
Capital reductions			—						—						(335)						—						—						(335)
Distributions			(410)						(97)						(135)						(24)						(916)						(1,582)
Redemptions			(615)						—						(110)						—						—						(725)
Change in fund value			(148)						(183)						13						441						196						319
Balance at 6/30/2024			$	29,083					$	10,724					$	11,720					$	6,808					$	9,357					$	67,692
			U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 12/31/2022			$	31,460					$	8,561					$	11,161					$	5,194					$	9,685					$	66,061
Net new par/equity commitments			1,643						15						475						456						—						2,589
Net new debt commitments			—						—						150						—						—						150
Capital reductions			(245)						—						(160)						—						—						(405)
Distributions			(2,466)						(72)						(131)						(203)						(104)						(2,976)
Redemptions			(554)						—						(402)						—						—						(956)
Change in fund value			(391)						88						32						57						522						308
Balance at 6/30/2023			$	29,447					$	8,592					$	11,125					$	5,504					$	10,103					$	64,771

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The components of our AUM for the Real Assets Group are presented below ($ in billions):

			AUM: $67.7						AUM: $64.8

			FPAUM						Non-fee paying(1)						AUM not yet paying fees

(1) Includes $0.7 billion and $0.6 billion of non-fee paying AUM from our general partner and employee commitments as of June 30, 2024 and 2023, respectively.

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Real Assets Group—Fee Paying AUM

The tables below present rollforwards of fee paying AUM for the Real Assets Group ($ in millions):

						U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 3/31/2024						$	20,087					$	6,140					$	3,265					$	5,176					$	6,168					$	40,836
Commitments						551						530						—						143						—						1,224
Deployment/subscriptions/increase in leverage						101						433						188						11						132						865
Distributions						(176)						(57)						(53)						(4)						(273)						(563)
Redemptions						(251)						—						(40)						—						—						(291)
Change in fund value						90						(96)						(4)						—						(28)						(38)
Change in fee basis						—						(410)						—						—						—						(410)
Balance at 6/30/2024						$	20,402					$	6,540					$	3,356					$	5,326					$	5,999					$	41,623
						U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 3/31/2023						$	21,300					$	5,685					$	3,365					$	4,570					$	6,008					$	40,928
Commitments						419						—						(5)						456						—						870
Deployment/subscriptions/increase in leverage						26						183						175						106						498						988
Capital reductions						—						(29)						(21)						—						—						(50)
Distributions						(433)						—						(76)						(254)						(333)						(1,096)
Redemptions						(298)						—						(133)						—						—						(431)
Change in fund value						(282)						26						63						—						20						(173)
Change in fee basis						—						98						—						—						—						98
Balance at 6/30/2023						$	20,732					$	5,963					$	3,368					$	4,878					$	6,193					$	41,134
						U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 12/31/2023						$	20,844					$	6,189					$	3,277					$	5,148					$	5,880					$	41,338
Commitments						847						530						—						143						—						1,520
Deployment/subscriptions/increase in leverage						347						553						290						50						489						1,729
Capital reductions						—						(12)						—						—						—						(12)
Distributions						(316)						(88)						(110)						(72)						(281)						(867)
Redemptions						(615)						—						(110)						—						—						(725)
Change in fund value						(201)						(222)						9						57						(89)						(446)
Change in fee basis						(504)						(410)						—						—						—						(914)
Balance at 6/30/2024						$	20,402					$	6,540					$	3,356					$	5,326					$	5,999					$	41,623
						U.S. Real Estate Equity						European Real Estate Equity						Real Estate Debt						Infrastructure Opportunities						Infrastructure Debt						Total Real Assets Group
Balance at 12/31/2022						$	21,788					$	5,634					$	3,691					$	4,524					$	5,970					$	41,607
Commitments						1,001						15						(5)						456						—						1,467
Deployment/subscriptions/increase in leverage						45						201						214						153						597						1,210
Capital reductions						(245)						(29)						(55)						—						—						(329)
Distributions						(830)						(55)						(139)						(255)						(451)						(1,730)
Redemptions						(554)						—						(415)						—						—						(969)
Change in fund value						(473)						99						77						—						77						(220)
Change in fee basis						—						98						—						—						—						98
Balance at 6/30/2023						$	20,732					$	5,963					$	3,368					$	4,878					$	6,193					$	41,134

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The charts below present FPAUM for the Real Assets Group by its fee bases ($ in billions):

			FPAUM: $41.6						FPAUM: $41.1

			Invested capital/other(1)						Market value(2)						Capital commitments

(1)Other consists of ACRE’s FPAUM, which is based on ACRE’s stockholders’ equity.

(2)Amounts represent FPAUM from funds that primarily invest in illiquid strategies. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.

Real Assets Group—Fund Performance Metrics as of June 30, 2024

The significant funds presented in the tables below collectively contributed approximately 39% of the Real Assets Group’s management fees for the six months ended June 30, 2024.

The following table presents the performance data for our significant funds that are not drawdown funds in the Real Assets Group as of June 30, 2024 ($ in millions):

																		Returns(%)
						Year of Inception						AUM						Current Quarter												Year-To-Date												Since Inception**(1)**												Primary Investment Strategy
Fund												Gross						Net						Gross						Net						Gross						Net
Ares Real Estate Income Trust, Inc. (“AREIT”)(2)						2012						$	5,329					N/A						(1.4)						N/A						(4.2)						N/A						6.0						U.S. Real Estate Equity
AIREIT(3)						2017						7,374						N/A						1.6						N/A						(2.5)						N/A						8.7						U.S. Real Estate Equity
Open-ended industrial real estate fund(4)						2017						4,694						1.5						1.2						(0.3)						(0.7)						18.2						14.8						U.S. Real Estate Equity

(1)Since inception returns are annualized.

(2)Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Actual individual stockholder returns will vary. Net returns are calculated using the fund’s NAV and assume distributions are reinvested at the NAV on the date of distribution. The inception date used in the calculation of the since inception return is the date in which the first shares of common stock were sold after converting to a NAV-based REIT. Additional information related to AREIT can be found in its filings with the SEC, which are not part of this report.

(3)Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Actual individual stockholder returns will vary. Net returns are calculated using the fund’s NAV and assume distributions are reinvested at the NAV on the date of distribution. Additional information related to AIREIT can be found in its filings with the SEC, which are not part of this report.

(4)Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Gross returns do not reflect the deduction of management fees, incentive fees, as applicable, or other expenses. Net returns are calculated by subtracting the applicable management fees, incentive fees, as applicable and other expenses from the gross returns on a quarterly basis.

The following table presents the performance data of the Real Assets Group’s significant drawdown fund as of June 30, 2024 ($ in millions):

						Year of Inception						AUM						Original Capital Commitments						Capital Invested to Date						Realized Value**(1)**						Unrealized Value**(2)**						Total Value						MoIC												IRR(%)												Primary Investment Strategy
Fund																											Gross**(3)**						Net**(4)**						Gross**(5)**						Net**(6)**
Fund Deploying Capital
IDF V(7)						2020						$	4,804					$	4,585					$	3,758					$	706					$	3,526					$	4,232					1.2x						1.1x						12.8						10.0						Infrastructure Debt

(1)Realized value includes distributions of operating income, sales and financing proceeds received.

(2)Unrealized value represents the fund's NAV reduced by the accrued incentive allocation, if applicable. There can be no assurance that unrealized values will be realized at the valuations indicated.

(3)The gross MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The gross MoIC is before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(4)The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and, if applicable, excludes interests attributable to the non fee-paying limited partners and/or the general partner which does not pay management fees or carried interest. The net MoIC is after giving effect to management fees, carried interest, as applicable, credit facility interest expense, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(5)The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRR reflects returns to the fee-paying limited partners and, if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(6)The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and, if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the net IRR calculations are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(7)IDF V is made up of U.S. Dollar hedged, Euro unhedged, GBP hedged, Yen hedged, and single investor parallel funds. The gross and net IRR and MoIC presented in the table are for the U.S. Dollar hedged parallel fund. The gross and net IRR for the single investor U.S. Dollar parallel fund are 10.1% and 7.7%, respectively. The gross and net MoIC for the single investor U.S. Dollar parallel fund are 1.2x and 1.1x, respectively. The gross and net IRR for the Euro unhedged parallel fund are 12.6% and 9.7%, respectively. The gross and net MoIC for the Euro unhedged parallel fund are 1.2x and 1.1x, respectively. The gross and net IRR for the GBP hedged parallel fund are 12.3% and 9.2%, respectively. The gross and net MoIC for the GBP hedged parallel fund are 1.1x and 1.1x, respectively. The gross and net IRR for the Yen hedged parallel fund are 10.6% and 7.5%, respectively. The gross and net MoIC for the Yen hedged parallel fund are 1.1x and 1.1x, respectively. Original capital commitments are converted to U.S. Dollars at the prevailing exchange rate at the time of fund's closing. All other values for IDF V are for the combined fund and are converted to U.S. Dollars at the prevailing quarter-end exchange rate.

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Private Equity Group—Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Fee Related Earnings

The following table presents the components of the Private Equity Group’s FRE ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Management fees			$	33,572					$	29,822					$	3,750					13%						$	68,505					$	59,662					$	8,843					15%
Other fees			447						421						26						6						886						815						71						9
Compensation and benefits			(14,075)						(13,413)						(662)						(5)						(28,860)						(30,039)						1,179						4
General, administrative and other expenses			(5,490)						(3,601)						(1,889)						(52)						(10,706)						(8,086)						(2,620)						(32)
Fee Related Earnings			$	14,454					$	13,229					1,225						9						$	29,825					$	22,352					7,473						33

Management Fees. The chart below presents Private Equity Group management fees and effective management fee rates ($ in millions):

Management fees increased primarily due to fees from funds that we manage as a result of the Crescent Point Acquisition that generated additional fees of $7.2 million and $14.6 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increases in management fees over the comparative periods were partially offset by decreases of $2.8 million and $5.5 million, respectively, from an energy opportunities fund, driven by the change in fee base from capital commitments to invested capital and reduction in fee rate from 1.50% to 0.75%. Both the change in fee base and the reduction in fee rate were contractually triggered at the expiration of the fund’s investment period.

The increases in effective management fee rate for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by certain funds from the Crescent Point Acquisition that have a higher effective management fee rate than the average effective management fee rate of the funds within our corporate private equity strategy.

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Compensation and Benefits. Although salary and benefits costs have modestly increased over the comparative periods to reflect changes from the increase in headcount from the Crescent Point Acquisition, compensation and benefits remained relatively flat for the three months ended June 30, 2024 compared to the same period in 2023 and decreased for the six months ended June 30, 2024 compared to the same period in 2023. These decreases were primarily driven by lower incentive-based compensation that is dependent on our operating performance and is expected to fluctuate each period.

Average headcount increased by 18% to 104 investment and investment support professionals for the year-to-date period in 2024 from 88 professionals for the same period in 2023, primarily due to the Crescent Point Acquisition.

General, Administrative and Other Expenses. The increases in general, administrative and other expenses for the three and six months ended June 30, 2024 compared to the same periods in 2023 largely reflect Crescent Point’s operating expenses following the Crescent Point Acquisition.

Realized Income

The following table presents the components of the Private Equity Group’s RI ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Fee Related Earnings			$	14,454					$	13,229					$	1,225					9%						$	29,825					$	22,352					$	7,473					33%
Performance income—realized			5,819						45,909						(40,090)						(87)						8,557						63,549						(54,992)						(87)
Performance related compensation—realized			(4,661)						(37,033)						32,372						(87)						(6,855)						(51,253)						44,398						87
Realized net performance income			1,158						8,876						(7,718)						(87)						1,702						12,296						(10,594)						(86)
Investment income—realized			188						2,084						(1,896)						(91)						308						2,963						(2,655)						(90)
Interest and other investment income—realized			277						191						86						45						461						357						104						29
Interest expense			(5,768)						(5,119)						(649)						(13)						(11,657)						(9,924)						(1,733)						(17)
Realized net investment loss			(5,303)						(2,844)						(2,459)						(86)						(10,888)						(6,604)						(4,284)						(65)
Realized Income			$	10,309					$	19,261					(8,952)						(46)						$	20,639					$	28,044					(7,405)						(26)

Realized net performance income for the three and six months ended June 30, 2024 was attributable to realized gains from ACOF IV’s investment in various energy companies. Realized net performance income and realized investment income for the three and six months ended June 30, 2023 also included realized gains from the partial sale of ACOF IV’s investment in the AZEK Company (“AZEK”).

Realized net investment loss for the three and six months ended June 30, 2024 and 2023 largely represents interest expense exceeding investment income during these periods. Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023, and to higher average SOFR rates and a higher average outstanding balance of our Credit Facility.

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Private Equity Group—Performance Income

The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Private Equity Group ($ in thousands):

			As of June 30, 2024																		As of December 31, 2023
			Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income						Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income
ACOF IV			$	170,107					$	136,257					$	33,850					$	181,317					$	145,197					$	36,120
ACOF V			—						—						—						474,878						380,807						94,071
ACOF VI			455,122						384,949						70,173						337,142						289,118						48,024
Other funds			48,902						36,312						12,590						55,178						42,295						12,883
Total Private Equity Group			$	674,131					$	557,518					$	116,613					$	1,048,515					$	857,417					$	191,098

The following table presents the change in accrued carried interest for the Private Equity Group ($ in thousands):

												As of December 31, 2023						Activity during the period																		As of June 30, 2024
						Waterfall Type						Accrued Carried Interest						Change in Unrealized						Realized												Accrued Carried Interest
ACOF IV						American						$	181,317					$	(2,653)					$	(8,557)											$	170,107
ACOF V						American						474,878						(474,878)						—												—
ACOF VI						American						337,142						117,980						—												455,122
Other funds						European						46,078						(3,629)						—												42,449
Other funds						American						9,100						(2,647)						—												6,453
Total Private Equity Group												$	1,048,515					$	(365,827)					$	(8,557)											$	674,131

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Private Equity Group—Assets Under Management

The tables below present rollforwards of AUM for the Private Equity Group ($ in millions):

						Corporate Private Equity						APAC Private Equity						Other						Total Private Equity Group
Balance at 3/31/2024						$	21,230					$	3,246					$	—					$	24,476
Net new par/equity commitments						15						—						—						15
Capital reductions						(2)						—						—						(2)
Distributions						(28)						(1)						—						(29)
Change in fund value						55						65						—						120
Balance at 6/30/2024						$	21,270					$	3,310					$	—					$	24,580
						Corporate Private Equity						APAC Private Equity						Other						Total Private Equity Group
Balance at 3/31/2023						$	20,565					$	91					$	—					$	20,656
Capital reductions						(2)						—						—						(2)
Distributions						(383)						(2)						—						(385)
Change in fund value						774						(2)						—						772
Balance at 6/30/2023						$	20,954					$	87					$	—					$	21,041
						Corporate Private Equity						APAC Private Equity						Other**(1)**						Total Private Equity Group
Balance at 12/31/2023						$	20,998					$	3,414					$	139					$	24,551
Net new par/equity commitments						269						3						58						330
Capital reductions						(4)						—						—						(4)
Distributions						(53)						(11)						—						(64)
Redemptions						—						(2)						—						(2)
Net allocations among investment strategies						150						—						(197)						(47)
Change in fund value						(90)						(94)						—						(184)
Balance at 6/30/2024						$	21,270					$	3,310					$	—					$	24,580
						Corporate Private Equity						APAC Private Equity						Other						Total Private Equity Group
Balance at 12/31/2022						$	20,939					$	90					$	—					$	21,029
Net new par/equity commitments						50						—						—						50
Capital reductions						(5)						—						—						(5)
Distributions						(649)						(2)						—						(651)
Change in fund value						619						(1)						—						618
Balance at 6/30/2023						$	20,954					$	87					$	—					$	21,041
(1) Activity within Other represents equity commitments to the platform that either have not yet been allocated to an investment strategy or have been allocated in a subsequent period as commitments to an investment strategy.

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The components of our AUM for the Private Equity Group are presented below ($ in billions):

						AUM: $24.6						AUM: $21.0

			FPAUM						Non-fee paying(1)						AUM not yet paying fees

(1) Includes $1.3 billion and $1.0 billion of non-fee paying AUM from our general partner and employee commitments as of June 30, 2024 and 2023, respectively.

Private Equity Group—Fee Paying AUM

The tables below present rollforwards of fee paying AUM for the Private Equity Group ($ in millions):

						Corporate Private Equity						APAC Private Equity												Total Private Equity Group
Balance at 3/31/2024						$	10,904					$	1,661											$	12,565
Deployment/subscriptions/increase in leverage						9						16												25
Change in fund value						(9)						—												(9)
Change in fee basis						(312)						(4)												(316)
Balance at 6/30/2024						$	10,592					$	1,673											$	12,265
						Corporate Private Equity						APAC Private Equity												Total Private Equity Group
Balance at 3/31/2023						$	11,277					$	4											$	11,281
Change in fee basis						—						(4)												(4)
Balance at 6/30/2023						$	11,277					$	—											$	11,277
						Corporate Private Equity						APAC Private Equity												Total Private Equity Group
Balance at 12/31/2023						$	11,459					$	1,665											$	13,124
Deployment/subscriptions/increase in leverage						9						16												25
Redemptions						—						(2)												(2)
Change in fund value						(28)						—												(28)
Change in fee basis						(848)						(6)												(854)
Balance at 6/30/2024						$	10,592					$	1,673											$	12,265
						Corporate Private Equity						APAC Private Equity												Total Private Equity Group
Balance at 12/31/2022						$	11,277					$	4											$	11,281
Change in fee basis						—						(4)												(4)
Balance at 6/30/2023						$	11,277					$	—											$	11,277

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The charts below present FPAUM for the Private Equity Group by its fee bases ($ in billions):

			FPAUM: $12.3						FPAUM: $11.3

						Invested capital									Capital commitments

Private Equity Group—Fund Performance Metrics as of June 30, 2024

The significant funds presented in the table below collectively contributed approximately 71% of the Private Equity Group’s management fees for the six months ended June 30, 2024.

The following table presents the performance data of the Private Equity Group’s significant drawdown funds as of June 30, 2024 ($ in millions):

						Year of Inception						AUM						Original Capital Commitments						Capital Invested to Date						Realized Value**(1)**						Unrealized Value**(2)**						Total Value						MoIC												IRR(%)												Primary Investment Strategy
Fund																											Gross**(3)**						Net**(4)**						Gross**(5)**						Net**(6)**
Fund Harvesting Investments
ACOF V						2017						$	8,157					$	7,850					$	7,611					$	3,513					$	7,657					$	11,170					1.5x						1.3x						9.4						7.3						Corporate Private Equity
Funds Deploying Capital
ACOF VI						2020						8,036						5,743						5,129						773						7,221						7,994						1.5x						1.3x						24.5						17.8						Corporate Private Equity

(1)Realized value represents the sum of all cash dividends, interest income, other fees and cash proceeds from realizations of interests in portfolio investments. Realized value excludes any proceeds related to bridge financings.

(2)Unrealized value represents the fair market value of remaining investments. Unrealized value does not take into account any bridge financings. There can be no assurance that unrealized investments will be realized at the valuations indicated.

(3)The gross MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The gross MoIC is before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The gross MoICs are also calculated before giving effect to any bridge financings. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(4)The net MoIC is calculated at the fund-level. The net MoIC is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or performance fees. The net MoIC is after giving effect to management fees, carried interest, as applicable, and other expenses. The net MoICs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net MoIC would be 1.3x for ACOF V and 1.3x for ACOF VI. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(5)The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRRs reflect returns to the fee-paying limited partners and, if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The gross IRRs are also calculated before giving effect to any bridge financings. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(6)The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the net IRR calculation are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees, carried interest as applicable, and other expenses and exclude commitments by the general partner and Schedule I investors who do not pay either management fees or carried interest. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. The net IRRs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net IRRs would be 7.5% for ACOF V and 16.8% for ACOF VI.

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Secondaries Group—Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Fee Related Earnings

The following table presents the components of the Secondaries Group’s FRE ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Management fees			$	48,145					$	41,785					$	6,360					15%						$	92,566					$	81,648					$	10,918					13%
Fee related performance revenues			15,163						298						14,865						NM						18,125						3,569						14,556						NM
Other fees			54						5						49						NM						58						5						53						NM
Compensation and benefits			(20,825)						(16,623)						(4,202)						(25)						(33,539)						(30,035)						(3,504)						(12)
General, administrative and other expenses			(8,896)						(4,151)						(4,745)						(114)						(17,964)						(8,443)						(9,521)						(113)
Fee Related Earnings			$	33,641					$	21,314					12,327						58						$	59,246					$	46,744					12,502						27

Management Fees. The chart below presents Secondaries Group management fees and effective management fee rates ($ in millions):

Management fees increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily due to higher management fees from APMF of $4.0 million and $6.9 million, respectively, due to additional capital raised and an increase in fee rate. Beginning April 1, 2023, a fee waiver expired, resulting in a step up in the fee rate from 0.25% to 1.40% per annum.

Excluding catch-up fees, management fees for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 also increased by: (i) $1.1 million and $2.0 million, respectively, from our third infrastructure secondaries fund, which launched during the fourth quarter of 2023; and (ii) $1.4 million and $2.9 million, respectively, from Landmark Real Estate Fund IX, L.P. (“LREF IX”). The increases in management fees for these funds were driven by additional capital commitments.

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Management fees also included catch-up fees from our third infrastructure secondaries fund of $0.9 million and $0.8 million for the three and six months ended June 30, 2024, respectively, and from LREF IX of $1.5 million and $2.1 million for the three and six months ended June 30, 2023, respectively.

The increases in effective management fee rate for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily due to additional capital raised by APMF, as well as the higher fee rate for APMF following the expiration of the fee waiver.

Fee Related Performance Revenues. The increases for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily attributable to higher fees from APMF as a result of gains that were recognized in connection with acquiring a sizable portfolio of limited partnership interests in the second quarter of 2024.

Compensation and Benefits. The increases in compensation and benefits for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by higher fee related performance compensation of $6.0 million and $4.0 million, respectively, corresponding to the increases in fee related performance revenues. Pursuant to a contractual expense limitation agreement with APMF to reduce its expense ratio, we have agreed to temporarily reimburse the fund for certain expenses in excess of 0.30% per annum of the average monthly net assets of each class of APMF shares. Such reimbursements, as well as a portion of the supplemental distribution fees paid by us to distribution partners, will result in a corresponding decrease in discretionary fee related performance compensation until reimbursed expenses have been recovered from fee related performance revenues earned from APMF.

The increase for the six months ended June 30, 2024 over the comparative period was also driven by an increase in payroll related taxes of $1.1 million, primarily due to the higher stock price associated with our restricted units that vested during the first quarter of 2024. The increases in compensation and benefits over the comparative periods were partially offset by lower incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year.

Average headcount increased by 11% to 112 investment and investment support professionals for the year-to-date period in 2024 from 101 professionals for the same period in 2023.

General, Administrative and Other Expenses. In an effort to accelerate the growth of APMF’s assets, we entered into agreements beginning in the second quarter of 2023 that pay distribution partners a supplemental distribution fee based on assets and/or sales. These agreements contributed to increases in expenses of $4.5 million and $7.9 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Such supplemental distribution fees are expected to fluctuate with sales and the growth in assets, and will reduce fee related performance compensation to the extent that fee related performance revenues are earned from APMF.

Realized Income

The following table presents the components of the Secondaries Group’s RI ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Fee Related Earnings			$	33,641					$	21,314					$	12,327					58%						$	59,246					$	46,744					$	12,502					27%
Performance income—realized			361						5,460						(5,099)						(93)						361						5,460						(5,099)						(93)
Performance related compensation—realized			110						(4,678)						4,788						NM						110						(4,678)						4,788						NM
Realized net performance income			471						782						(311)						(40)						471						782						(311)						(40)
Interest and other investment income—realized			148						182						(34)						(19)						358						1,407						(1,049)						(75)
Interest expense			(2,578)						(2,451)						(127)						(5)						(5,276)						(4,756)						(520)						(11)
Realized net investment loss			(2,430)						(2,269)						(161)						7						(4,918)						(3,349)						(1,569)						(47)
Realized Income			$	31,682					$	19,827					11,855						60						$	54,799					$	44,177					10,622						24

Realized net performance income for the three and six months ended June 30, 2023 was primarily attributable to tax distributions from LREF VIII.

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Realized net investment loss for the three and six months ended June 30, 2024 and 2023 largely represents interest expense exceeding investment income during these periods. Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023, and to higher average SOFR rates and a higher average outstanding balance of our Credit Facility. The activity for the six months ended June 30, 2023 also included dividend income received from APMF.

Secondaries Group—Performance Income

The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Secondaries Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in thousands):

			As of June 30, 2024																		As of December 31, 2023
			Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income						Accrued Performance Income						Accrued Performance Compensation						Accrued Net Performance Income
LEP XVI			$	117,400					$	100,429					$	16,971					$	128,650					$	110,053					$	18,597
LREF VIII			81,850						70,847						11,003						97,366						84,256						13,110
Other secondaries funds			67,786						56,018						11,768						57,339						48,897						8,442
Total Secondaries Group			$	267,036					$	227,294					$	39,742					$	283,355					$	243,206					$	40,149

The following table presents the change in accrued performance income for the Secondaries Group ($ in thousands):

												As of December 31, 2023						Activity during the period																		As of June 30, 2024
						Waterfall Type						Accrued Carried Interest						Change in Unrealized						Realized												Accrued Carried Interest
Accrued Carried Interest
LEP XVI						European						$	128,650					$	(11,250)					$	—											$	117,400
LREF VIII						European						97,366						(15,516)						—												81,850
Other secondaries funds						European						57,339						10,447						—												67,786
Total accrued carried interest												283,355						(16,319)						—												267,036
Other secondaries funds						Incentive						—						361						(361)												—
Total Secondaries Group												$	283,355					$	(15,958)					$	(361)											$	267,036

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Secondaries Group—Assets Under Management

The table below presents the rollforwards of AUM for the Secondaries Group ($ in millions):

			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries						Other						Total Secondaries Group
Balance at 3/31/2024			$	13,580					$	7,975					$	2,624					$	1,462					$	—					$	25,641
Net new par/equity commitments			415						38						209						204						—						866
Distributions			(223)						(2)						(55)						(5)						—						(285)
Change in fund value			66						(108)						121						2						—						81
Balance at 6/30/2024			$	13,838					$	7,903					$	2,899					$	1,663					$	—					$	26,303
			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries						Other**(1)**						Total Secondaries Group
Balance at 3/31/2023			$	12,670					$	7,667					$	1,569					$	938					$	50					$	22,894
Net new par/equity commitments			21						121						—						—						—						142
Distributions			(60)						(67)						(2)						—						—						(129)
Change in fund value			(48)						36						107						—						—						95
Balance at 6/30/2023			$	12,583					$	7,757					$	1,674					$	938					$	50					$	23,002
			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries						Other						Total Secondaries Group
Balance at 12/31/2023			$	13,174					$	7,826					$	2,380					$	1,380					$	—					$	24,760
Net new par/equity commitments			951						188						424						272						—						1,835
Distributions			(363)						(25)						(55)						(6)						—						(449)
Change in fund value			76						(86)						150						17						—						157
Balance at 6/30/2024			$	13,838					$	7,903					$	2,899					$	1,663					$	—					$	26,303
			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries						Other**(1)**						Total Secondaries Group
Balance at 12/31/2022			$	12,769					$	7,552					$	1,640					$	—					$	—					$	21,961
Net new par/equity commitments			42						359						—						938						50						1,389
Distributions			(319)						(163)						(72)						—						—						(554)
Change in fund value			91						9						106						—						—						206
Balance at 6/30/2023			$	12,583					$	7,757					$	1,674					$	938					$	50					$	23,002
(1) Activity within Other represents equity commitments to the platform that either have not yet been allocated to an investment strategy or have been allocated in a subsequent period as commitments to an investment strategy.

The components of our AUM for the Secondaries Group are presented below ($ in billions):

			AUM: $26.3						AUM: $23.0

			FPAUM						AUM not yet paying fees						Non-fee paying(1)

(1) Includes $0.5 billion of non-fee paying AUM from our general partner and employee commitments as of June 30, 2024 and 2023.

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Secondaries Group—Fee Paying AUM

The table below presents the rollforwards of fee paying AUM for the Secondaries Group ($ in millions):

			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries												Total Secondaries Group
Balance at 3/31/2024			$	11,641					$	6,203					$	1,972					$	75											$	19,891
Commitments			399						—						207						—												606
Deployment/subscriptions/increase in leverage			8						32						1						(1)												40
Distributions			(57)						(2)						(55)						(18)												(132)
Change in fund value			78						(94)						12						7												3
Change in fee basis			(51)						104						—						—												53
Balance at 6/30/2024			$	12,018					$	6,243					$	2,137					$	63											$	20,461
			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries												Total Secondaries Group
Balance at 3/31/2023			$	10,998					$	5,473					$	1,276					$	—											$	17,747
Commitments			21						115						—						—												136
Deployment/subscriptions/increase in leverage			—						186						7						—												193
Distributions			(16)						(57)						—						—												(73)
Change in fund value			(150)						(41)						(29)						—												(220)
Change in fee basis			(7)						19						—						—												12
Balance at 6/30/2023			$	10,846					$	5,695					$	1,254					$	—											$	17,795
			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries												Total Secondaries Group
Balance at 12/31/2023			$	11,204					$	5,978					$	1,763					$	95											$	19,040
Commitments			935						150						421						—												1,506
Deployment/subscriptions/increase in leverage			9						92						2						(1)												102
Distributions			(122)						(18)						(55)						(36)												(231)
Change in fund value			42						(55)						6						7												—
Change in fee basis			(50)						96						—						(2)												44
Balance at 6/30/2024			$	12,018					$	6,243					$	2,137					$	63											$	20,461
			Private Equity Secondaries						Real Estate Secondaries						Infrastructure Secondaries						Credit Secondaries												Total Secondaries Group
Balance at 12/31/2022			$	11,062					$	5,313					$	1,293					$	—											$	17,668
Commitments			42						201						—						—												243
Deployment/subscriptions/increase in leverage			67						217						15						—												299
Distributions			(55)						(153)						(58)						—												(266)
Change in fund value			(227)						111						4						—												(112)
Change in fee basis			(43)						6						—						—												(37)
Balance at 6/30/2023			$	10,846					$	5,695					$	1,254					$	—											$	17,795

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The chart below presents FPAUM for the Secondaries Group by its fee bases ($ in billions):

FPAUM: $20.4						FPAUM: $17.8

			Market value(1)						Capital commitments						Invested capital/other

(1)Amounts represent FPAUM from funds that primarily invest in illiquid strategies. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.

Secondaries Group—Fund Performance Metrics as of June 30, 2024

LEP XVI contributed approximately 25% of the Secondaries Group’s management fees for the six months ended June 30, 2024.

The following table presents the performance data of the Secondaries Group’s significant drawdown fund as of June 30, 2024 ($ in millions):

						Year of Inception						AUM						Original Capital Commitments						Capital Invested to Date						Realized Value**(1)**						Unrealized Value**(2)**						Total Value						MoIC												IRR(%)												Primary Investment Strategy
Fund																											Gross**(3)**						Net**(4)**						Gross**(5)**						Net**(6)**
Fund Harvesting Investments
LEP XVI(7)						2016						$	4,540					$	4,896					$	3,806					$	2,022					$	3,048					$	5,070					1.5x						1.3x						22.4						14.7						Private Equity Secondaries

For the funds in the Secondaries Group, returns are calculated from results of the underlying portfolio that are generally reported on a three month lag and may not include the impact of economic and market activities occurring in the current reporting period.

(1)Realized value represents the sum of all cash distributions to all limited partners and if applicable, exclude tax and incentive distributions made to the general partner.

(2)Unrealized value represents the limited partners’ share of fund’s NAV reduced by the accrued incentive allocation, if applicable. There can be no assurance that unrealized values will be realized at the valuations indicated.

(3)The gross MoIC is calculated at the fund-level and is based on the interests of all partners. If applicable, limiting the gross MoIC to exclude interests attributable to the non-fee paying limited partners and/or the general partner who does not pay management fees or carried interest would have no material impact on the result. The gross MoIC is before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documentation. The gross fund-level MoIC would have generally been lower had such fund called capital from its partners instead of utilizing the credit facility.

(4)The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes those interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The net MoIC is after giving effect to management fees and other expenses, carried interest and credit facility interest expense, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documentation. The net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(5)The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRR reflects returns to all partners. If applicable, limiting the gross IRR to exclude interests attributable to the non-fee paying limited partners and/or the general partner who does not pay management fees or carried interest would have no material impact on the result. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documents. The gross fund-level IRR would generally have been lower had such fund called capital from its partners instead of utilizing the credit facility.

(6)The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and, if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner who does not pay management fees or carried interest. The cash flow dates used in the net IRR calculations are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees and other expenses, carried interest and credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documents. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(7)The results of each fund is presented on a combined basis with the affiliated parallel funds or accounts, given that the investments are substantially the same.

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Operations Management Group—Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023

Fee Related Earnings

The following table presents the components of the Operations Management Group’s FRE ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Other fees			$	5,480					$	7,848					$	(2,368)					(30)%						$	9,813					$	12,488					$	(2,675)					(21)%
Compensation and benefits			(98,370)						(86,011)						(12,359)						(14)						(192,527)						(170,978)						(21,549)						(13)
General, administrative and other expenses			(53,910)						(49,467)						(4,443)						(9)						(104,390)						(95,639)						(8,751)						(9)
Fee Related Earnings			$	(146,800)					$	(127,630)					(19,170)						(15)						$	(287,104)					$	(254,129)					(32,975)						(13)

Other Fees. The decreases in other fees for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by lower asset-based, net distribution fees associated with our non-traded REITs. The three and six months ended June 30, 2023 also included broker-dealer advisory fees of $2.0 million which were earned by Ares Management Capital Markets LLC, a registered broker-dealer, for a capital markets transaction executed during the second quarter of 2023.

Compensation and Benefits. The increases in compensation and benefits for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 were primarily driven by: (i) the expansion of our strategy and relationship management teams to support global fundraising; (ii) the expansion of our business operations teams to support the growth of our business and other strategic initiatives; (iii) increased compensation and benefits associated with our retail distribution channel, AWMS, which included higher employee commissions due to increased sales volumes from ASIF and APMF; and (iv) increases in payroll related taxes primarily due to the higher stock price associated with our restricted units that vested during the first quarter of 2024. The increases in compensation and benefits over the comparative periods were partially offset by lower incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year.

Average headcount increased by 10% to 1,596 professionals for the year-to-date period in 2024 from 1,452 professionals for the same period in 2023.

General, Administrative and Other Expenses. Certain expenses increased during the current period, including occupancy costs, information services and information technology costs. These expenses collectively increased by $5.6 million and $10.7 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023 to support our growing headcount and the expansion of our business, including costs for our new corporate headquarters that we will occupy beginning in the third quarter of 2024. In addition, marketing costs have increased over the comparative periods by $1.9 million and $2.3 million, respectively, driven by company sponsorships and investor events held during the second quarter of 2024, including our firmwide AGM event. The increases were partially offset by: (i) lower tax related service fees of $3.2 million and $4.9 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, as we have recognized efficiencies from the transition of our income tax compliance function; and (ii) costs related to Ares’ 25th anniversary celebrations that were incurred in the prior year periods.

Realized Income

The following table presents the components of the OMG’s RI ($ in thousands):

			Three months ended June 30,												Favorable (Unfavorable)												Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change						2024						2023						$ Change						% Change
Fee Related Earnings			$	(146,800)					$	(127,630)					$	(19,170)					(15)%						$	(287,104)					$	(254,129)					$	(32,975)					(13)%
Interest and other investment income—realized			640						328						312						95						1,092						236						856						NM
Interest expense			(105)						(11)						(94)						NM						(145)						(37)						(108)						(292)
Realized net investment income			535						317						218						(69)						947						199						748						NM
Realized Income			$	(146,265)					$	(127,313)					(18,952)						(15)						$	(286,157)					$	(253,930)					(32,227)						(13)

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Liquidity and Capital Resources

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. Management believes that the Company is well-positioned and its liquidity will continue to be sufficient for its foreseeable working capital needs, contractual obligations, dividend payments, pending acquisitions and strategic initiatives.

Sources and Uses of Liquidity

Our sources of liquidity are: (i) cash on hand; (ii) net working capital; (iii) cash from operations, including management fees and fee related performance revenues, which are collected monthly, quarterly or semi-annually, and net realized performance income, which may be unpredictable as to amount and timing; (iv) fund distributions related to our investments that are unpredictable as to amount and timing; and (v) net borrowings from the Credit Facility. As of June 30, 2024, our cash and cash equivalents were $284.4 million and we have $905.0 million available under our Credit Facility. Our ability to draw from the Credit Facility is subject to leverage and other covenants. We remain in compliance with all covenants as of June 30, 2024. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for the foreseeable future. Cash flows from management fees may be impacted by a slowdown in deployment, declines in valuations or negatively impacted fundraising. In addition, management fees may be subject to deferral and fee related performance revenues may be subject to hold backs. Declines or delays in transaction activity may impact our fund distributions and net realized performance income, which could adversely impact our cash flows and liquidity. Market conditions may make it difficult to extend the maturity or refinance our existing indebtedness or obtain new indebtedness with similar terms.

We expect that our primary liquidity needs will continue to be to: (i) provide capital to facilitate the growth of our existing investment management businesses; (ii) fund our investment commitments; (iii) provide capital to facilitate our expansion into businesses that are complementary to our existing investment management businesses as well as other strategic growth initiatives; (iv) pay operating expenses, including cash compensation to our employees and tax payments for net settlement of equity awards; (v) fund capital expenditures; (vi) service our debt; (vii) pay income taxes and make payments under the tax receivable agreement (“TRA”); (viii) make dividend payments to our Class A and non-voting common stockholders in accordance with our dividend policy; and (ix) pay distributions to AOG unitholders.

In the normal course of business, we expect to pay dividends to our Class A and non-voting common stockholders that are aligned with our expected FRE after an allocation of current taxes paid. For the purposes of determining this amount, we allocate the current taxes paid to FRE and to realized performance and investment income in a manner that may be disproportionate to earnings generated by these metrics, and the actual taxes paid on these metrics should they be considered separately. Additionally, our methodology uses the tax benefits from certain expenses that are not included in these non-GAAP metrics, such as equity-based compensation from the vesting of restricted units and from the amortization of intangible assets, among others. We allocate the taxes by multiplying the statutory tax rate currently in effect by our net realized performance and net investment income and removing this amount from total current taxes. The remaining current tax paid is the amount that we allocate to FRE. We use this method to allocate the current provision for income taxes to approximate the amount of cash that is available to pay dividends to our stockholders. If cash flows from operations were insufficient to fund dividends over a sustained period of time, we expect that we would suspend or reduce paying such dividends. In addition, there is no assurance that dividends would continue at the current levels or at all.

Our ability to obtain debt financing and complete stock offerings provides us with additional sources of liquidity. For further discussion of financing transactions occurring in the current period, see “Cash Flows” within this section and “Note 6. Debt” and “Note 12. Equity and Redeemable Interest” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Our unaudited condensed consolidated financial statements reflect the cash flows of our operating businesses as well as those of our Consolidated Funds. The assets of our Consolidated Funds, on a gross basis, are significantly larger than the assets of our operating businesses and therefore have a substantial effect on the amounts reported within our condensed consolidated statements of cash flows. The primary cash flow activities of our Consolidated Funds include: (i) raising capital from third-party investors, which is reflected as non-controlling interests of our Consolidated Funds; (ii) financing certain investments by issuing debt; (iii) purchasing and selling investment securities; (iv) generating cash through the realization of certain investments; (v) collecting interest and dividend income; and (vi) distributing cash to investors. Our Consolidated Funds are generally accounted for as investment companies under GAAP; therefore, the character and classification of all Consolidated Fund transactions are presented as cash flows from operations. Liquidity available at our Consolidated Funds is not available for corporate liquidity needs, and debt of the Consolidated Funds is non–recourse to the Company except to the extent of the Company’s investment in the fund.

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Cash Flows

The following tables summarize our condensed consolidated statements of cash flows by activities attributable to the Company and Consolidated Funds. For more details on the activity of the Company and Consolidated Funds, refer to “Note 14. Consolidation” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

			Six months ended June 30,
			2024						2023
Net cash provided by operating activities			$	879,653					$	467,676
Net cash provided by (used in) the Consolidated Funds’ operating activities, net of eliminations			262,564						(459,156)
Net cash provided by operating activities			1,142,217						8,520
Net cash used in the Company’s investing activities			(63,309)						(21,127)
Net cash used in the Company’s financing activities			(878,127)						(564,377)
Net cash provided by (used in) the Consolidated Funds’ financing activities, net of eliminations			(247,404)						466,876
Net cash used in financing activities			(1,125,531)						(97,501)
Effect of exchange rate changes			(17,206)						(3,052)
Net change in cash and cash equivalents			$	(63,829)					$	(113,160)

The Consolidated Funds had no effect on cash flows attributable to the Company for the periods presented and are excluded from the discussion below. The following discussion focuses on cash flow by activities attributable to the Company.

Operating Activities

In the table below, cash flows from operations are summarized to present: (i) cash generated from our core operating activities, primarily consisting of profits generated principally from management fees and fee related performance revenues after covering for operating expenses and fee related performance compensation; (ii) net realized performance income; and (iii) net cash from investment related activities including purchases, sales, realized net investment income and interest payments. We generated meaningful cash flow from operations in each period presented.

			Six months ended June 30,												Favorable (Unfavorable)
			2024						2023						$ Change						% Change
Core operating activities			$	689,786					$	782,660					$	(92,874)					(12)%
Net realized performance income			50,921						(42,409)						93,330						(220)
Net cash provided by (used in) investment related activities			138,946						(272,575)						411,521						(151)
Net cash provided by operating activities			$	879,653					$	467,676					411,977						88

While cash from our core operating activities increased as a result of growing fee revenues and sustained profitability, cash flows generated from our core operating activities may vary depending on timing of cash collection of our receivables. Cash generated from our core operating activities decreased from the prior year due to the increase in receivables. The decrease in cash generated from our core operating activities was mostly attributable to fee related performance revenues earned from our non-traded REITs in 2022 and collected during the six months ended June 30, 2023. There were no fee related performance revenues earned from our non-traded REITs in 2023.

Net realized performance income represents a source of cash and includes: (i) carried interest distributions that may represent tax distributions or other distributions of income; and (ii) incentive fees that are realized annually at the end of the measurement period, which is typically at the end of the calendar year. Cash received from carried interest distributions and the subsequent payments to employees may not necessarily occur in the same quarter. Cash from the incentive fee activities is generally received in the period subsequent to the measurement period. The increase in net realized performance income over the comparative periods was primarily due to timing of payments to employees for tax distributions that were both received and paid in the fourth quarter 2023, while tax distributions received in the fourth quarter of 2022 were paid in the first quarter of 2023.

Net cash provided by (used in) investment related activities for the six months ended June 30, 2024 and 2023 primarily represents: (i) distributions received from our capital investments and the repayment of loans that we have made; (ii) sales of our capital investments to employees; (iii) the rebalancing of and associated return of our capital commitments upon admitting new limited partners; offset by (iv) purchases associated with funding capital commitments and strategic investments in our investment portfolio; and (v) interest payments on our debt obligations. Our investment related activities may fluctuate depending on timing of capital investments and distributions of each fund from year to year. For further discussion of our

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capital commitments, see “Note 7. Commitments and Contingencies,” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Our working capital needs are generally rising to support the growth of our business, while the capital requirements needed to support fund-related activities vary based upon the specific investment activities being conducted during such period.

Investing Activities

			Six months ended June 30,
			2024						2023
Purchase of furniture, equipment and leasehold improvements, net of disposals			$	(55,309)					$	(21,127)
Acquisitions			(8,000)						—
Net cash used in investing activities			$	(63,309)					$	(21,127)

Net cash used in the Company’s investing activities for both periods included cash to purchase furniture, fixtures, equipment and leasehold improvements to support the growth in our staffing levels and to expand our global presence. Net cash used in the Company’s investing activities for the six months ended June 30, 2024 was predominantly for the build out of our new corporate headquarters that will be in use in the third quarter of 2024.

Financing Activities

			Six months ended June 30,
			2024						2023
Net proceeds from issuance of Class A common stock			$	354,395					$	—
Net borrowings (repayments) of Credit Facility			(400,000)						25,000
Class A and non-voting common stock dividends			(385,738)						(294,604)
AOG unitholder distributions			(246,522)						(215,897)
Stock option exercises			1,511						53,140
Taxes paid related to net share settlement of equity awards			(203,076)						(133,570)
Other financing activities			1,303						1,554
Net cash used in the Company’s financing activities			$	(878,127)					$	(564,377)

As a result of generating higher fee related earnings, we increased the level of dividends paid to a growing shareholder base of Class A and non-voting common stockholders and distributions paid to AOG unitholders, resulting in net cash used in the Company’s financing activities for the six months ended June 30, 2024 and 2023.

Net cash used in the Company’s financing activities for the six months ended June 30, 2024 was also used for the repayment of our Credit Facility, partially using cash provided by the net proceeds from the Offering.

In connection with the vesting of restricted units that are granted to our employees under the 2023 Equity Incentive Plan (the “Equity Incentive Plan”), we withhold shares equal to the fair value of our employees’ tax withholding liabilities and pay the taxes on their behalf in cash and thus net issue fewer shares. The use of cash increased from the prior year period as a result of our higher stock price, which resulted in employees recognizing additional compensation. For the six months ended June 30, 2024 and 2023, we net settled and did not issue 1.7 million shares and 1.5 million shares, respectively. The Company’s financing activities also included cash received from stock options exercises with 0.1 million and 3.2 million options exercised for the six months ended June 30, 2024 and 2023, respectively. All the remaining options were exercised during the first quarter of 2024 and we will no longer receive cash or realize any tax benefit from the exercise of stock options.

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Capital Resources

We intend to use a portion of our available liquidity to pay cash dividends to our Class A and non-voting common stockholders on a quarterly basis in accordance with our dividend policy. Our ability to make cash dividends is dependent on a myriad of factors, including: (i) general economic and business conditions; (ii) our strategic plans and prospects; (iii) our business and investment opportunities; (iv) timing of capital calls by our funds in support of our commitments; (v) our financial condition and operating results; (vi) working capital requirements and other anticipated cash needs; (vii) contractual restrictions and obligations; (viii) legal, tax and regulatory restrictions; (ix) restrictions on the payment of distributions by our subsidiaries to us; and (x) other relevant factors.

We are required to maintain minimum net capital balances for regulatory purposes for our broker-dealer entities. These net capital requirements are met in part by retaining cash, cash equivalents and investment securities. Additionally, certain of our subsidiaries operating outside the U.S. are also subject to capital adequacy requirements in each of the applicable jurisdictions. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of June 30, 2024, we were required to maintain approximately $71.3 million in net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We remain in compliance with these regulatory requirements.

Holders of AOG Units, subject to the terms of the exchange agreement, may exchange their AOG Units for shares of our Class A common stock on a one-for-one basis. These exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of AMC that otherwise would not have been available. These increases in tax basis may increase depreciation and amortization for U.S. income tax purposes and thereby reduce the amount of tax that we would otherwise be required to pay in the future. We entered into the TRA that provides payment to the TRA recipients of 85% of the amount of actual cash savings (“Cash Tax Savings”), if any, in U.S. federal, state, local and foreign income tax or franchise tax that we actually realize as a result of these increases in tax basis and of certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA and interest accrued thereon (“Tax Benefit Payment”). Effective as of May 1, 2023, pursuant to an amendment to the TRA, to the extent Ares Owners Holdings L.P. would have been a recipient of certain Tax Benefit Payments under the TRA for taxable exchanges on or after May 1, 2023, Ares Owners Holdings L.P. will no longer be entitled to any Tax Benefit Payment for such exchanges and 100% of any Cash Tax Savings will inure to us. Future payments under the TRA in respect of subsequent exchanges are expected to be substantial. The TRA liability balance was $288.8 million and $191.3 million as of June 30, 2024 and December 31, 2023, respectively.

For a discussion of our debt obligations, including the debt obligations of our consolidated funds, see “Note 6. Debt,” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

We prepare our unaudited condensed consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our unaudited condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. For a summary of our significant accounting policies, see “Note 2. Summary of Significant Accounting Policies,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023. For a summary of our critical accounting estimates, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements and their impact on the Company can be found in “Note 2. Summary of Significant Accounting Policies,” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Commitments and Contingencies

In the normal course of business, we enter into contractual obligations that may require future cash payments. We may also engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, capital commitments to funds,

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indemnifications and potential contingent payment obligations. For further discussion of these arrangements, see “Note 7. Commitments and Contingencies” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.