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

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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 2024 Annual Report on Form 10-K of Ares Management Corporation. We have reclassified certain prior period amounts to conform to the current year presentation.

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.

The changes from current year compared to prior year may be deemed to be not meaningful and are 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 March 31, 2025, 92% 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 March 31, 2025
High yield bonds	ICE BAML High Yield Master II Index	U.S.		1.0
High yield bonds	ICE BAML European Currency High Yield Index	Europe		0.7

Leveraged loans	S&P UBS Leveraged Loan Index	U.S.		0.6
Leveraged loans	S&P UBS Western European Leveraged Loan Index	Europe		1.0
Equities	S&P 500 Index	U.S.		(4.3)
Equities	MSCI All Country World Ex-U.S. Index	Non-U.S.		5.2
Infrastructure equities	S&P Global Infrastructure Index	Global		4.6
Real estate equities	FTSE NAREIT All Equity REITs Index	U.S.		1.8
Real estate equities	FTSE EPRA/NAREIT Developed Europe Index	Europe		(1.9)
Real estate equities	Tokyo Stock Exchange REIT Index	APAC		2.3

During the first quarter of 2025, global equity and debt markets experienced volatility driven by elevated inflation, economic slowdown and potential implications of U.S. trade tariffs. The U.S. public equity markets declined amid investor concerns regarding the impact of the proposed tariffs while international markets outperformed. European markets showed positive performance due to potential increased defense spending. The APAC markets performed favorably, with macroeconomic conditions supporting consumption in Southeast Asia, India and Australia. The U.S. announced tariffs on all imports from China and plans for reciprocal tariffs on countries imposing duties on U.S. imports. Despite these challenges, APAC transaction volumes remained steady as optimism for heightened deal activity focusing on companies in Southeast Asia with market-leading positions.

The private equity industry navigated a dynamic landscape shaped by evolving macroeconomic conditions and policy shifts, particularly the impact that the macroeconomic and global trade environment may have on exit activity. This

environment has contributed to heightened focus on companies with strong organic growth and attractive strategic transaction opportunities. We believe that shifting towards value creation strategies emphasizing operational improvements, talent optimization and digital transformation is essential to ensure long-term competitiveness.

The commercial real estate markets experienced a slowdown in the current quarter due to heightened interest rates and the uncertainty around the recent trade policy shifts. Despite these headwinds, property values and capitalization rates remained steady. The European real estate markets are continuing to show slower signs of recovery, with the volatility in interest rates having a greater impact on performance during the quarter. While performance varies by sector and geography, we believe multifamily and industrial properties will continue to benefit from favorable long-term structural trends. In addition, renewable energy transaction volume remained strong, which has supported elevated renewable energy revenue contract prices. The convergence of digital infrastructure and artificial intelligence adoption, paired with surging power demand expectations continue to support infrastructure investment opportunities.

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 52% of our total assets were floating rate instruments as of March 31, 2025.

Managing Business Performance

Operating Metrics

We measure our business performance using certain operating metrics that are common to the alternative investment management industry and 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 12/31/2024	$	348,858	$	75,298	$	24,041	$	29,153	$	7,096	$	484,446
Acquisitions	—		45,281		—		—		—		45,281
Net new par/equity commitments	5,944		2,461		975		2,289		1,096		12,765
Net new debt commitments	4,820		2,614		—		—		—		7,434
Capital reductions	(3,414)		(768)		(36)		(58)		—		(4,276)
Distributions	(3,270)		(1,458)		(149)		(239)		(138)		(5,254)
Redemptions	(381)		(159)		—		(23)		—		(563)
Net allocations among investment strategies	1,309		—		—		—		(1,309)		—
Change in fund value	5,210		918		(104)		190		(174)		6,040
Balance at 3/31/2025	$	359,076	$	124,187	$	24,727	$	31,312	$	6,571	$	545,873

	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	7,735		408		315		969		1,515		10,942
Net new debt commitments	6,112		—		—		—		—		6,112
Capital reductions	(1,485)		(128)		(2)		—		—		(1,615)
Distributions	(3,563)		(846)		(36)		(164)		(135)		(4,744)
Redemptions	(2,517)		(434)		(2)		—		—		(2,953)
Net allocations among investment strategies	715		—		(47)		—		(668)		—
Change in fund value	2,292		(309)		(303)		76		(76)		1,680
Balance at 3/31/2024	$	308,639	$	64,104	$	24,476	$	25,641	$	5,479	$	428,339

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

579 580


			AUM: $545.9						AUM: $428.3


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

(1) Includes $14.1 billion and $14.7 billion of AUM of funds from which we indirectly earn management fees as of March 31, 2025 and 2024, respectively, and includes $5.2 billion and $4.1 billion of non-fee paying AUM from our general partner and employee commitments as of March 31, 2025 and 2024, respectively.

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

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 12/31/2024	$	209,145	$	44,088	$	11,427	$	22,401	$	5,492	$	292,553
Acquisitions	—		30,467		—		—		—		30,467
Commitments	6,478		1,068		—		1,053		1,036		9,635
Deployment/subscriptions/increase in leverage	7,731		1,509		17		257		253		9,767
Capital reductions	(3,610)		(42)		—		—		—		(3,652)
Distributions	(3,294)		(1,403)		—		(59)		(138)		(4,894)
Redemptions	(448)		(159)		—		(23)		—		(630)
Net allocations among investment strategies	1,172		—		—		—		(1,172)		—
Change in fund value	1,420		280		(1)		(159)		119		1,659
Change in fee basis	(363)		617		(91)		—		—		163
Balance at 3/31/2025	$	218,231	$	76,425	$	11,352	$	23,470	$	5,590	$	335,068

	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	3,778		296		—		900		1,321		6,295
Deployment/subscriptions/increase in leverage	7,221		862		—		61		—		8,144
Capital reductions	(2,764)		(12)		—		—		—		(2,776)
Distributions	(3,662)		(306)		—		(99)		(135)		(4,202)
Redemptions	(2,149)		(434)		(2)		—		—		(2,585)
Net allocations among investment strategies	886		—		—		—		(886)		—
Change in fund value	543		(404)		(19)		(2)		68		186
Change in fee basis	693		(504)		(538)		(9)		—		(358)
Balance at 3/31/2024	$	189,826	$	40,836	$	12,565	$	19,891	$	3,998	$	267,116

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

1235 1237


			FPAUM: $335.1						FPAUM: $267.1


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

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

(2)Includes $76.7 billion and $60.3 billion from funds that primarily invest in illiquid strategies as of March 31, 2025 and 2024, 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):

pERPETUAL CAPITAL.jpg

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 the three months ended March 31, 2025 and 2024, 92% and 95%, respectively, 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:

2195 2197


			Perpetual Capital - Publicly-Traded Vehicles						Perpetual Capital - Perpetual Wealth Vehicles						Perpetual Capital - Private Commingled Vehicles						Perpetual Capital - Managed Accounts						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):

AC and AUMNYPF.jpg


			Credit						Real Assets						Private Equity						Secondaries						Other Businesses

As of March 31, 2025, AUM Not Yet Paying Fees includes $81.5 billion of AUM available for future deployment that could generate approximately $764.4 million in potential incremental annual management fees, which represents 29% embedded gross base management fee growth upon deployment. As of March 31, 2024, AUM Not Yet Paying Fees included $64.6 billion of AUM available for future deployment that could generate approximately $621.5 million in potential incremental annual management fees. Development assets not yet stabilized represents fund assets that are in the development

stage. Upon completion of development, management fees generally increase with a change in fee base, in fee rate or both. As of March 31, 2025, development assets not yet stabilized could generate approximately $22.7 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):

IEAUM & IGAUM.jpg


			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 March 31, 2025, perpetual capital IGAUM that could potentially result in crystallized fee related performance revenues totaled $25.7 billion, composed of $19.5 billion within the Credit Group, $3.5 billion within the Real Assets Group and $2.7 billion within the Secondaries Group. As of March 31, 2024, perpetual capital IGAUM that could potentially result in crystallized fee related performance revenues totaled $19.2 billion, composed of $18.2 billion within the Credit Group and $1.0 billion within the Secondaries Group. As of March 31, 2025 and 2024, IGAUM included $37.9 billion and $37.6 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 our total FPAUM for each of the last 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 past its investment period and opportunistically seeking to monetize investments, while a fund deploying capital is generally seeking new investment opportunities.

Components of Consolidated Results of Operations

GCP Acquisition Overview

On March 1, 2025, we completed the acquisition of the international business of GLP Capital Partners Limited and certain of its affiliates, excluding its operations in Greater China (“GCP International”), and existing capital commitments to certain managed funds (such acquisition of GCP International and the capital commitments, the “GCP Acquisition”). The GCP Acquisition adds complementary real estate and digital infrastructure investment capabilities and expands the Company’s geographic presence. The activities of GCP International are included within the Real Assets Group segment.

The GCP Acquisition adds geographic exposure in Asia with a significant logistics platform in Japan, logistics platforms in emerging economies such as Brazil and Vietnam and an expanded presence in Europe and the U.S. The GCP Acquisition has broadened our vertically integrated operating and development capabilities across sectors and regions. We anticipate that the size and composition of fees earned, particularly our other fees, will be impacted by these expanded capabilities.

The activities of GCP International are reflected within our results of operations beginning on March 1, 2025. Therefore, our analysis compared to the prior year period will lack comparability, particularly in our Real Assets Group segment. Because the activities of GCP International represent one month of activity within the current quarter, we will separately discuss the significant impact of the GCP Acquisition within our discussion of our results of operations.

In addition, various components of the agreed upon purchase price for the GCP Acquisition are required to be accounted for as compensation because the payments were made to certain individuals that became Ares employees on March 1, 2025. Because they are required to be accounted for as compensation, these amounts have been excluded from purchase consideration and will have a varying impact on our results of operations in the current quarter as well as in future periods. Following the integration period, we expect to generate cost savings as we begin to execute on synergy opportunities.

In connection with the GCP Acquisition, we also entered into contingent compensation arrangements with the sellers and with certain of its professionals that became Ares employees. The portion of the arrangements that are attributable to the sellers represents a component of purchase consideration that will be accounted for as contingent consideration. The portion of the arrangements that are attributable to the professionals that became Ares employees requires continued service through the measurement periods and will be accounted for as compensation. These arrangements will have a varying impact on our results of operations in the current quarter as well as in future periods that is dependent on these classifications as well as the expected attainment of the measurement criteria.

For further discussion, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations of the Company” as well as “Note 3. Business Combinations” and “Note 8. Commitments and Contingencies” within our unaudited condensed consolidated financial statements.

Revenues

The following is an overview of our fee arrangements by strategy that were impacted as a result of the GCP Acquisition.

Management Fees. Details regarding our management fees from J-REIT are presented below:


Vehicle	Strategy	Annual Fee Rate and Fee Base

Real Assets Group
J-REIT	Real Estate	•Comprised of multiple components, including: ◦0.18% on GAV (“J-REIT Fee I”) ◦3.50% on net operating income (“J-REIT Fee II”) ◦Sum of J-REIT Fee I and J-REIT Fee II, multiplied by 0.033% on earnings per outstanding investment unit

Details regarding our management fees by strategy, excluding J-REIT described above, are presented below:


Strategy	Fee Rate	Fee Base	Average Remaining Contract Term(1)

Real Assets Group



Real Estate(2)	0.45% - 1.50%	Capital commitments, invested capital, GAV, NAV, aggregate cost basis of unrealized portfolio investments or a combination thereof	5.2 years

Infrastructure	1.00% - 1.50%	Capital commitments, invested capital, GAV or NAV	5.5 years

(1) Represents the average remaining contract term pursuant to the funds’ governing documents within each strategy, excluding perpetual capital vehicles, as of March 31, 2025.

(2) Following the expiration or termination of the investment period the basis on which management fees are earned for certain closed-end funds in this strategy changes from committed capital to invested capital with no change in the management fee rate. In addition, certain real estate funds pay a management fee of 7.50% of net operating income. For these funds, we present an effective fee rate as a percentage of GAV.

Incentive Fees. Details regarding our fee related performance revenues, excluding publicly-traded and perpetual wealth vehicles, are presented below:


Strategy	Fee Rate	Fee Base	Annual Hurdle Rate

Real Assets Group
Real Estate	20.0%	Incentive eligible fund’s profits	6.0%

Carried Interest Allocation. Details regarding our carried interest, which is generally based on a fund’s eligible profits, are presented below:


Strategy	Fee Rate	Annual Hurdle Rate



Real Assets Group
Infrastructure	15.0% - 20.0%	7.0% - 10.0%

Administrative, Transaction and Other Fees. Details regarding our other fees are presented below:


Other fees:
Property-related fees represent fees earned within our real estate strategy and include the following:
Acquisition fees						Based on a percentage of a property’s cost at the time of property acquisition
Development fees						Based on a percentage of costs to develop a property
Leasing fees						Based on a percentage of rental income at lease inception or lease renewal
Property management fees						Based on tenancy of properties over the time associated property management services are provided

See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Components of Consolidated Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a comprehensive overview of the components of our consolidated results of operations, including an overview of fee arrangements for other strategies that were not impacted as a result of the GCP Acquisition.

Consolidation and Deconsolidation of Ares Funds

Consolidated Funds represented approximately 3% of our AUM as of March 31, 2025 and 2% of total revenues for the three months ended March 31, 2025. As of March 31, 2025, we consolidated 27 CLOs, 11 private funds and one SPAC, and as of March 31, 2024, we consolidated 28 CLOs, 10 private funds and one SPAC.

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 three months ended March 31, 2025 and 2024, we did not deconsolidate any entities.

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 15. Consolidation” within our unaudited condensed consolidated financial statements included herein.

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 March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Total revenues		$	1,088,805	$	707,363	$	381,442	54%
Total expenses		(1,014,328)		(538,493)		(475,835)		(88)
Total other income, net		66,561		62,178		4,383		7

Less: Income tax expense		17,537		27,233		9,696		36
Net income		123,501		203,815		(80,314)		(39)
Less: Net income attributable to non-controlling interests in Consolidated Funds		55,977		66,716		(10,739)		(16)
Net income attributable to Ares Operating Group entities		67,524		137,099		(69,575)		(51)
Less: Net income attributable to redeemable interest in Ares Operating Group entities		316		73		243		NM
Less: Net income attributable to non-controlling interests in Ares Operating Group entities		20,038		63,999		(43,961)		(69)
Net income attributable to Ares Management Corporation		47,170		73,027		(25,857)		(35)


Less: Series B mandatory convertible preferred stock dividends declared		25,313		—		25,313		NM

Net income attributable to Ares Management Corporation Class A and non-voting common stockholders		$	21,857	$	73,027	(51,170)		(70)

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Consolidated Results of Operations of the Company

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

Revenues


	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Revenues
Management fees		$	816,987	$	687,692	$	129,295	19%
Carried interest allocation		160,008		(32,478)		192,486		NM
Incentive fees		32,048		8,667		23,381		270
Principal investment income		21,998		7,050		14,948		212
Administrative, transaction and other fees		57,764		36,432		21,332		59
Total revenues		$	1,088,805	$	707,363	381,442		54

Management Fees. Within the Credit Group, capital raised by our publicly-traded and perpetual wealth vehicles contributed to an increase in management fees of $41.6 million for the three months ended March 31, 2025 compared to the same period in 2024. Capital deployment in private funds within our direct lending and alternative credit strategies led to a rise in FPAUM, contributing to an increase in management fees of $23.4 million for the three months ended March 31, 2025 compared to the same period in 2024. Part I Fees increased by $15.1 million for the three months ended March 31, 2025 compared to the same period in 2024. The increase in Part I Fees was primarily due to the increase in pre-incentive fee net investment income generated by ASIF, CADC and our open-ended European direct lending fund, driven by an increase in the average size of their portfolios. Within the Real Assets Group, funds that we manage as a result of the GCP Acquisition and the acquisition of Walton Street Capital Mexico S. de R.L. de C.V. and certain of its affiliates (“WSM”) (“WSM Acquisition”), generated $29.4 million in additional management fees for the three months ended March 31, 2025. For detail regarding the fluctuations of management fees within each of our segments, see “—Results of Operations by Segment.”

Carried Interest Allocation. The following table sets forth carried interest allocation by segment ($ in millions):


	Three months ended March 31,
		2025		2024
Credit funds		$	130.7	$	219.6
Real Assets funds		3.2		(6.9)
Private Equity funds		37.0		(236.4)
Secondaries funds		(10.9)		(8.8)

Carried interest allocation		$	160.0	$	(32.5)

The activity was principally composed of the following:


Three months ended March 31, 2025						Three months ended March 31, 2024
Credit funds
•Primarily from four direct lending funds, one opportunistic credit fund and two alternative credit funds with $37.8 billion of IGAUM generating returns in excess of their hurdle rates: ◦Within our direct lending funds, Ares Capital Europe V, L.P. (“ACE V”), Ares Private Credit Solutions II, L.P. (“PCS II”) and Ares Capital Europe VI, L.P. (“ACE VI”) generated carried interest allocation of $46.3 million, $13.0 million and $26.6 million, respectively, driven by net investment income on an increasing invested capital base. Ares Capital Europe IV, L.P. (“ACE IV”) generated carried interest allocation of $13.3 million driven by net investment income during the period ◦Within our opportunistic credit funds, Ares Special Opportunities Fund II, L.P. (“ASOF II”) generated carried interest allocation of $21.0 million, driven by improved 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 $10.1 million and $21.6 million, respectively, driven by market appreciation of certain investments and net investment income during the period •Reversal of unrealized carried interest allocation of $27.0 million and $24.7 million from Ares Special Situations Fund IV, L.P. (“SSF IV”) and Ares Special Opportunities Fund, L.P. (“ASOF I”), respectively, primarily due to the market depreciation of their investment in Savers Value Village, Inc. (“SVV”), driven by its lower stock price						•Primarily from four direct lending funds, one alternative credit fund and three opportunistic credit funds with $35.8 billion of IGAUM generating returns in excess of their hurdle rates: ◦Within our direct lending funds, PCS II, ACE V and ACE VI generated carried interest allocation of $71.3 million, $39.7 million and $7.7 million, respectively, driven by net investment income on an increasing invested capital base. ACE IV generated carried interest allocation of $15.7 million driven by net investment income during the period ◦Within our opportunistic credit funds, ASOF II generated carried interest allocation of $30.4 million, driven by improving operating performance of portfolio companies that operate in the retail and healthcare industries. SSF IV and ASOF I generated carried interest allocation of $29.8 million and $12.4 million, respectively, primarily due to market appreciation of their investment in SVV driven by its higher stock price ◦Within our alternative credit funds, Pathfinder I generated carried interest allocation of $7.7 million driven by market appreciation of certain investments and net investment income during the period
Real Assets funds
•Ares Infrastructure Debt Fund V, L.P. (“IDF V”) generated carried interest allocation of $10.3 million, driven by net investment income during the period •Carried interest allocation of $5.1 million and $1.6 million generated from two U.S. real estate equity funds and Ares Energy Investors Fund V, L.P. (“EIF V”), respectively, primarily due to appreciation of certain investments •Reversal of unrealized carried interest allocation of $1.3 million from Ares Climate Infrastructure Partners, L.P. (“ACIP I”) was driven by the lower valuation of certain investments						•Reversal of unrealized carried interest of $10.8 million from two European real estate equity funds, $4.4 million from Ares European Real Estate Fund IV SCSp. (“EF IV”) and $3.0 million from Ares Real Estate Opportunity Fund III, L.P. (“AREOF III”), driven by lower valuations of certain office, hotel, retail and industrial properties •IDF V generated carried interest allocation of $12.8 million, driven by net investment income during the period
Private Equity funds
•Ares Corporate Opportunities Fund VI, L.P. (“ACOF VI”) and Ares Corporate Opportunities Fund IV, L.P. (“ACOF IV”) generated carried interest allocation of $42.7 million and $6.6 million, respectively, primarily driven by improved operating performance metrics from portfolio companies that primarily operate in the healthcare, services, industrial and retail industries •Reversal of unrealized carried interest allocation of $13.1 million from a private equity fund driven by lower operating performance from portfolio companies that primarily operate in the industrial and service industries						•Reversal of unrealized carried interest allocation of $244.3 million from Ares Corporate Opportunities Fund V, L.P. (“ACOF V”) was driven by lower operating performance metrics of certain portfolio companies that primarily operate in the healthcare and energy industries •ACOF VI generated carried interest allocation of $28.0 million, driven by appreciation across its investments in several portfolio companies that primarily operate in the services and retail industries and had positive operating performance during the period
Secondaries funds
•Reversal of unrealized carried interest of $10.9 million from Landmark Real Estate Fund VIII, L.P. (“LREF VIII”), primarily driven by the lower valuation of certain investments •Reversal of unrealized carried interest of $9.3 million from Landmark Equity Partners XVI, L.P. (“LEP XVI”), due to the lower valuation of certain investments •Landmark Equity Partners XVII, L.P. (“LEP XVII”) generated carried interest allocation of $6.0 million, driven by improved operating performance and appreciation of certain investments						•Reversal of unrealized carried interest of $4.7 million and $0.4 million from LEP XVI and LEP XVII, respectively, driven by depreciation across several investments

Incentive Fees. The following table sets forth incentive fees by segment ($ in millions):


	Three months ended March 31,
		2025		2024
Credit funds		$	21.9	$	2.0
Real Assets funds		0.4		3.7
Secondaries funds		9.7		3.0
Incentive fees		$	32.0	$	8.7

We earned higher incentive fees for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily from a European direct lending fund and from APMF. For further detail regarding the 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.”

Principal Investment Income. For equity method investments where we serve as general partner, we present the activity of net realized and unrealized gains on investments and realized investment income together with net capital activity. The following tables present the change in fair value of our equity method investments where we serve as general partner ($ in millions):


As of December 31, 2024				Activity during the period								As of March 31, 2025
Cost Basis		Fair Value		Net Capital Activity		Change in Unrealized		Realized		Other Adjustments		Cost Basis		Fair Value
$	451.4	$	536.9	$	45.7	$	8.2	$	14.0	$	(0.1)	$	514.1	$	604.7

The activity for the three months ended March 31, 2025 was primarily attributable to:

Principal investment income, primarily due to: (i) realized gains generated from various real estate debt and U.S. real estate equity funds; and (ii) interest income from newly admitted investors in an insurance fund, where capital account balances are reallocated from existing investors in exchange for interest to compensate for carrying costs
Net capital activities driven by investments made in various real estate funds, partially offset by the return of capital associated with an investment in a European real estate debt fund


As of December 31, 2023				Activity during the period						As of March 31, 2024
Cost Basis		Fair Value		Net Capital Activity		Change in Unrealized		Realized			Cost Basis		Fair Value
$	453.3	$	535.3	$	2.8	$	1.1	$	6.0		$	461.6	$	545.2

The activity for the three months ended March 31, 2024 was primarily attributable to:

Principal investment income, primarily due to interest income from newly admitted investors in an insurance fund
Net capital activities from investments in European direct lending, alternative credit and infrastructure debt funds, partially offset by transfers of capital investments within APAC credit funds to employee co-investment vehicles

Administrative, Transaction and Other Fees. The increase for the three months ended March 31, 2025 compared to the same period in 2024 was primarily driven by incremental fees following the completion of the GCP Acquisition. GCP International enhances our vertically integrated capabilities in real estate which enables us to generate additional leasing, development and property management fees. These fees contributed $13.6 million for the three months ended March 31, 2025.

The increase in fees over the comparative period was also driven by higher administrative service fees of $3.9 million primarily from private funds within our Credit Group that are based on invested capital and from our perpetual wealth vehicles.

Expenses


	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Expenses
Compensation and benefits		$	657,125	$	412,951	$	(244,174)	(59)%
Performance related compensation		122,633		(50,532)		(173,165)		NM
General, administrative and other expenses		227,914		170,928		(56,986)		(33)

Expenses of Consolidated Funds		6,656		5,146		(1,510)		(29)
Total expenses		$	1,014,328	$	538,493	(475,835)		(88)

Compensation and Benefits. In connection with the GCP Acquisition, various components of the agreed upon purchase price are required to be accounted for as compensation because the payments were made to certain individuals that became Ares employees following the GCP Acquisition. The GCP Acquisition contributed $151.0 million in incremental compensation and benefits for the three months ended March 31, 2025. The current quarter included equity-based compensation expense of $119.1 million from newly issued equity awards, including $108.8 million from the immediately vested portion of these awards. The three months ended March 31, 2025 also included: (i) one month of employment related costs of $17.9 million; (ii) other compensation costs of $8.8 million that were settled in cash at the close of the GCP Acquisition; and (iii) compensation expense of $5.2 million for certain contingent compensation arrangements established in connection with the GCP Acquisition. See “Note 8. Commitments and Contingencies” within our unaudited condensed consolidated financial statements for a further description of the contingent liabilities related to the GCP Acquisition arrangements.

Compensation and benefits, excluding the impact from the GCP Acquisition, increased by $93.2 million or 23% for the three months ended March 31, 2025 compared to the same period in 2024. The increase in expenses reflects the continued growth in salary and benefits for increased staff levels. The most significant expense increases were equity-based compensation, salary expense and payroll-related taxes. Equity-based compensation expense increased by $46.5 million from the prior year period as a result of newly issued unvested awards, magnified by our increased stock price. In addition, we accelerated expense for certain awards requiring no future service as retirement provisions have been achieved. These provisions increased expense by $25.0 million and $17.4 million for the three months ended March 31, 2025 and 2024, respectively.

The increase in compensation and benefits for the three months ended March 31, 2025 compared to the same period in 2024 was also driven by: (i) an increase in payroll-related taxes of $17.2 million, primarily due to the higher stock price associated with equity awards that vested during the current quarter; and (ii) an increase in salary expense of $12.7 million primarily attributable to headcount growth to support the expansion of our business.

Average headcount increased by 22% to 3,504 professionals for the year-to-date period in 2025 from 2,868 professionals in 2024. The acquisition of GCP International added 950 professionals to our period end headcount as of March 31, 2025, which represents an average of 316 professionals for the year-to-date period.

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 GCP Acquisition has contributed $50.2 million in general, administrative and other expenses to the three months ended March 31, 2025. These expenses were driven by: (i) acquisition-related costs of $33.7 million; (ii) amortization expense of $8.8 million for the three months ended March 31, 2025 related to the intangible assets recorded in connection with the GCP Acquisition; and (iii) one month of operating costs of $7.7 million, including temporary transition services agreement in connection with the GCP Acquisition of $1.5 million. The impact from the GCP Acquisition has been excluded from the discussion below.

General, administrative and other expenses, excluding the impact from the GCP Acquisition, increased by $6.8 million or 4% for the three months ended March 31, 2025 compared to the same period in 2024. The increase in expenses reflects the

continued growth to support staff levels and fundraising activities. The most significant expense increases were marketing costs, occupancy costs, information services costs and information technology costs.

Marketing costs include supplemental distribution fees and placement fees. Supplemental distribution fees increased by $8.7 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to ongoing development of our distribution relationships and expansion of our wealth product offerings, and also due to increases in sales volumes and net asset value of our wealth products. Conversely, placement fee expense decreased by $5.0 million for the three months ended March 31, 2025 compared to the same period in 2024. The activity for the three months ended March 31, 2025 primarily included placement fee expense of $5.6 million due to new commitments to our third opportunistic credit fund, while the three months ended March 31, 2024 primarily included placement fee expense of $9.1 million due to new commitments to Ares Senior Direct Lending Fund III, L.P. (“SDL III”).

In addition, occupancy costs, information services and information technology costs collectively increased by $7.9 million for the three months ended March 31, 2025 compared to the same period in 2024. The increases in these expenses were primarily to support our growing headcount and the expansion of our business, with occupancy costs also being impacted by the expansion of our New York office.

Other Income (Expense)


	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Other income (expense)
Net realized and unrealized gains on investments		$	268	$	10,516	$	(10,248)	(97)%
Interest and dividend income		17,656		5,382		12,274		228
Interest expense		(36,387)		(37,824)		1,437		4
Other income (expense), net		(10,714)		270		(10,984)		NM
Net realized and unrealized gains on investments of Consolidated Funds		88,406		34,424		53,982		157
Interest and other income of Consolidated Funds		160,072		257,276		(97,204)		(38)
Interest expense of Consolidated Funds		(152,740)		(207,866)		55,126		27
Total other income, net		$	66,561	$	62,178	4,383		7

Net Realized and Unrealized Gains on Investments; Interest and Dividend Income. For investments where we do not serve as general partner, we present the activity of net realized and unrealized gains on investments and interest and dividend income together with net capital activity. The following tables present the change in fair value of these investments ($ in millions):


As of December 31, 2024				Activity during the period								As of March 31, 2025
Cost Basis		Fair Value		Net Capital Activity		Net Realized and Unrealized Gains (Losses)		Interest and Dividend Income		Other Adjustments		Cost Basis		Fair Value
$	514.3	$	616.3	$	96.3	$	0.3	$	17.6	$	0.4	$	629.6	$	730.9

The activity for the three months ended March 31, 2025 was primarily attributable to:

Interest and dividend income, primarily due to: (i) interest income generated from our investments in CLOs; and (ii) $11.9 million of interest income earned from treasury-backed securities. Such treasury-backed securities were sold during the first quarter of 2025 and the proceeds from the sale were used to fund the GCP Acquisition. The interest income earned from treasury-backed securities will subside in future periods following the sale of these treasury-backed securities
Net capital activities driven by investments made in various real estate funds and in our open-ended infrastructure fund, partially offset by the collection of principal associated with loans that we made within our real estate strategy


As of December 31, 2023				Activity during the period								As of March 31, 2024
Cost Basis		Fair Value		Net Capital Activity		Net Realized and Unrealized Gains (Losses)		Interest and Dividend Income		Other Adjustments		Cost Basis		Fair Value
$	591.1	$	675.1	$	(112.1)	$	10.5	$	5.4	$	(0.4)	$	481.7	$	578.5

The activity for the three months ended March 31, 2024 was primarily attributable to:

Unrealized gains from our strategic investments in a U.S. energy company, primarily as a result of the increase in value of our various common and preferred equity investments, as well as unrealized gains on our investments from: (i) APMF; (ii) certain strategic investments in a company that manages real estate owned properties; partially offset by (iii) unrealized losses from our strategic investment in a non-core insurance related investment and a company that manages portfolios of non-performing loans
Interest and dividend income, primarily due to interest income generated from our investments in CLOs
Net capital activity driven by the collection of principal associated with loans that we made within our real estate strategy

Interest Expense. Interest expense decreased for the three months ended March 31, 2025 compared to the same period in 2024 primarily because savings from the reduction in use of our Credit Facility exceeded the collective interest expense associated with our term debt obligations. The balance of our Credit Facility will vary with needs.

Other Income (Expense), Net. The activity for the three months ended March 31, 2025 and 2024 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 months ended March 31, 2025 were primarily attributable to the U.S. dollar weakening against the British Pound and Euro and the associated impact on entities with functional currencies other than the U.S. dollar.

The purchase agreement in connection with the WSM Acquisition contains contingent consideration that is dependent on the achievement of revenue targets from the fundraising of a real estate equity fund and certain revenue targets associated with growing revenue sources from new business ventures. Other income (expense), net includes $2.3 million of expenses from the revaluation of these contingent liabilities for the three months ended March 31, 2025.

Income Tax Expense


	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Income before taxes		$	141,038	$	231,048	$	(90,010)	(39)%
Less: Income tax expense		17,537		27,233		9,696		36
Net income		$	123,501	$	203,815	(80,314)		(39)

The decrease in income tax expense was attributable to lower pre-tax income allocable to AMC for the three months ended March 31, 2025 compared to the same period in 2024 as the income attributed to redeemable and non-controlling interests is generally passed through to partners and not subject to corporate income taxes. As income tax expense also includes any taxes accrued in foreign or local jurisdictions, the calculation of total income taxes is sensitive to any changes in income subject to tax at the entity level.

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 March 31,
		2025		2024
AMC common stockholders		65.77	%	62.32	%
Non-controlling AOG unitholders		34.23		37.68

The change in ownership compared to the prior year period was primarily driven by the issuances of shares of Class A common stock in connection with exchanges of Ares Operating Group Units (“AOG Units”), the GCP Acquisition, the public offering that closed during the second quarter of 2024 (the “Offering”) and vesting of restricted unit awards.

Redeemable and Non-Controlling Interests


	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Net income		$	123,501	$	203,815	$	(80,314)	(39)%

Less: Net income attributable to non-controlling interests in Consolidated Funds		55,977		66,716		(10,739)		(16)
Net income attributable to Ares Operating Group entities		67,524		137,099		(69,575)		(51)
Less: Net income attributable to redeemable interest in Ares Operating Group entities		316		73		243		NM
Less: Net income attributable to non-controlling interests in Ares Operating Group entities		20,038		63,999		(43,961)		(69)
Net income attributable to Ares Management Corporation		47,170		73,027		(25,857)		(35)


Less: Series B mandatory convertible preferred stock dividends declared		25,313		—		(25,313)		NM

Net income attributable to Ares Management Corporation Class A and non-voting common stockholders		$	21,857	$	73,027	(51,170)		(70)

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

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 March 31,					Favorable (Unfavorable)
		2025		2024			$ Change		% Change
Expenses of the Consolidated Funds		$	(6,656)	$	(5,146)		$	(1,510)	(29)%
Net realized and unrealized gains on investments of Consolidated Funds		88,406		34,424			53,982		157
Interest and other income of Consolidated Funds		160,072		257,276			(97,204)		(38)
Interest expense of Consolidated Funds		(152,740)		(207,866)			55,126		27
Income before taxes		89,082		78,688			10,394		13
Less: Income tax expense (benefit) of Consolidated Funds		2,002		(1,130)			(3,132)		NM
Net income		87,080		79,818			7,262		9
Less: Revenues attributable to Ares Management Corporation eliminated upon consolidation		19,987		8,776			11,211		128
Other income, net attributable to Ares Management Corporation eliminated upon consolidation		(11,116)		(4,759)			6,357		134
General, administrative and other expense attributable to Ares Management Corporation eliminated upon consolidation		—		433			433		100
Net income attributable to non-controlling interests in Consolidated Funds		$	55,977	$	66,716		(10,739)		(16)

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.

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 Realized Income (“RI”) as a non-GAAP profit measure in making operating decisions, assessing performance and allocating resources. Fee Related Earnings (“FRE”) is a component of RI that excludes realized activities associated with investment income and performance income.

FRE and RI 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. In the first quarter of 2025, we combined the presentation of real estate strategies and infrastructure strategies within Real Assets. Real estate includes Americas real estate equity, European real estate equity, APAC real estate equity and real estate debt. Americas real estate equity, which we had recently renamed from North American real estate equity, now includes the activities of Brazil following the GCP Acquisition. APAC real estate equity is newly established following the GCP Acquisition and primarily represents the activities in Japan and Vietnam. Infrastructure includes digital infrastructure, infrastructure opportunities and infrastructure debt. Digital infrastructure is newly established following the GCP Acquisition. The change in presentation did not result in any change to the historical composition of our segments.

Interest expense was historically allocated among our segments based only on the cost basis of our balance sheet investments. Beginning in the first quarter of 2025, we changed our interest expense allocation methodology to consider the growing sources of financing requirements, including the cost of acquisitions in addition to the cost basis of our balance sheet investments. Prior period amounts have been reclassified to conform to the current period presentation.

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Fee Related Earnings:
Credit Group		$	408,594	$	352,417	$	56,177	16%
Real Assets Group		74,279		46,518		27,761		60
Private Equity Group		14,307		15,371		(1,064)		(7)
Secondaries Group		40,584		25,605		14,979		59
Other		4,469		2,063		2,406		117
Operations Management Group		(174,957)		(140,304)		(34,653)		(25)
Fee Related Earnings		$	367,276	$	301,670	65,606		22
Realized Income:
Credit Group		$	431,939	$	356,228	$	75,711	21%
Real Assets Group		87,597		43,939		43,658		99
Private Equity Group		10,227		11,557		(1,330)		(12)
Secondaries Group		39,671		17,586		22,085		126
Other		10,769		(262)		11,031		NM
Operations Management Group		(174,279)		(139,892)		(34,387)		(25)
Realized Income		$	405,924	$	289,156	116,768		40

Income before provision for income taxes is the GAAP financial measure most comparable to RI. 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 March 31,
	2025		2024
Income before taxes	$	141,038	$	231,048
Adjustments:
Depreciation and amortization expense	48,229		36,644
Equity compensation expense	257,862		92,421
Acquisition-related compensation expense(1)	21,999		5,504

Acquisition and merger-related expense	34,608		10,578
Placement fee adjustment	(6)		5,540
Other expense, net	2,526		131
Income before taxes of non-controlling interests in consolidated subsidiaries	(5,471)		(3,662)
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations	(57,979)		(65,586)
Total performance (income) loss—unrealized	(64,443)		45,476
Total performance related compensation—unrealized	40,550		(64,514)
Total net investment income—unrealized	(12,989)		(4,424)
Realized Income	405,924		289,156
Total performance income—realized	(125,448)		(23,181)
Total performance related compensation—realized	84,416		13,156
Total net investment loss—realized	2,384		22,539
Fee Related Earnings	$	367,276	$	301,670

(1)Represents bonus payments, contingent liabilities (“earnouts”) and other costs in connection with various acquisitions that are recorded as compensation expense and are presented within compensation and benefits within our 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 14. 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.

Results of Operations by Segment

Credit Group—Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Fee Related Earnings

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


	Three months ended March 31,	Favorable (Unfavorable)
			2025		2024		$ Change		% Change
Management fees			$	585,396	$	510,966	$	74,430	15%
Fee related performance revenues			18,395		755		17,640		NM
Other fees			10,598		9,911		687		7
Compensation and benefits			(164,747)		(134,849)		(29,898)		(22)
General, administrative and other expenses			(41,048)		(34,366)		(6,682)		(19)
Fee Related Earnings			$	408,594	$	352,417	56,177		16

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

Mgmt - Credit.jpg

The following table presents the components of and causes for changes in the Credit Group’s management fees for the three months ended March 31, 2025 compared to the prior year period ($ in millions):


	Year-over-year Change
Perpetual capital vehicles:
Fees from ARCC, ASIF and CADC, excluding Part I Fees, due to increases in the average portfolio size of their portfolios	$	34.9
Part I Fees from ASIF, CADC and our open-ended European direct lending fund driven by an increase in the average size of their portfolios	14.8
Fees from our open-ended European direct lending fund, excluding Part I Fees, due to the expiration of a fee waiver	5.2
Capital deployment in private funds:
Fees from SDL III, ACE VI and Pathfinder II, Ares Senior Direct Lending Fund II, L.P. (“SDL II”) and ASOF II	29.2

Distributions that reduced the fee base of ACE IV, ASOF I and Ares Senior Direct Lending Fund, L.P. (“SDL I”) as the funds are past their investment periods	(11.3)
Cumulative effect of other changes	1.6
Total	$	74.4

The decrease in effective management fee rate for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily attributable to deployment in certain funds within our U.S. direct lending and alternative credit strategies, which have effective management fee rates lower than the average effective management fee rate of funds within the Credit Group.

Fee Related Performance Revenues. The increase in fee related performance revenues for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily attributable to higher incentive fees earned from a European direct lending fund that crystallized a deferred payment due to the restructuring of its hold back provisions during the first quarter of 2025.

Compensation and Benefits. The increase in compensation and benefits for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by (i) higher fee related performance compensation of $12.8 million, corresponding to the increase in fee related performance revenues; (ii) an increase in payroll-related taxes of $8.1 million, primarily due to the higher stock price associated with equity awards that vested during the current quarter; and (iii) higher Part I Fee compensation of $6.4 million, corresponding to the increase in Part I Fees. For the three months ended March 31, 2025 and 2024, we reduced Part I Fee compensation by $4.8 million and $1.2 million, respectively, to reclaim a portion of the supplemental distribution fees that we paid to distribution partners.

Average headcount increased by 7% to 698 investment and investment support professionals for the year-to-date period in 2025 from 650 professionals in 2024 to support our growing direct lending and alternative credit platforms.

General, Administrative and Other Expenses. The increase in general, administrative and other expenses was primarily due to costs incurred to support distribution of shares in our perpetual wealth vehicles. Supplemental distribution fees were $11.5 million for the three months ended March 31, 2025 and increased by $6.5 million for the three months ended March 31, 2025 compared to the same period in 2024 as we continue to develop our distribution relationships and expand our wealth product offerings.

Additionally, certain expenses increased during the current period, including occupancy costs, information services and information technology costs. These expenses collectively increased by $2.9 million for the three months ended March 31, 2025 compared to the same period in 2024 to support our growing headcount and the expansion of our business.

Realized Income

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


	Three months ended March 31,	Favorable (Unfavorable)
			2025		2024		$ Change		% Change
Fee Related Earnings			$	408,594	$	352,417	$	56,177	16%
Performance income—realized			54,112		16,766		37,346		223
Performance related compensation—realized			(34,258)		(8,734)		(25,524)		(292)
Realized net performance income			19,854		8,032		11,822		147
Investment income—realized			5,379		1,765		3,614		205
Interest income			4,420		2,767		1,653		60
Interest expense			(6,308)		(8,753)		2,445		28

Realized net investment income (loss)			3,491		(4,221)		7,712		NM
Realized Income			$	431,939	$	356,228	75,711		21

The Credit Group’s realized activities were principally composed of and caused by the following:


Three months ended March 31, 2025						Three months ended March 31, 2024
Realized net performance income
Carried interest from: •Aggregate tax distributions of $17.2 million primarily from ACE IV, ACE V and an alternative credit fund Incentive fees from: •Incentive fees of $1.0 million, primarily generated from a U.S. direct lending fund						Carried interest from: •Aggregate tax distributions of $4.3 million primarily from Ares Private Credit Solutions, L.P. (“PCS I”) and an alternative credit fund Incentive fees from: •Incentive fees of $1.6 million primarily from two U.S. direct lending funds and an alternative credit fund
Realized investment income and interest income
•Distributions of investment income of $3.0 million generated from three liquid credit vehicles that are invested in the subordinated notes of CLOs and from our investment in SSF IV •Interest income earned on treasury-backed securities of $2.9 million •Interest income generated from nine CLO investments of $1.4 million						•Distributions of investment income of $2.0 million generated from four liquid credit vehicles that are invested in the subordinated notes of CLOs •Interest income generated from 14 CLO investments of $1.5 million

The change in allocated interest expense for the Credit Group over the comparative period is consistent with the change in interest expense as presented within our consolidated results of operations. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations of the Company” for further discussion of the changes in consolidated interest expense.

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 millions):


	As of March 31, 2025						As of December 31, 2024

	2025						2024
	Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income		Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income
Pathfinder I	$	198.2	$	168.5	$	29.7	$	191.4	$	165.7	$	25.7
ASOF I	293.7		205.8		87.9		318.4		223.2		95.2
ASOF II	279.2		196.4		82.8		258.2		181.4		76.8
PCS I	129.3		76.4		52.9		130.1		76.9		53.2
PCS II	184.6		109.4		75.2		171.4		101.5		69.9
ACE IV	172.5		112.0		60.5		168.8		109.6		59.2
ACE V	311.9		197.1		114.8		286.6		180.9		105.7
ACE VI	97.6		61.7		35.9		71.1		44.8		26.3
Other credit funds	324.6		207.4		117.2		332.0		207.0		125.0
Total Credit Group	$	1,991.6	$	1,334.7	$	656.9	$	1,928.0	$	1,291.0	$	637.0

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












		As of December 31, 2024		Activity during the period						As of March 31, 2025
	Waterfall Type	Accrued Performance Income		Change in Unrealized		Realized		Other Adjustments		Accrued Performance Income
Accrued Carried Interest
Pathfinder I	European	$	191.4	$	10.1	$	(3.3)	$	—	$	198.2
ASOF I	European	318.4		(24.7)		—		—		293.7
ASOF II	European	258.2		21.0		—		—		279.2
PCS I	European	130.1		(0.8)		—		—		129.3
PCS II	European	171.4		13.0		—		0.2		184.6

ACE IV	European	168.8		13.3		(9.5)		(0.1)		172.5
ACE V	European	286.6		46.3		(20.8)		(0.2)		311.9
ACE VI	European	71.1		26.6		—		(0.1)		97.6
Other credit funds	European	292.6		14.3		(17.2)		(5.9)		283.8
Other credit funds	American	39.4		11.6		0.2		(10.4)		40.8
Total accrued carried interest		1,928.0		130.7		(50.6)		(16.5)		1,991.6

Other credit funds	Incentive	—		3.5		(3.5)		—		—
Total Credit Group		$	1,928.0	$	134.2	$	(54.1)	$	(16.5)	$	1,991.6

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 12/31/2024	$	46,895	$	41,565	$	14,964	$	159,129	$	74,560	$	11,470	$	275	$	348,858

Net new par/equity commitments	459		560		1,072		2,983		856		14		—		5,944
Net new debt commitments	1,005		—		—		3,815		—		—		—		4,820
Capital reductions	(1,920)		(277)		(175)		(943)		—		(99)		—		(3,414)
Distributions	(29)		(862)		(142)		(1,232)		(973)		(32)		—		(3,270)
Redemptions	(260)		—		—		(121)		—		—		—		(381)
Net allocations among investment strategies	—		1,309		—		—		—		—		—		1,309
Change in fund value	396		612		(71)		1,119		3,044		107		3		5,210
Balance at 3/31/2025	$	46,546	$	42,907	$	15,648	$	164,750	$	77,487	$	11,460	$	278	$	359,076

	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	695		1,828		—		2,462		2,692		—		58		7,735
Net new debt commitments	994		—		—		4,836		662		(380)		—		6,112
Capital reductions	(1,134)		—		—		(553)		51		151		—		(1,485)
Distributions	(45)		(438)		(289)		(1,487)		(1,199)		(105)		—		(3,563)
Redemptions	(1,695)		—		—		(720)		(102)		—		—		(2,517)
Net allocations among investment strategies	—		668		—		—		150		—		(103)		715
Change in fund value	133		537		291		1,570		(317)		77		1		2,292
Balance at 3/31/2024	$	46,247	$	36,481	$	14,556	$	129,181	$	70,201	$	11,663	$	310	$	308,639

(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 Credit Group are presented below ($ in billions):

4753 4755


			AUM: $359.1						AUM: $308.6


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

(1) Includes $14.1 billion and $14.7 billion of AUM of funds from which we indirectly earn management fees as of March 31, 2025 and 2024, respectively, and includes $2.0 billion and $1.7 billion of non-fee paying AUM from our general partner and employee commitments as of March 31, 2025 and 2024, respectively.

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 12/31/2024	$	44,629	$	29,384	$	7,899	$	86,415	$	35,786	$	5,032	$	209,145

Commitments	2,189		—		—		3,641		634		14		6,478
Deployment/subscriptions/increase in leverage	9		1,467		428		3,552		1,906		369		7,731
Capital reductions	(1,920)		—		—		(1,641)		(49)		—		(3,610)
Distributions	(34)		(539)		(22)		(1,897)		(531)		(271)		(3,294)
Redemptions	(247)		—		—		(121)		(80)		—		(448)
Net allocations among investment strategies	—		1,172		—		—		—		—		1,172
Change in fund value	(88)		(18)		—		440		1,085		1		1,420
Change in fee basis	—		—		—		—		(332)		(31)		(363)
Balance at 3/31/2025	$	44,538	$	31,466	$	8,305	$	90,389	$	38,419	$	5,114	$	218,231

	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	1,223		—		—		2,549		6		—		3,778
Deployment/subscriptions/increase in leverage	—		1,233		340		3,474		1,875		299		7,221
Capital reductions	(967)		—		—		(1,324)		(455)		(18)		(2,764)
Distributions	(46)		(373)		(246)		(2,423)		(250)		(324)		(3,662)
Redemptions	(1,695)		—		—		(88)		(366)		—		(2,149)
Net allocations among investment strategies	—		886		—		—		—		—		886
Change in fund value	367		22		—		603		(478)		29		543
Change in fee basis	—		—		—		—		693		—		693
Balance at 3/31/2024	$	45,022	$	24,986	$	8,584	$	70,387	$	35,271	$	5,576	$	189,826

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

5112 5114


			FPAUM: $218.2						FPAUM: $189.8


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

(1)Includes $50.4 billion and $36.8 billion from funds that primarily invest in illiquid strategies as of March 31, 2025 and 2024, 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 March 31, 2025

ARCC contributed approximately 32% of the Credit Group’s total management fees for the three months ended March 31, 2025. In addition, the Credit Group’s other significant funds, which are presented in the tables below, collectively contributed approximately 38% of the Credit Group’s management fees for the three months ended March 31, 2025.

The following table presents the performance data for our significant funds that are not drawdown funds in the Credit Group as of March 31, 2025 ($ in millions):


				Returns(%)
	Year of Inception	AUM		Current Quarter		Since Inception(1)		Primary Investment Strategy
Fund		Gross		Net		Gross	Net
ARCC(2)	2004	$	33,020	N/A	2.1		N/A	12.1	U.S. Direct Lending
CADC(3)	2017	7,749		N/A	1.0		N/A	6.8	U.S. Direct Lending
Open-ended core alternative credit fund(4)	2021	6,219		2.9	2.2		11.6	8.7	Alternative Credit
ASIF(3)	2023	16,319		N/A	1.4		N/A	11.1	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 3.0% and 2.1%, respectively. The since inception gross and net returns for Class M (offshore) are 11.6% and 8.2%, respectively. The current quarter gross and net returns for Class C (offshore) are 2.5% and 1.8%, respectively. The since inception gross and net returns for Class C (offshore) are 11.2% and 8.0%, respectively.

The following table presents the performance data of the Credit Group’s significant drawdown funds as of March 31, 2025 ($ 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
ACE IV Unlevered(7)	2018	$	8,274	$	2,851	$	2,190		$	1,534		$	1,324		$	2,858		1.4x	1.3x	8.2	5.9	European Direct Lending
ACE IV Levered(7)		4,819		3,728		2,564			2,721			5,285			1.6x			1.4x	11.2	8.0
Pathfinder I	2020	4,066		3,683		3,177			775			3,340			4,115			1.4x	1.3x	14.7	10.6	Alternative Credit
SDL II Unlevered	2021	16,532		1,989		1,615			311			1,616			1,927			1.2x	1.2x	11.9	9.4	U.S. Direct Lending
SDL II Levered		6,047		4,531		1,366			4,514			5,880			1.4x			1.3x	18.7	14.2
Funds Deploying Capital
PCS II	2020	6,095		5,114		3,751			947			3,836			4,783			1.3x	1.2x	12.3	8.4	U.S. Direct Lending
ACE V Unlevered(8)	2020	16,759		7,026		5,413			1,237			5,374			6,611			1.3x	1.2x	11.1	8.3	European Direct Lending
ACE V Levered(8)		6,376		4,898		1,735			5,003			6,738			1.4x			1.3x	15.7	11.6
ASOF II	2021	8,709		7,128		5,322			20			6,629			6,649			1.4x	1.3x	17.7	12.8	Opportunistic Credit
ACE VI Unlevered(9)	2022	20,642		7,439		1,717			55			1,787			1,842			1.1x	1.1x	17.3	12.4	European Direct Lending
ACE VI Levered(9)		9,667		3,522		192			3,736			3,928			1.2x			1.1x	20.4	14.5
SDL III Unlevered	2023	24,442		3,311		932			23			956			979			1.1x	1.1x	NM	NM	U.S. Direct Lending
SDL III Levered		11,959		2,523		115			2,683			2,798			1.2x			1.1x	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 9.7% and 7.1%, respectively. The gross and net MoIC for ACE IV (G) Unlevered are 1.5x and 1.4x, respectively. The gross and net IRR for ACE IV (G) Levered are 12.6% and 9.0%, respectively. The gross and net MoIC for ACE IV (G) Levered are 1.6x and 1.5x, respectively. The gross and net IRR for ACE IV (D) Levered are 12.7% and 9.3%, respectively. The gross and net MoIC for ACE IV (D) Levered are 1.7x and 1.5x, 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.

(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 12.6% and 9.5%, respectively. The gross and net MoIC for ACE V (G) Unlevered are 1.4x and 1.3x, respectively. The gross and net IRR for ACE V (G) Levered are 16.7% and 12.2%, respectively. The gross and net MoIC for ACE V (G) Levered are 1.5x and 1.3x, respectively. The gross and net IRR for ACE V (D) Levered are 15.7% and 11.8%, respectively. The gross and net MoIC for ACE V (D) Levered are 1.5x and 1.3x, respectively. The gross and net IRR for ACE V (Y) Unlevered are 11.1% and 8.1%, 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)ACE VI is made up of six parallel funds, four denominated in Euros and two denominated in pound sterling: ACE VI (E) Unlevered, ACE VI (E) II Unlevered, ACE VI (G) Unlevered, ACE VI (E) Levered, ACE VI (E) II Levered, and ACE VI (G) Levered, and three feeder funds: ACE VI (D) Levered, ACE VI (Y) Unlevered and ACE VI (D) Rated Notes. ACE VI (E) II Levered includes ACE VI (D) Levered feeder fund and ACE VI (E) II Unlevered includes ACE VI (Y) Unlevered and ACE VI (D) Rated Notes feeder funds. The gross and net IRR and gross and net MoIC presented in the table are for ACE VI (E) Unlevered and ACE VI (E) Levered. Metrics for ACE VI (E) II Levered exclude the ACE VI (D) Levered feeder fund and metrics for ACE VI (E) II Unlevered exclude ACE VI (Y) Unlevered and ACE VI (D) Rated Notes feeder funds. The gross and net IRR for ACE VI (G) Unlevered are 12.7% and 8.5%, respectively. The gross and net MoIC for ACE VI (G) Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (G) Levered are 29.4% and 17.0%, respectively. The gross and net MoIC for ACE VI (G) Levered are 1.2x and 1.1x, respectively. The gross and net IRR for ACE VI (E) II Unlevered are 20.4% and 15.8%, respectively. The gross and net MoIC for ACE VI (E) II Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (E) II Levered are 24.6% and 17.5%, respectively. The gross and net MoIC for ACE VI (E) II Levered are 1.2x and 1.1x, respectively. The gross and net IRR for ACE VI (D) Levered are 23.5% and 17.6%, respectively. The gross and net MoIC for ACE VI (D) Levered are 1.2x and 1.1x, respectively. The gross and net IRR for ACE VI (Y) Unlevered are 10.7% and 6.9%, respectively. The gross and net MoIC for ACE VI (Y) Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (D) Rated Notes are 20.4% and 11.9%, respectively. The gross and net MoIC for ACE VI (D) Rated Notes are 1.2x 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 ACE VI Unlevered and ACE VI Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

Real Assets Group—Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Fee Related Earnings

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Management fees		$	130,453	$	93,814	$	36,639	39%

Other fees		21,380		5,075		16,305		NM
Compensation and benefits		(56,702)		(37,918)		(18,784)		(50)
General, administrative and other expenses		(20,852)		(14,453)		(6,399)		(44)
Fee Related Earnings		$	74,279	$	46,518	27,761		60

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

The following table presents the components of and causes for changes in the Real Assets Group’s management fees for the three months ended March 31, 2025 compared to the prior year period ($ in millions):


	Year-over-year Change

Fees from the GCP Acquisition effective March 1, 2025, including catch-up fees of $3.7 million from U.S. Logistics Partners V, L.P.	$	24.3
Fees from the WSM Acquisition effective December 1, 2024	5.1
Capital commitments:
Fees from Ares U.S. Real Estate Opportunity Fund IV, L.P. (“AREOF IV”) and our second climate infrastructure fund	2.7
Fees from our fourth European value-add real estate equity fund and 11th U.S. real estate equity fund, which launched subsequent to the first quarter of 2024	2.6

Fees from our diversified non-traded REIT, driven by additional capital raised	1.4
Cumulative effect of other changes	0.5
Total	$	36.6

The decrease in effective management fee rate for the three months ended March 31, 2025 compared to the same period in 2024 was primarily driven by lower effective management fee rates from funds that we manage as a result of the GCP Acquisition. Certain of these funds pay management fees based on net operating income and we present the associated effective management fee rates as a percentage of fund assets, which could result in greater variability in the Real Assets Group’s effective management fee rate. In addition, due to the vertically integrated capabilities of the acquired platform, we expect the size and composition of other fees earned from these funds will increase relative to management fees.

Other Fees. The increase in other fees for the three months ended March 31, 2025 compared to the same period in 2024 was driven by incremental fees following the completion of the GCP Acquisition. The GCP Acquisition enhances our vertically integrated capabilities, which enables us to generate additional property-related fees. In March 2025, we earned $13.6 million of property-related fees from funds that we now manage following the GCP Acquisition. Excluding the impact of the GCP Acquisition, other fees increased by $1.9 million, or 37%, primarily due to higher development fees from increased activity within certain U.S. real estate equity funds.

Compensation and Benefits. The three months ended March 31, 2025 included one month of activity following the completion of the GCP Acquisition. Headcount growth attributable to the GCP Acquisition contributed $13.5 million in employment related costs to the three months ended March 31, 2025. The impact from the GCP Acquisition has been excluded from the discussion below.

The increase in compensation and benefits for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was also driven by (i) an increase in payroll-related taxes of $3.0 million, primarily due to the higher stock price associated with equity awards that vested during the current quarter; and (ii) an increase in salary expenses of $2.0 million, primarily attributable to headcount growth to support the expansion of our business.

Average headcount increased by 71% to 645 investment and investment support professionals for the year-to-date period in 2025 from 378 professionals for the same period in 2024. The acquisition of GCP International added 683 professionals to our period end headcount as of March 31, 2025, which represents an average of 227 professionals for the year-to-date period.

General, Administrative and Other Expenses. The GCP Acquisition has contributed $3.5 million in general, administrative and other expenses to the three months ended March 31, 2025. These expenses were driven by travel and marketing expenses and occupancy costs. These expenses collectively contributed $1.9 million to the three months ended March 31, 2025. The impact from the GCP Acquisition has been excluded from the discussion below.

The increase in general, administrative and other expenses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was also driven by marketing and fundraising activities, including supplemental distribution fees charged in connection with an amended servicing arrangement that became effective subsequent to the first quarter of 2024. Supplemental distribution fees increased by $1.3 million for the three months ended March 31, 2025 compared to the same period in 2024. Marketing expenses for the comparative period also increased by $1.3 million driven by investor events held during the current quarter and non-reimbursable fund formation costs for certain real estate debt funds.

Realized Income

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Fee Related Earnings		$	74,279	$	46,518	$	27,761	60%
Performance income—realized		65,305		3,677		61,628		NM
Performance related compensation—realized		(46,807)		(2,228)		(44,579)		NM
Realized net performance income		18,498		1,449		17,049		NM
Investment income—realized		7,919		2,678		5,241		196
Interest income		2,618		700		1,918		274
Interest expense		(15,717)		(7,406)		(8,311)		(112)

Realized net investment loss		(5,180)		(4,028)		(1,152)		(29)
Realized Income		$	87,597	$	43,939	43,658		99

The Real Assets Group’s realized activities were principally composed of and caused by the following:


Three months ended March 31, 2025						Three months ended March 31, 2024
Realized net performance income
Carried interest from: •Tax distributions of $12.6 million from EIF V •Distributions of $2.8 million from U.S. Real Estate Fund VIII, L.P. (“US VIII”) and a U.S. real estate equity fund, which are both European-style waterfall funds that are past their investment periods and monetizing investments •Realized gains of $2.1 million from the sale of an ACIP I co-investment vehicle’s investment in a renewable energy company						Incentive fees from: •Incentive fees of $1.4 million generated from a U.S. open-ended industrial real estate fund that varies based upon a three-year measurement period calculated for each fund investor
Realized investment income and interest income
•Distributions of investment income of $5.6 million, primarily from our real estate debt funds •Interest income earned on treasury-backed securities of $2.1 million						•Distributions of investment income of $3.1 million, primarily from a European real estate debt fund

Interest expense increased over the comparative period primarily due to financing costs incurred in connection with the GCP Acquisition. Interest expense is allocated among our segments primarily based on the cost basis of our balance sheet investments and the cost of acquisitions. The financing costs to complete the GCP Acquisition resulted in a greater allocation of interest expense to the Real Assets Group in the current quarter. We expect that interest expense allocated to the Real Assets Group will remain elevated in the current year periods as the expense attributable to the GCP Acquisition will remain fully allocated to the Real Assets Group.

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 millions):


	As of March 31, 2025						As of December 31, 2024


	Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income		Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income

US IX	101.9		63.2		38.7		99.8		61.9		37.9


EIF V	73.1		54.6		18.5		121.3		90.7		30.6
IDF V	129.4		79.1		50.3		113.7		69.3		44.4
ACIP I	91.1		62.7		28.4		97.7		66.8		30.9
Other real assets funds	135.5		85.4		50.1		135.8		85.7		50.1
Total Real Assets Group	$	531.0	$	345.0	$	186.0	$	568.3	$	374.4	$	193.9

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












		As of December 31, 2024		Activity during the period						As of March 31, 2025
	Waterfall Type	Accrued Performance Income		Change in Unrealized		Realized		Other Adjustments		Accrued Performance Income
Accrued Carried Interest

US IX	European	99.8		2.1		—		—		101.9


EIF V	European	121.3		1.6		(49.8)		—		73.1
IDF V	European	113.7		10.3		—		5.4		129.4
ACIP I	European	97.7		(1.3)		(5.3)		—		91.1
Other real assets funds	European	97.2		5.8		(9.8)		0.2		93.4
Other real assets funds	American	38.6		3.5		—		—		42.1


Total accrued carried interest		568.3		22.0		(64.9)		5.6		531.0
Other real assets funds	Incentive	—		0.4		(0.4)		—		—
Total Real Assets Group		$	568.3	$	22.4	$	(65.3)	$	5.6	$	531.0

Real Assets Group—Assets Under Management

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


























	Real Estate(1)		Infrastructure(2)		Total Real Assets Group
Balance at 12/31/2024	$	58,246	$	17,052	$	75,298
Acquisitions	43,273		2,008		45,281
Net new par/equity commitments	1,403		1,058		2,461
Net new debt commitments	2,447		167		2,614
Capital reductions	(768)		—		(768)
Distributions	(791)		(667)		(1,458)
Redemptions	(159)		—		(159)
Net allocations among investment strategies	(27)		27		—
Change in fund value	816		102		918
Balance at 3/31/2025	$	104,440	$	19,747	$	124,187

	Real Estate(1)		Infrastructure(2)		Total Real Assets Group
Balance at 12/31/2023	$	49,715	$	15,698	$	65,413

Net new par/equity commitments	309		99		408

Capital reductions	(128)		—		(128)
Distributions	(273)		(573)		(846)
Redemptions	(434)		—		(434)

Change in fund value	(436)		127		(309)
Balance at 3/31/2024	$	48,753	$	15,351	$	64,104

(1)In the first quarter of 2025, we combined the presentation of real estate strategies within Real Assets. Real estate includes Americas real estate equity, European real estate equity, APAC real estate equity and real estate debt.

(2)In first quarter of 2025, we combined the presentation of infrastructure strategies within Real Assets. Infrastructure includes digital infrastructure, infrastructure opportunities and infrastructure debt.

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

3946 3948


			AUM: $124.2						AUM: $64.1


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

(1) Includes $1.5 billion and $0.6 billion of non-fee paying AUM from our general partner and employee commitments as of March 31, 2025 and 2024, respectively.

Real Assets Group—Fee Paying AUM

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




























	Real Estate(1)		Infrastructure(2)		Total Real Assets Group
Balance at 12/31/2024	$	32,896	$	11,192	$	44,088
Acquisitions	30,178		289		30,467
Commitments	890		178		1,068
Deployment/subscriptions/increase in leverage	717		792		1,509
Capital reductions	(42)		—		(42)
Distributions	(551)		(852)		(1,403)
Redemptions	(159)		—		(159)
Net allocations among investment strategies	(27)		27		—
Change in fund value	596		(316)		280
Change in fee basis	258		359		617
Balance at 3/31/2025	$	64,756	$	11,669	$	76,425

	Real Estate(1)		Infrastructure(2)		Total Real Assets Group
Balance at 12/31/2023	$	30,310	$	11,028	$	41,338

Commitments	296		—		296
Deployment/subscriptions/increase in leverage	467		395		862
Capital reductions	(12)		—		(12)
Distributions	(229)		(77)		(306)
Redemptions	(434)		—		(434)

Change in fund value	(402)		(2)		(404)
Change in fee basis	(504)		—		(504)
Balance at 3/31/2024	$	29,492	$	11,344	$	40,836

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

4200 4202


			FPAUM: $76.4						FPAUM: $40.8


			Invested capital/other(1)						GAV						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 March 31, 2025

The significant funds presented in the tables below collectively contributed approximately 37% of the Real Assets Group’s management fees for the three months ended March 31, 2025.

The following table presents the performance data for our significant funds that are not drawdown funds in the Real Assets Group as of March 31, 2025 ($ in millions):


				Returns(%)
	Year of Inception	AUM		Current Quarter		Since Inception(1)		Primary Investment Strategy
Fund		Gross		Net		Gross	Net
Diversified non-traded REIT(2)	2012	$	5,949	N/A	2.4		N/A	6.2	Real Estate
J-REIT(3)	2012	7,900		N/A	N/A		N/A	13.6	Real Estate
Industrial non-traded REIT(4)	2017	7,458		N/A	2.4		N/A	8.6	Real Estate
U.S. open-ended industrial real estate fund(5)	2017	5,226		1.7	1.4		17.2	14.0	Real Estate
Japanese open-ended industrial real estate fund	2020	3,748		2.4	2.2		14.0	12.1	Real Estate

(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.

(3)Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Actual individual stockholder returns will vary. Net returns are calculated using the fund’s NAV and assume distributions are reinvested at NAV on the semi-annual period-end date. NAVs are calculated semi-annually in February and August, and therefore, only the since inception return is presented. The inception date used in the calculation of the since inception return is the date in which the fund's investment units began to be listed on the Tokyo Stock Exchange. The since inception return is calculated based on the most recent NAV date. Additional information related to J-REIT can be found in its materials posted to its website, which are not part of this report.

(4)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.

(5)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 funds as of March 31, 2025 ($ 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
EIP II(7)	2020	$	3,695	$	1,839	$	1,645		$	184		$	1,623		$	1,807		1.2x	1.1x	3.0	2.6	Real Estate
Fund Deploying Capital
IDF V(8)	2020	4,993		4,585		3,859			922			3,668			4,590			1.3x	1.2x	12.9	10.1	Infrastructure

(1)Realized proceeds include distributions of operating income, sales and financing proceeds received to the limited partners.

(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.

(7)EIP II is a Euro-denominated fund. 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 EIP II are converted to U.S. Dollars at the prevailing quarter-end exchange rate.

(8)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 10.8% and 8.4%, respectively. The gross and net MoIC for the single investor U.S. Dollar parallel fund are 1.2x and 1.2x, respectively. The gross and net IRR for the Euro unhedged parallel fund are 12.7% and 9.8%, respectively. The gross and net MoIC for the Euro unhedged parallel fund are 1.3x and 1.2x, respectively. The gross and net IRR for the GBP hedged parallel fund are 12.4% and 9.4%, respectively. The gross and net MoIC for the GBP hedged parallel fund are 1.2x and 1.2x, respectively. The gross and net IRR for the Yen hedged parallel fund are 8.7% and 6.1%, 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.

Private Equity Group—Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Fee Related Earnings

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Management fees		$	31,998	$	34,933	$	(2,935)	(8)%
Other fees		397		439		(42)		(10)
Compensation and benefits		(13,831)		(14,785)		954		6
General, administrative and other expenses		(4,257)		(5,216)		959		18
Fee Related Earnings		$	14,307	$	15,371	(1,064)		(7)

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

Screenshot 2025-04-19 185146PE.jpg

The following table presents the components of and causes for changes in the Private Equity Group’s management fees for the three months ended March 31, 2025 compared to the prior year period ($ in millions):


	Year-over-year Change
Corporate private equity extended value fund that stopped paying fees at the end of the fourth quarter of 2024	(1.7)

Cumulative effect of other changes	(1.2)
Total	$	(2.9)

The increase in effective management fee rate for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by a corporate private equity extended fund that stopped paying fees at the end of the fourth quarter of 2024 and had a lower effective management fee rate than the average effective management fee rate of funds within the Private Equity Group.

Compensation and Benefits. The change in compensation and benefits largely reflects the decrease in salary expense and incentive-based compensation, partially offset by an increase in payroll-related taxes of $0.6 million, primarily due to the higher stock price associated with equity awards that vested during the first quarter of 2025. Average headcount decreased by 2% to 104 investment and investment support professionals for the year-to-date period in 2025 from 106 professionals in 2024.

General, Administrative and Other Expenses. The decrease in general, administrative and other expenses for the three months ended March 31, 2025 compared to the same period in 2024 was primarily attributable to lower professional service fees incurred during the current quarter.

Realized Income

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


	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Fee Related Earnings		$	14,307	$	15,371	$	(1,064)	(7)%
Performance income—realized		6,031		2,738		3,293		120
Performance related compensation—realized		(3,351)		(2,194)		(1,157)		(53)
Realized net performance income		2,680		544		2,136		NM
Investment income (loss)—realized		(4,602)		298		(4,900)		NM
Interest income		2,022		6		2,016		NM
Interest expense		(4,180)		(4,662)		482		10

Realized net investment loss		(6,760)		(4,358)		(2,402)		(55)
Realized Income		$	10,227	$	11,557	(1,330)		(12)

The Private Equity Group’s realized activities were principally composed of and caused by the following:


Three months ended March 31, 2025						Three months ended March 31, 2024
Realized net performance income
Carried interest from: •Realized gains from Ares Corporate Opportunities Fund IV, L.P. (“ACOF IV”)’s investment in an energy company						Carried interest from: •Realized gains from ACOF IV’s investment in an energy company
Realized investment income (loss) and interest income
•Realized investment loss from Ares Corporate Opportunities Fund III, L.P. as the fund continues to liquidate its remaining assets •Interest income earned on treasury-backed securities						•Nothing noteworthy

The change in allocated interest expense for the Private Equity Group over the comparative period is consistent with the change in interest expense as presented within our consolidated results of operations. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations of the Company” for further discussion of the changes in consolidated interest expense.

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 millions):


	As of March 31, 2025						As of December 31, 2024


	Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income		Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income
ACOF IV	$	167.4	$	134.1	$	33.3	$	166.8	$	133.6	$	33.2

ACOF VI	565.8		479.5		86.3		523.1		442.8		80.3
Other funds	8.6		7.5		1.1		20.9		14.8		6.1
Total Private Equity Group	$	741.8	$	621.1	$	120.7	$	710.8	$	591.2	$	119.6

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


		As of December 31, 2024		Activity during the period				As of March 31, 2025
	Waterfall Type	Accrued Carried Interest		Change in Unrealized		Realized		Accrued Carried Interest

ACOF IV	American	$	166.8	$	6.6	$	(6.0)	$	167.4

ACOF VI	American	523.1		42.7		—		565.8
Other funds	European	13.1		(12.5)		—		0.6
Other funds	American	7.8		0.2		—		8.0
Total Private Equity Group		$	710.8	$	37.0	$	(6.0)	$	741.8

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(1)		Total Private Equity Group
Balance at 12/31/2024	$	21,064	$	2,977	$	—	$	24,041

Net new par/equity commitments	959		16		—		975

Capital reductions	(36)		—		—		(36)
Distributions	(149)		—		—		(149)


Change in fund value	64		(168)		—		(104)
Balance at 3/31/2025	$	21,902	$	2,825	$	—	$	24,727

	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	254		3		58		315

Capital reductions	(2)		—		—		(2)
Distributions	(25)		(11)		—		(36)
Redemptions	—		(2)		—		(2)
Net allocations among investment strategies	150		—		(197)		(47)
Change in fund value	(145)		(158)		—		(303)
Balance at 3/31/2024	$	21,230	$	3,246	$	—	$	24,476

(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 Private Equity Group are presented below ($ in billions):

2525 2526


						AUM: $24.7						AUM: $24.5


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

(1) Includes $1.2 billion and $1.3 billion of non-fee paying AUM from our general partner and employee commitments as of March 31, 2025 and 2024, 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 12/31/2024	$	9,860	$	1,567	$	11,427


Deployment/subscriptions/increase in leverage	10		7		17




Change in fund value	(1)		—		(1)
Change in fee basis	(44)		(47)		(91)
Balance at 3/31/2025	$	9,825	$	1,527	$	11,352

	Corporate Private Equity		APAC Private Equity		Total Private Equity Group
Balance at 12/31/2023	$	11,459	$	1,665	$	13,124





Redemptions	—		(2)		(2)

Change in fund value	(19)		—		(19)
Change in fee basis	(536)		(2)		(538)
Balance at 3/31/2024	$	10,904	$	1,661	$	12,565

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

2787 2788


			FPAUM: $11.4						FPAUM: $12.6


						Capital commitments									Invested capital

Private Equity Group—Fund Performance Metrics as of March 31, 2025

The significant funds presented in the table below collectively contributed approximately 77% of the Private Equity Group’s management fees for the three months ended March 31, 2025.

The following table presents the performance data of the Private Equity Group’s significant drawdown funds as of March 31, 2025 ($ 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	$	7,612	$	7,850	$	7,611		$	3,509		$	7,146		$	10,655		1.4x	1.3x	7.4	5.5	Corporate Private Equity
Fund Deploying Capital
ACOF VI	2020	8,375		5,743		5,260			1,898			7,079			8,977			1.6x	1.5x	22.4	16.6	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 1.4x 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 5.6% for ACOF V and 15.9% for ACOF VI.

Secondaries Group—Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Fee Related Earnings

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Management fees		$	57,650	$	44,421	$	13,229	30%
Fee related performance revenues		9,656		2,962		6,694		226
Other fees		122		4		118		NM
Compensation and benefits		(18,371)		(12,714)		(5,657)		(44)
General, administrative and other expenses		(8,473)		(9,068)		595		7
Fee Related Earnings		$	40,584	$	25,605	14,979		59

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

Screenshot 2025-04-21 122320sec.jpg

The following table presents the components of and causes for changes in the Secondaries Group’s management fees for the three months ended March 31, 2025 compared to the prior year period ($ in millions):


	Year-over-year Change
Fees from APMF, driven by additional capital raised	$	6.2
Catch-up fees generated from our third infrastructure secondaries fund	3.5
Fees from our third infrastructure secondaries fund, which launched during the fourth quarter of 2023 (excluding catch-up fees)	2.1

Cumulative effect of other changes	1.4
Total	$	13.2

The increase in effective management fee rate for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to additional capital raised by APMF that has a fee rate of 1.40%.

Compensation and Benefits. The increase in compensation and benefits for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was driven by higher fee related performance compensation of $4.0 million, corresponding to the increase in fee related performance revenues. For the three months ended March 31, 2025 and 2024, we reduced fee related performance compensation by $2.7 million and $1.7 million, respectively, to reclaim a portion of the supplemental distribution fees paid to distribution partners.

Average headcount increased slightly to 112 investment and investment support professionals for the year-to-date period in 2025 from 111 professionals in 2024.

General, Administrative and Other Expenses. The decrease in general, administrative and other expenses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was driven by the decrease in travel related expenses of $0.5 million.

Realized Income

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Fee Related Earnings		$	40,584	$	25,605	$	14,979	59%



Investment income—realized		138		187		(49)		(26)
Interest income		957		23		934		NM
Interest expense		(2,008)		(8,229)		6,221		76

Realized net investment loss		(913)		(8,019)		7,106		89
Realized Income		$	39,671	$	17,586	22,085		126

Realized net investment loss for the three months ended March 31, 2025 and 2024 largely represents interest expense exceeding investment income during these periods.

Interest expense is allocated among our segments primarily based on the cost basis of our balance sheet investments and the cost of acquisitions. While interest expense in prior periods associated with the acquisition of Landmark Partners, LLC was largely allocated to the Secondaries Group, recent acquisitions warrant larger allocations in the current year.

Interest income for the three months ended March 31, 2025 primarily reflects income earned on treasury-backed securities.

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 millions):


	As of March 31, 2025						As of December 31, 2024


	Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income		Accrued Performance Income		Accrued Performance Compensation		Accrued Net Performance Income
LEP XVI	$	98.6	$	84.4	$	14.2	$	107.9	$	92.3	$	15.6
LREF VIII	70.4		59.6		10.8		81.3		68.9		12.4
Other secondaries funds	88.5		70.6		17.9		74.6		59.8		14.8
Total Secondaries Group	$	257.5	$	214.6	$	42.9	$	263.8	$	221.0	$	42.8

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


		As of December 31, 2024		Activity during the period		As of March 31, 2025
	Waterfall Type	Accrued Carried Interest		Change in Unrealized			Accrued Carried Interest
Accrued Carried Interest
LEP XVI	European	$	107.9	$	(9.3)		$	98.6
LREF VIII	European	81.3		(10.9)			70.4



Other secondaries funds	European	74.6		13.9			88.5


Total Secondaries Group		$	263.8	$	(6.3)		$	257.5

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		Total Secondaries Group
Balance at 12/31/2024	$	15,805	$	7,779	$	3,691	$	1,878	$	29,153

Net new par/equity commitments	1,249		228		337		475		2,289

Capital reductions	—		(58)		—		—		(58)
Distributions	(178)		(39)		(18)		(4)		(239)
Redemptions	(23)		—		—		—		(23)

Change in fund value	126		35		20		9		190
Balance at 3/31/2025	$	16,979	$	7,945	$	4,030	$	2,358	$	31,312

	Private Equity Secondaries		Real Estate Secondaries		Infrastructure Secondaries		Credit Secondaries		Total Secondaries Group
Balance at 12/31/2023	$	13,174	$	7,826	$	2,380	$	1,380	$	24,760

Net new par/equity commitments	536		150		215		68		969


Distributions	(140)		(23)		—		(1)		(164)


Change in fund value	10		22		29		15		76
Balance at 3/31/2024	$	13,580	$	7,975	$	2,624	$	1,462	$	25,641

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

3364 3369


			AUM: $31.3						AUM: $25.6


			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 March 31, 2025 and 2024.

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 12/31/2024	$	12,788	$	6,441	$	2,582	$	590	$	22,401

Commitments	549		170		334		—		1,053
Deployment/subscriptions/increase in leverage	85		32		13		127		257

Distributions	(9)		(33)		(17)		—		(59)
Redemptions	(23)		—		—		—		(23)

Change in fund value	(21)		(80)		15		(73)		(159)

Balance at 3/31/2025	$	13,369	$	6,530	$	2,927	$	644	$	23,470

	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	536		150		214		—		900
Deployment/subscriptions/increase in leverage	—		60		1		—		61

Distributions	(65)		(16)		—		(18)		(99)


Change in fund value	(35)		39		(6)		—		(2)
Change in fee basis	1		(8)		—		(2)		(9)
Balance at 3/31/2024	$	11,641	$	6,203	$	1,972	$	75	$	19,891

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

3616 3620


FPAUM: $23.5						FPAUM: $19.9


			Reported 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 March 31, 2025

LEP XVI contributed approximately 20% of the Secondaries Group’s management fees for the three months ended March 31, 2025.

The following table presents the performance data of the Secondaries Group’s significant drawdown fund as of March 31, 2025 ($ 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	$	4,180	$	4,896	$	4,174		$	2,079		$	3,066		$	5,145		1.4x	1.2x	16.2	%	9.8	%	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 the fund are presented on a combined basis with the affiliated parallel funds or accounts, given that the investments are substantially the same.

Operations Management Group—Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Fee Related Earnings

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Other fees		$	5,537	$	4,333	$	1,204	28%
Compensation and benefits		(116,468)		(94,157)		(22,311)		(24)
General, administrative and other expenses		(64,026)		(50,480)		(13,546)		(27)
Fee Related Earnings		$	(174,957)	$	(140,304)	(34,653)		(25)

Other Fees. The increase in other fees for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily driven by an increase in facilitation fees from the 1031 exchange program associated with our non-traded REITs .

Compensation and Benefits. Headcount growth attributable to the GCP Acquisition contributed $3.9 million in recurring employment related costs to the three months ended March 31, 2025. The impact from the GCP Acquisition has been excluded from the discussion below.

The increase in compensation and benefits for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was also driven by (i) the expansion of our business operations teams to support the growth of our business and other strategic initiatives; (ii) an increase in payroll-related taxes of $4.8 million primarily due to the higher stock price associated with equity awards that vested during the current quarter; (iii) higher incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year; and (iv) higher sales-based bonuses which increased by $2.8 million over the comparative period, primarily driven by the increase in the sale of ASIF shares.

Average headcount increased by 20% to 1,910 professionals for the year-to-date period in 2025 from 1,593 professionals in 2024. The acquisition of GCP International added 267 professionals to our period end headcount as of March 31, 2025, which represents an average of 89 professionals for the year-to-date period.

General, Administrative and Other Expenses. The GCP Acquisition has contributed $3.6 million in general, administrative and other expenses to the three months ended March 31, 2025. These expenses were primarily driven by professional service fees of $2.1 million, of which $1.4 million related to temporary transition services. The impact from the GCP Acquisition has been excluded from the discussion below.

The increase in general, administrative and other expenses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was also driven by occupancy costs and information technology costs, which collectively increased by $4.5 million. The increases in these expenses were primarily to support our growing headcount and the expansion of our business, with occupancy costs also being impacted by the expansion of our New York office. In addition, the increase in general, administrative and other expenses was attributable to higher professional service fees of $2.9 million, primarily from legal fees.

Realized Income

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



	Three months ended March 31,	Favorable (Unfavorable)
		2025		2024		$ Change		% Change
Fee Related Earnings		$	(174,957)	$	(140,304)	$	(34,653)	(25)%
Investment income—realized		331		11		320		NM
Interest income		603		441		162		37
Interest expense		(256)		(40)		(216)		NM

Realized net investment income		678		412		266		65
Realized Income		$	(174,279)	$	(139,892)	(34,387)		(25)

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 we are well-positioned and our liquidity will continue to be sufficient for our 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, which are collected monthly, quarterly or semi-annually, and fee related performance revenues, which are typically measured and collected annually, as well as 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 March 31, 2025, our cash and cash equivalents were $618.5 million and we have $415.0 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 March 31, 2025. 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 and our Series B mandatory convertible preferred stockholders in accordance with our dividend policies; 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 equity awards 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. Unless quarterly dividends have been declared and paid (or declared and set apart for payment) on the Series B mandatory convertible preferred stock, we may not declare or pay or set apart payment for dividends on any shares of our Class A common stock during the period. Declared dividends on the Series B mandatory convertible preferred stock will be payable, at our election, in cash, shares of our Class A common stock or a combination of cash and shares of our Class A common stock. Dividends on Series B mandatory convertible preferred stock are cumulative and the Series B mandatory convertible preferred stock, unless previously converted or redeemed, will automatically convert into our Class A common stock on October 1, 2027. Although any income allocated to Series B mandatory convertible preferred stock dividends may be subject to taxes, dividends to our Series B mandatory convertible preferred stockholders will not be reduced on account of any income taxes owed by us. As a result, taxes associated with any income allocated to Series B mandatory convertible preferred stock dividends will be borne by Class A and non-voting common stockholders.

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 7. Debt” and “Note 13. 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 us except to the extent of our investment in the fund.

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 15. Consolidation” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.


	Three months ended March 31,
	2025		2024
Net cash provided by operating activities	$	707,294	$	458,363
Net cash provided by the Consolidated Funds’ operating activities, net of eliminations	1,286,909		251,682
Net cash provided by operating activities	1,994,203		710,045
Net cash used in the Company’s investing activities	(1,744,690)		(34,071)
Net cash provided by (used in) the Company’s financing activities	143,647		(424,232)
Net cash used in the Consolidated Funds’ financing activities, net of eliminations	(1,321,374)		(242,400)
Net cash used in financing activities	(1,177,727)		(666,632)
Effect of exchange rate changes	38,774		(11,285)
Net change in cash and cash equivalents	$	(889,440)	$	(1,943)

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 expense. We generated meaningful cash flow from operations in each period presented.


	Three months ended March 31,				Favorable (Unfavorable)
	2025		2024		$ Change		% Change
Core operating activities	$	577,520	$	335,306	$	242,214	72%
Net realized performance income	148,842		50,733		98,109		193
Net cash provided by (used in) investment related activities	(19,068)		72,324		(91,392)		(126)
Net cash provided by operating activities	$	707,294	$	458,363	248,931		54

Cash from our core operating activities increased as a result of growing fee revenues and sustained profitability and timing of cash collection of our receivables.

Net realized performance income 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 incentive fees 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 tax distributions that were received in the first quarter of 2025 but not yet paid to employees, while minimal tax distributions were received and paid in the first quarter of 2024.

Net cash provided by (used in) investment related activities for the three months ended March 31, 2025 and 2024 primarily represents: (i) distributions received from our capital investments and the collection of principal and interest from loans that we have made; (ii) sales of certain capital investments to employees; and (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. Net cash provided by (used in) investment related activities for the three months ended March 31, 2025 also included interest income from treasury-backed securities. As we are committed to invest alongside the investors in our funds, our capital commitments will increase with our growing assets under management and 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 capital commitments, see “Note 8. 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


	Three months ended March 31,
	2025		2024
Purchase of furniture, equipment and leasehold improvements, net of disposals	$	(21,975)	$	(26,071)
Acquisitions, net of cash acquired	(1,722,715)		(8,000)
Net cash used in investing activities	$	(1,744,690)	$	(34,071)

Net cash used in investing activities for the current quarter was predominately cash used to complete the GCP Acquisition. Net cash used in investing activities for both periods also included cash to purchase furniture, fixtures, equipment and leasehold improvements primarily for the build out of our new corporate headquarters that we occupied beginning in the third quarter of 2024 and to support the growth in our staffing levels.

Financing Activities


	Three months ended March 31,
	2025		2024


Net borrowings of Credit Facility	985,000		80,000


Class A and non-voting common stock dividends	(258,691)		(190,504)
AOG unitholder distributions	(138,303)		(129,542)
Series B mandatory convertible preferred stock dividends	(48,094)		—

Stock option exercises	—		1,511
Taxes paid related to net share settlement of equity awards	(396,722)		(186,731)
Other financing activities	457		1,034
Net cash provided by (used in) the Company’s financing activities	$	143,647	$	(424,232)

Net cash provided by the Company’s financing activities for the three months ended March 31, 2025 included net borrowings from the Credit Facility. These proceeds were used primarily to fund the GCP Acquisition.

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 three months ended March 31, 2025 and 2024.

In addition, we issued 30,000,000 shares of Series B mandatory convertible preferred stock in October 2024. Net cash used in the Company’s financing activities included dividend payments made during the three months ended March 31, 2025 to preferred stockholders.

In connection with the vesting of equity awards that are granted to our employees under 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 issue fewer net shares. Cash used in connection with these awards increased during the current quarter primarily as a result of our higher stock price, which resulted in employees recognizing additional compensation. For the three months ended March 31, 2025, we net settled and did not issue 2.0 million shares, which includes 0.2 million shares that were withheld from

restricted units that vested on the GCP Acquisition close date. For the three months ended March 31, 2024, we net settled and did not issue 1.6 million shares.

Capital Resources

We intend to use a portion of our available liquidity to pay cash dividends to our Series B mandatory convertible preferred stockholders and Class A and non-voting common stockholders on a quarterly basis in accordance with our dividend policies. 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 March 31, 2025, we were required to maintain approximately $85.7 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 $475.1 million and $402.4 million as of March 31, 2025 and December 31, 2024, respectively. For the three months ended March 31, 2025 and 2024, payments under the TRA were $8.1 million and $6.1 million, respectively.

For a discussion of our debt obligations, including the debt obligations of our consolidated funds, see “Note 7. Debt” within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

For a discussion of our equity, see “Note 13. Equity and Redeemable Interest” 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, 2024. 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 Ares 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, indemnifications and potential contingent payment obligations. For further discussion of these arrangements, see “Note 8. Commitments and Contingencies” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

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