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ARES NYSE· Ares Management Corporation
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ARES NYSE· Ares Management Corporation
Earnings report Q4 2023

ARES Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

ARES Management Corporation reported total revenues of $3.63 billion for the latest quarter. The breakdown of revenue by segment is as follows:

  • Management fees: $2.55 billion
  • Carried interest allocation: $618.6 million
  • Incentive fees: $276.6 million
  • Principal investment income: $36.5 million
  • Administrative, transaction, and other fees: $149 million

Strengths

ARES demonstrated robust revenue growth in the latest quarter, with total revenues increasing by 18% compared to the previous year. This growth was primarily driven by higher management fees, which saw a significant increase of 19% year-over-year. The company's disciplined investment philosophy and market-leading position in its distinct investment groups, including Credit, Private Equity, Real Assets, and Secondaries, have contributed to its strong performance.

Challenges

While ARES reported strong revenue growth, it also experienced an increase in expenses. Total expenses for the quarter amounted to $2.80 billion, representing a 2% increase compared to the previous year. The rise in expenses was primarily driven by performance-related compensation, which increased by 17% year-over-year. This indicates that the company's compensation and benefits structure may pose a challenge to its profitability.

Noteworthy

ARES reported net realized and unrealized gains on investments of $77.6 million for the latest quarter, reflecting positive performance in its investment portfolio. Additionally, the company's total assets stood at $58.26 billion, demonstrating its strong financial position.

Summary

ARES Management Corporation delivered strong revenue growth in the latest quarter, driven by higher management fees. The company's market-leading position in its investment groups and disciplined investment philosophy have contributed to its success. However, the increase in expenses, particularly performance-related compensation, poses a challenge to its profitability. Overall, ARES's performance in the latest quarter showcases its ability to generate attractive returns for its investors.

Source documents

Form 10-K  filed on Feb 27, 2024
76 pages scanned

Reference data

Company financials Q4 revenue 1.05B
Analyst estimates Q4 EPS beat by 39.60%
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