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CONSOLIDATION
9 Months Ended
Sep. 30, 2018
Condensed Financial Information Disclosure [Abstract]  
CONSOLIDATION
CONSOLIDATION

Investments in Consolidated Variable Interest Entities  
The Company consolidates entities in which the Company has a variable interest and, as the general partner or investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at their carrying value, which approximates fair value, and represents the Company’s maximum exposure to loss.
Investments in Non-Consolidated Variable Interest Entities
The Company holds interests in certain VIEs that are not consolidated as the Company is not the primary beneficiary. The Company's interest in such entities generally is in the form of direct equity interests, fixed fee arrangements or both. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. Investments in the non-consolidated VIEs are carried at fair value.
The Company's interests and the Consolidated Funds' interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and their respective maximum exposure to loss relating to non-consolidated VIEs are as follows:
 
As of September 30,
 
As of December 31,
 
2018
 
2017
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs
$
206,850

 
$
251,376

Maximum exposure to loss attributable to the Company's investment in consolidated VIEs
190,316

 
175,620

Assets of consolidated VIEs
8,404,540

 
6,231,245

Liabilities of consolidated VIEs
7,649,028

 
5,538,054

 
For the Three Months Ended 
 September 30,
 
For the Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Net income attributable to non-controlling interests related to consolidated VIEs
$
13,169

 
$
18,195

 
$
23,418

 
$
25,403



CONSOLIDATING SCHEDULES
The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of September 30, 2018 and December 31, 2017 and results from operations for the three and nine months ended September 30, 2018 and 2017.  
 
As of September 30, 2018
 
Consolidated
Company 
Entities 
 
Consolidated
Funds 
 
Eliminations 
 
Consolidated 
Assets
 

 
 

 
 

 
 

Cash and cash equivalents
$
122,192

 
$

 
$

 
$
122,192

Investments ($947,267 of accrued carried interest)
1,605,964

 

 
(190,316
)
 
1,415,648

Due from affiliates
191,983

 

 
(7,997
)
 
183,986

Deferred tax asset, net
16,240

 

 

 
16,240

Other assets
102,411

 

 

 
102,411

Intangible assets, net
32,756

 

 

 
32,756

Goodwill
143,827

 

 

 
143,827

Assets of Consolidated Funds
 

 
 

 
 

 


Cash and cash equivalents

 
760,581

 

 
760,581

Investments, at fair value

 
7,515,383

 

 
7,515,383

Due from affiliates

 
14,658

 

 
14,658

Dividends and interest receivable

 
16,534

 

 
16,534

Receivable for securities sold

 
95,490

 

 
95,490

Other assets

 
1,894

 

 
1,894

Total assets
$
2,215,373

 
$
8,404,540

 
$
(198,313
)
 
$
10,421,600

Liabilities
 

 
 

 
 

 
 

Accounts payable, accrued expenses and other liabilities
$
76,648

 
$

 
$

 
$
76,648

Accrued compensation
127,481

 

 

 
127,481

Due to affiliates
59,456

 

 

 
59,456

Performance related compensation payable
688,100

 

 

 
688,100

Debt obligations
350,789

 

 

 
350,789

Liabilities of Consolidated Funds
 

 
 

 
 

 


Accounts payable, accrued expenses and other liabilities

 
77,752

 

 
77,752

Due to affiliates

 
7,997

 
(7,997
)
 

Payable for securities purchased

 
531,615

 

 
531,615

CLO loan obligations, at fair value

 
6,897,920

 
(13,224
)
 
6,884,696

Fund borrowings

 
133,744

 

 
133,744

Total liabilities
1,302,474

 
7,649,028

 
(21,221
)
 
8,930,281

Commitments and contingencies


 


 


 


Preferred equity (12,400,000 shares issued and outstanding)
298,761

 

 

 
298,761

Non-controlling interest in Consolidated Funds

 
755,512

 
(177,092
)
 
578,420

Non-controlling interest in Ares Operating Group entities
319,820

 

 

 
319,820

Controlling interest in Ares Management, L.P.:
 

 
 

 
 

 


Shareholders' equity (101,489,282 shares issued and outstanding)
301,721

 

 

 
301,721

Accumulated other comprehensive loss, net of tax
(7,403
)
 

 

 
(7,403
)
Total controlling interest in Ares Management, L.P.
294,318

 

 

 
294,318

Total equity
912,899


755,512


(177,092
)

1,491,319

Total liabilities and equity
$
2,215,373


$
8,404,540


$
(198,313
)

$
10,421,600

 
As of December 31, 2017
 
As adjusted
 
Consolidated
Company 
Entities 
 
Consolidated
Funds 
 
Eliminations
 
Consolidated 
Assets
 
 
 

 
 

 
 

Cash and cash equivalents
$
118,929

 
$

 
$

 
$
118,929

Investments ($1,077,236 of accrued carried interest)
1,900,191

 

 
(175,620
)
 
1,724,571

Due from affiliates
171,701

 

 
(5,951
)
 
165,750

Deferred tax asset, net
8,326

 

 

 
8,326

Other assets
135,674

 

 
(5,333
)
 
130,341

Intangible assets, net
40,465

 

 

 
40,465

Goodwill
143,895

 

 

 
143,895

Assets of Consolidated Funds
 
 
 

 
 

 


Cash and cash equivalents

 
556,500

 

 
556,500

Investments, at fair value

 
5,582,842

 

 
5,582,842

Due from affiliates

 
15,884

 

 
15,884

Dividends and interest receivable

 
12,568

 

 
12,568

Receivable for securities sold

 
61,462

 

 
61,462

Other assets

 
1,989

 

 
1,989

Total assets
$
2,519,181


$
6,231,245


$
(186,904
)

$
8,563,522

Liabilities
 
 
 

 
 

 
 

Accounts payable, accrued expenses and other liabilities
$
81,955

 
$

 
$

 
$
81,955

Accrued compensation
27,978

 

 

 
27,978

Due to affiliates
39,184

 

 

 
39,184

Performance related compensation payable
822,084

 

 

 
822,084

Debt obligations
616,176

 

 

 
616,176

Liabilities of Consolidated Funds
 
 
 

 
 

 


Accounts payable, accrued expenses and other liabilities

 
64,316

 

 
64,316

Due to affiliates

 
11,285

 
(11,285
)
 

Payable for securities purchased

 
350,145

 

 
350,145

CLO loan obligations, at fair value

 
4,974,110

 
(10,916
)
 
4,963,194

Fund borrowings

 
138,198

 

 
138,198

Total liabilities
1,587,377


5,538,054


(22,201
)

7,103,230

Commitments and contingencies


 


 


 


Preferred equity (12,400,000 shares issued and outstanding)
298,761

 

 

 
298,761

Non-controlling interest in Consolidated Funds

 
693,191

 
(164,703
)
 
528,488

Non-controlling interest in Ares Operating Group entities
358,186

 

 

 
358,186

Controlling interest in Ares Management, L.P.:
 

 
 

 
 

 
 

Shareholders' equity (82,280,033 shares issued and outstanding)
279,065

 

 

 
279,065

Accumulated other comprehensive loss, net of tax
(4,208
)
 

 

 
(4,208
)
Total controlling interest in Ares Management, L.P.
274,857

 

 

 
274,857

Total equity
931,804


693,191


(164,703
)

1,460,292

Total liabilities and equity
$
2,519,181


$
6,231,245


$
(186,904
)
 
$
8,563,522



 
 
For the Three Months Ended September 30, 2018
 
Consolidated
Company 
Entities 
 
Consolidated
Funds 
 
Eliminations 
 
Consolidated 
Revenues
 

 
 

 
 

 
 

Management fees (includes ARCC Part I Fees of $33,377)
$
213,662

 
$

 
$
(9,138
)
 
$
204,524

Carried interest allocation
31,902

 


 

 
31,902

Incentive fees
872

 


 

 
872

Principal investment income
(7,886
)
 

 
422

 
(7,464
)
Administrative, transaction and other fees
10,943

 

 

 
10,943

Total revenues
249,493




(8,716
)

240,777

Expenses
 

 
 

 
 

 
 
Compensation and benefits
145,594

 

 

 
145,594

Performance related compensation
17,606

 

 

 
17,606

General, administrative and other expense
51,155

 

 

 
51,155

Expenses of the Consolidated Funds

 
21,971

 
(9,138
)
 
12,833

Total expenses
214,355


21,971


(9,138
)

227,188

Other income (expense)
 

 
 

 
 

 
 
Net realized and unrealized gain on investments
6,540

 

 
(998
)
 
5,542

Interest and dividend income
901

 

 
(93
)
 
808

Interest expense
(4,143
)
 

 

 
(4,143
)
Other income, net
725

 

 
86

 
811

Net realized and unrealized gain on investments of the Consolidated Funds

 
4,686

 
751

 
5,437

Interest and other income of the Consolidated Funds

 
93,062

 

 
93,062

Interest expense of the Consolidated Funds

 
(63,103
)
 
340

 
(62,763
)
Total other income
4,023


34,645


86


38,754

Income before taxes
39,161


12,674


508


52,343

Income tax expense
5,118

 
13

 

 
5,131

Net income
34,043


12,661


508


47,212

Less: Net income attributable to non-controlling interests in Consolidated Funds

 
12,661

 
508

 
13,169

Less: Net income attributable to non-controlling interests in Ares Operating Group entities
18,133

 

 

 
18,133

Net income attributable to Ares Management, L.P.
15,910






15,910

Less: Preferred equity dividend paid
5,425

 

 

 
5,425

Net income attributable to Ares Management, L.P. common shareholders
$
10,485


$


$


$
10,485

 
For the Three Months Ended September 30, 2017
 
As adjusted
 
Consolidated
Company 
Entities 
 
Consolidated
Funds 
 
Eliminations 
 
Consolidated 
Revenues
 

 
 

 
 

 
 

Management fees (includes ARCC Part I Fees of $24,036)
$
188,628

 
$

 
$
(5,451
)
 
$
183,177

Carried interest allocation
82,534

 

 

 
82,534

Incentive fees
5,845

 

 
(1,371
)
 
4,474

Principal investment income
14,374

 

 
(9,643
)
 
4,731

Administrative, transaction and other fees
13,486

 

 

 
13,486

Total revenues
304,867




(16,465
)

288,402

Expenses
 

 
 

 
 

 
 
Compensation and benefits
129,347

 

 

 
129,347

Performance related compensation
58,637

 

 

 
58,637

General, administrative and other expense
47,104

 

 

 
47,104

Expenses of the Consolidated Funds

 
25,862

 
(6,823
)
 
19,039

Total expenses
235,088


25,862


(6,823
)

254,127

Other income (expense)
 

 
 

 
 

 
 
Net realized and unrealized gain on investments
5,101

 

 
(872
)
 
4,229

Interest and dividend income
1,986

 

 
(225
)
 
1,761

Interest expense
(5,343
)
 

 

 
(5,343
)
Other expense, net
(2,492
)
 

 

 
(2,492
)
Net realized and unrealized gain on investments of the Consolidated Funds

 
48,058

 
(12,118
)
 
35,940

Interest and other income of the Consolidated Funds

 
48,181

 

 
48,181

Interest expense of Consolidated Funds

 
(41,012
)
 
12,885

 
(28,127
)
Total other income (expense)
(748
)
 
55,227

 
(330
)
 
54,149

Income before taxes
69,031


29,365


(9,972
)

88,424

Income tax expense
3,354

 
1,198

 

 
4,552

Net income
65,677

 
28,167

 
(9,972
)
 
83,872

Less: Net income attributable to non-controlling interests in Consolidated Funds

 
28,167

 
(9,972
)
 
18,195

Less: Net income attributable to non-controlling interests in Ares Operating Group entities
37,839

 

 

 
37,839

Net income attributable to Ares Management, L.P.
27,838






27,838

Less: Preferred equity dividend paid
5,425

 

 

 
5,425

Net income attributable to Ares Management, L.P. common shareholders
$
22,413


$


$


$
22,413

 
 
For the Nine Months Ended September 30, 2018
 
Consolidated
Company 
Entities 
 
Consolidated
Funds 
 
Eliminations 
 
Consolidated 
Revenues
 

 
 

 
 

 
 

Management fees (includes ARCC Part I Fees of $91,660)
$
612,792

 
$

 
$
(24,721
)
 
$
588,071

Carried interest allocation
72,587

 

 

 
72,587

Incentive fees
17,683

 

 
(4,000
)
 
13,683

Principal investment income
9,544

 

 
(10,228
)
 
(684
)
Administrative, transaction and other fees
37,372

 

 

 
37,372

Total revenues
749,978




(38,949
)

711,029

Expenses
 

 
 

 
 

 
 
Compensation and benefits
419,225

 

 

 
419,225

Performance related compensation
30,479

 

 

 
30,479

General, administrative and other expense
155,523

 

 

 
155,523

Expenses of the Consolidated Funds

 
77,982

 
(28,721
)
 
49,261

Total expenses
605,227


77,982


(28,721
)

654,488

Other income (expense)
 

 
 

 
 

 
 
Net realized and unrealized gain on investments
9,800

 

 
(1,830
)
 
7,970

Interest and dividend income
6,604

 

 
(93
)
 
6,511

Interest expense
(17,088
)
 

 

 
(17,088
)
Other expense, net
(2,106
)
 

 
619

 
(1,487
)
Net realized and unrealized gain on investments of the Consolidated Funds

 
26,053

 
786

 
26,839

Interest and other income of the Consolidated Funds

 
250,117

 

 
250,117

Interest expense of consolidated Funds

 
(165,080
)
 
1,138

 
(163,942
)
Total other income (expense)
(2,790
)

111,090


620


108,920

Income before taxes
141,961


33,108


(9,608
)

165,461

Income tax expense
29,577

 
82

 

 
29,659

Net income
112,384


33,026


(9,608
)

135,802

Less: Net income attributable to non-controlling interests in Consolidated Funds

 
33,026

 
(9,608
)
 
23,418

Less: Net income attributable to non-controlling interests in Ares Operating Group entities
67,301

 

 

 
67,301

Net income attributable to Ares Management, L.P.
45,083






45,083

Less: Preferred equity dividend paid
16,275

 

 

 
16,275

Net income attributable to Ares Management, L.P. common shareholders
$
28,808


$


$


$
28,808



 
For the Nine Months Ended September 30, 2017
 
As Adjusted
 
Consolidated
Company 
Entities 
 
Consolidated
Funds 
 
Eliminations 
 
Consolidated 
Revenues
 

 
 

 
 

 
 

Management fees (includes ARCC Part I Fees of $76,436)
$
550,969

 
$

 
$
(14,979
)
 
$
535,990

Carried interest allocation
469,363

 

 
(1,014
)
 
468,349

Incentive fees
14,600

 

 
(2,745
)
 
11,855

Principal investment income
61,709

 

 
(16,084
)
 
45,625

Administrative, transaction and other fees
43,024

 

 

 
43,024

Total revenues
1,139,665

 

 
(34,822
)
 
1,104,843

Expenses
 

 
 

 
 

 
 
Compensation and benefits
384,905

 

 

 
384,905

Performance related compensation
361,044

 

 

 
361,044

General, administrative and other expense
145,193

 

 

 
145,193

Transaction support expense
275,177

 

 

 
275,177

Expenses of the Consolidated Funds

 
45,196

 
(17,724
)
 
27,472

Total expenses
1,166,319

 
45,196

 
(17,724
)
 
1,193,791

Other income (expense)
 

 
 

 
 

 
 
Net realized and unrealized gain (loss) on investments
3,810

 

 
(5,281
)
 
(1,471
)
Interest and dividend income
7,045

 

 
(1,898
)
 
5,147

Interest expense
(15,576
)
 

 

 
(15,576
)
Other income, net
16,826

 

 

 
16,826

Net realized and unrealized gain on investments of the Consolidated Funds

 
79,450

 
(24,187
)
 
55,263

Interest and other income of the Consolidated Funds

 
127,999

 

 
127,999

Interest expense of Consolidated Funds

 
(116,927
)
 
30,603

 
(86,324
)
Total other income
12,105

 
90,522

 
(763
)
 
101,864

Income (loss) before taxes
(14,549
)
 
45,326

 
(17,861
)
 
12,916

Income tax expense (benefit)
(30,521
)
 
2,062

 

 
(28,459
)
Net income
15,972

 
43,264

 
(17,861
)
 
41,375

Less: Net income attributable to non-controlling interests in Consolidated Funds

 
43,264

 
(17,861
)
 
25,403

Less: Net loss attributable to non-controlling interests in Ares Operating Group entities
(20,610
)
 

 

 
(20,610
)
Net income attributable to Ares Management, L.P.
36,582

 

 

 
36,582

Less: Preferred equity dividend paid
16,275

 

 

 
16,275

Net income attributable to Ares Management, L.P. common shareholders
$
20,307


$


$


$
20,307