10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to            

Commission File No. 001-36429

ARES MANAGEMENT CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	80-0962035
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

2000 Avenue of the Stars, 12th Floor, Los Angeles, CA 90067

(Address of principal executive office) (Zip Code)

(310) 201-4100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	ARES	New York Stock Exchange
7.00% Series A Preferred Stock, par value $0.01 per share	ARES.PRA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x  No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company.” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  x Accelerated Filer ☐ Non-Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No x

As of May 4, 2020 there were 132,460,236 of the registrant’s shares of Class A common stock outstanding, 1,000 shares of the registrant's Class B common stock outstanding, and 115,199,621 of the registrant's Class C common stock outstanding.

TABLE OF CONTENTS

	Page
PART I—FINANCIAL INFORMATION
Item 1. Financial Information - Unaudited	8
Condensed Consolidated Statements of Financial Condition as of March 31, 2020 and December 31, 2019	8
Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and March 31, 2019	9
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31,2020 and March 31,2019	10
Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2020 and for the year ended December 31, 2019	11
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and March 31, 2019	13
Notes to the Condensed Consolidated Financial Statements	14
Item 2.  Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	49
Item 3. Quantitative and Qualitative Disclosures about Market Risk	85
Item 4.  Controls And Procedures	86
PART II—OTHER INFORMATION
Item 1. Legal Proceedings	87
Item 1A.  Risk Factors	87
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	90
Item 3. Defaults Upon Senior Securities	90
Item 4. Mine Safety Disclosure	90
Item 5. Other Information	90
Item 6. Exhibits	91
Signatures	92

2

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which reflect our current views with respect to, among other things, future events, operations and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. Some of these factors are described in this report and in our Annual Report on Form 10-K for the year ended December 31, 2019, under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors”. These factors should not be construed as exhaustive and should be read in conjunction with the risk factors and other cautionary statements that are included in this report and in our other periodic filings. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Therefore, you should not place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. For a discussion of risks resulting from the coronavirus (COVID-19) pandemic and the impact on the U.S. and global economy, along with the oil and gas market disruption, see “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q.

3

References in this Quarterly Report on Form 10-Q to the “Ares Operating Group” refer to, collectively, Ares Holdings L.P. (“Ares Holdings”), Ares Offshore Holdings L.P. (“Ares Offshore”) and Ares Investments L.P. (“Ares Investments”). References in this Quarterly Report on Form 10-Q to an “Ares Operating Group Unit” or an “AOG Unit” refer to, collectively, a partnership unit in each of the Ares Operating Group entities. The use of any defined term in this report to mean more than one entities, persons, securities or other items collectively is solely for convenience of reference and in no way implies that such entities, persons, securities or other items are one indistinguishable group. For example, notwithstanding the use of the defined terms “Ares,” “we” and “our” in this report to refer to Ares Management Corporation and its subsidiaries, each subsidiary of Ares Management Corporation is a standalone legal entity that is separate and distinct from Ares Management Corporation and any of its other subsidiaries.

Under generally accepted accounting principles in the United States (“GAAP”), we are required to consolidate (a) entities other than limited partnerships and entities similar to limited partnerships in which we hold a majority voting interest or have majority ownership and control over the operational, financial and investing decisions of that entity, including Ares-affiliates and affiliated funds and co-investment entities, for which we are presumed to have controlling financial interests, and (b) entities that we concluded are variable interest entities (“VIEs”), including limited partnerships and collateralized loan obligations, for which we are deemed to be the primary beneficiary. When an entity is consolidated, we reflect the assets, liabilities, revenues, expenses and cash flows of the entity in our consolidated financial statements on a gross basis, subject to eliminations from consolidation, including the elimination of the management fees, performance income and other fees that we earn from the entity. However, the presentation of performance related compensation and other expenses associated with generating such revenues is not affected by the consolidation process. In addition, as a result of the consolidation process, the net income attributable to third-party investors in consolidated entities is presented as net income attributable to non-controlling interests in Consolidated Funds in our Condensed Consolidated Statements of Operations.

In this Quarterly Report on Form 10-Q, in addition to presenting our results on a consolidated basis in accordance with GAAP, we present revenues, expenses and other results on a (i) “segment basis,” which deconsolidates these entities and therefore shows the results of our reportable segments without giving effect to the consolidation of the entities and (ii) “unconsolidated reporting basis,” which shows the results of our reportable segments on a combined segment basis together with our Operations Management Group. In addition to our reportable segments, we have an Operations Management Group (the “OMG”). The OMG consists of shared resource groups to support our reportable segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, strategy and relationship management, legal, compliance and human resources. The OMG’s expenses are not allocated to our reportable segments but we consider the cost structure of the OMG when evaluating our financial performance. This information constitutes non-GAAP financial information within the meaning of Regulation G, as promulgated by the SEC. Our management uses this information to assess the performance of our reportable segments and the OMG, and we believe that this information enhances the ability of shareholders to analyze our performance. For more information, see “Notes to the Condensed Consolidated Financial Statements - Note 14. Segment Reporting.”

4

Glossary

When used in this report, unless the context otherwise requires:

•“ARCC Part I Fees” refers to a quarterly performance income on the net investment income of Ares Capital Corporation (NASDAQ: ARCC) (“ARCC”). Such fees from ARCC are classified as management fees as they are predictable and recurring in nature, not subject to contingent repayment and generally cash-settled each quarter;

•“ARCC Part II Fees” refers to fees that are paid in arrears as of the end of each calendar year when the cumulative aggregate realized capital gains exceed the cumulative aggregate realized capital losses and aggregate unrealized capital depreciation, less the aggregate amount of ARCC Part II Fees paid in all prior years since inception;

•“Ares”, “the Company”, “we”, “us” and “our” refer to Ares Management Corporation and its subsidiaries;

•“Ares Operating Group Unit” or an “AOG Unit” refers to, collectively, a partnership unit in each of the Ares Operating Group entities;

•“assets under management” or “AUM” refers to the assets we manage. For our funds other than CLOs, our AUM represents the sum of the net asset value ("NAV") of such funds, the drawn and undrawn debt (at the fund-level including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). For our funds that are CLOs, our AUM is equal to initial principal amounts adjusted for paydowns;

•"AUM not yet paying fees" refers to AUM that is not currently paying fees and is eligible to earn management fees upon deployment;

•“available capital” (also referred to as “dry powder”) is comprised of uncalled committed capital and undrawn amounts under credit facilities and may include AUM that may be canceled or not otherwise available to invest;

•“Class B membership interests” refers to the interests that were retained by the former owners of Crestline Denali Capital LLC and represent the financial interests in the subordinated notes of the CLOs;

•“CLOs” refers to “our funds” that are structured as collateralized loan obligations;

•“Consolidated Funds” refers collectively to certain Ares-affiliated funds, related co-investment entities and certain CLOs that are required under GAAP to be consolidated in our consolidated financial statements;

•“Credit Facility” refers to the revolving credit facility of the Ares Operating Group;

•“effective management fee rate” represents the annualized fees divided by the average fee paying AUM for the period, excluding the impact of one-time catch-up fees;

•“fee paying AUM” or “FPAUM” refers to the AUM from which we directly earn management fees. Fee paying AUM is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees;

•“fee related earnings” or “FRE”, a non-GAAP measure, is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes performance income, performance related compensation, investment income from our Consolidated Funds and non-consolidated funds and certain other items that we believe are not indicative of our core operating performance;

•“GAAP” refers to accounting principles generally accepted in the United States of America;

•“Holdco Members” refers to Michael Arougheti, David Kaplan, Antony Ressler, Bennett Rosenthal, Ryan Berry, R. Kipp deVeer and Michael McFerran;

5

•“Incentive eligible AUM” or “IEAUM” refers to the AUM of our funds from which performance income may be generated, regardless of whether or not they are currently generating performance income. It generally represents the NAV plus uncalled equity or total assets plus uncalled debt, as applicable, of our funds for which we are entitled to receive performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income). With respect to ARCC's AUM, only ARCC Part II Fees may be generated from IEAUM;

•“Incentive generating AUM” or “IGAUM” refers to the AUM of our funds that are currently generating, on a realized or unrealized basis, performance income. It generally represents the NAV or total assets of our funds, as applicable, for which we are entitled to receive performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income). ARCC is only included in IGAUM when ARCC Part II Fees are being generated;

•“management fees” refers to fees we earn for advisory services provided to our funds, which are generally based on a defined percentage of fair value of assets, total commitments, invested capital, net asset value, net investment income, total assets or par value of the investment portfolios managed by us and include ARCC Part I Fees;

•“net inflows of capital” refers to net new commitments during the period, including equity and debt commitments and gross inflows into our open-ended managed accounts and sub-advised accounts, as well as new debt and equity issuances by our publicly traded vehicles minus redemptions from our open-ended funds, managed accounts and sub-advised accounts;

•“net performance income” refers to performance income net of performance related compensation. Performance related compensation is the portion of performance income that is payable to our professionals;

•“our funds” refers to the funds, alternative asset companies, co-investment vehicles and other entities and accounts that are managed or co-managed by the Ares Operating Group, and which are structured to pay fees. It also includes funds managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of ARCC and a registered investment adviser;

•“permanent capital” refers to capital of our funds that do not have redemption provisions or a requirement to return capital to investors upon exiting the investments made with such capital, except as required by applicable law. Such funds currently consist of ARCC, Ares Commercial Real Estate Corporation (“ACRE”) and Ares Dynamic Credit Allocation Fund, Inc. (“ARDC”). Such funds may be required, or elect, to return all or a portion of capital gains and investment income;

•“performance income” refers to income we earn based on the performance of a fund that is generally based on certain specific hurdle rates as defined in the fund’s investment management or partnership agreements and may be either an incentive fee or carried interest;

•“realized income” or “RI”, a non-GAAP measure, is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and losses, which may or may not be eventually realized at the levels presented and whose realizations depend more on future outcomes than current business operations. RI differs from net income by excluding (a) income tax expense, (b) operating results of our Consolidated Funds, (c) depreciation and amortization expense, (d) the effects of changes arising from corporate actions, (e) unrealized gains and losses related to performance income and investment performance and (f) certain other items that we believe are not indicative of our operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital transactions, underwriting costs and expenses incurred in connection with corporate reorganization;

•“SEC” refers to the Securities and Exchange Commission;

•“Senior Notes” or the "AFC Notes" refers to senior notes issued by a wholly owned subsidiary of Ares Holdings; and

•"Series A Preferred Stock" refers to the preferred stock, $0.01 par value per share, of the Company designated as 7.00% Series A Preferred Stock.

6

Many of the terms used in this report, including AUM, FPAUM, FRE and RI, may not be comparable to similarly titled measures used by other companies. In addition, our definitions of AUM and FPAUM are not based on any definition of AUM or FPAUM that is set forth in the agreements governing the investment funds that we manage and may differ from definitions of AUM or FPAUM set forth in other agreements to which we are a party or definitions used by the SEC or other regulatory bodies. Further, FRE and RI are not measures of performance calculated in accordance with GAAP. We use FRE and RI as measures of operating performance, not as measures of liquidity. FRE and RI should not be considered in isolation or as substitutes for operating income, net income, operating cash flows, or other income or cash flow statement data prepared in accordance with GAAP. The use of FRE and RI without consideration of related GAAP measures is not adequate due to the adjustments described above. Our management compensates for these limitations by using FRE and RI as supplemental measures to our GAAP results. We present these measures to provide a more complete understanding of our performance as our management measures it. Amounts and percentages throughout this report may reflect rounding adjustments and consequently totals may not appear to sum.

7

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Ares Management Corporation 

Condensed Consolidated Statements of Financial Condition 

(Amounts in Thousands, Except Share Data)

	As of March 31,		As of December 31,
	2020		2019
	(unaudited)
Assets
Cash and cash equivalents	$	1,167,673	$	138,384
Investments (includes accrued carried interest of $747,363 and $1,134,967 at March 31, 2020 and December 31, 2019, respectively)	1,190,604		1,663,664
Due from affiliates	288,030		268,099
Other assets	426,911		341,293
Right-of-use operating lease assets	145,225		143,406
Assets of Consolidated Funds:
Cash and cash equivalents	514,401		606,321
Investments, at fair value	9,094,565		8,727,947
Due from affiliates	6,192		6,192
Receivable for securities sold	355,149		88,809
Other assets	28,179		30,081
Total assets	$	13,216,929	$	12,014,196
Liabilities
Accounts payable, accrued expenses and other liabilities	$	90,613	$	88,173
Accrued compensation	69,702		37,795
Due to affiliates	73,050		71,445
Performance related compensation payable	532,665		829,764
Debt obligations	1,046,775		316,609
Operating lease liabilities	169,828		168,817
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities	72,486		61,857
Payable for securities purchased	796,316		500,146
CLO loan obligations, at fair value	8,354,458		7,973,748
Fund borrowings	35,440		107,244
Total liabilities	11,241,333		10,155,598
Commitments and contingencies
Non-controlling interest in Consolidated Funds	562,818		618,020
Non-controlling interest in Ares Operating Group entities	514,166		472,288
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	298,761		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (132,373,743 shares and 115,242,028 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively)	1,324		1,152
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (115,199,621 shares and 1 share issued and outstanding at March 31, 2020 and December 31, 2019, respectively)	1,152		—
Additional paid-in-capital	746,595		525,244
Retained earnings	(138,371)		(50,820)
Accumulated other comprehensive loss, net of tax	(10,849)		(6,047)
Total stockholders' equity	898,612		768,290
Total equity	1,975,596		1,858,598
Total liabilities, non-controlling interests and equity	$	13,216,929	$	12,014,196

See accompanying notes to the condensed consolidated financial statements.

8

Ares Management Corporation

Condensed Consolidated Statements of Operations

(Amounts in Thousands, Except Share Data)

(unaudited)

	Three months ended March 31,
	2020		2019
Revenues
Management fees (includes ARCC Part I Fees of $43,923 and $38,393 for the three months ended March 31, 2020 and 2019, respectively)	$	263,849	$	224,659
Carried interest allocation	(230,876)		197,293
Incentive fees	(3,249)		16,815
Principal investment income (loss)	(26,723)		28,759
Administrative, transaction and other fees	10,408		9,671
Total revenues	13,409		477,197
Expenses
Compensation and benefits	180,084		156,846
Performance related compensation	(167,899)		156,520
General, administrative and other expenses	62,331		51,187
Expenses of Consolidated Funds	7,443		4,554
Total expenses	81,959		369,107
Other income (expense)
Net realized and unrealized gains (losses) on investments	(8,034)		3,476
Interest and dividend income	1,790		1,844
Interest expense	(5,306)		(5,589)
Other income (expense), net	5,464		(4,497)
Net realized and unrealized gains (losses) on investments of Consolidated Funds	(254,761)		4,364
Interest and other income of Consolidated Funds	113,225		93,184
Interest expense of Consolidated Funds	(80,241)		(64,912)
Total other income (expense)	(227,863)		27,870
Income (loss) before taxes	(296,413)		135,960
Income tax expense (benefit)	(20,616)		14,384
Net income (loss)	(275,797)		121,576
Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds	(166,406)		17,624
Less: Net income (loss) attributable to non-controlling interests in Ares Operating Group entities	(78,355)		59,003
Net income (loss) attributable to Ares Management Corporation	(31,036)		44,949
Less: Series A Preferred Stock dividends paid	5,425		5,425
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524
Net income (loss) attributable per share of Class A common stock
Basic	$	(0.33)	$	0.36
Diluted	$	(0.33)	$	0.36
Weighted-average shares of Class A common stock:
Basic	118,366,539		102,906,494
Diluted	118,366,539		110,699,112

Substantially all revenue is earned from affiliated funds of the Company. See accompanying notes to the condensed consolidated financial statements.

9

Ares Management Corporation

Condensed Consolidated Statements of Comprehensive Income

(Amounts in Thousands)

(unaudited)

	Three months ended March 31,
	2020		2019
Net income (loss)	$	(275,797)	$	121,576
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax	(14,208)		1,084
Total comprehensive income (loss)	(290,005)		122,660
Less: Comprehensive income (loss) attributable to non-controlling interests in Consolidated Funds	(171,093)		15,965
Less: Comprehensive income (loss) attributable to non-controlling interests in Ares Operating Group entities	(83,074)		60,462
Comprehensive income (loss) attributable to Ares Management Corporation	$	(35,838)	$	46,233

See accompanying notes to the condensed consolidated financial statements.

10

Ares Management Corporation

Condensed Consolidated Statements of Changes in Equity 

(Amounts in Thousands)

(unaudited)

	Series A Preferred Stock		Class A Common Stock		Class C Common Stock		Additional Paid-in-Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Non-Controlling Interest in Ares Operating Group Entities		Non-Controlling Interest in Consolidated Funds		Total Equity
Balance at December 31, 2019	$	298,761	$	1,152	$	—	$	525,244	$	(50,820)	$	(6,047)	$	472,288	$	618,020	$	1,858,598
Consolidation and deconsolidation of funds, net	—		—		—		—		—		—		—		(3,882)		(3,882)
Changes in ownership interests and related tax benefits	—		40		—		(196,670)		—		—		122,551		—		(74,079)
Issuances of common stock	—		121		1,152		382,061		—		—		—		—		383,334
Capital contributions	—		—		—		—		—		—		42,012		133,265		175,277
Dividends/Distributions	(5,425)		—		—		—		(51,090)		—		(55,748)		(13,492)		(125,755)
Net loss	5,425		—		—		—		(36,461)		—		(78,355)		(166,406)		(275,797)
Currency translation adjustment	—		—		—		—		—		(4,802)		(4,719)		(4,687)		(14,208)
Equity compensation	—		—		—		16,420		—		—		16,137		—		32,557
Stock option exercises	—		11		—		19,540		—		—		—		—		19,551
Balance at March 31, 2020	$	298,761	$	1,324	$	1,152	$	746,595	$	(138,371)	$	(10,849)	$	514,166	$	562,818	$	1,975,596

See accompanying notes to the condensed consolidated financial statements.

11

Ares Management Corporation

Condensed Consolidated Statements of Changes in Equity 

(Amounts in Thousands)

(unaudited)

	Series A Preferred Stock		Class A Common Stock		Additional Paid-in-Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Non-Controlling Interest in Ares Operating Group Entities		Non-Controlling Interest in Consolidated Funds		Total Equity
Balance at December 31, 2018	$	298,761	$	1,016	$	326,007	$	(29,336)	$	(8,524)	$	302,780	$	503,637	$	1,394,341
Relinquished with deconsolidation of funds	—		—		—		—		—		—		(55)		(55)
Changes in ownership interests and related tax benefits	—		15		(6,339)		—		—		(12,073)		—		(18,397)
Contributions	—		—		—		—		—		1,876		54,035		55,911
Dividends/Distributions	(5,425)		—		—		(35,367)		—		(40,112)		(20,736)		(101,640)
Net income	5,425		—		—		39,524		—		59,003		17,624		121,576
Currency translation adjustment	—		—		—		—		1,284		1,459		(1,659)		1,084
Equity compensation	—		—		12,637		—		—		14,367		—		27,004
Balance at March 31, 2019	298,761		1,031		332,305		(25,179)		(7,240)		327,300		552,846		1,479,824
Changes in ownership interests and related tax benefits	—		5		(32,128)		—		—		20,615		—		(11,508)
Repurchases of Class A common stock	—		(4)		(10,445)		—		—		—		—		(10,449)
Contributions	—		—		—		—		—		—		61,464		61,464
Dividends/Distributions	(5,425)		—		—		(36,782)		—		(40,103)		(10,219)		(92,529)
Net income	5,425		—		—		26,714		—		34,393		8,346		74,878
Currency translation adjustment	—		—		—		—		(1,639)		(1,858)		1,506		(1,991)
Equity compensation	—		—		11,306		—		—		12,535		—		23,841
Stock option exercises	—		43		78,751		—		—		—		—		78,794
Balance at June 30, 2019	298,761		1,075		379,789		(35,247)		(8,879)		352,882		613,943		1,602,324
Changes in ownership interests and related tax benefits	—		1		(94,004)		—		—		95,212		—		1,209
Contributions	—		70		206,635		—		—		—		49,391		256,096
Dividends/Distributions	(5,425)		—		—		(36,967)		—		(48,970)		(34,620)		(125,982)
Net income	5,425		—		—		27,906		—		42,636		15,908		91,875
Currency translation adjustment	—		—		—		—		(2,131)		(2,352)		(4,946)		(9,429)
Equity compensation	—		—		10,816		—		—		11,577		—		22,393
Stock option exercises	—		1		4,295		—		—		—		—		4,296
Balance at September 30, 2019	298,761		1,147		507,531		(44,308)		(11,010)		450,985		639,676		1,842,782
Changes in ownership interests and related tax benefits	—		1		(1,505)		—		—		1,587		—		83
Contributions	—		—		—		—		—		—		7,961		7,961
Dividends/Distributions	(5,425)		—		—		(39,552)		—		(45,814)		(30,707)		(121,498)
Net income	5,425		—		—		33,040		—		48,184		(2,174)		84,475
Currency translation adjustment	—		—		—		—		4,963		5,431		3,264		13,658
Equity compensation	—		—		11,801		—		—		11,915		—		23,716
Stock option exercises	—		4		7,417		—		—		—		—		7,421
Balance at December 31, 2019	$	298,761	$	1,152	$	525,244	$	(50,820)	$	(6,047)	$	472,288	$	618,020	$	1,858,598

See accompanying notes to the condensed consolidated financial statements.

12

Ares Management Corporation

Condensed Consolidated Statements of Cash Flows

(Amounts in Thousands)

(unaudited)

	Three months ended March 31,
	2020		2019
Cash flows from operating activities:
Net income (loss)	$	(275,797)	$	121,576
Adjustments to reconcile net income (loss) to net cash used in operating activities	125,070		10,766
Adjustments to reconcile net income (loss) to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds	(453,015)		(416,457)
Cash flows due to changes in operating assets and liabilities	51,995		3,537
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:	188,510		(69,268)
Net cash used in operating activities	(363,237)		(349,846)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(3,062)		(2,994)
Acquisitions	(35,844)		—
Net cash used in investing activities	(38,906)		(2,994)
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,334		—
Proceeds from credit facility	790,000		145,000
Repayments of credit facility	(60,000)		(60,000)
Dividends and distributions	(106,838)		(75,479)
Series A Preferred Stock dividends and distributions	(5,425)		(5,425)
Stock option exercises	19,551		—
Taxes paid related to net share settlement of equity awards	(73,500)		(21,121)
Other financing activities	(2,125)		2,140
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	133,265		54,035
Distributions to non-controlling interests in Consolidated Funds	(13,492)		(20,736)
Borrowings under loan obligations by Consolidated Funds	454,391		396,144
Repayments under loan obligations by Consolidated Funds	(73,609)		(61,227)
Net cash provided by financing activities	1,445,552		353,331
Effect of exchange rate changes	(14,120)		9,760
Net change in cash and cash equivalents	1,029,289		10,251
Cash and cash equivalents, beginning of period	138,384		110,247
Cash and cash equivalents, end of period	$	1,167,673	$	120,498

See accompanying notes to the condensed consolidated financial statements.

13

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

1. ORGANIZATION 

Ares Management Corporation (the "Company"), a Delaware corporation, together with its subsidiaries, is a leading global alternative investment manager operating integrated businesses across Credit, Private Equity and Real Estate. Information about segments should be read together with Note 14, “Segment Reporting.” Subsidiaries of the Company serve as the general partners and/or investment managers to various investment funds and managed accounts within each investment group (the “Ares Funds”). Such subsidiaries provide investment advisory services to the Ares Funds in exchange for management fees.

The accompanying unaudited financial statements include the condensed consolidated results of the Company and its subsidiaries. The Company is a holding company, and the Company’s sole assets are equity interests in Ares Holdings Inc., Ares Offshore Holdings, Ltd., and Ares AI Holdings L.P. In this quarterly report, the following of the Company’s subsidiaries are collectively referred to as the “Ares Operating Group” or “AOG”: Ares Offshore Holdings L.P. ("Ares Offshore"), Ares Holdings L.P. ("Ares Holdings"), and Ares Investments L.P ("Ares Investments"). The Company, indirectly through its wholly owned subsidiaries, is the general partner of each of the Ares Operating Group entities. The Company operates and controls all of the businesses and affairs of and conducts all of its material business activities through the Ares Operating Group.

Non-Controlling Interests in Ares Operating Group Entities

On February 21, 2020, the Company completed its acquisition of the Class A membership interests (the "Class A membership interests") in Crestline Denali Capital LLC ("Crestline Denali"). The Class A membership interests entitle the Company to the fees associated with managing seven collateral management contracts. The Class B membership interests of Crestline Denali (the "Class B membership interests") were retained by the former owners of Crestline Denali and represent the financial interests in the subordinated notes of the collateralized loan obligations.

The non-controlling interests in AOG entities represent a component of equity and net income attributable to the owners of the Ares Operating Group Units (“AOG Units”) that are not held directly or indirectly by the Company. These owners consist predominantly of Ares Owners Holdings L.P. but also include other strategic distribution partnerships with whom the Company has established joint ventures. In connection with the Company's control over Crestline Denali, the Company also consolidates investments and financial results that are attributable to the Class B membership interests to which the Company has no economic rights or obligations. Equity and income (loss) attributable to the Class B membership interests is included within non-controlling interests in AOG entities. Non-controlling interests in AOG entities are adjusted for contributions to and distributions from AOG during the reporting period and are allocated income from the AOG entities based on their historical ownership percentage for the proportional number of days in the reporting period.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent, and that all such adjustments are of a normal recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission ("SEC").

As of March 31, 2020, the impact of the outbreak of the coronavirus (COVID-19) pandemic continues to unfold. As a result, management's estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period.

14

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. All intercompany balances and transactions have been eliminated upon consolidation.

The Company has reclassified certain prior period amounts to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds.

At March 31, 2020 and December 31, 2019, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update related to separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this update clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. An entity may elect to adopt the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent

15

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. An entity may elect to apply the amendments in ASU 2020-04 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity may be made at any time after March 12, 2020 but no later than December 31, 2022. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

3. GOODWILL AND INTANGIBLE ASSETS

Finite Lived Intangible Assets, Net

The following table summarizes the carrying value, net of accumulated amortization, of the Company's intangible assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition:

	Weighted Average Amortization Period as of March 31, 2020	As of March 31,		As of December 31,
		2020		2019
Management contracts	6.3 years	$	42,547	$	12,498
Client relationships	8.3 years	6,341		6,341
Trade name	2.3 years	378		378
Intangible assets		49,266		19,217
Less: accumulated amortization		(7,592)		(11,242)
Intangible assets, net		$	41,674	$	7,975

In connection with the acquisition of seven collateral management agreements during the first quarter of 2020, the Company allocated $34.7 million of the $35.8 million purchase price to the fair value of the collateral management contracts. The acquired management contracts had a weighted average amortization period of 6.5 years as of March 31, 2020.

Amortization expense associated with intangible assets was $1.0 million and $1.2 million for the three months ended March 31, 2020 and 2019, respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. During the first quarter of 2020, the Company removed $4.7 million of intangible assets that were fully amortized.

Goodwill

The following table summarizes the carrying value of the Company's goodwill assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition:

	Credit Group		Private Equity Group		Real Estate Group		Total
Balance as of December 31, 2019	$	32,196	$	58,600	$	53,059	$	143,855
Foreign currency translation	—		—		(113)		(113)
Balance as of March 31, 2020	$	32,196	$	58,600	$	52,946	$	143,742

There was no impairment of goodwill recorded during the three months ended March 31, 2020 and 2019. The impact of foreign currency translation is reflected within other comprehensive income.

16

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

4. INVESTMENTS

The Company’s investments are comprised of the following:

					Percentage of total investments as of
	March 31,		December 31,		March 31,		December 31,
	2020		2019		2020		2019
Equity method investments:
Equity method private investment partnership interests - principal (1)	$	345,350	$	390,407	29.0	%	23.5	%
Equity method - carried interest (1)	747,363		1,134,967		62.8		68.2
Equity method private investment partnership interests and other (held at fair value)	18,911		51,528		1.6		3.1
Equity method private investment partnership interests and other	12,763		16,536		1.0		1.0
Total equity method investments	1,124,387		1,593,438		94.4		95.8
Collateralized loan obligations (2)	17,783		22,265		1.5		1.3
Other fixed income	47,561		46,918		4.0		2.8
Collateralized loan obligations and other fixed income, at fair value	65,344		69,183		5.5		4.1
Common stock, at fair value	873		1,043		0.1		0.1
Total investments	$	1,190,604	$	1,663,664

(1)Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date.

(2)Includes $2.6 million of collateralized loan obligations that are attributable to the Crestline Denali Class B Interests.

Equity Method Investments

The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant as defined by guidance from the SEC. As of and for the three months ended March 31, 2020 and 2019 no individual equity method investment held by the Company met the significance criteria.

The Company recognized a net loss related to its equity method investments of $28.8 million for the three months ended March 31, 2020. The Company recognized a net gain related to its equity method investments of $29.0 million for the three months ended March 31, 2019. The net gains and losses were included within principal investment income, net realized and unrealized gains on investments, and interest and dividend income within the Condensed Consolidated Statements of Operations.

With respect to the Company's equity method investments, the material assets are expected to generate either long-term capital appreciation and or interest income while the material liabilities are debt instruments collateralized by, or related to, the financing of the assets and net income is materially comprised of the changes in fair value of these net assets.

17

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Investments of the Consolidated Funds

Investments held in the Consolidated Funds are summarized below:

	Fair Value at				Percentage of total investments as of
	March 31,		December 31,		March 31,		December 31,
	2020		2019		2020		2019
Fixed income investments:
Bonds	$	200,152	$	212,376	2.2	%	2.4	%
Loans	8,533,658		8,062,740		93.8		92.4
Investments in CLO warehouse	—		44,435		—		0.5
Total fixed income investments	8,733,810		8,319,551		96.0		95.3
Equity securities	53,730		112,384		0.6		1.3
Partnership interests	307,025		296,012		3.4		3.4
Total investments, at fair value	$	9,094,565	$	8,727,947

At March 31, 2020 and December 31, 2019, no single issuer or investment, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5.0% of the Company’s total assets.

5. FAIR VALUE

Fair Value Measurements

GAAP establishes a hierarchal disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value.

Financial assets and liabilities measured and reported at fair value are classified as follows:

•Level I—Quoted prices in active markets for identical instruments.

•Level II—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates.

•Level III—Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available.

In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period.

18

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Fair Value of Financial Instruments Held by the Company and Consolidated Funds

The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of March 31, 2020:

Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income	$	—	$	—	$	65,344	$	—	$	65,344
Common stock and other equity securities	—		873		14,704		—		15,577
Partnership interests	—		—		2,575		1,632		4,207
Total investments, at fair value	—		873		82,623		1,632		85,128
Derivatives-foreign exchange contracts	—		5,429		—		—		5,429
Total assets, at fair value	$	—	$	6,302	$	82,623	$	1,632	$	90,557
Liabilities, at fair value
Derivatives-foreign exchange contracts	$	—	$	(5)	$	—	$	—	$	(5)
Total liabilities, at fair value	$	—	$	(5)	$	—	$	—	$	(5)

Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds	$	—	$	187,051	$	13,101	$	200,152
Loans	—		7,267,203		1,266,455		8,533,658
Total fixed income investments	—		7,454,254		1,279,556		8,733,810
Equity securities	10,978		—		42,752		53,730
Partnership interests	—		—		307,025		307,025
Total investments, at fair value	10,978		7,454,254		1,629,333		9,094,565
Derivatives-asset swaps-other	—		—		831		831
Total assets, at fair value	$	10,978	$	7,454,254	$	1,630,164	$	9,095,396
Liabilities, at fair value
Derivatives-asset swaps-other	$	—	$	—	$	(811)	$	(811)
Loan obligations of CLOs	—		(8,354,458)		—		(8,354,458)
Total liabilities, at fair value	$	—	$	(8,354,458)	$	(811)	$	(8,355,269)

19

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2019:

Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income	$	—	$	—	$	69,183	$	—	$	69,183
Common stock and other equity securities	—		1,043		14,704		—		15,747
Partnership interests	—		—		35,192		1,632		36,824
Total investments, at fair value	—		1,043		119,079		1,632		121,754
Derivatives-foreign exchange contracts	—		4,023		—		—		4,023
Total assets, at fair value	$	—	$	5,066	$	119,079	$	1,632	$	125,777
Liabilities, at fair value
Derivatives-foreign exchange contracts	$	—	$	(113)	$	—	$	—	$	(113)
Total liabilities, at fair value	$	—	$	(113)	$	—	$	—	$	(113)

Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds	$	—	$	207,966	$	4,410	$	212,376
Loans	—		7,728,014		334,726		8,062,740
Investments in CLO warehouse	—		44,435		—		44,435
Total fixed income investments	—		7,980,415		339,136		8,319,551
Equity securities	26,396		—		85,988		112,384
Partnership interests	—		—		296,012		296,012
Total investments, at fair value	26,396		7,980,415		721,136		8,727,947
Derivatives-foreign exchange contracts	—		667		—		667
Total assets, at fair value	$	26,396	$	7,981,082	$	721,136	$	8,728,614
Liabilities, at fair value
Derivatives:
Foreign exchange contracts	$	—	$	(670)	$	—	$	(670)
Asset swaps-other	—		—		(4,106)		(4,106)
Total derivative liabilities, at fair value	—		(670)		(4,106)		(4,776)
Loan obligations of CLOs	—		(7,973,748)		—		(7,973,748)
Total liabilities, at fair value	$	—	$	(7,974,418)	$	(4,106)	$	(7,978,524)

20

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2020:

	Level III Assets
Level III Assets of the Company	Equity  Securities		Fixed Income		Partnership Interests		Total
Balance, beginning of period	$	14,704	$	69,183	$	35,192	$	119,079
Additions(1)	—		3,686		—		3,686
Purchases(2)	—		643		—		643
Sales/settlements(3)	—		(402)		(32,430)		(32,832)
Realized and unrealized depreciation, net	—		(7,766)		(187)		(7,953)
Balance, end of period	$	14,704	$	65,344	$	2,575	$	82,623
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	—	$	(6,731)	$	5,511	$	(1,220)

Level III Assets of Consolidated Funds	Equity  Securities		Fixed  Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	85,988	$	339,136	$	296,012	$	(4,106)	$	717,030
Additions(1)	(635)		392,672		—		—		392,037
Transfer in	—		607,588		—		—		607,588
Transfer out	—		(61,774)		—		—		(61,774)
Purchases(2)	249		355,592		8,000		—		363,841
Sales/settlements(3)	(351)		(178,159)		—		(1,278)		(179,788)
Amortized discounts/premiums	—		499		—		48		547
Realized and unrealized appreciation (depreciation), net	(42,499)		(175,998)		3,013		5,356		(210,128)
Balance, end of period	$	42,752	$	1,279,556	$	307,025	$	20	$	1,629,353
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	(42,500)	$	(170,496)	$	3,012	$	2,874	$	(207,110)

(1)Additions relate to the net increase from consolidation of new funds or entities. For Consolidated Funds, additions are also offset by the deconsolidation of a fund.

(2)Purchases include paid-in-kind interest and securities received in connection with restructuring.

(3)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

21

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2019:

	Level III Assets
Level III Assets of the Company	Equity  Securities		Fixed Income		Partnership Interests		Total
Balance, beginning of period	$	10,397	$	60,824	$	35,192	$	106,413
Deconsolidation of fund	—		8,138		—		8,138
Purchases(1)	—		2,147		—		2,147
Sales/settlements(2)	—		(4,964)		—		(4,964)
Realized and unrealized appreciation, net	—		1,045		—		1,045
Balance, end of period	$	10,397	$	67,190	$	35,192	$	112,779
Increase in net unrealized appreciation included in earnings related to financial assets still held at the reporting date	$	—	$	719	$	—	$	719

Level III Assets of Consolidated Funds	Equity  Securities		Fixed  Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	150,752	$	547,958	$	271,447	$	680	$	970,837
Deconsolidation of fund	—		(58,883)		—		—		(58,883)
Transfer in	—		155,651		—		—		155,651
Transfer out	—		(182,087)		—		—		(182,087)
Purchases(1)	10,774		173,408		4,000		—		188,182
Sales/settlements(2)	(5,086)		(79,489)		—		(21)		(84,596)
Amortized discounts/premiums	—		312		—		(151)		161
Realized and unrealized appreciation (depreciation), net	2,592		7,434		7,612		(3,539)		14,099
Balance, end of period	$	159,032	$	564,304	$	283,059	$	(3,031)	$	1,003,364
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	2,592	$	7,894	$	7,612	$	(3,481)	$	14,617

(1)Purchases include paid-in-kind interest and securities received in connection with restructurings.

(2)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

The Company recognizes transfers between the levels as of the beginning of the period. Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service.

22

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of March 31, 2020:

Level III Measurements of the Company	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range
Assets
Equity securities	$	14,704	Transaction price(1)	N/A	N/A
Partnership interests	2,575		Other	N/A	N/A
Collateralized loan obligations	17,783		Broker quotes and/or 3rd party pricing services	N/A	N/A
Other fixed income	47,561		Other	N/A	N/A
Total	$	82,623

Level III Measurements of the Consolidated Funds	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range	Weighted Average
Assets
Equity securities
	$	325	Market approach	EBITDA multiple(2)	10.0x - 28.8x	18.9x
	40,426		Other	Net income multiple	32.5x	32.5x
				Illiquidity discount	25.0%	25.0%
	2,001		Transaction price	N/A	N/A	N/A
Partnership interest	307,025		Discounted cash flow	Discount rate	18.1%	18.1%
Fixed income securities
	1,223,236		Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
	56,320		Income approach	Yield	4.0% - 25.5%	10.4%
Total assets	$	1,630,164
Liabilities
Derivatives instruments	$	(811)	Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
Total liabilities	$	(811)

(1)Transaction price consists of securities recently purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

23

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2019:

Level III Measurements of the Company	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range
Assets
Equity securities	$	14,704	Transaction price(1)	N/A	N/A
Partnership interests	32,661		Transaction price(1)	N/A	N/A
	2,531		Other	N/A	N/A
Collateralized loan obligations	22,265		Broker quotes and/or 3rd party pricing services	N/A	N/A
Other fixed income	46,918		Other	N/A	N/A
Total	$	119,079

Level III Measurements of the Consolidated Funds	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range	Weighted Average
Assets
Equity securities
	$	431	Market approach	EBITDA multiple(2)	8.2x - 21.3x	16.1x
	40,745		Other	Net income multiple	36.2x	36.2x
				Illiquidity discount	25.0%	25.0%
	44,812		Transaction price(1)	N/A	N/A	N/A
Partnership interests	296,012		Discounted cash flow	Discount rate	19.6%	19.6%
Fixed income securities
	271,919		Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
	67,217		Income approach	Yield	4.8% - 14.3%	9.7%
Total assets	$	721,136
Liabilities
Derivatives instruments	$	(4,106)	Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
Total liabilities	$	(4,106)

(1)Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

The Company has an insurance-related investment in a private fund managed by a third party that is valued using NAV per share. The terms and conditions of this fund do not allow for redemptions without certain events or approvals that are outside the Company's control. This investment had a fair value of $1.6 million as of March 31, 2020 and December 31, 2019. The Company has no unfunded commitments for this investment.

24

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

6. DERIVATIVE FINANCIAL INSTRUMENTS

In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management.

The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds:

	As of March 31, 2020								As of December 31, 2019
	Assets				Liabilities				Assets				Liabilities
The Company	Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value
Foreign exchange contracts	$	56,555	$	5,429	$	124	$	5	$	67,930	$	4,023	$	10,846	$	113
Total derivatives, at fair value(2)	$	56,555	$	5,429	$	124	$	5	$	67,930	$	4,023	$	10,846	$	113

	As of March 31, 2020								As of December 31, 2019
	Assets				Liabilities				Assets				Liabilities
Consolidated Funds	Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value
Foreign exchange contracts	$	—	$	—	$	—	$	—	$	667	$	667	$	667	$	670
Asset swap - other	5,258		831		4,808		811		—		—		7,640		4,106
Total derivatives, at fair value(3)	$	5,258	$	831	$	4,808	$	811	$	667	$	667	$	8,307	$	4,776

(1)Represents the total contractual amount of derivative assets and liabilities outstanding.

(2)As of March 31, 2020 and December 31, 2019, the Company had the right to, but elected not to, offset an immaterial amount of its derivative liabilities.

(3)As of March 31, 2020 and December 31, 2019, the Consolidated Funds offset $0.7 million and $0.1 million of their derivative assets and liabilities, respectively.

25

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

7. DEBT

The following table summarizes the Company’s and its subsidiaries’ debt obligations:

					As of March 31, 2020			As of December 31, 2019
	Debt Origination Date	Maturity	Original Borrowing Amount		Carrying Value		Interest Rate	Carrying Value		Interest Rate
Credit Facility(1)	Revolver	3/30/2025	N/A		$	800,000	2.12%	$	70,000	3.06%
Senior Notes(2)	10/8/2014	10/8/2024	$	250,000	246,775		4.21%	246,609		4.21%
Total debt obligations					$	1,046,775		$	316,609

(1)The AOG entities are borrowers under the Credit Facility, which provides a $1.065 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. On March 30, 2020, the Company amended the Credit Facility to, among other things, extend the maturity date from March 2024 to March 2025 and to reduce borrowing costs on the undrawn amounts. As of March 31, 2020, base rate loans bear interest calculated based on the base rate plus 0.25% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.25%. The unused commitment fee is 0.13% per annum. There is a base rate and LIBOR floor of zero.  

(2)The Senior Notes were issued in October 2014 by Ares Finance Co. LLC, a subsidiary of the Company, at 98.27% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture.

As of March 31, 2020, the Company and its subsidiaries were in compliance with all covenants under the debt obligations. 

The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the Company's Senior Notes are recorded as a reduction of the corresponding debt obligation, and debt issuance costs related to the Credit Facility are included in other assets in the Condensed Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the remaining term of the related obligation.

The following table presents the activity of the Company's debt issuance costs:

	Credit Facility		Senior Notes
Unamortized debt issuance costs as of December 31, 2019	$	5,255	$	1,102
Debt issuance costs incurred	1,182		—
Amortization of debt issuance costs	(318)		(58)
Unamortized debt issuance costs as of March 31, 2020	$	6,119	$	1,044

Loan Obligations of the Consolidated CLOs

Loan obligations of the Consolidated Funds that are CLOs (“Consolidated CLOs”) represent amounts due to holders of debt securities issued by the Consolidated CLOs. The Company measures the loan obligations of the Consolidated CLOs using the fair value of the financial assets of its Consolidated CLOs.

26

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs:

	As of March 31, 2020					As of December 31, 2019
	Loan Obligations		Fair Value of Loan Obligations		Weighted  Average Remaining Maturity  In Years	Loan Obligations		Fair Value of Loan Obligations		Weighted Average Remaining Maturity  In Years
Senior secured notes(1)	$	9,461,567	$	8,169,907	10.71	$	7,738,337	$	7,700,038	10.97
Subordinated notes(2)	606,407		184,551		10.85	449,877		273,710		11.02
Total loan obligations of Consolidated CLOs	$	10,067,974	$	8,354,458		$	8,188,214	$	7,973,748

(1)Original borrowings under the senior secured notes totaled $9.5 billion, with various maturity dates ranging from July 2028 to October 2032. The weighted average interest rate as of March 31, 2020 was 2.83%.

(2)Original borrowings under the subordinated notes totaled $606.4 million, with various maturity dates ranging from July 2028 to October 2032. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO.

Loan obligations of the Consolidated CLOs are collateralized by the assets held by the Consolidated CLOs, consisting of cash and cash equivalents, corporate loans, corporate bonds and other securities. The assets of one Consolidated CLO may not be used to satisfy the liabilities of another Consolidated CLO. Loan obligations of the Consolidated CLOs include floating rate notes, deferrable floating rate notes, revolving lines of credit and subordinated notes. Amounts borrowed under the notes are repaid based on available cash flows subject to priority of payments under each Consolidated CLO’s governing documents. Based on the terms of these facilities, the creditors of the facilities have no recourse to the Company.

Credit Facilities of the Consolidated Funds

Certain Consolidated Funds maintain credit facilities to fund investments between capital drawdowns. These facilities generally are collateralized by the unfunded capital commitments of the Consolidated Funds’ limited partners, bear an annual commitment fee based on unfunded commitments and contain various affirmative and negative covenants and reporting obligations, including restrictions on additional indebtedness, liens, margin stock, affiliate transactions, dividends and distributions, release of capital commitments and portfolio asset dispositions. The creditors of these facilities have no recourse to the Company and only have recourse to a subsidiary of the Company to the extent the debt is guaranteed by such subsidiary. Credit facilities of the Consolidated Funds are reflected at cost in the Condensed Consolidated Statements of Financial Condition. As of March 31, 2020 and December 31, 2019, the Consolidated Funds were in compliance with all covenants under such credit facilities.

The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding:

				As of March 31, 2020			As of December 31, 2019
Consolidated Funds' Debt Facilities	Maturity Date	Total Capacity		Outstanding Loan(1)		Effective Rate	Outstanding Loan(1)		Effective Rate
Credit Facilities:
	1/1/2023	$	18,000	$	17,909	2.62%	$	17,550	3.44%
	3/5/2021	71,500		—		N/A	71,500		3.14
	6/30/2021	192,780		—		N/A	—		N/A
	7/15/2028	75,000		16,500		4.17	17,000		4.75
Revolving Term Loan	2/9/2022	1,900		1,031		7.69	1,194		7.70
Total borrowings of Consolidated Funds				$	35,440		$	107,244

(1)The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate.

(2)The effective rate is based on the three month EURIBOR or zero, whichever is higher, plus a spread of 1.00%.

27

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

8. COMMITMENTS AND CONTINGENCIES

Indemnification Arrangements

Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the Condensed Consolidated Statements of Financial Condition. As of March 31, 2020, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

Commitments

As of March 31, 2020 and December 31, 2019, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $398.2 million and $387.4 million, respectively.

Performance Income

Performance income is affected by changes in the fair values of the underlying investments in the funds that we advise. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, public equity market volatility, industry trading multiples and interest rates. Generally, if at the termination of a fund (and increasingly at interim points in the life of a fund), the fund has not achieved investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company will be obligated to repay carried interest that was received by the Company in excess of the amounts to which the Company is entitled. This contingent obligation is normally reduced by income taxes paid by the Company related to its carried interest. 

Senior professionals of the Company who have received carried interest distributions are responsible for funding their proportionate share of any contingent repayment obligations. However, the governing agreements of certain of the Company's funds provide that if a current or former professional does not fund his or her respective share for such fund, then the Company may have to fund additional amounts beyond what was received in carried interest, although the Company will generally retain the right to pursue any remedies under such governing agreements against those carried interest recipients who fail to fund their obligations.

Additionally, at the end of the life of the funds there could be a payment due to a fund by the Company if the Company has recognized more performance income than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund.

At March 31, 2020 and December 31, 2019, if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $282.8 million and $233.4 million, respectively, of which approximately $217.3 million and $175.1 million, respectively, is reimbursable to the Company by certain professionals who are the recipients of such performance income. Management believes the possibility of all of the investments becoming worthless is remote. As of March 31, 2020, if the funds were liquidated at their fair values, there would be $0.5 million contingent repayment obligation or liability. As of December 31, 2019, if the funds were liquidated at their fair values, there would be no contingent repayment obligation or liability.

Litigation

From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.

28

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Leases

The Company leases office space and certain office equipment. The Company's leases have remaining lease terms of one to 10 years. The tables below present certain supplemental quantitative disclosures regarding the Company's leases as of March 31, 2020 and December 31, 2019 and for the three months ended March 31, 2020 and 2019:

	Classification	As of March 31, 2020		As of December 31, 2019
Operating lease assets	Right-of-use operating lease assets	$	145,225	$	143,406
Finance lease assets	Other assets(1)	1,756		1,787
Total lease assets		$	146,981	$	145,193
Operating lease liabilities	Operating lease liabilities	$	169,828	$	168,817
Finance lease obligations	Accounts payable, accrued expenses and other liabilities	1,698		1,651
Total lease liabilities		$	171,526	$	170,468

(1) Finance lease assets are recorded net of accumulated amortization of $0.7 million and $0.6 million as of March 31, 2020 and December 31, 2019, respectively.

	Classification	Three months ended March 31, 2020		Three months ended March 31, 2019
Operating lease expense	General, administrative and other expenses	$	7,632	$	6,938
Finance lease expense:
Amortization of finance lease assets	General, administrative and other expenses	94		27
Interest on finance lease liabilities	Interest expense	11		13
Total lease expense		$	7,737	$	6,978

Other information	Three months ended March 31, 2020		Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	8,178	$	7,682
Operating cash flows for finance leases	6		52
Financing cash flows for finance leases	36		264
Leased assets obtained in exchange for new operating lease liabilities	8,744		45,435

Lease term and discount rate	As of March 31, 2020		As of December 31, 2019
Weighted-average remaining lease terms (in years):
Operating leases	6.4		6.5
Finance leases	3.2		3.3
Weighted-average discount rate:
Operating leases	3.97	%	4.00	%
Finance leases	3.38	%	3.39	%

29

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Maturity of lease liabilities	Operating Leases		Finance Leases
2020	$	22,173	$	461
2021	30,320		516
2022	31,506		485
2023	28,026		158
2024	25,178		156
After 2024	55,515		7
Total future payments	192,718		1,783
Less: interest	22,890		85
Total lease liabilities	$	169,828	$	1,698

9. RELATED PARTY TRANSACTIONS

Substantially all of the Company’s revenue is earned from its affiliates, including management fees, carried interest allocation, incentive fees, principal investment income and administrative expense reimbursements. The related accounts receivable are included within due from affiliates within the Condensed Consolidated Statements of Financial Condition, except that accrued carried interest allocations and incentive fees receivable, which are predominantly due from affiliated funds, are presented separately within investments and other assets, respectively, within the Condensed Consolidated Statements of Financial Condition.

The Company has investment management agreements with Ares Funds that it manages. In accordance with these agreements, these Ares Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Ares Funds.

The Company also has entered into agreements to be reimbursed for its expenses incurred for providing administrative services to certain related parties, including ARCC, ACRE, ARDC, Ivy Hill Asset Management, L.P., ACF FinCo I L.P. and CION Ares Diversified Credit Fund.

Employees and other related parties may be permitted to participate in co-investment vehicles that generally invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These co-investment vehicles generally do not require these individuals to pay management or performance income.

Performance income the Company earns from the funds can be distributed to professionals or their related entities on a current basis, subject, in the case of carried interest programs, to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several, and not joint, and are limited to distributions received by the relevant recipient.

30

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following:

	As of March 31,		As of December 31,
	2020		2019
Due from affiliates:
Management fees receivable from non-consolidated funds	$	211,887	$	203,554
Payments made on behalf of and amounts due from non-consolidated funds and employees	76,143		64,545
Due from affiliates—Company	$	288,030	$	268,099
Amounts due from portfolio companies and non-consolidated funds	$	6,192	$	6,192
Due from affiliates—Consolidated Funds	$	6,192	$	6,192
Due to affiliates:
Management fee rebate payable to non-consolidated funds	$	2,893	$	2,420
Management fees received in advance	6,100		3,012
Tax receivable agreement liability	33,694		26,542
Undistributed carried interest and incentive fees	17,459		28,086
Payments made by non-consolidated funds on behalf of and payable by the Company	12,904		11,385
Due to affiliates—Company	$	73,050	$	71,445

Due from Ares Funds and Portfolio Companies

In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional services, travel and other costs associated with particular portfolio company holdings, are subject to reimbursement by the portfolio companies.

ARCC Fee Waiver

In conjunction with ARCC's acquisition of American Capital, Ltd., the Company agreed to waive up to $10 million per quarter of ARCC's Part I Fees for ten calendar quarters, which began with the second quarter of 2017 and ended with the third quarter of 2019. ARCC Part I Fees are reported net of the fee waiver. For the three months ended March 31, 2019, the Company waived $10.0 million.

10. INCOME TAXES

The Company’s income tax provision includes corporate income taxes and other entity level income taxes, as well as income taxes incurred by certain affiliated funds that are consolidated in these financial statements. For the three months ended March 31, 2020, the Company recorded an income tax benefit of $20.6 million. For the three months ended March 31, 2019, the Company recorded income tax expense of $14.4 million.

The Company’s effective income tax rate is dependent on many factors, including the estimated nature and amounts of income and expenses allocated to the non-controlling interests without being subject to federal, state and local income taxes at the corporate level. Additionally, the Company’s effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment entities that are consolidated in the Company's condensed consolidated financial statements. For the three months ended March 31, 2020, the Company recorded its interim income tax provision utilizing the estimated annual effective tax rate.

        The income tax effects of temporary differences give rise to significant portions of deferred tax assets and liabilities, which are presented on a net basis. As of March 31, 2020 and December 31, 2019, the Company recorded a net deferred tax asset of $86.3 million and $46.4 million, respectively, within other assets in the Condensed Consolidated Statements of Financial Condition.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. With limited

31

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

exceptions, the Company is no longer subject to income tax audits by taxing authorities for any years prior to 2016. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed consolidated financial statements.

11. EARNINGS PER SHARE

Basic earnings per share of Class A common stock is computed by using the two-class method. Diluted earnings per share of Class A common stock is computed using the more dilutive method of either the two-class method or the treasury stock method. For the three months ended March 31, 2020, the Company had a net loss and earnings per share was computed under the two-class method. For the three months ended March 31, 2019, the treasury stock method was the more dilutive method.

For the three months ended March 31, 2020, the following options, restricted units and AOG Units represent the securities not included in the two-class method. For the three months ended March 31, 2019, the computation of dilutive earnings per share excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive:

	Three months ended March 31,
	2020	2019
Options	12,859,532	—
Restricted units	16,377,716	119
AOG Units	116,328,089	116,996,031

The following table presents the computation of basic and diluted earnings per common share:

	Three months ended March 31,
	2020		2019
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524
Distributions on unvested restricted units	(2,290)		(1,806)
Undistributed earnings allocable to participating unvested restricted units	—		(663)
Net income (loss) available to Class A common stockholders	$	(38,751)	$	37,055
Basic weighted-average shares of Class A common stock	118,366,539		102,906,494
Basic earnings (loss) per share of Class A common stock	$	(0.33)	$	0.36
Net income (loss) available to Class A common stockholders	$	(36,461)	$	39,524
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524
Effect of dilutive shares:
Restricted units	—		5,485,250
Options	—		2,307,368
Diluted weighted-average shares of Class A common stock	118,366,539		110,699,112
Diluted earnings (loss) per share of Class A common stock	$	(0.33)	$	0.36
Dividend declared and paid per Class A common stock	$	0.40	$	0.32

12. EQUITY COMPENSATION

Equity Incentive Plan

Equity-based compensation is granted under the Company's 2014 Equity Incentive Plan, as amended and restated on March 1, 2018 and as further amended and restated, effective November 26, 2018 (the "Equity Incentive Plan"). The total number of shares available to be issued under the Equity Incentive Plan resets based on a formula defined in the Equity Incentive Plan and may increase on January 1 of each year. On January 1, 2020, the total number of shares available for issuance under the Equity Incentive Plan reset to 37,528,029 shares, and as of March 31, 2020, 34,495,433 shares remain available for issuance.

32

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Generally, unvested restricted units and options are forfeited upon termination of employment in accordance with the Equity Incentive Plan. The Company recognizes forfeitures as a reversal of previously recognized compensation expense in the period the forfeiture occurs.

Equity-based compensation expense, net of forfeitures, recorded by the Company is included in the following table:

	Three months ended March 31,
	2020		2019
Restricted units	$	28,381	$	23,012
Restricted units with a market condition	4,133		891
Options	43		3,101
Phantom shares	—		548
Equity-based compensation expense	$	32,557	$	27,552

Restricted Units

Each restricted unit represents an unfunded, unsecured right of the holder to receive a share of the Company's Class A common stock on a specific date. The restricted units generally vest and are settled in shares of Class A common stock either (i) at a rate of one-third per year, beginning on the third anniversary of the grant date, (ii) in their entirety on the fifth anniversary of the grant date, (iii) at a rate of one quarter per year, beginning on either the first or second anniversary of the grant date or the holder's employment commencement date, or (iv) at a rate of one third per year, beginning on the first anniversary of the grant date in each case generally subject to the holder’s continued employment as of the applicable vesting date (subject to accelerated vesting upon certain qualifying terminations of employment). Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award.

The holders of restricted units, other than the market condition awards described below, generally have the right to receive as current compensation an amount in cash equal to (i) the amount of any dividend paid with respect to a share of Class A common stock multiplied by (ii) the number of restricted units held at the time such dividends are declared (“Dividend Equivalent”). During the three months ended March 31, 2020, the Company declared a dividend of $0.40 per share to Class A common stockholders at the close of business on March 17, 2020. For the three months ended March 31, 2020, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $6.4 million, which are presented as a component of dividends within the Condensed Consolidated Statements of Changes in Equity. When units are forfeited, the cumulative amount of dividend equivalents previously paid is reclassified to compensation and benefits expense in the Condensed Consolidated Statements of Operations.

The following table presents unvested restricted units' activity:

	Restricted Units	Weighted Average Grant Date Fair Value Per Unit
Balance - January 1, 2020	16,810,473	$	20.07
Granted	3,268,133	36.85
Vested	(3,921,722)	19.21
Forfeited	(211,925)	21.42
Balance - March 31, 2020	15,944,959	$	23.69

The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $291.3 million as of March 31, 2020 and is expected to be recognized over the remaining weighted average period of 3.17 years.

33

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Restricted Unit Awards with a Market Condition

The following table presents the unvested market condition awards' activity:

	Market Condition Awards Units	Weighted Average Grant Date Fair Value Per Unit
Balance - January 1, 2020	1,333,334	$	9.30
Granted	—	—
Vested	(666,667)	10.92
Forfeited	—	—
Balance - March 31, 2020	666,667	$	7.68

For the three months ended March 31, 2020, the market-priced vesting condition was met for one of the tranches of the market condition awards and compensation expense of $3.7 million was accelerated. The total compensation expense expected to be recognized in all future periods associated with the market condition awards is approximately $3.1 million as of March 31, 2020 and is expected to be recognized over the remaining weighted average period of 2.63 years.

Options

A summary of options activity during the three months ended March 31, 2020 is presented below:

	Options	Weighted Average Exercise Price		Weighted Average Remaining Life (in years)	Aggregate Intrinsic Value
Balance - January 1, 2020	13,426,870	$	18.99	4.34	$	224,260
Granted	—	—		—	—
Exercised	(1,134,677)	19.00		—	—
Expired	—	—		—	—
Forfeited	—	—		—	—
Balance - March 31, 2020	12,292,193	$	18.99	4.00	$	146,811
Exercisable at March 31, 2020	12,292,193	$	18.99	4.00	$	146,811

Net cash proceeds from exercises of stock options were $21.6 million for the three months ended March 31, 2020. The Company realized tax benefits of approximately $2.9 million from those exercises.

13. EQUITY

Common Stock

The Company's common stock consists of Class A, Class B and Class C common stock, each $0.01 par value per share. The Class B common stock and Class C common stock are non-economic and holders are not entitled to dividends from the Company or to receive any assets of the Company in the event of any dissolution, liquidation or winding up of the Company. Ares Management GP LLC is the sole holder of the Class B common stock and Ares Voting LLC ("Ares Voting") is the sole holder of the Class C common stock.

In February 2019, the Company's board of directors authorized the repurchase of up to $150 million of shares of Class A common stock. Under this stock repurchase program, shares may be repurchased from time to time in open market purchases, privately negotiated transactions or otherwise, including in reliance on Rule 10b5-1 of the Securities Act. In February 2020, the board of directors approved the renewal of the program and reset the repurchase amount back to $150 million. The renewed program is scheduled to expire in March 2021. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the three months ended March 31, 2020 and 2019, the Company did not repurchase any shares as part of the stock repurchase program.

34

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

On March 31, 2020, the Company issued and sold 12,130,540 shares of newly issued Class A common stock in a private offering (the "Offering") to Sumitomo Mitsui Banking Corporation ("SMBC") in connection with a share purchase agreement. The Company received $383.8 million in gross proceeds and incurred approximately $0.5 million of expenses in connection with the Offering. The expenses have been recorded as a reduction in the proceeds received and are presented on a net basis together with contributions in additional paid-in-capital within the Condensed Consolidated Statements of Changes in Equity. In connection with the Offering, the Company approved the amendment of its certificate of incorporation to, among other things, establish a new series of non-voting common stock, par value $0.01 per share, that has the same economic rights as the Class A common stock. SMBC may exchange all or a portion of the Class A common stock for an equivalent amount of the newly established non-voting common stock pursuant to certain terms set forth in an investor rights agreement entered into between the Company and SMBC. To satisfy a condition related to the Offering, the Company also issued 115,199,620 shares of its Class C common stock to Ares Voting on March 30, 2020. The issuance of the Class C units did not change the aggregate voting power of Ares Voting and Ares Voting will continue to be entitled to the number of votes equal to the number of AOG Units held of record by each Ares Operating Group limited partner, other than the Company and its subsidiaries, that does not own a share of Class C common stock.

The following table presents the changes in each class of common stock:

	Class A Common Stock	Class B Common Stock	Class C Common Stock	Total
Balance - January 1, 2020	115,242,028	1,000	1	115,243,029
Issuance of stock	12,130,540	—	115,199,620	127,330,160
Exchanges of AOG Units	1,376,422	—	—	1,376,422
Stock option exercises, net of shares withheld for tax	1,058,722	—	—	1,058,722
Vesting of restricted stock awards, net of shares withheld for tax	2,566,031	—	—	2,566,031
Balance Outstanding - March 31, 2020	132,373,743	1,000	115,199,621	247,574,364

The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities, as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities:

							Daily Average Ownership
	As of March 31, 2020			As of December 31, 2019				Three months ended March 31,
	AOG Units	Direct Ownership Interest		AOG Units	Direct Ownership Interest			2020		2019
Ares Management Corporation	132,373,743	53.47	%	115,242,028	49.70	%		50.43	%	46.80	%
Ares Owners Holding L.P.	115,199,621	46.53	%	116,641,833	50.30	%		49.57	%	53.20	%
Total	247,573,364	100.00	%	231,883,861	100.00	%

Preferred Stock

As of March 31, 2020 and December 31, 2019, the Company had 12,400,000 shares of the Series A Preferred Stock outstanding. When, as and if declared by the Company’s board of directors, dividends on the Series A Preferred Stock are payable quarterly at a rate per annum equal to 7.00%. The Series A Preferred Stock may be redeemed at the Company’s option, in whole or in part, at any time on or after June 30, 2021, at a price per share of $25.00.

14. SEGMENT REPORTING

The Company operates through its distinct operating segments that are summarized below:

Credit Group: The Credit Group manages credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, multi-asset credit, alternative credit investments and direct lending. The syndicated loans strategy focuses on evaluating individual credit opportunities related primarily to non-investment grade senior secured loans

35

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

and primarily target first lien secured debt, with a secondary focus on second lien loans, mezzanine loans, high yield bonds and unsecured loans. The high yield bond strategy seeks to deliver a diversified portfolio of liquid, traded non-investment grade corporate bonds, including secured, unsecured and subordinated debt instruments. Multi-asset credit is a “go anywhere” strategy designed to offer investors a flexible solution to global credit investing by tactical allocation between multiple asset classes in various market conditions. The alternative credit strategy seeks to capitalize on asset-focused investment opportunities that fall outside of traditional, well-defined markets such as corporate debt, real estate and private equity. The alternative credit strategy emphasizes downside protection and capital preservation through a focus on investments that tend to share the following key attributes: asset security, covenants, structural protections and cash flow velocity. The direct lending strategy is one of the largest self-originating direct lenders to the U.S. and European markets and has a multi-channel origination strategy designed to address a broad set of investment opportunities in the middle market. The Credit Group manages U.S. corporate lending activities primarily through its inaugural vehicle and publicly traded business development company, ARCC. The group maintains a flexible investment strategy with the capability to invest in first lien senior secured loans (including "unitranche" loans which are loans that combine senior and mezzanine debt, generally in a first lien position), second lien senior secured loans, mezzanine debt and non-control equity co-investments in middle market companies and power generation projects.

Private Equity Group:  The Private Equity Group manages investment strategies broadly categorized as corporate private equity, infrastructure and power, special opportunities, and energy opportunities. In its North American and European flexible capital corporate private equity strategy, the Company targets opportunistic majority or shared-control investments in businesses with strong franchises and attractive growth opportunities in North America and Europe. The infrastructure and power strategy targets infrastructure-related assets across the power generation, transmission, midstream sectors and renewables seeking attractive risk-adjusted equity returns with current cash flow and capital appreciation. The special opportunities strategy seeks to invest opportunistically across a broad spectrum of distressed or mispriced investments, including corporate debt, rescue capital, private asset-backed investments, post-reorganization securities and non-performing portfolios. The energy opportunities strategy targets investments in the energy industry where its flexible capital can provide attractive risk-adjusted returns while mitigating commodity risk.

Real Estate Group:  The Real Estate Group manages comprehensive real estate equity and debt strategies. Real Estate equity strategies focus on applying hands-on value creation initiatives to mismanaged and capital-starved assets, as well as new development, ultimately selling stabilized assets back into the market. The Real Estate Group manages both a value-add strategy and an opportunistic strategy. The value-add strategy seeks to create value by buying assets at attractive valuations and through active asset management of income-producing properties across the U.S. and Western Europe. The opportunistic strategy focuses on manufacturing core assets through development, redevelopment and fixing distressed capital structures across major properties in the U.S. and Europe. The Company’s debt strategies leverage the Real Estate Group’s diverse sources of capital to directly originate and manage commercial mortgage investments on properties that range from stabilized to requiring hands-on value creation. In addition to managing private debt funds, the Real Estate Group makes debt investments through a publicly traded commercial mortgage REIT, ACRE.

The OMG consists of shared resource groups to support the Company’s operating segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, strategy and relationship management, legal, compliance and human resources. Additionally, the OMG provides services to certain of the Company’s investment companies and partnerships, which reimburse the OMG for expenses equal to the costs of services provided. The OMG’s expenses are not allocated to the Company’s reportable segments but the Company does consider the cost structure of the OMG when evaluating its financial performance.

Segment Profit Measures: These measures supplement and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with GAAP.

Fee related earnings (“FRE”) is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes performance income, performance related compensation, investment income from the Consolidated Funds and non-consolidated funds and certain other items that the Company believes are not indicative of its core operating performance.

Realized income (“RI”) is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and expenses, which may or may not be eventually realized at the levels presented and whose

36

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

realizations depend more on future outcomes than current business operations. RI differs from net income by excluding (a) income tax expense, (b) operating results of the Consolidated Funds, (c) depreciation and amortization expense, (d) the effects of changes arising from corporate actions, (e) unrealized gains and losses related to performance income and investment performance and (f) certain other items that the Company believes are not indicative of operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital transactions, underwriting costs and expenses incurred in connection with corporate reorganization. Management believes RI is a more appropriate metric to evaluate the Company's current business operations.

Management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non-consolidated funds.

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2020:

	Credit Group		Private Equity Group		Real Estate Group		Total Segments		OMG		Total
Management fees (Credit Group includes ARCC Part I Fees of $43,923)	$	197,437	$	52,157	$	24,184	$	273,778	$	—	$	273,778
Other fees	3,058		110		704		3,872		—		3,872
Compensation and benefits	(70,925)		(19,596)		(12,413)		(102,934)		(36,426)		(139,360)
General, administrative and other expenses	(15,313)		(5,633)		(2,935)		(23,881)		(21,305)		(45,186)
Fee related earnings	114,257		27,038		9,540		150,835		(57,731)		93,104
Performance income—realized	9,016		116,154		26,600		151,770		—		151,770
Performance related compensation—realized	(7,899)		(92,924)		(17,170)		(117,993)		—		(117,993)
Realized net performance income	1,117		23,230		9,430		33,777		—		33,777
Investment income (loss)—realized	(843)		11,470		1,290		11,917		(5,698)		6,219
Interest and other investment income —realized	4,575		812		796		6,183		168		6,351
Interest expense	(1,715)		(1,643)		(971)		(4,329)		(977)		(5,306)
Realized net investment income (loss)	2,017		10,639		1,115		13,771		(6,507)		7,264
Realized income	$	117,391	$	60,907	$	20,085	$	198,383	$	(64,238)	$	134,145

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2019:

	Credit Group		Private Equity Group		Real Estate Group		Total Segments		OMG		Total
Management fees (Credit Group includes ARCC Part I Fees of $38,393)	$	162,966	$	51,396	$	18,650	$	233,012	$	—	$	233,012
Other fees	3,066		—		9		3,075		—		3,075
Compensation and benefits	(60,348)		(21,196)		(9,284)		(90,828)		(32,661)		(123,489)
General, administrative and other expenses	(13,505)		(4,057)		(3,132)		(20,694)		(20,632)		(41,326)
Fee related earnings	92,179		26,143		6,243		124,565		(53,293)		71,272
Performance income—realized	21,925		44,123		2,525		68,573		—		68,573
Performance related compensation—realized	(12,663)		(35,297)		(1,257)		(49,217)		—		(49,217)
Realized net performance income	9,262		8,826		1,268		19,356		—		19,356
Investment income—realized	858		10,936		3,480		15,274		—		15,274
Interest and other investment income —realized	2,905		294		1,105		4,304		15		4,319
Interest expense	(1,899)		(2,175)		(1,119)		(5,193)		(396)		(5,589)
Realized net investment income (loss)	1,864		9,055		3,466		14,385		(381)		14,004
Realized income	$	103,305	$	44,024	$	10,977	$	158,306	$	(53,674)	$	104,632

37

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

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

	Three months ended March 31,
	2020		2019
Segment revenues
Management fees (includes ARCC Part I Fees of $43,923 and $38,393 for the three months ended March 31, 2020 and 2019 respectively)	$	273,778	$	233,012
Other fees	3,872		3,075
Performance income—realized	151,770		68,573
Total segment revenues	$	429,420	$	304,660
Segment expenses
Compensation and benefits	$	102,934	$	90,828
General, administrative and other expenses	23,881		20,694
Performance related compensation—realized	117,993		49,217
Total segment expenses	$	244,808	$	160,739
Segment realized net investment income
Investment income—realized	$	11,917	$	15,274
Interest and other investment income —realized	6,183		4,304
Interest expense	(4,329)		(5,193)
Total segment realized net investment income	$	13,771	$	14,385

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

	Three months ended March 31,
	2020		2019
Total consolidated revenue	$	13,409	$	477,197
Performance (income) loss-unrealized	387,657		(146,575)
Management fees of Consolidated Funds eliminated in consolidation	10,502		8,413
Incentive fees of Consolidated Funds eliminated in consolidation	(45)		434
Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation	3,317		—
Administrative fees(1)	(9,661)		(6,602)
Performance income (loss) reclass(2)	(1,717)		606
Principal investment (income) loss, net of eliminations	26,723		(28,759)
Net income of non-controlling interests in consolidated subsidiaries	(765)		(54)
Total consolidation adjustments and reconciling items	416,011		(172,537)
Total segment revenue	$	429,420	$	304,660

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

(2)Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed Consolidated Statements of Operations.

38

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

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

	Three months ended March 31,
	2020		2019
Total consolidated expenses	$	81,959	$	369,107
Performance related compensation-unrealized	285,892		(107,303)
Expenses of Consolidated Funds added in consolidation	(17,899)		(13,401)
Expenses of Consolidated Funds eliminated in consolidation	10,456		8,847
Administrative fees(1)	(9,661)		(6,602)
OMG expenses	(57,731)		(53,293)
Acquisition and merger-related expense	(3,115)		(1,773)
Equity compensation expense	(32,557)		(27,552)
Deferred placement fees	(5,415)		(521)
Depreciation and amortization expense	(5,542)		(5,824)
Expense of non-controlling interests in consolidated subsidiaries	(1,579)		(946)
Total consolidation adjustments and reconciling items	162,849		(208,368)
Total segment expenses	$	244,808	$	160,739

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

39

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

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

	Three months ended March 31,
	2020		2019
Total consolidated other income	$	(227,863)	$	27,870
Investment (income) loss - unrealized	105,594		(16,183)
Interest and other investment (income) loss - unrealized	(4,961)		4,978
Other (income) loss from Consolidated Funds added in consolidation, net	198,245		(31,207)
Other income from Consolidated Funds eliminated in consolidation, net	(3,819)		(372)
OMG other expense	1,141		30
Performance (income) loss reclass(1)	1,717		(606)
Principal investment income (loss)	(75,988)		29,892
Other (income) expense, net	22		(1)
Other (income) loss of non-controlling interests in consolidated subsidiaries	19,683		(16)
Total consolidation adjustments and reconciling items	241,634		(13,485)
Total segment realized net investment income	$	13,771	$	14,385

(1)Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed Consolidated Statements of Operations.

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

	Three months ended March 31,
	2020		2019
Income (loss) before taxes	$	(296,413)	$	135,960
Adjustments:
Depreciation and amortization expense	5,542		5,824
Equity compensation expense	32,557		27,552
Acquisition and merger-related expense	3,137		1,773
Deferred placement fees	5,415		521
OMG expense, net	58,872		53,323
Other income, net	—		(1)
Net expense of non-controlling interests in consolidated subsidiaries	20,497		876
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net of eliminations	166,378		(17,045)
Total performance (income) loss - unrealized	387,657		(146,575)
Total performance related compensation - unrealized	(285,892)		107,303
Total investment (income) loss - unrealized	100,633		(11,205)
Realized income	198,383		158,306
Total performance income - realized	(151,770)		(68,573)
Total performance related compensation - realized	117,993		49,217
Total investment income - realized	(13,771)		(14,385)
Fee related earnings	$	150,835	$	124,565

40

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

15. 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 fair value and represent 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 in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows:

	As of March 31,		As of December 31,
	2020		2019
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs(1)	$	235,751	$	260,520
Maximum exposure to loss attributable to the Company's investment in consolidated VIEs(1)	154,490		181,856
Assets of consolidated VIEs	9,990,390		9,454,572
Liabilities of consolidated VIEs	9,308,677		8,679,869

(1)As of March 31, 2020 and December 31, 2019, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $64.9 million and $104.7 million, respectively.

	For the Three months ended March 31,
	2020		2019
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	$	(166,406)	$	17,624

41

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Consolidating Schedules

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows:

	As of March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	1,167,673	$	—	$	—	$	1,167,673
Investments (includes $747,363 of accrued carried interest)	1,345,094		—		(154,490)		1,190,604
Due from affiliates	308,566		—		(20,536)		288,030
Other assets	428,853		—		(1,942)		426,911
Right-of-use operating lease assets	145,225		—		—		145,225
Assets of Consolidated Funds
Cash and cash equivalents	—		514,401		—		514,401
Investments, at fair value	—		9,086,469		8,096		9,094,565
Due from affiliates	—		6,192		—		6,192
Receivable for securities sold	—		355,149		—		355,149
Other assets	—		28,179		—		28,179
Total assets	$	3,395,411	$	9,990,390	$	(168,872)	$	13,216,929
Liabilities
Accounts payable, accrued expenses and other liabilities	$	90,613	$	—	$	—	$	90,613
Accrued compensation	69,702		—		—		69,702
Due to affiliates	73,050		—		—		73,050
Performance related compensation payable	532,665		—		—		532,665
Debt obligations	1,046,775		—		—		1,046,775
Operating lease liabilities	169,828		—		—		169,828
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		72,486		—		72,486
Due to affiliates	—		14,382		(14,382)		—
Payable for securities purchased	—		796,316		—		796,316
CLO loan obligations, at fair value	—		8,390,053		(35,595)		8,354,458
Fund borrowings	—		35,440		—		35,440
Total liabilities	1,982,633		9,308,677		(49,977)		11,241,333
Commitments and contingencies
Non-controlling interest in Consolidated Funds	—		681,713		(118,895)		562,818
Non-controlling interest in Ares Operating Group entities	514,166		—		—		514,166
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (132,373,743 shares issued and outstanding)	1,324		—		—		1,324
Class B common stock, $0.01 par value,1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (115,199,621 shares issued and outstanding)	1,152		—		—		1,152
Additional paid-in-capital	746,595		—		—		746,595
Retained earnings	(138,371)		—		—		(138,371)
Accumulated other comprehensive loss, net of tax	(10,849)		—		—		(10,849)
Total stockholders' equity	898,612		—		—		898,612
Total equity	1,412,778		681,713		(118,895)		1,975,596
Total liabilities, non-controlling interests and equity	$	3,395,411	$	9,990,390	$	(168,872)	$	13,216,929

42

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

	As of December 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	138,384	$	—	$	—	$	138,384
Investments (includes $1,134,967 of accrued carried interest)	1,845,520		—		(181,856)		1,663,664
Due from affiliates	282,197		—		(14,098)		268,099
Other assets	343,674		—		(2,381)		341,293
Right-of-use operating lease assets	143,406		—		—		143,406
Assets of Consolidated Funds
Cash and cash equivalents	—		606,321		—		606,321
Investments, at fair value	—		8,723,169		4,778		8,727,947
Due from affiliates	—		6,192		—		6,192
Receivable for securities sold	—		88,809		—		88,809
Other assets	—		30,081		—		30,081
Total assets	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196
Liabilities
Accounts payable, accrued expenses and other liabilities	$	88,173	$	—	$	—	$	88,173
Accrued compensation	37,795		—		—		37,795
Due to affiliates	71,445		—		—		71,445
Performance related compensation payable	829,764		—		—		829,764
Debt obligations	316,609		—		—		316,609
Operating lease liabilities	168,817		—		—		168,817
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		61,857		—		61,857
Due to affiliates	—		11,700		(11,700)		—
Payable for securities purchased	—		500,146		—		500,146
CLO loan obligations	—		7,998,922		(25,174)		7,973,748
Fund borrowings	—		107,244		—		107,244
Total liabilities	1,512,603		8,679,869		(36,874)		10,155,598
Commitments and contingencies
Non-controlling interest in Consolidated Funds	—		774,703		(156,683)		618,020
Non-controlling interest in Ares Operating Group entities	472,288		—		—		472,288
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (115,242,028 shares issued and outstanding)	1,152		—		—		1,152
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding)	—		—		—		—
Additional paid-in-capital	525,244		—		—		525,244
Retained earnings	(50,820)		—		—		(50,820)
Accumulated other comprehensive loss, net of tax	(6,047)		—		—		(6,047)
Total stockholders' equity	768,290		—		—		768,290
Total equity	1,240,578		774,703		(156,683)		1,858,598
Total liabilities, non-controlling interests and equity	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196

43

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

	Three months ended March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $43,923)	$	274,351	$	—	$	(10,502)	$	263,849
Carried interest allocation	(230,876)		—		—		(230,876)
Incentive fees	(3,294)		—		45		(3,249)
Principal investment loss	(75,988)		—		49,265		(26,723)
Administrative, transaction and other fees	13,725		—		(3,317)		10,408
Total revenues	(22,082)		—		35,491		13,409
Expenses
Compensation and benefits	180,084		—		—		180,084
Performance related compensation	(167,899)		—		—		(167,899)
General, administrative and other expense	62,331		—		—		62,331
Expenses of the Consolidated Funds	—		17,899		(10,456)		7,443
Total expenses	74,516		17,899		(10,456)		81,959
Other income (expense)
Net realized and unrealized losses on investments	(35,695)		—		27,661		(8,034)
Interest and dividend income	2,602		—		(812)		1,790
Interest expense	(5,306)		—		—		(5,306)
Other expense, net	4,962		—		502		5,464
Net realized and unrealized losses on investments of the Consolidated Funds	—		(230,173)		(24,588)		(254,761)
Interest and other income of the Consolidated Funds	—		113,225		—		113,225
Interest expense of the Consolidated Funds	—		(81,297)		1,056		(80,241)
Total other expense	(33,437)		(198,245)		3,819		(227,863)
Loss before taxes	(130,035)		(216,144)		49,766		(296,413)
Income tax expense (benefit)	(20,644)		28		—		(20,616)
Net loss	(109,391)		(216,172)		49,766		(275,797)
Less: Net loss attributable to non-controlling interests in Consolidated Funds	—		(216,172)		49,766		(166,406)
Less: Net loss attributable to non-controlling interests in in Ares Operating Group entities	(78,355)		—		—		(78,355)
Net loss attributable to Ares Management Corporation	(31,036)		—		—		(31,036)
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net loss attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	—	$	—	$	(36,461)

44

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

	Three months ended March 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $38,393)	$	233,072	$	—	$	(8,413)	$	224,659
Carried interest allocation	197,293		—		—		197,293
Incentive fees	17,249		—		(434)		16,815
Principal investment income	29,892		—		(1,133)		28,759
Administrative, transaction and other fees	9,671		—		—		9,671
Total revenues	487,177		—		(9,980)		477,197
Expenses
Compensation and benefits	156,846		—		—		156,846
Performance related compensation	156,520		—		—		156,520
General, administrative and other expense	51,187		—		—		51,187
Expenses of the Consolidated Funds	—		13,401		(8,847)		4,554
Total expenses	364,553		13,401		(8,847)		369,107
Other income (expense)
Net realized and unrealized gains on investments	4,424		—		(948)		3,476
Interest and dividend income	2,324		—		(480)		1,844
Interest expense	(5,589)		—		—		(5,589)
Other expense, net	(4,868)		—		371		(4,497)
Net realized and unrealized gains on investments of the Consolidated Funds	—		3,748		616		4,364
Interest and other income of the Consolidated Funds	—		93,184		—		93,184
Interest expense of the Consolidated Funds	—		(65,725)		813		(64,912)
Total other income (expense)	(3,709)		31,207		372		27,870
Income before taxes	118,915		17,806		(761)		135,960
Income tax expense (benefit)	14,963		(579)		—		14,384
Net income	103,952		18,385		(761)		121,576
Less: Net income attributable to non-controlling interests in Consolidated Funds	—		18,385		(761)		17,624
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	59,003		—		—		59,003
Net income attributable to Ares Management Corporation	44,949		—		—		44,949
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net income attributable to Ares Management Corporation Class A common stockholders	$	39,524	$	—	$	—	$	39,524

45

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

	Three months ended March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net loss	$	(109,391)	$	(216,172)	$	49,766	$	(275,797)
Adjustments to reconcile net loss to net cash used in operating activities	190,761				(65,691)		125,070
Adjustments to reconcile net loss to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds			(478,695)		25,680		(453,015)
Cash flows due to changes in operating assets and liabilities	45,995				6,000		51,995
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:			99,272		89,238		188,510
Net cash provided by (used in) operating activities	127,365		(595,595)		104,993		(363,237)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(3,062)		—		—		(3,062)
Acquisitions	(35,844)		—		—		(35,844)
Net cash used in investing activities	(38,906)		—		—		(38,906)
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,334		—		—		383,334
Proceeds from credit facility	790,000		—		—		790,000
Repayments of credit facility	(60,000)		—		—		(60,000)
Dividends and distributions	(106,838)		—		—		(106,838)
Series A Preferred Stock dividends and distributions	(5,425)		—		—		(5,425)
Stock option exercises	19,551		—		—		19,551
Taxes paid related to net share settlement of equity awards	(73,500)		—		—		(73,500)
Other financing activities	(2,125)		—		—		(2,125)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		148,270		(15,005)		133,265
Distributions to non-controlling interests in Consolidated Funds	—		(15,426)		1,934		(13,492)
Borrowings under loan obligations by Consolidated Funds	—		454,391		—		454,391
Repayments under loan obligations by Consolidated Funds	—		(73,609)		—		(73,609)
Net cash provided by financing activities	944,997		513,626		(13,071)		1,445,552
Effect of exchange rate changes	(4,167)		(9,953)		—		(14,120)
Net change in cash and cash equivalents	1,029,289		(91,922)		91,922		1,029,289
Cash and cash equivalents, beginning of period	138,384		606,321		(606,321)		138,384
Cash and cash equivalents, end of period	$	1,167,673	$	514,399	$	(514,399)	$	1,167,673

46

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

	Three months ended March 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	103,952	$	18,385	$	(761)	$	121,576
Adjustments to reconcile net income to net cash used in operating activities	(79,008)		—		89,774		10,766
Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds	—		(415,841)		(616)		(416,457)
Cash flows due to changes in operating assets and liabilities	4,306		—		(769)		3,537
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:	—		83,267		(152,535)		(69,268)
Net cash provided by (used in) operating activities	29,250		(314,189)		(64,907)		(349,846)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(2,994)		—		—		(2,994)
Net cash used in investing activities	(2,994)		—		—		(2,994)
Cash flows from financing activities:
Proceeds from credit facility	145,000		—		—		145,000
Repayments of credit facility	(60,000)		—		—		(60,000)
Dividends and distributions	(75,479)		—		—		(75,479)
Series A Preferred Stock dividends and distributions	(5,425)		—		—		(5,425)
Taxes paid related to net share settlement of equity awards	(21,121)		—		—		(21,121)
Other financing activities	2,140		—		—		2,140
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		148,691		(94,656)		54,035
Distributions to non-controlling interests in Consolidated Funds	—		(23,629)		2,893		(20,736)
Borrowings under loan obligations by Consolidated Funds	—		392,777		3,367		396,144
Repayments under loan obligations by Consolidated Funds	—		(61,227)		—		(61,227)
Net cash provided by (used in) financing activities	(14,885)		456,612		(88,396)		353,331
Effect of exchange rate changes	(1,120)		10,880		—		9,760
Net change in cash and cash equivalents	10,251		153,303		(153,303)		10,251
Cash and cash equivalents, beginning of period	110,247		384,644		(384,644)		110,247
Cash and cash equivalents, end of period	$	120,498	$	537,947	$	(537,947)	$	120,498

47

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

16. SUBSEQUENT EVENTS

The Company evaluated all events or transactions that occurred after March 31, 2020 through the date the condensed consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure:

In April 2020, the Company's board of directors declared a quarterly dividend of $0.40 per share of Class A common stock payable on June 30, 2020 to common stockholders of record at the close of business on June 16, 2020.

In April 2020, the Company's board of directors declared a quarterly dividend of $0.4375 per share of Series A Preferred Stock payable on June 30, 2020 to preferred stockholders of record at the close of business on June 15, 2020.

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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-affiliated funds, related co-investment entities and certain CLOs that are required under generally accepted accounting principles in the United States (“GAAP”) to be consolidated in our 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 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 2019 Annual Report on Form 10-K of Ares Management Corporation and the related notes.

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. Certain prior period amounts have been reclassified to conform to the current year presentation.

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. As of March 31, 2020, approximately 69% of our AUM were in funds with a remaining contractual life of three years or more, approximately 74% of our AUM were in funds with an initial duration greater than seven years at time of closing and 87% of our management fees were derived from permanent capital, CLOs and closed end 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 of operations, including the fair value of our AUM, are affected by a variety of factors, particularly in the United States and Western Europe, including conditions in the global financial markets and the economic and political environments.

2020 has started off as a challenging year for markets around the world. The outbreak of COVID-19, which the World Health Organization has declared a global pandemic, has led to significant volatility in the equity and credit markets and significant declines in the global financial and energy markets. At this time, it is uncertain how long this volatility will continue. In addition, Saudi Arabia’s decision in early March to discount its price of oil and increase its production exacerbated the volatility. The shutdown of economic activity and heightened concerns regarding liquidity and leverage resulted in the widest levels of U.S. credit spreads since the Global Financial Crisis (“GFC”). The U.S. 10-year Treasury traded at a record low and U.S. investment grade and high yield spreads widened. Credit markets experienced sharp dislocations, as fund outflows in the leveraged finance market surged at a record pace, but investment grade primary market activity set a record high. The Federal Reserve moved with an unexpected pace to enact economic and financial stimulus plans as it effectively pledged support to keep markets and the economy afloat. Against this backdrop, the Credit Suisse Leveraged Loan Index ("CSLLI"), a leveraged loan index, and the ICE BofA High Yield Master II Index, a high yield bond index, had negative returns of 13.2% and 13.1%, respectively, for the first quarter of 2020.

European credit markets experienced similar results due to the wider economic impact of the COVID-19 pandemic on the Eurozone, which led to wide scale sell offs and collapses in prices in both the equity and debt markets. The primary markets for both European leveraged loans and high-yield bonds closed completely in mid-March. Aligned with the actions of the world’s major central banks, the European Central Bank enacted a new Pandemic Emergency Purchase Program to boost asset purchases. In this environment, the Credit Suisse Western European Leveraged Loan Index and ICE BofA European Currency High Yield Constrained Index had negative returns of 14.0% and 14.5%, respectively, for the first quarter of 2020.

The impact of COVID-19 pandemic was also reflected in the performance of the equity markets. The S&P 500 Index and the MSCI All Country World ex USA Index had negative returns of 19.6% and 23.3%, respectively, for the first quarter of 2020 Given the extreme market volatility, transaction volumes in the traditional private equity buyout market has slowed significantly. In addition to the difficulty of running a transaction process in the current environment, company performance and earnings across many industries have been impacted by COVID-19, including those of portfolio companies managed by our funds.

49

For the first quarter of 2020, rents and occupancies for industrial, office and residential real estate properties generally reflect favorable supply and demand fundamentals going into the current crisis. The effects of lockdowns and travel restrictions across Europe and the U.S. have had a more visible and immediate effect on retail and hospitality property performance.

Both European and U.S. publicly-traded Real Estate Investment Trusts (REITs) experienced the sharpest quarterly sell-off since the GFC. The FTSE EPRA/NAREIT Developed Europe Index and the FTSE NAREIT All Equity REITs Index had negative returns of 26.7% and 24.2%, respectively, for the first quarter of 2020. The implications of public sector price trends for private real estate values are still being assessed.

Managing Business Performance

Non-GAAP Financial Measures

We use the following non-GAAP measures to assess and track our performance:

•Fee Related Earnings (FRE)

•Realized Income (RI)

These non-GAAP financial measures supplement and should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “—Components of Consolidated Results of Operations” and are prepared in accordance with GAAP. For the specific components and calculations of these non-GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with GAAP, see Note 14, “Segment Reporting,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Operating Metrics

We monitor certain operating metrics that are common to the alternative asset management industry, which are discussed below.

Assets Under Management

Assets under management (“AUM”) refers to the assets we manage. We view AUM as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital. For our funds other than CLOs, our AUM equals the sum of the following:

•net asset value (“NAV”) of such funds;

•the drawn and undrawn debt (at the fund-level including amounts subject to restrictions); and

•uncalled committed capital (including commitments to funds that have yet to commence their investment periods).

NAV refers to the fair value of all of the assets of a fund less the liabilities of the fund.

For CLOs, our AUM is equal to initial principal amounts of notes adjusted for paydowns.

50

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

	Credit Group		Private Equity Group		Real Estate Group		Total AUM
Balance at 12/31/2019	$	110,543	$	25,166	$	13,207	$	148,916
Acquisitions	2,693		—		—		2,693
Net new par/equity commitments	2,036		364		1,560		3,960
Net new debt commitments	2,219		—		226		2,445
Capital reductions	(47)		(25)		—		(72)
Distributions	(632)		(1,838)		(643)		(3,113)
Redemptions	(464)		—		—		(464)
Change in fund value	(3,836)		(1,652)		(238)		(5,726)
Balance at 3/31/2020	$	112,512	$	22,015	$	14,112	$	148,639
Average AUM(1)	$	111,528	$	23,591	$	13,660	$	148,779

	Credit Group		Private Equity Group		Real Estate Group		Total AUM
Balance at 12/31/2018	$	95,836	$	23,487	$	11,340	$	130,663
Net new par/equity commitments	2,565		31		162		2,758
Net new debt commitments	2,966		—		473		3,439
Capital reductions	(104)		(3)		—		(107)
Distributions	(527)		(637)		(339)		(1,503)
Redemptions	(717)		—		—		(717)
Change in fund value	1,057		900		174		2,131
Balance at 3/31/2019	$	101,076	$	23,778	$	11,810	$	136,664
Average AUM(1)	$	98,457	$	23,633	$	11,576	$	133,666

(1) Represents the quarterly average of beginning and ending balances.

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

AUM: $148.6 AUM: $136.7

FPAUM AUM not yet paying fees Non-fee paying(1) General partner and affiliates

(1) Includes $8.0 billion and $6.8 billion of AUM of funds from which we indirectly earn management fees as of March 31, 2020 and 2019, respectively.

51

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

Our FPAUM is generally comprised of the following components:

•The amount of limited partner capital commitments for certain closed-end funds within the reinvestment period;

•The amount of limited partner invested capital for the aforementioned closed-end funds beyond the reinvestment period;

•The gross amount of aggregate collateral balance for CLOs, at par, adjusted for defaulted or discounted collateral; and

•The portfolio value, gross asset value or NAV.

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

	Credit Group		Private Equity Group		Real Estate Group		Total
FPAUM Balance at 12/31/2019	$	71,880	$	17,040	$	7,963	$	96,883
Acquisitions	2,596		—		—		2,596
Commitments	1,240		—		1,368		2,608
Subscriptions/deployment/increase in leverage	4,563		352		480		5,395
Capital reductions	(101)		—		(11)		(112)
Distributions	(1,031)		(367)		(226)		(1,624)
Redemptions	(481)		—		—		(481)
Change in fund value	(2,906)		(5)		(48)		(2,959)
Change in fee basis	—		—		(311)		(311)
FPAUM Balance at 3/31/2020	$	75,760	$	17,020	$	9,215	$	101,995
Average FPAUM(1)	$	73,821	$	17,031	$	8,590	$	99,442

	Credit Group		Private Equity Group		Real Estate Group		Total
FPAUM Balance at 12/31/2018	$	57,847	$	17,071	$	6,952	$	81,870
Commitments	1,838		81		86		2,005
Subscriptions/deployment/increase in leverage	3,933		313		156		4,402
Capital reductions	(85)		(4)		—		(89)
Distributions	(523)		(141)		(181)		(845)
Redemptions	(857)		—		—		(857)
Change in fund value	905		2		(38)		869
Change in fee basis	(134)		—		—		(134)
FPAUM Balance at 3/31/2019	$	62,924	$	17,322	$	6,975	$	87,221
Average FPAUM(1)	$	60,386	$	17,198	$	6,964	$	84,548

(1) Represents the quarterly average of beginning and ending balances.

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.

52

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

FPAUM: $102.0 FPAUM: $87.2

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

Incentive Eligible Assets Under Management, Incentive Generating Assets Under Management and Available Capital

IEAUM generally represents the NAV plus uncalled equity or total assets plus uncalled debt, as applicable, of our funds from which we are entitled to receive performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income). With respect to ARCC's AUM, only ARCC Part II Fees may be generated from IEAUM.

IGAUM generally represents the AUM of our funds that are currently generating on a realized or unrealized basis, performance income. It generally represents the NAV or total assets of our funds, as applicable, for which we are entitled to receive performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income). ARCC is only included in IGAUM when ARCC Part II Fees are being generated.

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

Credit Private Equity Real Estate

53

The charts below present our available capital, which we refer to as dry powder, and AUM not yet paying fees by segment ($ in billions):

Credit Private Equity Real Estate

Management Fees Fund Duration

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, 2020 and 2019, 78% and 84%, respectively, of our segment management fees were attributable to funds with three or more years in duration. The charts below present the composition of our segment management fees by the initial fund duration:

Permanent Capital 10 or more years 7 to 9 years 3 to 6 years Fewer than 3 years Differentiated Managed Accounts⁽¹⁾ Managed Accounts

(1) Differentiated managed accounts have been managed by the Company for longer than three years, are investing in illiquid strategies or are co-investments structured to pay management fees.

54

Fund Performance Metrics

Fund performance information for our investment 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 include those that contributed at least 1% of our total management fees for the three months ended March 31, 2020 or represented at least 1% of the Company’s total FPAUM as of March 31, 2020, and where we have sole discretion for investment decisions within the fund. In addition to management fees, each of our significant funds may generate performance income 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.

We do not present fund performance metrics for significant funds with less than two years of investment performance. Investment performance begins on the date of the fund's first investment, except for those significant funds that pay management fees on invested capital, in which case investment performance will be presented on the earlier of (i) the one-year anniversary of the fund's first investment or (ii) such time that the fund has invested at least 50% of its capital.

Consolidation and Deconsolidation of Ares Funds

Consolidated Funds represented approximately 7.9% of our AUM as of March 31, 2020, 3.8% of our management fees and less than 1% of our carried interest and incentive fees for the three months ended March 31, 2020. As of March 31, 2020, we consolidated 21 CLOs and seven private funds, and as of March 31, 2019, we consolidated 13 CLOs and nine private funds.

The activity of the Consolidated Funds is reflected within the condensed consolidated financial statement line items indicated by reference thereto. The impact of the Consolidated Funds also typically will decrease management fees, carried interest allocation and incentive fees reported under GAAP to the extent these 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. The net economic ownership interests of our Consolidated Funds, to which we have no economic rights, are reflected as non-controlling interests in the Consolidated Funds in our condensed consolidated financial statements.

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, 2020, one entity was liquidated/dissolved and no entities experienced a significant change in ownership that resulted in deconsolidation of the fund or CLO during each of the periods. During the three months ended March 31, 2019, one entity was liquidated/dissolved and two entities experienced a significant change in ownership that resulted in deconsolidation of the fund or CLO during each of the periods.

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” to our condensed consolidated financial statements included herein.

55

Results of Operations

Consolidated Results of Operations

We consolidate funds where we are deemed to hold a controlling financial interest. The Consolidated Funds are not necessarily the same entities in each year presented due to changes in ownership, changes in limited partners' rights, and the creation and termination of funds. The consolidation of these funds had no effect on net income attributable to us for the periods presented. As such, we separate the analysis of the Consolidated Funds and evaluate that activity in total. The following table and discussion sets forth information regarding our consolidated results of operations ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Revenues
Management fees (includes ARCC Part I Fees of $43,923 and $38,393 for the three months ended March 31, 2020 and 2019, respectively)	$	263,849	$	224,659	$	39,190	17	%
Carried interest allocation	(230,876)		197,293		(428,169)		NM
Incentive fees	(3,249)		16,815		(20,064)		NM
Principal investment income (loss)	(26,723)		28,759		(55,482)		NM
Administrative, transaction and other fees	10,408		9,671		737		8
Total revenues	13,409		477,197		(463,788)		(97)
Expenses
Compensation and benefits	180,084		156,846		(23,238)		(15)
Performance related compensation	(167,899)		156,520		324,419		NM
General, administrative and other expenses	62,331		51,187		(11,144)		(22)
Expenses of Consolidated Funds	7,443		4,554		(2,889)		(63)
Total expenses	81,959		369,107		287,148		78
Other income (expense)
Net realized and unrealized gains (losses) on investments	(8,034)		3,476		(11,510)		NM
Interest and dividend income	1,790		1,844		(54)		(3)
Interest expense	(5,306)		(5,589)		283		5
Other income (expense), net	5,464		(4,497)		9,961		NM
Net realized and unrealized gains (losses) on investments of Consolidated Funds	(254,761)		4,364		(259,125)		NM
Interest and other income of Consolidated Funds	113,225		93,184		20,041		22
Interest expense of Consolidated Funds	(80,241)		(64,912)		(15,329)		(24)
Total other income (expense)	(227,863)		27,870		(255,733)		NM
Income (loss) before taxes	(296,413)		135,960		(432,373)		NM
Income tax expense (benefit)	(20,616)		14,384		35,000		NM
Net income (loss)	(275,797)		121,576		(397,373)		NM
Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds	(166,406)		17,624		(184,030)		NM
Less: Net income (loss) attributable to non-controlling interests in Ares Operating Group entities	(78,355)		59,003		(137,358)		NM
Net income (loss) attributable to Ares Management Corporation	(31,036)		44,949		(75,985)		NM
Less: Series A Preferred Stock dividends paid	5,425		5,425		—		—
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524	(75,985)		NM

NM - Not Meaningful

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Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019 

Consolidated Results of Operations of the Company

Management Fees. Total management fees increased by $39.2 million, or 17%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase in total management fees was primarily due to the Credit Group, driven by an increase in ARCC Part I Fees and by higher FPAUM from capital deployments in direct lending funds. For detail regarding the fluctuations of management fees within each of our segments see “—Results of Operations by Segment.”

Carried Interest Allocation. Carried interest allocation decreased by $428.2 million to a reversal of $230.9 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decrease was principally composed of the following:

	Three months ended March 31, 2020		Primary Drivers	Three months ended March 31, 2019		Primary Drivers
	($ in millions)			($ in millions)
Credit funds	$	(27.5)	Four direct lending funds with $10.2 billion of IGAUM generating lower returns due to market volatility driven by the COVID-19 pandemic, primarily from Ares Capital Europe III, L.P. ("ACE III") and Ares Private Credit Solutions, L.P. ("PCS") that led to the reversal of unrealized carried interest allocation of $7.8 million and $18.2 million during the period, respectively. Ares Capital Europe IV, L.P. ("ACE IV") generated $4.6 million of carried interest allocation during the period.	$	36.8	12 direct lending funds with $8.9 billion of IGAUM as of March 31, 2019 generating returns in excess of their hurdle rates. ACE III, ACE IV, and PCS generated $13.2 million, $12.5 million, and $5.1 million of carried interest allocation during the period, respectively.
Private equity funds	(194.4)		Market depreciation across several investments that led to the reversal of unrealized carried interest allocation of $49.0 million for Ares Corporate Opportunities Fund III, L.P. (“ACOF III”), $23.7 million for Ares Corporate Opportunities Fund IV, L.P. ("ACOF IV"), $75.1 million for Ares Corporate Opportunities Fund V, L.P. ("ACOF V") and $27.4 million for Ares Energy Opportunities Fund, L.P. ("AEOF"). The market depreciation was driven by the extreme market volatility from the COVID-19 pandemic and the energy market dislocation.	144.1		Market appreciation of ACOF III's investment in Floor & Decor; and market appreciation across multiple ACOF IV portfolio companies.
Real estate funds	(9.0)		Market depreciation from multiple properties within real estate equity funds that led to the reversal of unrealized carried interest allocation primarily from US Real Estate Fund IX, L.P. ("US IX") and Ares European Real Estate Fund IV, L.P. ("EF IV") in the amount of $6.8 million and $9.0 million for the period, respectively, offset by gains generated in multiple funds from the monetization of a pan-European logistics portfolio.	16.4		Net market appreciation from properties within eight of our U.S. real estate funds.
Carried interest allocation	$	(230.9)		$	197.3

Incentive Fees. Incentive fees decreased by $20.1 million to a $3.2 million reversal of previously recognized fees for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decrease was principally composed of the following ($ in millions):

	Three months ended March 31, 2020		Primary Drivers	Three months ended March 31, 2019		Primary Drivers
Credit funds	$	(3.2)	One-time reversal of incentive fees following management's decision to extend the measurement period after the fees were crystallized.	$	16.8	11 direct lending funds with incentive fees that crystallized during the period.

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Principal Investment Income (Loss). Principal investment income (loss) decreased by $55.5 million to a $26.7 million loss for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. Extreme market volatility has negatively impacted the global equity and credit markets, leading to a broad decrease in valuations as a result of the outbreak of the COVID-19 pandemic and energy market dislocation.

Compensation and Benefits.  Compensation and benefits expenses increased by $23.2 million, or 15%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was primarily driven by headcount growth, by an increase of $3.6 million in ARCC Part I compensation and by an increase of $4.8 million in employer taxes associated with the vesting of a greater number of restricted units at a higher stock price. Equity compensation expense also increased by $5.0 million primarily due to the acceleration of expense recognized from the vesting of certain restricted units granted to our Chief Executive Officer that occurred after the performance condition of the award was achieved.

Performance Related Compensation.  Performance related compensation decreased by $324.4 million to a reversal of $167.9 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decrease in performance related compensation was largely correlated with the respective decreases in carried interest allocation and incentive fees described above.

General, Administrative and Other Expenses. General, administrative and other expenses increased by $11.1 million, or 22%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was driven by higher placement fees of $6.1 million attributable primarily to new commitments to a fund in our U.S. real estate equity strategy during the current year. In addition, costs of $3.3 million relating to a previously disclosed SEC matter were recorded during the current period. We have been cooperating with the SEC, and we believe that this matter is nearing resolution and that we have incurred substantially all costs. During the second quarter of 2020, insurance proceeds of $2.5 million were received in connection with this matter and will be reflected in next quarter's results.

Net Realized and Unrealized Gains (Losses) on Investments. Net realized and unrealized gains (losses) on investments decreased from gains of $3.5 million for the three months ended March 31, 2019 to losses of $8.0 million for the three months ended March 31, 2020. The activity during the current year was primarily attributable to losses from CLO securities due to market volatility driven by the COVID-19 pandemic. The activity in the prior year was primarily attributable to higher net gains on our CLO securities, which benefited from favorable market conditions.

Other Income (Expense), Net. Other income (expense), net is principally composed of transaction gains (losses) associated with currency fluctuations for our businesses domiciled outside of the U.S. and remain volatile based on the fluctuations in foreign currency exchange rates.

Income Tax Expense (Benefit). Income tax expense (benefit) decreased by $35.0 million from income tax expense of $14.4 million for the three months ended March 31, 2019 to income tax benefit of $20.6 million for the three months ended March 31, 2020. The decrease was attributable to the net losses allocable to Ares Management Corporation from unrealized losses on investments and the reversal of unrealized gains on performance income during the three months ended March 31, 2020.

Non-Controlling Interests. Net income (loss) attributable to non-controlling interests in Ares Operating Group entities represents results attributable to the owners of AOG Units that are not held by Ares Management Corporation. Net income (loss) is generally allocated based on the weighted average daily ownership of the other AOG unitholders, except for income (loss) generated from certain joint venture partnerships. Net income (loss) is allocated to other strategic distribution partners with whom we have established joint ventures based on the respective ownership percentages and to Crestline Denali Class B membership interests based on the activity of those financial interests.

Net income (loss) attributable to non-controlling interests in Ares Operating Group entities decreased by $137.4 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decrease was primarily a result of the decrease in income before taxes and the change in the weighted average daily ownership. The weighted average daily ownership for the non-controlling AOG unitholders decreased from 53.2% for the three months ended March 31, 2019 to 49.6% for the three months ended March 31, 2020. The decrease in non–controlling ownership was primarily driven by stock option exercises, vesting of restricted stock awards and by our Class A common stock offering that occurred after March 31, 2019. For the three months ended March 31, 2020, net loss of $19.6 million was also allocated to the Crestline Denali Class B Interests attributable to the losses from the CLO securities held.

58

Consolidated Results of Operations of the Consolidated Funds

The following table presents the results of operations of the Consolidated Funds:

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Expenses of the Consolidated Funds	$	(7,443)	$	(4,554)	$	(2,889)	(63)	%
Net realized and unrealized gains (losses) on investments of Consolidated Funds	(254,761)		4,364		(259,125)		NM
Interest and other income of Consolidated Funds	113,225		93,184		20,041		22
Interest expense of Consolidated Funds	(80,241)		(64,912)		(15,329)		(24)
Income (loss) before taxes	(229,220)		28,082		(257,302)		NM
Income tax (expense) benefit of Consolidated Funds	(28)		579		(607)		NM
Net income (loss)	(229,248)		28,661		(257,909)		NM
Less: Revenues attributable to Ares Management Corporation eliminated upon consolidation	(35,491)		9,980		(45,471)		NM
Less: Other income (expense) attributable to Ares Management Corporation eliminated upon consolidation	(27,351)		1,057		(28,408)		NM
Net income (loss) attributable to non-controlling interest in Consolidated Funds	$	(166,406)	$	17,624	(184,030)		NM

NM - Not Meaningful

The results of operations of the Consolidated Funds primarily represents activity from certain CLOs that we are deemed to have a controlling financial interest. Expenses primarily reflect higher professional fees that were incurred as a result of debt issuance costs related to the issuance of a European CLO. These fees were expensed in the period incurred, as CLO debt is recorded at fair value on our Consolidated Statements of Financial Condition. Net realized and unrealized gains from the prior year decreased to net realized and unrealized losses in the current year, primarily due to a significant reduction in the value of loans held by the CLOs. The CSLLI returned a negative 13.2% for the period, primarily due to the market volatility from the COVID-19 pandemic. The increase in interest and other income and in interest expense was attributable to the net increase of eight additional CLOs that we began consolidating subsequent to March 31, 2019, resulting in additional interest paying loans and interest expense from debt issued.

Revenues and other income (expense) attributable to Ares Management Corporation represents management fees, incentive fees, principal investment income and administrative, transaction and other fees that are eliminated from the respective components of Ares Management Corporation's results upon consolidation. The decrease for the three month comparative period for other income (expense) was primarily due to the market volatility mentioned above. The decrease was partially offset by management fees that increased due to the net increase of six additional CLOs and private funds that are consolidated and by administrative fees that increased due to the renegotiation of an administrative fee agreement with ACF FinCo I L.P. ("ACF") during the third quarter of 2019. The renegotiated administration fee allowed for more operating expenses to be reimbursed, but eliminated the management fee paid by the fund to us.

Segment Analysis

For segment reporting purposes, revenues and expenses are presented before giving effect to the results of our Consolidated Funds. As a result, segment revenues from management fees, performance income and investment income are different than those presented on a consolidated basis in accordance with GAAP because revenues recognized from Consolidated Funds are eliminated in consolidation. 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.

Discussed below are our results of operations for our reportable segments. We separately discuss the OMG. This information is used by our management to make operating decisions, assess performance and allocate resources.

59

FRE, RI and Other Measures

FRE and RI are non-GAAP financial measures our management uses when making resource deployment decisions and in assessing performance of our segments. For definitions of each of these non-GAAP financial measures see the Glossary. The following table sets forth FRE and RI by segment ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Fee Related Earnings:
Credit Group	$	114,257	$	92,179	$	22,078	24	%
Private Equity Group	27,038		26,143		895		3
Real Estate Group	9,540		6,243		3,297		53
Operations Management Group	(57,731)		(53,293)		(4,438)		(8)
Fee Related Earnings	$	93,104	$	71,272	21,832		31
Realized Income:
Credit Group	$	117,391	$	103,305	$	14,086	14	%
Private Equity Group	60,907		44,024		16,883		38
Real Estate Group	20,085		10,977		9,108		83
Operations Management Group	(64,238)		(53,674)		(10,564)		(20)
Realized Income	$	134,145	$	104,632	29,513		28

Reconciliation of Consolidated GAAP Financial Measures to Certain Non-GAAP Measures

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

	Three months ended March 31,
	2020		2019
Income (loss) before taxes	$	(296,413)	$	135,960
Adjustments:
Depreciation and amortization expense	5,542		5,824
Equity compensation expense	32,557		27,552
Acquisition and merger-related expense	3,137		1,773
Deferred placement fees	5,415		521
Other income, net	—		(1)
Net expense of non-controlling interests in consolidated subsidiaries	20,497		876
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net of eliminations	166,378		(17,045)
Unconsolidated performance (income) loss - unrealized	387,657		(146,575)
Unconsolidated performance related compensation - unrealized	(285,892)		107,303
Unconsolidated net investment (income) loss - unrealized	95,267		(11,556)
Realized Income	134,145		104,632
Unconsolidated performance income - realized	(151,770)		(68,573)
Unconsolidated performance related compensation - realized	117,993		49,217
Unconsolidated net investment income- realized	(7,264)		(14,004)
Fee Related Earnings	$	93,104	$	71,272

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Results of Operations by Segment

Credit Group—Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019

Fee Related Earnings:

The following table presents the components of the Credit Group's FRE and the changes from the prior year ($ in thousands):

					Favorable (Unfavorable)
	Three months ended March 31,
	2020		2019		$ Change		% Change
Management fees (includes ARCC Part I Fees of $43,923 and $38,393 for the three months ended March 31, 2020 and 2019, respectively)	$	197,437	$	162,966	$	34,471	21	%
Other fees	3,058		3,066		(8)		—
Compensation and benefits	(70,925)		(60,348)		(10,577)		(18)
General, administrative and other expenses	(15,313)		(13,505)		(1,808)		(13)
Fee Related Earnings	$	114,257	$	92,179	22,078		24

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

Management fees on existing direct lending funds benefited from increased deployment with an increase of $12.1 million in management fees from ACE IV, PCS and Ares Senior Direct Lending Fund L.P. (“SDL”) for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. Management fees from ARCC increased $6.4 million primarily due to an increase in leverage that became available at the end of the second quarter of 2019. ARCC Part I Fees increased primarily due to the expiration of the $10 million quarterly fee waiver at the end of the third quarter of 2019, partially offset by a decrease in origination activity as a result of the COVID-19 pandemic.

61

The decrease in the effective management fee rate for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 was primarily driven by deployment in certain direct lending and alternative credit funds that have fee rates below 1.00%.

Compensation and Benefits. Compensation and benefits expenses increased by $10.6 million, or 18%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was primarily driven by 10% headcount growth as we hired investment professionals to support our growing U.S. and European direct lending AUM, which increased by 13% from the prior period. Compensation and benefits are further driven by an increase in ARCC Part I Fees compensation of $3.6 million from the prior period and by an increase in employer taxes of $2.1 million primarily associated with the vesting of a greater number of restricted units at a higher stock price.

General, Administrative and Other Expenses.  General, administrative and other expenses increased by $1.8 million, or 13%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 primarily driven by an increase in marketing and distribution initiatives to support the expansion of our business.

Realized Income:

The following table presents the components of the Credit Group's RI and the changes from the prior year ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Fee Related Earnings	$	114,257	$	92,179	$	22,078	24	%
Performance income-realized	9,016		21,925		(12,909)		(59)
Performance related compensation-realized	(7,899)		(12,663)		4,764		38
Realized net performance income	1,117		9,262		(8,145)		(88)
Investment income (income)-realized	(843)		858		(1,701)		NM
Interest and other investment income-realized	4,575		2,905		1,670		57
Interest expense	(1,715)		(1,899)		184		10
Realized net investment income	2,017		1,864		153		8
Realized Income	$	117,391	$	103,305	14,086		14

NM - Not Meaningful

Realized income for the periods presented was composed of FRE, as explained above, realized net performance income and realized net investment income for the respective periods.

Realized net performance income for the three months ended March 31, 2020 was primarily attributable to a one-time reversal of certain incentive fees that were recognized in 2019. During 2020, management elected to extend the measurement period of these incentive fees. As a result, the performance obligation has no longer been met and achievement is not certain, leading to the derecognition of these incentive fees. Realized net performance income for the three months ended March 31, 2019 was primarily attributable to 11 direct lending funds with incentive fees that crystallized during the period.

Realized net investment income increased by $0.2 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was primarily attributable to a term loan investment that was made subsequent to the prior period and generated interest income during the current period, partially offset by a realized loss of $1.0 million from the write down of an investment in a U.S. CLO.

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Credit Group— Carried Interest and Incentive Fees

The following table presents the accrued carried interest and incentive fee receivables for the Credit Group ($ in thousands):

	As of March 31,		As of December 31,
	2020		2019
ACE III	$	67,879	$	76,628
ACE IV	60,843		57,388
CSF III	12,518		13,991
PCS	33,375		52,029
Other credit funds	75,452		112,959
Total Credit Group	$	250,067	$	312,995

The change in accrued carried interest and incentive fee receivable from the prior year end was primarily attributable to the following: (i) a $30.8 million decrease in total unrealized carried interest allocation for three months ended March 31, 2020; (ii) $9.0 million of carried interest allocation and incentive fees realized during the three months ended March 31, 2020; (iii) $21.8 million of net incentive fees for which the cash receipt did not occur in the year the realization was recognized; and offset by (iv) foreign currency translation and other adjustments.

The following table presents the components of the total change in unrealized carried interest allocation and incentive fees for the Credit Group ($ in thousands):

	Three months ended March 31, 2020						Three months ended March 31, 2019
	Realized		Unrealized, net		Total Change in Unrealized		Realized		Unrealized, net		Total Change in Unrealized
ACE III	$	5,255	$	(13,014)	$	(7,759)	$	4,706	$	8,455	$	13,161
ACE IV	—		4,646		4,646		—		12,472		12,472
CSF III	—		(1,473)		(1,473)		—		1,267		1,267
PCS	—		(18,247)		(18,247)		—		5,117		5,117
Other credit funds	3,761		(11,774)		(8,013)		17,219		4,321		21,540
Total Credit Group	$	9,016	$	(39,862)	$	(30,846)	$	21,925	$	31,632	$	53,557

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Credit Group—Assets Under Management

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

	Syndicated Loans		High Yield		Multi-Asset Credit		Alternative Credit		U.S. Direct Lending		European Direct Lending		Total Credit Group
Balance at 12/31/2019	$	22,320	$	3,492	$	2,611	$	7,571	$	48,431	$	26,118	$	110,543
Acquisitions	2,693		—		—		—		—		—		2,693
Net new par/equity commitments	103		22		6		929		880		96		2,036
Net new debt commitments	255		—		—		—		1,407		557		2,219
Capital reductions	(6)		—		—		—		(28)		(13)		(47)
Distributions	(15)		—		(2)		(94)		(349)		(172)		(632)
Redemptions	(124)		(267)		(37)		(18)		(18)		—		(464)
Change in fund value	(558)		(411)		(353)		(905)		(1,086)		(523)		(3,836)
Balance at 3/31/2020	$	24,668	$	2,836	$	2,225	$	7,483	$	49,237	$	26,063	$	112,512
Average AUM(1)	$	23,494	$	3,164	$	2,418	$	7,527	$	48,834	$	26,091	$	111,528

	Syndicated Loans		High Yield		Multi-Asset Credit		Alternative Credit		U.S. Direct Lending		European Direct Lending		Total Credit Group
Balance at 12/31/2018	$	18,880	$	4,024	$	2,761	$	5,448	$	40,668	$	24,055	$	95,836
Net new par/equity commitments	414		54		(165)		1,267		472		523		2,565
Net new debt commitments	2,082		—		—		—		734		150		2,966
Capital reductions	(45)		—		—		—		(37)		(22)		(104)
Distributions	(26)		(11)		(11)		(32)		(235)		(212)		(527)
Redemptions	(134)		(92)		(265)		(220)		(6)		—		(717)
Change in fund value	71		271		142		113		401		59		1,057
Balance at 3/31/2019	$	21,242	$	4,246	$	2,462	$	6,576	$	41,997	$	24,553	$	101,076
Average AUM(1)	$	20,061	$	4,135	$	2,612	$	6,012	$	41,333	$	24,304	$	98,457

(1) Represents the quarterly average of beginning and ending balances.

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

AUM: $112.5 AUM: $101.1

FPAUM AUM not yet paying fees Non-fee paying⁽¹⁾ General partner and affiliates

(1) Includes $8.0 billion and $6.8 billion of AUM of funds for which we indirectly earn management fees as of March 31, 2020 and 2019, respectively.

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Credit Group—Fee Paying AUM

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

	Syndicated Loans		High Yield		Multi-Asset Credit		Alternative Credit		U.S. Direct Lending		European Direct Lending		Total Credit Group
FPAUM Balance at 12/31/2019	$	21,458	$	3,495	$	2,144	$	4,340	$	27,876	$	12,567	$	71,880
Acquisitions	2,596		—		—		—		—		—		2,596
Commitments	802		22		6		335		75		—		1,240
Subscriptions/deployment/increase in leverage	—		—		9		212		2,490		1,852		4,563
Capital reductions	(25)		—		(59)		—		(2)		(15)		(101)
Distributions	(15)		—		(11)		(127)		(816)		(62)		(1,031)
Redemptions	(124)		(267)		(33)		(18)		(18)		(21)		(481)
Change in fund value	(568)		(411)		(343)		(571)		(797)		(216)		(2,906)
FPAUM Balance at 3/31/2020	$	24,124	$	2,839	$	1,713	$	4,171	$	28,808	$	14,105	$	75,760
Average FPAUM(1)	$	22,791	$	3,167	$	1,929	$	4,256	$	28,342	$	13,336	$	73,821

	Syndicated Loans		High Yield		Multi-Asset Credit		Alternative Credit		U.S. Direct Lending		European Direct Lending		Total Credit Group
FPAUM Balance at 12/31/2018	$	18,328	$	4,025	$	2,196	$	2,826	$	21,657	$	8,815	$	57,847
Commitments	1,429		54		10		330		15		—		1,838
Subscriptions/deployment/increase in leverage	15		—		10		210		2,084		1,614		3,933
Capital reductions	(25)		—		(10)		—		(28)		(22)		(85)
Distributions	(13)		(11)		(10)		(20)		(283)		(186)		(523)
Redemptions	(135)		(92)		(274)		(220)		(5)		(131)		(857)
Change in fund value	67		271		138		64		241		124		905
Change in fee basis	—		—		—		—		—		(134)		(134)
FPAUM Balance at 3/31/2019	$	19,666	$	4,247	$	2,060	$	3,190	$	23,681	$	10,080	$	62,924
Average FPAUM(1)	$	18,997	$	4,136	$	2,128	$	3,008	$	22,669	$	9,448	$	60,386

(1) Represents the quarterly average of beginning and ending balances. 

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

FPAUM: $75.8 FPAUM: $62.9

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

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Credit Group—Fund Performance Metrics as of March 31, 2020

ARCC contributed approximately 50% of the Credit Group’s total management fees for the three months ended March 31, 2020. In addition to ARCC, six significant funds, ACE III, ACE IV, Ares Credit Strategies Fund III L.P. (“CSF III”), Ares Secured Income Master Fund L.P. (“ASIF”), PCS and SDL, contributed approximately 18% of the Credit Group’s management fees for the three months ended March 31, 2020. ACE III and CSF III and are in harvest mode, meaning they are generally not seeking to deploy capital into new investment opportunities, while ACE IV, PCS and SDL are in deployment mode.

        The following table presents the performance data for our significant non-drawdown funds in the Credit Group as of March 31, 2020 ($ in millions):

				Returns(%)(1)
	Year of Inception	AUM		Current Quarter		Year-To-Date		Since Inception(2)		Primary Investment Strategy
Fund				Gross	Net	Gross	Net	Gross	Net
ARCC(3)	2004	$	17,052	N/A	(7.7)	N/A	(7.7)	N/A	11.0	U.S. Direct Lending
ASIF(4)	2018	1,140		(13.3)	(13.4)	(13.3)	(13.4)	(5.7)	(6.3)	Alternative Credit

(1)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.

(2)Since inception returns are annualized.

(3)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 financial statements filed with the SEC, which are not part of this report.

(4)Gross returns do not reflect the deduction of management fees or other expenses. Net returns are calculated by subtracting the applicable management fee and other expenses from the gross returns on a monthly basis. ASIF is a master/feeder structure and the AUM and returns include activity from its investment in an affiliated Ares fund. Returns presented in the table are expressed in U.S dollars and are for the master fund, excluding the share class hedges. The current quarter to-date and since inception returns (gross / net) for the pound sterling hedged Cayman feeder, the fund's sole feeder, are as follows: (13.9)% / (14.0)%, (7.5)% / (8.1)%, respectively.

The following table presents the performance data of our significant drawdown funds as of March 31, 2020 ($ in millions):

	Year of Inception	AUM		Original Capital Commitments		Cumulative Invested Capital		Realized Proceeds(1)		Unrealized Value(2)		Total Value		MoIC		IRR(%)		Primary Investment Strategy
Fund														Gross(3)	Net(4)	Gross(5)	Net(6)
CSF III	2010	$	1,185	$	1,135	$	1,251	$	617	$	1,200	$	1,817	1.5x	1.5x	8.9	7.6	European & U.S. Direct Lending
ACE III(7)	2015	4,786		2,822		2,446		637		2,433		3,070		1.4x	1.3x	12.4	8.8	European Direct Lending
PCS	2017	3,603		3,365		2,131		199		2,172		2,371		1.1x	1.1x	10.2	7.3	U.S. Direct Lending
ACE IV Unlevered(8)	2018	9,971		2,851		1,649		52		1,693		1,745		1.1x	1.1x	9.9	7.0	European Direct Lending
ACE IV Levered(8)				4,819		2,781		125		2,912		3,037		1.1x	1.1x	14.4	10.3
SDL Unlevered	2018	4,926		922		316		24		297		321		1.0x	1.0x	4.9	2.7	U.S. Direct Lending
SDL Levered				2,045		700		102		602		704		1.0x	1.0x	5.6	1.0

(1)Realized proceeds represent the sum of all cash distributions to all 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.

(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.

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(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, carried interest, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. The net MoIC would 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.

(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, carried interest, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would likely have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(7)ACE III is made up of two feeder funds, one denominated in U.S. dollars and one denominated in Euros. The gross and net IRR and MoIC presented in the table are for the Euro denominated feeder fund. The gross and net IRR for the U.S. dollar denominated feeder fund are 13.4% and 9.6%, respectively. The gross and net MoIC for the U.S. dollar denominated feeder fund are 1.4x and 1.3x, 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 III are for the combined fund and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

(8)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. 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 are inclusive of a U.S. dollar denominated feeder fund, which has not been presented separately. The gross and net IRR for ACE IV (G) Unlevered are 12.4% and 8.3%, respectively. The gross and net MoIC for ACE IV (G) Unlevered are 1.1x and 1.1.x, respectively. The gross and net IRR for ACE IV (G) Levered are 16.0% and 11.1%, respectively. The gross and net MoIC for ACE IV (G) Levered are 1.1x and 1.1x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund's closing. All other values for ACE IV Unlevered and ACE IV Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

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Private Equity Group—Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019

Fee Related Earnings:

The following table presents the components of the Private Equity Group's FRE and the changes from the prior year ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Management fees	$	52,157	$	51,396	$	761	1	%
Other fees	110		—		110		100
Compensation and benefits	(19,596)		(21,196)		1,600		8
General, administrative and other expenses	(5,633)		(4,057)		(1,576)		(39)
Fee Related Earnings	$	27,038	$	26,143	895		3

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

Management fees increased primarily from the launch of the special opportunities and corporate private equity continuation funds subsequent to the first quarter of 2019 and decreased due to ACOF III no longer paying management fees beginning in the fourth quarter of 2019.

Compensation and Benefits. Compensation and benefits expenses decreased by $1.6 million, or 8%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decrease was primarily driven by a reduction in incentive compensation based on the anticipated annual margin targets.

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General, Administrative and Other Expenses. General, administrative and other expenses increased by $1.6 million, or 39%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was primarily driven by placement fees in connection with new commitments to a fund in our special opportunities strategy and by marketing costs related to annual events that were held during the first quarter of 2020.

Realized Income:

The following table presents the components of the Private Equity Group's RI and the changes from the prior year ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Fee Related Earnings	$	27,038	$	26,143	$	895	3	%
Performance income-realized	116,154		44,123		72,031		163
Performance related compensation-realized	(92,924)		(35,297)		(57,627)		(163)
Realized net performance income	23,230		8,826		14,404		163
Investment income-realized	11,470		10,936		534		5
Interest and other investment income-realized	812		294		518		176
Interest expense	(1,643)		(2,175)		532		24
Realized net investment income	10,639		9,055		1,584		17
Realized Income	$	60,907	$	44,024	16,883		38

Realized income for the periods presented was composed of FRE, as explained above, realized net performance income and realized net investment income for the respective periods.

Realized net performance income and realized net investment income for the three months ended March 31, 2020 were primarily attributable to realizations from the monetization of ACOF IV's investment in National Veterinary Associates following the sale of the company during the current period. Realized net performance income and realized net investment income for the three months ended March 31, 2019 were primarily attributable to realizations from the partial monetization of multiple investments held within ACOF III, including partial sale of its position in Floor & Decor and partial sale of its position in a real estate development portfolio company.

Private Equity Group—Carried Interest

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

	As of March 31,		As of December 31,
	2020		2019
ACOF III	$	104,633	$	156,053
ACOF IV	206,063		343,546
ACOF V	—		75,099
EIF V	25,426		28,242
AEOF	—		27,377
Other funds	12,230		28,576
Total Private Equity Group	$	348,352	$	658,893

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The following table presents the components of the total unrealized gains (losses) in the carried interest allocation for the Private Equity Group ($ in thousands):

	Three months ended March 31, 2020						Three months ended March 31, 2019
	Realized		Unrealized, net		Total Change in Unrealized		Realized		Unrealized, net		Total Change in Unrealized
ACOF III	$	2,393	$	(51,420)	$	(49,027)	$	46,295	$	50,347	$	96,642
ACOF IV	113,761		(137,483)		(23,722)		—		43,461		43,461
ACOF V	—		(75,099)		(75,099)		—		—		—
EIF V	—		(2,816)		(2,816)		—		—		—
AEOF	—		(27,377)		(27,377)		—		5,551		5,551
Other funds	—		(16,317)		(16,317)		(2,172)		649		(1,523)
Total Private Equity Group	$	116,154	$	(310,512)	$	(194,358)	$	44,123	$	100,008	$	144,131

Refer to "Consolidated Results of Operations of the Company—Carried Interest Allocation" of this report for further discussion of the total change in unrealized gains (losses) in carried interest allocation for the Private Equity Group.

Private Equity Group—Assets Under Management

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

	Corporate Private Equity		Infrastructure & Power		Special Opportunities		Energy Opportunities		Total Private Equity Group
Balance at 12/31/2019	$	17,153	$	3,233	$	3,527	$	1,253	$	25,166
Net new equity commitments	—		—		364		—		364
Capital reductions	—		—		(25)		—		(25)
Distributions	(1,836)		—		(2)		—		(1,838)
Change in fund value	(1,254)		(6)		(147)		(245)		(1,652)
Balance at 3/31/2020	$	14,063	$	3,227	$	3,717	$	1,008	$	22,015
Average AUM(1)	$	15,608	$	3,230	$	3,622	$	1,131	$	23,591

	Corporate Private Equity		Infrastructure & Power		Special Opportunities		Energy Opportunities		Total Private Equity Group
Balance at 12/31/2018	$	17,159	$	3,842	$	1,733	$	753	$	23,487
Net new equity commitments	(125)		—		75		81		31
Capital reductions	(3)		—		—		—		(3)
Distributions	(421)		(184)		(32)		—		(637)
Change in fund value	909		(70)		33		28		900
Balance at 3/31/2019	$	17,519	$	3,588	$	1,809	$	862	$	23,778
Average AUM(1)	$	17,339	$	3,715	$	1,771	$	808	$	23,633

(1) Represents the quarterly average of beginning and ending balances.

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

AUM: $22.0 AUM: $23.8

FPAUM AUM not yet paying fees Non fee paying General partner and affiliates

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		Infrastructure & Power		Special Opportunities		Energy Opportunities		Total Private Equity Group
FPAUM Balance at 12/31/2019	$	10,924	$	3,352	$	1,720	$	1,044	$	17,040
Subscriptions/deployment/increase in leverage	19		—		333		—		352
Distributions	(229)		—		(138)		—		(367)
Change in fund value	(5)		—		—		—		(5)
FPAUM Balance at 3/31/2020	$	10,709	$	3,352	$	1,915	$	1,044	$	17,020
Average FPAUM(1)	$	10,817	$	3,352	$	1,818	$	1,044	$	17,031

	Corporate Private Equity		Infrastructure & Power		Special Opportunities		Energy Opportunities		Total Private Equity Group
FPAUM Balance at 12/31/2018	$	11,716	$	3,472	$	1,201	$	682	$	17,071
Commitments	—		—		—		81		81
Subscriptions/deployment/increase in leverage	125		46		142		—		313
Capital reductions	—		—		(4)		—		(4)
Distributions	(34)		(107)		—		—		(141)
Change in fund value	2		—		—		—		2
FPAUM Balance at 3/31/2019	$	11,809	$	3,411	$	1,339	$	763	$	17,322
Average FPAUM(1)	$	11,763	$	3,442	$	1,270	$	723	$	17,198

(1) Represents the quarterly average of beginning and ending balances.

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

FPAUM: $17.0 FPAUM: $17.3

Capital commitments Invested capital

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Private Equity Group—Fund Performance Metrics as of March 31, 2020

        Our significant funds combined for approximately 84% of the Private Equity Group’s management fees for the three months ended March 31, 2020. ACOF IV, U.S. Power Fund IV ("USPF IV") and Ares Special Situations Fund IV, L.P. ("SSF IV") are in harvest mode, meaning they are generally not seeking to deploy capital into new investment opportunities, while ACOF V and AEOF are in deployment mode. Ares Energy Investors Fund V, L.P. ("EIF V") is no longer considered a significant fund as it did not meet our significant fund threshold beginning in the first quarter of 2020.

The following table presents the performance data as of March 31, 2020 for our significant funds in the Private Equity Group, all of which are drawdown funds ($ in millions):

	Year of Inception	AUM		Original Capital Commitments		Cumulative Invested Capital		Realized Proceeds(1)		Unrealized Value(2)		Total Value		MoIC		IRR(%)		Primary Investment Strategy
Fund														Gross(3)	Net(4)	Gross(5)	Net(6)
USPF IV	2010	$	1,332	$	1,688	$	2,121	$	1,387	$	1,310	$	2,697	1.3x	1.1x	6.8	3.1	Infrastructure and Power
ACOF IV	2012	3,829		4,700		4,234		4,716		3,099		7,815		1.8x	1.6x	17.6	11.8	Corporate Private Equity
SSF IV(7)	2015	1,435		1,515		3,227		1,967		1,157		3,124		1.0x	0.9x	(2.7)	(4.5)	Special Opportunities
ACOF V	2017	7,799		7,850		5,807		331		5,899		6,230		1.1x	1.0x	4.7	(0.1)	Corporate Private Equity
AEOF	2018	1,009		1,120		753		11		685		696		0.9x	0.8x	NA	NA	Energy Opportunities

(1)Realized proceeds represent the sum of all cash dividends, interest income, other fees and cash proceeds from realizations of interests in portfolio investments. Realized proceeds exclude 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 investment-level and is based on the interests of all partners. The gross MoIC is before giving effect to management fees, carried interest and other expenses, as applicable. The gross MoIC for the corporate private equity funds is also calculated before giving effect to any bridge financings. Inclusive of bridge financings, gross MoIC would be 1.8x for ACOF IV, 1.1x for ACOF V and 0.9x for AEOF.

(4)The net MoIC for USPF IV and SSF IV is calculated at the fund-level. The net MoIC for the corporate private equity and energy opportunities funds is calculated at the investment level. For all funds, 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 funds may utilize a credit facility during the investment period and for general cash management purposes. The net MoIC would 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 investments and the residual value of the investments at the end of the measurement period. Gross IRRs reflect returns to all partners. For SSF IV, cash flows used in the gross IRR calculation are based on the actual dates of the cash flows. For all other funds, cash flows are assumed to occur at month-end. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable. The gross IRR for the corporate private equity funds is also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the gross IRR would be 17.5% for ACOF IV and 5.0% for ACOF V.

(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 have generally been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(7)In January 2017, a new team assumed portfolio management of SSF IV. In addition to presenting the cumulative performance measure for SSF IV, we have also adopted a new performance measurement called “SSF IV 2.0.” SSF IV 2.0 is a subset of SSF IV positions and is intended to provide insight into the new team’s cumulative investment performance. SSF IV 2.0 investments represent (i) existing and re-underwritten positions by the new team on January 1, 2017 and (ii) all new investments made by the new team since January 1, 2017. As part of the re-underwriting process, each liquid investment in the SSF IV portfolio was evaluated and a determination was made whether to continue to hold such investment in the SSF IV portfolio or dispose of such investment. At the same time, legacy illiquid investments have been excluded from the SSF IV 2.0 track record as it was not possible to dispose of such investments in the near-term due to their private, illiquid nature. Since January 2017, SSF IV 2.0 has generated gross and net internal rates of return of 5.5% and 3.6% through March 31, 2020, respectively. The IRR is an annualized since inception internal rate of return of cash flows to and from investments and the residual value of the investments at the end of the measurement period. Cash flows used in the IRRs calculations 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. The net IRRs are calculated after giving effect to estimated management fees, carried interest, as applicable, and other expenses.

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Real Estate Group—Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019

Fee Related Earnings:

The following table presents the components of the Real Estate Group's FRE and the changes from the prior year ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Management fees	$	24,184	$	18,650	$	5,534	30	%
Other fees	704		9		695		NM
Compensation and benefits	(12,413)		(9,284)		(3,129)		(34)
General, administrative and other expenses	(2,935)		(3,132)		197		6
Fee Related Earnings	$	9,540	$	6,243	3,297		53

NM - Not Meaningful

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

Management fees increased primarily due to an increase in capital commitments relating to the launch of a U.S. real estate equity fund in the fourth quarter of 2019. Management fees also increased due to the same U.S. real estate equity fund generating $0.4 million from one-time catch up fees during the quarter. The increase in management fees was also driven by our Real Estate Group completing the sale of its stake in a 40-property pan-European logistics portfolio that resulted in the recognition of $2.0 million of deferred revenue that will not recur in future periods.

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The decrease in effective management fee rates between periods was primarily due to the increase in committed capital from the launch of multiple real estate equity funds. Our latest real estate equity funds pay a fixed fee on committed capital and that fee increases once that capital is invested. As a result, our effective fee rate temporarily decreases immediately following capital raising and increases as capital is subsequently deployed. In addition, there were capital commitments to certain real estate debt funds that have fee rates below 0.75%.

Compensation and Benefits.  Compensation and benefits expenses increased by $3.1 million, or 34%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was primarily driven by higher incentive compensation attributable to the addition of new senior executives in the fourth quarter of 2019.

Realized Income:

The following table presents the components of the Real Estate Group's RI and the changes from the prior year ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Fee Related Earnings	$	9,540	$	6,243	$	3,297	53	%
Performance income-realized	26,600		2,525		24,075		NM
Performance related compensation-realized	(17,170)		(1,257)		(15,913)		NM
Realized net performance income	9,430		1,268		8,162		NM
Investment income-realized	1,290		3,480		(2,190)		(63)
Interest and other investment income-realized	796		1,105		(309)		(28)
Interest expense	(971)		(1,119)		148		13
Realized net investment income	1,115		3,466		(2,351)		(68)
Realized Income	$	20,085	$	10,977	9,108		83

NM - Not Meaningful

Realized income for the periods presented was composed of FRE, as explained above, realized net performance income and realized net investment income for the respective periods.

Realized net performance income and realized net investment income for the three months ended March 31, 2020 were primarily attributable to realizations from the Real Estate Group's sale of a 40-property pan-European logistics portfolio held within multiple real estate funds. Realized net performance income and investment income for the three months ended March 31, 2019 were attributable to the monetization of several properties held within a certain European equity real estate fund. Additionally, the sale of multiple properties held within Ares US Real Estate Fund VIII, L.P. and within various other U.S. real estate equity funds generated realized investment income for the three months ended March 31, 2019.

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Real Estate Group— Carried Interest and Incentive Fees

The following table presents the accrued carried interest and incentive fee receivables for the Real Estate Group ($ in thousands):

	As of March 31,		As of December 31,
	2020		2019
US IX	$	—	$	6,844
EF IV	61,219		70,440
Other real estate funds	108,536		128,826
Subtotal	169,755		206,110
Other fee generating funds(1)	4,865		7,268
Total Real Estate Group	$	174,620	$	213,378

(1)Relates to investment income from AREA Sponsor Holdings LLC that is reclassified for segment reporting to align with the character of the underlying income generated.

The change in accrued carried interest and incentive fee receivable from the prior year end was primarily attributable to the following: (i) a $10.7 million decrease in total unrealized carried interest allocation for the three months ended March 31, 2020; (ii) $26.6 million of carried interest allocation and incentive fees realized during the three months ended March 31, 2020; and (iii) foreign currency translation and other adjustments. 

The following table presents the components of total change in unrealized incentive fees and carried interest allocation for the Real Estate Group ($ in thousands):

	Three months ended March 31, 2020						Three months ended March 31, 2019
	Realized		Unrealized, net		Total Change in Unrealized		Realized		Unrealized, net		Total Change in Unrealized
US IX	$	—	$	(6,844)	$	(6,844)	$	—	$	—	$	—
EF IV	—		(9,048)		(9,048)		—		(5,125)		(5,125)
Other real estate funds	26,092		(19,166)		6,926		2,058		19,920		21,978
Subtotal	26,092		(35,058)		(8,966)		2,058		14,795		16,853
Other fee generating funds(1)	508		(2,225)		(1,717)		467		139		606
Total Real Estate Group	$	26,600	$	(37,283)	$	(10,683)	$	2,525	$	14,934	$	17,459

(1)Relates to investment income from AREA Sponsor Holdings LLC that is reclassified for segment reporting to align with the character of the underlying income generated.

Real Estate Group—Assets Under Management

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

	Real Estate Equity - U.S.		Real Estate Equity - Europe		Real Estate Debt		Total Real Estate Group
Balance at 12/31/2019	$	3,793	$	4,588	$	4,826	$	13,207
Net new equity commitments	559		581		420		1,560
Net new debt commitments	—		—		226		226
Distributions	(53)		(572)		(18)		(643)
Change in fund value	(126)		(86)		(26)		(238)
Balance at 3/31/2020	$	4,173	$	4,511	$	5,428	$	14,112
Average AUM(1)	$	3,983	$	4,550	$	5,127	$	13,660

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	Real Estate Equity - U.S.		Real Estate Equity - Europe		Real Estate Debt		Total Real Estate Group
Balance at 12/31/2018	$	4,163	$	3,711	$	3,466	$	11,340
Net new equity commitments	(110)		191		81		162
Net new debt commitments	—		—		473		473
Distributions	(295)		(34)		(10)		(339)
Change in fund value	136		29		9		174
Balance at 3/31/2019	$	3,894	$	3,897	$	4,019	$	11,810
Average AUM(1)	$	4,029	$	3,804	$	3,743	$	11,576

(1) Represents the quarterly average of beginning and ending balances.

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

AUM: $14.1 AUM: $11.8

FPAUM AUM not yet paying fees Non-fee paying General partner and affiliates

Real Estate Group—Fee Paying AUM

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

	Real Estate Equity - U.S.		Real Estate Equity - Europe		Real Estate Debt		Total Real Estate Group
FPAUM Balance at 12/31/2019	$	2,635	$	3,792	$	1,536	$	7,963
Commitments	756		539		73		1,368
Subscriptions/deployment/increase in leverage	48		145		287		480
Capital reductions	—		(10)		(1)		(11)
Distributions	(22)		(186)		(18)		(226)
Change in fund value	—		(58)		10		(48)
Change in fee basis	—		(311)		—		(311)
FPAUM Balance at 3/31/2020	$	3,417	$	3,911	$	1,887	$	9,215
Average FPAUM(1)	$	3,026	$	3,852	$	1,712	$	8,590

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	Real Estate Equity - U.S.		Real Estate Equity - Europe		Real Estate Debt		Total Real Estate Group
FPAUM Balance at 12/31/2018	$	2,739	$	3,269	$	944	$	6,952
Commitments	—		86		—		86
Subscriptions/deployment/increase in leverage	11		55		90		156
Distributions	(125)		(46)		(10)		(181)
Change in fund value	—		(47)		9		(38)
FPAUM Balance at 3/31/2019	$	2,625	$	3,317	$	1,033	$	6,975
Average FPAUM(1)	$	2,682	$	3,293	$	989	$	6,964

(1) Represents the quarterly average of beginning and ending balances.

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

FPAUM: $9.2 FPAUM: $7.0

Capital commitments Invested capital Market value/other(1)

(1)Includes ACRE's fee paying AUM, which is based on ACRE’s stockholders’ equity.

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Real Estate Group—Fund Performance Metrics as of March 31, 2020

Our significant funds in the Real Estate Group combined for approximately 36% of the Real Estate Group’s management fees for the three months ended March 31, 2020. US IX and Ares European Real Estate Fund V SCSp ("EF V") are in deployment mode, meaning they are generally seeking to invest capital into new investment opportunities. EF IV is no longer considered a significant fund as it did not meet our significant fund threshold beginning in the first quarter of 2020.

The following table presents the performance data as of March 31, 2020 for our significant funds in the Real Estate Group, all of which are drawdown funds ($ in millions):

	Year of Inception	AUM		Original Capital Commitments		Cumulative Invested Capital		Realized Proceeds(1)		Unrealized Value(2)		Total Value		MoIC		IRR(%)		Primary Investment Strategy
Fund														Gross(3)	Net(4)	Gross(5)	Net(6)
US IX	2017	$	1,030	$	1,040	$	773	$	35	$	762	$	797	1.1x	1.0x	8.6	4.4	U.S. Real Estate Equity
EF V(7)	2018	1,908		1,968		566		45		553		598		1.0x	0.9x	2.3	(9.0)	European Real Estate Equity

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

(2)Unrealized value represents the fair value of remaining investments. There can be no assurance that unrealized investments will be realized at the valuations indicated.

(3)The gross MoIC is calculated at the investment level and is based on the interests of all partners. The gross MoIC for all funds is before giving effect to management fees, carried interest and other expenses, as applicable.

(4)The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying partners and, if applicable, excludes interests attributable to the non fee-paying partners and/or the general partner which does not pay management fees, carried interest or has such fees rebated outside of the fund. The net MoIC is after giving effect to management fees, carried interest as applicable and other expenses. Net fund-level MoICs would generally likely 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 investments and the residual value of the investments at the end of the measurement period. Gross IRRs reflect returns to all partners. Cash flows used in the gross IRR calculation are assumed to occur at quarter-end. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable.

(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 partners and, if applicable, exclude interests attributable to the non fee-paying partners and/or the general partner which does not pay management fees or carried interest or has such fees rebated outside of the fund. 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. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally likely have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.

(7)EF V is made up of two parallel funds, one denominated in U.S. dollars and one denominated in Euros. The gross and net IRR and MoIC presented in the table are for the Euro denominated parallel fund. The gross and net IRRs for the U.S. dollar denominated parallel fund are 2.3% and (9.7%), respectively. The gross and net MoIC for the U.S. dollar denominated parallel fund are 1.0x and 0.9x, 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 EF V are for the combined fund and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

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Operations Management Group—Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019

Fee Related Earnings:

The following table presents the components of the OMG's FRE and the changes from the prior year ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Compensation and benefits	$	(36,426)	$	(32,661)	$	(3,765)	(12)	%
General, administrative and other expenses	(21,305)		(20,632)		(673)		(3)
Fee Related Earnings	$	(57,731)	$	(53,293)	(4,438)		(8)

Compensation and Benefits. Compensation and benefits expenses increased by $3.8 million, or 12%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was primarily driven by the headcount growth from the expansion of our strategy and relationship management teams in order to support global fundraising and other strategic initiatives and of our business operations teams. The expansion of our business operations teams internalized certain business processes and included opening a new office in India during the second half of 2019. This expense growth of $0.8 million was offset by reduced professional services expenses for accounting and information technology support that are reflected within general, administrative and other expenses.

General, Administrative and Other Expenses. General, administrative and other expenses increased by $0.7 million, or 3%, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increase was primarily driven by costs of $3.3 million relating to a previously disclosed SEC matter were recorded during the current period. We have been cooperating with the SEC, and we believe that this matter is nearing resolution and that we have incurred substantially all costs. During the second quarter of 2020, insurance proceeds of $2.5 million were received in connection with this matter and will be reflected in next quarter's results. While occupancy and overhead costs increased for operating a new office in India, the reduction to professional services expenses resulted in the net reduction in total expenses of $1.6 million.

Realized Income:

The following table presents the components of the OMG's RI and the changes from the prior year ($ in thousands):

	Three months ended March 31,				Favorable (Unfavorable)
	2020		2019		$ Change		% Change
Fee Related Earnings	$	(57,731)	$	(53,293)	$	(4,438)	(8)	%
Investment income-realized	(5,698)		—		(5,698)		(100)
Interest and other investment income —realized	168		15		153		NM
Interest expense	(977)		(396)		(581)		(147)
Realized net investment loss	(6,507)		(381)		(6,126)		NM
Realized Income	$	(64,238)	$	(53,674)	(10,564)		(20)

NM - Not Meaningful

Realized income for the periods presented was composed of FRE, as explained above, and realized net investment income for the respective periods.

Realized net investment loss was $6.5 million for the three months ended March 31, 2020 primarily driven by realized loss associated with the sale of a portfolio holding of a non–core insurance company.

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Liquidity and Capital Resources

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. In the wake of the COVID-19 pandemic, management believes that the Company is well-positioned and its liquidity will continue to be sufficient for its foreseeable working capital needs, contractual obligations, dividend payments, pending acquisitions and strategic initiatives. For further discussion regarding the potential risks and impact of the COVID-19 pandemic on the Company, see Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q.

Sources and Uses of Liquidity

Our sources of liquidity are (1) cash on hand, (2) net working capital, (3) cash from operations, including management fees, which are collected monthly, quarterly or semi-annually, and net realized performance income, which is unpredictable as to amount and timing, (4) fund distributions related to our investments that are also unpredictable as to amount and timing and (5) net borrowing from the Credit Facility. As of March 31, 2020, our cash and cash equivalents were $1.2 billion and we had $800.0 million of borrowings outstanding under our Credit Facility. Our ability to draw from the Credit Facility is subject to a leverage and other covenants. We remain in compliance with all covenants as of March 31, 2020. 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. Market conditions resulting from the COVID-19 pandemic may impact our liquidity. Cash flows from management fees may be impacted by a slowdown or declines in deployment, declines or write downs in valuations, or a slowdown or negatively impacted fundraising. Declines or delays and transaction activity may impact our fund distributions and net realized performance income which could adversely impact our cash flows and liquidity. In addition, management fees may be subject to deferral. Market conditions may make it difficult to extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms.

One of our sources of cash from operations is ARCC Part I Fees. Under certain circumstances, the payment of ARCC Part I Fees that have been earned and recorded by us as revenue may be deferred under the terms of the applicable investment advisory agreement with ARCC. ARCC Part I Fees are earned based on ARCC’s net investment income, which does not include any realized gains or losses or any unrealized gains or losses resulting from changes in fair value. Payment of ARCC Part I Fees that we have earned are deferred if, during the most recent four full calendar quarter periods ending on or prior to the date such payment is to be made, the sum of (a) aggregate distributions to ARCC's stockholders and (b) ARCC's change in net assets (defined as ARCC's total assets less indebtedness and before taking into account any income based fees or capital gains incentive fees accrued during the period) is less than 7.0% of ARCC's net assets (defined as total assets less indebtedness) at the beginning of such period. These calculations will be adjusted for any share issuances or repurchases. Once earned, ARCC Part I Fees are not reversible even if deferred. All fees deferred for payment will be carried over and paid in the period when the payment hurdle is achieved in accordance with the investment advisory agreement with ARCC. The impacts of COVID-19 are unknown and could result in market dislocations that could cause the payment of ARCC Part I Fees to be earned yet deferred. In such cases, we may still recognize the revenue, however, it would also result in a larger receivable from affiliates. The impact of this deferral mechanic to our liquidity is offset by the fact that 60% of ARCC Part I Fees are paid to certain professionals as compensation, which is recorded as a liability but will not be paid until the cash is received by us. Therefore, the potential liquidity impact of a deferral of the payment of ARCC Part I Fees is limited to 40% of the total amount of ARCC Part I Fees earned.

We expect that our primary liquidity needs will continue to be to (1) provide capital to facilitate the growth of our existing investment management businesses, (2) fund our investment commitments, (3) provide capital to facilitate our expansion into businesses that are complementary to our existing investment management businesses as well as other strategic growth initiatives, (4) pay operating expenses, including cash compensation to our employees and payments under the tax receivable agreement (“TRA”), (5) fund capital expenditures, (6) service our debt, (7) pay income taxes and (8) make dividend payments to our Class A common stockholders and the Series A Preferred stockholders in accordance with our dividend policy.

In the normal course of business, we expect to pay dividends that are aligned with the expected changes in our fee related earnings. If cash flow 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 A 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. Dividends on Series A Preferred Stock are not cumulative and the Series A Preferred Stock is not convertible into our Class A common stock or any other security.

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Stock offerings and repurchases may be additional sources and uses of liquidity, respectively. For a discussion of transactions occurring in the current period, see Note 13, “Equity,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Net realized performance income also provides us with a source of liquidity. Performance income may be realized when a portfolio investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or hurdle rate or may be realized at the end of each fund’s measurement period when investment performance exceeds a stated benchmark or hurdle rate. For a summary of accrued carried interest and incentive fee receivables by segment, see “— Results of Operations by Segment.”

Our 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 our reported cash flows. The primary cash flow activities of our Consolidated Funds include: (1) raising capital from third-party investors, which is reflected as non-controlling interests of our Consolidated Funds, (2) financing certain investments by issuing debt, (3) purchasing and selling investment securities, (4) generating cash through the realization of certain investments, (5) collecting interest and dividend income and (6) distributing cash to investors. Our Consolidated Funds are 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 typically not available for corporate liquidity needs, and debt of the Consolidated Funds is non–recourse to the Company except to the extent of the Company's investment in the fund.

Cash Flows

We consolidate funds where we are deemed to hold a controlling financial interest. The Consolidated Funds are not necessarily the same entities in each year presented due to changes in ownership, changes in limited partners' rights, and the creation and termination of funds. The consolidation of these funds had no effect on cash flows attributable to us for the periods presented. As such, we evaluate the activity of the Consolidated Funds and the eliminations resulting from the consolidation separately. The following tables and discussion summarize our condensed consolidated statements of cash flows by activity attributable to the Company and to our Consolidated Funds. Negative amounts represent a net outflow or use of cash ($ in thousands):

	Three months ended March 31,
	2020		2019
Net cash provided by the Company's operating activities	$	127,365	$	29,250
Net cash used in the Consolidated Funds' operating activities, net of eliminations	(490,602)		(379,096)
Net cash used in operating activities	(363,237)		(349,846)
Net cash used in the Company's investing activities	(38,906)		(2,994)
Net cash provided by (used in) the Company's financing activities	944,997		(14,885)
Net cash provided by the Consolidated Funds' financing activities, net of eliminations	500,555		368,216
Net cash provided by financing activities	1,445,552		353,331
Effect of exchange rate changes	(14,120)		9,760
Net change in cash and cash equivalents	$	1,029,289	$	10,251

Operating Activities

Cash provided by the Company’s operating activities increased from $29.3 million for the three months ended March 31, 2019 to $127.4 million for the three months ended March 31, 2020. While net income (loss) of the Company decreased by $213.3 million to a net loss of $109.4 million for the three months ended March 31, 2020, the net loss was primarily driven by non-cash activity associated with the unrealized depreciation from our carried interest allocation and investments. Non-cash activity also consists of equity compensation, amortization and depreciation and is added back to net income in determining cash that is provided by operations. Cash flow from operations increased primarily due to greater management fees and realized performance income.

Net cash used in the Consolidated Funds' operating activities was principally attributable to the investment purchases of recently launched funds during both periods.

Our increasing working capital needs reflect 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. The movements within our Consolidated Funds do not adversely impact our liquidity or earnings trends. We believe that our ability

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to generate cash from operations, as well as the capacity under the Credit Facility, provides us with the necessary liquidity to manage short-term fluctuations in working capital and to meet our short-term commitments.

Investing Activities

	Three months ended March 31,
	2020		2019
Purchase of furniture, equipment and leasehold improvements, net	$	(3,062)	$	(2,994)
Acquisitions	(35,844)		—
Net cash used in investing activities	$	(38,906)	$	(2,994)

Net cash used in the Company's investing activities was principally composed of cash used to purchase CLO collateral management agreements from Crestline Denali Capital LLC in the current period that we recorded as intangible assets in our statement of financial condition and of cash used for furniture, fixtures, equipment and leasehold improvements purchased during both periods to support the growth in our staffing levels and our expanding global presence.

Financing Activities

	Three months ended March 31,
	2020		2019
Net proceeds from issuance of Class A common stock	$	383,334	$	—
Net proceeds from credit facility	730,000		85,000
Dividends	(51,090)		(35,367)
Distributions	(55,748)		(40,112)
Series A Preferred Stock dividends and distributions	(5,425)		(5,425)
Stock option exercises	19,551		—
Taxes paid related to net share settlement of equity awards	(73,500)		(21,121)
Other financing activities	(2,125)		2,140
Net cash provided by (used in) the Company's financing activities	$	944,997	$	(14,885)

Net cash provided by (used in) the Company's financing activities for the three months ended March 31, 2020 was principally composed of net proceeds from the Company's Credit Facility to enhance our liquidity position as a precautionary measure in response to the uncertainty caused by the COVID-19 pandemic and to leverage our growth in future periods. In addition, net cash provided by the Company's financing activities includes cash proceeds from the private offering of Class A common stock to SMBC. These proceeds were partially offset by cash used to pay higher dividends and distributions to Class A common stockholders and AOG unitholders, respectively, in connection with our expectation of generating higher fee related earnings and to the increased number of Class A shares outstanding compared to the prior period.

	Three months ended March 31,
	2020		2019
Contributions from non-controlling interests in Consolidated Funds, net of eliminations	$	133,265	$	54,035
Distributions to non-controlling interests in Consolidated Funds, net of eliminations	(13,492)		(20,736)
Borrowings under loan obligations by Consolidated Funds	454,391		396,144
Repayments under loan obligations by Consolidated Funds	(73,609)		(61,227)
Net cash provided by Consolidated Funds' financing activities	$	500,555	$	368,216

Net cash provided by Consolidated Funds' financing activities was principally attributable to borrowings of newly launched funds for both periods.

Capital Resources

We intend to use a portion of our available liquidity to pay cash dividends to our Series A Preferred stockholders and our Class A common stockholders on a quarterly basis in accordance with our dividend policies. Our ability to make cash dividends to the Series A Preferred stockholders and our Class A common stockholders is dependent on a myriad of factors, including among others: general economic and business conditions; our strategic plans and prospects; our business and investment opportunities; timing of capital calls by our funds in support of our commitments; our financial condition and

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operating results; working capital requirements and other anticipated cash needs; contractual restrictions and obligations; legal, tax and regulatory restrictions; restrictions on the payment of distributions by our subsidiaries to us and other relevant factors.

We are required to maintain minimum net capital balances for regulatory purposes for our United Kingdom subsidiaries, Luxembourg subsidiary and broker-dealer subsidiary. These net capital requirements are met in part by retaining cash, cash equivalents and investment securities. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of March 31, 2020, we were required to maintain approximately $32.3 million in liquid net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We remain in compliance with all 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 Ares Management Corporation 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, 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. Future payments under the TRA in respect of subsequent exchanges are expected to be substantial. The TRA liability balance was $33.7 million as of March 31, 2020.

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

Series A Preferred Stock

For a discussion of our equity, including our Series A Preferred Stock, see Note 13, “Equity,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

We prepare our 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 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. Actual results may also differ from our estimates and judgments due to risks and uncertainties, including uncertainty in the current economic environment due to the COVID-19 pandemic and oil and gas market disruption. As the impact of the COVID-19 pandemic continues to unfold, further volatility is likely to occur and may result in material differences in the valuation of our investments and the valuation of our interests in our funds and portfolio companies disclosed in this report. 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.

Except as disclosed below, there have been no material changes to the critical accounting estimates previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019. For a summary of our significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K. 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.

Acquisitions

Management’s determination of fair value of assets acquired and liabilities assumed at the acquisition date is based on the best information available in the circumstances and may incorporate management’s own assumptions and involve a significant degree of judgment. We use our best estimates and assumptions to accurately assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets. Examples of critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, future expected cash inflows and outflows, expected useful life, and discount rates. Our estimates for future cash flows are based on historical data, various internal estimates and certain external sources, and are based on assumptions that are

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consistent with the plans and estimates we are using to manage the underlying assets acquired. We estimate the useful lives of the intangible assets based on the expected period over which we anticipate generating economic benefit from the asset. We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements and their impact on the Company can be found in Note 2, “Summary of Significant Accounting Policies,” in the “Notes to the Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

In the normal course of business, we engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications and potential contingent repayment obligations. See Note 8, “Commitments and Contingencies,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Commitments and Contingencies

For further discussion of our capital commitments, indemnification arrangements and contingent obligations, see Note 8, “Commitments and Contingencies,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Our primary exposure to market risk is related to our role as general partner or investment adviser to our investment funds and the sensitivity to movements in the fair value of their investments, including the effect on management fees, performance income and investment income. Uncertainty with respect to the economic effects of the COVID-19 pandemic has introduced significant volatility in the financial markets, and the effects of this volatility could materially impact our market risks, including those listed below. For additional information concerning the COVID-19 pandemic and its potential impact on our business and our operating results, see Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q.

Market Risk

The market price of investments may significantly fluctuate during the period of investment. Investments may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of an investment may decline due to general market conditions, which are not specifically related to such investment, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. It may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. For further discussion of market activity in the current year which includes the COVID-19 pandemic and the impact on the U.S. and global economy, along with the oil and gas market disruption, refer to the "Trends Affecting Our Business" section within Part I, Item 2.

Our credit orientation has been a central tenet of our business across our debt and equity investment strategies. Our investment professionals benefit from our independent research and relationship networks and insights from our portfolio of active investments. We believe the combination of high-quality proprietary information flow and a consistent, rigorous approach to managing investments across our strategies has been, and we believe will continue to be, a major driver of our strong risk-adjusted returns and the stability and predictability of our income.

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Credit Risk

We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. At March 31, 2020 and December 31, 2019, we had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. We seek to mitigate this exposure by monitoring the credit standing of these financial institutions.

There have been no material changes in our market risks for the three months ended March 31, 2020. For additional information on our market risks, refer to our Annual Report on Form 10-K for the year ended December 31, 2019, which is accessible on the SEC's website at sec.gov.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2020. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, as of March 31, 2020, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2020 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.

Item 1.  Legal Proceedings

From time to time we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business, some of which may be material. As of March 31, 2020 and December 31, 2019, we were not subject to any material pending legal proceedings. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.

Item 1A.  Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors described below and in Part I, “Item 1A, Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, which could materially affect our business, financial condition and/or operating results. The risks described below and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. Our Annual Report on Form 10-K for the year ended December 31, 2019, is accessible on the SEC’s website at www.sec.gov.

Risks Related to Our Business

The COVID-19 pandemic has caused severe disruptions in the U.S. and global economy, has disrupted, and may continue to disrupt, industries in which we, our funds and our funds’ portfolio companies operate and could potentially negatively impact us, our funds or our funds’ portfolio companies.

As of the date of this Quarterly Report, there is an ongoing outbreak of a novel and highly contagious form of coronavirus, which the World Health Organization has declared a global pandemic, the United States has declared a national emergency and every state in the United States is under a federal disaster declaration. The COVID-19 pandemic has resulted in numerous deaths, adversely impacted global commercial activity and contributed to significant volatility in equity and debt markets. Many countries and states in the United States, including those in which we operate, have issued orders requiring the closure of nonessential businesses and/or requiring residents to stay at home. The COVID-19 pandemic and preventative measures taken to contain or mitigate its spread have caused, and are continuing to cause, business shutdowns, cancellations of events and travel, significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions and overall economic and financial market instability both globally and in the United States. Such measures, as well as the general uncertainty surrounding the dangers and impact of the COVID-19 pandemic, have created significant disruption in supply chains and economic activity and are having a particularly adverse impact on the energy, hospitality, travel, retail and restaurant industries, as well as other industries, including industries in which certain of our funds' portfolio companies operate. Such effects will likely continue for the duration of the pandemic, which is uncertain, and for some period thereafter. While several countries, as well as certain states in the United States, have begun to lift the public health restrictions with a view to reopening their economies, recurring COVID-19 outbreaks could lead to the re-introduction of such restrictions.

The extent of the impact of the COVID-19 pandemic on our and our funds’ operational and financial performance will depend on many factors, including the duration and scope of the public health emergency, the actions taken by governmental authorities to contain its financial and economic impact, the continued implementation of travel advisories and restrictions, the impact of such public health emergency on overall supply and demand, goods and services, investor liquidity, consumer confidence and levels of economic activity and the extent of its disruption to global, regional and local supply chains and economic markets, all of which are uncertain and difficult to assess. The COVID-19 pandemic is continuing as of the filing date of this Quarterly Report and its extended duration may have further adverse impacts on our business, financial performance, operating results, cash flows and financial condition, including the market price of shares of our securities, including for the reasons described below.

The effects of a public health emergency may materially and adversely impact our value and performance and the value and performance of our funds and our funds’ portfolio companies. The impact of the COVID-19 pandemic may not be fully reflected in the valuation of our or our funds’ investments, which may differ materially from the values that we may ultimately realize with respect to such investments. Our valuations, and particularly valuations of our interests in our funds and our funds’ investments, reflect a moment in time, are inherently uncertain, may fluctuate over short periods of time and are often based on subjective estimates, comparisons and qualitative evaluations of private information. Valuations, on an unrealized basis, can also be significantly affected by a variety of external factors including, but not limited to, public equity

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market volatility, industry trading multiples and interest rates, all of which have been impacted by the COVID-19 pandemic. Further, the extreme volatility in the broader market and particularly in the energy markets has led to a broad decrease in valuations and such valuations may continue to decline and become increasingly difficult to ascertain. As a result, our valuations and the valuations of our interests in our funds and our funds’ investments, may not show the complete or continuing impact of the COVID-19 pandemic and the resulting measures taken in response thereto. Accordingly, we and our funds may continue to incur additional net unrealized losses or may incur realized losses in the future, which could have a material adverse effect on our business, financial condition and results of operations. Any public health emergency, including the COVID-19 pandemic or any outbreak of other existing or new epidemic diseases, or the threat thereof, and the resulting financial and economic market uncertainty could have a significant adverse impact on us, the fair value of our and our funds’ investments and could adversely impact our funds’ ability to fulfill our investment objectives.

Our ability to market and raise new or successor funds may be impacted by the shelter-in-place orders, travel restrictions and social distancing requirements implemented in response to the COVID-19 pandemic. This may lower or delay anticipated fee revenues. In addition, the significant volatility and declines in valuations in the global markets as well as liquidity concerns may impact our ability to raise funds or deter fund investors from investing in new or successor funds that we are marketing.

Our funds may experience a slowdown in the pace of their investment activity, which could also adversely affect the timing of raising capital for new or successor funds and could also impact the management fees we earn on funds that generate fees based on invested (and not committed) capital. While the increased volatility in the financial markets caused by the COVID-19 pandemic may present attractive investment opportunities, we or our funds may not be able to complete those investments due to, among other factors, increased competition or operational challenges such as our ability to obtain attractive financing, conduct due diligence and consummate the acquisition and disposition of investments for our funds because of shelter-in-place orders, travel restrictions and social distancing requirements.

If the impact of the COVID-19 pandemic and current market conditions continue, we and our funds may have fewer opportunities to successfully exit investments, due to, among other reasons, lower valuations, decreased revenues and earnings, lack of potential buyers with financial resources or access to financing to pursue an acquisition, lack of refinancing markets, resulting in a reduced ability to realize value from such investments at attractive valuations or at all, and thereby negatively impacting our realized income.

The current market conditions resulting from the COVID-19 pandemic may impact our liquidity. Our cash flows from management fees may be impacted by, among other things, a slowdown in fundraising or delayed deployment. ARCC Part I Fees may be subject to cash payment deferral if certain return hurdles are not met, which could have an adverse effect on our cash flows. Current market conditions may make it difficult for us to refinance our existing indebtedness or obtain new indebtedness with similar terms and any failure to do so could have a material adverse effect on our business. The capital that will be available to us in the future, if at all, may be at a higher cost and on less favorable terms and conditions than we currently experience. While our senior professionals have historically made co-investments in our funds alongside our limited partners, thereby reducing our obligation to make such investments, due to financial uncertainty or liquidity concerns, our employees may be less likely to make co-investments, which would result in such general partner commitments remaining our obligation to fund and reducing our liquidity. In addition, our funds may be impacted due to failure by our fund investors to meet capital calls, which would negatively impact our funds’ ability to make investments or pay us management fees.

The COVID-19 pandemic is having a particularly severe impact on certain industries, including but not limited to the energy, hospitality, travel, retail and restaurant industries, which are industries in which some of our funds have made investments. As of March 31, 2020, 3% and 2% of our total AUM was invested in the energy (including oil and gas exploration and midstream investments) and retail sectors, respectively which were challenged during the period from the market disruption. Many of our funds’ portfolio companies in these industries are facing operational and financial hardships resulting from the spread of COVID-19 and related governmental measures, such as the closure of stores, hotels, restaurants and other sites, restrictions on travel, quarantines or stay-at-home orders. As a result of these disruptions, the businesses, financial results and prospects of certain of these portfolio companies have already been severely affected and could continue to be so affected. This may result in potential impairment and decrease in value of our funds’ investments, which may be material.

Our funds’ portfolio companies are also facing or may face in the future increased credit and liquidity risk due to volatility in financial markets, reduced or eliminated revenue streams, and limited or higher cost of access to preferred sources of funding. Changes in the debt financing markets are impacting, and, if the volatility in financial markets continues, may in the future impact, the ability of our funds’ portfolio companies to meet their respective financial obligations and continue as going concerns. This could lead to the insolvency and/or bankruptcy of these companies which would cause our funds to realize losses

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in respect of those investments. Any of the foregoing would adversely affect our results of operations, perhaps materially, and could harm our reputation.

Our funds may experience similar credit and liquidity risk. Failure of our funds to meet their financial obligations could result in our funds being required to repay indebtedness or other financial obligations immediately in whole or in part, together with any attendant costs, and our funds could be forced to sell some of their assets to fund such costs. Our funds could lose both invested capital in, and anticipated profits from, the affected investment.

Borrowers of loans and other credit instruments made by our funds may be unable to make their loan payments on a timely basis and meet their loan covenants, and tenants leasing real estate properties owned by our funds may not be able to pay rents in a timely manner or at all, resulting in a decrease in value of our funds’ credit and real estate investments and lower than expected returns. In addition, for variable interest instruments, lower reference rates resulting from government stimulus programs in response to the COVID-19 pandemic could lead to lower interest income for funds making loans.

The COVID-19 pandemic may adversely impact our business and operations since an extended period of remote working by our employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the COVID-19 pandemic. In addition, our data security, data privacy, investor reporting and business continuity processes could be impacted by a third party’s inability to perform due to the COVID-19 pandemic or by failures of, or attacks on, their information systems and technology. Also, our accounting and financial reporting systems, processes, and controls could be impacted as a result of these risks. In addition, COVID-19 presents a significant threat to our employees’ well-being and morale, and we may experience potential loss of productivity.

Regulatory oversight and enforcement may become more rigorous for the financial services industry and other regulated industries as a result of the impact of the COVID-19 pandemic on the financial markets, especially in the wake of the array of governmental financial assistance programs provided by state and national governments around the world. In addition, new laws or regulations that are passed in response to the COVID-19 pandemic could adversely impact investment management firms. This may result in a more complex regulatory, tax and political environment, which could subject us to increased compliance costs and administrative burdens.

The global capital markets are currently in a period of disruption and instability. Such market conditions have materially and adversely affected debt and equity capital markets, which have had, and may continue to have, a negative impact on our business and operations.

Beginning in February 2020 and continuing through date of this Quarterly Report, capital markets entered into a period of disruption and instability, as evidenced by the volatility in global stock markets as a result of, among other things, uncertainty surrounding the COVID-19 pandemic, the fluctuating price of commodities such as oil and uncertainty between the United States and other countries with respect to trade policies, treaties and tariffs. Despite actions of the U.S. federal government and foreign governments, these events have contributed to worsening general economic conditions that are materially and adversely impacting the broader financial and credit markets and reducing the availability of debt and equity capital for the market as a whole. These conditions could continue for a prolonged period or worsen in the future. The effects of the COVID-19 pandemic and concerns regarding its global spread have negatively impacted, and are expected to continue to negatively impact, the domestic and international demand for oil and natural gas, which has caused and may continue to cause price volatility and reduced volumes of oil and natural gas transports. In April 2020, members of the Organization of Petroleum Exporting Countries (“OPEC”) and Russia engaged in negotiations to potentially extend their agreed oil production cuts and to make additional oil production cuts. Market volatility was further amplified as a result of Saudi Arabia’s decision in early March to discount oil pricing and increase its production, and Russia’s announcement that all agreed oil production cuts between members of OPEC and Russia expired on April 1, 2020. Following these announcements, within one day global oil prices declined to their lowest levels since 2016. Although OPEC reached an agreement in April 2020 to limit production, increased oil price volatility is expected to continue due to, among other factors, the uncertainties and economic impacts of the COVID-19 pandemic. The ongoing COVID-19 pandemic, and any fluctuations in oil and natural gas prices, may adversely affect our funds and our funds’ investments.

The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the COVID-19 pandemic on economic and market conditions. In addition to the foregoing, COVID-19 may exacerbate the potential adverse effects on our business, financial performance, operating results, cash flows and financial condition described in the risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 31, 2020, we issued and sold 12,130,540 shares of newly issued Class A common stock in a private offering to Sumitomo Mitsui Banking Corporation that was exempt from registration in reliance on Section 4(a)(2) of the Securities Act.

Except as set forth below, all unregistered purchases of equity securities during the period covered by this Quarterly Report were previously disclosed in our current reports on Form 8-K ($ in thousands; except share data):

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (1)
January 1, 2020 - January 31, 2020	—	$	—	—	$	139,551
February 1, 2020 - February 29, 2020	—	—		—	150,000
March 1, 2020 - March 31, 2020	—	—		—	150,000
Total	—			—

(1)In February 2019, our board of directors authorized the repurchase of up to $150 million of shares of our Class A common stock. Under this stock repurchase program, shares may be repurchased from time to time in open market purchases, privately negotiated transactions or otherwise, including in reliance on Rule 10b5-1 of the Securities Act. In February 2020, our board of directors approved the renewal of the program and reset the repurchase amount back to $150 million. The program is scheduled to expire in March 2021. Repurchases under the program depend on the prevailing market conditions and other factors.

As permitted by our policies and procedures governing transactions in our securities by our directors, executive officers and other employees, from time to time some of these persons may establish plans or arrangements complying with Rule 10b5-1 under the Exchange Act, and similar plans and arrangements relating to our Class A common stock.

Item 3. Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

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Item 6.  Exhibits, Financial Statement Schedules

(a)Exhibits.

The following is a list of all exhibits filed or furnished as part of this report.

Exhibit No.	Description
3.1	Restated Certificate of Incorporation of Ares Management Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on March 30, 2020).
3.2	Bylaws of Ares Management Corporation (incorporated by reference to Exhibit 99.4 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on November 15, 2018).
10.1	Share Purchase Agreement, dated March 27, 2020, between Sumitomo Mitsui Banking Corporation and Ares Management Corporation (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File 001-36429) filed with the SEC on March 30, 2020).
10.2**	Investor Rights Agreement, dated March 31, 2020, by and between Sumitomo Mitsui Banking Corporation and Ares Management Corporation.
10.3	Amendment No. 9, dated as of March 30, 2020, to the Sixth Amended and Restated Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Investments L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-36429) filed with the SEC on April 1, 2020).
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a).
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a).
32.1*	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

* These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings.

** Filed herewith

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SIGNATURES

	ARES MANAGEMENT CORPORATION
Dated: May 8, 2020	By:		/s/ Michael J Arougheti
		Name:	Michael J Arougheti
		Title:	Co-Founder, Chief Executive Officer & President (Principal Executive Officer)
Dated: May 8, 2020	By:		/s/ Michael R. McFerran
		Name:	Michael R. McFerran
		Title:	Chief Operating Officer & Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-10.2

INVESTOR RIGHTS AGREEMENT BY AND BETWEEN

SUMITOMO MITSUI BANKING CORPORATION AND

ARES MANAGEMENT CORPORATION

Dated as of March 31, 2020

TABLE OF CONTENTS
		Page
Article 1
Definitions
Section 1.01.	Certain Defined Terms	1
Section 1.02.	Construction	8
Article 2
Share Ownership
Section 2.01.	Mandatory Exchange of Class A Common Stock and Nonvoting Stock	9
Section 2.02.	Voluntary Exchange of Subject Shares	9
Section 2.03.	Nonvoting Stock	9
Section 2.04.	Application of Agreement to Additional Securities	10
Article 3
Transfer Restrictions
Section 3.01.	General Transfer Restrictions	10
Section 3.02.	Special Transfer Restrictions	11
Section 3.03.	Regulatory Hardship Transfer	11
Section 3.04.	Binding Effect on Transferees	12
Section 3.05.	Charter Provisions	12
Article 4
Board of Directors
Section 4.01.	Board Observer	12
Section 4.02.	Director Designation Right	13
Section 4.03.	Corporate Opportunities	15
Article 5
Registration Rights
Section 5.01.	Shelf Registration	15
Section 5.02.	Demand Registration	17
Section 5.03.	Withdrawal Rights	18
Section 5.04.	Registration Procedures	19
Section 5.05.	Registration Expenses	25
Section 5.06.	Indemnification	26
Article 6
Other Covenants
Section 6.01.	Avoidance of Regulation Under the BHCA	28
Section 6.02.	Information Rights	29
Section 6.03.	Business Alliance	29
Section 6.04.	Rule 144 Reporting	30
Section 6.05.	Class C Common Stock	30
Section 6.06.	Confidentiality	31
Section 6.07.	Cooperation on Regulatory Matters.	32

Article 7
Miscellaneous
Section 7.01.	Headings	33
Section 7.02.	Entire Agreement	33
Section 7.03.	Further Actions; Cooperation	33
Section 7.04.	Notices	33
Section 7.05.	Applicable Law	34
Section 7.06.	Severability	34
Section 7.07.	Successors and Assigns	35
Section 7.08.	Amendments	35
Section 7.09.	Waiver	35
Section 7.10.	Counterparts	35
Section 7.11.	Governing Law; Jurisdiction; WAIVER OF JURY TRIAL	35
Section 7.12.	Injunctive Relief	36
Section 7.13.	Termination	36
Section 7.14.	Inconsistency	37
EXHIBITS
Exhibit A – Form of Board Agreement
Exhibit B – Form of Joinder Agreement

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is entered into as of March 31, 2020, by and between Sumitomo Mitsui Banking Corporation, a Japanese joint stock company (the “Investor”), and Ares Management Corporation, a Delaware corporation (the “Company”). Unless otherwise indicated, references to articles, exhibits and sections shall be to articles, exhibits and sections of this Agreement.

WHEREAS, prior to the execution of this Agreement, the parties hereto entered into that certain Share Purchase Agreement (the “Purchase Agreement”), dated as of March 27, 2020, by and between the Investor and the Company pursuant to which, on the date hereof, the Investor is acquiring from the Company newly issued shares of Class A Common Stock (as defined below) (the “Shares” and, together with any shares of Class A Common Stock and Nonvoting Stock that are Beneficially Owned by the Stockholders at any applicable time, whether acquired or obtained by acquisition, purchase, dividend, exchange, conversion, issuance, stock split or otherwise, the “Subject Shares”) in consideration for an investment by the Investor in the Company (such

transaction, the “Investment Transaction”);

WHEREAS, as a result of the Investment Transaction, the Investor will become the Beneficial Owner of the Shares; and

WHEREAS, the parties hereto desire to enter into this Agreement to establish certain arrangements and rights of the Stockholders, including with respect to the Subject Shares.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1 DEFINITIONS

Section 1.01. Certain Defined Terms. For purposes of this Agreement, the following terms shall have the respective meanings set forth or as referenced below:

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control, with such specified Person. Notwithstanding the foregoing, (i) neither the Company nor any of its Subsidiaries shall be deemed to be an Affiliate of the Stockholders or their Affiliates, (ii) neither the Stockholders nor any of their Affiliates shall be deemed to be an Affiliate of the Company or any of its Affiliates and (iii) no portfolio company or investment or special purpose entity formed to acquire any such portfolio company or investment of the Ares Funds shall be deemed to be an Affiliate of the Company or any of its Affiliates or any Stockholder or any of its Affiliates.

“Agreement” shall have the meaning assigned to it in the preamble.

“Ares Funds” means, collectively, all Funds (excluding their portfolio companies and investments and all special purpose entities formed to acquire any such portfolio companies and investments, including collateralized loan obligations) (i) sponsored or promoted by the Company or any of its Subsidiaries or (ii) for which the Company or any of its Subsidiaries acts

as (A) a general partner or managing member (or in a similar capacity) or (B) an investment adviser or investment manager.

“Ares Operating Group Partnerships” shall mean Ares Holdings L.P., a Delaware limited partnership, Ares Offshore Holdings L.P., a Cayman Islands exempted limited partnership and Ares Investments L.P., a Delaware limited partnership.

“Ares Operating Group Unit” shall have the meaning assigned to it in the Certificate of Incorporation.

“Ares Ownership Condition” shall have the meaning assigned to it in the Certificate of Incorporation, as of the date of this Agreement. “Amended and Restated Charter” means the Amended and Restated Certificate of Incorporation of the Company, substantially in the form attached to the Share Purchase Agreement as Exhibit A thereto.

“AST” means the American Stock Transfer & Trust Company, LLC.

“Beneficial Owner” or any variation thereof, including “Beneficial Ownership,” “Beneficially Owns” and “Beneficially Owned,” shall have the meaning ascribed to it in Rule 13d-3 of the Exchange Act.

“BHCA” means the Bank Holding Company Act of 1956, as amended, and all related rules, regulations and published guidance.

“Board” means the board of directors of the Company.

“Board Agreement” means a confidentiality and board participation agreement to be executed and delivered by and between the Company, on the one hand, and an Observer or a Stockholder Designee (as defined in Section 4.02), as applicable, on the other hand, in form and substance substantially consistent with Exhibit A.

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York, USA or Tokyo, Japan are authorized or required by applicable laws to close.

“Bylaws” means the bylaws of the Company, as may be amended, supplemented and/or restated from time to time.

“Certificate of Incorporation” means the certificate of incorporation of the Company, as may be amended, supplemented and/or restated from time to time, including following the filing of the Amended and Restated Charter with (and acceptance thereof by) the Delaware Secretary, the Amended and Restated Charter.

“Change of Control” means any (i) merger, reorganization, consolidation, tender offer, self-tender, exchange offer, stock acquisition, business combination or other similar transaction or series of related transactions to which the Company or its Affiliates is a party, as a result of which the holders of the Company Stock outstanding immediately prior to such transaction or transactions would cease to Beneficially Own a majority of the voting power of all shares of capital stock or other securities of the surviving Person (or, if such surviving Person is a Subsidiary of another Person, of such other Person constituting the ultimate parent thereof) that

are then entitled to vote generally in the election of directors (and not solely upon the occurrence and during the continuation of certain specified events) immediately after such transaction or transactions, (ii) sale or other transfer or disposition of a majority or greater of the Company’s consolidated assets (including Ares Operating Group Units or capital stock of Subsidiaries of the Company) to another Person that is not an Affiliate, or (iii) approval by the stockholders of the Company of any plan of liquidation or dissolution of the Company.

“Class A Common Stock” means the Company’s Class A common stock, $0.01 par value per share.

“Class B Common Stock” means the Company’s Class B common stock, $0.01 par value per share.

“Class C Common Stock” means the Company’s Class C common stock, $0.01 par value per share.

“Commission” means the United States Securities and Exchange Commission or any successor agency.

“Company” shall have the meaning assigned to it in the preamble.

“Company Securities” means any (i) shares of Company Stock and (ii) other securities convertible into or exercisable or exchangeable for shares of Company Stock, including the Ares Operating Group Units (whether or not currently so convertible, exercisable or exchangeable or only convertible, exercisable or exchangeable upon the passage of time, the satisfaction of any conditions, the occurrence of any action, change, circumstance or event or any combination of the foregoing).

“Company Stock” means, collectively, the Class A Common Stock, the Class B Common Stock, the Class C Common Stock and any Nonvoting Stock.

“Confidential Information” shall have the meaning assigned to it in Section 6.06(a).

“control” (including the correlative meanings of the terms “controlling,” “controlled

by” and “under common control with”), as used with respect to any Person means the power

to, directly or indirectly, direct or cause the direction of the affairs of management of such Person, whether through the ownership of voting securities, by the right to appoint a majority of the members of such Person’s board of directors or managers (or other similar governing body), by contract or otherwise.

“Control Event” shall have the meaning assigned to it in Section 6.01(a).

“Corporate Opportunity” shall have the meaning assigned to it in Section 4.03.

“Delaware Court” shall have the meaning assigned to it in Section 7.11(a).

“Delaware Secretary” means the Secretary of State for the State of Delaware.

“Demand Registration” shall have the meaning assigned to it in Section 5.02.

“Demand Registration Statement” shall have the meaning assigned to it in Section 5.02.

“Demanding Holder” shall have the meaning assigned to it in Section 5.02.

“Director” means any member of the Board (other than any advisory, emeritus, honorary or non-voting observer member of the Board).

“Director Designation Right” shall have the meaning assigned to it in Section 4.02(a).

“Director Designation Right Event” shall have the meaning assigned to it in

Section 4.02(a).

“Economic Ownership Percentage” means, with respect to the Stockholders, at any time, the quotient, expressed as a percentage, of (i) the total number of Subject Shares owned by the Stockholders divided by (ii) the total number of Ares Operating Group Units. “Economic Ownership Percentage” shall be subject to appropriate adjustment for any unit or stock split, or dividend, distribution, reclassification, subdivision, reorganization, recapitalization or similar event with respect to the Company or any of the issuers of Ares Operating Group Units.

“Exchange” shall have the meaning assigned to it in Section 2.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exchange Event” means any action, change, circumstance, occurrence or event that results, or could reasonably be expected to result, in the Stockholders and any other affiliate of the Stockholders for purposes of the BHCA, in the aggregate, Holding Company Securities representing more than the Voting Percentage Limit.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.

“Filings” means any (a) annual, quarterly and current reports and other documents filed

or furnished by the Company or any of its Subsidiaries under the Exchange Act; (b) annual

reports to stockholders, annual and quarterly statutory statements of the Company or any of its Subsidiaries; and (c) registration statements, prospectuses documents filed or furnished by the Company or any of its Subsidiaries under the Securities Act (other than any registration statement, any Issuer Free Writing Prospectus, any prospectus or preliminary prospectus or any amendment thereof or supplement thereto to the extent that Section 5.06(a) of this Agreement applies).

“FINRA” means the Financial Industry Regulatory Authority or any successor agency.

“Fund” means any collective investment vehicle (whether open-ended or closed-ended), including an investment company, a general or limited partnership, a trust and any other business entity or investment vehicle organized in any jurisdiction that provides for management fees or “carried interest” (or other similar profits allocations) to be borne by investors therein.

“Hold” or “Held” and any derivation thereof, means ownership, control, or the power to vote, as those terms or phrases are construed for purposes of the BHCA.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Independent Committee” shall have the meaning assigned to it in Section 4.01(a).

“Initial Shares” means, collectively, the Shares and any shares of Nonvoting Stock into

which the Shares are converted or exchanged, whether in one or multiple conversions or

exchanges, in accordance with the terms of this Agreement, so long as such Shares or any shares of Nonvoting Stock into which such Shares are converted or exchanged are Beneficially Owned or Held by the Investor, any other Stockholder or any other affiliate of the Stockholders for purposes of the BHCA.

“Inspectors” shall have the meaning assigned to it in Section 5.04(a)(viii).

“Investment Transaction” shall have the meaning assigned to it in the Recitals.

“Investor” shall have the meaning assigned to it in the preamble.

“Issuer Free Writing Prospectus” means an issuer free writing prospectus, as defined in Rule 433 under the Securities Act.

“Joinder Agreement” means a joinder to this Agreement, in form and substance substantially consistent with Exhibit B.

“Losses” shall have the meaning assigned to it in Section 5.06(a)(i).

“Nonvoting Stock” means the class of nonvoting common stock of the Company authorized pursuant to the Amended and Restated Charter.

“Observer” shall have the meaning assigned to it in Section 4.01(a).

“Offering Expenses” shall have the meaning assigned to it in Section 5.05(a).

“Permitted Transferee” means, with respect to the Investor or any other Stockholder, any wholly owned Subsidiary of Sumitomo Mitsui Financial Group, Inc. or the Investor, that becomes a party to this Agreement by delivering an executed Joinder Agreement to the Company.

“Person” means any individual, firm, corporation, partnership, limited liability company or other entity, and shall include any successor (by merger or otherwise) of such entity.

“Records” shall have the meaning assigned to it in Section 5.04(a)(viii).

“Registrable Amount” means a number of shares of Class A Common Stock and

Nonvoting Stock such that the aggregate gross proceeds of an offering of such shares of Class A Common Stock and Nonvoting Stock would reasonably be expected to generate sale proceeds for the holders thereof (in the aggregate) of equal to or greater than $50 million.

“Registrable Securities” means any Subject Shares. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement registering such securities under the Securities Act has been declared effective and such securities have been sold or otherwise transferred by the holder thereof pursuant to such effective registration statement or (ii) such securities are sold in accordance with Rule 144 (or any successor provision) promulgated under the Securities Act and any restrictive legend is removed therefrom.

“Registration Expenses” shall have the meaning assigned to it in Section 5.05(a).

“Regulatory Hardship” shall have the meaning assigned to it in Section 3.03(a).

“Regulatory Hardship Transfer” shall have the meaning assigned to it in

Section 3.03(b).

“Representatives” with respect to any Person means such Person’s Affiliates, and the directors, officers, employees, financial and legal advisors, accountants, consultants and other representatives of such Person and its Affiliates.

“Requested Information” shall have the meaning assigned to it in Section 5.06(d)(iii).

“Requesting Holder” shall have the meaning assigned to it in Section 5.02.

“Rule 144” shall have the meaning assigned to it in Section 6.04(a).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Selling Holders” shall have the meaning assigned to it in Section 5.04(a)(i).

“Share Purchase Agreement” shall have the meaning assigned to it in the Recitals.

“Shelf Notice” shall have the meaning assigned to it in Section 5.01(a).

“Shelf Registration” shall have the meaning assigned to it in Section 5.01(a).

“Shelf Registration Effectiveness Period” shall have the meaning assigned to it in Section 5.01(a).

“Shelf Registration Statement” shall have the meaning assigned to it in Section 5.01(a).

“Shelf Takedown Notice” shall have the meaning assigned to it in Section 5.01(e).

“Shelf Underwritten Offering” shall have the meaning assigned to it in Section 5.01(e).

“Stockholder” means the Investor and each Permitted Transferee for so long as any such Person owns Subject Shares.

“Subject Shares” shall have the meaning assigned to it in the Recitals.

“Subsidiary” means with respect to any Person (i) a corporation, fifty percent (50%) or more of the voting or capital stock of which is, directly or indirectly owned by such Person, (ii) any other partnership, joint venture, association, joint stock company, trust, unincorporated organization or other entity in which such Person, directly or indirectly, owns fifty percent (50%) or more of the equity economic interest thereof or has the power to elect or direct the election of fifty percent (50%) or more of the members of the governing body of such entity or otherwise has control over such entity (e.g., as the managing partner of a partnership), or (iii) any entities that would be considered subsidiaries of such Person within the meaning of Regulation S-K or Regulation S-X of the Commission. Notwithstanding the foregoing, the Subsidiaries of the Company shall not include the Ares Funds or their portfolio companies or investments, or special purpose entities formed to acquire any such portfolio companies or investments, including collateralized loan obligations.

“Suspension Period” shall have the meaning assigned to it in Section 5.01(d).

“Transaction Litigation” shall have the meaning assigned to it in Section 7.05.

“Transfer” means, directly or indirectly, to sell, transfer, assign, pledge, hypothecate,

encumber, or similarly dispose of (by merger, disposition, operation of law or otherwise), either

voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, or similar disposition of (by merger, disposition, operation of law or otherwise), any Company Securities or any interest in any Company Securities, including in any hedging, derivative, swap, securities lending or similar agreements, arrangements or understandings or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of any Company Securities. The direct or indirect Transfer of any securities of a Person that owns a security or any interest therein shall be deemed to be a Transfer by such Person of such security or any interest therein. Notwithstanding the foregoing: (a) a merger, amalgamation, plan of arrangement or consolidation or similar business combination transaction in which any Stockholder is a constituent entity shall not be deemed to be a Transfer of any Company Securities or any interest in any Company Securities Beneficially Owned by such Stockholder or any of its wholly owned Subsidiaries so long as (i) the surviving Person of such transaction remains subject to, and bound by, the obligations of such Stockholder under this Agreement and (ii) the Initial Shares Beneficially Owned by such Stockholder and any of its wholly owned Subsidiaries represent ten percent (10)% or less of the total assets (based on the carrying value of such Initial Shares) of such Stockholder and its wholly owned Subsidiaries, taken as a whole, immediately prior to entry into a definitive agreement in respect of such transaction and (b) the sale, transfer, assignment or similar

disposition of equity interests or other securities of Sumitomo Mitsui Financial Group, Inc. or any of its wholly owned Subsidiaries shall not be deemed to be a Transfer of any Company Securities or any interest in any Company Securities Beneficially Owned by such Stockholder or any of its wholly owned Subsidiaries so long as the Initial Shares Beneficially Owned by Sumitomo Mitsui Financial Group, Inc. or such Subsidiaries, as applicable, and any of its wholly owned Subsidiaries represent ten percent (10)% or less of the total assets (based on the carrying value of such Initial Shares) of Sumitomo Mitsui Financial Group, Inc. or its Subsidiaries, as applicable, and any of its wholly owned Subsidiaries, taken as a whole, immediately prior to entry into a definitive agreement in respect of such transaction.

“Transfer Exceptions” shall have the meaning assigned to it in Section 3.02(a).

“Underwriting Agreement” means any underwriting agreement between the Company

and the underwriters named therein.

“Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public, whether in a marketed transaction or in an overnight or block trade.

“Voluntary Exchange Event” shall have the meaning assigned to it in Section 2.02(a).

“Voting Percentage Limit” means, as of any given time, a “voting percentage” (as that

concept is calculated and interpreted pursuant to 12 C.F.R. 225.2(u) or in any successor regulation or published interpretation of the Federal Reserve Board then in effect for purposes of the BHCA) of 4.90%.

Section 1.02. Construction. For the purposes of this Agreement (i) words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa and words (including capitalized terms defined herein) of one gender shall be held to include other genders as the context requires; (ii) the terms “hereof,” “hereunder,” “hereto,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and subsection references are to this Agreement unless otherwise specified; (iii) the word “including” and words of similar import when used in this Agreement means “including, without limitation”;

(iv) all references to any period of days shall be deemed to be to the relevant number of calendar days unless otherwise specified; (v) all references herein to “$” or dollars shall refer to United States dollars, unless otherwise specified; (vi) Person shall be deemed to “Beneficially Own” securities if such Person is deemed to be a “beneficial owner” within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act’ (vii) except as the context otherwise requires, the terms “either,” “or,” “neither,” “nor,” and “any” when used in this Agreement are not exclusive; (viii) all references to any Article, Section, subsection, clause, or Exhibit are to the corresponding Article, Section, subsection or clause of, or Exhibit to, this Agreement; (ix) except as otherwise specified herein, references to agreements, contracts, policies, standards, guidelines or instruments, or to statutes or regulations, are to such agreements, contracts, policies, standards, guidelines or instruments, or statutes or regulations, as amended or supplemented from time to time (or to successors thereto); (xi) all references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person, unless otherwise indicated

or the context otherwise requires; (xii) the word “extent” in the phrase “to the extent” means the degree to which a subject or other theory extends, and such phrase shall not mean “if”; (xiii) references to any party to this Agreement shall include such party’s successors and permitted assigns; (xiv) accounting terms not otherwise defined have the meaning assigned to them in accordance with United States generally accepted accounting principles.

ARTICLE 2

SHARE OWNERSHIP

Section 2.01. Mandatory Exchange of Class A Common Stock and Nonvoting Stock. If, at any time, any Stockholder or the Company becomes aware of any pending, proposed or contemplated Exchange Event, then (i) such Stockholder or the Company, as applicable, shall promptly provide written notice to the other parties of such Exchange Event and (ii) prior to the

consummation of the Exchange Event, effect an exchange whereby each share of Class A Common Stock Held by the Stockholders and their affiliates (for purposes of the BHCA) in excess of the Voting Percentage Limit is exchanged for an equal number of shares of Nonvoting Stock (any such exchange, together with any exchange pursuant to Section 2.02, an “Exchange”). Any Exchange shall be subject to satisfaction of all requirements under applicable laws, rules and regulations, and each of the Stockholders and the Company shall use their respective commercially reasonable efforts to promptly satisfy all such requirements. In connection with an Exchange, the Stockholders shall have the sole right to determine which shares of Class A Common Stock of the Stockholders shall be so Exchanged.

Section 2.02. Voluntary Exchange of Subject Shares.

(a) Upon at least fifteen (15) Business Days’ prior written notice from a Stockholder, the Company shall effect an Exchange of all or part of the Class A Common Shares Held by the Stockholders (each, a “Voluntary Exchange Event”) for an equal number of shares of Nonvoting Stock. Notwithstanding the foregoing, the Company shall not be required to effect a Voluntary Exchange Event if effecting such Voluntary Exchange Event would reasonably be expected to have adverse consequences (other than that are de minimis) to the Company or its stockholders (including making it reasonably less likely that any of the Company’s equity securities would not be included on (or remain on) any stock or exchange index), as reasonably determined by the Company in good faith. Any such Exchange shall be subject to satisfaction of all requirements under applicable laws, rules and regulations, and each of the Stockholders and the Company shall use their respective commercially reasonable efforts to promptly satisfy all such requirements.

(b) Any notice requesting an Exchange delivered pursuant to this Section 2.02 shall contain the number of shares of Class A Common Stock Held by the Stockholders that it or they desire to be subject to an Exchange.

Section 2.03. Nonvoting Stock.

(a) All shares of Nonvoting Stock issued as part of an Exchange (whether pursuant to Section 2.01 or Section 2.02) shall be (i) validly issued, fully paid and non- assessable, (ii) free of preemptive or similar rights and (iii) free of any lien or adverse claim

created by the Company (other than Transfer restrictions arising under this Agreement or applicable securities laws or the Certificate of Incorporation). The Company shall bear all costs and expenses incurred by the Company in connection with, and any issuance tax resulting from, an Exchange. The Company shall promptly deliver to the applicable Stockholders evidence of shares in book-entry registered in the name of the applicable Stockholder, representing the applicable number of shares of Nonvoting Stock issued in the Exchange for the shares of Class A Common Stock so exchanged by such Stockholder.

(b) The Company shall reserve for issuance out of its authorized but unissued shares of Class A Common Stock, that number of shares of Class A Common Stock into which the issued and outstanding shares of Nonvoting Stock are convertible (in all cases, subject to and in accordance with expectations and requirements of the Federal Reserve Board regarding the transfer and conversion of non-voting securities for purposes of the BHCA).

(c) The Company represents and warrants to the Stockholders that, on the date of this Agreement, other than the Amended and Restated Charter Requirements (as defined in the

Purchase Agreement), the receipt of the Stockholder Written Consent (as defined in the Purchase Agreement) and the filing of the Amended and Restated Charter with (and acceptance thereof by) the Delaware Secretary, (A) no consent, approval, authorization, order, license, registration or qualification of or with any governmental agency or authority of competent jurisdiction is required for the Company to perform its obligations under this Article 2 and (B) such performance shall not result in any violation of the provisions of the Certificate of Incorporation, Bylaws, or similar constitutive or organizational documents of the Company.

Section 2.04. Application of Agreement to Additional Securities.

(a) Any additional Class A Common Stock or Nonvoting Stock of which any Stockholder acquires Beneficial Ownership following the date of this Agreement shall be “Subject Shares” and subject to the restrictions and commitments contained in this Agreement as fully as if such Class A Common Stock or Nonvoting Stock were Beneficially Owned by the Investor as of the date hereof.

(b) In the event that a majority of the Class A Common Stock or Nonvoting Stock on a given date are converted or exchanged into any other capital stock on such date (whether of the Company, an Affiliate of the Company or otherwise), all references herein to Class A Common Stock or Nonvoting Stock shall be deemed to mean the capital stock into which such shares of Class A Common Stock or Nonvoting Stock are converted of exchanged.

ARTICLE 3

TRANSFER RESTRICTIONS

Section 3.01. General Transfer Restrictions. The right of any Stockholder to Transfer any Subject Shares is subject to the restrictions set forth in this Article 3, and no Transfer by any Stockholder of any Subject Shares may be effected except in compliance with this Article 3.

Any attempted Transfer in violation of this Agreement shall be of no effect and null and void, regardless of whether the purported transferee has any actual or constructive knowledge of the

Transfer restrictions set forth in this Agreement, and shall not be recorded on the stock transfer books of the Company.

Section 3.02. Special Transfer Restrictions.

(a) No Stockholder shall Transfer any Initial Shares, other than Transfers (i) pursuant to an Exchange, (ii) to a Permitted Transferee, (iii) pursuant to a Regulatory Hardship Transfer in accordance with Section 3.03, (iv) pursuant to any sale, merger, consolidation, acquisition (including by way of tender offer or exchange offer or share exchange), recapitalization or other business combination involving the Company or any of its Subsidiaries, or (v) with the prior written consent of the Company (the foregoing exceptions in

Section 3.02(a)(i)-(v), collectively, the “Transfer Exceptions”). The Investor has advised the Company that it may consider certain hedging transactions for a portion of its Initial Shares for risk management purposes, which hedging transactions may be a Transfer of such portion of the Initial Shares. The Company will reasonably consider in good faith whether to consent to any such Transfer.

(b) Notwithstanding Section 3.02(a):

(i) following March 31, 2022, the Stockholders may Transfer up to 33.33% of the Initial Shares;

(ii) following March 31, 2023, the Stockholders may Transfer up to 66.66% of the Initial Shares;

(iii) following March 31, 2024, the Stockholders may Transfer any or all of the Initial Shares; and

(iv) the Stockholders may Transfer any or all of the Initial Shares in the event (and at and following the time) that the Company or any of its Affiliates enters into a definitive agreement that contemplates a transaction or transactions the consummation or completion of which would reasonably be expected (at the time of announcement or any time thereafter) to result in the Ares Ownership Condition no longer being satisfied.

(c) In addition to the requirements of Sections 3.02(a), no Stockholder shall Transfer any shares of Nonvoting Stock unless such Transfer complies with the terms of this Agreement and the Certificate of Incorporation.

Section 3.03. Regulatory Hardship Transfer.

(a) If any Stockholder (i) determines in good faith and based on the reasonable advice of external counsel (such counsel to be a law firm possessing recognized expertise with respect to applicable laws and regulations in the applicable jurisdiction(s) at issue) that continuing to Hold all or any of the Subject Shares would be inconsistent with, violate or breach any applicable laws or regulations or (ii) receives a directive or request from any governmental agency or authority of competent jurisdiction to Transfer all or any of its Subject Shares (either of clauses (i) or (ii), a “Regulatory Hardship”), then the Stockholders shall promptly notify the Company of such Regulatory Hardship. Such notice shall describe the

nature of the Regulatory Hardship in reasonable detail. Such description need not include information that is not permitted by applicable laws or regulations to be disclosed. To the extent permitted by law and practicable under the circumstances, the applicable party shall use commercially reasonable efforts to obtain permission from the appropriate governmental agency or authority of competent jurisdiction to disclose such information to the other party.

(b) Following the occurrence of a Regulatory Hardship or a Control Event, the Stockholders shall have the right to Transfer (such Transfer, a “Regulatory Hardship Transfer”) only such portion of the Subject Shares that is required to be Transferred to remediate or eliminate such Regulatory Hardship or Control Event to any third-party purchaser without being subject to any restrictions on Transfer set forth in this Article 3.

Section 3.04. Binding Effect on Transferees. A Permitted Transferee (and no other Person) shall become a Stockholder under this Agreement, without any further action by the Company, following a transfer by the Investor (or any other Stockholder) of Subject Shares to such Permitted Transferee upon the execution by such Permitted Transferee (and delivery to the Company) of a Joinder Agreement.

Section 3.05. Charter Provisions. The Company shall use its commercially reasonable efforts to take or cause to be taken all lawful action necessary or appropriate (including any amendment to the Certificate of Incorporation and/or the Bylaws) to ensure that the Certificate of Incorporation and the Bylaws do not contain any provisions that would (x) add restrictions to the transferability of the Subject Shares, which restrictions are beyond those then provided for in the Amended and Restated Charter, the Bylaws, this Agreement or applicable securities laws, (y) nullify any of the rights of the Stockholders arising under this Agreement or (z) have a materially disproportionate and adverse effect on any Stockholder as compared to other stockholders of the Company, in each case, unless such provision is expressly approved in advance in writing by the Stockholders that own a majority of the Company Securities owned by all Stockholders.

ARTICLE 4

BOARD OF DIRECTORS

Section 4.01. Board Observer.

(a) For so long as the Stockholders (x) Beneficially Own, in the aggregate, at least two-thirds (2/3) of the Initial Shares and (y) do not have a Director Designation Right, (i) the Stockholders shall have the right to (A) appoint one (1) non-voting representative (the “Observer”) to attend (at the Observer’s option, in person or via remote access, including telephonically) all meetings of the Board (and all committees thereof on which independent directors of the Company serve (collectively, the “Independent Committees”)), (B) change the Observer so appointed at any time upon written notice to the Company and (C) upon the resignation, removal or replacement of the Observer for any reason, to appoint another Observer and (ii) the Company shall provide the Observer with copies of all notices, consents, resolutions, minutes or other written materials provided or made available to the Board (or to any Independent Committee) as set forth in the Board Agreement. The Stockholders shall cease to have any right or entitlement to appoint an Observer from and after the first instance in which the

Stockholders cease to Beneficially Own, in the aggregate, at least two-thirds (2/3) of the Initial Shares.

(b) Prior to the right of the Observer to attend any meeting of the Board (or any Independent Committee) or receive the information contemplated in Section 4.01(a)(ii), the Observer shall execute and deliver to the Company a Board Agreement.

(c) Notwithstanding anything to the contrary in this Agreement or the Board Agreement, the Company may exclude such Observer from access to any portions of materials or attendance at any portion of any meetings of the Board (or any Independent Committee) to the extent that such (i) access or attendance would reasonably be expected to jeopardize the attorney- client privilege of the Company, any of its Affiliates or the Ares Funds, (ii) access or attendance would reasonably be expected to violate any confidentiality obligation owed to any unaffiliated third party by the Company, any of its Affiliates or the Ares Funds, (iii) materials or meetings relates to (A) the Company’s, the Ares Funds’ or any of their respective Affiliates’ relationship, contractual or otherwise, with any of the Stockholders or any of their respective Affiliates or (B) any actual or potential transactions between or involving the Company, the Ares Funds or any of their respective Affiliates, on the one hand, and any of the Stockholders or any of their respective Affiliates, on the other hand, or (iv) such exclusion is necessary to avoid an actual or reasonably likely conflict of interest. Notwithstanding the foregoing, the Company shall use commercially

reasonable efforts to make other arrangements (including redacting information or making substitute disclosure arrangements) that would enable disclosure to the Observer to occur without

(A) in the case of the foregoing clause (i), jeopardizing such privilege, (B) in the case of the foregoing clause (ii), violating such confidentiality obligations, or (C) in the case of the foregoing clause (iv), creating an actual or reasonably likely conflict of interest.

(d) Notwithstanding anything in this Agreement to the contrary, the Observer must be reasonably acceptable to the Company and may not be a Person who (i) has been removed for cause from the Board, (ii) has ever been convicted of a felony or equivalent crime (which conviction was not subsequently overturned) under the laws of any jurisdiction, (iii) is or has been subject to any permanent injunction on serving on the board of directors (or similar governing body) of publicly listed companies in the United States for violation of any United States federal or state securities law, (iv) has been determined by any governmental or quasi- governmental agency or authority of competent jurisdiction, or is reasonably likely pursuant to applicable law, regulation or listing authority rules, to be ineligible to serve on a board of directors (or similar governing body) of publicly listed companies or (v) is employed by, is engaged as a consultant for, or serves as a director (or similar position) for, any competitor of the Company. The Company acknowledges that the individual identified by the Investor in writing as the Observer as of the date of the Purchase Agreement is acceptable to the Company.

Section 4.02. Director Designation Right.

(a) In the event that the aggregate Economic Ownership Percentage of the Stockholders is equal to or greater than ten percent (10%) (a “Director Designation Right Event”), the Stockholders that own a majority of the Company Securities owned by all Stockholders shall have the right to designate one (1) individual to be nominated for election as a Director (such individual, a “Stockholder Designee” and such right, the “Director Designation

Right”). Notwithstanding the foregoing, such Stockholders shall not exercise the Director Designation Right in the event that doing so would require the Stockholders or their Affiliates to submit and file notification obligations of the HSR Act in respect of the investment in the Company by the Stockholders until such time as such submission and filing shall have occurred and any applicable waiting period under the HSR Act relating to such filing shall have expired or been terminated. In the event that, following a Director Designation Right Event, the aggregate Economic Ownership Percentage of the Stockholders decreases below ten percent (10%) as a result of (i) Transfers of Company Securities by the Stockholders (other than to a Permitted Transferee), the Stockholders shall cause the Director designated by it or them to promptly resign as a Director of the Board or (ii) any other action, change, circumstance, occurrence or event (including share issuances by the Company), the Investor shall retain the Director Designation Right for a period of six (6) months following such other action, change, circumstance, occurrence or event, and, thereafter, the Stockholders shall cause the Director designated by it or them to promptly resign as a Director of the Board. The loss of the Director Designation Right in one or more instances (regardless of the reason) shall not prevent or preclude the Stockholders from obtaining and exercising the Director Designation Right in the future in the event of a subsequent Director Designation Right Event. Notwithstanding the foregoing, the Stockholders shall cease to have any right to obtain or exercise the Director Designation Right from and after the first instance in which the Stockholders cease to Beneficially Own, in the aggregate, at least two-thirds (2/3) of the Initial Shares.

(b) At any time that the Stockholders are entitled to the Director Designation

Right:

(i) the Company shall take all reasonable actions within its control (subject to any applicable laws or securities exchange or equivalent listing requirements) to effectuate the provisions of this Section 4.02 and to cause the election or appointment of the individual designated by the Stockholders pursuant to Section 4.02(a), which shall include the Company (i) including such designee in the slate of nominees recommended by the Board for election at any meeting of stockholders of the Company at which Directors are to be elected to the Board and (ii) nominating, recommending and using its commercially reasonable efforts to solicit from its stockholders eligible to vote for the election of Directors proxies in favor of the election of such designee in the same manner and to the same extent it solicits proxies in favor of other candidates nominated for election by the Board; and

(ii) in the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal of any Director who has been designated by the Stockholders pursuant to Section 4.02(a) (other than as a result of a failure of such Director who has been nominated for election as a Director to be re-elected at any meeting of stockholders of the Company at which Directors are to be elected to the Board), subject to Section 4.02(d), the Company shall take all reasonable actions within its control (subject to any applicable laws or securities exchange or equivalent listing requirements) to cause the vacancy created thereby to be filled as promptly as practicable by a new designee of the Stockholders, including by appointment to the Board by the Directors (to the extent permitted by the Certificate of Incorporation and Bylaws and applicable law).

(c) Prior to (or substantially concurrently with) the Company taking any actions to appoint or nominate a Stockholder Designee, such Stockholder Designee shall execute and deliver to the Company a Board Agreement.

(d) Notwithstanding anything in this Agreement to the contrary, the Stockholder Designee must be reasonably acceptable to the Company and may not be a Person who (i) has been removed for cause from the Board, (ii) has ever been convicted of a felony or equivalent crime (which conviction was not subsequently overturned) under the laws of any jurisdiction, (iii) is or has been subject to any permanent injunction on serving on the board of directors (or similar governing body) of publicly listed companies in the United States for violation of any United States federal or state securities law, (iv) has been determined by any governmental or quasi-governmental agency or authority of competent jurisdiction, or is reasonably likely pursuant to applicable law, regulation or listing authority rules, to be ineligible to serve on a board of directors (or similar governing body) of publicly listed companies or (v) is employed by, is engaged as a consultant for, or serves as a director (or similar position) for, any competitor of the Company.

Section 4.03. Corporate Opportunities. To the maximum extent permitted by applicable law, the Company hereby renounces any interest or expectancy in, or any right to be offered an opportunity to participate in, any business opportunities or classes or categories of business opportunities (each, a “Corporate Opportunity”) that are developed by or presented to an Observer or Stockholder Designee (other than any Corporate Opportunity presented to such Observer or Stockholder Designee in connection with his or her capacity as such), even if such Corporate Opportunity is one that the Company, any of the Company’s Subsidiaries, any Ares Fund or any of their respective Affiliates might reasonably be deemed to have pursued or had the

ability or desire to pursue if granted the opportunity to do so. Except for a Corporate Opportunity presented to an Observer or Stockholder Designee in connection with his or her capacity as such, no Observer or Stockholder Designee shall have any duty to communicate or offer any Corporate Opportunity to the Company, any of the Company’s Subsidiaries, any Ares Fund or any of their respective Affiliates. Notwithstanding the foregoing, an Observer or Stockholder Designee who is offered or presented a Corporate Opportunity in his or her capacity as an Observer or Stockholder Designee, as applicable, shall be obligated to communicate such Corporate Opportunity to the Company, and none of such Observer or Stockholder Designee, the Stockholders nor any of their respective Affiliates shall pursue such opportunity unless the Board has adopted a resolution expressly waiving such opportunity on behalf of the Company.

ARTICLE 5 REGISTRATION RIGHTS

Section 5.01. Shelf Registration.

(a) Subject to Section 5.01(d), the Investor or any of its Permitted Transferees (in each case, if it is a Stockholder under this Agreement) may by written notice delivered (which notice can be delivered at any time after the eleven (11) month anniversary of the date hereof) to the Company (the “Shelf Notice”) require the Company to, with respect to all or, if the amount to be registered is equal to or greater than the Registrable Amount, any portion of the Registrable Securities, (a) as promptly as practicable (but no later than forty-five (45) days after

the date the Shelf Notice is delivered) prepare and file a registration statement on Form S-3 (or a supplement to an existing effective registration statement to the extent the Company is legally able to do so) or a successor form as permitted by Rule 415 of the Securities Act (or such other similar rule as is then applicable) (the “Shelf Registration Statement”) for the public resale of such Registrable Securities then outstanding on a delayed or continuous basis (the “Shelf Registration”) and (b) if such Shelf Registration Statement has not theretofore been declared effective or is not automatically effective upon such filing, use commercially reasonable efforts to cause such Shelf Registration Statement to become and be declared effective by the Commission no later than sixty (60) days after such filing date and in any event as soon as practicable after such filing. The Company shall use commercially reasonable efforts to cause each Shelf Registration Statement filed pursuant to this Section 5.01(a) to be continuously effective, supplemented, amended or replaced to the extent necessary to ensure that it is available for the resale of all Registrable Securities Beneficially Owned by the Investor (or any of its Permitted Transferees) and any other Persons that at the time of the Shelf Notice meet the definition of a “Stockholder” (as such term is used herein) who elect to participate therein as provided in Section 5.01(c) until the earlier of (i) all Registrable Securities covered by the Shelf Registration Statement having been distributed in the manner set forth and as contemplated in such Shelf Registration Statement and (ii) such time as the Stockholders, together, Beneficially Own less than a Registrable Amount (the “Shelf Registration Effectiveness Period”). So long as the Company is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) at the time of filing of the Shelf Registration Statement with the Commission, such Shelf Registration Statement shall be designated by the Company as an automatic Shelf Registration Statement.

(b) If, at any time, a Shelf Registration ceases to be effective, the Company shall use its commercially reasonable efforts to file and use its commercially reasonable efforts

to cause to become effective a new “evergreen” Shelf Registration Statement providing for an offering to be made on a continuous basis of all of the Registrable Securities of the holders.

Such Shelf Registration Statement shall be filed on Form S-3 or, if Form S-3 is unavailable to the Company, on Form S-1 following a Demand Registration in the manner contemplated by

Section 5.02.

(c) As promptly as practicable but in no event later than ten (10) Business Days after receipt of a Shelf Notice pursuant to Section 5.01(a), the Company will deliver written notice thereof to each Stockholder. Each Stockholder may elect to participate in the Shelf Registration Statement by delivering to the Company (not later than five (5) Business Days after delivery of such notice by the Company) a written request to so participate.

(d) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providing notice to the Stockholders who elected to participate in the Shelf Registration Statement or to the Demanding Holders, as applicable, to (i) delay the filing or effectiveness of any registration statement or prospectus or

(ii) require such Stockholders to suspend the use of the prospectus for sales of Registrable Securities under any registration statement for a reasonable period of time not to exceed ninety

(90) days in succession or one hundred and fifty (150) days in the aggregate in any twelve-month period and not more than twice in such twelve-month period (a “Suspension Period”) if the Board determines in good faith and in its reasonable judgment that it is required to disclose in

such registration statement or prospectus material, non-public information that the Company has a bona fide business purpose for preserving as confidential. Immediately upon receipt of such notice, the Stockholders covered by such registration statement shall suspend the use of the prospectus until the requisite changes to the prospectus have been made as required below. Any Suspension Period shall terminate at such time as the public disclosure of such information is made. After the expiration of any Suspension Period and without any further request from a Stockholder, the Company shall as promptly as practicable prepare a post-effective amendment or supplement to such registration statement or prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company shall not allow the use of any other registration statement or file any new registration statement during any Suspension Period.

(e) At any time, and from time-to-time, during the Shelf Registration Effectiveness Period (except during a Suspension Period), each of the Investor or any of its Permitted Transferees (in each case, if it is a Stockholder hereunder) may deliver a notice (a “Shelf Takedown Notice”) to notify the Company of their intent to sell Registrable Securities covered by the Shelf Registration Statement (in whole or in part) in an Underwritten Offering (a “Shelf Underwritten Offering”). Notwithstanding the foregoing, the Company (i) shall not be obligated to participate in more than two (2) marketed underwritten offerings during any twelve

(12) month period and (ii) may take such actions (including deferring a Shelf Underwritten Offering) as it deems necessary or appropriate to comply with its policies regarding trading windows or otherwise to coordinate the timing of such Shelf Underwritten Offering with the Company’s earnings releases and Commission reporting obligations (provided such actions are applied consistently to the Investor and any other Persons otherwise generally subject to policies regarding trading windows). Such Shelf Takedown Notice shall specify (x) the aggregate

number of Registrable Securities requested to be registered in such Shelf Underwritten Offering and (y) the identity of the Stockholder(s) requesting such Shelf Underwritten Offering. Upon receipt by the Company of such notice, the Company shall promptly comply with the applicable provisions of this Agreement, including those provisions of Section 5.04 relating the Company’s obligation to make Filings with the Commission, assist in the preparation and filing with the Commission of prospectus supplements and amendments to the Shelf Registration Statement, participate in “road shows,” agree to customary “lock-up” agreements with respect to the Company’s securities and obtain “comfort” letters, and the Company shall take such other actions as necessary or appropriate to permit the consummation of such Shelf Underwritten Offering as promptly as practicable. Each Shelf Underwritten Offering shall be for the sale of a number of Registrable Securities equal to or greater than the Registrable Amount. In any Shelf Underwritten Offering, the Stockholders participating in such Shelf Underwritten Offering that hold a majority of the Registrable Securities included in such Shelf Underwritten Offering shall select the investment bank(s) and managers that will serve as lead or co-managing underwriters with respect to the offering of such Registrable Securities, which shall be reasonably acceptable to the Company.

Section 5.02. Demand Registration. Subject to the provisions of Section 5.01(d), if the Company is ineligible to use a Shelf Registration Statement or if the Shelf Registration

Statement is otherwise unavailable to the Company, the Stockholders (the “Demanding Holders”) may make a written demand that the Company promptly prepare and file a registration statement (a “Demand Registration Statement”) under the Securities Act of all or part of their Registrable Securities having an anticipated aggregate offering price of the value of all the Registrable Securities owned by the Stockholders, which written demand shall describe the amount and type of security to be included in such Demand Registration Statement and the intended method(s) of distribution thereof, which may include delayed distribution pursuant to Rule 415 under the Securities Act (such written demand a “Demand Registration”). Each Demand Registration shall be for the sale of a number of Registrable Securities equal to or greater than the Registrable Amount. The Company shall, within ten (10) Business Days after receipt of the Demand Registration, notify, in writing, all other Stockholders, if any, of such demand, and each holder of Registrable Securities who thereafter wishes to include all or a portion of such holder’s Registrable Securities in a Demand Registration (each such holder that includes all or a portion of such holder’s Registrable Securities in such Demand Registration, a “Requesting Holder”) shall so notify the Company, in writing, within five (5) Business Days after the receipt by such other Stockholders of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s), such Requesting Holder(s) shall be entitled to have their Registrable Securities included in such Demand Registration and the Company shall effect, as soon thereafter as practicable, the registration of all Registrable Securities requested by the Demanding Holder(s) and Requesting Holder(s) pursuant to such Demand Registration, including by filing a Demand Registration Statement relating thereto as soon as practicable, but not more than sixty (60) days immediately after the Company’s receipt of the Demand Registration. Under no circumstances shall the Company be obligated to obtain effectiveness of more than one (1) Demand Registration Statement under this Section 5.02 with respect to any or all Registrable Securities within any twelve (12) month period; provided that a Demand Registration shall not count against this limitation unless and until (i) the Demand Registration Statement has been declared effective by the Commission, (ii) the Company has complied with all of its obligations under this Agreement with respect thereto, and (iii) the Demand Registration Statement has remained effective for the Shelf Registration Effectiveness Period; provided, further, that if, after such Demand Registration Statement has

been declared effective, an offering of Registrable Securities pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency, then the Demand Registration Statement shall be deemed not to have been declared effective, unless and until, such stop order or injunction is removed, rescinded or otherwise terminated; provided, further, that the Company shall not be obligated or required to file another Demand Registration Statement until the Demand Registration Statement that has been previously filed with respect to a Demand Registration becomes effective or is subsequently terminated.

Section 5.03. Withdrawal Rights. Any Stockholder having notified or directed the Company to include any or all of its Registrable Securities in a registration statement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securities designated by it for registration by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the event of any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shall continue to be Registrable Securities for all

purposes of this Agreement. No such withdrawal shall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn.

Section 5.04. Registration Procedures. (a) If and whenever the Company is required to use commercially reasonable efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 5.01 and 5.02, the Company shall as promptly as practicable (in each case, to the extent applicable):

(i) prepare and file with the Commission a registration statement to effect such registration, use commercially reasonable efforts to cause such registration statement to become effective as promptly as practicable, and thereafter use commercially reasonable efforts to cause such registration statement to remain effective pursuant to the terms of this Agreement; provided, however, that the Company may discontinue any registration of its securities which are not Registrable Securities at any time prior to the effective date of the registration statement relating thereto; provided, further, that before filing such registration statement or any amendments thereto, the Company will furnish to the counsel selected by the holders of Registrable Securities which are to be included in such registration (“Selling Holders”) copies of all such documents proposed to be filed, which documents will be subject to the review of and comment by such counsel (it being understood that counsel to the Selling Holders will conduct its review and provide any comments promptly);

(ii) prepare and file with the Commission such amendments (including post-effective amendments) and supplements to such registration statement and the prospectus used in connection therewith and any Exchange Act reports incorporated by reference therein as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until the earlier of such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the Selling Holder(s) set forth in such registration statement or (A) in the case of a Demand Registration pursuant to Section 5.02, the expiration of sixty (60) days after such registration statement becomes effective or (B) in the case of a Shelf Registration pursuant to Section 5.01, the Shelf Registration Effectiveness Period;

(iii) furnish to each Selling Holder and each underwriter, if any, of the securities being sold by such Selling Holder such number of conformed copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and any Issuer Free Writing Prospectus and such other documents as such Selling Holder and underwriter, if any, may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Selling Holder;

(iv) use commercially reasonable efforts to register or qualify such Registrable Securities covered by such registration statement under such other securities

laws or blue sky laws of such jurisdictions as any Selling Holder and any underwriter of the securities being sold by such Selling Holder shall reasonably request, and take any other action which may be reasonably necessary or advisable to enable such Selling Holder and underwriter to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Selling Holder, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (iv) be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to file a general consent to service of process in any such jurisdiction;

(v) use commercially reasonable efforts to cause such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if no such securities are so listed, use commercially reasonable efforts to cause such Registrable Securities to be listed on the New York Stock Exchange or the Nasdaq Stock Market;

(vi) use commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agency or authority of competent jurisdiction as may be necessary to enable the Selling Holder(s) thereof to consummate the disposition of such Registrable Securities;

(vii) in connection with an Underwritten Offering, obtain for each Selling Holder and underwriter:

(A) an opinion of counsel for the Company, covering the matters customarily covered in opinions requested in underwritten offerings (including customary negative assurances) and such other matters as may be reasonably requested by such Selling Holder and underwriters, and

(B) a “comfort” letter (or, in the case of any such Person which does not satisfy the conditions for receipt of a “comfort” letter specified in AU Section 634 of the AICPA Professional Standards, an “agreed upon procedures” letter) signed by the independent registered public accountants who have certified the Company’s financial statements included in such registration statement (and, if necessary, any other independent registered public

accountant of any business acquired by the Company from which financial statements and financial data are, or are required to be, included in the registration statement);

(viii) promptly make available for inspection by any Selling Holder, any underwriter participating in any disposition pursuant to any registration statement, and any attorney, accountant or other agent or representative retained by any such Selling Holder or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably necessary to enable such Selling Holder or underwriter to exercise their due diligence responsibility, and cause the Company’s

officers, directors and employees to supply all information requested by any such Inspector in connection with such registration statement promptly; provided that, (1) unless the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any information under this clause (viii) if (i) the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information or

(ii) if either (A) the Company has requested and been granted from the Commission confidential treatment of such information contained in any filing with the Commission or documents provided supplementally or otherwise or (B) the Company reasonably determines in good faith that such Records are confidential and so notifies the Inspectors in writing unless prior to furnishing any such information with respect to (i) or (ii) such holder of Registrable Securities requesting such information agrees, and causes each of its Inspectors, to enter into a confidentiality agreement on terms reasonably acceptable to the Company; (2) each holder of Registrable Securities agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action and to prevent disclosure of the Records deemed confidential; and (3) to the extent practicable, the foregoing inspection and information gathering shall be coordinated on behalf of the Selling Holders participating in such offering by one law firm designated by and on behalf of such Selling Holders, which counsel the Company reasonably determines to be acceptable;

(ix) promptly notify in writing each Selling Holder and the underwriters, if any, of the following events:

(A) the filing of the registration statement, the prospectus or any prospectus supplement related thereto, any Issuer Free Writing Prospectus or post-effective amendment to the registration statement, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective;

(B) any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information;

(C) the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for that purpose;

(D) when any Issuer Free Writing Prospectus includes information that may conflict with the information contained in the registration statement; and

(E) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale

under the securities or blue sky laws of any jurisdiction or the initiation or threat of any proceeding for such purpose;

(x) notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, at the request of any Selling Holder, promptly prepare and furnish to such Selling Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;

(xi) use commercially reasonable efforts to obtain the withdrawal of any order or to fulfill any request suspending the effectiveness of such registration statement;

(xii) cooperate with any Selling Holder and any underwriter and the managing underwriter to facilitate the timely preparation and delivery of certificates or security entitlements (which shall not bear any restrictive legends unless required under applicable law), if necessary or appropriate, representing securities sold under any registration statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter or such Selling Holder may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registration statement a supply of such certificates as necessary or appropriate;

(xiii) have appropriate officers of the Company prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, take other actions to obtain ratings for any Registrable Securities (if they are eligible to be rated) and otherwise use its commercially reasonable efforts to cooperate as reasonably requested by the Selling Holders and the underwriters in the offering, marketing or selling of the Registrable Securities;

(xiv) have appropriate officers of the Company, and cause representatives of the Company’s independent registered public accountants, to participate in any due diligence discussions reasonably requested by any Selling Holder or any underwriter;

(xv) if requested by any underwriter, agree, and cause the Company and any directors or officers of the Company to agree, to be bound by customary “lock-up” agreements restricting the ability to dispose of Company Securities; provided that (A) the Company and any directors or officers of the Company shall not be required to enter into any lock-up agreement unless requested by the underwriters, if any, in an underwritten offering; and (B) unless the Selling Holders, collectively, own less than three percent

(3%) of the Company following such transaction, such agreement shall be on terms substantially similar to that entered into by the holders selling Registrable Securities, and

(C) in any event, such agreement shall not include a lock-up period longer than ninety

(90) days from the date of the final prospectus relating to such offering;

(xvi) if requested by any Selling Holders or any underwriter, promptly incorporate in the registration statement or any prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Selling Holders may reasonably request to have included therein, including information relating to the “Plan of Distribution” of the Registrable Securities;

(xvii) cooperate and assist in any filings required to be made with the FINRA and in the performance of any due diligence investigation by any underwriter that is required to be undertaken in accordance with the rules and regulations of the FINRA;

(xviii) otherwise use commercially reasonable efforts to cooperate as reasonably requested by the Selling Holders and the underwriters in the offering, marketing or selling of the Registrable Securities;

(xix) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission and all reporting requirements under the rules and regulations of the Exchange Act; and

(xx) use commercially reasonable efforts to take any action requested by the Selling Holders, including any action described in clauses (i) through (xix) above to prepare for and facilitate any “over-night deal” or other proposed sale of Registrable Securities over a limited timeframe.

The Company may require each Selling Holder and each underwriter, if any, to furnish the Company in writing such information regarding each Selling Holder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably request to complete or amend the information required by such registration statement.

(b) Without limiting any of the foregoing, in the event that the offering of Registrable Securities is to be made by or through an underwriter, the Company shall enter into an Underwriting Agreement with a managing underwriter or underwriters containing representations, warranties, indemnities and agreements customarily included (but not inconsistent with the covenants and agreements of the Company contained herein) by an issuer of common stock in underwriting agreements with respect to offerings of common stock for the account of, or on behalf of, such issuers. In connection with any offering of Registrable Securities registered pursuant to this Agreement, the Company shall furnish to the underwriter, if any (or, if no underwriter, the Selling Holder), unlegended certificates representing ownership of the Registrable Securities being sold (unless, in the Company’s sole discretion, such Registrable Securities are to be issued in uncertificated form pursuant to the customary arrangements for

issuing shares in such form), in such denominations as requested and instruct any transfer agent and registrar of the Registrable Securities to release any stop transfer order with respect thereto.

(c) Each Selling Holder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5.04(a)(x), such Selling Holder shall forthwith discontinue such Selling Holder’s disposition of Registrable Securities pursuant to the applicable registration statement and prospectus relating thereto until such Selling Holder is advised in writing by the Company that such Selling Holder may resume such disposition and such Selling Holder has received copies of the supplemented or amended prospectus contemplated by Section 5.04(a)(x) and, if so directed by the Company, such Selling Holder shall deliver to the Company, at the Company’s expense, all copies, other than permanent file copies, then in such Selling Holder’s possession of the prospectus current at the time of receipt of such notice relating to such Registrable Securities. In the event the Company shall give such notice, any applicable sixty (60) day period during which such registration statement must remain effective pursuant to this Agreement shall be extended by the number of days during the period from the date of giving of a notice regarding the happening of an event of the kind described in Section 5.04(a)(ix) to the date when all such Selling Holders shall receive such a supplemented or amended prospectus and such prospectus shall have been filed with the Commission.

(d) If the sole or managing underwriter of a public offering pursuant to a Demand Registration or Shelf Underwritten Offering advises the Company that the number of Registrable Securities to be included exceeds the number of Registrable Securities that can be sold in such offering without adversely affecting the distribution of the securities being offered, the price that shall be paid in such offering or the marketability thereof, the Company shall include in such registration the greatest number of Registrable Securities proposed to be registered by the Holders, which in the opinion of such underwriters can be sold in such offering without adversely affecting the distribution of the securities being offered, the price that shall be paid in such offering or the marketability thereof, ratably among the Holders requesting registration, based on the respective amounts of Registrable Securities held by each such Holder.

(e) Except in the case of a Demand Registration or Shelf Underwritten Offering, if the sole or managing underwriter of a registration advises the Company in writing that in its opinion the number of Registrable Securities and other securities requested to be included exceeds the number of Registrable Securities and other securities which can be sold in such offering without adversely affecting the distribution of the securities being offered, the price that shall be paid in such offering or the marketability thereof, the Company shall include in such registration the Registrable Securities and other securities of the Company in the following order of priority:

(i) first, to the Company for its own account; and

(ii) second, to the Holders requesting such registration, ratably among such Holders based on the respective amounts of Registrable Securities held by each such Holder.

(iii) Upon delivering a request under this Section 5.04, a Holder shall, if requested by the Company, execute and deliver execute such agreements as the Company may reasonably request to facilitate such registration.

(f) Each Holder agrees that in connection with an underwritten offering made pursuant to this Section 5 (whether or not such Holder is participating in such registration), if (i) requested by the Company or the managing underwriter or underwriters of such underwritten offering and (ii) all directors and officers of the Company agree to be bound by the same restrictions with respect to any capital stock of the Company held by such directors and officers (other than those included in the registration), such Holder shall not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities or other capital stock of the Company (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time as the Company or such underwriters may specify; provided that such period of time shall not exceed the shorter of (x) ninety (90) days following the effective date of the applicable offering and (y) such other period as the underwriters may require of the Company; provided, further, that if any director or officer of the Company is provided with the prior written consent of the Company or such underwriters, as the case may be, to engage in any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any capital stock of the Company any capital stock of the Company held by such directors and officers (other than those included in the registration), then such consent will also be simultaneously provided to each Holder with respect to a corresponding number of Registrable Securities held by such Holder.

Section 5.05. Registration Expenses. (a) All expenses incident to the Company’s performance of, or compliance with, its obligations under this Agreement including (i)(A) all registration and filing fees, all fees and expenses of compliance with securities and “blue sky” laws, (B) all fees and expenses associated with filings required to be made with FINRA (including, if applicable, the fees and expenses of any “qualified independent underwriter” as such term is defined in NASD Rule 2720 or the equivalent rule incorporated into the FINRA rulebook), (C) all fees and expenses of compliance with securities and “blue sky” laws, (D) all printing (including expenses of printing certificates, if any, for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses and Issuer Free Writing Prospectuses is requested by a holder of Registrable Securities) and copying expenses, (E) all messenger and delivery expenses, (F) all fees and expenses of the Company’s independent certified public accountants and counsel (including with respect to “comfort” letters, “agreed-upon procedures” letter and opinions) and

(G) fees and expenses of one (1) counsel for the Stockholders selling in such registration (which firm shall be selected by the Stockholders selling in such registration that hold a majority of the Registrable Securities included in such registration) (collectively, the “Registration Expenses”) and (ii) any expenses described in clauses (i)(A) through (G) above incurred in connection with the marketing and sale of Registrable Securities (“Offering Expenses”) shall be borne by the Company, regardless of whether a registration is effected, marketing is commenced or sale is made. The Company will pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties, the expense of any annual audit and the expense of any liability insurance) and the expenses and fees for listing the securities to be registered on each securities exchange and included in each established over-the-counter market on which similar securities issued by the Company are then listed or traded.

(b) Each Selling Holder shall pay its portion of all (i) underwriting fees, discounts and commissions, (ii) legal fees for counsel to the Selling Holders and (iii) and transfer

taxes, if any, relating to the sale of such Selling Holder’s Registrable Securities pursuant to any registration.

Section 5.06. Indemnification.

(a) Registration Statement Indemnification.

(i) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each Selling Holder, its officers, directors, employees, managers, members, partners and Affiliates, and each underwriter in an Underwritten Offering from and against any and all losses, claims, damages, liabilities and expenses (including reasonable and documented expenses of investigation and reasonable and documented attorneys’ fees and expenses) (collectively, the “Losses”) caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, any Issuer Free Writing Prospectus, any prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as the same are caused by any information furnished in writing to the Company by (i) a Selling Holder or (ii) an underwriter expressly for use therein.

(ii) In connection with any registration statement in which a holder of Registrable Securities is participating, each such Selling Holder will furnish to the Company in writing information regarding such Selling Holder’s ownership of Registrable Securities and its intended method of distribution thereof and, to the extent permitted by applicable law, shall, severally and not jointly, indemnify the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company or such other indemnified Person and each underwriter in an Underwritten Offering against all Losses caused by any untrue statement of material fact contained in the registration statement, any Issuer Free Writing Prospectus, any prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or omission is made in reliance upon the information furnished in writing to the Company by such Selling Holder expressly for use therein; provided, however, that each Selling Holder’s obligation to indemnify the Company hereunder shall, to the extent more than one Selling Holder is subject to the same indemnification obligation, be apportioned between each Selling Holder based upon the net amount received by each Selling Holder from the sale of Registrable Securities, as compared to the total net amount received by all of the Selling Holders of Registrable Securities sold pursuant to such registration statement. Notwithstanding the foregoing, no Selling Holder shall be liable to the Company for amounts in excess of the lesser of (i) such apportionment and (ii) the net amount received by such holder in the offering giving rise to such liability.

(b) Contribution. If recovery is held by a court of competent jurisdiction to be unavailable under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any Person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such Person would be entitled to such indemnification but for such reason or reasons. In

determining the amount of contribution to which the respective Persons are entitled, there shall be considered the Persons’ relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and other equitable considerations appropriate under the circumstances.

It is hereby agreed that it would not necessarily be equitable if the amount of such contribution were determined by pro rata or per capita allocation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation.

Notwithstanding the foregoing, no Selling Holder or transferee thereof shall be required to make a contribution in excess of the net amount received by such holder from its sale of Registrable Securities in connection with the offering that gave rise to the contribution obligation.

(c) Procedure.

(i) Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification. Notwithstanding the foregoing, the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has suffered actual detriment by such failure to provide such notice on a timely basis.

(ii) In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party or (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or is reasonably likely to be prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for the expenses incurred in connection with retaining separate legal counsel). The indemnifying party shall lose its right to defend, contest, litigate and settle a matter if it shall fail to diligently contest such matter.

(d) Other Matters.

(i) The indemnity and contribution agreements contained in this Section 5.06 shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any indemnitee, the Company, its directors or officers, or any Person controlling the Company, and (ii) any termination of this Agreement.

(ii) The parties hereto shall, and shall cause their respective Subsidiaries to, cooperate with each other in a reasonable manner with respect to access to unprivileged information and similar matters in connection with any indemnification claim made pursuant to this Section 5.06. The provisions of this Section 5.06 are for the benefit of, and are intended to create third-party beneficiary rights in favor of, each of the indemnified parties referred to herein.

(iii) Not less than three (3) days before the expected filing date of each registration statement pursuant to this Agreement, the Company shall notify each Stockholder who has timely provided the requisite notice hereunder entitling the Stockholder to register Registrable Securities in such registration statement of the information, documents and instruments from such Stockholder that the Company or any underwriter reasonably requests in connection with such registration statement, including, but not limited to, a questionnaire, custody agreement, power of attorney, lock-up letter and underwriting agreement (the “Requested Information”). If the Company has not received, on or before the day before the expected filing date, the Requested Information from such Stockholder, the Company may file the Registration Statement without including Registrable Securities of such Stockholder. The failure to so include in any registration statement the Registrable Securities of a Stockholder (with regard to that registration statement) shall not in and of itself result in any liability on the part of the Company to such Stockholder.

(iv) The indemnification and contribution provided pursuant to this Agreement shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any Person entitled to indemnification and contribution hereunder and the expiration or termination of this Agreement.

(v) Notwithstanding anything to the contrary in this Agreement, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with any underwritten public offering are in conflict with this Article 5, the provisions in such underwriting agreement shall control.

ARTICLE 6

OTHER COVENANTS

Section 6.01. Avoidance of Regulation Under the BHCA.

(a) Notwithstanding anything in this Agreement to the contrary, no Stockholder shall acquire additional Company Securities if such acquisition could reasonably be

expected to result in (i) the Company becoming subject to the BHCA because the Company is or would be controlled (for purposes of the BHCA) by any Stockholder or any of its affiliates (for purposes of the BHCA) for purposes of the BHCA (a “Control Event”), or (ii) the Stockholders and any of their affiliates (for purposes of the BHCA), in the aggregate, Holding Company Securities representing more than the Voting Percentage Limit.

(b) If any Stockholder or the Company becomes aware of any existing, pending, proposed or contemplated action, change, circumstance, occurrence or event that could reasonably be expected to result in a Control Event, then such party shall promptly give notice to the other parties to this Agreement of such action, change, circumstance, occurrence or event.

Such notice shall include a reasonably detailed description for the basis of its belief that such action, change, circumstance, occurrence or event would reasonably be expected to result in a Control Event. Such description need not include information that is not permitted by applicable laws or regulations to be disclosed. To the extent permitted by law and practicable under the circumstances, the applicable party shall use commercially reasonable efforts to obtain permission from the appropriate governmental agency or authority of competent jurisdiction to disclose such information to the other party. Promptly following delivery of such notice and, assuming an Exchange will not eliminate or avoid a Control Event, the Stockholders will take all actions reasonably required to eliminate or avoid such Control Event, including undertaking a Regulatory Hardship Transfer.

Section 6.02. Information Rights. For so long as the Stockholders Beneficially Own, in the aggregate, at least one-third (1/3) of the Initial Shares, the Company shall:

(a) provide the Stockholders information concerning the Company and its Subsidiaries that relates to the matters described in Section 6.03 as the Stockholders may reasonably request (in each case, in a manner so as to not (x) unreasonably interfere in any material respect with the normal business operations of the Company or its Subsidiaries or (y) require the Company or its Subsidiaries to incur any material cost not reimbursed by the Stockholders); and

(b) cause members of its senior management to meet with members of the senior management of the Stockholders (in person or via remote access, including telephonically, as agreed by the parties) to provide the Stockholders with a presentation regarding developments relating to the business and operations of the Company and its Subsidiaries and to respond to questions from the Stockholders; provided that the Company and its Subsidiaries shall not be required to provide senior management presentations pursuant to this Section 6.02(b) more than once during any fiscal year of the Company.

Section 6.03. Business Alliance. The Investor and the Company desire to collaborate across three areas which are expected to strengthen the existing businesses of the Company and the Investor and their respective Affiliates’ and enhance each such Person’s ability to support its clients’ needs on a global basis. In connection therewith, the Investor and the Company plan to:

(i) enter into a strategic distribution agreement to market the Company’s investment products to the Investor’s clients in the Japanese market, (ii) utilize the Investor’s and its Affiliates’ capital to make investments that will support the launch of certain new businesses, and accelerate the advancement of certain existing platforms, of the Company, with a particular focus on private credit markets and (iii) coordinate on certain capital markets financing activities in the US and Asian leveraged finance markets. This Section 6.03 is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding obligation on any Person. It is understood that this Section 6.03 does not constitute an offer or commitment on the part of the Company or any of its Affiliates or the Investor or any of its Affiliates to negotiate with the other party or its Affiliates or to enter into any subsequent agreement, in each case, on these or any other terms at any future time.

Section 6.04. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Subject Shares to the public without registration, the Company agrees to use its commercially reasonable efforts to:

(a) make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 under the Securities Act (“Rule 144”) (or any similar provision then in effect), at all times;

(b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at all times;

(c) furnish (i) if accurate, forthwith upon request, a written statement of the Company that it has complied with the reporting requirements of Rule 144 (or any similar provision then in effect) and (ii) unless otherwise available via the Commission’s EDGAR filing system, to the Stockholders (upon request) a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as the Stockholders may reasonably request in availing themselves of any rule or regulation of the Commission allowing the Stockholders to sell any such securities without registration; and

(d) if at any time there is in place an effective registration statement to cover the sale of all or any portion of the Subject Shares, or if the Subject Shares may be sold such that a restrictive legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission), then the Company agrees that at such time as any restrictive legend is no longer required, it will upon the request of the Stockholder, promptly provide AST with a legal opinion issued by the Company’s legal counsel (at the Company’s sole cost and expense) in form and substance that is acceptable to AST that the Subject Shares are not required to bear a restrictive legend and shall instruct AST to promptly remove any such legends from the Subject Shares.

Section 6.05. Class C Common Stock. The Company shall not effect any reverse stock split or share cancellation or take any other action that would decrease the amount of issued and outstanding shares of Class C Common Stock (whether existing on or following the date of this Agreement) to a number that is less than the number of Ares Operating Group Units directly or indirectly owned by the Company without the prior written consent of the Stockholders that own a majority of the Company Securities owned by all Stockholders (such consent not to be unreasonably withheld, conditioned or delayed if effecting such reverse stock split or share cancellation or taking any such other action would not reasonably be expected to result in an Exchange Event). The foregoing shall not prohibit or restrict the Company from retiring or cancelling any shares of Class C Common Stock in the event a corresponding number of Ares

Operating Group Units Beneficially Owned by any Person (other than by the Company) are converted or exchanged into shares of Class A Common Stock.

Section 6.06. Confidentiality.

(a) Without limiting any other confidentiality obligation any Stockholder may have to the Company, any of the Company’s Subsidiaries, any Ares Fund or any of their respective Affiliates, each Stockholder shall (and shall (x) cause each of its Affiliates and controlled Representatives to, and (y) request and direct that its non-controlled Representatives) not disclose to any Person (other than its Representatives who have a need to know such information and the Company, any of the Company’s Subsidiaries, any Ares Fund or any of their respective Affiliates) any: (i) information provided by or on behalf of the Company, any Ares Fund or any of their respective Representatives to such Stockholder or any of its Representatives in connection with (A) such Stockholder’s investment in the Company, (B) such Stockholder’s

rights under this Agreement or (C) such Stockholder’s, or any of its Affiliates’ evaluation of any of its existing or potential investments in the Company, any Ares Fund or any of their respective Affiliates or (ii) any Information (as defined in the applicable Board Agreement) provided by or on behalf of the Observer or Stockholder Designee to such Stockholder (the information described in clause (i) and (ii), collectively, “Confidential Information”). Confidential Information will not include any information that (I) was known by the Investor or its Affiliates on a non-confidential basis prior to the date of this Agreement, (II) is or becomes generally available to the public, other than as a result of a disclosure by (x) a Stockholder or any of its Representatives in violation of this Agreement or (y) an Observer or Stockholder Designee in violation of a Board Agreement, (III) was independently generated by such Stockholder without the use of Confidential Information or (IV) is or becomes available or known to such Stockholder from a source (other than the Company, any Ares Fund or any Representative of any of the foregoing) that, to the Stockholder’s knowledge, is not bound by a confidentiality agreement or other obligation of confidentiality with respect to such information.

(b) If any Stockholder is compelled, requested or required (orally or in writing) by a regulatory authority, applicable law, regulation, oral questions, requests for information or documents, interrogatories, subpoena, court order, deposition, administrative proceeding, inspection, audit, civil investigative demand, formal or informal investigation by any governmental agency or authority of competent jurisdiction or other similar legal process to disclose any Confidential Information, to the extent permitted by applicable law and practicable under the circumstances, such Stockholder shall provide to Company in writing (including via email) prompt notice of any such request or requirement so that Company may, at the Company’s cost and expense, intervene and seek an appropriate protective order or waive certain of such Stockholder’s obligations under this Agreement. If no protective order is obtained (or, if the protective order that is obtained does not relieve such Stockholder from his or her duty or obligation of disclosure), such Stockholder (i) may disclose that portion of Confidential Information that such Stockholder reasonably believes it is compelled, requested or required to disclose and (ii) will use its commercially reasonable efforts to request assurances that confidential treatment will be accorded such Confidential Information. Nothing in this Agreement shall prevent any Stockholder from disclosing any Confidential Information to any bank or financial governmental agency or authority of competent jurisdiction (including the Federal Reserve Board or the Financial Services Agency of Japan) with jurisdiction over such

Stockholder or any of its affiliates (for purposes of the BHCA), which such disclosure is reasonably necessary to respond to a request or requirement of (including in connection with any audit or examination of or filing with) such bank or financial governmental authority or agency and, accordingly, the obligations of confidentiality and non-disclosure set out herein shall not apply to any such disclosure; provided that, promptly following such disclosure, subject to applicable law and the directions of the applicable bank or financial governmental authority or agency, the applicable Stockholder shall provide notice to the Company of any such disclosure in response to such a request or requirement that specifically targets the Company, any of the Company’s Subsidiaries, any Ares Fund or any of their respective Representatives.

(c) Each Stockholder acknowledges and agrees that (i) the Confidential Information may not be complete, (ii) the Company is not providing any representations or warranties to the Stockholders with respect to the Confidential Information, (iii) the provision of Confidential Information shall not in and of itself be construed as or constitute an admission or agreement that such Confidential Information is material to the Company or its Subsidiaries and

(iv) the Company shall not have any liability to any Stockholder or any of their respective Representatives relating to or resulting from the use or non-use of the Confidential Information, other than as expressly provided for in a separate written agreement between the Company and any Stockholder or any of its Representatives. Each Stockholder acknowledges that possession of Confidential Information may constitute the possession of material non-public information with respect to one or more Persons and may preclude such Stockholder and others who receive such Confidential Information from (or on behalf of) any Stockholder from buying or selling publicly traded securities with respect to the applicable Persons.

(d) All Confidential Information is and shall remain the property of the Company. No license, copyright or similar right is granted with respect to any of the Confidential Information or any other information provided to any Stockholder by, or on behalf of, the Company or any of its Representatives.

Section 6.07. Cooperation on Regulatory Matters. To the extent permitted by applicable law, each Stockholder shall (and shall (x) cause each of its Affiliates and controlled Representatives to, and (y) request and direct that its non-controlled Representatives) use commercially reasonable efforts to promptly provide all documentation and information that has been reasonably requested by the Company that is requested of the Company, any Subsidiary of the Company, any Ares Fund or any portfolio company or investment thereof by any governmental or quasi-governmental agency or authority of competent jurisdiction (or otherwise required by any applicable laws, rules and regulations). Each Stockholder shall use commercially reasonable efforts to reasonably cooperate with the Company in connection with the Company’s, the Ares Funds’, and their respective Affiliates’ and portfolio companies’ or investments’ compliance with laws, rules and regulations applicable to their respective businesses to the extent related to the Stockholders’ Beneficial Ownership of the Subject Shares and the Stockholders’ rights arising under this Agreement.

ARTICLE 7 MISCELLANEOUS

Section 7.01. Headings. The headings in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any provisions hereof.

Section 7.02. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and there are no restrictions, promises, representations, warranties, covenants, conditions or undertakings with respect to the subject matter hereof, other than those expressly set forth or referred to herein.

This Agreement supersedes and preempts all prior agreements and understandings between the parties hereto, written or oral, with respect to the subject matter hereof.

Section 7.03. Further Actions; Cooperation. Each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to give effect to the transactions contemplated by this Agreement.

Section 7.04. Notices. All notices, requests, consents and other communications to any party hereto under this agreement shall be deemed to be sufficient if contained in a written

instrument delivered in person or sent by facsimile, electronic mail, nationally recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated on the signature pages of this Agreement or in writing by such party to the other parties:

if to the Investor, to:
	Sumitomo Mitsui Banking Corporation 277 Park Avenue
	New York, NY 10172, U.S.A.
Attn:	Dasuke Tanaka
	Tomohiro Homma
	Atsushi Kubo
Email:	Daisuke_Tanaka_ny@smbcgroup.com
	Tomohiro_Homma@smbcgroup.com
	Atsushi_Kubo@smbcgroup.com
with a copy (which shall not constitute notice) to:
	Skadden, Arps, Slate, Meagher & Flom LLP
	One Manhattan West, 401 9th Avenue
	New York, NY 10001
Attn:	Sven Mickisch
Email:	sven.mickisch@skadden.com
If to the Company, to:
	Ares Management Corporation
	2000 Avenue of the Stars
	12th Floor
	Los Angeles, CA 90067
	Attention: Naseem Sagati Aghili, General Counsel
	Email: nsagati@aresmgmt.com
with a copy (which shall not constitute notice) to:
	Kirkland & Ellis LLP
	2049 Century Park East
	Suite 3700
	Los Angeles, CA 90067
	Fax: (310) 552-5900
	Email: jonathan.benloulou@kirkland.com, pippa.bond@kirkland.com
	Attn: Jonathan Benloulou, P.C.; Pippa Bond, P.C.

If to a Stockholder that is not the Investor, then to the address set forth in a Joinder Agreement of such Stockholder.

All such notices, requests, consents and other communications shall be deemed to have been given or made if and when received (including by overnight courier) by the parties at the above addresses or sent by facsimile or electronic mail (if no failure message is generated), to the email addresses or facsimile numbers specified above (or at such other electronic mail address or facsimile number for a party as shall be specified by like notice). Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 7.04. Legal counsel for any party may send to any other party any notices, requests, demands or other communications required or permitted to be given under this Agreement by such party.

Section 7.05. Applicable Law. This Agreement, and all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (“Transaction Litigation”), shall be governed by and enforced and construed in accordance with the Laws of the State of Delaware (including its statute of limitations), regardless of the Laws that might otherwise govern under applicable principles of conflicts of law thereof.

Section 7.06. Severability. The provisions of this Agreement are independent of and separable from each other. The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement, including any such provisions, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by applicable law. The parties hereto shall endeavor in good faith negotiations to replace any invalid, illegal or unenforceable provisions with valid

provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision, as applicable.

Section 7.07. Successors and Assigns. Except as otherwise provided herein, all the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and permitted assigns of the parties hereto. No Stockholder shall assign any of its rights under this Agreement to any Person other than a Permitted Transferee. Each Permitted Transferee who becomes a Stockholder under this Agreement shall be subject to all of the terms of this Agreement, and by taking and holding such Subject Shares, such Person shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to comply with all of the obligations, terms and provisions of this Agreement. Notwithstanding the foregoing, no transfer of rights permitted under this Agreement shall be binding upon or obligate the Company unless and until, if required under Section 3.04, the Company shall have received written notice of such transfer and an executed Joinder Agreement from the Permitted Transferee provided for in Section 3.04. The Company may not assign any of its rights or obligations under this Agreement without the prior written consent of the Stockholders that own a majority of the Company Securities owned by the Stockholders. Any assignment attempted or effected without obtaining such required consent shall be null and void. Notwithstanding the foregoing, no assignee of the Company shall have any rights granted under this Agreement until such Person shall acknowledge its rights and obligations under this Agreement by a signed written statement of such Person’s acceptance of such rights and obligations.

Section 7.08. Amendments. This Agreement may not be amended, restated, modified or supplemented unless such amendment, restatement, modification or supplement is in writing and signed by the Stockholders that own a majority of the Company Securities owned by the Stockholders and the Company.

Section 7.09. Waiver. The failure of a party to this Agreement at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver by a party of any condition or of any breach of any term, covenant, representation or warranty contained in this Agreement shall be effective unless in a writing signed by the party against whom the waiver is to be effective. No waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or a waiver of any other condition or breach of any other term, covenant, representation or warranty.

Section 7.10. Counterparts. This Agreement may be executed by facsimile or by email with .pdf attachments in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement.

Section 7.11. Governing Law; Jurisdiction; WAIVER OF JURY TRIAL.

(a) Each of the parties hereto irrevocably and unconditionally (a) agrees that any Transaction Litigation shall be instituted in the Court of Chancery of the State of Delaware (provided that if jurisdiction is not then available in such court, then any such legal suit, action, proceeding or counterclaim shall be brought in any federal court located in the State of Delaware

or in any other Delaware state court) (any of the foregoing Delaware courts, a “Delaware Court”); (b) waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such legal suit, action, proceeding or counterclaim; and (c) submits to the non-exclusive jurisdiction of a Delaware Court in any such legal suit, action, proceeding or counterclaim. Any final and nonappealable judgment against any party in any Transaction Litigation shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment.

(b) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY TRANSACTION LITIGATION. EACH PARTY AGREES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IF THERE IS ANY TRANSACTIONAL LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (IV) EACH OTHER PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATES IN THIS SECTION 7.11(b).

Section 7.12. Injunctive Relief. Each party hereto acknowledges and agrees that a violation of any of the terms of this Agreement will cause the other parties irreparable injury for which an adequate remedy at law is not available. Therefore, the parties hereto agree that, in addition to any other remedy to which they are entitled at law or in equity, each party shall be

entitled to seek an injunction, restraining order, specific performance or other equitable relief from any court of competent jurisdiction, restraining any party from committing any violations of the provisions of this Agreement, without the need to post a bond or prove the inadequacy of monetary damages.

Section 7.13. Termination.

(a) The terms of this Agreement shall terminate, and be of no further force or effect (i) upon the mutual consent of all of the parties hereto, (ii) at such time as all Stockholders party to this Agreement cease to own any Subject Shares and (iii) with respect to any Stockholder, at such time as such Stockholder ceases to own any Subject Shares. The Stockholders party to this Agreement shall notify the Company when they cease to own any Subject Shares.

(b) In the event of a Change of Control as a result of which the Company shall not be the surviving Person, (i) Article 4 and Section 6.02 shall terminate and be of no further force or effect and (ii) the Company shall cause proper provision to be made so that the surviving Person (or, if such surviving Person is a Subsidiary of another Person, of such other Person constituting the ultimate parent thereof) assumes the obligations of the Company set forth in this Agreement (other than Article 4 and Section 6.02) in respect of any shares of capital stock into which all or a portion of the Subject Shares are or may be converted or exchanged in the Change of Control.

(c) Notwithstanding a termination of this Agreement (or certain provisions herein) in accordance with Section 7.13(a) or Section 7.13(b)(i), the following shall survive the termination of this Agreement: (i) the provisions of Section 5.05, Section 5.06, Section 7.05, Section 7.11 and this Section 7.13; (ii) the rights with respect to the breach of any provision hereof by any party to this Agreement; and (iii) any registration rights vested or obligations accrued as of the date of termination of this Agreement to the extent, in the case of registration rights so vested, if the Investor or its Permitted Transferee ceases to meet the definition of a “Stockholder” under this Agreement subsequent to the vesting of such registration rights as a result of action taken by the Company.

Section 7.14. Inconsistency. The parties to this Agreement agree and acknowledge that, to the extent any terms and provisions of this Agreement are in any way inconsistent with or in conflict with any term, condition or provision of the Purchase Agreement, the terms and provisions of this Agreement shall govern and control to the extent necessary to resolve such inconsistency or conflict as between the Investor and the Company.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly appointed officers as of the date first above written.

	INVESTOR:
	SUMITOMO MITSUI BANKING CORPORATION
By:	/s/ Yoshihiro Hyakutome
	Name: Yoshihiro Hyakutome
	Title: Managing Executive Officer CEO, Americas Division
	COMPANY:
	ARES MANAGEMENT CORPORATION
By:	/s/ Michael J Arougheti
	Name: Michael J Arougheti
	Title: Chief Executive Officer

Exhibit A

Form of Board Agreement

(See attached)

Exhibit B

Form of Joinder Agreement

[DATE]

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d- 14(a)

I, Michael J Arougheti, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Ares Management Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2020

/s/ Michael J Arougheti
Name:	Michael J Arougheti
Title:	Co-Founder, Chief Executive Officer & President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a)

I, Michael R. McFerran, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Ares Management Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2020

/s/ Michael R. McFerran
Name:	Michael R. McFerran
Title:	Chief Operating Officer & Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to

18 U.S.C. Section 1350

In connection with the Quarterly Report on Form 10-Q of Ares Management Corporation (the “Company”) for the quarter ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Michael J Arougheti, as Chief Executive Officer of the Company, and Michael R. McFerran, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2020

/s/ Michael J Arougheti
Name:	Michael J Arougheti
Title:	Co-Founder, Chief Executive Officer & President (Principal Executive Officer)
/s/ Michael R. McFerran
Name:	Michael R. McFerran
Title:	Chief Operating Officer & Chief Financial Officer (Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Ares Management Corporation and will be retained by Ares Management Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Summary of valuation of investments and other financial instruments by fair value hierarchy levels

The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of March 31, 2020:

Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income	$	—	$	—	$	65,344	$	—	$	65,344
Common stock and other equity securities	—		873		14,704		—		15,577
Partnership interests	—		—		2,575		1,632		4,207
Total investments, at fair value	—		873		82,623		1,632		85,128
Derivatives-foreign exchange contracts	—		5,429		—		—		5,429
Total assets, at fair value	$	—	$	6,302	$	82,623	$	1,632	$	90,557
Liabilities, at fair value
Derivatives-foreign exchange contracts	$	—	$	(5)	$	—	$	—	$	(5)
Total liabilities, at fair value	$	—	$	(5)	$	—	$	—	$	(5)

Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds	$	—	$	187,051	$	13,101	$	200,152
Loans	—		7,267,203		1,266,455		8,533,658
Total fixed income investments	—		7,454,254		1,279,556		8,733,810
Equity securities	10,978		—		42,752		53,730
Partnership interests	—		—		307,025		307,025
Total investments, at fair value	10,978		7,454,254		1,629,333		9,094,565
Derivatives-asset swaps-other	—		—		831		831
Total assets, at fair value	$	10,978	$	7,454,254	$	1,630,164	$	9,095,396
Liabilities, at fair value
Derivatives-asset swaps-other	$	—	$	—	$	(811)	$	(811)
Loan obligations of CLOs	—		(8,354,458)		—		(8,354,458)
Total liabilities, at fair value	$	—	$	(8,354,458)	$	(811)	$	(8,355,269)

The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2019:

Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income	$	—	$	—	$	69,183	$	—	$	69,183
Common stock and other equity securities	—		1,043		14,704		—		15,747
Partnership interests	—		—		35,192		1,632		36,824
Total investments, at fair value	—		1,043		119,079		1,632		121,754
Derivatives-foreign exchange contracts	—		4,023		—		—		4,023
Total assets, at fair value	$	—	$	5,066	$	119,079	$	1,632	$	125,777
Liabilities, at fair value
Derivatives-foreign exchange contracts	$	—	$	(113)	$	—	$	—	$	(113)
Total liabilities, at fair value	$	—	$	(113)	$	—	$	—	$	(113)

Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds	$	—	$	207,966	$	4,410	$	212,376
Loans	—		7,728,014		334,726		8,062,740
Investments in CLO warehouse	—		44,435		—		44,435
Total fixed income investments	—		7,980,415		339,136		8,319,551
Equity securities	26,396		—		85,988		112,384
Partnership interests	—		—		296,012		296,012
Total investments, at fair value	26,396		7,980,415		721,136		8,727,947
Derivatives-foreign exchange contracts	—		667		—		667
Total assets, at fair value	$	26,396	$	7,981,082	$	721,136	$	8,728,614
Liabilities, at fair value
Derivatives:
Foreign exchange contracts	$	—	$	(670)	$	—	$	(670)
Asset swaps-other	—		—		(4,106)		(4,106)
Total derivative liabilities, at fair value	—		(670)		(4,106)		(4,776)
Loan obligations of CLOs	—		(7,973,748)		—		(7,973,748)
Total liabilities, at fair value	$	—	$	(7,974,418)	$	(4,106)	$	(7,978,524)

Summary of changes in the fair value of the Level III investments

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2020:

	Level III Assets
Level III Assets of the Company	Equity  Securities		Fixed Income		Partnership Interests		Total
Balance, beginning of period	$	14,704	$	69,183	$	35,192	$	119,079
Additions(1)	—		3,686		—		3,686
Purchases(2)	—		643		—		643
Sales/settlements(3)	—		(402)		(32,430)		(32,832)
Realized and unrealized depreciation, net	—		(7,766)		(187)		(7,953)
Balance, end of period	$	14,704	$	65,344	$	2,575	$	82,623
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	—	$	(6,731)	$	5,511	$	(1,220)

Level III Assets of Consolidated Funds	Equity  Securities		Fixed  Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	85,988	$	339,136	$	296,012	$	(4,106)	$	717,030
Additions(1)	(635)		392,672		—		—		392,037
Transfer in	—		607,588		—		—		607,588
Transfer out	—		(61,774)		—		—		(61,774)
Purchases(2)	249		355,592		8,000		—		363,841
Sales/settlements(3)	(351)		(178,159)		—		(1,278)		(179,788)
Amortized discounts/premiums	—		499		—		48		547
Realized and unrealized appreciation (depreciation), net	(42,499)		(175,998)		3,013		5,356		(210,128)
Balance, end of period	$	42,752	$	1,279,556	$	307,025	$	20	$	1,629,353
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	(42,500)	$	(170,496)	$	3,012	$	2,874	$	(207,110)

(1)Additions relate to the net increase from consolidation of new funds or entities. For Consolidated Funds, additions are also offset by the deconsolidation of a fund.

(2)Purchases include paid-in-kind interest and securities received in connection with restructuring.

(3)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2019:

	Level III Assets
Level III Assets of the Company	Equity  Securities		Fixed Income		Partnership Interests		Total
Balance, beginning of period	$	10,397	$	60,824	$	35,192	$	106,413
Deconsolidation of fund	—		8,138		—		8,138
Purchases(1)	—		2,147		—		2,147
Sales/settlements(2)	—		(4,964)		—		(4,964)
Realized and unrealized appreciation, net	—		1,045		—		1,045
Balance, end of period	$	10,397	$	67,190	$	35,192	$	112,779
Increase in net unrealized appreciation included in earnings related to financial assets still held at the reporting date	$	—	$	719	$	—	$	719

Level III Assets of Consolidated Funds	Equity  Securities		Fixed  Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	150,752	$	547,958	$	271,447	$	680	$	970,837
Deconsolidation of fund	—		(58,883)		—		—		(58,883)
Transfer in	—		155,651		—		—		155,651
Transfer out	—		(182,087)		—		—		(182,087)
Purchases(1)	10,774		173,408		4,000		—		188,182
Sales/settlements(2)	(5,086)		(79,489)		—		(21)		(84,596)
Amortized discounts/premiums	—		312		—		(151)		161
Realized and unrealized appreciation (depreciation), net	2,592		7,434		7,612		(3,539)		14,099
Balance, end of period	$	159,032	$	564,304	$	283,059	$	(3,031)	$	1,003,364
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	2,592	$	7,894	$	7,612	$	(3,481)	$	14,617

(1)Purchases include paid-in-kind interest and securities received in connection with restructurings.

(2)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

Summary of quantitative inputs and assumptions used for Level III inputs

The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of March 31, 2020:

Level III Measurements of the Company	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range
Assets
Equity securities	$	14,704	Transaction price(1)	N/A	N/A
Partnership interests	2,575		Other	N/A	N/A
Collateralized loan obligations	17,783		Broker quotes and/or 3rd party pricing services	N/A	N/A
Other fixed income	47,561		Other	N/A	N/A
Total	$	82,623

Level III Measurements of the Consolidated Funds	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range	Weighted Average
Assets
Equity securities
	$	325	Market approach	EBITDA multiple(2)	10.0x - 28.8x	18.9x
	40,426		Other	Net income multiple	32.5x	32.5x
				Illiquidity discount	25.0%	25.0%
	2,001		Transaction price	N/A	N/A	N/A
Partnership interest	307,025		Discounted cash flow	Discount rate	18.1%	18.1%
Fixed income securities
	1,223,236		Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
	56,320		Income approach	Yield	4.0% - 25.5%	10.4%
Total assets	$	1,630,164
Liabilities
Derivatives instruments	$	(811)	Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
Total liabilities	$	(811)

(1)Transaction price consists of securities recently purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2019:

Level III Measurements of the Company	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range
Assets
Equity securities	$	14,704	Transaction price(1)	N/A	N/A
Partnership interests	32,661		Transaction price(1)	N/A	N/A
	2,531		Other	N/A	N/A
Collateralized loan obligations	22,265		Broker quotes and/or 3rd party pricing services	N/A	N/A
Other fixed income	46,918		Other	N/A	N/A
Total	$	119,079

Level III Measurements of the Consolidated Funds	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range	Weighted Average
Assets
Equity securities
	$	431	Market approach	EBITDA multiple(2)	8.2x - 21.3x	16.1x
	40,745		Other	Net income multiple	36.2x	36.2x
				Illiquidity discount	25.0%	25.0%
	44,812		Transaction price(1)	N/A	N/A	N/A
Partnership interests	296,012		Discounted cash flow	Discount rate	19.6%	19.6%
Fixed income securities
	271,919		Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
	67,217		Income approach	Yield	4.8% - 14.3%	9.7%
Total assets	$	721,136
Liabilities
Derivatives instruments	$	(4,106)	Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
Total liabilities	$	(4,106)

(1)Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The Company evaluated all events or transactions that occurred after March 31, 2020 through the date the condensed consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure:

In April 2020, the Company's board of directors declared a quarterly dividend of $0.40 per share of Class A common stock payable on June 30, 2020 to common stockholders of record at the close of business on June 16, 2020.

In April 2020, the Company's board of directors declared a quarterly dividend of $0.4375 per share of Series A Preferred Stock payable on June 30, 2020 to preferred stockholders of record at the close of business on June 15, 2020.

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SEGMENT REPORTING (Operating Segments) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment reporting
Total revenues	$ 13,409	$ 477,197
Operating segment
Segment reporting
Fee related earnings	150,835	124,565
Performance income—realized	151,770	68,573
Performance related compensation—realized	(117,993)	(49,217)
Realized net investment income (loss)	13,771	14,385
Realized income	(198,383)	(158,306)
OMG
Segment reporting
Compensation and benefits	(36,426)	(32,661)
General, administrative and other expenses	(21,305)	(20,632)
Fee related earnings	(57,731)	(53,293)
Performance income—realized	0	0
Performance related compensation—realized	0	0
Realized net performance income	0	0
Investment income (loss)—realized	(5,698)	0
Interest and other investment income —realized	168	15
Interest expense	(977)	(396)
Realized net investment income (loss)	(6,507)	(381)
Realized income	(64,238)	(53,674)
Total
Segment reporting
Compensation and benefits	(139,360)	(123,489)
General, administrative and other expenses	(45,186)	(41,326)
Fee related earnings	93,104	71,272
Performance income—realized	151,770	68,573
Performance related compensation—realized	(117,993)	(49,217)
Realized net performance income	33,777	19,356
Investment income (loss)—realized	6,219	15,274
Interest and other investment income —realized	6,351	4,319
Interest expense	(5,306)	(5,589)
Realized net investment income (loss)	7,264	14,004
Realized income	134,145	104,632
Ares Management L.P
Segment reporting
Total revenues	13,409	477,197
Compensation and benefits	(180,084)	(156,846)
General, administrative and other expenses	(62,331)	(51,187)
Ares Management L.P | Affiliated entity | ARCC
Segment reporting
Management fees, part I fees	43,923	38,393
Ares Management L.P | Operating segment
Segment reporting
Compensation and benefits	(102,934)	(90,828)
General, administrative and other expenses	(23,881)	(20,694)
Fee related earnings	150,835	124,565
Performance income—realized	151,770	68,573
Performance related compensation—realized	(117,993)	(49,217)
Realized net performance income	33,777	19,356
Investment income (loss)—realized	11,917	15,274
Interest and other investment income —realized	6,183	4,304
Interest expense	(4,329)	(5,193)
Realized net investment income (loss)	13,771	14,385
Realized income	198,383	158,306
Ares Management L.P | Operating segment | Credit Group
Segment reporting
Compensation and benefits	(70,925)	(60,348)
General, administrative and other expenses	(15,313)	(13,505)
Fee related earnings	114,257	92,179
Performance income—realized	9,016	21,925
Performance related compensation—realized	(7,899)	(12,663)
Realized net performance income	1,117	9,262
Investment income (loss)—realized	(843)	858
Interest and other investment income —realized	4,575	2,905
Interest expense	(1,715)	(1,899)
Realized net investment income (loss)	2,017	1,864
Realized income	117,391	103,305
Ares Management L.P | Operating segment | Private Equity Group
Segment reporting
Compensation and benefits	(19,596)	(21,196)
General, administrative and other expenses	(5,633)	(4,057)
Fee related earnings	27,038	26,143
Performance income—realized	116,154	44,123
Performance related compensation—realized	(92,924)	(35,297)
Realized net performance income	23,230	8,826
Investment income (loss)—realized	11,470	10,936
Interest and other investment income —realized	812	294
Interest expense	(1,643)	(2,175)
Realized net investment income (loss)	10,639	9,055
Realized income	60,907	44,024
Ares Management L.P | Operating segment | Real Estate Group
Segment reporting
Compensation and benefits	(12,413)	(9,284)
General, administrative and other expenses	(2,935)	(3,132)
Fee related earnings	9,540	6,243
Performance income—realized	26,600	2,525
Performance related compensation—realized	(17,170)	(1,257)
Realized net performance income	9,430	1,268
Investment income (loss)—realized	1,290	3,480
Interest and other investment income —realized	796	1,105
Interest expense	(971)	(1,119)
Realized net investment income (loss)	1,115	3,466
Realized income	20,085	10,977
Management fees | OMG
Segment reporting
Total revenues	0	0
Management fees | Total
Segment reporting
Total revenues	273,778	233,012
Management fees | Ares Management L.P
Segment reporting
Total revenues	263,849	224,659
Management fees | Ares Management L.P | Operating segment
Segment reporting
Total revenues	273,778	233,012
Management fees | Ares Management L.P | Operating segment | Credit Group
Segment reporting
Total revenues	197,437	162,966
Management fees | Ares Management L.P | Operating segment | Private Equity Group
Segment reporting
Total revenues	52,157	51,396
Management fees | Ares Management L.P | Operating segment | Real Estate Group
Segment reporting
Total revenues	24,184	18,650
Other fees | OMG
Segment reporting
Total revenues	0	0
Other fees | Total
Segment reporting
Total revenues	3,872	3,075
Other fees | Ares Management L.P | Operating segment
Segment reporting
Total revenues	3,872	3,075
Other fees | Ares Management L.P | Operating segment | Credit Group
Segment reporting
Total revenues	3,058	3,066
Other fees | Ares Management L.P | Operating segment | Private Equity Group
Segment reporting
Total revenues	110	0
Other fees | Ares Management L.P | Operating segment | Real Estate Group
Segment reporting
Total revenues	$ 704	$ 9

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EQUITY COMPENSATION (Options) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Jun. 30, 2019	Dec. 31, 2019
Options
Exercised (in units)	(1,058,722)
Options
Options
Balance at the beginning of the period (in units)	13,426,870
Granted (in units)	0
Exercised (in units)	(1,134,677)
Expired (in units)	0
Forfeited (in units)	0
Balance at the end of the period (in units)	12,292,193
Exercisable at the end of the period (in units)	12,292,193
Weighted Average Exercise Price
Balance at the beginning of the period (in dollars per unit)	$ 18.99
Granted (in dollars per unit)	0
Exercised (in dollars per unit)	19.00
Expired (in dollars per unit)	0
Forfeited (in dollars per unit)	0
Balance at the end of the period (in dollars per unit)	18.99
Exercisable at the end of the period (in dollars per unit)	$ 18.99
Weighted Average Remaining Life
Weighted average remaining life		4 years 4 months 2 days
Expected to vest at the end of the period	4 years
Exercisable at the end of the period	4 years
Aggregate Intrinsic Value
Beginning balance	$ 146,811		$ 224,260
Ending balance	146,811		$ 224,260
Exercisable	146,811
Stock option exercises	21,600
Tax benefits of exercises	$ 2,900

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EARNINGS PER SHARE (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Basic
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$ (36,461)	$ 39,524
Distributions on unvested restricted units	(2,290)	(1,806)
Undistributed earnings allocable to participating unvested restricted units	0	(663)
Net income (loss) available to Class A common stockholders	$ (38,751)	$ 37,055
Basic weighted-average shares of Class A common stock (in shares)	118,366,539	102,906,494
Basic earnings per share of Class A common stock (in dollars per share)	$ (0.33)	$ 0.36
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$ (36,461)	$ 39,524
Diluted
Diluted weighted-average shares of Class A common stock (in shares)	118,366,539	110,699,112
Diluted earnings per share of Class A common stock (in dollars per share)	$ (0.33)	$ 0.36
Dividend declared and paid per Class A common stock (in dollar per share)	$ 0.40	$ 0.32
Restricted units
Diluted
Effect of dilutive shares (in shares)	0	5,485,250
Options
Diluted
Effect of dilutive shares (in shares)	0	2,307,368

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INVESTMENTS (Investments of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Investments
Total investments	$ 9,094,565	$ 8,727,947
Percent of total assets	5.00%	5.00%
Fixed Income Securities
Investments
Total investments	$ 8,733,810	$ 8,319,551
Percentage of total investments as of	96.00%	95.30%
Fixed Income Securities | Bonds
Investments
Total investments	$ 200,152	$ 212,376
Percentage of total investments as of	2.20%	2.40%
Fixed Income Securities | Loans
Investments
Total investments	$ 8,533,658	$ 8,062,740
Percentage of total investments as of	93.80%	92.40%
Fixed Income Securities | Investments in CLO warehouse
Investments
Total investments	$ 0	$ 44,435
Percentage of total investments as of	0.00%	0.50%
Equity Securities
Investments
Total investments	$ 53,730	$ 112,384
Percentage of total investments as of	0.60%	1.30%
Partnership Interests
Investments
Total investments	$ 307,025	$ 296,012
Percentage of total investments as of	3.40%	3.40%

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FAIR VALUE (Investments Using NAV per Share) (Details) - Investments Measured at NAV - Non-core investments - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
FAIR VALUE
Fair Value	$ 1,600,000	$ 1,600,000
Unfunded commitments			$ 0

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SEGMENT REPORTING (Revenue, Expenses and Other Income (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment revenues
Total revenues	$ 13,409	$ 477,197
Total segment revenues	429,420	304,660
Segment expenses
Total expenses	81,959	369,107
Segment other income
Total other income (expense)	(227,863)	27,870
Operating segment
Segment revenues
Performance income—realized	151,770	68,573
Segment expenses
Total performance related compensation - realized	117,993	49,217
Ares Management L.P
Segment revenues
Total revenues	13,409	477,197
Segment expenses
Compensation and benefits	180,084	156,846
General, administrative and other expenses	62,331	51,187
Ares Management L.P | ARCC | Affiliated entity
Segment other income
Management fees, part I fees	43,923	38,393
Ares Management L.P | Management fees
Segment revenues
Total revenues	263,849	224,659
Ares Management L.P | Operating segment
Segment revenues
Performance income—realized	151,770	68,573
Total segment revenues	429,420	304,660
Segment expenses
Compensation and benefits	102,934	90,828
General, administrative and other expenses	23,881	20,694
Total performance related compensation - realized	117,993	49,217
Total expenses	244,808	160,739
Segment other income
Investment income—realized	11,917	15,274
Interest and other investment income—realized	6,183	4,304
Interest expense	(4,329)	(5,193)
Total other income (expense)	13,771	14,385
Ares Management L.P | Operating segment | Management fees
Segment revenues
Total revenues	273,778	233,012
Ares Management L.P | Operating segment | Other fees
Segment revenues
Total revenues	$ 3,872	$ 3,075

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SEGMENT REPORTING (Reconciliation of Income Before Taxes) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Economic net income
Income (loss) before taxes	$ (296,413)	$ 135,960
Adjustments:
Equity compensation expense	32,557	27,552
Consolidated Funds
Adjustments:
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net of eliminations	(166,406)	17,624
Total investment income - realized	(113,225)	(93,184)
Operating segment
Economic net income
Income (loss) before taxes	(296,413)	135,960
Adjustments:
Depreciation and amortization expense	5,542	5,824
Equity compensation expense	32,557	27,552
Transaction support expense	3,137	1,773
Deferred placement fees	5,415	521
Other expense	0	(1)
Total performance (income) loss - unrealized	387,657	(146,575)
Total performance related compensation - unrealized	(285,892)	107,303
Total investment (income) loss - unrealized	100,633	(11,205)
Realized income	198,383	158,306
Total performance income - realized	(151,770)	(68,573)
Total performance related compensation - realized	117,993	49,217
Total investment income - realized	(13,771)	(14,385)
Fee related earnings	150,835	124,565
Operating segment | Consolidated Funds
Adjustments:
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net of eliminations	166,378	(17,045)
OMG
Adjustments:
OMG expense, net	58,872	53,323
Realized income	64,238	53,674
Total performance income - realized	0	0
Total performance related compensation - realized	0	0
Total investment income - realized	6,507	381
Fee related earnings	(57,731)	(53,293)
Subsidiaries | Operating segment
Adjustments:
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net of eliminations	$ 20,497	$ 876

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CONSOLIDATION (Cash Flow Statement) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ (275,797)	$ 84,475	$ 91,875	$ 74,878	$ 121,576
Net cash used in operating activities	(363,237)				(349,846)
Cash flows from investing activities:
Net cash used in investing activities	(38,906)				(2,994)
Allocable to non-controlling interests in Consolidated Funds:
Net cash provided by financing activities	1,445,552				353,331
Effect of exchange rate changes	(14,120)				9,760
Net change in cash and cash equivalents	1,029,289				10,251
Cash and cash equivalents, beginning of period	138,384			120,498
Cash and cash equivalents, end of period	1,167,673	138,384			120,498
Reportable legal entity
Cash flows from operating activities:
Net income (loss)	(216,172)				103,952
Net cash used in operating activities	(595,595)				29,250
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net					(2,994)
Net cash used in investing activities					(2,994)
Allocable to non-controlling interests in Consolidated Funds:
Net cash provided by financing activities					(14,885)
Effect of exchange rate changes					(1,120)
Net change in cash and cash equivalents					10,251
Cash and cash equivalents, beginning of period				120,498	110,247
Cash and cash equivalents, end of period					120,498
Eliminations
Cash flows from operating activities:
Net income (loss)	49,766				(761)
Net cash used in operating activities	104,993				(64,907)
Allocable to non-controlling interests in Consolidated Funds:
Net cash provided by financing activities	(13,071)				(88,396)
Effect of exchange rate changes	0				0
Net change in cash and cash equivalents	91,922				(153,303)
Cash and cash equivalents, beginning of period	(606,321)			(537,947)	(384,644)
Cash and cash equivalents, end of period	(514,399)	(606,321)			(537,947)
Consolidated Funds
Cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities	(453,015)				(416,457)
Cash flows due to changes in operating assets and liabilities	188,510				(69,268)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	133,265				54,035
Distributions to non-controlling interests in Consolidated Funds	(13,492)				(20,736)
Borrowings under loan obligations by Consolidated Funds	454,391				396,144
Repayments under loan obligations by Consolidated Funds	(73,609)				(61,227)
Consolidated Funds | Reportable legal entity
Cash flows from operating activities:
Net income (loss)	(216,172)				18,385
Adjustments to reconcile net income (loss) to net cash used in operating activities	(478,695)				(415,841)
Cash flows due to changes in operating assets and liabilities	99,272				83,267
Net cash used in operating activities					(314,189)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	148,270				148,691
Distributions to non-controlling interests in Consolidated Funds	(15,426)				(23,629)
Borrowings under loan obligations by Consolidated Funds	454,391				392,777
Repayments under loan obligations by Consolidated Funds	(73,609)				(61,227)
Net cash provided by financing activities	513,626				456,612
Effect of exchange rate changes	(9,953)				10,880
Net change in cash and cash equivalents	(91,922)				153,303
Cash and cash equivalents, beginning of period	606,321			537,947	384,644
Cash and cash equivalents, end of period	514,399	606,321			537,947
Consolidated Funds | Eliminations
Cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities	25,680				(616)
Cash flows due to changes in operating assets and liabilities	89,238				(152,535)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	(15,005)				(94,656)
Distributions to non-controlling interests in Consolidated Funds	1,934				2,893
Borrowings under loan obligations by Consolidated Funds					3,367
Repayments under loan obligations by Consolidated Funds					0
Ares Management L.P
Cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities	125,070				10,766
Cash flows due to changes in operating assets and liabilities	51,995				3,537
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(3,062)				(2,994)
Acquisitions	(35,844)				0
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,334				0
Proceeds from credit facility	790,000				145,000
Repayments of credit facility	(60,000)				(60,000)
Dividends and distributions	(106,838)				(75,479)
Series A Preferred Stock dividends and distributions	(5,425)				(5,425)
Stock option exercises	19,551				0
Taxes paid related to net share settlement of equity awards	(73,500)				(21,121)
Other financing activities	(2,125)				2,140
Allocable to non-controlling interests in Consolidated Funds:
Cash and cash equivalents, beginning of period				$ 120,498	110,247
Cash and cash equivalents, end of period					120,498
Ares Management L.P | Reportable legal entity
Cash flows from operating activities:
Net income (loss)	(109,391)				103,952
Adjustments to reconcile net income (loss) to net cash used in operating activities	190,761				(79,008)
Cash flows due to changes in operating assets and liabilities	45,995				4,306
Net cash used in operating activities	127,365
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(3,062)
Acquisitions	(35,844)
Net cash used in investing activities	(38,906)
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,334
Proceeds from credit facility	790,000				145,000
Repayments of credit facility	(60,000)				(60,000)
Dividends and distributions	106,838				(75,479)
Series A Preferred Stock dividends and distributions	(5,425)				(5,425)
Stock option exercises	19,551
Taxes paid related to net share settlement of equity awards	(73,500)				(21,121)
Other financing activities	(2,125)				2,140
Allocable to non-controlling interests in Consolidated Funds:
Net cash provided by financing activities	944,997
Effect of exchange rate changes	(4,167)
Net change in cash and cash equivalents	1,029,289
Cash and cash equivalents, beginning of period	138,384
Cash and cash equivalents, end of period	1,167,673	$ 138,384
Ares Management L.P | Eliminations
Cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities	(65,691)				89,774
Cash flows due to changes in operating assets and liabilities	$ 6,000				$ (769)

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COMMITMENTS AND CONTINGENCIES (Leases: Maturity of Lease Liabilities) (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Operating Leases
2020	$ 22,173
2021	30,320
2022	31,506
2023	28,026
2024	25,178
After 2024	55,515
Total future payments	192,718
Less: interest	22,890
Operating lease liabilities	169,828
Finance Leases
2020	461
2021	516
2022	485
2023	158
2024	156
After 2024	7
Total future payments	1,783
Less: interest	85
Total lease liabilities	$ 1,698

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COMMITMENTS AND CONTINGENCIES (Leases: Assets and Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Lessee, Lease, Description [Line Items]
Operating lease liabilities	$ 169,828
Finance lease obligations	1,698
Accumulated amortization	700	$ 600
Ares Management L.P
Lessee, Lease, Description [Line Items]
Operating lease assets	145,225	143,406
Finance lease assets	1,756	1,787
Total lease assets	146,981	145,193
Operating lease liabilities	169,828	168,817
Finance lease obligations	1,698	1,651
Total lease liabilities	$ 171,526	$ 170,468
Minimum
Lessee, Lease, Description [Line Items]
Lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Lease term	10 years

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Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Assets
Total assets	$ 13,216,929	$ 12,014,196
Liabilities
Operating lease liabilities	169,828
Total liabilities	11,241,333	10,155,598
Commitments and contingencies
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	298,761	298,761
Additional paid-in-capital	746,595	525,244
Retained earnings	(138,371)	(50,820)
Accumulated other comprehensive loss, net of tax	(10,849)	(6,047)
Total stockholders' equity	898,612	768,290
Total equity	1,975,596	1,858,598	$ 1,842,782	$ 1,602,324	$ 1,479,824	$ 1,394,341
Total liabilities, non-controlling interests and equity	$ 13,216,929	$ 12,014,196
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Preferred stock, shares issued (in shares)	12,400,000	12,400,000
Preferred stock, shares outstanding (in shares)	12,400,000	12,400,000
Common stock, shares outstanding (in shares)	247,574,364	115,243,029
Class A common stock
Stockholders' Equity
Common stock	$ 1,324	$ 1,152
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (in shares)	132,373,743	115,242,028
Common stock, shares outstanding (in shares)	132,373,743	115,242,028
Class B common stock
Stockholders' Equity
Common stock	$ 0	$ 0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000	1,000
Common stock, shares issued (in shares)	1,000	1,000
Common stock, shares outstanding (in shares)	1,000	1,000
Class C common stock
Stockholders' Equity
Common stock	$ 1,152	$ 0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	499,999,000	499,999,000
Common stock, shares issued (in shares)	115,199,621	1
Common stock, shares outstanding (in shares)	115,199,621	1
Consolidated Funds
Assets
Cash and cash equivalents	$ 514,401	$ 606,321
Investments, at fair value	9,094,565	8,727,947
Due from affiliates	6,192	6,192
Other assets	28,179	30,081
Receivable for securities sold	355,149	88,809
Liabilities
Accounts payable, accrued expenses and other liabilities	72,486	61,857
Due to affiliates	0	0
Payable for securities purchased	796,316	500,146
CLO loan obligations, at fair value	8,354,458	7,973,748
Fund borrowings	35,440	107,244
Non-controlling interest in Consolidated Funds	562,818	618,020
AOG
Liabilities
Non-controlling interest in Ares Operating Group entities	514,166	472,288
Ares Management L.P
Assets
Cash and cash equivalents	1,167,673	138,384
Investments, at fair value	1,190,604	1,663,664
Due from affiliates	288,030	268,099
Other assets	426,911	341,293
Right-of-use operating lease assets	145,225	143,406
Liabilities
Accounts payable, accrued expenses and other liabilities	90,613	88,173
Accrued compensation	69,702	37,795
Due to affiliates	73,050	71,445
Performance related compensation payable	532,665	829,764
Debt obligations	1,046,775	316,609
Operating lease liabilities	169,828	168,817
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	298,761	298,761
Additional paid-in-capital	746,595	525,244
Retained earnings	(138,371)	(50,820)
Accumulated other comprehensive loss, net of tax	(10,849)	(6,047)
Total stockholders' equity	898,612	768,290
Ares Management L.P | Accrued Interest
Assets
Investments, at fair value	747,363	1,134,967
Ares Management L.P | Class A common stock
Stockholders' Equity
Common stock	1,324	1,152
Ares Management L.P | Class B common stock
Stockholders' Equity
Common stock	0	0
Ares Management L.P | Class C common stock
Stockholders' Equity
Common stock	$ 1,152	$ 0

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net income (loss)	$ (275,797)	$ 121,576
Consolidated Funds
Other comprehensive income (loss):
Less: Comprehensive income (loss) attributable to non-controlling interests	(171,093)	15,965
AOG
Other comprehensive income (loss):
Less: Comprehensive income (loss) attributable to non-controlling interests	(83,074)	60,462
Ares Management L.P
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax	(14,208)	1,084
Total comprehensive income (loss)	(290,005)	122,660
Comprehensive income (loss) attributable to Ares Management Corporation	$ (35,838)	$ 46,233

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Schedule of antidilutive securities excluded from earnings per common unit

For the three months ended March 31, 2020, the following options, restricted units and AOG Units represent the securities not included in the two-class method. For the three months ended March 31, 2019, the computation of dilutive earnings per share excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive:

	Three months ended March 31,
	2020	2019
Options	12,859,532	—
Restricted units	16,377,716	119
AOG Units	116,328,089	116,996,031

Schedule of the computation of basic and diluted earnings per common unit

The following table presents the computation of basic and diluted earnings per common share:

	Three months ended March 31,
	2020		2019
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524
Distributions on unvested restricted units	(2,290)		(1,806)
Undistributed earnings allocable to participating unvested restricted units	—		(663)
Net income (loss) available to Class A common stockholders	$	(38,751)	$	37,055
Basic weighted-average shares of Class A common stock	118,366,539		102,906,494
Basic earnings (loss) per share of Class A common stock	$	(0.33)	$	0.36
Net income (loss) available to Class A common stockholders	$	(36,461)	$	39,524
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524
Effect of dilutive shares:
Restricted units	—		5,485,250
Options	—		2,307,368
Diluted weighted-average shares of Class A common stock	118,366,539		110,699,112
Diluted earnings (loss) per share of Class A common stock	$	(0.33)	$	0.36
Dividend declared and paid per Class A common stock	$	0.40	$	0.32

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CONSOLIDATION (Tables)

3 Months Ended

Mar. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Schedule of interest in VIEs

The Company's interests in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows:

	As of March 31,		As of December 31,
	2020		2019
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs(1)	$	235,751	$	260,520
Maximum exposure to loss attributable to the Company's investment in consolidated VIEs(1)	154,490		181,856
Assets of consolidated VIEs	9,990,390		9,454,572
Liabilities of consolidated VIEs	9,308,677		8,679,869

(1)As of March 31, 2020 and December 31, 2019, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $64.9 million and $104.7 million, respectively.

	For the Three months ended March 31,
	2020		2019
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	$	(166,406)	$	17,624

Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows:

	As of March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	1,167,673	$	—	$	—	$	1,167,673
Investments (includes $747,363 of accrued carried interest)	1,345,094		—		(154,490)		1,190,604
Due from affiliates	308,566		—		(20,536)		288,030
Other assets	428,853		—		(1,942)		426,911
Right-of-use operating lease assets	145,225		—		—		145,225
Assets of Consolidated Funds
Cash and cash equivalents	—		514,401		—		514,401
Investments, at fair value	—		9,086,469		8,096		9,094,565
Due from affiliates	—		6,192		—		6,192
Receivable for securities sold	—		355,149		—		355,149
Other assets	—		28,179		—		28,179
Total assets	$	3,395,411	$	9,990,390	$	(168,872)	$	13,216,929
Liabilities
Accounts payable, accrued expenses and other liabilities	$	90,613	$	—	$	—	$	90,613
Accrued compensation	69,702		—		—		69,702
Due to affiliates	73,050		—		—		73,050
Performance related compensation payable	532,665		—		—		532,665
Debt obligations	1,046,775		—		—		1,046,775
Operating lease liabilities	169,828		—		—		169,828
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		72,486		—		72,486
Due to affiliates	—		14,382		(14,382)		—
Payable for securities purchased	—		796,316		—		796,316
CLO loan obligations, at fair value	—		8,390,053		(35,595)		8,354,458
Fund borrowings	—		35,440		—		35,440
Total liabilities	1,982,633		9,308,677		(49,977)		11,241,333
Commitments and contingencies
Non-controlling interest in Consolidated Funds	—		681,713		(118,895)		562,818
Non-controlling interest in Ares Operating Group entities	514,166		—		—		514,166
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (132,373,743 shares issued and outstanding)	1,324		—		—		1,324
Class B common stock, $0.01 par value,1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (115,199,621 shares issued and outstanding)	1,152		—		—		1,152
Additional paid-in-capital	746,595		—		—		746,595
Retained earnings	(138,371)		—		—		(138,371)
Accumulated other comprehensive loss, net of tax	(10,849)		—		—		(10,849)
Total stockholders' equity	898,612		—		—		898,612
Total equity	1,412,778		681,713		(118,895)		1,975,596
Total liabilities, non-controlling interests and equity	$	3,395,411	$	9,990,390	$	(168,872)	$	13,216,929

	As of December 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	138,384	$	—	$	—	$	138,384
Investments (includes $1,134,967 of accrued carried interest)	1,845,520		—		(181,856)		1,663,664
Due from affiliates	282,197		—		(14,098)		268,099
Other assets	343,674		—		(2,381)		341,293
Right-of-use operating lease assets	143,406		—		—		143,406
Assets of Consolidated Funds
Cash and cash equivalents	—		606,321		—		606,321
Investments, at fair value	—		8,723,169		4,778		8,727,947
Due from affiliates	—		6,192		—		6,192
Receivable for securities sold	—		88,809		—		88,809
Other assets	—		30,081		—		30,081
Total assets	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196
Liabilities
Accounts payable, accrued expenses and other liabilities	$	88,173	$	—	$	—	$	88,173
Accrued compensation	37,795		—		—		37,795
Due to affiliates	71,445		—		—		71,445
Performance related compensation payable	829,764		—		—		829,764
Debt obligations	316,609		—		—		316,609
Operating lease liabilities	168,817		—		—		168,817
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		61,857		—		61,857
Due to affiliates	—		11,700		(11,700)		—
Payable for securities purchased	—		500,146		—		500,146
CLO loan obligations	—		7,998,922		(25,174)		7,973,748
Fund borrowings	—		107,244		—		107,244
Total liabilities	1,512,603		8,679,869		(36,874)		10,155,598
Commitments and contingencies
Non-controlling interest in Consolidated Funds	—		774,703		(156,683)		618,020
Non-controlling interest in Ares Operating Group entities	472,288		—		—		472,288
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (115,242,028 shares issued and outstanding)	1,152		—		—		1,152
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding)	—		—		—		—
Additional paid-in-capital	525,244		—		—		525,244
Retained earnings	(50,820)		—		—		(50,820)
Accumulated other comprehensive loss, net of tax	(6,047)		—		—		(6,047)
Total stockholders' equity	768,290		—		—		768,290
Total equity	1,240,578		774,703		(156,683)		1,858,598
Total liabilities, non-controlling interests and equity	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196

Schedule of results from operations

	Three months ended March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $43,923)	$	274,351	$	—	$	(10,502)	$	263,849
Carried interest allocation	(230,876)		—		—		(230,876)
Incentive fees	(3,294)		—		45		(3,249)
Principal investment loss	(75,988)		—		49,265		(26,723)
Administrative, transaction and other fees	13,725		—		(3,317)		10,408
Total revenues	(22,082)		—		35,491		13,409
Expenses
Compensation and benefits	180,084		—		—		180,084
Performance related compensation	(167,899)		—		—		(167,899)
General, administrative and other expense	62,331		—		—		62,331
Expenses of the Consolidated Funds	—		17,899		(10,456)		7,443
Total expenses	74,516		17,899		(10,456)		81,959
Other income (expense)
Net realized and unrealized losses on investments	(35,695)		—		27,661		(8,034)
Interest and dividend income	2,602		—		(812)		1,790
Interest expense	(5,306)		—		—		(5,306)
Other expense, net	4,962		—		502		5,464
Net realized and unrealized losses on investments of the Consolidated Funds	—		(230,173)		(24,588)		(254,761)
Interest and other income of the Consolidated Funds	—		113,225		—		113,225
Interest expense of the Consolidated Funds	—		(81,297)		1,056		(80,241)
Total other expense	(33,437)		(198,245)		3,819		(227,863)
Loss before taxes	(130,035)		(216,144)		49,766		(296,413)
Income tax expense (benefit)	(20,644)		28		—		(20,616)
Net loss	(109,391)		(216,172)		49,766		(275,797)
Less: Net loss attributable to non-controlling interests in Consolidated Funds	—		(216,172)		49,766		(166,406)
Less: Net loss attributable to non-controlling interests in in Ares Operating Group entities	(78,355)		—		—		(78,355)
Net loss attributable to Ares Management Corporation	(31,036)		—		—		(31,036)
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net loss attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	—	$	—	$	(36,461)

	Three months ended March 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $38,393)	$	233,072	$	—	$	(8,413)	$	224,659
Carried interest allocation	197,293		—		—		197,293
Incentive fees	17,249		—		(434)		16,815
Principal investment income	29,892		—		(1,133)		28,759
Administrative, transaction and other fees	9,671		—		—		9,671
Total revenues	487,177		—		(9,980)		477,197
Expenses
Compensation and benefits	156,846		—		—		156,846
Performance related compensation	156,520		—		—		156,520
General, administrative and other expense	51,187		—		—		51,187
Expenses of the Consolidated Funds	—		13,401		(8,847)		4,554
Total expenses	364,553		13,401		(8,847)		369,107
Other income (expense)
Net realized and unrealized gains on investments	4,424		—		(948)		3,476
Interest and dividend income	2,324		—		(480)		1,844
Interest expense	(5,589)		—		—		(5,589)
Other expense, net	(4,868)		—		371		(4,497)
Net realized and unrealized gains on investments of the Consolidated Funds	—		3,748		616		4,364
Interest and other income of the Consolidated Funds	—		93,184		—		93,184
Interest expense of the Consolidated Funds	—		(65,725)		813		(64,912)
Total other income (expense)	(3,709)		31,207		372		27,870
Income before taxes	118,915		17,806		(761)		135,960
Income tax expense (benefit)	14,963		(579)		—		14,384
Net income	103,952		18,385		(761)		121,576
Less: Net income attributable to non-controlling interests in Consolidated Funds	—		18,385		(761)		17,624
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	59,003		—		—		59,003
Net income attributable to Ares Management Corporation	44,949		—		—		44,949
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net income attributable to Ares Management Corporation Class A common stockholders	$	39,524	$	—	$	—	$	39,524

Schedule of cash flows

	Three months ended March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net loss	$	(109,391)	$	(216,172)	$	49,766	$	(275,797)
Adjustments to reconcile net loss to net cash used in operating activities	190,761				(65,691)		125,070
Adjustments to reconcile net loss to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds			(478,695)		25,680		(453,015)
Cash flows due to changes in operating assets and liabilities	45,995				6,000		51,995
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:			99,272		89,238		188,510
Net cash provided by (used in) operating activities	127,365		(595,595)		104,993		(363,237)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(3,062)		—		—		(3,062)
Acquisitions	(35,844)		—		—		(35,844)
Net cash used in investing activities	(38,906)		—		—		(38,906)
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,334		—		—		383,334
Proceeds from credit facility	790,000		—		—		790,000
Repayments of credit facility	(60,000)		—		—		(60,000)
Dividends and distributions	(106,838)		—		—		(106,838)
Series A Preferred Stock dividends and distributions	(5,425)		—		—		(5,425)
Stock option exercises	19,551		—		—		19,551
Taxes paid related to net share settlement of equity awards	(73,500)		—		—		(73,500)
Other financing activities	(2,125)		—		—		(2,125)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		148,270		(15,005)		133,265
Distributions to non-controlling interests in Consolidated Funds	—		(15,426)		1,934		(13,492)
Borrowings under loan obligations by Consolidated Funds	—		454,391		—		454,391
Repayments under loan obligations by Consolidated Funds	—		(73,609)		—		(73,609)
Net cash provided by financing activities	944,997		513,626		(13,071)		1,445,552
Effect of exchange rate changes	(4,167)		(9,953)		—		(14,120)
Net change in cash and cash equivalents	1,029,289		(91,922)		91,922		1,029,289
Cash and cash equivalents, beginning of period	138,384		606,321		(606,321)		138,384
Cash and cash equivalents, end of period	$	1,167,673	$	514,399	$	(514,399)	$	1,167,673

	Three months ended March 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	103,952	$	18,385	$	(761)	$	121,576
Adjustments to reconcile net income to net cash used in operating activities	(79,008)		—		89,774		10,766
Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds	—		(415,841)		(616)		(416,457)
Cash flows due to changes in operating assets and liabilities	4,306		—		(769)		3,537
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:	—		83,267		(152,535)		(69,268)
Net cash provided by (used in) operating activities	29,250		(314,189)		(64,907)		(349,846)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(2,994)		—		—		(2,994)
Net cash used in investing activities	(2,994)		—		—		(2,994)
Cash flows from financing activities:
Proceeds from credit facility	145,000		—		—		145,000
Repayments of credit facility	(60,000)		—		—		(60,000)
Dividends and distributions	(75,479)		—		—		(75,479)
Series A Preferred Stock dividends and distributions	(5,425)		—		—		(5,425)
Taxes paid related to net share settlement of equity awards	(21,121)		—		—		(21,121)
Other financing activities	2,140		—		—		2,140
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		148,691		(94,656)		54,035
Distributions to non-controlling interests in Consolidated Funds	—		(23,629)		2,893		(20,736)
Borrowings under loan obligations by Consolidated Funds	—		392,777		3,367		396,144
Repayments under loan obligations by Consolidated Funds	—		(61,227)		—		(61,227)
Net cash provided by (used in) financing activities	(14,885)		456,612		(88,396)		353,331
Effect of exchange rate changes	(1,120)		10,880		—		9,760
Net change in cash and cash equivalents	10,251		153,303		(153,303)		10,251
Cash and cash equivalents, beginning of period	110,247		384,644		(384,644)		110,247
Cash and cash equivalents, end of period	$	120,498	$	537,947	$	(537,947)	$	120,498

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EQUITY COMPENSATION

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

EQUITY COMPENSATION

EQUITY COMPENSATION

Equity Incentive Plan

Equity-based compensation is granted under the Company's 2014 Equity Incentive Plan, as amended and restated on March 1, 2018 and as further amended and restated, effective November 26, 2018 (the "Equity Incentive Plan"). The total number of shares available to be issued under the Equity Incentive Plan resets based on a formula defined in the Equity Incentive Plan and may increase on January 1 of each year. On January 1, 2020, the total number of shares available for issuance under the Equity Incentive Plan reset to 37,528,029 shares, and as of March 31, 2020, 34,495,433 shares remain available for issuance.

Generally, unvested restricted units and options are forfeited upon termination of employment in accordance with the Equity Incentive Plan. The Company recognizes forfeitures as a reversal of previously recognized compensation expense in the period the forfeiture occurs.

Equity-based compensation expense, net of forfeitures, recorded by the Company is included in the following table:

	Three months ended March 31,
	2020		2019
Restricted units	$	28,381	$	23,012
Restricted units with a market condition	4,133		891
Options	43		3,101
Phantom shares	—		548
Equity-based compensation expense	$	32,557	$	27,552

Restricted Units

Each restricted unit represents an unfunded, unsecured right of the holder to receive a share of the Company's Class A common stock on a specific date. The restricted units generally vest and are settled in shares of Class A common stock either (i) at a rate of one-third per year, beginning on the third anniversary of the grant date, (ii) in their entirety on the fifth anniversary of the grant date, (iii) at a rate of one quarter per year, beginning on either the first or second anniversary of the grant date or the holder's employment commencement date, or (iv) at a rate of one third per year, beginning on the first anniversary of the grant date in each case generally subject to the holder’s continued employment as of the applicable vesting date (subject to accelerated vesting upon certain qualifying terminations of employment). Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award.

The holders of restricted units, other than the market condition awards described below, generally have the right to receive as current compensation an amount in cash equal to (i) the amount of any dividend paid with respect to a share of Class A common stock multiplied by (ii) the number of restricted units held at the time such dividends are declared (“Dividend Equivalent”). During the three months ended March 31, 2020, the Company declared a dividend of $0.40 per share to Class A common stockholders at the close of business on March 17, 2020. For the three months ended March 31, 2020, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $6.4 million, which are presented as a component of dividends within the Condensed Consolidated Statements of Changes in Equity. When units are forfeited, the cumulative amount of dividend equivalents previously paid is reclassified to compensation and benefits expense in the Condensed Consolidated Statements of Operations.

The following table presents unvested restricted units' activity:

	Restricted Units	Weighted Average Grant Date Fair Value Per Unit
Balance - January 1, 2020	16,810,473	$	20.07
Granted	3,268,133	36.85
Vested	(3,921,722)	19.21
Forfeited	(211,925)	21.42
Balance - March 31, 2020	15,944,959	$	23.69

The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $291.3 million as of March 31, 2020 and is expected to be recognized over the remaining weighted average period of 3.17 years.

Restricted Unit Awards with a Market Condition

The following table presents the unvested market condition awards' activity:

	Market Condition Awards Units	Weighted Average Grant Date Fair Value Per Unit
Balance - January 1, 2020	1,333,334	$	9.30
Granted	—	—
Vested	(666,667)	10.92
Forfeited	—	—
Balance - March 31, 2020	666,667	$	7.68

For the three months ended March 31, 2020, the market-priced vesting condition was met for one of the tranches of the market condition awards and compensation expense of $3.7 million was accelerated. The total compensation expense expected to be recognized in all future periods associated with the market condition awards is approximately $3.1 million as of March 31, 2020 and is expected to be recognized over the remaining weighted average period of 2.63 years.

Options

A summary of options activity during the three months ended March 31, 2020 is presented below:

	Options	Weighted Average Exercise Price		Weighted Average Remaining Life (in years)	Aggregate Intrinsic Value
Balance - January 1, 2020	13,426,870	$	18.99	4.34	$	224,260
Granted	—	—		—	—
Exercised	(1,134,677)	19.00		—	—
Expired	—	—		—	—
Forfeited	—	—		—	—
Balance - March 31, 2020	12,292,193	$	18.99	4.00	$	146,811
Exercisable at March 31, 2020	12,292,193	$	18.99	4.00	$	146,811

Net cash proceeds from exercises of stock options were $21.6 million for the three months ended March 31, 2020. The Company realized tax benefits of approximately $2.9 million from those exercises.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Indemnification Arrangements

Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded in the Condensed Consolidated Statements of Financial Condition. As of March 31, 2020, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

Commitments

As of March 31, 2020 and December 31, 2019, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $398.2 million and $387.4 million, respectively.

Performance Income

Performance income is affected by changes in the fair values of the underlying investments in the funds that we advise. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, public equity market volatility, industry trading multiples and interest rates. Generally, if at the termination of a fund (and increasingly at interim points in the life of a fund), the fund has not achieved investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company will be obligated to repay carried interest that was received by the Company in excess of the amounts to which the Company is entitled. This contingent obligation is normally reduced by income taxes paid by the Company related to its carried interest. 

Senior professionals of the Company who have received carried interest distributions are responsible for funding their proportionate share of any contingent repayment obligations. However, the governing agreements of certain of the Company's funds provide that if a current or former professional does not fund his or her respective share for such fund, then the Company may have to fund additional amounts beyond what was received in carried interest, although the Company will generally retain the right to pursue any remedies under such governing agreements against those carried interest recipients who fail to fund their obligations.

Additionally, at the end of the life of the funds there could be a payment due to a fund by the Company if the Company has recognized more performance income than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund.

At March 31, 2020 and December 31, 2019, if the Company assumed all existing investments were worthless, the amount of performance income subject to potential repayment, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $282.8 million and $233.4 million, respectively, of which approximately $217.3 million and $175.1 million, respectively, is reimbursable to the Company by certain professionals who are the recipients of such performance income. Management believes the possibility of all of the investments becoming worthless is remote. As of March 31, 2020, if the funds were liquidated at their fair values, there would be $0.5 million contingent repayment obligation or liability. As of December 31, 2019, if the funds were liquidated at their fair values, there would be no contingent repayment obligation or liability.

Litigation

From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.

Leases

The Company leases office space and certain office equipment. The Company's leases have remaining lease terms of one to 10 years. The tables below present certain supplemental quantitative disclosures regarding the Company's leases as of March 31, 2020 and December 31, 2019 and for the three months ended March 31, 2020 and 2019:

	Classification	As of March 31, 2020		As of December 31, 2019
Operating lease assets	Right-of-use operating lease assets	$	145,225	$	143,406
Finance lease assets	Other assets(1)	1,756		1,787
Total lease assets		$	146,981	$	145,193
Operating lease liabilities	Operating lease liabilities	$	169,828	$	168,817
Finance lease obligations	Accounts payable, accrued expenses and other liabilities	1,698		1,651
Total lease liabilities		$	171,526	$	170,468

(1) Finance lease assets are recorded net of accumulated amortization of $0.7 million and $0.6 million as of March 31, 2020 and December 31, 2019, respectively.

	Classification	Three months ended March 31, 2020		Three months ended March 31, 2019
Operating lease expense	General, administrative and other expenses	$	7,632	$	6,938
Finance lease expense:
Amortization of finance lease assets	General, administrative and other expenses	94		27
Interest on finance lease liabilities	Interest expense	11		13
Total lease expense		$	7,737	$	6,978

Other information	Three months ended March 31, 2020		Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	8,178	$	7,682
Operating cash flows for finance leases	6		52
Financing cash flows for finance leases	36		264
Leased assets obtained in exchange for new operating lease liabilities	8,744		45,435

Lease term and discount rate	As of March 31, 2020		As of December 31, 2019
Weighted-average remaining lease terms (in years):
Operating leases	6.4		6.5
Finance leases	3.2		3.3
Weighted-average discount rate:
Operating leases	3.97	%	4.00	%
Finance leases	3.38	%	3.39	%

Maturity of lease liabilities	Operating Leases		Finance Leases
2020	$	22,173	$	461
2021	30,320		516
2022	31,506		485
2023	28,026		158
2024	25,178		156
After 2024	55,515		7
Total future payments	192,718		1,783
Less: interest	22,890		85
Total lease liabilities	$	169,828	$	1,698

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INVESTMENTS

3 Months Ended

Mar. 31, 2020

Investments in and Advances to Affiliates [Abstract]

INVESTMENTS

INVESTMENTS

The Company’s investments are comprised of the following:

					Percentage of total investments as of
	March 31,		December 31,		March 31,		December 31,
	2020		2019		2020		2019
Equity method investments:
Equity method private investment partnership interests - principal (1)	$	345,350	$	390,407	29.0	%	23.5	%
Equity method - carried interest (1)	747,363		1,134,967		62.8		68.2
Equity method private investment partnership interests and other (held at fair value)	18,911		51,528		1.6		3.1
Equity method private investment partnership interests and other	12,763		16,536		1.0		1.0
Total equity method investments	1,124,387		1,593,438		94.4		95.8
Collateralized loan obligations (2)	17,783		22,265		1.5		1.3
Other fixed income	47,561		46,918		4.0		2.8
Collateralized loan obligations and other fixed income, at fair value	65,344		69,183		5.5		4.1
Common stock, at fair value	873		1,043		0.1		0.1
Total investments	$	1,190,604	$	1,663,664

(1)Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date.

(2)Includes $2.6 million of collateralized loan obligations that are attributable to the Crestline Denali Class B Interests.

Equity Method Investments

The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant as defined by guidance from the SEC. As of and for the three months ended March 31, 2020 and 2019 no individual equity method investment held by the Company met the significance criteria.

The Company recognized a net loss related to its equity method investments of $28.8 million for the three months ended March 31, 2020. The Company recognized a net gain related to its equity method investments of $29.0 million for the three months ended March 31, 2019. The net gains and losses were included within principal investment income, net realized and unrealized gains on investments, and interest and dividend income within the Condensed Consolidated Statements of Operations.

With respect to the Company's equity method investments, the material assets are expected to generate either long-term capital appreciation and or interest income while the material liabilities are debt instruments collateralized by, or related to, the financing of the assets and net income is materially comprised of the changes in fair value of these net assets.

Investments of the Consolidated Funds

Investments held in the Consolidated Funds are summarized below:

	Fair Value at				Percentage of total investments as of
	March 31,		December 31,		March 31,		December 31,
	2020		2019		2020		2019
Fixed income investments:
Bonds	$	200,152	$	212,376	2.2	%	2.4	%
Loans	8,533,658		8,062,740		93.8		92.4
Investments in CLO warehouse	—		44,435		—		0.5
Total fixed income investments	8,733,810		8,319,551		96.0		95.3
Equity securities	53,730		112,384		0.6		1.3
Partnership interests	307,025		296,012		3.4		3.4
Total investments, at fair value	$	9,094,565	$	8,727,947

At March 31, 2020 and December 31, 2019, no single issuer or investment, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5.0% of the Company’s total assets.

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SUBSEQUENT EVENTS (Details) - Subsequent event	1 Months Ended
	Apr. 30, 2020 $ / shares
Subsequent events
Quarterly distribution declared (in dollars per unit)	$ 0.40
Preferred equity quarterly distribution (in dollars per unit)	$ 0.4375

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SEGMENT REPORTING (Revenue Reconciliation) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue adjustment
Total revenues	$ 13,409	$ 477,197
Principal investment income	(13,771)	(14,385)
Total segment revenue	429,420	304,660
Ares Management L.P
Revenue adjustment
Total revenues	13,409	477,197
Operating segment | Ares Management L.P
Revenue adjustment
Performance (income) loss-unrealized	387,657	(146,575)
Total segment revenue	429,420	304,660
Reconciling items
Revenue adjustment
Performance fee reclass	26,723	(28,759)
Principal investment income	75,988	(29,892)
Total segment revenue	416,011	(172,537)
Reconciling items | Non-Controlling interest | Subsidiaries
Revenue adjustment
Total segment revenue	(765)	(54)
Reconciling items | Performance income reclass
Revenue adjustment
Performance fee reclass	(1,717)	606
Management fees | Ares Management L.P
Revenue adjustment
Total revenues	263,849	224,659
Management fees | Operating segment | Ares Management L.P
Revenue adjustment
Total revenues	273,778	233,012
Management fees | Consolidated Funds | Eliminations
Revenue adjustment
Total segment revenue	10,502	8,413
Carried interest allocation | Ares Management L.P
Revenue adjustment
Total revenues	(230,876)	197,293
Incentive fees | Ares Management L.P
Revenue adjustment
Total revenues	(3,249)	16,815
Incentive fees | Consolidated Funds | Eliminations
Revenue adjustment
Total revenues	(45)	434
Principal investment income (loss) | Ares Management L.P
Revenue adjustment
Total revenues	(26,723)	28,759
Administrative, transaction and other fees
Revenue adjustment
Total revenues	0	0
Administrative, transaction and other fees | Ares Management L.P
Revenue adjustment
Total revenues	10,408	9,671
Administrative, transaction and other fees | Reconciling items
Revenue adjustment
Total revenues	(9,661)	(6,602)
Administrative, transaction and other fees | Consolidated Funds | Reconciling items
Revenue adjustment
Total revenues	$ 3,317	$ 0

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CONSOLIDATION (Variable Interest Entities) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Variable Interest Entity [Line Items]
Assets of consolidated VIEs	$ 13,216,929		$ 12,014,196
Liabilities of consolidated VIEs	11,241,333		10,155,598
Investments in CLO warehouse
Variable Interest Entity [Line Items]
Maximum exposure to loss attributable to the Company's investment in VIEs	64,900		104,700
Consolidated Funds
Variable Interest Entity [Line Items]
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	(166,406)	$ 17,624
Non-Consolidated Variable Interest Entities
Variable Interest Entity [Line Items]
Maximum exposure to loss attributable to the Company's investment in VIEs	235,751		260,520
Consolidated VIEs
Variable Interest Entity [Line Items]
Maximum exposure to loss attributable to the Company's investment in VIEs	154,490		181,856
Consolidated VIEs | Consolidated Funds
Variable Interest Entity [Line Items]
Assets of consolidated VIEs	9,990,390		9,454,572
Liabilities of consolidated VIEs	$ 9,308,677		$ 8,679,869

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COMMITMENTS AND CONTINGENCIES (Leases: Lease Term and Discount Rate) (Details)	Mar. 31, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Weighted-average remaining lease terms, operating lease	6 years 4 months 24 days	6 years 6 months
Weighted-average remaining lease terms, finance lease	3 years 2 months 12 days	3 years 3 months 18 days
Weighted-average discount rate, operating lease	3.97%	4.00%
Weighted-average discount rate, finance lease	3.38%	3.39%

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
COMMITMENTS AND CONTINGENCIES
Unfunded capital commitments	$ 398.2	$ 387.4
Performance Income
Carried interest, contingent repayment obligations	0.5	0.0
Performance Income
Performance Income
Performance income subject to potential clawback provision	282.8	233.4
Performance income subject to potential claw back provision that are reimbursable by professionals	$ 217.3	$ 175.1

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EQUITY COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of equity-based compensation expense, net of assumed forfeitures

Equity-based compensation expense, net of forfeitures, recorded by the Company is included in the following table:

	Three months ended March 31,
	2020		2019
Restricted units	$	28,381	$	23,012
Restricted units with a market condition	4,133		891
Options	43		3,101
Phantom shares	—		548
Equity-based compensation expense	$	32,557	$	27,552

Summary of unvested restricted units' activity

The following table presents unvested restricted units' activity:

	Restricted Units	Weighted Average Grant Date Fair Value Per Unit
Balance - January 1, 2020	16,810,473	$	20.07
Granted	3,268,133	36.85
Vested	(3,921,722)	19.21
Forfeited	(211,925)	21.42
Balance - March 31, 2020	15,944,959	$	23.69

The following table presents the unvested market condition awards' activity:

	Market Condition Awards Units	Weighted Average Grant Date Fair Value Per Unit
Balance - January 1, 2020	1,333,334	$	9.30
Granted	—	—
Vested	(666,667)	10.92
Forfeited	—	—
Balance - March 31, 2020	666,667	$	7.68

Summary of unvested options activity

A summary of options activity during the three months ended March 31, 2020 is presented below:

	Options	Weighted Average Exercise Price		Weighted Average Remaining Life (in years)	Aggregate Intrinsic Value
Balance - January 1, 2020	13,426,870	$	18.99	4.34	$	224,260
Granted	—	—		—	—
Exercised	(1,134,677)	19.00		—	—
Expired	—	—		—	—
Forfeited	—	—		—	—
Balance - March 31, 2020	12,292,193	$	18.99	4.00	$	146,811
Exercisable at March 31, 2020	12,292,193	$	18.99	4.00	$	146,811

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ORGANIZATION (Details)	Feb. 21, 2020 contract
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of collateral management contracts acquired	7

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Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Preferred stock, shares issued (in shares)	12,400,000	12,400,000
Preferred stock, shares outstanding (in shares)	12,400,000	12,400,000
Common stock, shares outstanding (in shares)	247,574,364	115,243,029
Class A common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (in shares)	132,373,743	115,242,028
Common stock, shares outstanding (in shares)	132,373,743	115,242,028
Class B common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000	1,000
Common stock, shares issued (in shares)	1,000	1,000
Common stock, shares outstanding (in shares)	1,000	1,000
Class C common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	499,999,000	499,999,000
Common stock, shares issued (in shares)	115,199,621	1
Common stock, shares outstanding (in shares)	115,199,621	1
Ares Management L.P
Investments	$ 1,190,604	$ 1,663,664
Ares Management L.P | Accrued Interest
Investments	$ 747,363	$ 1,134,967

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Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Preferred Class A	Common Stock Class A common stock	Common Stock Class C common stock	Additional Paid-in-Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-Controlling interest AOG	Non-Controlling interest Consolidated Funds
Balance at Dec. 31, 2018	$ 1,394,341	$ 298,761	$ 1,016		$ 326,007	$ (29,336)	$ (8,524)	$ 302,780	$ 503,637
Increase (Decrease) in Stockholders' Equity
Relinquished with deconsolidation of funds	(55)								(55)
Changes in ownership interests and related tax benefits	(18,397)		15		(6,339)			(12,073)
Capital contributions	55,911							1,876	54,035
Dividends/Distributions	(101,640)	(5,425)				(35,367)		(40,112)	(20,736)
Net income (loss)	121,576	5,425				39,524		59,003	17,624
Currency translation adjustment	1,084						1,284	1,459	(1,659)
Equity compensation	27,004				12,637			14,367
Equity compensation at Mar. 31, 2019	1,479,824	298,761	1,031		332,305	(25,179)	(7,240)	327,300	552,846
Increase (Decrease) in Stockholders' Equity
Changes in ownership interests and related tax benefits	(11,508)		5		(32,128)			20,615
Repurchases of Class A common stock	(10,449)		(4)		(10,445)
Capital contributions	61,464								61,464
Dividends/Distributions	(92,529)	(5,425)				(36,782)		(40,103)	(10,219)
Net income (loss)	74,878	5,425				26,714		34,393	8,346
Currency translation adjustment	(1,991)						(1,639)	(1,858)	1,506
Equity compensation	23,841				11,306			12,535
Stock option exercises	78,794		43		78,751
Equity compensation at Jun. 30, 2019	1,602,324	298,761	1,075		379,789	(35,247)	(8,879)	352,882	613,943
Increase (Decrease) in Stockholders' Equity
Changes in ownership interests and related tax benefits	1,209		1		(94,004)			95,212
Capital contributions	256,096		70		206,635				49,391
Dividends/Distributions	(125,982)	(5,425)				(36,967)		(48,970)	(34,620)
Net income (loss)	91,875	5,425				27,906		42,636	15,908
Currency translation adjustment	(9,429)						(2,131)	(2,352)	(4,946)
Equity compensation	22,393				10,816			11,577
Stock option exercises	4,296		1		4,295
Equity compensation at Sep. 30, 2019	1,842,782	298,761	1,147		507,531	(44,308)	(11,010)	450,985	639,676
Increase (Decrease) in Stockholders' Equity
Changes in ownership interests and related tax benefits	83		1		(1,505)			1,587
Capital contributions	7,961								7,961
Dividends/Distributions	(121,498)	(5,425)				(39,552)		(45,814)	(30,707)
Net income (loss)	84,475	5,425				33,040		48,184	(2,174)
Currency translation adjustment	13,658						4,963	5,431	3,264
Equity compensation	23,716				11,801			11,915
Stock option exercises	7,421		4		7,417
Equity compensation at Dec. 31, 2019	1,858,598	298,761	1,152	$ 0	525,244	(50,820)	(6,047)	472,288	618,020
Increase (Decrease) in Stockholders' Equity
Consolidation and deconsolidation of funds, net	(3,882)								(3,882)
Changes in ownership interests and related tax benefits	(74,079)		40		(196,670)			122,551
Issuances of common stock	383,334		121	1,152	382,061
Capital contributions	175,277							42,012	133,265
Dividends/Distributions	(125,755)	(5,425)				(51,090)		(55,748)	(13,492)
Net income (loss)	(275,797)	5,425				(36,461)		(78,355)	(166,406)
Currency translation adjustment	(14,208)						(4,802)	(4,719)	(4,687)
Equity compensation	32,557				16,420			16,137
Stock option exercises	19,551		11		19,540
Equity compensation at Mar. 31, 2020	$ 1,975,596	$ 298,761	$ 1,324	$ 1,152	$ 746,595	$ (138,371)	$ (10,849)	$ 514,166	$ 562,818

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DEBT

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

DEBT

DEBT

The following table summarizes the Company’s and its subsidiaries’ debt obligations:

					As of March 31, 2020			As of December 31, 2019
	Debt Origination Date	Maturity	Original Borrowing Amount		Carrying Value		Interest Rate	Carrying Value		Interest Rate
Credit Facility(1)	Revolver	3/30/2025	N/A		$	800,000	2.12%	$	70,000	3.06%
Senior Notes(2)	10/8/2014	10/8/2024	$	250,000	246,775		4.21%	246,609		4.21%
Total debt obligations					$	1,046,775		$	316,609

(1)The AOG entities are borrowers under the Credit Facility, which provides a $1.065 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. On March 30, 2020, the Company amended the Credit Facility to, among other things, extend the maturity date from March 2024 to March 2025 and to reduce borrowing costs on the undrawn amounts. As of March 31, 2020, base rate loans bear interest calculated based on the base rate plus 0.25% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.25%. The unused commitment fee is 0.13% per annum. There is a base rate and LIBOR floor of zero.  

(2)The Senior Notes were issued in October 2014 by Ares Finance Co. LLC, a subsidiary of the Company, at 98.27% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture.

As of March 31, 2020, the Company and its subsidiaries were in compliance with all covenants under the debt obligations. 

The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the Company's Senior Notes are recorded as a reduction of the corresponding debt obligation, and debt issuance costs related to the Credit Facility are included in other assets in the Condensed Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the remaining term of the related obligation.

The following table presents the activity of the Company's debt issuance costs:

	Credit Facility		Senior Notes
Unamortized debt issuance costs as of December 31, 2019	$	5,255	$	1,102
Debt issuance costs incurred	1,182		—
Amortization of debt issuance costs	(318)		(58)
Unamortized debt issuance costs as of March 31, 2020	$	6,119	$	1,044

Loan Obligations of the Consolidated CLOs

Loan obligations of the Consolidated Funds that are CLOs (“Consolidated CLOs”) represent amounts due to holders of debt securities issued by the Consolidated CLOs. The Company measures the loan obligations of the Consolidated CLOs using the fair value of the financial assets of its Consolidated CLOs.

The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs:

	As of March 31, 2020					As of December 31, 2019
	Loan Obligations		Fair Value of Loan Obligations		Weighted  Average Remaining Maturity  In Years	Loan Obligations		Fair Value of Loan Obligations		Weighted Average Remaining Maturity  In Years
Senior secured notes(1)	$	9,461,567	$	8,169,907	10.71	$	7,738,337	$	7,700,038	10.97
Subordinated notes(2)	606,407		184,551		10.85	449,877		273,710		11.02
Total loan obligations of Consolidated CLOs	$	10,067,974	$	8,354,458		$	8,188,214	$	7,973,748

(1)Original borrowings under the senior secured notes totaled $9.5 billion, with various maturity dates ranging from July 2028 to October 2032. The weighted average interest rate as of March 31, 2020 was 2.83%.

(2)Original borrowings under the subordinated notes totaled $606.4 million, with various maturity dates ranging from July 2028 to October 2032. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO.

Loan obligations of the Consolidated CLOs are collateralized by the assets held by the Consolidated CLOs, consisting of cash and cash equivalents, corporate loans, corporate bonds and other securities. The assets of one Consolidated CLO may not be used to satisfy the liabilities of another Consolidated CLO. Loan obligations of the Consolidated CLOs include floating rate notes, deferrable floating rate notes, revolving lines of credit and subordinated notes. Amounts borrowed under the notes are repaid based on available cash flows subject to priority of payments under each Consolidated CLO’s governing documents. Based on the terms of these facilities, the creditors of the facilities have no recourse to the Company.

Credit Facilities of the Consolidated Funds

Certain Consolidated Funds maintain credit facilities to fund investments between capital drawdowns. These facilities generally are collateralized by the unfunded capital commitments of the Consolidated Funds’ limited partners, bear an annual commitment fee based on unfunded commitments and contain various affirmative and negative covenants and reporting obligations, including restrictions on additional indebtedness, liens, margin stock, affiliate transactions, dividends and distributions, release of capital commitments and portfolio asset dispositions. The creditors of these facilities have no recourse to the Company and only have recourse to a subsidiary of the Company to the extent the debt is guaranteed by such subsidiary. Credit facilities of the Consolidated Funds are reflected at cost in the Condensed Consolidated Statements of Financial Condition. As of March 31, 2020 and December 31, 2019, the Consolidated Funds were in compliance with all covenants under such credit facilities.

The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding:

				As of March 31, 2020			As of December 31, 2019
Consolidated Funds' Debt Facilities	Maturity Date	Total Capacity		Outstanding Loan(1)		Effective Rate	Outstanding Loan(1)		Effective Rate
Credit Facilities:
	1/1/2023	$	18,000	$	17,909	2.62%	$	17,550	3.44%
	3/5/2021	71,500		—		N/A	71,500		3.14
	6/30/2021	192,780		—		N/A	—		N/A
	7/15/2028	75,000		16,500		4.17	17,000		4.75
Revolving Term Loan	2/9/2022	1,900		1,031		7.69	1,194		7.70
Total borrowings of Consolidated Funds				$	35,440		$	107,244

(1)The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate.

(2)The effective rate is based on the three month EURIBOR or zero, whichever is higher, plus a spread of 1.00%.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent, and that all such adjustments are of a normal recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission ("SEC").

As of March 31, 2020, the impact of the outbreak of the coronavirus (COVID-19) pandemic continues to unfold. As a result, management's estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period.

The condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. All intercompany balances and transactions have been eliminated upon consolidation.

The Company has reclassified certain prior period amounts to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds.

At March 31, 2020 and December 31, 2019, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update related to separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this update clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. An entity may elect to adopt the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent

to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. An entity may elect to apply the amendments in ASU 2020-04 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity may be made at any time after March 12, 2020 but no later than December 31, 2022. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic earnings per share of Class A common stock is computed by using the two-class method. Diluted earnings per share of Class A common stock is computed using the more dilutive method of either the two-class method or the treasury stock method. For the three months ended March 31, 2020, the Company had a net loss and earnings per share was computed under the two-class method. For the three months ended March 31, 2019, the treasury stock method was the more dilutive method.

For the three months ended March 31, 2020, the following options, restricted units and AOG Units represent the securities not included in the two-class method. For the three months ended March 31, 2019, the computation of dilutive earnings per share excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive:

	Three months ended March 31,
	2020	2019
Options	12,859,532	—
Restricted units	16,377,716	119
AOG Units	116,328,089	116,996,031

The following table presents the computation of basic and diluted earnings per common share:

	Three months ended March 31,
	2020		2019
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524
Distributions on unvested restricted units	(2,290)		(1,806)
Undistributed earnings allocable to participating unvested restricted units	—		(663)
Net income (loss) available to Class A common stockholders	$	(38,751)	$	37,055
Basic weighted-average shares of Class A common stock	118,366,539		102,906,494
Basic earnings (loss) per share of Class A common stock	$	(0.33)	$	0.36
Net income (loss) available to Class A common stockholders	$	(36,461)	$	39,524
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	39,524
Effect of dilutive shares:
Restricted units	—		5,485,250
Options	—		2,307,368
Diluted weighted-average shares of Class A common stock	118,366,539		110,699,112
Diluted earnings (loss) per share of Class A common stock	$	(0.33)	$	0.36
Dividend declared and paid per Class A common stock	$	0.40	$	0.32

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INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2020

Investments in and Advances to Affiliates [Abstract]

Summary of investments held

The Company’s investments are comprised of the following:

					Percentage of total investments as of
	March 31,		December 31,		March 31,		December 31,
	2020		2019		2020		2019
Equity method investments:
Equity method private investment partnership interests - principal (1)	$	345,350	$	390,407	29.0	%	23.5	%
Equity method - carried interest (1)	747,363		1,134,967		62.8		68.2
Equity method private investment partnership interests and other (held at fair value)	18,911		51,528		1.6		3.1
Equity method private investment partnership interests and other	12,763		16,536		1.0		1.0
Total equity method investments	1,124,387		1,593,438		94.4		95.8
Collateralized loan obligations (2)	17,783		22,265		1.5		1.3
Other fixed income	47,561		46,918		4.0		2.8
Collateralized loan obligations and other fixed income, at fair value	65,344		69,183		5.5		4.1
Common stock, at fair value	873		1,043		0.1		0.1
Total investments	$	1,190,604	$	1,663,664

(1)Investment or portion of the investment is denominated in foreign currency and is translated into U.S. dollars at each reporting date.

(2)Includes $2.6 million of collateralized loan obligations that are attributable to the Crestline Denali Class B Interests.

Investments held in the Consolidated Funds are summarized below:

	Fair Value at				Percentage of total investments as of
	March 31,		December 31,		March 31,		December 31,
	2020		2019		2020		2019
Fixed income investments:
Bonds	$	200,152	$	212,376	2.2	%	2.4	%
Loans	8,533,658		8,062,740		93.8		92.4
Investments in CLO warehouse	—		44,435		—		0.5
Total fixed income investments	8,733,810		8,319,551		96.0		95.3
Equity securities	53,730		112,384		0.6		1.3
Partnership interests	307,025		296,012		3.4		3.4
Total investments, at fair value	$	9,094,565	$	8,727,947

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CONSOLIDATION

3 Months Ended

Mar. 31, 2020

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 fair value and represent 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 in consolidated and non-consolidated VIEs, as presented in the Condensed Consolidated Statements of Financial Condition, and its respective maximum exposure to loss relating to non-consolidated VIEs are as follows:

	As of March 31,		As of December 31,
	2020		2019
Maximum exposure to loss attributable to the Company's investment in non-consolidated VIEs(1)	$	235,751	$	260,520
Maximum exposure to loss attributable to the Company's investment in consolidated VIEs(1)	154,490		181,856
Assets of consolidated VIEs	9,990,390		9,454,572
Liabilities of consolidated VIEs	9,308,677		8,679,869

(1)As of March 31, 2020 and December 31, 2019, the Company's maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs that are managed and totaled $64.9 million and $104.7 million, respectively.

	For the Three months ended March 31,
	2020		2019
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	$	(166,406)	$	17,624

Consolidating Schedules

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition, results from operations and cash flows:

	As of March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	1,167,673	$	—	$	—	$	1,167,673
Investments (includes $747,363 of accrued carried interest)	1,345,094		—		(154,490)		1,190,604
Due from affiliates	308,566		—		(20,536)		288,030
Other assets	428,853		—		(1,942)		426,911
Right-of-use operating lease assets	145,225		—		—		145,225
Assets of Consolidated Funds
Cash and cash equivalents	—		514,401		—		514,401
Investments, at fair value	—		9,086,469		8,096		9,094,565
Due from affiliates	—		6,192		—		6,192
Receivable for securities sold	—		355,149		—		355,149
Other assets	—		28,179		—		28,179
Total assets	$	3,395,411	$	9,990,390	$	(168,872)	$	13,216,929
Liabilities
Accounts payable, accrued expenses and other liabilities	$	90,613	$	—	$	—	$	90,613
Accrued compensation	69,702		—		—		69,702
Due to affiliates	73,050		—		—		73,050
Performance related compensation payable	532,665		—		—		532,665
Debt obligations	1,046,775		—		—		1,046,775
Operating lease liabilities	169,828		—		—		169,828
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		72,486		—		72,486
Due to affiliates	—		14,382		(14,382)		—
Payable for securities purchased	—		796,316		—		796,316
CLO loan obligations, at fair value	—		8,390,053		(35,595)		8,354,458
Fund borrowings	—		35,440		—		35,440
Total liabilities	1,982,633		9,308,677		(49,977)		11,241,333
Commitments and contingencies
Non-controlling interest in Consolidated Funds	—		681,713		(118,895)		562,818
Non-controlling interest in Ares Operating Group entities	514,166		—		—		514,166
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (132,373,743 shares issued and outstanding)	1,324		—		—		1,324
Class B common stock, $0.01 par value,1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (115,199,621 shares issued and outstanding)	1,152		—		—		1,152
Additional paid-in-capital	746,595		—		—		746,595
Retained earnings	(138,371)		—		—		(138,371)
Accumulated other comprehensive loss, net of tax	(10,849)		—		—		(10,849)
Total stockholders' equity	898,612		—		—		898,612
Total equity	1,412,778		681,713		(118,895)		1,975,596
Total liabilities, non-controlling interests and equity	$	3,395,411	$	9,990,390	$	(168,872)	$	13,216,929

	As of December 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Assets
Cash and cash equivalents	$	138,384	$	—	$	—	$	138,384
Investments (includes $1,134,967 of accrued carried interest)	1,845,520		—		(181,856)		1,663,664
Due from affiliates	282,197		—		(14,098)		268,099
Other assets	343,674		—		(2,381)		341,293
Right-of-use operating lease assets	143,406		—		—		143,406
Assets of Consolidated Funds
Cash and cash equivalents	—		606,321		—		606,321
Investments, at fair value	—		8,723,169		4,778		8,727,947
Due from affiliates	—		6,192		—		6,192
Receivable for securities sold	—		88,809		—		88,809
Other assets	—		30,081		—		30,081
Total assets	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196
Liabilities
Accounts payable, accrued expenses and other liabilities	$	88,173	$	—	$	—	$	88,173
Accrued compensation	37,795		—		—		37,795
Due to affiliates	71,445		—		—		71,445
Performance related compensation payable	829,764		—		—		829,764
Debt obligations	316,609		—		—		316,609
Operating lease liabilities	168,817		—		—		168,817
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities	—		61,857		—		61,857
Due to affiliates	—		11,700		(11,700)		—
Payable for securities purchased	—		500,146		—		500,146
CLO loan obligations	—		7,998,922		(25,174)		7,973,748
Fund borrowings	—		107,244		—		107,244
Total liabilities	1,512,603		8,679,869		(36,874)		10,155,598
Commitments and contingencies
Non-controlling interest in Consolidated Funds	—		774,703		(156,683)		618,020
Non-controlling interest in Ares Operating Group entities	472,288		—		—		472,288
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding)	298,761		—		—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (115,242,028 shares issued and outstanding)	1,152		—		—		1,152
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding)	—		—		—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (1 share issued and outstanding)	—		—		—		—
Additional paid-in-capital	525,244		—		—		525,244
Retained earnings	(50,820)		—		—		(50,820)
Accumulated other comprehensive loss, net of tax	(6,047)		—		—		(6,047)
Total stockholders' equity	768,290		—		—		768,290
Total equity	1,240,578		774,703		(156,683)		1,858,598
Total liabilities, non-controlling interests and equity	$	2,753,181	$	9,454,572	$	(193,557)	$	12,014,196

	Three months ended March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $43,923)	$	274,351	$	—	$	(10,502)	$	263,849
Carried interest allocation	(230,876)		—		—		(230,876)
Incentive fees	(3,294)		—		45		(3,249)
Principal investment loss	(75,988)		—		49,265		(26,723)
Administrative, transaction and other fees	13,725		—		(3,317)		10,408
Total revenues	(22,082)		—		35,491		13,409
Expenses
Compensation and benefits	180,084		—		—		180,084
Performance related compensation	(167,899)		—		—		(167,899)
General, administrative and other expense	62,331		—		—		62,331
Expenses of the Consolidated Funds	—		17,899		(10,456)		7,443
Total expenses	74,516		17,899		(10,456)		81,959
Other income (expense)
Net realized and unrealized losses on investments	(35,695)		—		27,661		(8,034)
Interest and dividend income	2,602		—		(812)		1,790
Interest expense	(5,306)		—		—		(5,306)
Other expense, net	4,962		—		502		5,464
Net realized and unrealized losses on investments of the Consolidated Funds	—		(230,173)		(24,588)		(254,761)
Interest and other income of the Consolidated Funds	—		113,225		—		113,225
Interest expense of the Consolidated Funds	—		(81,297)		1,056		(80,241)
Total other expense	(33,437)		(198,245)		3,819		(227,863)
Loss before taxes	(130,035)		(216,144)		49,766		(296,413)
Income tax expense (benefit)	(20,644)		28		—		(20,616)
Net loss	(109,391)		(216,172)		49,766		(275,797)
Less: Net loss attributable to non-controlling interests in Consolidated Funds	—		(216,172)		49,766		(166,406)
Less: Net loss attributable to non-controlling interests in in Ares Operating Group entities	(78,355)		—		—		(78,355)
Net loss attributable to Ares Management Corporation	(31,036)		—		—		(31,036)
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net loss attributable to Ares Management Corporation Class A common stockholders	$	(36,461)	$	—	$	—	$	(36,461)

	Three months ended March 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $38,393)	$	233,072	$	—	$	(8,413)	$	224,659
Carried interest allocation	197,293		—		—		197,293
Incentive fees	17,249		—		(434)		16,815
Principal investment income	29,892		—		(1,133)		28,759
Administrative, transaction and other fees	9,671		—		—		9,671
Total revenues	487,177		—		(9,980)		477,197
Expenses
Compensation and benefits	156,846		—		—		156,846
Performance related compensation	156,520		—		—		156,520
General, administrative and other expense	51,187		—		—		51,187
Expenses of the Consolidated Funds	—		13,401		(8,847)		4,554
Total expenses	364,553		13,401		(8,847)		369,107
Other income (expense)
Net realized and unrealized gains on investments	4,424		—		(948)		3,476
Interest and dividend income	2,324		—		(480)		1,844
Interest expense	(5,589)		—		—		(5,589)
Other expense, net	(4,868)		—		371		(4,497)
Net realized and unrealized gains on investments of the Consolidated Funds	—		3,748		616		4,364
Interest and other income of the Consolidated Funds	—		93,184		—		93,184
Interest expense of the Consolidated Funds	—		(65,725)		813		(64,912)
Total other income (expense)	(3,709)		31,207		372		27,870
Income before taxes	118,915		17,806		(761)		135,960
Income tax expense (benefit)	14,963		(579)		—		14,384
Net income	103,952		18,385		(761)		121,576
Less: Net income attributable to non-controlling interests in Consolidated Funds	—		18,385		(761)		17,624
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	59,003		—		—		59,003
Net income attributable to Ares Management Corporation	44,949		—		—		44,949
Less: Series A Preferred Stock dividends paid	5,425		—		—		5,425
Net income attributable to Ares Management Corporation Class A common stockholders	$	39,524	$	—	$	—	$	39,524

	Three months ended March 31, 2020
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net loss	$	(109,391)	$	(216,172)	$	49,766	$	(275,797)
Adjustments to reconcile net loss to net cash used in operating activities	190,761				(65,691)		125,070
Adjustments to reconcile net loss to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds			(478,695)		25,680		(453,015)
Cash flows due to changes in operating assets and liabilities	45,995				6,000		51,995
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:			99,272		89,238		188,510
Net cash provided by (used in) operating activities	127,365		(595,595)		104,993		(363,237)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(3,062)		—		—		(3,062)
Acquisitions	(35,844)		—		—		(35,844)
Net cash used in investing activities	(38,906)		—		—		(38,906)
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,334		—		—		383,334
Proceeds from credit facility	790,000		—		—		790,000
Repayments of credit facility	(60,000)		—		—		(60,000)
Dividends and distributions	(106,838)		—		—		(106,838)
Series A Preferred Stock dividends and distributions	(5,425)		—		—		(5,425)
Stock option exercises	19,551		—		—		19,551
Taxes paid related to net share settlement of equity awards	(73,500)		—		—		(73,500)
Other financing activities	(2,125)		—		—		(2,125)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		148,270		(15,005)		133,265
Distributions to non-controlling interests in Consolidated Funds	—		(15,426)		1,934		(13,492)
Borrowings under loan obligations by Consolidated Funds	—		454,391		—		454,391
Repayments under loan obligations by Consolidated Funds	—		(73,609)		—		(73,609)
Net cash provided by financing activities	944,997		513,626		(13,071)		1,445,552
Effect of exchange rate changes	(4,167)		(9,953)		—		(14,120)
Net change in cash and cash equivalents	1,029,289		(91,922)		91,922		1,029,289
Cash and cash equivalents, beginning of period	138,384		606,321		(606,321)		138,384
Cash and cash equivalents, end of period	$	1,167,673	$	514,399	$	(514,399)	$	1,167,673

	Three months ended March 31, 2019
	Consolidated Company  Entities		Consolidated Funds		Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	103,952	$	18,385	$	(761)	$	121,576
Adjustments to reconcile net income to net cash used in operating activities	(79,008)		—		89,774		10,766
Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds	—		(415,841)		(616)		(416,457)
Cash flows due to changes in operating assets and liabilities	4,306		—		(769)		3,537
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds:	—		83,267		(152,535)		(69,268)
Net cash provided by (used in) operating activities	29,250		(314,189)		(64,907)		(349,846)
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(2,994)		—		—		(2,994)
Net cash used in investing activities	(2,994)		—		—		(2,994)
Cash flows from financing activities:
Proceeds from credit facility	145,000		—		—		145,000
Repayments of credit facility	(60,000)		—		—		(60,000)
Dividends and distributions	(75,479)		—		—		(75,479)
Series A Preferred Stock dividends and distributions	(5,425)		—		—		(5,425)
Taxes paid related to net share settlement of equity awards	(21,121)		—		—		(21,121)
Other financing activities	2,140		—		—		2,140
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	—		148,691		(94,656)		54,035
Distributions to non-controlling interests in Consolidated Funds	—		(23,629)		2,893		(20,736)
Borrowings under loan obligations by Consolidated Funds	—		392,777		3,367		396,144
Repayments under loan obligations by Consolidated Funds	—		(61,227)		—		(61,227)
Net cash provided by (used in) financing activities	(14,885)		456,612		(88,396)		353,331
Effect of exchange rate changes	(1,120)		10,880		—		9,760
Net change in cash and cash equivalents	10,251		153,303		(153,303)		10,251
Cash and cash equivalents, beginning of period	110,247		384,644		(384,644)		110,247
Cash and cash equivalents, end of period	$	120,498	$	537,947	$	(537,947)	$	120,498

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EQUITY COMPENSATION (Restricted Units Awards with a Market Condition) (Details) - Restricted units with a market condition - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Units
Balance at the beginning of the period (in units or shares)	1,333,334
Granted (in units)	0
Vested (in units)	(666,667)
Forfeited (in units)	0
Balance at the end of the period (in units or shares)	666,667
Weighted Average Grant Date Fair Value
Weighted average grant date fair value (USD per share)	$ 7.68	$ 9.30
Granted (in dollars per share)	0
Vested (in dollars per share)	10.92
Forfeited (in dollars per share)	$ 0
Share-based compensation expense	$ 3.7
Unrecognized compensation expenses	$ 3.1
Weighted average period of compensation expense expected to be recognized	2 years 7 months 17 days

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EARNINGS PER SHARE (Antidilutive) (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
AOG
Earnings per common unit
Antidilutive securities excluded from calculation of earnings per common unit (in units)	116,328,089	116,996,031
Options
Earnings per common unit
Antidilutive securities excluded from calculation of earnings per common unit (in units)	12,859,532	0
Restricted units
Earnings per common unit
Antidilutive securities excluded from calculation of earnings per common unit (in units)	16,377,716	119

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EQUITY (Preferred Stock) (Details) - $ / shares	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Dividend rate, percentage	7.00%
Redemption price (in dollars per share)	$ 25.00
Preferred Equity
Class of Stock [Line Items]
Partners' capital (in shares)	12,400,000	12,400,000

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FAIR VALUE (Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Consolidated Funds
Assets, at fair value
Collateralized loan obligations and other fixed income	$ 8,733,810	$ 8,319,551
Common stock and other equity securities	53,730	112,384
Partnership interests	307,025	296,012
Total investments, at fair value	9,094,565	8,727,947
Derivatives-foreign exchange contracts		831
Total derivative assets, at fair value	9,095,396	8,728,614
Liabilities, at fair value
Derivative liabilities		(4,776)
Loan obligations of CLOs	(8,354,458)	(7,973,748)
Total liabilities, at fair value	(8,355,269)	(7,978,524)
Consolidated Funds | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts		667
Liabilities, at fair value
Derivative liabilities		(670)
Consolidated Funds | Derivatives-asset swaps-other
Assets, at fair value
Derivatives-foreign exchange contracts	831
Liabilities, at fair value
Derivative liabilities	(811)	(4,106)
Consolidated Funds | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income		44,435
Consolidated Funds | Bonds
Assets, at fair value
Collateralized loan obligations and other fixed income	200,152	212,376
Consolidated Funds | Loans
Assets, at fair value
Collateralized loan obligations and other fixed income	8,533,658	8,062,740
Consolidated Funds | Level I
Assets, at fair value
Collateralized loan obligations and other fixed income	0	0
Common stock and other equity securities	10,978	26,396
Partnership interests	0	0
Total investments, at fair value	10,978	26,396
Derivatives-foreign exchange contracts		0
Total derivative assets, at fair value	10,978	26,396
Liabilities, at fair value
Derivative liabilities		0
Loan obligations of CLOs	0	0
Total liabilities, at fair value	0	0
Consolidated Funds | Level I  | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts		0
Liabilities, at fair value
Derivative liabilities		0
Consolidated Funds | Level I  | Derivatives-asset swaps-other
Assets, at fair value
Derivatives-foreign exchange contracts	0
Liabilities, at fair value
Derivative liabilities	0	0
Consolidated Funds | Level I  | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income		0
Consolidated Funds | Level I  | Bonds
Assets, at fair value
Collateralized loan obligations and other fixed income	0	0
Consolidated Funds | Level I  | Loans
Assets, at fair value
Collateralized loan obligations and other fixed income	0	0
Consolidated Funds | Level II
Assets, at fair value
Collateralized loan obligations and other fixed income	7,454,254	7,980,415
Common stock and other equity securities	0	0
Partnership interests	0	0
Total investments, at fair value	7,454,254	7,980,415
Derivatives-foreign exchange contracts		0
Total derivative assets, at fair value	7,454,254	7,981,082
Liabilities, at fair value
Derivative liabilities		(670)
Loan obligations of CLOs	(8,354,458)	(7,973,748)
Total liabilities, at fair value	(8,354,458)	(7,974,418)
Consolidated Funds | Level II  | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts		667
Liabilities, at fair value
Derivative liabilities		(670)
Consolidated Funds | Level II  | Derivatives-asset swaps-other
Assets, at fair value
Derivatives-foreign exchange contracts	0
Liabilities, at fair value
Derivative liabilities	0	0
Consolidated Funds | Level II  | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income		44,435
Consolidated Funds | Level II  | Bonds
Assets, at fair value
Collateralized loan obligations and other fixed income	187,051	207,966
Consolidated Funds | Level II  | Loans
Assets, at fair value
Collateralized loan obligations and other fixed income	7,267,203	7,728,014
Consolidated Funds | Level III
Assets, at fair value
Collateralized loan obligations and other fixed income	1,279,556	339,136
Common stock and other equity securities	42,752	85,988
Partnership interests	307,025	296,012
Total investments, at fair value	1,629,333	721,136
Derivatives-foreign exchange contracts		831
Total derivative assets, at fair value	1,630,164	721,136
Liabilities, at fair value
Derivative liabilities		(4,106)
Loan obligations of CLOs	0	0
Total liabilities, at fair value	(811)	(4,106)
Consolidated Funds | Level III  | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts		0
Liabilities, at fair value
Derivative liabilities		0
Consolidated Funds | Level III  | Derivatives-asset swaps-other
Assets, at fair value
Derivatives-foreign exchange contracts	831
Liabilities, at fair value
Derivative liabilities	(811)	(4,106)
Consolidated Funds | Level III  | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income		0
Consolidated Funds | Level III  | Bonds
Assets, at fair value
Collateralized loan obligations and other fixed income	13,101	4,410
Consolidated Funds | Level III  | Loans
Assets, at fair value
Collateralized loan obligations and other fixed income	1,266,455	334,726
Ares Management L.P
Assets, at fair value
Common stock and other equity securities	15,577	15,747
Partnership interests	4,207	36,824
Total investments, at fair value	85,128	121,754
Total derivative assets, at fair value	90,557	125,777
Liabilities, at fair value
Derivative liabilities		(113)
Total liabilities, at fair value	(5)	(113)
Ares Management L.P | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts	5,429	4,023
Liabilities, at fair value
Derivative liabilities	(5)
Ares Management L.P | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income	65,344	69,183
Ares Management L.P | Level I
Assets, at fair value
Common stock and other equity securities	0	0
Partnership interests	0	0
Total investments, at fair value	0	0
Total derivative assets, at fair value	0	0
Liabilities, at fair value
Derivative liabilities		0
Total liabilities, at fair value	0	0
Ares Management L.P | Level I  | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts	0	0
Liabilities, at fair value
Derivative liabilities	0
Ares Management L.P | Level I  | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income	0	0
Ares Management L.P | Level II
Assets, at fair value
Common stock and other equity securities	873	1,043
Partnership interests	0	0
Total investments, at fair value	873	1,043
Total derivative assets, at fair value	6,302	5,066
Liabilities, at fair value
Derivative liabilities		(113)
Total liabilities, at fair value	(5)	(113)
Ares Management L.P | Level II  | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts	5,429	4,023
Liabilities, at fair value
Derivative liabilities	(5)
Ares Management L.P | Level II  | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income	0	0
Ares Management L.P | Level III
Assets, at fair value
Common stock and other equity securities	14,704	14,704
Partnership interests	2,575	35,192
Total investments, at fair value	82,623	119,079
Total derivative assets, at fair value	82,623	119,079
Liabilities, at fair value
Derivative liabilities		0
Total liabilities, at fair value	0	0
Ares Management L.P | Level III  | Derivatives-foreign exchange contracts
Assets, at fair value
Derivatives-foreign exchange contracts	0	0
Liabilities, at fair value
Derivative liabilities	0
Ares Management L.P | Level III  | Investments in CLO warehouse
Assets, at fair value
Collateralized loan obligations and other fixed income	65,344	69,183
Ares Management L.P | Investments Measured at NAV
Assets, at fair value
Partnership interests	1,632	1,632
Total investments, at fair value	1,632	1,632
Total derivative assets, at fair value	$ 1,632	$ 1,632

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DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Consolidated Funds
Assets
Notional amount, Assets	$ 5,258	$ 667
Fair Value, Assets	831	667
Liabilities
Notional amount, Liabilities	4,808	8,307
Fair Value, Liabilities	811	4,776
Derivative asset, amount offset	700	100
Derivative liability, amount offset	700	100
Consolidated Funds | Foreign exchange contracts
Assets
Notional amount, Assets	0	667
Fair Value, Assets	0	667
Liabilities
Notional amount, Liabilities	0	667
Fair Value, Liabilities	0	670
Consolidated Funds | Asset swap - other
Assets
Notional amount, Assets	5,258	0
Fair Value, Assets	831	0
Liabilities
Notional amount, Liabilities	4,808	7,640
Fair Value, Liabilities	811	4,106
Ares Management L.P
Assets
Notional amount, Assets	56,555	67,930
Fair Value, Assets	5,429	4,023
Liabilities
Notional amount, Liabilities	124	10,846
Fair Value, Liabilities	5	113
Ares Management L.P | Foreign exchange contracts
Assets
Notional amount, Assets	56,555	67,930
Fair Value, Assets	5,429	4,023
Liabilities
Notional amount, Liabilities	124	10,846
Fair Value, Liabilities	$ 5	$ 113

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RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Jun. 30, 2017	Mar. 31, 2020	Dec. 31, 2019
ARCC | American Capital Ltd.
Due to affiliates:
Maximum fees waived	$ 10,000,000.0	$ 10,000,000
Consolidated Funds
Due from affiliates:
Due from affiliates			$ 6,192,000	$ 6,192,000
Due to affiliates:
Due to affiliates			0	0
Consolidated Funds | Affiliated entity
Due from affiliates:
Due from affiliates			6,192,000	6,192,000
Ares Management L.P
Due from affiliates:
Due from affiliates			288,030,000	268,099,000
Due to affiliates:
Due to affiliates			73,050,000	71,445,000
Ares Management L.P | Affiliated entity
Due from affiliates:
Management fees receivable from non-consolidated funds			211,887,000	203,554,000
Payments made on behalf of and amounts due from non-consolidated funds and employees			76,143,000	64,545,000
Due to affiliates:
Management fee rebate payable to non-consolidated funds			2,893,000	2,420,000
Management fees received in advance			6,100,000	3,012,000
Tax receivable agreement liability			33,694,000	26,542,000
Undistributed carried interest and incentive fees			17,459,000	28,086,000
Payments made by non-consolidated funds on behalf of and payable by the Company			$ 12,904,000	$ 11,385,000

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COMMITMENTS AND CONTINGENCIES (Leases: Lease Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Operating lease expense	$ 7,632	$ 6,938
Amortization of finance lease assets	94	27
Interest on finance lease liabilities	11	13
Total lease expense	$ 7,737	$ 6,978

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DEBT (Loan Obligations of the Consolidated CLOs) (Details) - Consolidated Funds - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
DEBT
Fair Value of Loan Obligations	$ 8,354,458	$ 7,973,748
Investments in CLO warehouse
DEBT
Loan Obligations	10,067,974	8,188,214
Fair Value of Loan Obligations	8,354,458	7,973,748
Senior secured notes | Investments in CLO warehouse
DEBT
Loan Obligations	9,461,567	7,738,337
Fair Value of Loan Obligations	$ 8,169,907	$ 7,700,038
Weighted  Average Remaining Maturity  In Years	10 years 8 months 15 days	10 years 11 months 19 days
Debt instrument face amount	$ 9,500,000
Weighted average interest rate (as a percent)	2.83%
Subordinated notes / preferred shares | Investments in CLO warehouse
DEBT
Loan Obligations	$ 606,407	$ 449,877
Fair Value of Loan Obligations	$ 184,551	$ 273,710
Weighted  Average Remaining Maturity  In Years	10 years 10 months 6 days	11 years 7 days
Debt instrument face amount	$ 606,400

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SEGMENT REPORTING (Other Income (Expense)) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total segment realized net investment income	$ (227,863)	$ 27,870
Principal investment income (loss)	13,771	14,385
Ares Management L.P
Segment Reporting, Other Significant Reconciling Item [Line Items]
Other income from Consolidated Funds eliminated in consolidation, net	5,464	(4,497)
Operating segment
Segment Reporting, Other Significant Reconciling Item [Line Items]
Investment (income) loss - unrealized	(100,633)	11,205
Other (income) expense, net	0	1
Operating segment | Ares Management L.P
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total segment realized net investment income	13,771	14,385
Investment (income) loss - unrealized	105,594	(16,183)
Interest and other investment (income) loss - unrealized	(4,961)	4,978
Operating segment | Consolidated Funds
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total segment realized net investment income	(227,863)	27,870
Reconciling items
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total segment realized net investment income	241,634	(13,485)
Principal investment income (loss)	(75,988)	29,892
Other (income) expense, net	22	(1)
Reconciling items | Subsidiaries | Non-Controlling interest
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total segment realized net investment income	19,683	(16)
Reconciling items | Performance income reclass
Segment Reporting, Other Significant Reconciling Item [Line Items]
Performance fee reclass	1,717	(606)
Reconciling items | Consolidated Funds
Segment Reporting, Other Significant Reconciling Item [Line Items]
Other (income) loss from Consolidated Funds added in consolidation, net	198,245	(31,207)
Eliminations | Consolidated Funds
Segment Reporting, Other Significant Reconciling Item [Line Items]
Other income from Consolidated Funds eliminated in consolidation, net	(3,819)	(372)
OMG
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total segment realized net investment income	$ 1,141	$ 30

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CONSOLIDATION (Income Statement) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Revenues
Total revenues	$ 13,409				$ 477,197
Expenses
Total expenses	81,959				369,107
Other income (expense)
Total other income (expense)	(227,863)				27,870
Income (loss) before taxes	(296,413)				135,960
Income tax expense (benefit)	(20,616)				14,384
Net income (loss)	(275,797)	$ 84,475	$ 91,875	$ 74,878	121,576
Net income (loss) attributable to Ares Management Corporation	(31,036)				44,949
Less: Series A Preferred Stock dividends paid	5,425				5,425
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	(36,461)				39,524
Reportable legal entity
Other income (expense)
Net income (loss)	(216,172)				103,952
Eliminations
Revenues
Total revenues	35,491				(9,980)
Expenses
Compensation and benefits	0				0
Performance related compensation	0				0
General, administrative and other expenses	0				0
Total expenses	(10,456)				(8,847)
Other income (expense)
Net realized and unrealized gains (losses) on investments	27,661				(948)
Interest and dividend income	(812)				(480)
Other income (expense), net	502				371
Total other income (expense)	3,819				372
Income (loss) before taxes	49,766				(761)
Income tax expense (benefit)	0				0
Net income (loss)	49,766				(761)
Less: Series A Preferred Stock dividends paid	0				0
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	0				0
Consolidated Funds
Expenses
Expenses of Consolidated Funds	7,443				4,554
Other income (expense)
Net realized and unrealized gains (losses) on investments	(254,761)				4,364
Interest expense	(80,241)				(64,912)
Interest and other income of Consolidated Funds	113,225				93,184
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	(166,406)				17,624
Consolidated Funds | Reportable legal entity
Expenses
Expenses of Consolidated Funds	17,899				13,401
Total expenses	17,899				13,401
Other income (expense)
Net realized and unrealized gains (losses) on investments	(230,173)				3,748
Interest expense	(81,297)				(65,725)
Interest and other income of Consolidated Funds	113,225				93,184
Total other income (expense)	(198,245)				31,207
Income (loss) before taxes	(216,144)				17,806
Income tax expense (benefit)	28				(579)
Net income (loss)	(216,172)				18,385
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	(216,172)				18,385
Consolidated Funds | Eliminations
Expenses
Expenses of Consolidated Funds	(10,456)				(8,847)
Other income (expense)
Net realized and unrealized gains (losses) on investments	(24,588)				616
Interest expense	1,056				813
Interest and other income of Consolidated Funds	0				0
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	49,766				(761)
AOG
Other income (expense)
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	(78,355)				59,003
AOG | Reportable legal entity
Other income (expense)
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	(78,355)				59,003
AOG | Eliminations
Other income (expense)
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	0				0
Ares Management L.P
Revenues
Total revenues	13,409				477,197
Expenses
Compensation and benefits	180,084				156,846
Performance related compensation	(167,899)				156,520
General, administrative and other expenses	62,331				51,187
Other income (expense)
Net realized and unrealized gains (losses) on investments	(8,034)				3,476
Interest and dividend income	1,790				1,844
Interest expense	(5,306)				(5,589)
Other income (expense), net	5,464				(4,497)
Ares Management L.P | Affiliated entity | ARCC
Other income (expense)
Management fees, part I fees	43,923				38,393
Ares Management L.P | Reportable legal entity
Revenues
Total revenues	(22,082)				487,177
Expenses
Compensation and benefits	180,084				156,846
Performance related compensation	(167,899)				156,520
General, administrative and other expenses	62,331				51,187
Total expenses	74,516				364,553
Other income (expense)
Net realized and unrealized gains (losses) on investments	(35,695)				4,424
Interest and dividend income	2,602				2,324
Interest expense	(5,306)				(5,589)
Other income (expense), net	4,962				(4,868)
Total other income (expense)	(33,437)				(3,709)
Income (loss) before taxes	(130,035)				118,915
Income tax expense (benefit)	(20,644)				14,963
Net income (loss)	(109,391)				103,952
Net income (loss) attributable to Ares Management Corporation	(31,036)				44,949
Less: Series A Preferred Stock dividends paid	5,425				5,425
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	(36,461)				39,524
Management fees | Eliminations
Revenues
Total revenues	(10,502)				(8,413)
Management fees | Ares Management L.P
Revenues
Total revenues	263,849				224,659
Management fees | Ares Management L.P | Reportable legal entity
Revenues
Total revenues	274,351				233,072
Carried interest allocation | Eliminations
Revenues
Total revenues	0				0
Carried interest allocation | Ares Management L.P
Revenues
Total revenues	(230,876)				197,293
Carried interest allocation | Ares Management L.P | Reportable legal entity
Revenues
Total revenues	(230,876)				197,293
Incentive fees | Eliminations
Revenues
Total revenues	45				(434)
Incentive fees | Ares Management L.P
Revenues
Total revenues	(3,249)				16,815
Incentive fees | Ares Management L.P | Reportable legal entity
Revenues
Total revenues	(3,294)				17,249
Principal investment income (loss) | Eliminations
Revenues
Total revenues	49,265				(1,133)
Principal investment income (loss) | Ares Management L.P
Revenues
Total revenues	(26,723)				28,759
Principal investment income (loss) | Ares Management L.P | Reportable legal entity
Revenues
Total revenues	(75,988)				29,892
Administrative, transaction and other fees
Revenues
Total revenues	0				0
Administrative, transaction and other fees | Eliminations
Revenues
Total revenues	(3,317)				0
Administrative, transaction and other fees | Ares Management L.P
Revenues
Total revenues	10,408				9,671
Administrative, transaction and other fees | Ares Management L.P | Reportable legal entity
Revenues
Total revenues	$ 13,725				$ 9,671

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Substantially all of the Company’s revenue is earned from its affiliates, including management fees, carried interest allocation, incentive fees, principal investment income and administrative expense reimbursements. The related accounts receivable are included within due from affiliates within the Condensed Consolidated Statements of Financial Condition, except that accrued carried interest allocations and incentive fees receivable, which are predominantly due from affiliated funds, are presented separately within investments and other assets, respectively, within the Condensed Consolidated Statements of Financial Condition.

The Company has investment management agreements with Ares Funds that it manages. In accordance with these agreements, these Ares Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Ares Funds.

The Company also has entered into agreements to be reimbursed for its expenses incurred for providing administrative services to certain related parties, including ARCC, ACRE, ARDC, Ivy Hill Asset Management, L.P., ACF FinCo I L.P. and CION Ares Diversified Credit Fund.

Employees and other related parties may be permitted to participate in co-investment vehicles that generally invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These co-investment vehicles generally do not require these individuals to pay management or performance income.

Performance income the Company earns from the funds can be distributed to professionals or their related entities on a current basis, subject, in the case of carried interest programs, to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several, and not joint, and are limited to distributions received by the relevant recipient.

The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following:

	As of March 31,		As of December 31,
	2020		2019
Due from affiliates:
Management fees receivable from non-consolidated funds	$	211,887	$	203,554
Payments made on behalf of and amounts due from non-consolidated funds and employees	76,143		64,545
Due from affiliates—Company	$	288,030	$	268,099
Amounts due from portfolio companies and non-consolidated funds	$	6,192	$	6,192
Due from affiliates—Consolidated Funds	$	6,192	$	6,192
Due to affiliates:
Management fee rebate payable to non-consolidated funds	$	2,893	$	2,420
Management fees received in advance	6,100		3,012
Tax receivable agreement liability	33,694		26,542
Undistributed carried interest and incentive fees	17,459		28,086
Payments made by non-consolidated funds on behalf of and payable by the Company	12,904		11,385
Due to affiliates—Company	$	73,050	$	71,445

Due from Ares Funds and Portfolio Companies

In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional services, travel and other costs associated with particular portfolio company holdings, are subject to reimbursement by the portfolio companies.

ARCC Fee Waiver

In conjunction with ARCC's acquisition of American Capital, Ltd., the Company agreed to waive up to $10 million per quarter of ARCC's Part I Fees for ten calendar quarters, which began with the second quarter of 2017 and ended with the third quarter of 2019. ARCC Part I Fees are reported net of the fee waiver. For the three months ended March 31, 2019, the Company waived $10.0 million.

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FAIR VALUE

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE

FAIR VALUE

Fair Value Measurements

GAAP establishes a hierarchal disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value.

Financial assets and liabilities measured and reported at fair value are classified as follows:

•Level I—Quoted prices in active markets for identical instruments.

•Level II—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates.

•Level III—Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available.

In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period.

Fair Value of Financial Instruments Held by the Company and Consolidated Funds

The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of March 31, 2020:

Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income	$	—	$	—	$	65,344	$	—	$	65,344
Common stock and other equity securities	—		873		14,704		—		15,577
Partnership interests	—		—		2,575		1,632		4,207
Total investments, at fair value	—		873		82,623		1,632		85,128
Derivatives-foreign exchange contracts	—		5,429		—		—		5,429
Total assets, at fair value	$	—	$	6,302	$	82,623	$	1,632	$	90,557
Liabilities, at fair value
Derivatives-foreign exchange contracts	$	—	$	(5)	$	—	$	—	$	(5)
Total liabilities, at fair value	$	—	$	(5)	$	—	$	—	$	(5)

Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds	$	—	$	187,051	$	13,101	$	200,152
Loans	—		7,267,203		1,266,455		8,533,658
Total fixed income investments	—		7,454,254		1,279,556		8,733,810
Equity securities	10,978		—		42,752		53,730
Partnership interests	—		—		307,025		307,025
Total investments, at fair value	10,978		7,454,254		1,629,333		9,094,565
Derivatives-asset swaps-other	—		—		831		831
Total assets, at fair value	$	10,978	$	7,454,254	$	1,630,164	$	9,095,396
Liabilities, at fair value
Derivatives-asset swaps-other	$	—	$	—	$	(811)	$	(811)
Loan obligations of CLOs	—		(8,354,458)		—		(8,354,458)
Total liabilities, at fair value	$	—	$	(8,354,458)	$	(811)	$	(8,355,269)

The tables below summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2019:

Financial Instruments of the Company	Level I		Level II		Level III		Investments Measured at NAV		Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income	$	—	$	—	$	69,183	$	—	$	69,183
Common stock and other equity securities	—		1,043		14,704		—		15,747
Partnership interests	—		—		35,192		1,632		36,824
Total investments, at fair value	—		1,043		119,079		1,632		121,754
Derivatives-foreign exchange contracts	—		4,023		—		—		4,023
Total assets, at fair value	$	—	$	5,066	$	119,079	$	1,632	$	125,777
Liabilities, at fair value
Derivatives-foreign exchange contracts	$	—	$	(113)	$	—	$	—	$	(113)
Total liabilities, at fair value	$	—	$	(113)	$	—	$	—	$	(113)

Financial Instruments of the Consolidated Funds	Level I		Level II		Level III		Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds	$	—	$	207,966	$	4,410	$	212,376
Loans	—		7,728,014		334,726		8,062,740
Investments in CLO warehouse	—		44,435		—		44,435
Total fixed income investments	—		7,980,415		339,136		8,319,551
Equity securities	26,396		—		85,988		112,384
Partnership interests	—		—		296,012		296,012
Total investments, at fair value	26,396		7,980,415		721,136		8,727,947
Derivatives-foreign exchange contracts	—		667		—		667
Total assets, at fair value	$	26,396	$	7,981,082	$	721,136	$	8,728,614
Liabilities, at fair value
Derivatives:
Foreign exchange contracts	$	—	$	(670)	$	—	$	(670)
Asset swaps-other	—		—		(4,106)		(4,106)
Total derivative liabilities, at fair value	—		(670)		(4,106)		(4,776)
Loan obligations of CLOs	—		(7,973,748)		—		(7,973,748)
Total liabilities, at fair value	$	—	$	(7,974,418)	$	(4,106)	$	(7,978,524)

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2020:

	Level III Assets
Level III Assets of the Company	Equity  Securities		Fixed Income		Partnership Interests		Total
Balance, beginning of period	$	14,704	$	69,183	$	35,192	$	119,079
Additions(1)	—		3,686		—		3,686
Purchases(2)	—		643		—		643
Sales/settlements(3)	—		(402)		(32,430)		(32,832)
Realized and unrealized depreciation, net	—		(7,766)		(187)		(7,953)
Balance, end of period	$	14,704	$	65,344	$	2,575	$	82,623
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	—	$	(6,731)	$	5,511	$	(1,220)

Level III Assets of Consolidated Funds	Equity  Securities		Fixed  Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	85,988	$	339,136	$	296,012	$	(4,106)	$	717,030
Additions(1)	(635)		392,672		—		—		392,037
Transfer in	—		607,588		—		—		607,588
Transfer out	—		(61,774)		—		—		(61,774)
Purchases(2)	249		355,592		8,000		—		363,841
Sales/settlements(3)	(351)		(178,159)		—		(1,278)		(179,788)
Amortized discounts/premiums	—		499		—		48		547
Realized and unrealized appreciation (depreciation), net	(42,499)		(175,998)		3,013		5,356		(210,128)
Balance, end of period	$	42,752	$	1,279,556	$	307,025	$	20	$	1,629,353
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	(42,500)	$	(170,496)	$	3,012	$	2,874	$	(207,110)

(1)Additions relate to the net increase from consolidation of new funds or entities. For Consolidated Funds, additions are also offset by the deconsolidation of a fund.

(2)Purchases include paid-in-kind interest and securities received in connection with restructuring.

(3)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2019:

	Level III Assets
Level III Assets of the Company	Equity  Securities		Fixed Income		Partnership Interests		Total
Balance, beginning of period	$	10,397	$	60,824	$	35,192	$	106,413
Deconsolidation of fund	—		8,138		—		8,138
Purchases(1)	—		2,147		—		2,147
Sales/settlements(2)	—		(4,964)		—		(4,964)
Realized and unrealized appreciation, net	—		1,045		—		1,045
Balance, end of period	$	10,397	$	67,190	$	35,192	$	112,779
Increase in net unrealized appreciation included in earnings related to financial assets still held at the reporting date	$	—	$	719	$	—	$	719

Level III Assets of Consolidated Funds	Equity  Securities		Fixed  Income		Partnership Interests		Derivatives, Net		Total
Balance, beginning of period	$	150,752	$	547,958	$	271,447	$	680	$	970,837
Deconsolidation of fund	—		(58,883)		—		—		(58,883)
Transfer in	—		155,651		—		—		155,651
Transfer out	—		(182,087)		—		—		(182,087)
Purchases(1)	10,774		173,408		4,000		—		188,182
Sales/settlements(2)	(5,086)		(79,489)		—		(21)		(84,596)
Amortized discounts/premiums	—		312		—		(151)		161
Realized and unrealized appreciation (depreciation), net	2,592		7,434		7,612		(3,539)		14,099
Balance, end of period	$	159,032	$	564,304	$	283,059	$	(3,031)	$	1,003,364
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$	2,592	$	7,894	$	7,612	$	(3,481)	$	14,617

(1)Purchases include paid-in-kind interest and securities received in connection with restructurings.

(2)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

The Company recognizes transfers between the levels as of the beginning of the period. Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service.

The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of March 31, 2020:

Level III Measurements of the Company	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range
Assets
Equity securities	$	14,704	Transaction price(1)	N/A	N/A
Partnership interests	2,575		Other	N/A	N/A
Collateralized loan obligations	17,783		Broker quotes and/or 3rd party pricing services	N/A	N/A
Other fixed income	47,561		Other	N/A	N/A
Total	$	82,623

Level III Measurements of the Consolidated Funds	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range	Weighted Average
Assets
Equity securities
	$	325	Market approach	EBITDA multiple(2)	10.0x - 28.8x	18.9x
	40,426		Other	Net income multiple	32.5x	32.5x
				Illiquidity discount	25.0%	25.0%
	2,001		Transaction price	N/A	N/A	N/A
Partnership interest	307,025		Discounted cash flow	Discount rate	18.1%	18.1%
Fixed income securities
	1,223,236		Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
	56,320		Income approach	Yield	4.0% - 25.5%	10.4%
Total assets	$	1,630,164
Liabilities
Derivatives instruments	$	(811)	Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
Total liabilities	$	(811)

(1)Transaction price consists of securities recently purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

The following table summarizes the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds' Level III measurements as of December 31, 2019:

Level III Measurements of the Company	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range
Assets
Equity securities	$	14,704	Transaction price(1)	N/A	N/A
Partnership interests	32,661		Transaction price(1)	N/A	N/A
	2,531		Other	N/A	N/A
Collateralized loan obligations	22,265		Broker quotes and/or 3rd party pricing services	N/A	N/A
Other fixed income	46,918		Other	N/A	N/A
Total	$	119,079

Level III Measurements of the Consolidated Funds	Fair Value		Valuation Technique(s)	Significant Unobservable Input(s)	Range	Weighted Average
Assets
Equity securities
	$	431	Market approach	EBITDA multiple(2)	8.2x - 21.3x	16.1x
	40,745		Other	Net income multiple	36.2x	36.2x
				Illiquidity discount	25.0%	25.0%
	44,812		Transaction price(1)	N/A	N/A	N/A
Partnership interests	296,012		Discounted cash flow	Discount rate	19.6%	19.6%
Fixed income securities
	271,919		Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
	67,217		Income approach	Yield	4.8% - 14.3%	9.7%
Total assets	$	721,136
Liabilities
Derivatives instruments	$	(4,106)	Broker quotes and/or 3rd party pricing services	N/A	N/A	N/A
Total liabilities	$	(4,106)

(1)Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

The Company has an insurance-related investment in a private fund managed by a third party that is valued using NAV per share. The terms and conditions of this fund do not allow for redemptions without certain events or approvals that are outside the Company's control. This investment had a fair value of $1.6 million as of March 31, 2020 and December 31, 2019. The Company has no unfunded commitments for this investment.

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RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

Schedule of amounts due from and to affiliates

The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following:

	As of March 31,		As of December 31,
	2020		2019
Due from affiliates:
Management fees receivable from non-consolidated funds	$	211,887	$	203,554
Payments made on behalf of and amounts due from non-consolidated funds and employees	76,143		64,545
Due from affiliates—Company	$	288,030	$	268,099
Amounts due from portfolio companies and non-consolidated funds	$	6,192	$	6,192
Due from affiliates—Consolidated Funds	$	6,192	$	6,192
Due to affiliates:
Management fee rebate payable to non-consolidated funds	$	2,893	$	2,420
Management fees received in advance	6,100		3,012
Tax receivable agreement liability	33,694		26,542
Undistributed carried interest and incentive fees	17,459		28,086
Payments made by non-consolidated funds on behalf of and payable by the Company	12,904		11,385
Due to affiliates—Company	$	73,050	$	71,445

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Schedule of financial results for Company's operating segments, as well as the OMG

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2020:

	Credit Group		Private Equity Group		Real Estate Group		Total Segments		OMG		Total
Management fees (Credit Group includes ARCC Part I Fees of $43,923)	$	197,437	$	52,157	$	24,184	$	273,778	$	—	$	273,778
Other fees	3,058		110		704		3,872		—		3,872
Compensation and benefits	(70,925)		(19,596)		(12,413)		(102,934)		(36,426)		(139,360)
General, administrative and other expenses	(15,313)		(5,633)		(2,935)		(23,881)		(21,305)		(45,186)
Fee related earnings	114,257		27,038		9,540		150,835		(57,731)		93,104
Performance income—realized	9,016		116,154		26,600		151,770		—		151,770
Performance related compensation—realized	(7,899)		(92,924)		(17,170)		(117,993)		—		(117,993)
Realized net performance income	1,117		23,230		9,430		33,777		—		33,777
Investment income (loss)—realized	(843)		11,470		1,290		11,917		(5,698)		6,219
Interest and other investment income —realized	4,575		812		796		6,183		168		6,351
Interest expense	(1,715)		(1,643)		(971)		(4,329)		(977)		(5,306)
Realized net investment income (loss)	2,017		10,639		1,115		13,771		(6,507)		7,264
Realized income	$	117,391	$	60,907	$	20,085	$	198,383	$	(64,238)	$	134,145

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2019:

	Credit Group		Private Equity Group		Real Estate Group		Total Segments		OMG		Total
Management fees (Credit Group includes ARCC Part I Fees of $38,393)	$	162,966	$	51,396	$	18,650	$	233,012	$	—	$	233,012
Other fees	3,066		—		9		3,075		—		3,075
Compensation and benefits	(60,348)		(21,196)		(9,284)		(90,828)		(32,661)		(123,489)
General, administrative and other expenses	(13,505)		(4,057)		(3,132)		(20,694)		(20,632)		(41,326)
Fee related earnings	92,179		26,143		6,243		124,565		(53,293)		71,272
Performance income—realized	21,925		44,123		2,525		68,573		—		68,573
Performance related compensation—realized	(12,663)		(35,297)		(1,257)		(49,217)		—		(49,217)
Realized net performance income	9,262		8,826		1,268		19,356		—		19,356
Investment income—realized	858		10,936		3,480		15,274		—		15,274
Interest and other investment income —realized	2,905		294		1,105		4,304		15		4,319
Interest expense	(1,899)		(2,175)		(1,119)		(5,193)		(396)		(5,589)
Realized net investment income (loss)	1,864		9,055		3,466		14,385		(381)		14,004
Realized income	$	103,305	$	44,024	$	10,977	$	158,306	$	(53,674)	$	104,632

Schedule of segment’ revenue, expenses and other income (expense)

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

	Three months ended March 31,
	2020		2019
Segment revenues
Management fees (includes ARCC Part I Fees of $43,923 and $38,393 for the three months ended March 31, 2020 and 2019 respectively)	$	273,778	$	233,012
Other fees	3,872		3,075
Performance income—realized	151,770		68,573
Total segment revenues	$	429,420	$	304,660
Segment expenses
Compensation and benefits	$	102,934	$	90,828
General, administrative and other expenses	23,881		20,694
Performance related compensation—realized	117,993		49,217
Total segment expenses	$	244,808	$	160,739
Segment realized net investment income
Investment income—realized	$	11,917	$	15,274
Interest and other investment income —realized	6,183		4,304
Interest expense	(4,329)		(5,193)
Total segment realized net investment income	$	13,771	$	14,385

Schedule of segment revenues components

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

	Three months ended March 31,
	2020		2019
Total consolidated revenue	$	13,409	$	477,197
Performance (income) loss-unrealized	387,657		(146,575)
Management fees of Consolidated Funds eliminated in consolidation	10,502		8,413
Incentive fees of Consolidated Funds eliminated in consolidation	(45)		434
Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation	3,317		—
Administrative fees(1)	(9,661)		(6,602)
Performance income (loss) reclass(2)	(1,717)		606
Principal investment (income) loss, net of eliminations	26,723		(28,759)
Net income of non-controlling interests in consolidated subsidiaries	(765)		(54)
Total consolidation adjustments and reconciling items	416,011		(172,537)
Total segment revenue	$	429,420	$	304,660

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

(2)Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed Consolidated Statements of Operations.

Schedule of segment expenses components

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

	Three months ended March 31,
	2020		2019
Total consolidated expenses	$	81,959	$	369,107
Performance related compensation-unrealized	285,892		(107,303)
Expenses of Consolidated Funds added in consolidation	(17,899)		(13,401)
Expenses of Consolidated Funds eliminated in consolidation	10,456		8,847
Administrative fees(1)	(9,661)		(6,602)
OMG expenses	(57,731)		(53,293)
Acquisition and merger-related expense	(3,115)		(1,773)
Equity compensation expense	(32,557)		(27,552)
Deferred placement fees	(5,415)		(521)
Depreciation and amortization expense	(5,542)		(5,824)
Expense of non-controlling interests in consolidated subsidiaries	(1,579)		(946)
Total consolidation adjustments and reconciling items	162,849		(208,368)
Total segment expenses	$	244,808	$	160,739

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

Schedule of segment other income (expense) components

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

	Three months ended March 31,
	2020		2019
Total consolidated other income	$	(227,863)	$	27,870
Investment (income) loss - unrealized	105,594		(16,183)
Interest and other investment (income) loss - unrealized	(4,961)		4,978
Other (income) loss from Consolidated Funds added in consolidation, net	198,245		(31,207)
Other income from Consolidated Funds eliminated in consolidation, net	(3,819)		(372)
OMG other expense	1,141		30
Performance (income) loss reclass(1)	1,717		(606)
Principal investment income (loss)	(75,988)		29,892
Other (income) expense, net	22		(1)
Other (income) loss of non-controlling interests in consolidated subsidiaries	19,683		(16)
Total consolidation adjustments and reconciling items	241,634		(13,485)
Total segment realized net investment income	$	13,771	$	14,385

(1)Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed Consolidated Statements of Operations.

Reconciliation of segment results to the Company's income before taxes and total assets

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

	Three months ended March 31,
	2020		2019
Income (loss) before taxes	$	(296,413)	$	135,960
Adjustments:
Depreciation and amortization expense	5,542		5,824
Equity compensation expense	32,557		27,552
Acquisition and merger-related expense	3,137		1,773
Deferred placement fees	5,415		521
OMG expense, net	58,872		53,323
Other income, net	—		(1)
Net expense of non-controlling interests in consolidated subsidiaries	20,497		876
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net of eliminations	166,378		(17,045)
Total performance (income) loss - unrealized	387,657		(146,575)
Total performance related compensation - unrealized	(285,892)		107,303
Total investment (income) loss - unrealized	100,633		(11,205)
Realized income	198,383		158,306
Total performance income - realized	(151,770)		(68,573)
Total performance related compensation - realized	117,993		49,217
Total investment income - realized	(13,771)		(14,385)
Fee related earnings	$	150,835	$	124,565

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ORGANIZATION

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION

ORGANIZATION 

Ares Management Corporation (the "Company"), a Delaware corporation, together with its subsidiaries, is a leading global alternative investment manager operating integrated businesses across Credit, Private Equity and Real Estate. Information about segments should be read together with Note 14, “Segment Reporting.” Subsidiaries of the Company serve as the general partners and/or investment managers to various investment funds and managed accounts within each investment group (the “Ares Funds”). Such subsidiaries provide investment advisory services to the Ares Funds in exchange for management fees.

The accompanying unaudited financial statements include the condensed consolidated results of the Company and its subsidiaries. The Company is a holding company, and the Company’s sole assets are equity interests in Ares Holdings Inc., Ares Offshore Holdings, Ltd., and Ares AI Holdings L.P. In this quarterly report, the following of the Company’s subsidiaries are collectively referred to as the “Ares Operating Group” or “AOG”: Ares Offshore Holdings L.P. ("Ares Offshore"), Ares Holdings L.P. ("Ares Holdings"), and Ares Investments L.P ("Ares Investments"). The Company, indirectly through its wholly owned subsidiaries, is the general partner of each of the Ares Operating Group entities. The Company operates and controls all of the businesses and affairs of and conducts all of its material business activities through the Ares Operating Group.

Non-Controlling Interests in Ares Operating Group Entities

On February 21, 2020, the Company completed its acquisition of the Class A membership interests (the "Class A membership interests") in Crestline Denali Capital LLC ("Crestline Denali"). The Class A membership interests entitle the Company to the fees associated with managing seven collateral management contracts. The Class B membership interests of Crestline Denali (the "Class B membership interests") were retained by the former owners of Crestline Denali and represent the financial interests in the subordinated notes of the collateralized loan obligations.

The non-controlling interests in AOG entities represent a component of equity and net income attributable to the owners of the Ares Operating Group Units (“AOG Units”) that are not held directly or indirectly by the Company. These owners consist predominantly of Ares Owners Holdings L.P. but also include other strategic distribution partnerships with whom the Company has established joint ventures. In connection with the Company's control over Crestline Denali, the Company also consolidates investments and financial results that are attributable to the Class B membership interests to which the Company has no economic rights or obligations. Equity and income (loss) attributable to the Class B membership interests is included within non-controlling interests in AOG entities. Non-controlling interests in AOG entities are adjusted for contributions to and distributions from AOG during the reporting period and are allocated income from the AOG entities based on their historical ownership percentage for the proportional number of days in the reporting period.

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Cover Page - shares	3 Months Ended
	Mar. 31, 2020	May 04, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-36429
Entity Registrant Name	ARES MANAGEMENT CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	80-0962035
Entity Address, Address Line One	2000 Avenue of the Stars
Entity Address, Address Line Two	12th Floor
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90067
City Area Code	310
Local Phone Number	201-4100
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001176948
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Class A common stock
Entity Information [Line Items]
Title of 12(b) Security	Class A common stock, par value $0.01 per share
Trading Symbol	ARES
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		132,460,236
Series A Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	7.00% Series A Preferred Stock, par value $0.01 per share
Trading Symbol	ARES.PRA
Security Exchange Name	NYSE
Class B common stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		1,000
Class C common stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		115,199,621

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GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 143,855,000
Foreign currency translation	(113,000)
Goodwill, ending balance	143,742,000
Goodwill impairment	0	$ 0
Credit Group
Goodwill [Roll Forward]
Goodwill, beginning balance	32,196,000
Foreign currency translation	0
Goodwill, ending balance	32,196,000
Private Equity Group
Goodwill [Roll Forward]
Goodwill, beginning balance	58,600,000
Foreign currency translation	0
Goodwill, ending balance	58,600,000
Real Estate Group
Goodwill [Roll Forward]
Goodwill, beginning balance	53,059,000
Foreign currency translation	(113,000)
Goodwill, ending balance	$ 52,946,000

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Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Ares Management L.P | Affiliated entity | ARCC
Management fees, part I fees	$ 43,923	$ 38,393

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair value and notional amounts of derivative contracts by major product type on a gross basis

	As of March 31, 2020								As of December 31, 2019
	Assets				Liabilities				Assets				Liabilities
The Company	Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value
Foreign exchange contracts	$	56,555	$	5,429	$	124	$	5	$	67,930	$	4,023	$	10,846	$	113
Total derivatives, at fair value(2)	$	56,555	$	5,429	$	124	$	5	$	67,930	$	4,023	$	10,846	$	113

	As of March 31, 2020								As of December 31, 2019
	Assets				Liabilities				Assets				Liabilities
Consolidated Funds	Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value
Foreign exchange contracts	$	—	$	—	$	—	$	—	$	667	$	667	$	667	$	670
Asset swap - other	5,258		831		4,808		811		—		—		7,640		4,106
Total derivatives, at fair value(3)	$	5,258	$	831	$	4,808	$	811	$	667	$	667	$	8,307	$	4,776

(1)Represents the total contractual amount of derivative assets and liabilities outstanding.

(2)As of March 31, 2020 and December 31, 2019, the Company had the right to, but elected not to, offset an immaterial amount of its derivative liabilities.

(3)As of March 31, 2020 and December 31, 2019, the Consolidated Funds offset $0.7 million and $0.1 million of their derivative assets and liabilities, respectively.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Accounting

Basis of Presentation

The accompanying condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent, and that all such adjustments are of a normal recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission ("SEC").

As of March 31, 2020, the impact of the outbreak of the coronavirus (COVID-19) pandemic continues to unfold. As a result, management's estimates and assumptions may be subject to a higher degree of variability and volatility that may result in material differences from the current period.

The condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. All intercompany balances and transactions have been eliminated upon consolidation.

Reclassifications

The Company has reclassified certain prior period amounts to conform to the current year presentation.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds.

At March 31, 2020 and December 31, 2019, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update related to separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this update clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for public entities for annual reporting periods beginning after December 15, 2020 and interim periods within those reporting periods, with early adoption permitted. The amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. An entity may elect to adopt the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent

to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. An entity may elect to apply the amendments in ASU 2020-04 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The one-time election to sell, transfer, or both sell and transfer debt securities classified as held-to-maturity may be made at any time after March 12, 2020 but no later than December 31, 2022. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements

Derivative Instruments

In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management.

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EQUITY

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

EQUITY

EQUITY

Common Stock

The Company's common stock consists of Class A, Class B and Class C common stock, each $0.01 par value per share. The Class B common stock and Class C common stock are non-economic and holders are not entitled to dividends from the Company or to receive any assets of the Company in the event of any dissolution, liquidation or winding up of the Company. Ares Management GP LLC is the sole holder of the Class B common stock and Ares Voting LLC ("Ares Voting") is the sole holder of the Class C common stock.

In February 2019, the Company's board of directors authorized the repurchase of up to $150 million of shares of Class A common stock. Under this stock repurchase program, shares may be repurchased from time to time in open market purchases, privately negotiated transactions or otherwise, including in reliance on Rule 10b5-1 of the Securities Act. In February 2020, the board of directors approved the renewal of the program and reset the repurchase amount back to $150 million. The renewed program is scheduled to expire in March 2021. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the three months ended March 31, 2020 and 2019, the Company did not repurchase any shares as part of the stock repurchase program.

On March 31, 2020, the Company issued and sold 12,130,540 shares of newly issued Class A common stock in a private offering (the "Offering") to Sumitomo Mitsui Banking Corporation ("SMBC") in connection with a share purchase agreement. The Company received $383.8 million in gross proceeds and incurred approximately $0.5 million of expenses in connection with the Offering. The expenses have been recorded as a reduction in the proceeds received and are presented on a net basis together with contributions in additional paid-in-capital within the Condensed Consolidated Statements of Changes in Equity. In connection with the Offering, the Company approved the amendment of its certificate of incorporation to, among other things, establish a new series of non-voting common stock, par value $0.01 per share, that has the same economic rights as the Class A common stock. SMBC may exchange all or a portion of the Class A common stock for an equivalent amount of the newly established non-voting common stock pursuant to certain terms set forth in an investor rights agreement entered into between the Company and SMBC. To satisfy a condition related to the Offering, the Company also issued 115,199,620 shares of its Class C common stock to Ares Voting on March 30, 2020. The issuance of the Class C units did not change the aggregate voting power of Ares Voting and Ares Voting will continue to be entitled to the number of votes equal to the number of AOG Units held of record by each Ares Operating Group limited partner, other than the Company and its subsidiaries, that does not own a share of Class C common stock.

The following table presents the changes in each class of common stock:

	Class A Common Stock	Class B Common Stock	Class C Common Stock	Total
Balance - January 1, 2020	115,242,028	1,000	1	115,243,029
Issuance of stock	12,130,540	—	115,199,620	127,330,160
Exchanges of AOG Units	1,376,422	—	—	1,376,422
Stock option exercises, net of shares withheld for tax	1,058,722	—	—	1,058,722
Vesting of restricted stock awards, net of shares withheld for tax	2,566,031	—	—	2,566,031
Balance Outstanding - March 31, 2020	132,373,743	1,000	115,199,621	247,574,364

The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities, as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities:

							Daily Average Ownership
	As of March 31, 2020			As of December 31, 2019				Three months ended March 31,
	AOG Units	Direct Ownership Interest		AOG Units	Direct Ownership Interest			2020		2019
Ares Management Corporation	132,373,743	53.47	%	115,242,028	49.70	%		50.43	%	46.80	%
Ares Owners Holding L.P.	115,199,621	46.53	%	116,641,833	50.30	%		49.57	%	53.20	%
Total	247,573,364	100.00	%	231,883,861	100.00	%

Preferred Stock

As of March 31, 2020 and December 31, 2019, the Company had 12,400,000 shares of the Series A Preferred Stock outstanding. When, as and if declared by the Company’s board of directors, dividends on the Series A Preferred Stock are payable quarterly at a rate per annum equal to 7.00%. The Series A Preferred Stock may be redeemed at the Company’s option, in whole or in part, at any time on or after June 30, 2021, at a price per share of $25.00.

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INVESTMENTS (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Investments in and Advances to Affiliates [Abstract]
Equity method investments gain (loss)	$ (28.8)	$ 29.0

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FAIR VALUE (Valuation Techniques) (Details) $ in Thousands	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Consolidated Funds
Assets, Fair Value Disclosure [Abstract]
Equity securities	$ 53,730	$ 112,384
Partnership interests	307,025	296,012
Collateralized loan obligations	8,354,458	7,973,748
Other fixed income	8,733,810	8,319,551
Total derivative assets, at fair value	9,095,396	8,728,614
Liabilities, Fair Value Disclosure [Abstract]
Derivatives instruments		(4,776)
Total liabilities, at fair value	(8,355,269)	(7,978,524)
Consolidated Funds | Level III
Assets, Fair Value Disclosure [Abstract]
Equity securities	42,752	85,988
Partnership interests	307,025	296,012
Collateralized loan obligations	0	0
Other fixed income	1,279,556	339,136
Total derivative assets, at fair value	1,630,164	721,136
Liabilities, Fair Value Disclosure [Abstract]
Derivatives instruments		(4,106)
Total liabilities, at fair value	(811)	(4,106)
Consolidated Funds | Level III  | Transaction price
Assets, Fair Value Disclosure [Abstract]
Equity securities	2,001	44,812
Consolidated Funds | Level III  | Other
Assets, Fair Value Disclosure [Abstract]
Equity securities	$ 40,426	$ 40,745
Consolidated Funds | Level III  | Other | Net income multiple
Unobservable Input
Equity securities	32.5	36.2
Consolidated Funds | Level III  | Other | Net income multiple | Weighted Average
Unobservable Input
Equity securities	32.5	36.2
Consolidated Funds | Level III  | Other | Illiquidity discount
Unobservable Input
Equity securities	0.250	0.250
Consolidated Funds | Level III  | Other | Illiquidity discount | Weighted Average
Unobservable Input
Equity securities	0.250	0.250
Consolidated Funds | Level III  | Broker quotes and/or 3rd party pricing services
Assets, Fair Value Disclosure [Abstract]
Other fixed income	$ 1,223,236	$ 271,919
Liabilities, Fair Value Disclosure [Abstract]
Derivatives instruments	(811)	(4,106)
Consolidated Funds | Level III  | Discounted cash flow
Assets, Fair Value Disclosure [Abstract]
Partnership interests	$ 307,025	$ 296,012
Consolidated Funds | Level III  | Discounted cash flow | Discount rate
Unobservable Input
Partnership interest	0.181	0.196
Consolidated Funds | Level III  | Discounted cash flow | Discount rate | Weighted Average
Unobservable Input
Partnership interest	0.181	0.196
Consolidated Funds | Level III  | Market approach
Assets, Fair Value Disclosure [Abstract]
Equity securities	$ 325	$ 431
Consolidated Funds | Level III  | Market approach | EBITDA multiple | Minimum
Unobservable Input
Equity securities	10.0	8.2
Consolidated Funds | Level III  | Market approach | EBITDA multiple | Maximum
Unobservable Input
Equity securities	28.8	21.3
Consolidated Funds | Level III  | Market approach | EBITDA multiple | Weighted Average
Unobservable Input
Equity securities	18.9	16.1
Consolidated Funds | Level III  | Income approach
Assets, Fair Value Disclosure [Abstract]
Other fixed income	$ 56,320	$ 67,217
Consolidated Funds | Level III  | Income approach | Yield | Minimum
Unobservable Input
Fixed income securities	0.040	0.048
Consolidated Funds | Level III  | Income approach | Yield | Maximum
Unobservable Input
Fixed income securities	0.255	0.143
Consolidated Funds | Level III  | Income approach | Yield | Weighted Average
Unobservable Input
Fixed income securities	0.104	0.097
Ares Management L.P
Assets, Fair Value Disclosure [Abstract]
Equity securities	$ 15,577	$ 15,747
Partnership interests	4,207	36,824
Total derivative assets, at fair value	90,557	125,777
Liabilities, Fair Value Disclosure [Abstract]
Derivatives instruments		(113)
Total liabilities, at fair value	(5)	(113)
Ares Management L.P | Level III
Assets, Fair Value Disclosure [Abstract]
Equity securities	14,704	14,704
Partnership interests	2,575	35,192
Total derivative assets, at fair value	82,623	119,079
Liabilities, Fair Value Disclosure [Abstract]
Derivatives instruments		0
Total liabilities, at fair value	0	0
Ares Management L.P | Level III  | Transaction price
Assets, Fair Value Disclosure [Abstract]
Equity securities	14,704	14,704
Partnership interests		32,661
Ares Management L.P | Level III  | Other
Assets, Fair Value Disclosure [Abstract]
Partnership interests	2,575	2,531
Other fixed income	47,561	46,918
Ares Management L.P | Level III  | Broker quotes and/or 3rd party pricing services
Assets, Fair Value Disclosure [Abstract]
Collateralized loan obligations	$ 17,783	$ 22,265

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DEBT (Debt Issuance Costs) (Details) - Ares Management L.P $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Credit Facility
Debt Issuance Costs
Unamortized debt issuance costs	$ 5,255
Debt issuance costs incurred	1,182
Amortization of debt issuance costs	(318)
Unamortized debt issuance costs	6,119
Senior Notes
Debt Issuance Costs
Unamortized debt issuance costs	1,102
Debt issuance costs incurred	0
Amortization of debt issuance costs	(58)
Unamortized debt issuance costs	$ 1,044

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EQUITY (Common Stock) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Feb. 29, 2020	Dec. 31, 2019	Feb. 28, 2019
Class of Stock [Line Items]
Proceeds from sale of shares	$ 383,800,000
Fees related to stock issuance	$ 500,000
Increase (Decrease) in Stockholders' Equity
Balance (in shares)	115,243,029
Issuance of stock (in shares)	127,330,160
Stock option exercises (in shares)	1,058,722
Vesting of restricted stock awards, net of shares withheld for tax (shares)	2,566,031
Balance (in shares)	247,574,364
AOG
Increase (Decrease) in Stockholders' Equity
Exchanges of AOG Units (in shares)	1,376,422
Class A common stock
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.01		$ 0.01
Authorized amount		$ 150,000,000		$ 150,000,000
Remaining available for repurchases of common stock	$ 150,000,000
Increase (Decrease) in Stockholders' Equity
Balance (in shares)	115,242,028
Issuance of stock (in shares)	12,130,540
Stock option exercises (in shares)	1,058,722
Vesting of restricted stock awards, net of shares withheld for tax (shares)	2,566,031
Balance (in shares)	132,373,743
Class A common stock | AOG
Increase (Decrease) in Stockholders' Equity
Exchanges of AOG Units (in shares)	1,376,422
Class A common stock | Underwritten
Class of Stock [Line Items]
Number of shares sold (in shares)	12,130,540
Class B common stock
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.01		0.01
Increase (Decrease) in Stockholders' Equity
Balance (in shares)	1,000
Issuance of stock (in shares)	0
Stock option exercises (in shares)	0
Vesting of restricted stock awards, net of shares withheld for tax (shares)	0
Balance (in shares)	1,000
Class B common stock | AOG
Increase (Decrease) in Stockholders' Equity
Exchanges of AOG Units (in shares)	0
Class C common stock
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.01		$ 0.01
Number of shares sold (in shares)	115,199,620
Increase (Decrease) in Stockholders' Equity
Balance (in shares)	1
Issuance of stock (in shares)	115,199,620
Stock option exercises (in shares)	0
Vesting of restricted stock awards, net of shares withheld for tax (shares)	0
Balance (in shares)	115,199,621
Class C common stock | AOG
Increase (Decrease) in Stockholders' Equity
Exchanges of AOG Units (in shares)	0

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EQUITY COMPENSATION (Equity Incentive Plan) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jan. 01, 2019
Equity compensation
Equity compensation expenses	$ 32,557	$ 27,552
Restricted units
Equity compensation
Equity compensation expenses	28,381	23,012
Restricted units with a market condition
Equity compensation
Equity compensation expenses	4,133	891
Options
Equity compensation
Equity compensation expenses	43	3,101
Phantom Shares
Equity compensation
Equity compensation expenses	$ 0	$ 548
Ares Management L.P
Equity compensation
Total number of shares available for grant under the Equity Incentive Plan (in shares)	34,495,433		37,528,029

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of carrying value for the Company's intangible assets

The following table summarizes the carrying value, net of accumulated amortization, of the Company's intangible assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition:

	Weighted Average Amortization Period as of March 31, 2020	As of March 31,		As of December 31,
		2020		2019
Management contracts	6.3 years	$	42,547	$	12,498
Client relationships	8.3 years	6,341		6,341
Trade name	2.3 years	378		378
Intangible assets		49,266		19,217
Less: accumulated amortization		(7,592)		(11,242)
Intangible assets, net		$	41,674	$	7,975

Schedule of goodwill rollforward

The following table summarizes the carrying value of the Company's goodwill assets that are included within other assets in the Condensed Consolidated Statements of Financial Condition:

	Credit Group		Private Equity Group		Real Estate Group		Total
Balance as of December 31, 2019	$	32,196	$	58,600	$	53,059	$	143,855
Foreign currency translation	—		—		(113)		(113)
Balance as of March 31, 2020	$	32,196	$	58,600	$	52,946	$	143,742

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

The Company operates through its distinct operating segments that are summarized below:

Credit Group: The Credit Group manages credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, multi-asset credit, alternative credit investments and direct lending. The syndicated loans strategy focuses on evaluating individual credit opportunities related primarily to non-investment grade senior secured loans

and primarily target first lien secured debt, with a secondary focus on second lien loans, mezzanine loans, high yield bonds and unsecured loans. The high yield bond strategy seeks to deliver a diversified portfolio of liquid, traded non-investment grade corporate bonds, including secured, unsecured and subordinated debt instruments. Multi-asset credit is a “go anywhere” strategy designed to offer investors a flexible solution to global credit investing by tactical allocation between multiple asset classes in various market conditions. The alternative credit strategy seeks to capitalize on asset-focused investment opportunities that fall outside of traditional, well-defined markets such as corporate debt, real estate and private equity. The alternative credit strategy emphasizes downside protection and capital preservation through a focus on investments that tend to share the following key attributes: asset security, covenants, structural protections and cash flow velocity. The direct lending strategy is one of the largest self-originating direct lenders to the U.S. and European markets and has a multi-channel origination strategy designed to address a broad set of investment opportunities in the middle market. The Credit Group manages U.S. corporate lending activities primarily through its inaugural vehicle and publicly traded business development company, ARCC. The group maintains a flexible investment strategy with the capability to invest in first lien senior secured loans (including "unitranche" loans which are loans that combine senior and mezzanine debt, generally in a first lien position), second lien senior secured loans, mezzanine debt and non-control equity co-investments in middle market companies and power generation projects.

Private Equity Group:  The Private Equity Group manages investment strategies broadly categorized as corporate private equity, infrastructure and power, special opportunities, and energy opportunities. In its North American and European flexible capital corporate private equity strategy, the Company targets opportunistic majority or shared-control investments in businesses with strong franchises and attractive growth opportunities in North America and Europe. The infrastructure and power strategy targets infrastructure-related assets across the power generation, transmission, midstream sectors and renewables seeking attractive risk-adjusted equity returns with current cash flow and capital appreciation. The special opportunities strategy seeks to invest opportunistically across a broad spectrum of distressed or mispriced investments, including corporate debt, rescue capital, private asset-backed investments, post-reorganization securities and non-performing portfolios. The energy opportunities strategy targets investments in the energy industry where its flexible capital can provide attractive risk-adjusted returns while mitigating commodity risk.

Real Estate Group:  The Real Estate Group manages comprehensive real estate equity and debt strategies. Real Estate equity strategies focus on applying hands-on value creation initiatives to mismanaged and capital-starved assets, as well as new development, ultimately selling stabilized assets back into the market. The Real Estate Group manages both a value-add strategy and an opportunistic strategy. The value-add strategy seeks to create value by buying assets at attractive valuations and through active asset management of income-producing properties across the U.S. and Western Europe. The opportunistic strategy focuses on manufacturing core assets through development, redevelopment and fixing distressed capital structures across major properties in the U.S. and Europe. The Company’s debt strategies leverage the Real Estate Group’s diverse sources of capital to directly originate and manage commercial mortgage investments on properties that range from stabilized to requiring hands-on value creation. In addition to managing private debt funds, the Real Estate Group makes debt investments through a publicly traded commercial mortgage REIT, ACRE.

The OMG consists of shared resource groups to support the Company’s operating segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, strategy and relationship management, legal, compliance and human resources. Additionally, the OMG provides services to certain of the Company’s investment companies and partnerships, which reimburse the OMG for expenses equal to the costs of services provided. The OMG’s expenses are not allocated to the Company’s reportable segments but the Company does consider the cost structure of the OMG when evaluating its financial performance.

Segment Profit Measures: These measures supplement and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with GAAP.

Fee related earnings (“FRE”) is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes performance income, performance related compensation, investment income from the Consolidated Funds and non-consolidated funds and certain other items that the Company believes are not indicative of its core operating performance.

Realized income (“RI”) is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and expenses, which may or may not be eventually realized at the levels presented and whose

realizations depend more on future outcomes than current business operations. RI differs from net income by excluding (a) income tax expense, (b) operating results of the Consolidated Funds, (c) depreciation and amortization expense, (d) the effects of changes arising from corporate actions, (e) unrealized gains and losses related to performance income and investment performance and (f) certain other items that the Company believes are not indicative of operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital transactions, underwriting costs and expenses incurred in connection with corporate reorganization. Management believes RI is a more appropriate metric to evaluate the Company's current business operations.

Management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non-consolidated funds.

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2020:

	Credit Group		Private Equity Group		Real Estate Group		Total Segments		OMG		Total
Management fees (Credit Group includes ARCC Part I Fees of $43,923)	$	197,437	$	52,157	$	24,184	$	273,778	$	—	$	273,778
Other fees	3,058		110		704		3,872		—		3,872
Compensation and benefits	(70,925)		(19,596)		(12,413)		(102,934)		(36,426)		(139,360)
General, administrative and other expenses	(15,313)		(5,633)		(2,935)		(23,881)		(21,305)		(45,186)
Fee related earnings	114,257		27,038		9,540		150,835		(57,731)		93,104
Performance income—realized	9,016		116,154		26,600		151,770		—		151,770
Performance related compensation—realized	(7,899)		(92,924)		(17,170)		(117,993)		—		(117,993)
Realized net performance income	1,117		23,230		9,430		33,777		—		33,777
Investment income (loss)—realized	(843)		11,470		1,290		11,917		(5,698)		6,219
Interest and other investment income —realized	4,575		812		796		6,183		168		6,351
Interest expense	(1,715)		(1,643)		(971)		(4,329)		(977)		(5,306)
Realized net investment income (loss)	2,017		10,639		1,115		13,771		(6,507)		7,264
Realized income	$	117,391	$	60,907	$	20,085	$	198,383	$	(64,238)	$	134,145

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2019:

	Credit Group		Private Equity Group		Real Estate Group		Total Segments		OMG		Total
Management fees (Credit Group includes ARCC Part I Fees of $38,393)	$	162,966	$	51,396	$	18,650	$	233,012	$	—	$	233,012
Other fees	3,066		—		9		3,075		—		3,075
Compensation and benefits	(60,348)		(21,196)		(9,284)		(90,828)		(32,661)		(123,489)
General, administrative and other expenses	(13,505)		(4,057)		(3,132)		(20,694)		(20,632)		(41,326)
Fee related earnings	92,179		26,143		6,243		124,565		(53,293)		71,272
Performance income—realized	21,925		44,123		2,525		68,573		—		68,573
Performance related compensation—realized	(12,663)		(35,297)		(1,257)		(49,217)		—		(49,217)
Realized net performance income	9,262		8,826		1,268		19,356		—		19,356
Investment income—realized	858		10,936		3,480		15,274		—		15,274
Interest and other investment income —realized	2,905		294		1,105		4,304		15		4,319
Interest expense	(1,899)		(2,175)		(1,119)		(5,193)		(396)		(5,589)
Realized net investment income (loss)	1,864		9,055		3,466		14,385		(381)		14,004
Realized income	$	103,305	$	44,024	$	10,977	$	158,306	$	(53,674)	$	104,632

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

	Three months ended March 31,
	2020		2019
Segment revenues
Management fees (includes ARCC Part I Fees of $43,923 and $38,393 for the three months ended March 31, 2020 and 2019 respectively)	$	273,778	$	233,012
Other fees	3,872		3,075
Performance income—realized	151,770		68,573
Total segment revenues	$	429,420	$	304,660
Segment expenses
Compensation and benefits	$	102,934	$	90,828
General, administrative and other expenses	23,881		20,694
Performance related compensation—realized	117,993		49,217
Total segment expenses	$	244,808	$	160,739
Segment realized net investment income
Investment income—realized	$	11,917	$	15,274
Interest and other investment income —realized	6,183		4,304
Interest expense	(4,329)		(5,193)
Total segment realized net investment income	$	13,771	$	14,385

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

	Three months ended March 31,
	2020		2019
Total consolidated revenue	$	13,409	$	477,197
Performance (income) loss-unrealized	387,657		(146,575)
Management fees of Consolidated Funds eliminated in consolidation	10,502		8,413
Incentive fees of Consolidated Funds eliminated in consolidation	(45)		434
Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation	3,317		—
Administrative fees(1)	(9,661)		(6,602)
Performance income (loss) reclass(2)	(1,717)		606
Principal investment (income) loss, net of eliminations	26,723		(28,759)
Net income of non-controlling interests in consolidated subsidiaries	(765)		(54)
Total consolidation adjustments and reconciling items	416,011		(172,537)
Total segment revenue	$	429,420	$	304,660

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

(2)Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed Consolidated Statements of Operations.

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

	Three months ended March 31,
	2020		2019
Total consolidated expenses	$	81,959	$	369,107
Performance related compensation-unrealized	285,892		(107,303)
Expenses of Consolidated Funds added in consolidation	(17,899)		(13,401)
Expenses of Consolidated Funds eliminated in consolidation	10,456		8,847
Administrative fees(1)	(9,661)		(6,602)
OMG expenses	(57,731)		(53,293)
Acquisition and merger-related expense	(3,115)		(1,773)
Equity compensation expense	(32,557)		(27,552)
Deferred placement fees	(5,415)		(521)
Depreciation and amortization expense	(5,542)		(5,824)
Expense of non-controlling interests in consolidated subsidiaries	(1,579)		(946)
Total consolidation adjustments and reconciling items	162,849		(208,368)
Total segment expenses	$	244,808	$	160,739

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

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

	Three months ended March 31,
	2020		2019
Total consolidated other income	$	(227,863)	$	27,870
Investment (income) loss - unrealized	105,594		(16,183)
Interest and other investment (income) loss - unrealized	(4,961)		4,978
Other (income) loss from Consolidated Funds added in consolidation, net	198,245		(31,207)
Other income from Consolidated Funds eliminated in consolidation, net	(3,819)		(372)
OMG other expense	1,141		30
Performance (income) loss reclass(1)	1,717		(606)
Principal investment income (loss)	(75,988)		29,892
Other (income) expense, net	22		(1)
Other (income) loss of non-controlling interests in consolidated subsidiaries	19,683		(16)
Total consolidation adjustments and reconciling items	241,634		(13,485)
Total segment realized net investment income	$	13,771	$	14,385

(1)Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in the Company’s Condensed Consolidated Statements of Operations.

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

	Three months ended March 31,
	2020		2019
Income (loss) before taxes	$	(296,413)	$	135,960
Adjustments:
Depreciation and amortization expense	5,542		5,824
Equity compensation expense	32,557		27,552
Acquisition and merger-related expense	3,137		1,773
Deferred placement fees	5,415		521
OMG expense, net	58,872		53,323
Other income, net	—		(1)
Net expense of non-controlling interests in consolidated subsidiaries	20,497		876
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net of eliminations	166,378		(17,045)
Total performance (income) loss - unrealized	387,657		(146,575)
Total performance related compensation - unrealized	(285,892)		107,303
Total investment (income) loss - unrealized	100,633		(11,205)
Realized income	198,383		158,306
Total performance income - realized	(151,770)		(68,573)
Total performance related compensation - realized	117,993		49,217
Total investment income - realized	(13,771)		(14,385)
Fee related earnings	$	150,835	$	124,565

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DEBT (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of borrowings outstanding

The following table presents the activity of the Company's debt issuance costs:

	Credit Facility		Senior Notes
Unamortized debt issuance costs as of December 31, 2019	$	5,255	$	1,102
Debt issuance costs incurred	1,182		—
Amortization of debt issuance costs	(318)		(58)
Unamortized debt issuance costs as of March 31, 2020	$	6,119	$	1,044

The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs:

	As of March 31, 2020					As of December 31, 2019
	Loan Obligations		Fair Value of Loan Obligations		Weighted  Average Remaining Maturity  In Years	Loan Obligations		Fair Value of Loan Obligations		Weighted Average Remaining Maturity  In Years
Senior secured notes(1)	$	9,461,567	$	8,169,907	10.71	$	7,738,337	$	7,700,038	10.97
Subordinated notes(2)	606,407		184,551		10.85	449,877		273,710		11.02
Total loan obligations of Consolidated CLOs	$	10,067,974	$	8,354,458		$	8,188,214	$	7,973,748

(1)Original borrowings under the senior secured notes totaled $9.5 billion, with various maturity dates ranging from July 2028 to October 2032. The weighted average interest rate as of March 31, 2020 was 2.83%.

(2)Original borrowings under the subordinated notes totaled $606.4 million, with various maturity dates ranging from July 2028 to October 2032. The notes do not have contractual interest rates, instead holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO.

The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding:

				As of March 31, 2020			As of December 31, 2019
Consolidated Funds' Debt Facilities	Maturity Date	Total Capacity		Outstanding Loan(1)		Effective Rate	Outstanding Loan(1)		Effective Rate
Credit Facilities:
	1/1/2023	$	18,000	$	17,909	2.62%	$	17,550	3.44%
	3/5/2021	71,500		—		N/A	71,500		3.14
	6/30/2021	192,780		—		N/A	—		N/A
	7/15/2028	75,000		16,500		4.17	17,000		4.75
Revolving Term Loan	2/9/2022	1,900		1,031		7.69	1,194		7.70
Total borrowings of Consolidated Funds				$	35,440		$	107,244

(1)The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate.

(2)The effective rate is based on the three month EURIBOR or zero, whichever is higher, plus a spread of 1.00%.

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DEBT (Debt Obligations) (Details) - Ares Management L.P - USD ($)	1 Months Ended	3 Months Ended
	Oct. 31, 2014	Mar. 31, 2020	Dec. 31, 2019
DEBT
Carrying Value		$ 1,046,775,000	$ 316,609,000
Credit Facility
DEBT
Carrying Value		$ 800,000,000	$ 70,000,000
Interest Rate		2.12%	3.06%
Maximum borrowing capacity		$ 1,065,000,000.000
Unused commitment fees		0.13%
Interest rate		0.00%
Credit Facility | Base rate
DEBT
Interest rate spread		0.25%
Credit Facility | LIBOR
DEBT
Interest rate spread		1.25%
Senior Notes
DEBT
Original Borrowing Amount		$ 250,000,000
Carrying Value		$ 246,775,000	$ 246,609,000
Interest Rate		4.21%	4.21%
AFC Notes
DEBT
Debt issuance rate	98.27%

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INVESTMENTS (Fair Value Investments, excluding Equity Method Investments Held at Fair Value) (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Investments
Equity method investments		$ 1,663,664
Ares Management L.P
Investments
Equity method investments	$ 1,190,604
Partnership interests	4,207	36,824
Total equity method investments	85,128	121,754
Collateralized loan obligations (2)	17,783	22,265
Equity securities	$ 15,577	$ 15,747
Percentage of total investments as of	1.50%	1.30%
Ares Management L.P | Crestline Denali Class B Interests
Investments
Collateralized loan obligations (2)	$ 2,600
Partnership interests | Ares Management L.P
Investments
Total equity method investments	$ 1,124,387	$ 1,593,438
Percentage of total investments as of	94.40%	95.80%
Other fixed income | Ares Management L.P
Investments
Total equity method investments	$ 47,561	$ 46,918
Percentage of total investments as of	4.00%	2.80%
Investments in CLO warehouse | Ares Management L.P
Investments
Collateralized loan obligations (2)	$ 65,344	$ 69,183
Percentage of total investments as of	5.50%	4.10%
Common Stock | Ares Management L.P
Investments
Equity securities	$ 873	$ 1,043
Percentage of total investments as of	0.10%	0.10%
Partnership interests | Ares Management L.P
Investments
Equity method investments	$ 345,350	$ 390,407
Percentage of total investments as of	29.00%	23.50%
Carried interest allocation | Ares Management L.P
Investments
Equity method investments	$ 747,363	$ 1,134,967
Percentage of total investments as of	62.80%	68.20%
Equity method private investment partnership interests and other (held at fair value) | Ares Management L.P
Investments
Equity method investments	$ 18,911	$ 51,528
Percentage of total investments as of	1.60%	3.10%
Equity method private investment partnership interests and other | Ares Management L.P
Investments
Partnership interests	$ 12,763	$ 16,536
Percentage of total investments as of	1.00%	1.00%

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FAIR VALUE (Changes in Fair Value of Level III Measurements) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Consolidated Funds
Changes in the fair value of the Level III investments
Balance, beginning of period	$ 717,030	$ 970,837
Additions(1)	392,037
Deconsolidation of fund		(58,883)
Transfer in	607,588	155,651
Transfer out	(61,774)	(182,087)
Purchases	363,841	188,182
Sales/settlements	(179,788)	(84,596)
Amortized discounts/premiums	547	161
Realized and unrealized appreciation (depreciation), net	(210,128)	14,099
Balance, end of period	1,629,353	1,003,364
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	(207,110)	14,617
Consolidated Funds | Equity Securities
Changes in the fair value of the Level III investments
Balance, beginning of period	85,988	150,752
Additions(1)	(635)
Deconsolidation of fund		0
Transfer in	0	0
Transfer out	0	0
Purchases	249	10,774
Sales/settlements	(351)	(5,086)
Amortized discounts/premiums	0	0
Realized and unrealized appreciation (depreciation), net	(42,499)	2,592
Balance, end of period	42,752	159,032
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	(42,500)	2,592
Consolidated Funds | Fixed Income Securities
Changes in the fair value of the Level III investments
Balance, beginning of period	339,136	547,958
Additions(1)	392,672
Deconsolidation of fund		(58,883)
Transfer in	607,588	155,651
Transfer out	(61,774)	(182,087)
Purchases	355,592	173,408
Sales/settlements	(178,159)	(79,489)
Amortized discounts/premiums	499	312
Realized and unrealized appreciation (depreciation), net	(175,998)	7,434
Balance, end of period	1,279,556	564,304
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	(170,496)	7,894
Consolidated Funds | Partnership interests
Changes in the fair value of the Level III investments
Balance, beginning of period	296,012	271,447
Additions(1)	0
Deconsolidation of fund		0
Transfer in	0	0
Transfer out	0	0
Purchases	8,000	4,000
Sales/settlements	0	0
Amortized discounts/premiums	0	0
Realized and unrealized appreciation (depreciation), net	3,013	7,612
Balance, end of period	307,025	283,059
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	3,012	7,612
Consolidated Funds | Derivatives, Net
Changes in the fair value of the Level III investments
Balance, beginning of period	(4,106)	680
Additions(1)	0
Deconsolidation of fund		0
Transfer in	0	0
Transfer out	0	0
Purchases	0	0
Sales/settlements	(1,278)	(21)
Amortized discounts/premiums	48	(151)
Realized and unrealized appreciation (depreciation), net	5,356	(3,539)
Balance, end of period	20	(3,031)
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	2,874	(3,481)
Ares Management L.P
Changes in the fair value of the Level III investments
Balance, beginning of period	119,079	106,413
Additions(1)	3,686
Deconsolidation of fund		8,138
Purchases	643	2,147
Sales/settlements	(32,832)	(4,964)
Realized and unrealized appreciation (depreciation), net	(7,953)	1,045
Balance, end of period	82,623	112,779
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	(1,220)	719
Ares Management L.P | Equity Securities
Changes in the fair value of the Level III investments
Balance, beginning of period	14,704	10,397
Additions(1)	0
Deconsolidation of fund		0
Purchases	0	0
Sales/settlements	0	0
Realized and unrealized appreciation (depreciation), net	0	0
Balance, end of period	14,704	10,397
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	0	0
Ares Management L.P | Fixed Income Securities
Changes in the fair value of the Level III investments
Balance, beginning of period	69,183	60,824
Additions(1)	3,686
Deconsolidation of fund		8,138
Purchases	643	2,147
Sales/settlements	(402)	(4,964)
Realized and unrealized appreciation (depreciation), net	(7,766)	1,045
Balance, end of period	65,344	67,190
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	(6,731)	719
Ares Management L.P | Partnership interests
Changes in the fair value of the Level III investments
Balance, beginning of period	35,192	35,192
Additions(1)	0
Deconsolidation of fund		0
Purchases	0	0
Sales/settlements	(32,430)	0
Realized and unrealized appreciation (depreciation), net	(187)	0
Balance, end of period	2,575	35,192
Increase (decrease) in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date	$ 5,511	$ 0

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EQUITY (Common Stock Offering) (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
AOG Units (in units)	247,573,364	231,883,861
AOG
Class of Stock [Line Items]
Direct Ownership Interest	100.00%	100.00%
Ares Owners Holdings, L.P.
Class of Stock [Line Items]
AOG Units (in units)	115,199,621	116,641,833
Ares Owners Holdings, L.P. | AOG
Class of Stock [Line Items]
Direct Ownership Interest	46.53%	50.30%
Daily Average Ownership	49.57%	53.20%
AOG
Class of Stock [Line Items]
AOG Units (in units)	132,373,743	115,242,028
AOG | AOG
Class of Stock [Line Items]
Direct Ownership Interest	53.47%	49.70%
Daily Average Ownership	50.43%	46.80%

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EQUITY COMPENSATION (Restricted Units) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Equity compensation
Dividend declared and paid per share of Class A common stock (in dollar per share)	$ 0.40	$ 0.32
Distribution equivalents made to holders	$ 6.4
Restricted units
Units
Balance at the beginning of the period (in units or shares)	16,810,473
Granted (in units)	3,268,133
Vested (in units)	(3,921,722)
Forfeited (in units)	(211,925)
Balance at the end of the period (in units or shares)	15,944,959
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)	$ 20.07
Granted (in dollars per share)	36.85
Vested (in dollars per share)	19.21
Forfeited (in dollars per share)	21.42
Balance at the end of the period (in dollars per share)	$ 23.69
Unrecognized compensation expenses	$ 291.3
Weighted average period of compensation expense expected to be recognized	3 years 2 months 1 day
Third Anniversary of Grant Date | Restricted units
Equity compensation
Annual award vesting percentage	33.33%
First Anniversary of Grant Date | Restricted units
Equity compensation
Annual award vesting percentage	25.00%
First Anniversary | Restricted units
Equity compensation
Annual award vesting percentage	33.33%

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COMMITMENTS AND CONTINGENCIES (Leases: Other Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Operating cash flows for operating leases	$ 8,178	$ 7,682
Operating cash flows for finance leases	6	52
Financing cash flows for finance leases	36	264
Leased assets obtained in exchange for new operating lease liabilities	$ 8,744	$ 45,435

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DEBT (Credit Facilities of the Consolidated Funds) (Details) - Consolidated Funds - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
DEBT
Total borrowings of Consolidated Funds	$ 35,440	$ 107,244
Credit Facility Maturing 1/1/2023
DEBT
Maximum borrowing capacity	18,000
Outstanding Loan	$ 17,909	$ 17,550
Effective Rate	2.62%	3.44%
Credit Facility Maturing 3/5/2021
DEBT
Maximum borrowing capacity	$ 71,500
Outstanding Loan	0	$ 71,500
Effective Rate		3.14%
Credit Facility Maturing 6/30/2021
DEBT
Maximum borrowing capacity	192,780
Outstanding Loan	0	$ 0
Credit Facility Maturing 7/15/2028
DEBT
Maximum borrowing capacity	75,000
Outstanding Loan	$ 16,500	$ 17,000
Effective Rate	4.17%	4.75%
Credit Facility Maturing 6/29/2019
DEBT
Interest rate	0.00%	0.00%
Credit Facility Maturing 6/29/2019 | EURIBOR
DEBT
Interest rate spread	1.00%	1.00%
Revolving Term Loan
DEBT
Maximum borrowing capacity	$ 1,900
Outstanding Loan	$ 1,031	$ 1,194
Effective Rate	7.69%	7.70%

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INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (20,616)	$ 14,384
Deferred tax assets, net	$ 86,300		$ 46,400

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SEGMENT REPORTING (Expenses) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting, Other Significant Reconciling Item [Line Items]
Expenses	$ 81,959	$ 369,107
Equity compensation expense	32,557	27,552
Operating segment
Segment Reporting, Other Significant Reconciling Item [Line Items]
Transaction support expense	3,137	1,773
Equity compensation expense	32,557	27,552
Deferred placement fees	5,415	521
Depreciation and amortization expense	5,542	5,824
Operating segment | Ares Management L.P
Segment Reporting, Other Significant Reconciling Item [Line Items]
Expenses	244,808	160,739
Performance related compensation-unrealized	285,892	(107,303)
Operating segment | Consolidated Funds
Segment Reporting, Other Significant Reconciling Item [Line Items]
Expenses	81,959	369,107
Reconciling items
Segment Reporting, Other Significant Reconciling Item [Line Items]
Expenses	162,849	(208,368)
Administrative fees	(9,661)	(6,602)
Transaction support expense	(3,115)	(1,773)
Equity compensation expense	(32,557)	(27,552)
Deferred placement fees	(5,415)	(521)
Depreciation and amortization expense	(5,542)	(5,824)
Reconciling items | Non-Controlling interest | Subsidiaries
Segment Reporting, Other Significant Reconciling Item [Line Items]
Expenses	(1,579)	(946)
Reconciling items | Consolidated Funds
Segment Reporting, Other Significant Reconciling Item [Line Items]
Expenses of Consolidated Funds added in consolidation	(17,899)	(13,401)
Expenses of Consolidated Funds eliminated in consolidation	10,456	8,847
OMG
Segment Reporting, Other Significant Reconciling Item [Line Items]
Expenses	$ 57,731	$ 53,293

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CONSOLIDATION (Balance Sheet) (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Assets
Total assets	$ 13,216,929	$ 12,014,196
Liabilities
Operating lease liabilities	169,828
Total liabilities	11,241,333	10,155,598
Commitments and contingencies
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	298,761	298,761
Additional paid-in-capital	746,595	525,244
Retained earnings	(138,371)	(50,820)
Accumulated other comprehensive loss, net of tax	(10,849)	(6,047)
Total stockholders' equity	898,612	768,290
Total equity	1,975,596	1,858,598	$ 1,842,782	$ 1,602,324	$ 1,479,824	$ 1,394,341
Total liabilities, non-controlling interests and equity	$ 13,216,929	$ 12,014,196
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Preferred stock, shares issued (in shares)	12,400,000	12,400,000
Preferred stock, shares outstanding (in shares)	12,400,000	12,400,000
Common stock, shares outstanding (in shares)	247,574,364	115,243,029
Class A common stock
Stockholders' Equity
Common stock	$ 1,324	$ 1,152
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (in shares)	132,373,743	115,242,028
Common stock, shares outstanding (in shares)	132,373,743	115,242,028
Class B common stock
Stockholders' Equity
Common stock	$ 0	$ 0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000	1,000
Common stock, shares issued (in shares)	1,000	1,000
Common stock, shares outstanding (in shares)	1,000	1,000
Class C common stock
Stockholders' Equity
Common stock	$ 1,152	$ 0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	499,999,000	499,999,000
Common stock, shares issued (in shares)	115,199,621	1
Common stock, shares outstanding (in shares)	115,199,621	1
Eliminations
Assets
Total assets	$ (168,872)	$ (193,557)
Liabilities
Total liabilities	(49,977)	(36,874)
Commitments and contingencies
Stockholders' Equity
Total equity	(118,895)	(156,683)
Total liabilities, non-controlling interests and equity	(168,872)	(193,557)
Consolidated Funds
Assets
Cash and cash equivalents	514,401	606,321
Investments, at fair value	9,094,565	8,727,947
Due from affiliates	6,192	6,192
Other assets	28,179	30,081
Receivable for securities sold	355,149	88,809
Liabilities
Accounts payable, accrued expenses and other liabilities	72,486	61,857
Due to affiliates	0	0
Payable for securities purchased	796,316	500,146
CLO loan obligations, at fair value	8,354,458	7,973,748
Fund borrowings	35,440	107,244
Non-controlling interest in Consolidated Funds	562,818	618,020
Consolidated Funds | Reportable legal entity
Assets
Cash and cash equivalents	514,401	606,321
Investments, at fair value	9,086,469	8,723,169
Due from affiliates	6,192	6,192
Other assets	28,179	30,081
Receivable for securities sold	355,149	88,809
Total assets	9,990,390	9,454,572
Liabilities
Accounts payable, accrued expenses and other liabilities	72,486	61,857
Due to affiliates	14,382	11,700
Payable for securities purchased	796,316	500,146
CLO loan obligations, at fair value	8,390,053	7,998,922
Fund borrowings	35,440	107,244
Total liabilities	9,308,677	8,679,869
Commitments and contingencies
Non-controlling interest in Consolidated Funds	681,713	774,703
Stockholders' Equity
Total equity	681,713	774,703
Total liabilities, non-controlling interests and equity	9,990,390	9,454,572
Consolidated Funds | Eliminations
Assets
Cash and cash equivalents	0	0
Investments, at fair value	8,096	4,778
Due from affiliates	0	0
Other assets	0	0
Receivable for securities sold	0	0
Liabilities
Accounts payable, accrued expenses and other liabilities	0	0
Due to affiliates	(14,382)	(11,700)
Payable for securities purchased	0	0
CLO loan obligations, at fair value	(35,595)	(25,174)
Fund borrowings	0	0
Non-controlling interest in Consolidated Funds	(118,895)	(156,683)
AOG
Liabilities
Non-controlling interest in Ares Operating Group entities	514,166	472,288
AOG | Reportable legal entity
Liabilities
Non-controlling interest in Ares Operating Group entities	514,166	472,288
AOG | Eliminations
Liabilities
Non-controlling interest in Ares Operating Group entities	0	0
Ares Management L.P
Assets
Cash and cash equivalents	1,167,673	138,384
Investments, at fair value	1,190,604	1,663,664
Due from affiliates	288,030	268,099
Other assets	426,911	341,293
Right-of-use operating lease assets	145,225	143,406
Liabilities
Accounts payable, accrued expenses and other liabilities	90,613	88,173
Accrued compensation	69,702	37,795
Due to affiliates	73,050	71,445
Performance related compensation payable	532,665	829,764
Debt obligations	1,046,775	316,609
Operating lease liabilities	169,828	168,817
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	298,761	298,761
Additional paid-in-capital	746,595	525,244
Retained earnings	(138,371)	(50,820)
Accumulated other comprehensive loss, net of tax	(10,849)	(6,047)
Total stockholders' equity	898,612	768,290
Ares Management L.P | Class A common stock
Stockholders' Equity
Common stock	1,324	1,152
Ares Management L.P | Class B common stock
Stockholders' Equity
Common stock	0	0
Ares Management L.P | Class C common stock
Stockholders' Equity
Common stock	1,152	0
Ares Management L.P | Accrued Interest
Assets
Investments, at fair value	747,363	1,134,967
Ares Management L.P | Reportable legal entity
Assets
Cash and cash equivalents	1,167,673	138,384
Investments, at fair value	1,345,094	1,845,520
Due from affiliates	308,566	282,197
Other assets	428,853	343,674
Right-of-use operating lease assets	145,225	143,406
Total assets	3,395,411	2,753,181
Liabilities
Accounts payable, accrued expenses and other liabilities	90,613	88,173
Accrued compensation	69,702	37,795
Due to affiliates	73,050	71,445
Performance related compensation payable	532,665	829,764
Debt obligations	1,046,775	316,609
Operating lease liabilities	169,828	168,817
Total liabilities	1,982,633	1,512,603
Commitments and contingencies
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	298,761	298,761
Additional paid-in-capital	746,595	525,244
Retained earnings	(138,371)	(50,820)
Accumulated other comprehensive loss, net of tax	(10,849)	(6,047)
Total stockholders' equity	898,612	768,290
Total equity	1,412,778	1,240,578
Total liabilities, non-controlling interests and equity	3,395,411	2,753,181
Ares Management L.P | Reportable legal entity | Class A common stock
Stockholders' Equity
Common stock	1,324	1,152
Ares Management L.P | Reportable legal entity | Class B common stock
Stockholders' Equity
Common stock		0
Ares Management L.P | Reportable legal entity | Class C common stock
Stockholders' Equity
Common stock		0
Ares Management L.P | Eliminations
Assets
Cash and cash equivalents	0	0
Investments, at fair value	(154,490)	(181,856)
Due from affiliates	(20,536)	(14,098)
Other assets	(1,942)	(2,381)
Liabilities
Accounts payable, accrued expenses and other liabilities	0	0
Accrued compensation	0	0
Due to affiliates	0	0
Performance related compensation payable	0	0
Debt obligations	0	0
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (12,400,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)	0	0
Accumulated other comprehensive loss, net of tax	0	0
Total stockholders' equity	0	0
Ares Management L.P | Eliminations  | Class A common stock
Stockholders' Equity
Common stock	$ 0	$ 0

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INCOME TAXES

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s income tax provision includes corporate income taxes and other entity level income taxes, as well as income taxes incurred by certain affiliated funds that are consolidated in these financial statements. For the three months ended March 31, 2020, the Company recorded an income tax benefit of $20.6 million. For the three months ended March 31, 2019, the Company recorded income tax expense of $14.4 million.

The Company’s effective income tax rate is dependent on many factors, including the estimated nature and amounts of income and expenses allocated to the non-controlling interests without being subject to federal, state and local income taxes at the corporate level. Additionally, the Company’s effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment entities that are consolidated in the Company's condensed consolidated financial statements. For the three months ended March 31, 2020, the Company recorded its interim income tax provision utilizing the estimated annual effective tax rate.

        The income tax effects of temporary differences give rise to significant portions of deferred tax assets and liabilities, which are presented on a net basis. As of March 31, 2020 and December 31, 2019, the Company recorded a net deferred tax asset of $86.3 million and $46.4 million, respectively, within other assets in the Condensed Consolidated Statements of Financial Condition.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. With limited

exceptions, the Company is no longer subject to income tax audits by taxing authorities for any years prior to 2016. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s condensed consolidated financial statements.

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DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against credit and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. The Company recognizes all of its derivative instruments at fair value as either assets or liabilities in the Condensed Consolidated Statements of Financial Condition within other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management.

The following tables identify the fair value and notional amounts of derivative contracts by major product type on a gross basis for the Company and the Consolidated Funds:

	As of March 31, 2020								As of December 31, 2019
	Assets				Liabilities				Assets				Liabilities
The Company	Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value
Foreign exchange contracts	$	56,555	$	5,429	$	124	$	5	$	67,930	$	4,023	$	10,846	$	113
Total derivatives, at fair value(2)	$	56,555	$	5,429	$	124	$	5	$	67,930	$	4,023	$	10,846	$	113

	As of March 31, 2020								As of December 31, 2019
	Assets				Liabilities				Assets				Liabilities
Consolidated Funds	Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value		Notional(1)		Fair Value
Foreign exchange contracts	$	—	$	—	$	—	$	—	$	667	$	667	$	667	$	670
Asset swap - other	5,258		831		4,808		811		—		—		7,640		4,106
Total derivatives, at fair value(3)	$	5,258	$	831	$	4,808	$	811	$	667	$	667	$	8,307	$	4,776

(1)Represents the total contractual amount of derivative assets and liabilities outstanding.

(2)As of March 31, 2020 and December 31, 2019, the Company had the right to, but elected not to, offset an immaterial amount of its derivative liabilities.

(3)As of March 31, 2020 and December 31, 2019, the Consolidated Funds offset $0.7 million and $0.1 million of their derivative assets and liabilities, respectively.

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Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Revenues
Total revenues	$ 13,409				$ 477,197
Expenses
Total expenses	81,959				369,107
Other income (expense)
Total other income (expense)	(227,863)				27,870
Income (loss) before taxes	(296,413)				135,960
Income tax expense (benefit)	(20,616)				14,384
Net income (loss)	(275,797)	$ 84,475	$ 91,875	$ 74,878	121,576
Net income (loss) attributable to Ares Management Corporation	(31,036)				44,949
Less: Series A Preferred Stock dividends paid	5,425				5,425
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$ (36,461)				$ 39,524
Net income (loss) attributable per share of Class A common stock
Basic (in dollars per share)	$ (0.33)				$ 0.36
Diluted (in dollars per share)	$ (0.33)				$ 0.36
Weighted-average shares of Class A common stock:
Basic (in shares)	118,366,539				102,906,494
Diluted (in shares)	118,366,539				110,699,112
Consolidated Funds
Expenses
Expenses of Consolidated Funds	$ 7,443				$ 4,554
Other income (expense)
Net realized and unrealized gains (losses) on investments	(254,761)				4,364
Interest expense	(80,241)				(64,912)
Interest and other income of Consolidated Funds	113,225				93,184
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	(166,406)				17,624
AOG
Other income (expense)
Net income (loss) attributable to non-controlling interests related to consolidated VIEs	(78,355)				59,003
Ares Management L.P
Revenues
Total revenues	13,409				477,197
Expenses
Compensation and benefits	180,084				156,846
Performance related compensation	(167,899)				156,520
General, administrative and other expenses	62,331				51,187
Other income (expense)
Net realized and unrealized gains (losses) on investments	(8,034)				3,476
Interest and dividend income	1,790				1,844
Interest expense	(5,306)				(5,589)
Other income (expense), net	5,464				(4,497)
Management fees | Ares Management L.P
Revenues
Total revenues	263,849				224,659
Carried interest allocation | Ares Management L.P
Revenues
Total revenues	(230,876)				197,293
Incentive fees | Ares Management L.P
Revenues
Total revenues	(3,249)				16,815
Principal investment income (loss) | Ares Management L.P
Revenues
Total revenues	(26,723)				28,759
Administrative, transaction and other fees
Revenues
Total revenues	0				0
Administrative, transaction and other fees | Ares Management L.P
Revenues
Total revenues	$ 10,408				$ 9,671

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GOODWILL AND INTANGIBLE ASSETS (Carrying Value of Intangible Assets) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)	Feb. 21, 2020 contract	Dec. 31, 2019 USD ($)
Finite-lived intangible assets, net
Intangible assets	$ 49,266			$ 19,217
Less: accumulated amortization	(7,592)			(11,242)
Intangible assets, net	41,674			7,975
Number of collateral management contracts acquired | contract			7
Fully-amortized intangibles, amount removed during the period	$ 4,700
Crestline Denali
Finite-lived intangible assets, net
Estimated useful lives, intangible assets	6 years 6 months
Finite-lived intangible assets acquired	$ 34,700
General, administrative and other expense
Finite-lived intangible assets, net
Amortization expense	$ 1,000	$ 1,200
Management contracts
Finite-lived intangible assets, net
Estimated useful lives, intangible assets	6 years 3 months 18 days
Intangible assets	$ 42,547			12,498
Client relationships
Finite-lived intangible assets, net
Estimated useful lives, intangible assets	8 years 3 months 18 days
Intangible assets	$ 6,341			6,341
Trade name
Finite-lived intangible assets, net
Estimated useful lives, intangible assets	2 years 3 months 18 days
Intangible assets	$ 378			$ 378

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Lease

The tables below present certain supplemental quantitative disclosures regarding the Company's leases as of March 31, 2020 and December 31, 2019 and for the three months ended March 31, 2020 and 2019:

	Classification	As of March 31, 2020		As of December 31, 2019
Operating lease assets	Right-of-use operating lease assets	$	145,225	$	143,406
Finance lease assets	Other assets(1)	1,756		1,787
Total lease assets		$	146,981	$	145,193
Operating lease liabilities	Operating lease liabilities	$	169,828	$	168,817
Finance lease obligations	Accounts payable, accrued expenses and other liabilities	1,698		1,651
Total lease liabilities		$	171,526	$	170,468

(1) Finance lease assets are recorded net of accumulated amortization of $0.7 million and $0.6 million as of March 31, 2020 and December 31, 2019, respectively.

	Classification	Three months ended March 31, 2020		Three months ended March 31, 2019
Operating lease expense	General, administrative and other expenses	$	7,632	$	6,938
Finance lease expense:
Amortization of finance lease assets	General, administrative and other expenses	94		27
Interest on finance lease liabilities	Interest expense	11		13
Total lease expense		$	7,737	$	6,978

Other information	Three months ended March 31, 2020		Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	8,178	$	7,682
Operating cash flows for finance leases	6		52
Financing cash flows for finance leases	36		264
Leased assets obtained in exchange for new operating lease liabilities	8,744		45,435

Lease term and discount rate	As of March 31, 2020		As of December 31, 2019
Weighted-average remaining lease terms (in years):
Operating leases	6.4		6.5
Finance leases	3.2		3.3
Weighted-average discount rate:
Operating leases	3.97	%	4.00	%
Finance leases	3.38	%	3.39	%

Operating Lease, Liability, Maturity

Maturity of lease liabilities	Operating Leases		Finance Leases
2020	$	22,173	$	461
2021	30,320		516
2022	31,506		485
2023	28,026		158
2024	25,178		156
After 2024	55,515		7
Total future payments	192,718		1,783
Less: interest	22,890		85
Total lease liabilities	$	169,828	$	1,698

Finance Lease, Liability, Maturity

Maturity of lease liabilities	Operating Leases		Finance Leases
2020	$	22,173	$	461
2021	30,320		516
2022	31,506		485
2023	28,026		158
2024	25,178		156
After 2024	55,515		7
Total future payments	192,718		1,783
Less: interest	22,890		85
Total lease liabilities	$	169,828	$	1,698

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ (275,797)	$ 84,475	$ 91,875	$ 74,878	$ 121,576
Net cash used in operating activities	(363,237)				(349,846)
Cash flows from investing activities:
Net cash used in investing activities	(38,906)				(2,994)
Allocable to non-controlling interests in Consolidated Funds:
Net cash provided by financing activities	1,445,552				353,331
Effect of exchange rate changes	(14,120)				9,760
Net change in cash and cash equivalents	1,029,289				10,251
Cash and cash equivalents, beginning of period	138,384			120,498
Cash and cash equivalents, end of period	1,167,673	$ 138,384			120,498
Consolidated Funds
Cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities	(453,015)				(416,457)
Cash flows due to changes in operating assets and liabilities	188,510				(69,268)
Allocable to non-controlling interests in Consolidated Funds:
Contributions from non-controlling interests in Consolidated Funds	133,265				54,035
Distributions to non-controlling interests in Consolidated Funds	(13,492)				(20,736)
Borrowings under loan obligations by Consolidated Funds	454,391				396,144
Repayments under loan obligations by Consolidated Funds	(73,609)				(61,227)
Ares Management L.P
Cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash used in operating activities	125,070				10,766
Cash flows due to changes in operating assets and liabilities	51,995				3,537
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net	(3,062)				(2,994)
Acquisitions	(35,844)				0
Cash flows from financing activities:
Net proceeds from issuance of Class A common stock	383,334				0
Proceeds from credit facility	790,000				145,000
Repayments of credit facility	(60,000)				(60,000)
Dividends and distributions	(106,838)				(75,479)
Series A Preferred Stock dividends and distributions	(5,425)				(5,425)
Stock option exercises	19,551				0
Taxes paid related to net share settlement of equity awards	(73,500)				(21,121)
Other financing activities	$ (2,125)				2,140
Allocable to non-controlling interests in Consolidated Funds:
Cash and cash equivalents, beginning of period				$ 120,498	110,247
Cash and cash equivalents, end of period					$ 120,498

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EQUITY (Tables)

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Schedule of Stock by Class

The following table presents the changes in each class of common stock:

	Class A Common Stock	Class B Common Stock	Class C Common Stock	Total
Balance - January 1, 2020	115,242,028	1,000	1	115,243,029
Issuance of stock	12,130,540	—	115,199,620	127,330,160
Exchanges of AOG Units	1,376,422	—	—	1,376,422
Stock option exercises, net of shares withheld for tax	1,058,722	—	—	1,058,722
Vesting of restricted stock awards, net of shares withheld for tax	2,566,031	—	—	2,566,031
Balance Outstanding - March 31, 2020	132,373,743	1,000	115,199,621	247,574,364

Schedule of Ownership Interests

The following table presents each partner's AOG Units and corresponding ownership interest in each of the Ares Operating Group entities, as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities:

							Daily Average Ownership
	As of March 31, 2020			As of December 31, 2019				Three months ended March 31,
	AOG Units	Direct Ownership Interest		AOG Units	Direct Ownership Interest			2020		2019
Ares Management Corporation	132,373,743	53.47	%	115,242,028	49.70	%		50.43	%	46.80	%
Ares Owners Holding L.P.	115,199,621	46.53	%	116,641,833	50.30	%		49.57	%	53.20	%
Total	247,573,364	100.00	%	231,883,861	100.00	%