v3.26.1
SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING
13. SEGMENT REPORTING

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

Credit Group: The Credit Group manages credit strategies across the liquid and illiquid spectrum, including liquid credit, alternative credit, opportunistic credit, direct lending and Asia-Pacific (“APAC”) credit.

Real Assets Group: The Real Assets Group manages comprehensive equity and debt strategies across real estate and infrastructure investments.

Secondaries Group: The Secondaries Group invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate, infrastructure and credit.

Private Equity Group: The Private Equity Group broadly categorizes its investment strategies as corporate private equity and APAC private equity.

Other: Other represents a compilation of operating segments and strategic investments that seek to expand the Company’s reach and its scale in new and existing global markets but individually are not yet material to the Company’s
results. These results include activities from: (i) Ares Insurance Solutions (“AIS”), the Company’s insurance platform that provides solutions to insurance clients including asset management, capital solutions and corporate development; (ii) the SPACs sponsored by the Company; (iii) a venture capital business with fund strategies that are focused on growth-stage companies and applied artificial intelligence, among others; and (iv) other initiatives, such as activities from the Company’s investments in certain structured financing vehicles.

The Operations Management Group (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, legal, compliance, human resources, strategy, relationship management, and distribution, including the Company’s wealth distribution platform, Ares Wealth Management Solutions (“AWMS”). Through our registered broker-dealer subsidiary, Ares Management Capital Markets LLC (“AMCM”), AWMS facilitates the product development, distribution, marketing and client management activities for investment offerings in the global wealth management channel. Additionally, the OMG provides services to certain of the Company’s managed funds and vehicles, which may reimburse the OMG for expenses either equal to the costs of services provided or as a percentage of invested capital. The OMG’s revenues and expenses are not allocated to the Company’s operating segments but the Company does consider the financial results of the OMG when evaluating its financial performance.

Segment Profit Measure: Realized income (“RI”), which includes fee related earnings (“FRE”) as a component, supplements and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with GAAP.

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 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 income before taxes by excluding: (i) operating results of the Consolidated Funds; (ii) depreciation and amortization expense; (iii) the effects of changes arising from corporate actions; (iv) unrealized gains and losses related to carried interest, incentive fees and investment performance; and adjusts for 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 activities, underwriting costs and expenses incurred in connection with corporate reorganization. Placement fee adjustment represents the net portion of either expense deferral or amortization of upfront fees to placement agents that is presented to match the timing of expense recognition with the period over which management fees are expected to be earned from the associated fund for segment purposes but have been expensed in advance in accordance with GAAP. For periods in which the amortization of upfront fees for segment purposes is higher than the GAAP expense, the placement fee adjustment is presented as a reduction to RI. Management believes RI is a more appropriate metric to evaluate the Company’s current business operations.

FRE, a non-GAAP measure that is a component of RI, is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees and fee related performance revenues, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes net performance income, investment income and adjusts for certain other items that the Company believes are not indicative of its core operating performance. Fee related performance revenues, together with fee related performance compensation, are presented within FRE because they represent incentive fees from perpetual capital vehicles that are measured and eligible to be received on a recurring basis and not dependent on realization events from the underlying investments.

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The CODM 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. Total assets by segments is not disclosed because such information is not used by the Company’s CODM in evaluating the segments.
The following tables present the financial results for the Company’s operating segments, as well as the OMG:
Three months ended March 31, 2026
Credit GroupReal Assets Group
Secondaries Group
Private Equity Group
Other
Total SegmentsOMGTotal
Management fees$684,663 $196,626 $70,275 $33,119 $16,888 $1,001,571 $— $1,001,571 
Fee related performance revenues5,256 2,601 11,699 — — 19,556 — 19,556 
Other fees15,099 46,752 1,785 500 50 64,186 9,781 73,967 
Compensation and benefits(176,237)(80,091)(20,499)(13,784)(7,964)(298,575)(150,072)(448,647)
General, administrative and other expenses(51,345)(33,919)(8,627)(4,978)(2,563)(101,432)(80,611)(182,043)
Fee related earnings477,436 131,969 54,633 14,857 6,411 685,306 (220,902)464,404 
Performance income—realized166,228 11,663 — 35,657 — 213,548 — 213,548 
Performance related compensation—realized(102,249)(7,400)— (28,563)— (138,212)— (138,212)
Realized net performance income63,979 4,263 — 7,094 — 75,336 — 75,336 
Investment income (loss)—realized4,024 5,446 169 78 2,194 11,911 (131)11,780 
Interest income832 184 19 — — 1,035 941 1,976 
Interest expense(3,355)(31,089)(1,623)(3,416)(11,141)(50,624)(136)(50,760)
Realized net investment income (loss)1,501 (25,459)(1,435)(3,338)(8,947)(37,678)674 (37,004)
Realized income$542,916 $110,773 $53,198 $18,613 $(2,536)$722,964 $(220,228)$502,736 
Three months ended March 31, 2025
Credit GroupReal Assets Group
Secondaries Group
Private Equity Group
Other
Total SegmentsOMGTotal
Management fees$585,396 $130,453 $57,650 $31,998 $12,879 $818,376 $— $818,376 
Fee related performance revenues18,395 — 9,656 — — 28,051 — 28,051 
Other fees10,598 21,380 122 397 136 32,633 5,537 38,170 
Compensation and benefits
(164,747)(56,702)(18,371)(13,831)(7,063)(260,714)(116,468)(377,182)
General, administrative and other expenses(41,048)(20,852)(8,473)(4,257)(1,483)(76,113)(64,026)(140,139)
Fee related earnings408,594 74,279 40,584 14,307 4,469 542,233 (174,957)367,276 
Performance income—realized54,112 65,305 — 6,031 — 125,448 — 125,448 
Performance related compensation—realized(34,258)(46,807)— (3,351)— (84,416)— (84,416)
Realized net performance income19,854 18,498 — 2,680 — 41,032 — 41,032 
Investment income (loss)—realized5,379 7,919 138 (4,602)2,530 11,364 331 11,695 
Interest income4,420 2,618 957 2,022 11,688 21,705 603 22,308 
Interest expense(6,308)(15,717)(2,008)(4,180)(7,918)(36,131)(256)(36,387)
Realized net investment income (loss)3,491 (5,180)(913)(6,760)6,300 (3,062)678 (2,384)
Realized income$431,939 $87,597 $39,671 $10,227 $10,769 $580,203 $(174,279)$405,924 
The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income (loss):
Three months ended March 31,
20262025
Segment revenues
Management fees$1,001,571 $818,376 
Fee related performance revenues19,556 28,051 
Other fees64,186 32,633 
Performance income—realized213,548 125,448 
Total segment revenues$1,298,861 $1,004,508 
Segment expenses
Compensation and benefits$298,575 $260,714 
General, administrative and other expenses101,432 76,113 
Performance related compensation—realized138,212 84,416 
Total segment expenses$538,219 $421,243 
Segment realized net investment income (loss)
Investment income—realized$11,911 $11,364 
Interest income1,035 21,705 
Interest expense(50,624)(36,131)
Total segment realized net investment loss$(37,678)$(3,062)
The following table reconciles the Company’s consolidated revenues to segment revenue:
Three months ended March 31,
20262025
Total consolidated revenue$1,396,436 $1,088,805 
Performance income—unrealized(92,035)(64,443)
Management fees of Consolidated Funds eliminated in consolidation21,513 9,894 
Performance income of Consolidated Funds eliminated in consolidation16,118 5,128 
Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation83 124 
Administrative fees(1)
(24,035)(19,728)
OMG revenue(9,780)(5,537)
Principal investment income, net of eliminations(477)(21,998)
Net (revenue) expense of non-controlling interests in consolidated subsidiaries(8,962)12,263 
Total consolidation adjustments and reconciling items(97,575)(84,297)
Total segment revenue$1,298,861 $1,004,508 
(1)Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within 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 expenses to segment expenses:
Three months ended March 31,
20262025
Total consolidated expenses$1,168,463 $1,014,328 
Performance related compensation-unrealized(81,422)(40,550)
Expenses of Consolidated Funds added in consolidation(28,878)(16,684)
Expenses of Consolidated Funds eliminated in consolidation21,595 10,028 
Administrative fees(1)
(24,035)(19,728)
OMG expenses(230,683)(180,494)
Acquisition and merger-related expense(1,244)(34,608)
Equity compensation expense(203,632)(257,862)
Acquisition-related compensation expense(2)
(28,200)(21,999)
Placement fee adjustment6,822 6 
Depreciation and amortization expense(59,694)(48,229)
Expense of non-controlling interests in consolidated subsidiaries
(873)17,035 
Total consolidation adjustments and reconciling items(630,244)(593,085)
Total segment expenses$538,219 $421,243 
(1)Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.
(2)Represents bonus payments, a portion of earnouts and other costs recorded in connection with various acquisitions that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Condensed Consolidated Statements of Operations. See “Note 7. Commitments and Contingencies” for a further description of the various contingent earnout arrangements.

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

Three months ended March 31,
20262025
Total consolidated other income$84,948 $66,561 
Investment income—unrealized(20,138)(21,638)
Interest and other investment (income) loss—unrealized(3,373)3,774 
Other income, net of Consolidated Funds added in consolidation(106,720)(86,422)
Other expense (income), net of Consolidated Funds eliminated in consolidation(236)1,800 
OMG other (income) expense(675)4,197 
Principal investment income29,012 26,839 
Other (income) expense, net(23,006)2,526 
Other loss (income) of non-controlling interests in consolidated subsidiaries2,510 (699)
Total consolidation adjustments and reconciling items(122,626)(69,623)
Total segment realized net investment loss$(37,678)$(3,062)
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,
20262025
Income before taxes$312,921 $141,038 
Adjustments:
Depreciation and amortization expense59,694 48,229 
Equity compensation expense203,632 257,862 
Acquisition-related compensation expense(1)
28,200 21,999 
Acquisition and merger-related expense1,244 34,608 
Placement fee adjustment(6,822)(6)
OMG expense, net220,227 179,154 
Other (income) expense, net
(23,006)2,526 
Income before taxes of non-controlling interests in consolidated subsidiaries(5,578)(5,471)
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations(33,424)(57,979)
Total performance income—unrealized(92,035)(64,443)
Total performance related compensation—unrealized81,422 40,550 
Total net investment income—unrealized(23,511)(17,864)
Realized income722,964 580,203 
Total performance income—realized(213,548)(125,448)
Total performance related compensation—realized138,212 84,416 
Total net investment loss—realized37,678 3,062 
Fee related earnings$685,306 $542,233 
(1)Represents bonus payments, a portion of earnouts and other costs recorded in connection with various acquisitions that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Condensed Consolidated Statements of Operations. See “Note 7. Commitments and Contingencies” for a further description of the various contingent earnout arrangements.