Ares Management (ARES)

Financials · $31.4B market cap · SEC CIK 0001176948

Next reports on Feb 3, 2027, before the open, with analysts expecting $1.88 in earnings per share.

52-week range $95.80 to $181.19. 23% below its 52-week high and 46% above its low.

The case for ARES

• Revenue up 24.0% on the year.
• Pays a 2.8% dividend while you wait.
• Has compounded revenue at 26.0% a year over five years.
• Return on equity of 15%.

The case against

• Expensive for its growth: 49.4× earnings, where 10%+ a year of growth plus a 2.8% dividend would justify about 27×.
• Swings harder than the market (beta 1.54).
• Dividend takes 302% of earnings, leaving little cushion.
• Profitability is weak (40/100): return on equity 15%, net margin 10.6%.
• Trailed the S&P 500 by 21 points over the past year.

What the score is made of

Each factor is half a curve over reported figures and half a rank among the other Financials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• Its debt and cash flow are not scored, as for every company in the Financials sector: for banks, insurers and brokers, borrowing is the business.
• Each factor except momentum is half fixed thresholds, half rank among the 76 Financials companies.

The financials

The financials, five years deep

Pulled from Ares Management's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

What Ares Management says it does

Overview Ares is a leading global alternative investment manager with $622.5 billion of assets under management and over 4,250 employees in over 55 o ffices in more than 25 countries . We offer our investors a range of investment strategies and seek to deliver attractive performance to an investor base that includes over 2,850 direct institutional relationships and a significant retail investor base across our publicly-traded funds, sub-advised accounts and perpetual wealth vehicles. Since our inception in 1997, we have adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns through market cycles. Ares believes each of its distinct but complementary investment groups in Credit, Real Assets, Secondaries and Private Equity is a market leader based on assets under management and investment performance. We believe we create value for our stakeholders not only through our investment…

Risk factors ARES lists in its 10-K

• We depend on our executive officers, senior professionals and other key personnel, and our ability to retain them and attract additional qualified personnel is critical to our success and our growth prospects
• Our failure to appropriately address conflicts of interest could damage our reputation and adversely affect our businesses
• Conflicts of interest may arise in our allocation of co-investment opportunities
• The investment management business is intensely competitive
• Poor performance of our funds, or a failure or slowdown in deployment, would cause a decline in our revenue and results of operations and could adversely affect our ability to raise capital for future funds
• ARCC’s management fee comprises a significant portion of our management fees
• We may not be able to maintain our current fee structure as a result of industry pressure from fund investors to reduce fees, which could have an adverse effect on our profit margins and results of operations
• A portion of our revenue, earnings and cash flow is variable, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause the price of shares of our Class A common stock to decline
• Our use of leverage to finance our businesses exposes us to substantial risks
• We are exposed to risks associated with changes in interest rates
• Inflation has impacted and may in the future adversely affect our business, results of operations and financial condition of our funds and their portfolio companies
• Operational risks may disrupt our businesses, result in losses or limit our growth
• Our capital markets activities expose us to risks that could limit our revenue growth and expose us to losses from counterparties
• We are subject to risks in using prime brokers, custodians, counterparties, administrators and other agents
• Rapid growth of our businesses, particularly outside the U.S., may be difficult to sustain and may place significant demands on our administrative, operational and financial resources
• If we are unable to consummate or successfully integrate new businesses and strategies, acquisitions or joint ventures, we may not be able to implement our growth strategy successfully
• Our financial support to particular structured financing vehicles, or our inability to provide support, may cause our AUM, revenue and earnings to decline
• Hedging strategies may adversely affect the returns on our cash flow and financial condition and funds’ investments
• Our risk management strategies and procedures may leave us exposed to unidentified or unanticipated risks
• Restrictions on our ability to collect and analyze data regarding our clients’ investments could adversely affect our business
• Extensive regulation affects our activities, increases the cost of doing business and creates the potential for significant liabilities and penalties that could adversely affect our businesses and results of operations
• Overview of our regulatory environment and exemptions from certain laws
• Regulatory environment of our funds and portfolio companies of our funds
• Changes in relevant data protection laws could necessitate changes to the steps taken by our funds for the purposes of complying with such laws and the way in which personal data is transferred between our funds
• Regulatory changes in jurisdictions outside the U.S. could adversely affect our businesses
• Alternative Investment Fund Managers Directive
• Economic Crime and Corporate Transparency Act 2023
• Regulations governing the operation of our business development companies affect their ability to raise, and the way in which they raise, additional capital
• The publicly-traded and perpetual wealth investment vehicles that we manage are subject to regulatory complexities that limit the way in which they do business and may subject them to a higher level of regulatory scrutiny
• Failure to comply with “pay to play” regulations implemented by the SEC and certain states, and changes to the “pay to play” regulatory regimes, could adversely affect our businesses
• Increased regulatory scrutiny and uncertainty with respect to expense allocation may expose us to additional risk
• New and evolving and sometimes conflicting sustainability/ESG regulations and disclosure expectations could increase our compliance costs and expose us to enforcement, litigation or fundraising constraints
• The U.K.’s divergence from the EU (“Brexit”) could adversely affect our business and our operations
• Adverse regulatory and legal developments relating to SPACs and their sponsors could adversely affect our business and reputation and result in significant losses and expenses
• The historical returns attributable to our funds should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in shares of our Class A common stock
• Valuation methodologies for certain assets can be subject to significant subjectivity, and our value of an asset may differ materially from the value ultimately realized
• The valuation process for the portfolio holdings of our registered funds and BDCs that we manage may create a conflict of interest
• Market values of debt instruments and publicly-traded securities that our funds hold as investments may be volatile
• Our funds may be unable to deploy capital at a steady and consistent pace, which could have an adverse effect on our results of operations and future fundraising
• Dependence on significant leverage by our funds subjects us to volatility and contractions in the debt financing markets could adversely affect our ability to achieve attractive rates of return on those investments
• Some of our funds may invest in companies that are highly leveraged, which may increase the risk of loss associated with those investments
• Certain of our funds utilize special situations and distressed debt investment strategies that involve significant risks
• Our funds may be held liable for the underfunded pension liabilities of their portfolio companies
• Contingent liabilities could harm fund performance
• Our funds make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States
• Investments in emerging markets are subject to greater risks than those in more developed markets
• Many of our funds make investments in companies that we do not control and may rank junior to preferred equity and debt in a company’s capital structure
• We may need to pay “clawback” or “contingent repayment”
• obligations if and when they are triggered under the governing agreements with our funds
• Customized separate account and advisory account fee revenue is not a long-term contracted source of revenue and is subject to intense competition
• We are vulnerable to an increased number of investors seeking to participate in share redemption programs or tender offers of our perpetual wealth vehicles
• Our funds may be forced to dispose of investments at a disadvantageous time. Furthermore, we may have to waive management fees for certain of our funds in certain circumstances
• Our credit funds are subject to the risks inherent in the private credit industry
• Our Real Assets Group funds are subject to the risks inherent in the ownership and operation of real assets and the construction and development of real assets
• Our investments in infrastructure assets may expose us to increased risks and liabilities
• Certain of our funds invest in secondaries investment products that we do not control
• Our Private Equity Group funds’ performance has been and may in the future be adversely affected by the financial performance of our portfolio companies and the industries in which our funds invest
• Climate change and related transition and physical risks could adversely affect our operations and those of our portfolio companies and increase costs (including insurance costs)
• The Holdco Members are able to significantly influence the outcome of any matter that may be submitted for a vote of holders of our common stock
• As a “controlled company,” we qualify for some exemptions from the corporate governance and other requirements of the NYSE
• Certain actions by our board of directors require the approval of the Class B Stockholder, which is controlled by the Holdco Members
• Our certificate of incorporation states that the Class B Stockholder is under no obligation to consider the separate interests of our other stockholders and contains provisions limiting the liability of the Class B Stockholder
• Our ability to pay dividends to the holders of our Class A and non-voting common stock may be limited by our holding company structure, applicable provisions of Delaware law and contractual restrictions or obligations
• The Class B Stockholder or the Class C Stockholder may transfer their interests in the shares of our Class B common stock or the shares of our Class C common stock, respectively, which could materially alter our operations
• Our certificate of incorporation also provides us with a right to acquire shares of our Class A common stock under specified circumstances, which may adversely affect the price of shares of our Class A common stock
• Other anti-takeover provisions in our charter documents could delay or prevent a change in control
• The market price and trading volume of shares of our Class A common stock may be volatile, which could result in rapid and substantial losses for holders of our Class A common stock
• The market price of shares of our Class A common stock may decline due to the large number of shares of Class A common stock eligible for exchange and future sale
• Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities may adversely affect our effective tax rate, tax liability and financial condition and results
• condition and results, ability to raise funds from certain foreign investors, increase our compliance or withholding tax costs and conflict with our contractual obligations
• Overview of certain relevant U.S. tax laws
• Overview of certain relevant foreign tax laws
• Tax consequences to the direct and indirect holders of AOG Units or to general partners in our funds may give rise to conflicts of interests
• There may be potential conflicts in the tax treatment of carried interest
• Limitations on the amount of interest expense that we may deduct could materially increase our tax liability and negatively affect an investment in shares of our Class A common stock
• Technological developments in artificial intelligence could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs
• We are subject to numerous privacy laws, and violation of such laws may subject us to significant fines or penalties, litigation, or reputational damage, and new privacy laws could impact our business and financial performance
• We may be subject to litigation risks and may face liabilities and damage to our professional reputation
• We may not be able to maintain sufficient insurance to cover us for potential litigation or other risks
• Events which harm our reputation or brand may impact our ability to attract and retain investors and raise new capital

Filings

Other Financials companies