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What changed in Ares Management Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Ares Management Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+1019 added−993 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-27)

Top changes in Ares Management Corp's 2025 10-K

1019 paragraphs added · 993 removed · 743 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

132 edited+31 added−52 removed95 unchanged
Biggest changeWe also conduct anonymous firmwide surveys at least annually to evaluate employee morale, productivity and overall well-being. • Education Sponsorship Program: Employees are encouraged to participate in degree programs, business-related seminars, workshops, ad-hoc academic courses, continued education seminars to maintain job-related licenses and other outside training courses to facilitate professional development. • Internal Training and Development Programs: We continue to foster an environment that cultivates company and employee growth through educational programs focused on professional development, mandatory training and other learning opportunities that are offered in person or online.
Biggest changeWe also conduct surveys to measure employee engagement and overall well-being, using the results to develop action plans to improve the employee experience. • Education Sponsorship Program: Employees are encouraged to participate in degree programs, ad-hoc academic courses and other outside business-related seminars and training opportunities to facilitate ongoing professional development and to maintain job-related licenses and/or certifications. • Internal Training and Development Programs: We continue to foster an environment that cultivates employee growth through internal educational programs focused on various professional skills, management and leadership training, mandatory compliance and policy training and other learning opportunities. • Performance Management: We take a continuous feedback approach to performance management, encouraging leaders and team members to participate in goal setting and ongoing transparent feedback discussions throughout the year.
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, Private Equity and Secondaries is a market leader based on assets under management and investment performance.
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.
This proficiency is complemented by our flexibility in deploying capital in a range of structures and different market environments to maximize risk-adjusted returns. 9 Table of Contents • Differentiated Market Intelligence: Our proprietary research on over 55 industries and insights from a broad, global investment portfolio enable us to more effectively diligence and structure our products and investments. • Consistent Investment Approach: We believe our rigorous, credit-oriented investment approach across each of our investment groups is a key contributor to our strong investment performance and ability to expand our product offering. • Robust Sourcing Model: Our investment professionals’ local market presence and ability to effectively cross-source for other investment groups generates a robust pipeline of high-quality investment opportunities across our platform. • Talented and Committed Professionals: We attract, develop and retain highly accomplished professionals who not only demonstrate deep and broad investment and non-investment expertise but also have a strong sense of commitment to our firm. • Collaborative Culture: We share ideas, relationships and information across our investment groups, which enables us to more effectively source, evaluate and manage investments.
This proficiency is complemented by our flexibility in deploying capital in a range of structures and different market environments to maximize risk-adjusted returns. • Differentiated Market Intelligence: Our proprietary research on over 55 industries and insights from a broad, global investment portfolio enable us to more effectively diligence and structure our products and investments. 9 Table of Contents • Consistent Investment Approach: We believe our rigorous, credit-oriented investment approach across each of our investment groups is a key contributor to our strong investment performance and ability to expand our product offering. • Robust Sourcing Model: Our investment professionals’ local market presence and ability to effectively cross-source for other investment groups generates a robust pipeline of high-quality investment opportunities across our platform. • Talented and Committed Professionals: We attract, develop and retain highly accomplished professionals who not only demonstrate deep and broad investment and non-investment expertise but also have a strong sense of commitment to our firm. • Collaborative Culture: We share ideas, relationships and information, which enables our investment groups to more effectively source, evaluate and manage investments.
However, holders of our Series B mandatory convertible preferred stock are not entitled to vote on an as-converted basis with common stockholders on matters on which holders of common stockholders are entitled to vote.
However, holders of our Series B mandatory convertible preferred stock are not entitled to vote on an as-converted basis with common stockholders on matters on which holders of common stock are entitled to vote.
By investing through multiple investment vehicles, our real estate debt team has the ability to provide flexible financing across the capital structure and risk-return spectrum, including core/core-plus, value-add, and opportunistic debt. While our real estate debt strategy focuses predominantly on directly originated transactions, we also have the ability to selectively pursue secondary market acquisitions and syndicated transactions.
By investing through multiple investment vehicles, our real estate debt team has the ability to provide flexible financing across the capital structure and risk-return spectrum, including core/core-plus, value-add, and opportunistic debt. While our real estate debt team focuses predominantly on directly originated transactions, we also have the ability to selectively pursue secondary market acquisitions and syndicated transactions.
With the exception of certain of the publicly-traded and perpetual wealth vehicles, the investment vehicles themselves do not generally register as investment companies under the Investment Company Act of 1940, as amended (the “Investment Company Act”), in reliance on applicable exemptions thereunder.
With the exception of certain of the publicly-traded funds and perpetual wealth vehicles, the investment vehicles themselves do not generally register as investment companies under the Investment Company Act of 1940, as amended (the “Investment Company Act”), in reliance on applicable exemptions thereunder.
We do not have a centralized investment committee and instead our investment committees are structured with overlapping membership from different investment groups to ensure consistency of approach, shared investment experience and collaboration across our platform.
We do not have a centralized investment committee and instead our investment committees are generally structured with overlapping membership from different investment groups to ensure consistency of approach, shared investment experience and collaboration across our platform.
Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including the General Data Protection Regulation (“GDPR”), a European Union (“EU”) 32 Table of Contents regulation designed to protect privacy rights of individuals residing in the European Economic Area (the “EEA”), the GDPR as it forms part of the laws of England and Wales, Scotland and Northern Ireland by virtue of Section 3 of the European Union Withdrawal Act 2018 (as amended) and the Data Protection Act 2018 (collectively, “U.K.
Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including the General Data Protection Regulation (“GDPR”), a European Union (“EU”) regulation designed to protect privacy rights of individuals residing in the European Economic Area (the “EEA”), the GDPR as 31 Table of Contents it forms part of the laws of England and Wales, Scotland and Northern Ireland by virtue of Section 3 of the European Union Withdrawal Act 2018 (as amended) and the Data Protection Act 2018 (collectively, “U.K.
(whether because its effect is preserved in the U.K. as a matter of domestic policy or because compliance with such legislation (whether in whole or part) is a necessary condition for market access into the EEA) and other EEA member states where we have operations. AM Lux operates under the EU legislative frameworks.
(whether because its effect is preserved in the U.K. as a matter of domestic policy or because compliance with such legislation (whether in whole or part) is a necessary condition for market access into the EEA) and other EEA member states where we have operations. AM Lux operates under the EU legislative frameworks. Notwithstanding Brexit, the U.K.
Our capital deployment in drawdown funds was comprised of the following ($ in billions): Credit Real Assets Private Equity Secondaries 19 Table of Contents Investment Groups Each of our investment groups employs a disciplined, credit-oriented investment philosophy and is managed by a seasoned leadership team of senior professionals with extensive experience investing in, advising and underwriting assets held by our funds.
Our capital deployment in drawdown funds was comprised of the following ($ in billions): Credit Real Assets Secondaries Private Equity 18 Table of Contents Investment Groups Each of our investment groups employs a disciplined, credit-oriented investment philosophy and is managed by a seasoned leadership team of senior professionals with extensive experience investing in, advising and underwriting assets held by our funds.
Direct Lending: Our U.S. direct lending team is comprised of over 225 investment professionals that cover more than 565 financial sponsors and provide a wide range of financing solutions to middle market companies that typically range from $10 million to over $500 million in earnings before interest, tax, depreciation and amortization (“EBITDA”).
Direct Lending: Our U.S. direct lending team is comprised of over 225 investment professionals that cover more than 520 financial sponsors and provide a wide range of financing solutions to middle market companies that typically range from $10 million to over $500 million in earnings before interest, tax, depreciation and amortization (“EBITDA”).
In line with our continued commitment to support an environment where all team members experience a genuine sense of belonging, we hold educational trainings and employee engagement events, often in partnership with our 14 employee communities that help to support our DEI strategy and recognize the different cultures, backgrounds and experiences of our employees.
In line with our continued commitment to support an environment where all team members experience a genuine sense of belonging, we hold educational trainings and employee engagement events, often in partnership with our 14 employee communities that help to support our inclusion strategy and recognize the different cultures, backgrounds and experiences of our employees.
To access these filings, go to the “Investor Resources” section of our website and then click on “SEC Filings.” In addition, these reports and the other documents we file with the SEC are available at a website maintained by the SEC at http://www.sec.gov. 36 Table of Contents
To access these filings, go to the “Investor Resources” section of our website and then click on “SEC Filings.” In addition, these reports and the other documents we file with the SEC are available at a website maintained by the SEC at http://www.sec.gov. 35 Table of Contents
GDPR”) with respect to individuals residing in the United Kingdom (the “U.K.”), and numerous state and federal privacy laws applicable to individuals residing in the U.S. Various global privacy laws also apply to our business. These privacy laws and related regulations are quickly evolving and may conflict with one another.
GDPR”) with respect to individuals residing in the United Kingdom (the “U.K.”), and numerous state and federal privacy laws applicable to individuals residing in the U.S. Various global privacy laws also apply to our business. These privacy laws and related regulations are regularly evolving and may conflict with one another.
There remains considerable uncertainty as to the nature of the U.K.’s future relationship with the EU, creating continuing uncertainty as to the full extent to which the businesses of the U.K. Regulated Entities and our businesses generally could be adversely affected by Brexit. See “Item 1A.
There remains considerable uncertainty as to the nature of the U.K.’s future relationship with the EU and the full extent to which the businesses of the U.K. Regulated Entities and our businesses generally could be adversely affected by Brexit. See “Item 1A.
The group broadly categorizes its investment strategies into corporate private equity, which focuses on investments in North America and Europe, and APAC private equity, which focuses on investments in the APAC region. Corporate Private Equity: Our team consists of over 50 investment professionals based primarily in Los Angeles and London.
The group broadly categorizes its investment strategies into corporate private equity, which focuses on investments in North America and Europe, and APAC private equity, which focuses on investments in the APAC region. Corporate Private Equity: Our team consists of over 45 investment professionals based primarily in Los Angeles and London.
The CLOs that we manage are structured investment vehicles that are generally private limited liability companies. Our drawdown funds are generally organized as limited partnerships or limited liability companies. However, there are non-U.S. funds that are structured as corporate or non-partnership entities under applicable law.
The CLOs that we manage are structured financing vehicles that are generally private limited liability companies. Our drawdown funds are generally organized as limited partnerships or limited liability companies. However, there are non-U.S. funds that are structured as corporate or non-partnership entities under applicable law.
As we manage strategies across the return spectrum, capital stack and across geographies, we provide our investors with a full range of solutions and access to the widest set of opportunities sourced by our team. Our real estate platform has achieved significant scale over time through both organic fundraising efforts as well as various acquisitions.
As we manage strategies across the return spectrum, capital stack and across geographies, we provide our investors with a full range of solutions and access to the widest set of opportunities sourced by our team. Our real estate platform has achieved significant scale over time through both organic fundraising efforts as well as through various 21 Table of Contents acquisitions.
Venture Capital: Our venture capital business is focused on fund strategies that seek to advance proprietary artificial intelligence solutions and to partner with industry leading vendors to help drive efficiencies for our portfolio companies, assets and certain investment and business processes. 26 Table of Contents The following charts present Other Businesses AUM and FPAUM as of December 31, 2024 by investment strategy ($ in billions): AUM: $7.1 FPAUM: $5.5 Insurance Other Product Offering To meet investors’ growing demand for alternative investments, we manage investments in an increasingly comprehensive range of funds across a spectrum of compelling and complementary strategies.
Venture Capital: Our venture capital business is focused on fund strategies that seek to advance proprietary artificial intelligence solutions and to partner with industry leading vendors to help drive efficiencies for our portfolio companies, assets and certain investment and business processes. 25 Table of Contents The following charts present Other Businesses AUM and FPAUM as of December 31, 2025 by investment strategy ($ in billions): AUM: $9.1 FPAUM: $7.1 Insurance Other Product Offering To meet investors’ growing demand for alternative investments, we manage investments in an increasingly comprehensive range of funds across a spectrum of compelling and complementary strategies.
Our dedicated and extensive in-house relationship management team, comprised of over 175 professionals located in North America, Europe, 28 Table of Contents APAC and the Middle East, is dedicated to raising capital globally across all of our funds, servicing existing fund investors and tailoring offerings to meet their needs, developing products to complement our existing offerings, and deepening existing relationships to expand them across our platform.
Our dedicated and extensive in-house relationship management team, comprised of over 200 professionals located in North America, Europe, APAC and the Middle East, is dedicated to raising capital globally across all of our funds, servicing existing fund investors and 27 Table of Contents tailoring offerings to meet their needs, developing products to complement our existing offerings, and deepening existing relationships to expand them across our platform.
Some of our competitors may be more successful than us in the development and implementation of new technologies, including services and platforms based on artificial intelligence, to address various matters including investor demand, operations or investment activity.
Some of our competitors may be more successful than us in the development and implementation of new technologies, including services 34 Table of Contents and platforms based on artificial intelligence, to address various matters including investor demand, operations or investment activity.
Risk Factors—Risks Related to Regulation—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.” Since September 2019, the SEC has required broker-dealers, or natural persons who are associated persons of broker-dealers, to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities, without placing the financial or other interest of the broker, dealer or natural person who is an associated person of a broker-dealer making the recommendation ahead of the interest of the retail customer (“Regulation Best Interest”).
Risk Factors—Risks Related to Regulation—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.” The SEC requires broker-dealers, or natural persons who are associated persons of broker-dealers, to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities, without placing the financial or other interest of the broker, dealer or natural person who is an associated person of a broker-dealer making the recommendation ahead of the interest of the retail customer (“Regulation Best Interest”).
Any failure to comply with such laws or regulations could result in substantial fines, penalties and/or sanctions, litigation, as well as reputational harm. Moreover, to the extent that these laws and regulations or the enforcement of the same become more stringent, or if new laws or regulations or enacted, our financial performance or plans for growth may be adversely impacted.
Any failure to comply with such laws or regulations could result in substantial fines, penalties and/or sanctions, litigation and reputational harm. Moreover, to the extent that these laws and regulations or the enforcement of the same become more stringent or change, or if new laws or regulations are enacted, our financial performance or plans for growth may be adversely impacted.
Generally, the material terms of our investment advisory agreements relate to the scope of services to be rendered by the investment adviser to the applicable vehicle, the calculation of management fees to be borne by investors in our investment vehicles and certain rights of termination with respect to our investment advisory agreements.
Generally, the material terms of our investment advisory agreements relate to the scope of services to be rendered by the investment adviser to the applicable 30 Table of Contents vehicle, the calculation of management fees to be borne by investors in our investment vehicles and certain rights of termination with respect to our investment advisory agreements.
European Direct Lending: Our European direct lending team is comprised of over 90 investment professionals, with the ability to invest across the capital structure and across several geographies in Europe. The team covers over 395 financial sponsors, offers self-originated, flexible and scaled debt capital predominantly to companies with EBITDA typically ranging from €10 million to over €250 million.
European Direct Lending: Our European direct lending team is comprised of over 100 investment professionals, with the ability to invest across the capital structure and across several geographies in Europe. The team covers over 435 financial sponsors, offers self-originated, flexible and scaled debt capital predominantly to companies with EBITDA typically ranging from €10 million to over €250 million.
We offer our investors a range of investment strategies and seek to deliver attractive performance to an investor base that includes approximately 2,700 direct institutional relationships and a significant retail investor base across our publicly-traded funds, sub-advised accounts and perpetual wealth vehicles.
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.
Responsibility for the day-to-day operations of each investment vehicle is typically delegated to the Ares entity serving as 31 Table of Contents investment adviser pursuant to an investment advisory, management or similar agreement.
Responsibility for the day-to-day operations of each investment vehicle is typically delegated to the Ares entity serving as investment adviser pursuant to an investment advisory, management or similar agreement.
The Credit Group offers the following credit strategies across the liquid and illiquid spectrum: Liquid Credit: Our liquid credit investment solutions help fixed income investors access the syndicated loan and high yield bond markets in North America and Europe and capitalize on opportunities across multi-asset credit.
The Credit Group offers the following credit strategies across the liquid and illiquid spectrum: Liquid Credit: Our liquid credit investment solutions help fixed income investors access the syndicated loan and high yield bond markets in the U.S. and Europe and capitalize on opportunities across multi-asset credit.
Risk Factors—Risks Related to Regulation—The U.K.’s exit from the EU (“Brexit”) could adversely affect our business and our operations.” Despite the U.K.’s departure from the EU, new and existing EU legislation is expected to continue to impact our business in the U.K.
Risk Factors—Risks Related to Regulation—The U.K.’s divergence from the EU (“Brexit”) could adversely affect our business and our operations.” Despite Brexit, new and existing EU legislation is expected to continue to impact our business in the U.K.
In addition, as part of our commitment to equitable pay for all employees, we monitor and assess total compensation to help ensure we have alignment with role responsibilities and contributions. • Business Processes and Investment Platform: We seek to embed DEI best practices into our business and investment diligence processes in an effort to drive innovation and returns.
In addition, as part of our commitment to pay equality for all employees, we monitor and assess total compensation to help ensure we have alignment with role responsibilities and contributions. • Business Processes and Investment Platform: We seek to embed diversity, equity and inclusion best practices into our business and investment diligence processes in an effort to drive innovation and returns.
Regulatory and Compliance Matters Our businesses, as well as the financial services industry, generally are subject to extensive regulation, including periodic examinations and potential investigations by governmental agencies and self-regulatory organizations or exchanges in the U.S. and foreign jurisdictions in which we operate relating to, among other things, the management of our funds, antitrust laws, anti-money laundering laws, anti-bribery laws relating to foreign officials, tax laws and data privacy laws with respect to client and other information, and some of our funds invest in businesses that operate in highly regulated industries.
Regulatory and Compliance Matters Our businesses, as well as the financial services industry, generally are subject to extensive regulation, including periodic examinations and potential investigations by governmental agencies and self-regulatory organizations or exchanges in the U.S. and foreign jurisdictions in which we operate relating to, among other things, the management of our funds, antitrust laws, foreign investment review regimes, anti-money laundering laws, anti-bribery laws relating to foreign officials, tax laws and data privacy laws with respect to client and other information.
A s shown in the chart below, over the past five and ten years, our assets under management have achieved a compound annual growth rate (“CAGR”) of 27% and 19%, respectively ($ in billions): We have an established track record of delivering strong risk-adjusted returns through market cycles.
A s shown in the chart below, over the past five and 10 years, our assets under management have achieved a compound annual growth rate (“CAGR”) of 26% and 21%, respectively ($ in billions): We have an established track record of delivering strong risk-adjusted returns through market cycles.
Philanthropy at Ares includes: • Ares Charitable Foundation (the “Ares Foundation”): A 501(c)(3) qualifying organization sponsored by the firm, the Ares Foundation, launched in 2021, envisions a world in which people have access to the financial knowledge, resources and opportunities needed to achieve their full potential and chart pathways to self-sufficiency.
Philanthropy at Ares includes: • Ares Charitable Foundation (the “Ares Foundation”): A 501(c)(3) qualifying organization sponsored by the firm, the Ares Foundation, launched in 2021 and envisions a world in which people have access to the financial knowledge, resources and opportunities needed to advance economically and chart pathways to self-sufficiency.
As of December 31, 2024, we and our employees had more than $6.0 billion invested in or committed to Ares-managed vehicles, including $3.0 billion of capital commitments from Ares, $2.8 billion of capital commitments from our employee co-investment vehicles and $0.2 billion of employee investments in our publicly-traded and perpetual wealth vehicles.
As of December 31, 2025, we and our employees had more than $7.2 billion invested in or committed to Ares-managed vehicles, including $3.4 billion of capital commitments from Ares, $3.6 billion of capital commitments from our employee co-investment vehicles and $0.2 billion of employee investments in our publicly-traded funds and our perpetual wealth vehicles.
We believe that our strong performance, consistent growth and high talent retention through economic cycles is due largely to the effective application of this principle across our broad organization of over 3,200 employees. The management of our operating businesses is currently overseen by our board of directors and managed by our 11 Table of Contents senior leadership.
We believe that our strong performance, consistent growth and high talent retention through economic cycles is due largely to the effective application of this principle across our broad organization of over 4,250 employees. The management of our operating businesses is currently overseen by our board of directors and managed by our senior leadership.
As of December 31, 2024, our total AUM was divided by channel, and further our institutional direct AUM by client type and geographic origin as follows ($ in billions): Institutional Direct Retail Institutional Intermediaries Pension Insurance Bank North America Europe APAC Sovereign Wealth Fund Other High Net Worth and Private Bank Middle East & Africa Investment Manager The following chart presents the AUM of investors committed to more than one of our funds as of December 31, 2024 compared to December 31, 2019 ($ in billions): We believe that the AUM of multi-fund investors demonstrates our investors’ satisfaction with our performance, disciplined management of their capital and diverse product offering.
As of December 31, 2025, our total AUM was divided by channel, and further our institutional direct AUM by client type and geographic origin as follows ($ in billions): Institutional Direct Perpetual Wealth Vehicles Publicly-Traded Vehicles Pension Insurance Bank Americas APAC Europe Institutional Intermediaries Sovereign Wealth Fund Investment Manager High Net Worth and Private Bank Middle East & Africa Other The following chart presents the AUM of investors committed to more than one of our funds as of December 31, 2025 compared to December 31, 2020 ($ in billions): We believe that the AUM of multi-fund investors demonstrates our investors’ satisfaction with our performance, disciplined management of their capital and diverse product offering.
Private Equity Secondaries : The private equity secondaries strategy seeks to achieve attractive secondary cash flow and diversification characteristics by investing across the spectrum of private equity secondaries transactions. As of December 31, 2024, our private equity secondaries team of more than 35 investment professionals managed $15.8 billion of AUM in over 40 funds and related co-investment vehicles.
Private Equity Secondaries : The private equity secondaries strategy seeks to achieve attractive secondary cash flow and diversification characteristics by investing across the spectrum of private equity secondaries transactions. As of December 31, 2025, our private equity secondaries team of more than 40 investment professionals managed $22.1 billion of AUM in over 40 funds and related co-investment vehicles.
Economic interests of AMC are calculated based on 199,872,571 outstanding shares of Class A common stock and 3,489,911 outstanding shares of non-voting common stock. 30 Table of Contents Holding Company Structure Our common stockholders are entitled to vote on all matters on which stockholders of a corporation are generally entitled to vote under the Delaware General Corporation Law (the “DGCL”), including the election of our board of directors.
Economic interests of AMC are calculated based on 227,459,008 outstanding shares of Class A common stock and 3,489,911 outstanding shares of non-voting common stock. 29 Table of Contents Holding Company Structure Our common stockholders are entitled to vote on all matters on which stockholders of a corporation are generally entitled to vote under the Delaware General Corporation Law (the “DGCL”), including the election of our board of directors.
Across our real estate equity and debt investment strategies, our team differentiates itself through its cycle-tested leadership, demonstrated performance across market cycles, access to real-time property market and corporate trends, and proven ability to create value 10 Table of Contents through a disciplined investment process.
Across our real estate investment strategies, our team differentiates itself through its cycle-tested leadership, demonstrated performance across market cycles, access to real-time property market and corporate trends, and proven ability to create value through a disciplined investment process.
We continue to maintain a differentiated investment strategy that utilizes our skills in fundamental manager and portfolio analysis, our quantitative research capabilities and the support and insights from the wider Ares platform with the aim to generate strong risk-adjusted returns. Our private equity secondaries team also manages APMF.
We continue to maintain a differentiated investment strategy that utilizes our skills in fundamental manager and portfolio analysis, our quantitative research capabilities and the support and insights from the wider Ares platform with the aim to generate strong risk-adjusted returns.
Our human resources function, our global DEI Council, our DEI team and business leaders across the Ares platform work in partnership to implement a strategic framework to attract, engage and develop diverse talent within a welcoming environment, as well as to support DEI efforts in select investments and through our broader involvement in our communities. • People and Culture: As part of our ongoing effort to foster a culture built on apprenticeship, we support the growth and advancement of talent through various mentorship and professional development programs.
Our human resources function and our business leaders, as well as our global Diversity, Equity and Inclusion Council and team work in partnership to implement a strategic framework to attract, engage and develop talent within an environment of inclusion and excellence, as well as to support diversity, equity and inclusion efforts in select investments and through our broader involvement in our communities. • People and Culture: As part of our ongoing effort to foster a culture built on apprenticeship, we support the growth and advancement of talent through various mentorship and professional development programs.
As registered broker-dealers and members of a self-regulatory organization, AWMS and AMCM are, however, subject to the SEC’s uniform net capital rule. Rule 15c3-1 of the Exchange Act, which specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer’s assets be kept in relatively liquid form. See “Item 1A.
As a registered broker-dealer and member of a self-regulatory organization, AMCM is, however, subject to the SEC’s uniform net capital rule, Rule 15c3-1 of the Exchange Act, which specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer’s assets be kept in relatively liquid form.
As of December 31, 2024 , $106.0 billion, or 27%, of our direct institutional AUM was managed through SMAs. We believe that client relationships are fundamental to our business and that our performance across our investment groups coupled with our focus on client service has resulted in strong relationships with our investors.
As of December 31, 2025 , $139.6 billion, or 30%, of our direct institutional AUM was managed through SMAs. We believe that client relationships are fundamental to our business and that our performance across our investment groups coupled with our focus on client service has resulted in strong relationships with our investors.
With the exception of our infrastructure private BDC, which has elected to be treated as a corporation for U.S. federal tax purposes, each of the other five companies has elected, for U.S. federal 33 Table of Contents tax purposes, to be treated as a regulated investment company (“RIC”) under Subchapter M of the U.S.
With the exception of our open-ended core infrastructure fund, which has elected to be treated as a corporation for U.S. federal tax purposes, each of the other five companies has 32 Table of Contents elected, for U.S. federal tax purposes, to be treated as a regulated investment company (“RIC”) under Subchapter M of the U.S.
As of December 31, 2024, our infrastructure secondaries team of more than ten investment professionals managed $3.7 billion of AUM in more than ten funds and related co-investment vehicles. Our team focuses on achieving diversification through building a portfolio that provides inflation protection and exposure to uncorrelated assets.
As of December 31, 2025, our infrastructure secondaries team of more than 10 investment professionals managed $6.9 billion of AUM in more than 15 funds and related co-investment vehicles. Our team focuses on achieving diversification through building a portfolio that provides inflation protection and exposure to uncorrelated assets.
AIS acts as the dedicated investment manager, capital solutions and corporate development partner to Aspida Life Insurance Company and Aspida Life Re Limited (collectively referred to as “Aspida”), which are insurance companies that focus on the U.S. life and annuity insurance and reinsurance markets, respectively.
AIS acts as the dedicated investment manager, capital solutions and corporate development partner to Aspida Life Insurance Company (“Aspida Life”) and Aspida Life Re Limited (“Aspida Re,” collectively with Aspida Life, Aspida Holdings Ltd. and its subsidiaries, “Aspida”), which are insurance companies that focus on the U.S. life and annuity insurance and reinsurance markets, respectively.
As of December 31, 2024, our team manages $29.2 billion of AUM in over 85 funds. Our team has a track record of innovation through customized transaction solutions tailored to meet the needs of limited partners and general partners.
As of December 31, 2025, our team manages $42.1 billion of AUM in over 90 funds. Our team has a track record of innovation through customized transaction solutions tailored to meet the needs of limited partners and general partners.
We have an Operating Committee comprised of leadership from our investment and business operations groups that meets regularly to discuss strategy and operational matters. We also have a Partners Committee comprised of senior leadership from across the firm that meets periodically to discuss our business, including investment and operating performance, fundraising, market conditions, strategic initiatives and other firm matters.
We also have a Partners Committee comprised of senior leadership from across the firm that meets periodically to discuss our business, including investment and operating 11 Table of Contents performance, fundraising, market conditions, strategic initiatives and other firm matters.
In addition to medical, dental, vision, life insurance, disability insurance and retirement benefits, we provide generous primary and non-primary caregiver leave, domestic partner health and life insurance, adoption and reproductive assistance, family care resources (including back-up care benefits and baby baskets for new parents) and mental health benefits.
In addition to medical, dental, vision, life insurance, disability insurance and retirement benefits, we provide generous primary and non-primary caregiver leave, domestic partner health and life insurance, adoption and reproductive assistance, family care resources and mental health benefits.
We are committed to providing flexibility to our employees, and in 2024, we continued to offer business group flexibility frameworks as well as our summer “Work From Anywhere” program, which allows people to work virtually for up to a maximum of three weeks.
We are committed to providing flexibility to our employees, and in 2025, we continued to offer business-group-driven flexibility frameworks, a day off for mental health and our summer “Work From Anywhere” program, which allows people to work virtually for up to a maximum of three weeks.
Ares Acquisition Corporation II: Ares Acquisition Corporation II (NYSE: AACT) (“AAC II”) is a SPAC sponsored by Ares and formed in 2021 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination.
Ares Acquisition Corporation II: Ares Acquisition Corporation II (NYSE: AACT) (“AAC II”) was a SPAC sponsored by Ares and formed in 2021 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination. In September 2025, AAC II was renamed Kodiak AI, Inc.
Our APAC private credit strategy targets privately sourced loans in high quality businesses across the region. APAC credit primarily employs a direct origination model and aims to provide flexible capital solutions to its investee companies and compelling risk-reward investment opportunities to our investors.
Our APAC credit strategy focuses on credit opportunities with strong downside protection and equity-like returns and high-quality privately sourced loans in high-quality businesses across the region. APAC credit primarily employs a direct origination model and aims to provide flexible capital solutions to its investee companies and compelling risk-reward investment opportunities to our investors.
We believe the fundraising from existing investors demonstrates our investors’ satisfaction with our performance, disciplined management of their capital and diverse product offering. 17 Table of Contents Capital Deployment In 2024 , w e invested $106.7 billion across our diverse global platform as shown in the following charts ($ in billions): Credit $87.6 Real Assets: $9.8 U.S.
We believe the fundraising from existing investors demonstrates our investors’ satisfaction with our performance, disciplined management of their capital and diverse product offering. 16 Table of Contents Capital Deployment In 2025 , w e invested $145.8 billion across our diverse global platform as shown in the following charts ($ in billions): Credit $111.1 Real Assets: $23.5 U.S.
AWMS facilitates the product development, distribution, marketing and client management activities for investment offerings in the global wealth management channel with over 140 professionals. As of December 31, 2024, our publicly-traded and perpetual wealth vehicles account for $74.3 billion, or 15%, of our AUM.
AWMS facilitates the product development, distribution, marketing and client management activities for investment offerings in the global wealth management channel with over 175 professionals. As of December 31, 2025, our publicly-traded funds and our perpetual wealth vehicles account for $108.4 billion, or 17%, of our AUM.
Our real estate activities are managed by equity and debt teams in North America and Europe, along with our vertically-integrated operating platform. These professionals collaborate frequently within and across strategies to enhance sourcing, exchange information to inform underwriting and leverage relationships to drive pricing power.
Our real estate activities are managed by equity and debt teams in the Americas, Europe and Asia-Pacific (“APAC”), supported by our vertically-integrated operating platforms. These professionals collaborate frequently within and across strategies to enhance sourcing, exchange information to inform underwriting and leverage relationships to drive pricing power.
As of December 31, 2024, our APAC credit team of over 70 investment professionals managed $11.5 billion of AUM in over 15 funds and related co-investment vehicles. The following charts present the Credit Group’s AUM and FPAUM as of December 31, 2024 by investment strategy ($ in billions): AUM: $348.8 FPAUM: $209.2 U.S.
As of December 31, 2025, our APAC credit team of over 60 investment professionals managed $11.5 billion of AUM in over 20 funds and related co-investment vehicles. The following charts present the Credit Group’s AUM and FPAUM as of December 31, 2025 by investment strategy ($ in billions): AUM: $406.9 FPAUM: $249.8 U.S.
Item 1. Business Overview Ares is a leading global alternative investment manager with $484.4 billion of assets under management and over 3,200 employees in over 35 o ffices in more than 15 countries .
Item 1. Business 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 compete globally and on a regional, industry and asset basis. We face competition both in the pursuit of fund investors and investment opportunities. Generally, our competition varies across business lines, geographies and financial markets.
We face competition both in the pursuit of fund investors and investment opportunities. Generally, our competition varies across business lines, geographies and financial markets.
Inclusive of Class A common stock held directly by Ares employees and assuming the full exchange of AOG Units for shares of our Class A common stock, Ares employee ownership would represent 42.05% of all outstanding shares.
Inclusive of Class A common stock held directly by Ares employees and assuming the full exchange of AOG Units and conversion of Series B mandatory convertible preferred stock for shares of our Class A common stock, Ares employee ownership would represent 37.13% of all outstanding shares.
To foster this culture, we invest heavily in our human capital efforts, including: Talent Management: As of December 31, 2024, we had over 3,200 employees, comprised of over 1,100 professionals in our investment groups and over 2,100 operations management professionals, located in over 35 offices in more than 15 countries.
To foster this culture, we invest heavily in our human capital efforts, including: Talent Management: As of December 31, 2025, we had over 4,250 employees, comprised of over 1,650 professionals in our investment groups and over 2,550 operations management professionals, located in over 55 offices in more than 25 countries.
We have successfully launched new business lines, integrated acquired businesses into our operations and created scale within the OMG to support a much larger platform. 29 Table of Contents Organizational Structure The simplified diagram below (which omits certain intermediate holding companies) depicts our legal organizational structure. Ownership information in the diagram below is presented as of December 31, 2024.
As such, significant investments have been made to develop the OMG. We have successfully launched new business lines, integrated acquired businesses into our operations and created scale within the OMG to support a much larger platform. 28 Table of Contents Organizational Structure The simplified diagram below (which omits certain intermediate holding companies) depicts our legal organizational structure.
Direct Lending Alternative Credit European Direct Lending Liquid Credit North American Real Estate Equity Real Estate Debt Infrastructure Debt Opportunistic Credit APAC Credit Other European Real Estate Equity Infrastructure Opportunities Private Equity: $0.4 Secondaries: $5.1 Corporate Private Equity APAC Private Equity Private Equity Secondaries Real Estate Secondaries Infrastructure Secondaries Credit Secondaries 18 Table of Contents Other Businesses: $3.8 Insurance Of the $106.7 billion invested, $50.1 billion was from our drawdown funds.
Direct Lending Alternative Credit European Direct Lending Liquid Credit Real Estate Infrastructure Opportunistic Credit APAC Credit Secondaries: $6.0 Private Equity: $1.4 Private Equity Secondaries Real Estate Secondaries Corporate Private Equity APAC Private Equity Infrastructure Secondaries Credit Secondaries 17 Table of Contents Other Businesses: $3.8 Insurance Of the $145.8 billion invested, $69.1 billion was from our drawdown funds.
In some circumstances other Ares entities are or may become subject to EU laws or the law of EEA member states, including with respect to marketing our funds to investors in the EEA. AM Lux and AMUKL are both AIFMs.
Regulated Entities generally continue to be regulated under these frameworks to the extent they were preserved in U.K. law. In some circumstances other Ares entities are or may become subject to EU laws or the law of EEA member states, including with respect to marketing our funds to investors in the EEA. AM Lux and AMUKL are both AIFMs.
We have established deep and sophisticated independent research capabilities in over 55 industries and insights from investments in over 1,900 companies, over 1,750 alternative credit investments, over 555 properties, over 60 infrastructure assets and over 885 limited partnership interests.
We have established deep and sophisticated independent research capabilities in over 55 industries and insights from investments in over 2,150 companies, over 1,900 alternative credit investments, over 1,300 properties, over 90 infrastructure assets and over 1,000 limited partnership interests in investment funds.
Direct Lending European Direct Lending Liquid Credit Alternative Credit Real Estate Debt North American Real Estate Equity European Real Estate Equity Opportunistic Credit APAC Credit Other Infrastructure Debt Infrastructure Opportunities Private Equity: $0.5 Secondaries: $5.1 Corporate Private Equity Other Private Equity Secondaries Infrastructure Secondaries Credit Secondaries Real Estate Secondaries 16 Table of Contents Other Businesses: $6.5 Insurance The chart below summarizes gross new capital raised from existing and new direct institutional investors for the year ended December 31, 2024 : Existing - Re-Up Existing - New Product New In 2024, 85% of our fundraising from direct institutional investors was from existing investors that either committed to a new product or re-upped their commitment to a subsequent fund vintage within the same product.
Direct Lending Liquid Credit European Direct Lending Opportunistic Credit Real Estate Infrastructure Alternative Credit APAC Credit Secondaries: $12.9 Private Equity: $2.3 Private Equity Secondaries Infrastructure Secondaries Corporate Private Equity APAC Private Equity Credit Secondaries Real Estate Secondaries 15 Table of Contents Other Businesses: $7.1 Insurance The chart below summarizes gross new capital raised from existing and new direct institutional investors for the year ended December 31, 2025 : Existing - Same Product Existing - New Product New In 2025, 79% of our fundraising from direct institutional investors was from existing investors that either committed to a new product or committed to a subsequent fund vintage within the same product.
Guided by the belief that as the firm thrives, so should our communities and our society, Ares is committed to donating a portion of our annualized, realized net performance income from select Ares funds to tie investment performance to social impact. • Pathfinder and Other Funds: In addition, Ares committed to donate a minimum of 10% of the carried interest generated from Ares Pathfinder Fund, L.P.
As such, the firm donates a portion of annualized, realized net performance income from select Ares funds to the Ares Foundation to tie investment performance to social impact. • Pathfinder and Other Funds: In addition, Ares committed to donate a minimum of 10% of the carried interest generated from Ares Pathfinder Fund, L.P.
We employ a direct origination and tailored structuring approach to provide borrowers with flexible financing solutions. We aim to deliver attractive risk adjusted returns focused on cash yield by targeting infrastructure debt investments with defensive characteristics that have the potential to perform across different market cycles.
We aim to deliver attractive risk-adjusted returns focused on cash yield by targeting infrastructure debt investments with defensive characteristics that have the potential to perform across different market cycles.
AIS manages $18.7 billion of AUM as of December 31, 2024, of which $12.3 billion is sub-advised by Ares vehicles and included within other strategies.
AIS manages $25.9 billion of AUM as of December 31, 2025, of which $16.9 billion is sub-advised by Ares vehicles and included within other strategies.
Our funds are generally advised by Ares Management LLC, which is registered under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), a wholly owned subsidiary thereof or subsidiary controlled by AMC.
We also manage several publicly-traded funds and perpetual wealth vehicles with varying redemption criteria. Our funds are generally advised by Ares Management LLC, which is registered under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), a wholly owned subsidiary thereof or subsidiary controlled by AMC.
Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existing employees. For additional information concerning the competitive risks that we face, see “Item 1A.
Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existing employees. For additional information concerning the competitive risks that we face, see “Item 1A. Risk Factors—Risks Related to Our Businesses—The investment management business is intensely competitive.” Available Information Ares Management Corporation is a Delaware corporation.
These communities of practice help organizations establish aligned networks, develop knowledge to inform their work and build organizational capacity for innovation by accessing support from other funders. The year-long, cohort experience explores topics like measurement, evaluation and storytelling.
These communities of practice help organizations establish aligned networks, develop knowledge to inform their work and build organizational capacity for innovation, including to help them attract support from other funders. The year-long, cohort experience explores topics like measurement, evaluation and storytelling. Ares believes that the communities where we do business should share in the firm’s success.
U.S. The SEC oversees the activities of our subsidiaries that are registered investment advisers under the Investment Advisers Act. The Financial Industry Regulatory Authority (“FINRA”) and the SEC oversee the activities of our wholly owned subsidiaries, AWMS and Ares Management Capital Markets LLC (“AMCM”), as registered broker-dealers.
U.S. Regulations The SEC oversees the activities of our subsidiaries that are registered investment advisers under the Investment Advisers Act. The Financial Industry Regulatory Authority (“FINRA”) and the SEC oversee the activities of our wholly owned subsidiary, AMCM, as a registered broker-dealer.
Internal Revenue Code of 1986, as amended (the “Code”). ACRE, in addition to our diversified non-traded REIT and industrial non-traded REIT, have each elected and qualified to be taxed as a real estate investment trust, or REIT, under the Code.
Internal Revenue Code of 1986, as amended (the “Code”). Ares Commercial Real Estate Corporation (NYSE: ACRE) (“ACRE”), in addition to our diversified non-traded REIT and industrial non-traded REIT, have each elected and qualified to be taxed as a real estate investment trust, or REIT, under the Code. We operate our wealth distribution platform, AWMS, through our wholly owned subsidiary AMCM.
As of December 31, 2024 , our U.S. direct lending team and its affiliates managed $159.1 billion of AUM in over 80 funds and investment vehicles.
As of December 31, 2025 , our U.S. direct lending team and its affiliates managed $189.6 billion of AUM in approximately 90 funds and investment vehicles.
In addition, as the ultimate parent of the controlling entity of Aspida Re, a Bermuda Class E insurance company, we are considered its “shareholder controller” (as defined in the Bermuda Insurance Act) by the Bermuda Monetary Authority (the “BMA”). Competition The investment management industry is intensely competitive, and we expect it to remain so.
In addition, the Bermuda Monetary Authority (the “BMA”) considers us to be the “shareholder controller” (as defined in the Bermuda Insurance Act) of Aspida Re, a Bermuda Class E insurance company. Competition The investment management industry is intensely competitive, and we expect it to remain so. We compete globally and on a regional, industry and asset basis.
(1) Assuming the full exchange of AOG Units for shares of our Class A common stock, as of December 31, 2024, Ares Owners Holdings L.P. would hold 37.35%, Sumitomo Mitsui Banking Corporation (“SMBC”) would hold 5.38% and the public would hold 57.27% of AMC.
(1) Assuming the full exchange of AOG Units and conversion of Series B mandatory convertible preferred stock for shares of our Class A common stock, as of December 31, 2025, Ares Owners Holdings L.P. would hold 32.54%, Sumitomo Mitsui Banking Corporation (“SMBC”) would hold 5.02% and the public would hold 62.44% of AMC.
Our AUM has grown to $484.4 billion as of December 31, 2024 from $82.0 billion a decade earlier.
Our AUM has grown to $622.5 billion as of December 31, 2025 from $94.0 billion a decade earlier.
(“Pathfinder II”) and 5% of the incentive fees generated from an open-ended core alternative credit fund to global health and educational charities, contributed by the firm and our team members. • Ares in Motion (“AIM”): Our signature platform for employee engagement has empowered our team members to support local communities and nonprofit organizations since 2012.
(“Pathfinder II”) and 5% of the incentive fees generated from an open-ended core alternative credit fund to global health and educational charities, contributed by the firm and our team members. • Ares in Motion (“AIM”): Launched in 2012, AIM is Ares’ global community engagement program designed to foster volunteerism and philanthropy in local communities.
We manage various types of direct lending vehicles within our U.S. and European direct lending teams including commingled funds, SMAs for large institutional investors seeking tailored investment solutions and joint venture lending programs. Our direct lending team has a multi-channel origination strategy designed to address a broad set of investment opportunities in the middle market.
Direct Lending: We manage various types of direct lending vehicles within our U.S. and European direct lending teams including commingled funds, SMAs for large institutional investors seeking tailored investment solutions and joint venture lending programs.
Each investment decision involves an intensive due diligence process that is generally focused on evaluating the target company or portfolio, as applicable, and its current and future prospects, its management team and industry, its ability to withstand adverse conditions and its capital structure, sponsorship and structural protection, among others. On January 1, 2024, we changed our segment composition.
Each investment decision involves an intensive due diligence process that is generally focused on evaluating the target company or portfolio, as applicable, and its current and future prospects, its management team and industry, its ability to withstand adverse conditions and its capital structure, sponsorship and structural protection, among others. • Real Assets : With our experienced team, along with our expansive network of relationships, our Real Assets Group manages equity and debt strategies across real estate and infrastructure investments.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe believe that the primary risks affecting our businesses and an investment in shares of our Class A common stock or Series B mandatory convertible preferred stock are: • difficult, volatile market and political conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital; • we operate in a complex regulatory and tax environment involving rules and regulations (both domestic and foreign), some of which are outdated relative to today’s global financial activities and some of which are subject to political influence, which could restrict or require us to adjust our operations or the operations of our funds or portfolio companies and subject us to increased compliance costs and administrative burdens, as well as restrictions on our business activities; • inflation has adversely affected and may continue to adversely affect our business, results of operations and financial condition of our funds and their portfolio companies; • if we are unable to raise capital from investors or deploy capital into investments, or experience reduced capital raising or deployment activity, or if any of our management fees are waived or reduced, or if we fail to realize investments and generate carried interest or incentive fees, our revenues and cash flows would be materially reduced; • we are subject to risks related to our dependence on our executive officers, senior professionals and other key personnel as well as attracting, retaining and developing human capital in a highly competitive talent market; • we may experience reputational harm if we fail to appropriately address conflicts of interest or if we, our employees, our funds or their portfolio companies fail (or are alleged to have failed) to comply with applicable regulations in an increasingly complex political and regulatory environment; • we face intense competition in the investment management business for investment opportunities; • our growth strategy contemplates acquisitions and entering new lines of business and expanding into new investment strategies, geographic markets and businesses, which subject us to numerous risks, expenses and uncertainties, including related to the integration of development opportunities, acquisitions or joint ventures; • we derive a significant portion of our management fees from ARCC; • economic U.S. and foreign sanction laws may prohibit us and our affiliates from transacting with certain countries, individuals and companies; • our international operations subject us to numerous regulatory, operational and reputational risks and expenses; • we are subject to operational risks and risks in using prime brokers, custodians, counterparties, administrators and other agents; • the increasing demands of fund investors, including the potential for fee compression and changes to other terms, could materially adversely affect our future revenues; • security incidents or cyber-attacks could adversely affect our business, financial condition and operating results; • 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 and reputational risks and related liabilities or risks related to employee misconduct, fraud and other deceptive practices; • increases in interest rates could negatively impact the values of certain assets or investments and the ability of our funds and their portfolio companies to access the debt markets on attractive terms, which could adversely impact investment and realization opportunities; 37 Table of Contents • the use of leverage by us and our funds exposes us to substantial risks, including related to the use of Secured Overnight Financing Rate (“SOFR”) and Sterling Overnight Interbank Average Rate (“SONIA”); • asset valuation methodologies can be highly subjective and our value of an asset may differ materially from the value ultimately realized; • our funds may perform poorly due to market conditions, political actions or environments, monetary and fiscal policy or other conditions beyond our control; • third-party investors in our funds may not satisfy their contractual obligation to fund capital calls or may exercise redemption, termination or dissolution rights; • we are subject to risks relating to our contractual rights and obligations under our funds’ governing documents and investment management agreements; • a downturn in the global credit markets could adversely affect certain of our investments, including CLO investments and other liquid credit portfolios; • due to our and our funds’ investments in certain market sectors, such as power, infrastructure and energy, real estate and insurance, we are subject to risks and regulations inherent to those industries; • if we were deemed to be an “investment company” under the Investment Company Act, applicable restrictions could make it impractical for us to continue our businesses as contemplated; • due to the Holdco Members ownership and control of our shares of common stock, holders of our Class A common stock will generally have no influence over matters on which holders of our common stock vote and limited ability to influence decisions regarding our business; • we are subject to risks related to our categorization as a “controlled company” within the meaning of the NYSE listing standards; • potential conflicts of interest may arise among the holders of Class B and Class C common stock and the holders of our Class A common stock and/or Series B mandatory convertible preferred stock; • our holding company structure, Delaware law and contractual restrictions may limit our ability to pay dividends to the holders of our Class A and non-voting common stock; • other anti-takeover provisions in our charter documents could delay or prevent a change in control; and • we are subject to risks related to our tax receivable agreement (the “TRA”).
Biggest changeWe believe that the primary risks affecting our businesses and an investment in shares of our Class A common stock or Series B mandatory convertible preferred stock are: • difficult, volatile market and political conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital; • we operate in a complex regulatory and tax environment involving rules and regulations (both domestic and foreign), some of which are outdated relative to today’s global financial activities and some of which are subject to political influence, which could restrict or require us to adjust our operations or the operations of our funds or portfolio companies and subject us to increased compliance costs and administrative burdens, as well as restrictions on our business activities; • if we are unable to raise capital from investors or deploy capital into investments, or experience reduced capital raising or deployment activity, or if any of our management fees are waived or reduced, or if we fail to realize investments and generate carried interest or incentive fees, our revenues and cash flows would be materially reduced; • we are subject to risks related to our dependence on our executive officers, senior professionals and other key personnel as well as attracting, retaining and developing human capital in a highly competitive talent market; • we may experience reputational harm if we fail to appropriately address conflicts of interest, if we, our employees, our funds or their portfolio companies fail (or are alleged to have failed) to comply with applicable regulations in an increasingly complex political and regulatory environment and as a result of negative publicity related to our various businesses and strategies; • we face intense competition in the investment management business for investment opportunities; • our growth strategy contemplates acquisitions and entering new lines of business and expanding into new investment strategies, geographic markets and businesses, which subject us to numerous risks, expenses and uncertainties, including related to the integration of new businesses and strategies, acquisitions or joint ventures; • we derive a significant portion of our management fees from ARCC; • economic U.S. and foreign sanction laws may prohibit us and our affiliates from transacting with certain countries, individuals and companies; • our international operations subject us to numerous regulatory, operational and reputational risks and expenses; • our financial support of particular investment products, or the inability to provide support, may cause AUM, revenue and earnings to decline; • we are subject to operational risks and risks in using prime brokers, custodians, counterparties, administrators and other agents; • the increasing demands of fund investors, including the potential for fee compression and changes to other terms, could materially adversely affect our future revenues; • security incidents or cyber-attacks, affecting us or our third-party service providers, could adversely affect our business, financial condition and operating results; • 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 or changes in enforcement of existing privacy laws could impact our business and financial performance; • we may be subject to litigation and reputational risks and related liabilities or risks related to employee misconduct, fraud and other deceptive practices; 36 Table of Contents • changes in interest rates could negatively impact the values of certain assets or investments and the ability of our funds and their portfolio companies to access the debt markets on attractive terms, which could adversely impact investment and realization opportunities; • 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; • the use of leverage by us and our funds exposes us to substantial risks, including related to the use of Secured Overnight Financing Rate (“SOFR”) and Sterling Overnight Interbank Average Rate (“SONIA”); • asset valuation methodologies can be highly subjective and our value of an asset may differ materially from the value ultimately realized; • our funds may perform poorly due to market conditions, political actions or environments, monetary and fiscal policy or other conditions beyond our control; • third-party investors in our funds may not satisfy their contractual obligation to fund capital calls or may exercise redemption, termination or dissolution rights; • we are subject to risks relating to our contractual rights and obligations under our funds’ governing documents and investment management agreements; • a downturn in the global credit markets could adversely affect certain of our investments; • due to our and our funds’ investments in certain market sectors, such as private credit, power, infrastructure and energy, real estate, insurance, secondaries and private equity products, we are subject to risks and regulations inherent to those industries; • if we were deemed to be an “investment company” under the Investment Company Act, applicable restrictions could make it impractical for us to continue our businesses as contemplated; • due to the Holdco Members ownership and control of our shares of common stock, holders of our Class A common stock will generally have no influence over matters on which holders of our common stock vote and limited ability to influence decisions regarding our business; • we are subject to risks related to our categorization as a “controlled company” within the meaning of the NYSE listing standards; • potential conflicts of interest may arise among the holders of Class B and Class C common stock and the holders of our Class A common stock and/or Series B mandatory convertible preferred stock; • our holding company structure, Delaware law and contractual restrictions may limit our ability to pay dividends to the holders of our Class A and non-voting common stock; • other anti-takeover provisions in our charter documents could delay or prevent a change in control; and • we are subject to risks related to our tax receivable agreement (the “TRA”).
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. Following Brexit, the provisions of the GDPR were incorporated directly into U.K. law as the U.K.
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. Following Brexit, the provisions of the GDPR were incorporated directly into U.K. law as the U.K. GDPR.
Similarly, investors in our funds often require certain investment restrictions or limitations be included in their side letters that we are contractually obligated to observe in the management of such investors’ interests in the applicable fund.
Similarly, investors in our funds often require certain investment restrictions or limitations be included in their side letters that we are contractually obligated to observe in the management of such investors’ interests in the applicable fund.
Investments in foreign securities involve certain factors not typically associated with investing in U.S. securities, including risks relating to: • our funds’ abilities to exchange local currencies for U.S. dollars and other currency exchange matters, including fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another; • controls on, and changes in controls on, foreign investment and limitations on repatriation of invested capital; • less developed or less efficient financial markets than exist in the United States, which may lead to price volatility and relative illiquidity; • the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation; • changes in laws or clarifications to existing laws (and changes in administrative practices) that could impact our tax treaty positions, which could adversely impact the returns on our investments; • differences in legal and regulatory environments, particularly with respect to bankruptcy and reorganization, labor and employment laws, less developed corporate laws regarding fiduciary duties and the protection of investors and less reliable judicial systems to enforce contracts and applicable law; • political hostility to investments by foreign or private equity investors; • less publicly available information in respect of companies in foreign markets; • reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms; • higher rates of inflation; • higher transaction costs; • difficulty in enforcing contractual obligations; 72 Table of Contents • fewer investor protections; • limitations on the deductibility of interest and other financing costs and expenses for income tax purposes in certain jurisdictions; • certain economic and political risks, including potential exchange control regulations and restrictions on our foreign investments and repatriation of capital, potential political, economic or social instability, the possibility of nationalization or expropriation or confiscatory taxation and adverse economic and political developments; and • the imposition of foreign taxes or withholding taxes on income and gains recognized with respect to such securities.
Investments in foreign securities involve certain factors not typically associated with investing in U.S. securities, including risks relating to: • our funds’ abilities to exchange local currencies for U.S. dollars and other currency exchange matters, including fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another; • controls on, and changes in controls on, foreign investment and limitations on repatriation of invested capital; • less developed or less efficient financial markets than exist in the United States, which may lead to price volatility and relative illiquidity; • the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation; • changes in laws or clarifications to existing laws (and changes in administrative practices) that could impact our tax treaty positions, which could adversely impact the returns on our investments; • differences in legal and regulatory environments, particularly with respect to bankruptcy and reorganization, labor and employment laws, less developed corporate laws regarding fiduciary duties and the protection of investors and less reliable judicial systems to enforce contracts and applicable law; • political hostility to investments by foreign or private equity investors; • less publicly available information in respect of companies in foreign markets; 72 Table of Contents • reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms; • higher rates of inflation; • higher transaction costs; • difficulty in enforcing contractual obligations; • fewer investor protections; • limitations on the deductibility of interest and other financing costs and expenses for income tax purposes in certain jurisdictions; • certain economic and political risks, including potential exchange control regulations and restrictions on our foreign investments and repatriation of capital, potential political, economic or social instability, the possibility of nationalization or expropriation or confiscatory taxation and adverse economic and political developments; and • the imposition of foreign taxes or withholding taxes on income and gains recognized with respect to such securities.
On any date on which the Ares Ownership Condition is satisfied, the shares of our Class B common stock held by the Class B Stockholder entitles it to a number of votes, in the aggregate, equal to (x) four times the aggregate number of votes attributable to the shares of our Class A common stock minus (y) the aggregate number of votes attributable to the shares of our Class C common stock.
On any date on which the Ares Ownership Condition is satisfied, the shares of our Class B common stock held by the Class B Stockholder entitles it to a number of votes, in the aggregate, equal to (x) four times the aggregate number of votes attributable to the shares of our Class A common stock minus (y) the aggregate number of votes attributable to the shares of our Class C common stock.
A holder of AOG Units must exchange one AOG Unit in the Ares Operating Group entity to effect an exchange for a share of Class A common stock of AMC.
A holder of AOG Units must exchange one AOG Unit in the Ares Operating Group entity to effect an exchange for a share of Class A common stock of AMC.
For example, a decision to receive material non-public information about a company while pursuing an investment opportunity may give rise to a potential conflict of interest if it results in our having to restrict any fund or other part of our business from trading in the securities of such company; • we may allocate an investment opportunity that is appropriate for Ares and/or multiple funds in a manner that excludes one or more funds or results in a disproportionate allocation based on factors or criteria that we determine, such as differences with respect to available capital, the size of a fund, minimum investment amounts and remaining life of a fund, differences in investment objectives or current investment strategies, such as objectives or strategies, differences in risk profile at the time an opportunity becomes available, the potential transaction and other costs of allocating an opportunity among various funds, potential conflicts of interest, including whether multiple funds have an existing investment in the security in question or the issuer of such security, the nature of the security or the transaction including the size of investment opportunity, minimum investment amounts and the source of the opportunity, current and anticipated market and general economic conditions, existing positions in an issuer/security, prior positions in an issuer/security and other considerations deemed relevant to us; • our funds may acquire positions in a single portfolio company, for example, where the fund that made an initial investment no longer has capital available to invest; • our funds may invest in different parts of the capital structure of a company in which one or more of our other funds invests.
For example, a decision to receive material non-public information about a company while pursuing an investment opportunity may give rise to a potential conflict of interest if it results in our having to restrict any fund or other part of our business from trading in the securities of such company; • we may allocate an investment opportunity that is appropriate for Ares and/or multiple funds in a manner that excludes one or more funds or results in a disproportionate allocation based on factors or criteria that we determine, such as differences with respect to available capital, the size of a fund, minimum investment amounts and remaining life of a fund, differences in investment objectives or current investment strategies, such as objectives or strategies, differences in risk profile at the time an opportunity becomes available, the potential transaction and other costs of allocating an opportunity among various funds, potential conflicts of interest, including whether multiple funds have an existing investment in the security in question or the issuer of such security, the nature of the security or the transaction including the size of investment opportunity, minimum investment amounts and the source of the opportunity, current and anticipated market and general economic conditions, existing positions in an issuer/security, prior positions in an issuer/security and other considerations deemed relevant to us; • our funds may acquire positions in a single portfolio company, for example, where the fund that made an initial investment no longer has capital available to invest; • our funds may invest in different parts of the capital structure of a company in which one or more of our other funds also invests.
The Action Plan contemplates, among other things: establishing EU labels for green financial products; clarifying asset managers’ and institutional investors’ duties regarding sustainability in their investment decision-making processes; increasing disclosure requirements in the financial services sector around sustainability and increasing the transparency of companies on their ESG policies and related processes and management systems; and introducing a ‘green supporting factor’ in the EU prudential rules for banks and insurance companies to incorporate climate risks into banks’ and insurance companies’ risk management policies.
The Action Plan contemplates, among other things: establishing EU labels for green financial products; clarifying asset managers’ and institutional investors’ duties regarding ESG in their investment decision-making processes; increasing disclosure requirements in the financial services sector around ESG and increasing the transparency of companies on their ESG policies and related processes and management systems; and introducing a ‘green supporting factor’ in the EU prudential rules for banks and insurance companies to incorporate climate risks into banks’ and insurance companies’ risk management policies.
Our business operations, our funds’ portfolio companies, and the companies in which our funds invest may face risks associated with climate change, including “transition risks” such as risks related to the impact of climate-related legislation and regulation (both domestically and internationally), risks related to climate-related business trends (such as the process of transitioning to a lower-carbon economy) and risks stemming from the physical impacts of climate change, such as the increasing frequency or severity of extreme weather events (including wildfires, droughts, hurricanes and floods) and rising sea levels and temperatures.
Our business operations, our funds’ portfolio companies, and the companies in which our funds invest may face risks associated with climate change, including “transition risks” such as risks related to the impact of climate-related legislation and regulation (both domestically and internationally), risks related to climate-related business trends (such as the process of transitioning to a lower-carbon economy) and risks stemming from the potential physical impacts of climate change, such as the increasing frequency or severity of extreme weather events (including wildfires, droughts, hurricanes and floods) and rising sea levels and temperatures.
If certain proposed acquisitions or dispositions of portfolio companies by our managed investment funds are delayed or rejected by antitrust enforcers, or if previously closed transactions are investigated, it could have an adverse impact on our ability to generate future performance revenues and to fully invest the available capital in our funds, as well as reduce opportunities to exit and realize value from our fund investments.
If certain proposed acquisitions or dispositions of portfolio companies by our managed investment funds are delayed, conditioned or rejected by antitrust enforcers, or if previously closed transactions are investigated, it could have an adverse impact on our ability to generate future performance revenues and to fully invest the available capital in our funds, as well as reduce opportunities to exit and realize value from our fund investments.
In addition, the governing agreements of the AOG entities authorize the direct subsidiaries of AMC which are the general partners of those entities to issue an unlimited number of additional units of the Ares Operating Group entity with such designations, preferences, rights, powers and duties that are different from, and may be senior to, those applicable to the AOG Units, and which may be exchangeable for shares of our Class A common stock.
In addition, the governing agreements of the AOG entities authorize our direct subsidiaries which are the general partners of those entities to issue an unlimited number of additional units of the Ares Operating Group entity with such designations, preferences, rights, powers and duties that are different from, and may be senior to, those applicable to the AOG Units, and which may be exchangeable for shares of our Class A common stock.
Where a fund’s governing documents do not permit the payment of a particular expense, we will generally pay such fund’s allocable portion of such expense. Potential conflicts will arise with respect to our decisions regarding how to allocate co-investment opportunities among our funds and investors and the terms of any such co-investments.
Where a fund’s governing documents do not permit the payment of a particular expense, we will generally pay such fund’s allocable portion of such expense. Potential conflicts will arise with respect to our decisions regarding how to allocate co-investment opportunities among us, our funds and investors and the terms of any such co-investments.
Under the Dodd-Frank Act, the CFTC has jurisdiction over swaps and the SEC has jurisdiction over security-based swaps. Under CFTC rules, all swaps (other than security-based swaps) included in the definition of commodity interests. As a result, funds that utilize swaps (whether or not related to a physical commodity) may fall within the statutory definition of a commodity pool.
Under the Dodd-Frank Act, the CFTC has jurisdiction over swaps and the SEC has jurisdiction over security-based swaps. Under CFTC rules, all swaps (other than security-based swaps) are included in the definition of commodity interests. As a result, funds that utilize swaps (whether or not related to a physical commodity) may fall within the statutory definition of a commodity pool.
In the U.S., the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, executive orders and regulations establishing U.S. economic and trade sanctions, which restrict or prohibit, among other things, direct and indirect transactions with, and the provision of services to, certain foreign countries, territories, individuals and entities.
Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, executive orders and regulations establishing U.S. economic and trade sanctions, which restrict or prohibit, among other things, direct and indirect transactions with, and the provision of services to, certain foreign countries, territories, individuals and entities.
The terms of the contracts with these third-party service providers are often customized and complex, and many of these arrangements occur in markets or relate to products that are not subject to regulatory oversight, although the Dodd-Frank Act provides for regulation of the derivatives market.
Although the Dodd-Frank Act provides for general regulation of the derivatives market, the terms of the contracts with these third-party service providers are often customized and complex, and many of these arrangements occur in markets or relate to products that are not subject to regulatory oversight.
Increasing scrutiny from stakeholders and regulators with respect to ESG matters could impact our or our funds’ portfolio companies’ reputation, the cost of our or their operations, or result in investors ceasing to allocate their capital to us, all of which could adversely affect our business and results of operations.
Increasing scrutiny from stakeholders and regulators with respect to sustainability—or ESG—matters could impact our or our funds’ portfolio companies’ reputation, the cost of our or their operations, or result in investors ceasing to allocate their capital to us, all of which could adversely affect our business and results of operations.
In 2024, the National Association of Insurance Commissioners in the U.S. adopted changes to its Financial Analysis Handbook to provide additional guidance to regulators reviewing affiliated investment management agreements and added new regulatory considerations and guidance to assist regulators in assessing complex ownership structures.
In 2024, the National Association of Insurance Commissioners (“NAIC”) in the U.S. adopted changes to its Financial Analysis Handbook to provide additional guidance to regulators reviewing affiliated investment management agreements and added new regulatory considerations and guidance to assist regulators in assessing complex ownership structures.
SFTR are substantively similar, there are some areas of regulatory divergence (including with respect to the differing new validation rules) and there can be no guarantee that the U.K. will move in lockstep with the future changes proposed by the EU.
SFTR are substantively similar, there are some areas of regulatory divergence (including with respect to differing validation rules) and there can be no guarantee that the U.K. will move in lockstep with the future changes proposed by the EU.
In Asia, regulators in Singapore and Hong Kong have released guidelines for asset managers to integrate climate risk considerations in investment and risk management processes, together with enhanced disclosure and reporting and have also issued enhanced rules for certain ESG funds on general ESG risk management and disclosure.
In Asia, regulators in Singapore, Japan and Hong Kong have released guidelines for asset managers to integrate climate risk considerations in investment and risk management processes, together with enhanced disclosure and reporting and have also issued enhanced rules for certain ESG funds on general ESG risk management and disclosure.
In addition, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which an investment is made, holders of securities ranking senior to our investment would typically be entitled to receive payment in full before distributions could be made in respect of our investment.
In the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which an investment is made, holders of securities ranking senior to our investment would typically be entitled to receive payment in full before distributions could be made in respect of our investment.
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. We depend on the diligence, skill, judgment, business contacts and personal reputations of our executive officers, senior professionals and other key personnel depart.
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. We depend on the diligence, skill, judgment, business contacts and personal reputations of our executive officers, senior professionals and other key personnel.
As capital calls made to a fund’s investors are delayed when using a subscription line of credit, the investment period of such investor capital is shortened, which may increase the net internal rate of return of an investment fund.
As capital calls made to a fund’s investors are delayed when using a subscription line of credit, the investment period of such investor capital is shortened, which may increase the leveraged net internal rate of return of an investment fund.
If our real estate funds acquire direct or indirect interests in undeveloped land or underdeveloped real property, which may often be non-income producing, they will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction (including risks beyond the control of our fund, such as weather or labor conditions or material shortages) and the availability of both construction and permanent financing on favorable terms.
If our Real Assets Group funds acquire direct or indirect interests in undeveloped land or underdeveloped real property, which may often be non-income producing, they will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction (including risks beyond the control of our fund, such as weather or labor conditions or material shortages) and the availability of both construction and permanent financing on favorable terms.
For example, • Ownership of infrastructure assets may also present additional risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental or other applicable laws. 78 Table of Contents • Infrastructure asset investments may face construction risks including, without limitation: (i) labor disputes, shortages of material and skilled labor, or work stoppages; (ii) slower than projected construction progress and the unavailability or late delivery of necessary equipment; (iii) less than optimal coordination with public utilities in the relocation of their facilities; (iv) adverse weather conditions and unexpected construction conditions; (v) accidents or the breakdown or failure of construction equipment or processes; and (vi) catastrophic events such as explosions, fires, terrorist activities and other similar events.
For example, • Ownership of infrastructure assets may also present additional risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental or other applicable laws. • Infrastructure asset investments may face construction risks including, without limitation: (i) labor disputes, shortages of material and skilled labor, or work stoppages; (ii) slower than projected construction progress and the unavailability or late delivery of necessary equipment; (iii) less than optimal coordination with public utilities in the relocation of their facilities; (iv) adverse weather conditions and unexpected construction conditions; (v) accidents or the breakdown or failure of construction equipment or processes; and (vi) catastrophic events such as explosions, fires, terrorist activities and other similar events.
The SEC’s recent lists of examination priorities for investment advisers includes numerous items related to the oversight of asset managers to private funds, and many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding private funds, including the calculation of fees and expenses, the allocation of broken-deal expenses, the disclosure of operating partner or operating executive compensation, outside business activities of firm principals and employees, group purchasing arrangements and general conflicts of interest disclosures.
The SEC’s recent list of examination priorities for investment advisers includes numerous items related to the oversight of asset managers to private funds, and many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding private funds, including the calculation of fees and expenses, the allocation of broken-deal expenses, the disclosure of operating partner or operating executive compensation, outside business activities of firm principals and employees, group purchasing arrangements and general conflicts of interest disclosures.
There is also a risk that market expectations in relation to SFDR categorization of financial products could adversely affect our ability to raise capital from EEA investors.
There is also a risk that market expectations in relation to SFDR categorization of financial products could adversely affect our ability to raise capital, especially from EEA investors.
Our existing and future indebtedness exposes us to the typical risks associated with the use of leverage, 61 Table of Contents including the same risks that are applicable to our funds that use leverage as discussed below under “—Risks Related to Our Funds—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.” The occurrence or continuation of any of these events or trends could cause us to suffer a decline in the credit ratings assigned to our debt by rating agencies, which would cause the interest rate applicable to borrowings under the Credit Facility to increase and could result in other material adverse effects on our businesses.
Our existing and future indebtedness exposes us to the typical risks associated with the use of leverage, including the same risks that are applicable to our funds that use leverage as discussed below under “—Risks Related to Our Funds—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.” The occurrence or continuation of any of these events or trends could cause us to suffer a decline in the credit ratings assigned to our debt by rating agencies, which would cause the interest rate applicable to borrowings under the Credit Facility to increase and could result in other material adverse effects on our businesses.
While diversification is generally an objective of our funds, there can be no assurance as to the degree of diversification, if any, that will be achieved in any fund investments.
In particular, while diversification is generally an objective of our funds, there can be no assurance as to the degree of diversification, if any, that will be achieved in any fund investments.
Bribery Act or other applicable anti-corruption laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects, financial position or the market value of shares of our Class A common stock.
Bribery Act and ECCTA or other applicable anti-corruption and fraud laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects, financial position or the market value of shares of our Class A common stock.
These events and the disruptions they cause, alone or in combination, could also lead to increased costs of insurance (particularly for real estate in certain regions).
These events and the disruptions they may cause, alone or in combination, could also lead to increased costs of insurance (particularly for real estate in certain regions).
Regulatory authorities in the U.S. and many relevant jurisdictions have broad regulatory (including through any regulatory support organization), administrative, and in some cases discretionary, authority with respect to insurance companies and/or their investment advisors, which may include, among other things, the investments insurance companies may acquire and hold, marketing practices, affiliate transactions, reserve requirements and capital adequacy.
Regulatory authorities in the U.S. and many relevant jurisdictions have broad regulatory (including through any regulatory support organization), administrative, and in some cases discretionary, authority with respect to insurance companies and/or their investment advisers, which may include, among other things, the investments insurance companies may acquire and hold, marketing practices, affiliate transactions, reserve requirements and capital adequacy.
The FTPF Offence is modeled on similar existing offences for ‘failure to prevent bribery’ and ‘failure to prevent the facilitation of tax evasion.’ The FTPF Offence imposes criminal liability on bodies corporate and partnerships, wherever incorporated, meeting specified size thresholds (so-called ‘large organizations’) where an ‘associate’ (being an employee, agent, subsidiary undertaking or person who provides services for or on behalf of the large organization) commits a U.K. fraud offence, unless the large organization has in place reasonable fraud prevention policies and procedures (or it was not reasonable to have policies and procedures in place).
The FTPF Offence is modeled on similar existing offences for ‘failure to prevent bribery’ and ‘failure to prevent the facilitation of tax evasion.’ The FTPF Offence imposes criminal liability on bodies corporate and partnerships, wherever incorporated, meeting specified size thresholds (so-called ‘large organizations’) where an ‘associate’ (being an employee, agent, subsidiary 58 Table of Contents undertaking or person who provides services for or on behalf of the large organization) commits a U.K. fraud offence, unless the large organization has in place reasonable fraud prevention policies and procedures (or it was not reasonable to have policies and procedures in place).
More generally, investments in real estate-related businesses and assets are subject to risks including the following: • those associated with the burdens of ownership of real property; • fluctuations in the average occupancy and room rates for hotel properties; • the financial resources of tenants; • changes in building, environmental and other laws; • energy and supply shortages; • various uninsured or uninsurable risks; • liability for “slip-and-fall” and other accidents on properties held by our funds; • natural disasters, extreme weather events and other physical risks related to climate change; • changes in government regulations (such as rent control, digital infrastructure regulation and tax laws); • changes in real property tax and transfer tax rates; • changes in interest rates; • the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable; • negative developments in the economy that depress travel activity; • environmental liabilities; • contingent liabilities on disposition of assets; • unexpected cost overruns in connection with development projects; • terrorist attacks, war and other factors that are beyond our control; and 77 Table of Contents • dependence on local operating partners.
More generally, investments in real estate-related businesses and assets are subject to risks including the following: • those associated with the burdens of ownership of real property; • fluctuations in the average occupancy and room rates for hotel properties; • the financial resources of tenants; • changes in building, environmental and other laws; • energy and supply shortages and supply chain disruptions; • various uninsured or uninsurable risks; • liability for “slip-and-fall” and other accidents on properties held by our funds; • natural disasters, extreme weather events and other physical risks related to climate change; • changes in government regulations (such as rent control, digital infrastructure regulation and tax laws); 77 Table of Contents • changes in real property tax and transfer tax rates; • changes in interest rates; • the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable; • negative developments in the economy that depress travel activity; • environmental liabilities; • tariffs and trade wars; • contingent liabilities on disposition of assets; • unexpected cost overruns in connection with development projects; • terrorist attacks, war and other factors that are beyond our control; and • dependence on local operating partners.
The SEC has also recently brought enforcement actions against a SPAC and its sponsor for misleading claims in advance of a proposed business combination.
The SEC has also brought enforcement actions against a SPAC and its sponsor for misleading claims in advance of a proposed business combination.
Some of our funds invest a portion of their assets in the equity, debt, loans or other securities of issuers located outside the U.S., including Europe and APAC, while certain of our funds invest substantially all of their assets in these types of securities, and we expect that international investments will increase as a proportion of certain of our funds’ portfolios in the future.
Many of our funds invest a portion of their assets in the equity, debt, loans or other securities of issuers located outside the U.S., including Europe and APAC, while certain of our funds invest substantially all of their assets in these types of securities, and we expect that international investments will increase as a proportion of certain of our funds’ portfolios in the future.
The different investment objectives or terms of such funds may result in a potential conflict of 41 Table of Contents interest, including in connection with the allocation of investments between the funds made pursuant to the Co-Investment Exemptive Order; • conflicts of interest may exist in the valuation of our investments (which can affect fees and carried interest) and regarding decisions about the allocation of specific investment opportunities among us and our funds and the allocation of fees and costs among us, our funds and their portfolio companies; and • fund investors may perceive conflicts of interest regarding investment decisions for funds in which our investment professionals, who have made and may continue to make significant personal investments, are personally invested.
The different investment objectives or terms of such funds may result in a potential conflict of interest, including in connection with the allocation of investments between the funds made pursuant to the Co-Investment Exemptive Order; • conflicts of interest may exist in the valuation of our investments (which can affect fees and carried interest) and regarding decisions about the allocation of specific investment opportunities among us and our funds and the allocation of fees and costs among us, our funds and their portfolio companies; and • fund investors may perceive conflicts of interest regarding investment decisions for funds in which our investment professionals, who have made and may continue to make significant personal investments, are personally invested.
We may need to use or reserve cash to repay such contingent repayment obligations instead of using the cash for other purposes. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations, Commitments and Contingencies and Other Arrangements,” “Note 2. Summary of Significant Accounting Policies,” and “Note 8.
We may need to use or reserve cash to repay such contingent repayment obligations instead of using the cash for other purposes. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations, Commitments and Contingencies and Other Arrangements,” “Note 2. Summary of Significant Accounting Policies,” and “Note 9.
The result of any security incident or cyber-attack may include disrupted operations, including in our, our employees’, our fund investors, our counterparties’, or third parties’ operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen or improperly accessed assets or information (including personal information), fines or penalties, investigations, increased cybersecurity protection and insurance costs, litigation, or damage to our business relationships and reputation, in 92 Table of Contents each case, causing our business and results of operations to suffer or otherwise causing interruptions or malfunctions in our, our employees’, our fund investors’, our counterparties’ or third parties’ operations.
The result of any security incident or cyber-attack may include disrupted operations, including in our, our employees’, our fund investors, our counterparties’, or third parties’ operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen or improperly accessed assets or information (including personal information), fines or penalties, investigations, increased cybersecurity protection and insurance costs, litigation, or damage to our business relationships and reputation, in each case, causing our business and results of operations to suffer or otherwise causing interruptions or malfunctions in our, our employees’, our fund investors’, our counterparties’ or third parties’ operations.
Although we have no policy governing the maturities of our investments, under current market conditions we expect that we will invest in a portfolio of debt generally having maturities of up to ten years. Trading prices for debt that pays a fixed rate of return tend to fall as interest rates rise.
Although we have no policy governing the maturities of our investments, under current market conditions we expect that we will invest in a portfolio of debt generally having maturities of up to 10 years. Trading prices for debt that pays a fixed rate of return tend to fall as interest rates rise.
This obligation is known as a “clawback” or contingent repayment obligation. Due to the fact that our carried interest is generally determined on a liquidation basis, as of December 31, 2024, if the funds were liquidated at their fair values at that date, there would have been no contingent repayment obligation or liability.
This obligation is known as a “clawback” or contingent repayment obligation. Due to the fact that our carried interest is generally determined on a liquidation basis, as of December 31, 2025, if the funds were liquidated at their fair values at that date, there would have been no contingent repayment obligation or liability.
Changes in rules and regulations impacting the insurance industry could adversely impact our expansion into the insurance industry, the prospects of our Bermuda insurance company subsidiary Aspida Re and other investments we make in the insurance industry, both in the U.S. and abroad and limit our ability to raise capital for our funds from insurance companies, which could limit our ability to grow.
Changes in rules and regulations impacting the insurance industry could adversely impact our expansion into the insurance industry, the prospects of Aspida Re, a Bermuda insurance company, and other investments we make in the insurance industry, both in the U.S. and abroad and limit our ability to raise capital for our funds from insurance companies, which could limit our ability to grow.
In addition, the act of selecting and evaluating material ESG factors is subjective by nature, and there is no guarantee that the criteria utilized, or judgement exercised by Ares, will reflect the beliefs or values, internal policies or preferred practices of investors or other managers, or align with market trends.
In addition, the act of selecting and evaluating material ESG factors is subjective by nature, and there is no guarantee that the criteria utilized, or judgment exercised by Ares, will reflect the beliefs or values, internal policies or preferred practices of investors or other managers, or align with market trends.
To the extent such fees, costs, and expenses are incurred for the account or benefit of more than one fund, each such fund will typically bear an allocable portion of any such fees, costs, and expenses in proportion to the size of its investment in the activity or entity to which such expense relates (subject to the terms of each fund’s governing documents) or in such other manner as we consider fair and equitable under the circumstances such as the relative fund size or capital available to be invested by such funds.
To the extent such fees, costs, and expenses are incurred for the account or benefit of more than 41 Table of Contents one fund, each such fund will typically bear an allocable portion of any such fees, costs, and expenses in proportion to the size of its investment in the activity or entity to which such expense relates (subject to the terms of each fund’s governing documents) or in such other manner as we consider fair and equitable under the circumstances such as the relative fund size or capital available to be invested by such funds.
We derive revenues primarily from: • management fees, which are based generally on the amount of capital committed to or invested by our funds; • carried interest and incentive fees, which are based on the performance of our funds; and • returns on investments of our own capital in the funds and other investment vehicles, including SPACs, that we sponsor and manage.
We derive revenues primarily from: • management fees, which are based generally on the amount of capital committed to or invested by our funds; • carried interest and incentive fees, which are based on the performance of our funds; and • returns on investments of our own capital in the funds and other investment vehicles that we sponsor and manage.
Even 49 Table of Contents if a sanction is imposed against us, one of our subsidiaries or our personnel by a regulator for a small monetary amount, the costs incurred in responding to such matters could be material, the adverse publicity related to the sanction could harm our reputation, which in turn could have a material adverse effect on our businesses in a number of ways, making it harder for us to raise new funds and discouraging others from doing business with us.
Even if a sanction is imposed against us, one of our subsidiaries or our personnel by a regulator for a small monetary amount, the costs incurred in responding to such matters could be material, the adverse publicity related to the sanction could harm our reputation, which in turn could have a material adverse effect on our businesses in a number of ways, making it harder for us to raise new funds and discouraging others from doing business with us.
If our ESG ratings or practices do not meet the standards set by such investors or our stockholders, or if we fail, or are perceived to fail, to demonstrate progress toward our ESG goals and initiatives, they may choose not to invest in our funds or exclude our common stock from their investments.
If our ESG ratings or practices do not meet the standards set by such investors or our stockholders, or if we fail, or are perceived to fail, to demonstrate progress toward our ESG objectives and initiatives, they may choose not to invest in our funds or exclude our common stock from their investments.
While our investments are exposed to FERC and public utility commission regulation in a manner that is consistent with other participants in the power, infrastructure and energy sector, such regulations could nonetheless result in delays in making investments, delays in exiting investments or limitations or conditions that may adversely affect the ability 69 Table of Contents of our funds to execute on their investment strategy with respect to such transactions as well as limit our flexibility in structuring or financing certain transactions.
While our investments are exposed to FERC and public utility commission regulation in a manner that is consistent with other participants in the power, infrastructure and energy sector, such regulations could nonetheless result in delays in making investments, delays in exiting investments or limitations or conditions that may adversely affect the ability of our funds to execute on their investment strategy with respect to such transactions as well as limit our flexibility in structuring or financing certain transactions.
Our certificate of incorporation contains provisions stating that the Class B Stockholder is under no obligation to consider the separate interests of our other stockholders (including the tax consequences to such stockholders) in deciding whether or not to cause us to take (or decline to take) any action as well as provisions stating that the Class B Stockholder shall not be liable to our other stockholders for monetary damages or equitable relief for losses sustained, liabilities incurred or benefits not derived by such stockholders in connection with such decisions.
Our certificate of incorporation contains provisions stating that the Class B Stockholder is under no obligation to consider the separate interests of our other stockholders (including the tax consequences to such stockholders) in deciding whether or not to cause us to take (or decline to take) any action as well as provisions stating that the Class B Stockholder shall not be liable to our other stockholders for monetary damages or equitable relief for losses sustained, liabilities 83 Table of Contents incurred or benefits not derived by such stockholders in connection with such decisions.
As such, the Class B Stockholder and Class C Stockholder, and thereby the Holdco Members, have the ability to indirectly, and in some cases directly, influence the determination of the amount and timing of the Ares Operating Group’s investments and dispositions, cash expenditures, including those relating to compensation, indebtedness, issuances of additional 82 Table of Contents partner interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of AOG Units.
As such, the Class B Stockholder and Class C Stockholder, and thereby the Holdco Members, have the ability to indirectly, and in some cases directly, influence the determination of the amount and timing of the Ares Operating Group’s investments and dispositions, cash expenditures, including those relating to compensation, indebtedness, issuances of additional partner interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of AOG Units.
As a holding company, our ability to pay dividends will be subject to the ability of our subsidiaries to provide cash to us. AMC has no material assets other than investments in the AOG entities, either directly or through subsidiaries. We have no independent means of generating revenues.
As a holding company, our ability to pay dividends will be subject to the ability of our subsidiaries to provide cash to us. We have no material assets other than investments in the AOG entities, either directly or through subsidiaries. We have no independent means of generating revenues.
Congress and the new Presidential administration may consider legislation to further extend the holding period for carried interest to qualify for long-term capital gains treatment, have carried interest taxed as ordinary income rather than as capital gain, impose surcharges on carried interest or increase the capital gains tax rate.
Congress and the current Presidential administration may consider legislation to further extend the holding period for carried interest to qualify for long-term capital gains treatment, have carried interest taxed as ordinary income rather than as capital gain, impose surcharges on carried interest or increase the capital gains tax rate.
Many of the investments of our funds are illiquid and thus have no readily ascertainable market prices. We value these investments based on our estimate, or an independent third party’s estimate, of their fair value as of the date of determination, which often involves significant subjectivity.
Many of our funds’ investments are illiquid and thus have no readily ascertainable market prices. We value these investments based on our estimate, or an independent third-party’s estimate, of their fair value as of the date of determination, which often involves significant subjectivity.
In the event that our funds are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at an increased interest rate or on unfavorable terms, our funds may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would otherwise be the case, either of which could reduce the 66 Table of Contents performance and investment income earned by us.
In the event that our funds are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at an increased interest rate or on unfavorable terms, our funds may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would otherwise be the case, either of which could reduce the performance and investment income earned by us.
These conflicts are most likely to arise between or among our funds or between one or more funds across our Credit, Real Assets, Private Equity and Secondaries Groups, and other businesses including any SPACs and similar investment vehicles that we sponsor.
These conflicts are most likely to arise between or among our funds or between one or more funds across our Credit, Real Assets, Secondaries and Private Equity Groups, and other businesses including any investment vehicles that we sponsor.
Furthermore, if, as a result of poor performance or otherwise, a fund does not achieve total investment returns that exceed a specified investment return threshold over the life of the fund or other measurement period, we may be obligated to repay the amount by which carried interest that was previously distributed or paid to us exceeds amounts to which we were entitled.
Furthermore, if, as a result of poor performance or otherwise, a fund does not achieve total investment returns that exceed a specified investment return threshold 43 Table of Contents over the life of the fund or other measurement period, we may be obligated to repay the amount by which carried interest that was previously distributed or paid to us exceeds amounts to which we were entitled.
As a result of these variation margin requirements, 48 Table of Contents some of our funds are required to post collateral to satisfy the variation margin requirements which has made transacting in uncleared swaps more expensive. Position limits imposed by various regulators, self-regulatory organizations or trading facilities on derivatives may also limit our ability to effect desired trades.
As a result of these variation margin requirements, some of our funds are required to post collateral to satisfy the variation margin requirements which has made transacting in uncleared swaps more expensive. Position limits imposed by various regulators, self-regulatory organizations or trading facilities on derivatives may also limit our ability to effect desired trades.
In addition, a new holder of shares of our Class B common stock or shares of our Class C common stock, or new controlling members of the Class B Stockholder or Class C Stockholder, may choose to vote for the election of directors to our board of directors who may not be willing or able to cause us to form new funds and could cause us to form funds that have investment objectives and governing terms that differ materially from those of our current funds.
In addition, a new holder of shares of our Class B common stock or shares of our Class C common stock, or new controlling members of the Class B Stockholder or Class C Stockholder, may choose to vote for the election of directors to our board of directors who may not be willing or able to cause us to form new funds and could cause us to form funds that 85 Table of Contents have investment objectives and governing terms that differ materially from those of our current funds.
Applicable U.S. and foreign tax law, regulations, or treaties, and changes in such tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely affect our effective tax rate, tax liability, financial condition and results, ability to raise funds from certain foreign investors, increase our compliance or withholding tax costs and conflict with our contractual obligations.
Applicable U.S. and foreign tax law, regulations, or treaties, and changes in such tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely affect our effective tax rate, tax liability, financial 87 Table of Contents condition and results, ability to raise funds from certain foreign investors, increase our compliance or withholding tax costs and conflict with our contractual obligations.
In addition, such guidelines may restrict our ability to pursue certain investments and strategies on behalf of our clients or limit an investor’s exposure to such investments and strategies that we believe are economically desirable, which could similarly result in losses to a client account or investor capital account or termination or potential withdrawal of the account or investor and a corresponding reduction in AUM.
In addition, such guidelines may restrict our ability to pursue certain investments and strategies on behalf of our clients or limit an investor’s exposure to such investments and strategies that we believe are economically desirable, which could similarly result 71 Table of Contents in losses to a client account or investor capital account or termination or potential withdrawal of the account or investor and a corresponding reduction in AUM.
Any of these events could cause our earnings to decline and materially and adversely affect our business, financial condition and results of operations. 71 Table of Contents Third-party investors in certain of our funds with commitment-based structures may not satisfy their contractual obligation to fund capital calls when requested by us, which could adversely affect a fund’s operations and performance.
Any of these events could cause our earnings to decline and materially and adversely affect our business, financial condition and results of operations. Third-party investors in certain of our funds with commitment-based structures may not satisfy their contractual obligation to fund capital calls when requested by us, which could adversely affect a fund’s operations and performance.
Regulatory authorities in many relevant jurisdictions have broad administrative, and in some cases discretionary, authority with respect to 50 Table of Contents insurance companies and/or their investment advisors, which may include, among other things, the investments insurance companies may acquire and hold, marketing practices, affiliate transactions, reserve requirements, capital adequacy including insurance company licensing and examination, agent licensing, establishment of reserve requirements and solvency standards, premium rate regulation, admissibility of assets, policy form approval, unfair trade and claims practices, advertising, maintaining policyholder privacy, payment of dividends and distributions to shareholders, investments, review and/or approval of transactions with affiliates, reinsurance, acquisitions, mergers and other matters.
Regulatory authorities in many relevant jurisdictions have broad administrative, and in some cases discretionary, authority with respect to insurance companies and/or their investment advisers, which may include, among other things, the investments insurance companies may acquire and hold, marketing practices, affiliate transactions, reserve requirements, capital adequacy including insurance company licensing and examination, agent licensing, establishment of reserve requirements and solvency standards, premium rate regulation, admissibility of assets, policy form approval, unfair trade and claims practices, advertising, maintaining policyholder privacy, payment of dividends and distributions to shareholders, investments, review and/or approval of transactions with affiliates, reinsurance, acquisitions, mergers and other matters.
There can be no assurance that any conflicts of interest will be resolved in favor of any particular funds or investors (including any 42 Table of Contents applicable co-investors) and such investment fund or investor (or the SEC) may challenge our treatment of such conflict, which could impose costs on our business and expose us to potential liability.
There can be no assurance that any conflicts of interest will be resolved in favor of any particular funds or investors (including any applicable co-investors) and such investment fund or investor (or the SEC) may challenge our treatment of such conflict, which could impose costs on our business and expose us to potential liability.
Our strategic initiatives may include joint ventures and business combinations through subsidiary sponsored SPACs, in which case we will be subject to additional risks and uncertainties in that we may be dependent upon, and subject to liability, losses or reputational damage relating to systems, controls and personnel that are not under our control or disputes with our joint venture partners.
Our strategic initiatives may include joint ventures and business combinations through subsidiary sponsored investment vehicles, in which case we will be subject to additional risks and uncertainties in that we may be dependent upon, and subject to liability, losses or reputational damage relating to systems, controls and personnel that are not under our control or disputes with our joint venture partners.
Further the departure of some or all of those individuals could also trigger certain “key person” provisions in the documentation governing certain of our funds, which would permit the investors in those funds to suspend or terminate such 40 Table of Contents funds’ investment periods or, in the case of certain funds, permit investors to withdraw their capital prior to expiration of the applicable lock-up date.
Further the departure of some or all of those individuals could also trigger certain “key person” provisions in the documentation governing certain of our funds, which would permit the investors in those funds to suspend or terminate such funds’ investment periods or, in the case of certain funds, permit investors to withdraw their capital prior to expiration of the applicable lock-up date.
Also, they may vary greatly from the prices that would be obtained if the assets were to be liquidated on the date of the valuation and 64 Table of Contents often do vary greatly from the prices we eventually realize; as a result, there can be no assurance that such unrealized valuations will be fully or timely realized.
Also, they may vary greatly from the prices that would be obtained if the assets were to be liquidated on the date of the valuation and often do vary greatly from the prices we eventually realize; as a result, there can be no assurance that such unrealized valuations will be fully or timely realized.
Decisions made with respect to an acceleration or deferral of income or the sale or disposition of assets with unrealized built-in tax gains may also influence the timing and amount of payments that are received by the TRA Recipients (including, among others, the Holdco Members and other executive officers) under the TRA.
Decisions made with respect to an acceleration or deferral of income or the sale or disposition of assets with unrealized built-in tax gains may also influence the timing and amount of payments that are 91 Table of Contents received by the TRA Recipients (including, among others, the Holdco Members and other executive officers) under the TRA.
Cybersecurity risks are also exacerbated by the rapidly increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personal information of our employees, our investors and others, and other sensitive information that we collect, process and store in our data centers and on our networks or those of our third-party service providers.
Cybersecurity risks are also exacerbated by the rapidly 92 Table of Contents increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personal information of our employees, our investors and others, and other sensitive information that we collect, process and store in our data centers and on our networks or those of our third-party service providers.
In addition, subject to certain exceptions, our BDCs are generally prohibited from issuing and selling their common stock at a price below net asset value per share and from incurring indebtedness (including for this purpose, preferred stock), if the BDCs’ respective asset coverage ratio, as calculated pursuant to the Investment Company Act, equals less than 150% after giving effect to such incurrence.
In addition, subject to certain exceptions, our BDCs 59 Table of Contents are generally prohibited from issuing and selling their common stock at a price below net asset value per share and from incurring indebtedness (including for this purpose, preferred stock), if the BDCs’ respective asset coverage ratio, as calculated pursuant to the Investment Company Act, equals less than 150% after giving effect to such incurrence.
If we or our supervising regulators were to determine that we have improperly allocated such expenses, we could be required to refund amounts to the funds and could be subject to regulatory censure, litigation from our fund investors and/or reputational harm, each of which could have a material adverse effect on our financial condition.
If we or our supervising regulators were to determine that we have improperly allocated such expenses, we could be required to refund amounts to the funds and could be subject to regulatory action, litigation from our fund investors and/or reputational harm, each of which could have a material adverse effect on our business and financial condition.
Such an event may have material adverse consequences on our investment or assets of the same type or may require applicable portfolio companies to increase preventative security measures or expand insurance coverage. In addition, cybersecurity has become a priority for regulators in the U.S. and around the world.
Such an event may have material adverse consequences on our investment or assets of the same type or may require applicable portfolio companies to increase preventative security measures or expand insurance coverage. In addition, cybersecurity is a priority for regulators in the U.S. and around the world.
In addition, compliance with applicable Privacy Laws may require adhering to stringent legal and operational requirements, which could increase compliance costs for us and require the dedication of additional time and resources to compliance. A failure to comply with applicable Privacy Laws could result in fines, sanctions, enforcement actions or other penalties or reputational damage.
In addition, compliance with applicable Privacy Laws may require adhering to stringent legal and operational requirements, which could increase compliance costs for us and require the dedication of additional time and 94 Table of Contents resources to compliance. A failure to comply with applicable Privacy Laws could result in fines, sanctions, enforcement actions or other penalties or reputational damage.
For example, in many non-distressed private equity investments, indebtedness may be as much as 75% or more of a portfolio company’s or real estate asset’s total debt and equity capitalization, including debt that may be incurred in connection with the investment, whether incurred at or above the investment-level entity.
For example, in many non-distressed private equity investments, indebtedness may be as much as 75% or more of a portfolio company’s or real estate asset’s total debt and equity capitalization, including debt that may be incurred in connection with the investment, 67 Table of Contents whether incurred at or above the investment-level entity.
Federal regulation. Under the Dodd-Frank Act, the Financial Stability Oversight Council (“FSOC”) has the authority to review the activities of certain nonbank financial firms engaged in financial activities and designate them as systemically important financial institutions (“SIFI”). Currently, there are no non-bank financial companies with a non-bank SIFI designation.
Under the Dodd-Frank Act, the Financial Stability Oversight Council (“FSOC”) has the authority to review the activities of certain non-bank financial firms engaged in financial activities and designate them as systemically important financial institutions (“SIFI”). Currently, there are no non-bank financial companies with a non-bank SIFI designation.
Performance metrics, such as IRR, going forward for any current or future fund may vary considerably from the historical performance generated by any particular fund, or for our funds as a whole.
Performance metrics, such as IRR and MoIC, going forward for any current or future fund may vary considerably from the historical performance generated by any particular fund, or for our funds as a whole.
In addition, debt instruments that are held by our funds to maturity or for long terms must be “marked-to-market” periodically, and their values are therefore vulnerable to interest rate fluctuations and the changes in the general state of 65 Table of Contents the credit environment, notwithstanding their underlying performance.
In addition, debt instruments that are held by our funds to maturity or for long terms must be “marked-to-market” periodically, and their values are therefore vulnerable to interest rate fluctuations and the changes in the general state of the credit environment, notwithstanding their underlying performance.
Accordingly, we do not believe that AMC is an inadvertent investment company by virtue of the 40% test in Section 3(a)(1)(C) of the Investment Company Act as described in the second bullet point above. The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies.
Accordingly, we do not believe that we are an inadvertent investment company by virtue of the 40% test in Section 3(a)(1)(C) of the Investment Company Act as described in the second bullet point above. The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies.
Isolated departures have occurred in the past but have not had a material impact on our business. Moreover, a number of our contracts with state government-sponsored clients 75 Table of Contents are secured through such government’s mandated procurement process, and are subject to periodic renewal.
Isolated departures have occurred in the past but have not had a material impact on our business. Moreover, a number of our contracts with state government-sponsored clients are secured through such government’s mandated procurement process, and are subject to periodic renewal.
If investors subject to such legislation viewed our funds or responsible investing or ESG practices, including our climate-related goals and commitments, as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, such investors may not invest in our funds, our ability to maintain the size of our funds could be impaired, and it could negatively affect results of our operations, cash flow or the price of our common stock.
If investors subject to anti-ESG legislation viewed our funds or responsible investing or ESG practices, including our climate-related goals 60 Table of Contents and commitments, as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, such investors may not invest in our funds, our ability to maintain the size of our funds could be impaired, and it could negatively affect results of our operations, cash flow or the price of our common stock.
The efficient operation of our business is dependent on information systems and technology, including computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, all of which are potentially vulnerable to security incidents and cyber-attacks, which may include intentional attacks or accidental losses, either of which may result in unauthorized access to, or corruption of, our hardware, software, or data processing systems, or to our confidential, personal, or other sensitive information.
The efficient operation of our business is dependent on information systems and technology, including computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, all of which are potentially vulnerable to security incidents and cyber-attacks, which may include intentional attacks or accidental losses, either of which may result in unauthorized access to, or corruption of, our or our third-party service providers’ hardware, software, or data processing systems, or to our confidential, personal, or other sensitive information.
In November 2023, FSOC adopted amendments to its guidance regarding procedures for designating non-bank financial companies as SIFIs which eliminated the prior guidance’s prioritization of an “activities-based” approach for identifying, assessing and addressing potential risks to financial stability.
In November 2023, FSOC adopted amendments to its guidance regarding procedures for designating non-bank financial companies as SIFIs which eliminated the prior guidance’s prioritization of an “activities-based” approach for identifying, 52 Table of Contents assessing and addressing potential risks to financial stability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors—General Risk Factors—Security incidents or cyber-attacks could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential, personal or other sensitive information and/or damage to our business relationships or reputation, any of which could negatively impact our business, financial condition and operating results.” Oversight of Cybersecurity Risks Our cybersecurity program is managed by a dedicated internal cybersecurity team, which is responsible for enterprise-wide cybersecurity strategy, policies, standards, engineering, architecture and processes.
Biggest changeRisk Factors—General Risk Factors—Security incidents or cyber-attacks, affecting us or our third-party service providers, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential, personal or other sensitive information and/or damage to our business relationships or reputation, any of which could negatively impact our business, financial condition and operating results.” Oversight of Cybersecurity Risks Our cybersecurity program is managed by a dedicated internal cybersecurity team, which is responsible for enterprise-wide cybersecurity strategy, policies, standards, engineering, architecture and processes.
The ERC, through regular consultation with the internal cybersecurity team, assesses, discusses, and prioritizes our approach to high-level risks, mitigating controls, and ongoing cybersecurity efforts. The audit committee has primary responsibility for oversight and review of guidelines and policies with respect to risk assessment and risk management, including cybersecurity.
The ERC, 97 Table of Contents through regular consultation with the internal cybersecurity team, assesses, discusses, and prioritizes our approach to high-level risks, mitigating controls, and ongoing cybersecurity efforts. The audit committee has primary responsibility for oversight and review of guidelines and policies with respect to risk assessment and risk management, including cybersecurity.
Such reporting includes updates on our cybersecurity program, the external threat environment, and our programs to address and mitigate the risks associated with the evolving cybersecurity threat environment. These reports also include updates on our preparedness, prevention, detection, responsiveness, and recovery with respect to cyber incidents.
Such reporting includes updates on our cybersecurity program, the external threat environment, and our programs to address and mitigate the risks associated with the evolving cybersecurity threat environment. These reports also include updates on our preparedness, prevention, detection, responsiveness, and recovery with respect to cyber incidents. 98 Table of Contents
The ERC is a committee that governs and oversees our Enterprise Risk Program, including 96 Table of Contents cybersecurity. The ERC includes our Chief Executive Officer, Co-Presidents, Chief Financial Officer, General Counsel, Global Chief Compliance Officer and Head of Enterprise Risk, who acts as chairperson of the ERC.
The ERC is a committee that governs and oversees our Enterprise Risk Program, including cybersecurity. The ERC includes our Chief Executive Officer, Co-Presidents, Chief Financial Officer, General Counsel, Chief Information Officer, Chief Compliance Officer and Head of Enterprise Risk, who acts as chairperson of the ERC.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2024, we had 30,000,000 shares of our Series B mandatory convertible preferred stock outstanding. During 2024, we declared dividends of $0.759375 per share, totaling approximately $22.8 million payable on January 1, 2025 to holders of record of shares of the Series B mandatory convertible preferred stock.
Biggest changeAs of December 31, 2025, we had 30,000,000 shares of our Series B mandatory convertible preferred stock outstanding. During 2024, we declared dividends of $0.759375 per share to holders of record of shares of the Series B mandatory convertible preferred stock with respect to the fourth quarter of 2024, or approximately $22.8 million.
If the AOG entities make such distributions, the partners of the AOG entities will be entitled to receive equivalent distributions based on their partnership units in the Ares Operating Group (except as set forth in the following paragraph); 99 Table of Contents • second, we cause AMC’s direct subsidiaries to distribute to AMC their share of such distributions, net of any taxes and amounts payable under the tax receivable agreement by such direct subsidiaries; and • third, AMC pays such distributions to our holders of our Class A and non-voting common stock, net of any taxes and amounts payable under the tax receivable agreement, on a pro rata basis.
If the AOG entities make such distributions, the partners of the AOG entities will be entitled to receive equivalent distributions based on their partnership units in the Ares Operating Group (except as set forth in the following paragraph); 101 Table of Contents • second, we cause AMC’s direct subsidiaries to distribute to AMC their share of such distributions, net of any taxes and amounts payable under the tax receivable agreement by such direct subsidiaries; and • third, AMC pays such distributions to our holders of our Class A and non-voting common stock, net of any taxes and amounts payable under the tax receivable agreement, on a pro rata basis.
The Series B mandatory convertible preferred stock accumulates dividends at a rate per annum equal to 6.75% on the liquidation preference thereof, payable when, as and if declared by the our board of directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, beginning on January 1, 2025 and concluding on October 1, 2027.
Dividend Policy for the Series B Mandatory Convertible Preferred Stock The Series B mandatory convertible preferred stock accumulates dividends at a rate per annum equal to 6.75% on the liquidation preference thereof, payable when, as and if declared by the our board of directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, beginning on January 1, 2025 and concluding on October 1, 2027.
Because U.S. corporations are taxed on their own taxable income, and because owners of such entities are taxed on any dividends paid from such entities, there are two levels of potential tax upon income earned by such entities. Unregistered Sales of Equity Securities and Purchases of Equity Securities None. Item 6. [Reserved] 100 Table of Contents
Because U.S. corporations are taxed on their own taxable income, and because owners of such entities are taxed on any dividends paid from such entities, there are two levels of potential tax upon income earned by such entities. Unregistered Sales of Equity Securities and Purchases of Equity Securities None. Item 6. [Reserved] 102 Table of Contents
The graph assumes $100 invested on December 31, 2019 and dividends received reinvested in the security or index. The performance graph is not intended to be indicative of future performance.
The graph assumes $100 invested on December 31, 2020 and dividends received reinvested in the security or index. The performance graph is not intended to be indicative of future performance.
Subject to the approval of our board of directors, we intend to pay a dividend of $1.12 per share of our Class A and non-voting common stock per quarter in 2025. Our fixed dividend will be reassessed each year based upon the level and growth of our fee related earnings after an allocation of current taxes paid.
Subject to the approval of our board of directors, we intend to pay a dividend of $1.35 per share of our Class A and non-voting common stock per quarter in 2026. Our fixed dividend will be reassessed each year based upon the level and growth of our fee related earnings after an allocation of current taxes paid.
During 2024, we declared a dividend each quarter of $0.93 (totaling $3.72 annually) per share to Class A and non-voting common stockholders , or approximately $743.0 million.
Dividend Policy for Class A and Non-Voting Common Stock During 2024, we declared a dividend each quarter of $0.93 (totaling $3.72 annually) per share to Class A common stockholders and non-voting common stockholders, or approximately $743.0 million.
In February 2025 , our board of directors declared a quarterly dividend of $1.12 per share of Class A and non-voting common stock with respect to the first quarter of 2025 payable on March 31, 2025 to common stockholders of record at the close of business on March 17, 2025.
In February 2026 , our board of directors declared a quarterly dividend of $1.35 per share of Class A and non-voting common stock with respect to the first quarter of 2026 payable on March 31, 2026 to common stockholders of record at the close of business on March 17, 2026.
Stock Performance Graph The following graph depicts the total return to holders of our Class A common stock from the closing price on December 31, 2019 through December 31, 2024, relative to the performance of the S&P 500 Index and the Dow Jones U.S. Asset Managers Index.
Stock Performance Graph The following graph depicts the total return to holders of our Class A common stock from the closing price on December 31, 2020 through December 31, 2025, relative to the performance of the S&P 500 Index and the Dow Jones U.S. Asset Managers Index.
The number of holders of record of our Class A common stock as of February 21, 2025 was 24, which does not include the number of shareholders that hold shares in “street name” through banks or broker-dealers.
The number of holders of record of our Class A common stock as of February 19, 2026 was 133, which does not include the number of shareholders that hold shares in “street name” through banks or broker-dealers.
In February 2025, our board of directors declared a quarterly dividend of $0.84375 per share, amounting to $25.3 million payable on April 1, 2025 to holders of record of shares of the Series B mandatory convertible preferred stock on March 15, 2025.
In February 2026, our board of directors declared a quarterly dividend of $0.84375 per share of Series B mandatory convertible preferred stock payable on April 1, 2026 to preferred stockholders of record on March 15, 2026.
Dividend Policy for Class A and Non-Voting Common Stock During 2023, we declared a dividend each quarter of $0.77 (totaling $3.08 annually) per share to Class A common stockholders and non-voting common stockholders, or approximately $571.9 million.
During 2025, we declared a dividend each quarter of $1.12 (totaling $4.48 annually) per share to Class A and non-voting common stockholders , or approximately $985.5 million.
Removed
Total Return Performance Table 98 Table of Contents Issuer Purchases of Equity Securities None. Dividend Policy for the Series B Mandatory Convertible Preferred Stock On October 10 2024, we issued 30,000,000 shares of our Series B mandatory convertible preferred stock, for total proceeds of $1,462.5 million (after deducting underwriting discounts but before offering expenses).
Added
Total Return Performance Table 100 Table of Contents Issuer Purchases of Equity Securities None.
Added
During 2025, we declared a dividend each quarter of $0.84375 (totaling $3.375 annually) per share to holders of record of shares of the Series B mandatory convertible preferred stock, or approximately $101.3 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

267 edited+119 added−96 removed150 unchanged
Biggest changeAccrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions): As of December 31, 2024 2023 Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income US VIII $ 20.1 $ 12.9 $ 7.2 $ 32.2 $ 20.7 $ 11.5 US IX 99.8 61.9 37.9 90.0 55.8 34.2 AREOF III 24.5 14.8 9.7 35.7 21.4 14.3 EF IV 22.9 13.7 9.2 49.2 29.5 19.7 EIF V 121.3 90.7 30.6 93.6 70.0 23.6 IDF V 113.7 69.3 44.4 56.1 33.7 22.4 ACIP 97.7 66.8 30.9 61.4 42.2 19.2 Other real assets funds 68.3 44.3 24.0 78.7 50.2 28.5 Total Real Assets Group $ 568.3 $ 374.4 $ 193.9 $ 496.9 $ 323.5 $ 173.4 The following table presents the change in accrued performance income for the Real Assets Group ($ in millions): As of December 31, 2023 Activity during the period As of December 31, 2024 Waterfall Type Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income Accrued Carried Interest US VIII European $ 32.2 $ (0.1) $ (12.0) $ — $ 20.1 US IX European 90.0 9.8 — — 99.8 AREOF III European 35.7 (11.2) — — 24.5 EF IV American 49.2 (26.3) — — 22.9 EIF V European 93.6 27.7 — — 121.3 IDF V European 56.1 63.8 — (6.2) 113.7 ACIP European 61.4 44.0 (7.7) — 97.7 Other real assets funds European 51.0 8.8 (12.2) 5.0 52.6 Other real assets funds American 27.7 (10.8) (1.2) — 15.7 Total accrued carried interest 496.9 105.7 (33.1) (1.2) 568.3 Other real assets funds Incentive — 27.2 (27.2) — — Total Real Assets Group $ 496.9 $ 132.9 $ (60.3) $ (1.2) $ 568.3 138 Table of Contents Real Assets Group—Assets Under Management The tables below present rollforwards of AUM for the Real Assets Group ($ in millions): North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2023 $ 29,177 $ 6,941 $ 13,597 $ 6,248 $ 9,450 $ 65,413 Acquisitions 2,488 — — — — 2,488 Net new par/equity commitments 2,684 1,465 1,580 664 974 7,367 Net new debt commitments 200 — 3,849 — — 4,049 Capital reductions — — (1,086) — — (1,086) Distributions (1,148) (240) (418) (395) (1,274) (3,475) Redemptions (883) — (210) — — (1,093) Net allocations among investment strategies — — — — 20 20 Change in fund value 441 (358) 167 927 438 1,615 Balance at 12/31/2024 $ 32,959 $ 7,808 $ 17,479 $ 7,444 $ 9,608 $ 75,298 North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2022 $ 31,460 $ 7,196 $ 12,526 $ 5,194 $ 9,685 $ 66,061 Net new par/equity commitments 3,116 36 1,278 1,218 428 6,076 Net new debt commitments — — 726 — — 726 Capital reductions (245) — (235) — — (480) Distributions (2,813) (250) (273) (322) (1,138) (4,796) Redemptions (1,207) — (552) — — (1,759) Change in fund value (1,134) (41) 127 158 475 (415) Balance at 12/31/2023 $ 29,177 $ 6,941 $ 13,597 $ 6,248 $ 9,450 $ 65,413 The components of our AUM for the Real Assets Group are presented below ($ in billions): AUM: $75.3 AUM: $65.4 FPAUM Non-fee paying (1) AUM not yet paying fees (1) Includes $1.0 billion and $0.6 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2024 and 2023, respectively. 139 Table of Contents Real Assets Group—Fee Paying AUM The tables below present rollforwards of fee paying AUM for the Real Assets Group ($ in millions): North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2023 $ 20,844 $ 5,913 $ 3,553 $ 5,148 $ 5,880 $ 41,338 Acquisitions 1,554 — — — — 1,554 Commitments 2,278 936 — 226 — 3,440 Deployment/subscriptions/increase in leverage 609 668 828 98 977 3,180 Capital reductions — — (12) — — (12) Distributions (855) (178) (330) (340) (454) (2,157) Redemptions (883) — (210) — — (1,093) Net allocations among investment strategies — — — — 20 20 Change in fund value 197 (390) 94 57 (114) (156) Change in fee basis (1,066) (654) — (60) (246) (2,026) Balance at 12/31/2024 $ 22,678 $ 6,295 $ 3,923 $ 5,129 $ 6,063 $ 44,088 North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2022 $ 21,788 $ 5,566 $ 3,759 $ 4,524 $ 5,970 $ 41,607 Commitments 2,525 26 (5) 1,128 — 3,674 Deployment/subscriptions/increase in leverage 199 221 602 350 1,596 2,968 Capital reductions (245) — (210) — — (455) Distributions (1,125) 9 (280) (854) (1,612) (3,862) Redemptions (1,207) — (568) — — (1,775) Change in fund value (1,091) 91 157 — (74) (917) Change in fee basis — — 98 — — 98 Balance at 12/31/2023 $ 20,844 $ 5,913 $ 3,553 $ 5,148 $ 5,880 $ 41,338 The charts below present FPAUM for the Real Assets Group by its fee bases ($ in billions): FPAUM: $44.1 FPAUM: $41.3 Invested capital/other (1) Market value (2) Capital commitments (1) Other consists of ACRE’s FPAUM, which is based on ACRE’s stockholders’ equity.
Biggest changeAccrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions): As of December 31, 2025 2024 Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income US IX $ 85.0 $ 52.7 $ 32.3 $ 99.8 $ 61.9 $ 37.9 EIF V 93.6 70.0 23.6 121.3 90.7 30.6 IDF V 172.5 106.9 65.6 113.7 69.3 44.4 ACIP I 84.8 58.2 26.6 97.7 66.8 30.9 Other Real Assets funds 151.1 104.6 46.5 135.8 85.7 50.1 Total Real Assets Group $ 587.0 $ 392.4 $ 194.6 $ 568.3 $ 374.4 $ 193.9 The following table presents the change in accrued performance income for the Real Assets Group ($ in millions): As of December 31, 2024 Activity during the period As of December 31, 2025 Waterfall Type Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income Accrued Carried Interest US IX European $ 99.8 $ 11.5 $ (26.3) $ — $ 85.0 EIF V European 121.3 22.1 (49.8) — 93.6 IDF V European 113.7 42.0 — 16.8 172.5 ACIP I European 97.7 (7.6) (5.3) — 84.8 Other Real Assets funds European 97.2 34.9 (17.9) 0.9 115.1 Other Real Assets funds American 38.6 (2.6) — — 36.0 Total accrued carried interest 568.3 100.3 (99.3) 17.7 587.0 Other Real Assets funds Incentive — 0.5 (0.5) — — Total Real Assets Group $ 568.3 $ 100.8 $ (99.8) $ 17.7 $ 587.0 141 Table of Contents Real Assets Group—Assets Under Management The tables below present rollforwards of AUM for the Real Assets Group ($ in millions): Real Estate Infrastructure Total Real Assets Group Balance at 12/31/2024 $ 58,246 $ 17,052 $ 75,298 Acquisitions 43,273 2,008 45,281 New par/equity commitments 7,799 6,517 14,316 New debt commitments 8,597 1,014 9,611 Capital reductions (3,014) (261) (3,275) Distributions (3,975) (2,407) (6,382) Redemptions (786) (378) (1,164) Net allocations among investment strategies (411) 683 272 Change in fund value 4,016 1,115 5,131 Balance at 12/31/2025 $ 113,745 $ 25,343 $ 139,088 Real Estate Infrastructure Total Real Assets Group Balance at 12/31/2023 $ 49,715 $ 15,698 $ 65,413 Acquisitions 2,488 — 2,488 New par/equity commitments 5,729 1,638 7,367 New debt commitments 4,049 — 4,049 Capital reductions (1,086) — (1,086) Distributions (1,806) (1,669) (3,475) Redemptions (1,093) — (1,093) Net allocations among investment strategies — 20 20 Change in fund value 250 1,365 1,615 Balance at 12/31/2024 $ 58,246 $ 17,052 $ 75,298 The components of our AUM for the Real Assets Group are presented below ($ in billions): AUM: $139.1 AUM: $75.3 FPAUM Non-fee paying (1) AUM not yet paying fees (1) Includes $1.4 billion and $1.0 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2025 and 2024, respectively. 142 Table of Contents Real Assets Group—Fee Paying AUM The tables below present rollforwards of fee paying AUM for the Real Assets Group ($ in millions): Real Estate Infrastructure Total Real Assets Group Balance at 12/31/2024 $ 32,896 $ 11,192 $ 44,088 Acquisitions 30,178 289 30,467 Commitments 5,662 2,342 8,004 Deployment/increase in leverage 3,824 2,703 6,527 Capital reductions (1,190) — (1,190) Distributions (3,067) (3,787) (6,854) Redemptions (786) (378) (1,164) Net allocations among investment strategies (411) 658 247 Change in fund value 3,187 (376) 2,811 Change in fee basis 770 359 1,129 Balance at 12/31/2025 $ 71,063 $ 13,002 $ 84,065 Real Estate Infrastructure Total Real Assets Group Balance at 12/31/2023 $ 30,310 $ 11,028 $ 41,338 Acquisitions 1,554 — 1,554 Commitments 3,214 226 3,440 Deployment/increase in leverage 2,105 1,075 3,180 Capital reductions (12) — (12) Distributions (1,363) (794) (2,157) Redemptions (1,093) — (1,093) Net allocations among investment strategies — 20 20 Change in fund value (99) (57) (156) Change in fee basis (1,720) (306) (2,026) Balance at 12/31/2024 $ 32,896 $ 11,192 $ 44,088 The charts below present FPAUM for the Real Assets Group by its fee bases ($ in billions): FPAUM: $84.1 FPAUM: $44.1 Invested capital GAV Market value (1) Capital commitments (1) Amounts represent FPAUM from funds that primarily invest in illiquid strategies.
These fees are composed of a program administration fee and a facilitation fee for advisory services and sales-based efforts, respectively Expenses Compensation and Benefits. Compensation generally includes salaries, bonuses, health and welfare benefits, payroll-related taxes, equity compensation, Part I Fee compensation and fee related performance compensation expenses.
These fees are composed of a program administration fee and a facilitation fee for advisory services and sales-based efforts, respectively Expenses Compensation and Benefits. Compensation generally includes salaries, bonuses, health and welfare benefits, payroll-related taxes, Part I Fee compensation, fee related performance compensation and equity compensation.
Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
Early in the life of a fund, the net fund-level MoICs would generally 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.
(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.
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.
Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (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.
Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (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.
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 and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes.
The net IRRs are calculated after giving effect to management fees and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes.
(3) The gross 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.
(3) The gross 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.
Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
Early in the life of a fund, the net fund-level MoICs would generally 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.
(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 fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (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.
Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (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.
(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.
(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.
Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
Our ability to make cash dividends is dependent on a myriad of factors, including: (i) general economic and business conditions; (ii) our strategic plans and prospects; (iii) our business and investment opportunities; (iv) timing of capital calls by our funds in support of our commitments; (v) our financial condition and operating results; (vi) working capital requirements and other anticipated cash needs; (vii) contractual restrictions and obligations; (viii) legal, tax and regulatory restrictions; (ix) restrictions on the payment of distributions by our subsidiaries to us; and (x) other relevant factors.
Our ability to make cash dividends and distributions is dependent on a myriad of factors, including: (i) general economic and business conditions; (ii) our strategic plans and prospects; (iii) our business and investment opportunities; (iv) timing of capital calls by our funds in support of our commitments; (v) our financial condition and operating results; (vi) working capital requirements and other anticipated cash needs; (vii) contractual restrictions and obligations; (viii) legal, tax and regulatory restrictions; (ix) restrictions on the payment of distributions by our subsidiaries to us; and (x) other relevant factors.
We entered into a TRA with the TRA Recipients that requires us to pay them 85% of any cash tax savings, if any, realized by AMC from any step-up in tax basis resulting from an exchange of AOG Units for shares of our Class A common stock or, at our option, for cash.
We entered into a TRA with the TRA Recipients that requires us to pay them 85% of any cash tax savings, if any, realized by AMC from amortizing any step-up in tax basis resulting from an exchange of AOG Units for shares of our Class A common stock or, at our option, for cash.
The activity for the year ended December 31, 2024 also included $5.5 million of one-time interest expense related to a temporary bridge facility that was established in connection with the GCP Acquisition. The facility was not utilized and was terminated in the fourth quarter of 2024. Other Income, Net.
The activity for the year ended December 31, 2024 included $5.5 million of one-time interest expense related to a temporary bridge facility that was established in connection with the GCP Acquisition. The facility was not utilized and was terminated in the fourth quarter of 2024. Other Income (Expense), Net.
As a result, taxes associated with income allocated to Series B mandatory convertible preferred stock dividends will be borne by Class A and non-voting common stockholders. Our ability to obtain debt financing and complete stock offerings provides us with additional sources of liquidity.
As a result, taxes associated with any income allocated to Series B mandatory convertible preferred stock dividends will be borne by Class A and non-voting common stockholders. Our ability to obtain debt financing and complete stock offerings provides us with additional sources of liquidity.
Although income allocated to Series B mandatory convertible preferred stock dividends may be subject to tax, dividends to our Series B preferred stockholders will not be reduced on account of any income taxes owed by us.
Although any income allocated to Series B mandatory convertible preferred stock dividends may be subject to taxes, dividends to our Series B mandatory convertible preferred stockholders will not be reduced on account of any income taxes owed by us.
Such expenses are subject to reimbursement from the perpetual wealth vehicles and may result in a corresponding reduction to our fee related performance revenues until the expenses have been recovered.
Such expenses are subject to reimbursement from the perpetual wealth vehicles and may result in a reduction to our fee related performance revenues until the expenses have been recovered.
(“SSF IV”) and Ares Special Opportunities Fund, L.P. (“ASOF I”), respectively, primarily due to the market depreciation of their investments in Savers Value Village, Inc.
(“SSF IV”) and Ares Special Opportunities Fund I, L.P. (“ASOF I”) respectively, primarily due to the market depreciation of their investments in Savers Value Village, Inc.
Accordingly, such amounts may not be comparable for the periods presented, and in any event have no material impact on net income attributable to Ares Management Corporation. 123 Table of Contents Segment Analysis For segment reporting purposes, revenues and expenses are presented before giving effect to the results of our Consolidated Funds and the results attributable to non-controlling interests of joint ventures that we consolidate.
Accordingly, such amounts may not be comparable for the periods presented, and in any event have no material impact on net income attributable to Ares Management Corporation. 125 Table of Contents Segment Analysis For segment reporting purposes, revenues and expenses are presented before giving effect to the results of our Consolidated Funds and the results attributable to non-controlling interests of joint ventures that we consolidate.
For limited partnerships and similar entities evaluated under the voting interest model, we do not consolidate those entities for which we act as the general partner unless we hold a majority voting interest.
For limited partnerships and similar entities evaluated under the voting interest entity model, we do not consolidate those entities for which we act as the general partner unless we hold a majority voting interest.
Commitments and Contingencies,” within our consolidated financial statements and “Item 1A. Risk Factors—Risks Related to Our Funds—We may need to pay “clawback” or “contingent repayment” obligations if and when they are triggered under the governing agreements with our funds” included in this Annual Report on Form 10-K. 112 Table of Contents Performance Income.
Commitments and Contingencies,” within our consolidated financial statements and “Item 1A. Risk Factors—Risks Related to Our Funds—We may need to pay “clawback” or “contingent repayment” obligations if and when they are triggered under the governing agreements with our funds” included in this Annual Report on Form 10-K. 114 Table of Contents Performance Income.
For most funds, the carried interest is subject to a preferred return ranging from 5.0% to 10.0%, after which there is typically a catch-up allocation to the general partner.
For most funds, the carried interest is subject to a preferred return ranging from 5% to 10%, after which there is typically a catch-up allocation to the general partner.
We pay sales-based bonuses for the sale and distribution of our wealth products through AWMS, including our exchange programs associated with our non-traded REITs. Incremental changes in fair value of certain contingent liabilities established in connection with our various acquisitions are recognized ratably over the service period and are also presented within compensation and benefits.
We pay sales-based bonuses for the sale and distribution of our wealth products, including our exchange programs associated with our non-traded REITs. Incremental changes in fair value of certain contingent liabilities established in connection with our various acquisitions are recognized ratably over the service period and are also presented within compensation and benefits.
Operating Activities In the table below, cash flows from operations are summarized to present: (i) cash generated from our core operating activities, primarily consisting of profits generated principally from management fees and fee related performance revenues after covering for operating expenses and fee related performance compensation; (ii) net realized performance income; and (iii) net cash from investment related activities including purchases, sales, realized net investment income and interest expense.
Operating Activities In the table below, cash flows from operations are summarized to present: (i) cash generated from our core operating activities, primarily consisting of profits generated principally from fee revenues after covering for operating expenses and fee related performance compensation; (ii) net realized performance income; and (iii) net cash from investment related activities including purchases, sales, realized net investment income and interest expense.
Risk Factors” for a discussion of the risks our businesses are subject to, both included in this Annual Report on Form 10-K. 102 Table of Contents Managing Business Performance Operating Metrics We measure our business performance using certain operating metrics that are common to the alternative investment management industry and are discussed below.
Risk Factors” for a discussion of the risks our businesses are subject to, both included in this Annual Report on Form 10-K. 104 Table of Contents Managing Business Performance Operating Metrics We measure our business performance using certain operating metrics that are common to the alternative investment management industry and are discussed below.
(3) Interest obligations reflect future interest payments on outstanding debt obligations with stated interest rates for fixed rate debt and at the prevailing rate in effect as of the reporting date for floating rate debt. (4) Represents payment obligations with respect to long-term service contracts entered into by the Company and future minimum commitments for our finance leases.
(3) Interest obligations reflect future interest payments on outstanding debt obligations with stated interest rates for fixed rate debt and at the prevailing rate in effect as of the reporting date for floating rate debt. (4) Represents payment obligations with respect to long-term service contracts entered into by us and future minimum commitments for our finance leases.
Management fees for corporate private equity funds generally step down to 0.75% of the aggregate adjusted cost of unrealized portfolio investments following the earlier to occur of: (i) the expiration or termination of the investment period; and (ii) the activation of a successor fund. (10) Fee rate represents typical rate during the investment period.
Management fees for corporate private equity funds generally step down to 0.75% to 1.00% of the aggregate adjusted cost of unrealized portfolio investments following the earlier to occur of: (i) the expiration or termination of the investment period; and (ii) the activation of a successor fund. (10) Fee rate represents typical rate during the investment period.
“Consolidated Funds” refers collectively to certain Ares funds, co-investment vehicles, CLOs and SPACs that are required under generally accepted accounting principles in the United States (“GAAP”) to be consolidated within our consolidated financial statements included in this Annual Report on Form 10-K.
“Consolidated Funds” refers collectively to certain Ares funds, co-investment vehicles, structured financing vehicles, CLOs and SPACs that are required under generally accepted accounting principles in the United States (“GAAP”) to be consolidated within our consolidated financial statements included in this Annual Report on Form 10-K.
Such fees are presented as incentive fees earned from funds with stated investment periods. 111 Table of Contents Carried Interest Allocation. Carried interest allocation is recognized based on changes in valuation of our funds’ investments that exceed certain preferred returns as set forth in each respective partnership agreement.
Such fees are presented as incentive fees earned from funds with stated investment periods. 113 Table of Contents Carried Interest Allocation. Carried interest allocation is recognized based on changes in valuation of our funds’ investments that exceed certain preferred returns as set forth in each respective partnership agreement.
Details regarding our carried interest, which is generally based on a fund’s eligible profits, are presented below: Strategy Fee Rate Annual Hurdle Rate Credit Group Liquid Credit and Alternative Credit 10.0% - 20.0% 6.0% - 8.0% Opportunistic Credit 20.0% 8.0% U.S. and European Direct Lending 10.0% - 20.0% 5.0% - 8.0% APAC Credit 15.0% - 20.0% 6.0% - 8.0% Real Assets Group Real Estate 10.0% - 20.0% 7.0% - 10.0% Infrastructure 15.0% - 20.0% 7.0% - 8.0% Private Equity Group Corporate Private Equity and APAC Private Equity 15.0% - 20.0% 8.0% Secondaries Group Private Equity, Real Estate, Infrastructure and Credit Secondaries 10.0% - 15% 7.0% - 8.0% Other Businesses Ares Insurance Solutions 20.0% 8.0% For detailed discussion of contingencies on carried interest, see “Note 8.
Details regarding our carried interest, which is generally based on a fund’s eligible profits, are presented below: Strategy Fee Rate Annual Hurdle Rate Credit Group Alternative Credit 20% 6% Opportunistic Credit 20% 8% U.S. and European Direct Lending 10% - 20% 5% - 8% APAC Credit 15% - 20% 6% - 8% Real Assets Group Real Estate 10% - 20% 6% - 10% Infrastructure 15% - 20% 7% - 8% Secondaries Group Private Equity, Real Estate, Infrastructure and Credit Secondaries 10% - 15% 7% - 8% Private Equity Group Corporate Private Equity and APAC Private Equity 15% - 20% 8% Other Businesses Ares Insurance Solutions 20% 8% For detailed discussion of contingencies on carried interest, see “Note 9.
For the specific components and calculations of these non-GAAP measures, as well as additional reconciliations to the most comparable measures in accordance with GAAP, see “Note 14. Segment Reporting” within our consolidated financial statements included in this Annual Report on Form 10-K.
For the specific components and calculations of these non-GAAP measures, as well as additional reconciliations to the most comparable measures in accordance with GAAP, see “Note 15. Segment Reporting” within our consolidated financial statements included in this Annual Report on Form 10-K.
The net MoICs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net MoIC would be 1.3x for ACOF V and 1.4x for ACOF VI. The funds may utilize a credit facility during the investment period and for general cash management purposes.
The net MoICs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net MoIC would be 1.2x for ACOF V and 1.4x for ACOF VI. The funds may utilize a credit facility during the investment period and for general cash management purposes.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023. We have reclassified certain prior period amounts to conform to the current year presentation.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. We have reclassified certain prior period amounts to conform to the current year presentation.
Details regarding our fee related performance revenues from our publicly-traded and perpetual wealth vehicles are presented below: Vehicle Strategy Annual Fee Rate Fee Base Annual Hurdle Rate Real Assets Group ACRE Real Estate Debt 20.0% The difference between ACRE’s core earnings (as defined in ACRE’s management agreement) and its shareholders' return on equity 8.0% Diversified Non-traded REIT and Industrial Non-traded REIT North American Real Estate Equity 12.5% Annual investment returns, subject to certain net loss carry-forward provisions 5.0% Secondaries Group APMF Private Equity Secondaries 12.5% Quarterly investment returns, subject to certain net loss carry-forward provisions N/A We are party to contractual expense limitation agreements with certain perpetual wealth vehicles under which we may advance a portion of certain expenses to reduce the perpetual wealth vehicles’ expense ratios.
Details regarding our fee related performance revenues from our publicly-traded funds and our perpetual wealth vehicles are presented below: Vehicle Strategy Fee Rate Fee Base Annual Hurdle Rate Real Assets Group ACRE Real Estate 20% The difference between ACRE’s core earnings (as defined in ACRE’s management agreement) and its shareholders’ return on equity 8% Diversified Non-Traded REIT and Industrial Non-Traded REIT Real Estate 12.5% Annual investment returns, subject to certain net loss carry-forward provisions 5% Secondaries Group APMF Private Equity Secondaries 12.5% Quarterly investment returns, subject to certain net loss carry-forward provisions N/A We are party to contractual expense limitation agreements with certain perpetual wealth vehicles under which we may advance a portion of certain expenses to reduce the perpetual wealth vehicles’ expense ratios.
Consolidation” within our consolidated financial statements included herein. 116 Table of Contents Results of Operations Consolidated Results of Operations Although the consolidated results presented below include the results of our operations together with those of the Consolidated Funds and other joint ventures, we separate our analysis of those items primarily impacting the Company from those of the Consolidated Funds.
Consolidation” within our consolidated financial statements included herein. 118 Table of Contents Results of Operations Consolidated Results of Operations Although the consolidated results presented below include the results of our operations together with those of the Consolidated Funds and other joint ventures, we separate our analysis of those items primarily impacting the Company from those of the Consolidated Funds.
This section of the Annual Report on Form 10-K discusses activity as of and for the years ended December 31, 2024 and 2023. For discussion on activity for the year ended December 31, 2022 and period-over-period analysis on results for the year ended December 31, 2023 to 2022, refer to Part II, “Item 7.
This section of the Annual Report on Form 10-K discusses activity as of and for the years ended December 31, 2025 and 2024. For discussion on activity for the year ended December 31, 2023 and period-over-period analysis on results for the year ended December 31, 2024 to 2023, refer to Part II, “Item 7.
Class M includes investors electing to participate in all investments and Class C includes investors electing to be excluded from exposure to liquid investments. Returns presented in the table are for onshore Class M. The current quarter gross and net returns for Class M (offshore) are 2.9% and 2.0%, respectively.
Class M includes investors electing to participate in all investments and Class C includes investors electing to be excluded from exposure to liquid investments. Returns presented in the table are for onshore Class M. The current quarter gross and net returns for Class M (offshore) are 2.9% and 2.3%, respectively.
Incentive Eligible Assets Under Management and Incentive Generating Assets Under Management The charts below present our IEAUM and IGAUM by segment ($ in billions): Credit Real Assets Private Equity Secondaries Other Businesses 106 Table of Contents The charts below present our IGAUM by strategy for funds generating fee related performance revenues and net fee related performance revenues by strategy as of and for the years ended: U.S.
Incentive Eligible Assets Under Management and Incentive Generating Assets Under Management The charts below present our IEAUM and IGAUM by segment ($ in billions): Credit Real Assets Secondaries Private Equity Other Businesses 108 Table of Contents The charts below present our IGAUM by strategy for funds generating fee related performance revenues and net fee related performance revenues by strategy as of and for the years ended: Real Estate U.S.
Supplemental distribution fees are fundraising costs associated with wealth products, generally paid to strategic investors and/or financial intermediaries for the distribution of shares and may be upfront on a portion of sales, ongoing as a percentage of net asset value or temporary in the form of a fee concession.
Supplemental distribution fees are fundraising costs associated with wealth products, generally paid to strategic investors and/or financial intermediaries for the distribution of shares and may be upfront on a portion of sales, ongoing as a percentage of net asset value or temporary in the form of a fee concession. Expenses of Consolidated Funds.
For more details on the activity of the Company and Consolidated Funds, refer to “Note 15. Consolidation” within our consolidated financial statements included in this Annual Report on Form 10-K.
For more details on the activity of the Company and Consolidated Funds, refer to “Note 16. Consolidation” within our consolidated financial statements included in this Annual Report on Form 10-K.
We continue to expand our distribution channels throughout the wealth channel with our global wealth management offerings, as well as the needs of traditional institutional investors, such as pension funds, sovereign wealth funds and endowments. If market volatility persists or increases, investors may seek absolute return strategies that seek to mitigate volatility.
We continue to expand our product offerings and distribution relationships throughout the wealth channel with our global wealth management offerings, as well as the needs of traditional institutional investors, such as pension funds, sovereign wealth funds and endowments. If market volatility persists or increases, investors may seek absolute return strategies that seek to mitigate volatility.
Management believes that we are well-positioned and our liquidity will continue to be sufficient for our foreseeable working capital needs, contractual obligations, dividend payments, pending acquisitions and strategic initiatives.
Management believes that we are well-positioned and our liquidity will continue to be sufficient for our foreseeable working capital needs, contractual obligations, dividend payments and strategic initiatives.
Principles of Consolidation We consolidate entities based on either a variable interest model or voting interest model. As such, for entities that are determined to be variable interest entities (“VIEs”), we consolidate those entities where we have both significant economics and the power to direct the activities of the entity that impact economic performance.
Principles of Consolidation We consolidate entities based on either a VIE model or voting interest entity (“VOE”) model. As such, for entities that are determined to be variable interest entities, we consolidate those entities where we have both significant economics and the power to direct the activities of the entity that impact economic performance.
(8) Fee range represents typical range during the investment period. Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested.
(7) Fee range represents typical range during the investment period. Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested.
Realized incentive fees are generally higher during the second half of the year, aligning with the measurement period that typically ends at the end of the calendar year. Once realized, such incentive fees are not subject to repayment. Cash from the realizations is typically received in the period subsequent to the measurement period.
Realized incentive fees are generally higher during the second half of the year, aligning with the 112 Table of Contents measurement period that typically ends at the end of the calendar year. Once realized, such incentive fees are not subject to repayment. Cash from the realizations is typically received in the period subsequent to the measurement period.
For European-style waterfalls, we in our role as general partner are entitled to receive carried interest if the investors in the fund have received distributions in an amount equal to all prior capital contributions plus a preferred return.
For European-style waterfalls, we in our role as general partner are entitled to receive carried interest if the investors in the fund have received distributions in an amount equal to all prior capital contributions (plus allocable expenses), as well as a preferred return.
Although changes in performance related compensation are directly correlated with changes in carried interest allocation and incentive fees reported within our segment results, this correlation does not always exist when our results are reported on a fully consolidated basis in accordance with GAAP.
Although the majority of changes in performance related compensation are directly correlated with changes in carried interest allocation and incentive fees reported within our segment results, this correlation does not always exist when our results are reported on a fully consolidated basis in accordance with GAAP.
Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. Impairment of Intangible Assets We evaluate intangible assets for impairment annually, or if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable.
Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. Impairment of Intangible Assets We evaluate finite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable.
For detail regarding the fluctuations of management fees within each of our segments, see “—Results of Operations by Segment.” 117 Table of Contents Carried Interest Allocation.
For detail regarding the fluctuations of management fees within each of our segments, see “—Results of Operations by Segment.” 119 Table of Contents Carried Interest Allocation.
Net income (loss) attributable to non-controlling interests in AOG entities 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) attributable to redeemable interest in AOG entities is allocated based on the ownership percentage attributable to the redeemable interest. Net income (loss) attributable to non-controlling interests in AOG entities 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.
Details regarding our fee related performance revenues by strategy, excluding publicly-traded and perpetual wealth vehicles described above, are presented below: Strategy Fee Rate Fee Base Annual Hurdle Rate Credit Group Alternative Credit 15.0% Incentive eligible fund’s profits 6.0% U.S. and European Direct Lending 8.0% - 16.0% Incentive eligible fund’s profits 5.0% - 8.0% Details regarding our incentive fees earned from funds with stated investment periods, which are generally based on a fund’s eligible profits, are presented below: Strategy Fee Rate Annual Hurdle Rate Credit Group Liquid Credit 10.0% - 20.0% 3.0% - 12.0% Alternative Credit 12.5% - 20.0% 6.0% - 7.0% U.S. and European Direct Lending (1) 10.0% - 15.0% 5.0% - 8.0% Real Assets Group Real Estate Equity 15.0% - 20.0% 6.0% - 8.0% Infrastructure Opportunities (1) (1) Secondaries Group Private Equity Secondaries 10.0% 8.0% (1) We may receive Part II Fees, which are not paid unless ARCC, ASIF, our open-ended European direct lending fund and our infrastructure private BDC achieve cumulative aggregate realized capital gains (net of cumulative aggregate realized capital losses and aggregate unrealized capital depreciation), subject to certain catch-up provisions.
Details regarding our fee related performance revenues by strategy, excluding our publicly-traded funds and our perpetual wealth vehicles described above, are presented below: Strategy Fee Rate Fee Base Annual Hurdle Rate Credit Group Alternative Credit 15% Incentive eligible fund’s profits 6% U.S. and European Direct Lending 8% - 16% Incentive eligible fund’s profits 5% - 8% Real Assets Group Real Estate 15% - 20% Incentive eligible fund’s profits 6% - 8% Details regarding our incentive fees earned from funds with stated investment periods, which are generally based on a fund’s eligible profits, are presented below: Strategy Fee Rate Annual Hurdle Rate Credit Group Liquid Credit 10% - 20% 3% - 12% Alternative Credit 12.5% - 20% 6% - 7% U.S. and European Direct Lending (1) 10% - 15% 5% - 8% Real Assets Group Real Estate 15% - 20% 6% - 8% Infrastructure (1) (1) Secondaries Group Private Equity Secondaries 10% 8% (1) We may receive Part II Fees from certain publicly-traded funds and perpetual wealth vehicles, which are not paid unless these funds achieve cumulative aggregate realized capital gains (net of cumulative aggregate realized capital losses and aggregate unrealized capital depreciation), subject to certain catch-up provisions.
Interest and other income of Consolidated Funds primarily includes interest and dividend income generated from the underlying investments of our Consolidated Funds. 114 Table of Contents Interest Expense of Consolidated Funds. Interest expense primarily consists of interest related to our Consolidated CLOs’ loans payable and, to a lesser extent, revolving credit lines, term loans and notes of other Consolidated Funds.
Interest and other income of Consolidated Funds primarily includes interest and dividend income generated from the underlying investments of our Consolidated Funds. Interest Expense of Consolidated Funds. Interest expense primarily consists of interest related to our Consolidated CLOs’ loans payable and, to a lesser extent, revolving credit lines, term loans and notes of other Consolidated Funds.
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. For the year ended December 31, 2024, 95% of our management fees were derived from perpetual capital vehicles or long-dated funds.
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. For the year ended December 31, 2025, 93% of our management fees were derived from perpetual capital vehicles or long-dated funds.
We are required to maintain minimum net capital balances for regulatory purposes for our broker-dealer entities. These net capital requirements are met in part by retaining cash, cash equivalents and investment securities. Additionally, certain of our subsidiaries operating outside the U.S. are also subject to capital adequacy requirements in each of the applicable jurisdictions.
We are required to maintain minimum net capital balances for regulatory purposes for our registered broker-dealers. These net capital requirements are met in part by retaining cash, cash equivalents and investment securities. Additionally, certain of our subsidiaries operating outside the U.S. are also subject to capital adequacy requirements in each of the applicable jurisdictions.
Other income (expense), net consists of (i) non-economic transaction gains (losses) on the revaluation of assets and liabilities denominated in currencies other than an entity’s functional currency; and (ii) other non-operating and non-investment related activities, such as changes in fair value of contingent liabilities, loss on disposal of assets, among other items.
Other income (expense), net consists of (i) transaction gains (losses) on the revaluation of assets and liabilities denominated in currencies other than an entity’s functional currency; (ii) changes in fair value of contingent earnout arrangements; and (iii) other non-operating and non-investment related activities, such as loss on disposal of assets, among other items.
We entered into the TRA that provides payment to the TRA recipients of 85% of the amount of actual cash savings (“Cash Tax 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 (“Tax Benefit Payment”).
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.
The net MoIC is after giving effect to management fees and other expenses, carried interest and credit facility interest expense, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documentation.
The net MoIC is after giving effect to management fees and other expenses, carried interest and credit facility interest expense, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a 149 Table of Contents long-term credit facility as permitted by the respective fund’s governing documentation.
For the actual impact that consolidation had on our results and further discussion on consolidation and deconsolidation of funds, see “Note 15.
For the actual impact that consolidation had on our results and further discussion on consolidation and deconsolidation of funds, see “Note 16.
There can be no assurance that unrealized values will be realized at the valuations indicated. For funds other than our opportunistic credit funds, the unrealized value is based on all partners.
There can be no assurance that unrealized values will be realized at the valuations indicated. For funds other than our opportunistic credit funds, the unrealized value is based on all partners. For our opportunistic credit funds, the unrealized value is based on the fee-paying limited partners.
Conversely, any excess of the fair value of the net assets acquired over the purchase consideration is recognized as a bargain purchase gain. Critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful lives, discount rates and income tax rates.
Conversely, any excess of the fair value of the net assets acquired in excess of the purchase consideration is recognized as a bargain purchase gain. Critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, future expected cashflows, future fundraising assumptions, expected useful lives, discount rates and income tax rates.
Capital Resources We intend to use a portion of our available liquidity to pay cash dividends to our Series B mandatory convertible preferred stockholders and Class A and non-voting common stockholders on a quarterly basis in accordance with our dividend policies.
Capital Resources We intend to use a portion of our available liquidity to pay cash dividends and distributions to our Series B mandatory convertible preferred stockholders, Class A and non-voting common stockholders and AOG unitholders on a quarterly basis in accordance with our dividend and distribution policies.
Performance related compensation generally represents 60% to 80% of carried interest allocation and incentive fees recognized before giving effect to payroll taxes and will vary based on the mix of funds generating carried interest allocation and incentive fees for that period. General, Administrative and Other Expenses.
Performance related compensation generally represents 60% to 80% of carried interest allocation and incentive fees recognized before giving effect to payroll taxes and will vary based on the mix of funds generating carried interest allocation and incentive fees for that period.
For further discussion of our capital commitments, indemnification arrangements and contingent liabilities, see “Note 8. Commitments and Contingencies,” within our consolidated financial statements included in this Annual Report on Form 10-K. 159 Table of Contents
For further discussion of our capital commitments, indemnification arrangements and contingent liabilities, see “Note 9. Commitments and Contingencies,” within our consolidated financial statements included in this Annual Report on Form 10-K. 163 Table of Contents
The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. 132 Table of Contents Credit Group—Fund Performance Metrics as of December 31, 2024 ARCC contributed approximately 34% of the Credit Group’s total management fees for the year ended December 31, 2024.
The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. 134 Table of Contents Credit Group—Fund Performance Metrics as of December 31, 2025 ARCC contributed approximately 31% of the Credit Group’s total management fees for the year ended December 31, 2025.
The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. 140 Table of Contents Real Assets Group—Fund Performance Metrics as of December 31, 2024 The significant funds presented in the tables below collectively contributed approximately 37% of the Real Assets Group’s management fees for the year ended December 31, 2024.
The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. 143 Table of Contents Real Assets Group—Fund Performance Metrics as of December 31, 2025 The significant funds presented in the tables below collectively contributed approximately 34% of the Real Assets Group’s management fees for the year ended December 31, 2025.
The infrastructure opportunities funds generally step down the fee base to the aggregated adjusted cost of unrealized portfolio investments, while retaining the same fee rate, following the expiration or termination of the investment period. (9) Fee rate represents typical rate during the investment period.
The infrastructure opportunities funds generally step down the fee base to the aggregated adjusted cost of unrealized portfolio investments, while retaining the same fee rate, following the expiration or termination of the investment period.
Direct Lending European Direct Lending APAC Credit Other (1) Total Credit Group Balance at 12/31/2023 $ 47,299 $ 33,886 $ 14,554 $ 123,073 $ 68,264 $ 11,920 $ 354 $ 299,350 Acquisitions — — — 362 — — — 362 Net new par/equity commitments 2,995 4,222 1,653 19,408 10,234 689 142 39,343 Net new debt commitments 6,615 250 — 21,010 1,773 (380) — 29,268 Capital reductions (7,011) (30) (1,022) (2,608) 55 70 — (10,546) Distributions (403) (1,854) (1,088) (6,183) (6,134) (1,202) — (16,864) Redemptions (3,390) (150) — (1,572) (140) — — (5,252) Net allocations among investment strategies (18) 2,824 25 25 200 — (228) 2,828 Change in fund value 808 2,417 842 5,614 308 373 7 10,369 Balance at 12/31/2024 $ 46,895 $ 41,565 $ 14,964 $ 159,129 $ 74,560 $ 11,470 $ 275 $ 348,858 Liquid Credit Alternative Credit Opportunistic Credit U.S.
Direct Lending European Direct Lending APAC Credit Other (1) Total Credit Group Balance at 12/31/2023 $ 47,299 $ 33,886 $ 14,554 $ 123,073 $ 68,264 $ 11,920 $ 354 $ 299,350 Acquisitions — — — 362 — — — 362 New par/equity commitments 2,995 4,222 1,653 19,408 10,234 689 142 39,343 New debt commitments 6,615 250 — 21,010 1,773 (380) — 29,268 Capital reductions (7,011) (30) (1,022) (2,608) 55 70 — (10,546) Distributions (403) (1,854) (1,088) (6,183) (6,134) (1,202) — (16,864) Redemptions (3,390) (150) — (1,572) (140) — — (5,252) Net allocations among investment strategies (18) 2,824 25 25 200 — (228) 2,828 Change in fund value 808 2,417 842 5,614 308 373 7 10,369 Balance at 12/31/2024 $ 46,895 $ 41,565 $ 14,964 $ 159,129 $ 74,560 $ 11,470 $ 275 $ 348,858 (1) Amounts represent equity commitments to the platform that have not yet been allocated to an investment strategy.
As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of December 31, 2024, we were required to maintain approximately $71.6 million in net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We remain in compliance with these regulatory requirements.
As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of December 31, 2025, we were required to maintain approximately $99.0 million in net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We remain in compliance with these regulatory requirements.
The components of our AUM for the Credit Group are presented below ($ in billions): AUM: $348.8 AUM: $299.4 FPAUM AUM not yet paying fees Non-fee paying (1) (1) Includes $14.4 billion and $15.1 billion of AUM of funds from which we indirectly earn management fees as of December 31, 2024 and 2023, respectively, and includes $2.0 billion and $1.8 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2024 and 2023, respectively. 131 Table of Contents Credit Group—Fee Paying AUM The tables below present rollforwards of fee paying AUM for the Credit Group ($ in millions): Liquid Credit Alternative Credit Opportunistic Credit U.S.
The components of our AUM for the Credit Group are presented below ($ in billions): AUM: $406.9 AUM: $348.8 FPAUM Non-fee paying (1) AUM not yet paying fees (1) Includes $18.2 billion and $14.4 billion of AUM of funds from which we indirectly earn management fees as of December 31, 2025 and 2024, respectively, and includes $2.0 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2025 and 2024. 133 Table of Contents Credit Group—Fee Paying AUM The tables below present rollforwards of fee paying AUM for the Credit Group ($ in millions): Liquid Credit Alternative Credit Opportunistic Credit U.S.
In addition, the Credit Group’s other significant funds, which are presented in the tables below, collectively contributed approximately 34% of the Credit Group’s management fees for the year ended December 31, 2024.
In addition, the Credit Group’s other significant funds, which are presented in the tables below, collectively contributed approximately 42% of the Credit Group’s management fees for the year ended December 31, 2025.
Net cash provided by (used in) investment related activities for the years ended December 31, 2024 and 2023 primarily represents: (i) distributions received from our capital investments and the collection of principal and interest from loans that we have made; (ii) sales of certain capital investments to employees; (iii) the rebalancing of and associated return of our capital commitments upon admitting new limited partners; (iv) interest income from treasury-backed securities; offset by (v) purchases associated with funding capital commitments and strategic investments in our investment portfolio; and (vi) interest payments on our debt obligations.
Net cash provided by investment related activities for the years ended December 31, 2025 and 2024 primarily represents: (i) distributions received from our capital investments and the collection of principal and interest from loans that we have made; (ii) sales of certain capital investments to employees; (iii) the rebalancing of and associated return of our capital commitments upon admitting new limited partners; and (iv) interest income from treasury-backed securities that were redeemed in March 2025, providing proceeds to support the GCP Acquisition; offset by (v) purchases associated with funding capital commitments and strategic investments in our investment portfolio; and (vi) interest payments on our debt obligations.
The investment management agreements we enter into with clients in connection with contractual SMAs may generally be terminated by such clients with reasonably short prior written notice. Typically, terminations do not require liquidation of the SMAs and such SMAs will continue to exist until the underlying investments are liquidated.
The investment management agreements we enter into with clients in connection with contractual SMAs may generally be terminated by such clients with reasonably short prior written notice. Typically, terminations do not require liquidation of assets so that SMAs will continue to pay fees until the underlying investments are liquidated.
The management fees of CLOs accounted for approximately 2% of our total management fees on a consolidated basis and 4% on an unconsolidated basis for the year ended December 31, 2024.
The management fees of CLOs accounted for approximately 2% of our total management fees on a consolidated basis and 3% on an unconsolidated basis for the year ended December 31, 2025.
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 the amounts reported within our consolidated statements of cash flows.
Our 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 the amounts reported within our consolidated statements of cash flows.
The gross and net IRR for ACE V (Y) Unlevered are 12.0% and 8.8%, respectively. The gross and net MoIC for ACE V (Y) Unlevered are 1.3x and 1.2x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund's closing.
The gross and net IRR for ACE V (Y) Unlevered are 11.9% and 8.8%, respectively. The gross and net MoIC for ACE V (Y) Unlevered 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.
As a result, segment revenues from management fees, fee related performance revenues, performance income and investment income are different than those presented on a consolidated basis in accordance with GAAP. Revenues recognized from Consolidated Funds are eliminated in consolidation and those attributable to the non-controlling interests of joint ventures have been excluded by us.
As a result, segment revenues are different than those presented on a consolidated basis in accordance with GAAP. Revenues recognized from Consolidated Funds are eliminated in consolidation and those attributable to the non-controlling interests of joint ventures have been excluded by us.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeEffect on Management Fees Management fees are generally based on a defined percentage of fair value of assets, capital commitments, invested capital, NAV, net investment income, total assets or par value of the investment portfolios we manage. Management fees calculated based on fair value of assets or net investment income are affected by short-term changes in market values.
Biggest changeEffect on Management Fees Management fees are generally based on a defined percentage of capital commitments, invested capital, net investment income, total assets, par value, NAV or the fair value of assets of the investment portfolios we manage.
In the cases where our funds pay management fees based on NAV, we would expect our management fees to experience a change in direction and magnitude corresponding to that experienced by the underlying portfolios. 161 Table of Contents 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 the cases where our funds pay management fees based on NAV, we would expect our management fees to experience a change in direction and magnitude corresponding to that experienced by the underlying portfolios. 165 Table of Contents 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.
We estimate that a hypothetical 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar as of December 31, 2024 would not result in a material change to management fees, carried interest, incentive fees or investments for the year ended December 31, 2024, and would be largely offset by the currency conversions of the expenses denominated in foreign currencies.
We estimate that a hypothetical 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar as of December 31, 2025 would not result in a material change to management fees, carried interest, incentive fees or investments for the year ended December 31, 2025, and would be largely offset by the currency conversions of the expenses denominated in foreign currencies.
For a further discussion of our Credit Facility, see “Note 6. Debt,” within our consolidated financial statements included in this Annual Report on Form 10-K.
For a further discussion of our Credit Facility, see “Note 7. Debt,” within our consolidated financial statements included in this Annual Report on Form 10-K.
These issuers can be more sensitive to adverse market conditions, such as a recession or increasing interest rates, as compared to higher rated issuers. We seek to minimize risk exposure by subjecting each prospective investment to our rigorous, credit-oriented investment approach. 162 Table of Contents
These issuers can be more sensitive to adverse market conditions, such as a recession or increasing interest rates, as compared to higher rated issuers. We seek to minimize risk exposure by subjecting each prospective investment to our rigorous, credit-oriented investment approach.
Additionally, as a large percentage of our carried interest and incentive fees are paid to employees as performance related compensation, the overall net impact to our income would be mitigated by lower compensation payments. 160 Table of Contents See “Note 8.
Additionally, as a large percentage of our carried interest and incentive fees are paid to employees as performance related compensation, the overall net impact to our income would be mitigated by lower compensation payments. 164 Table of Contents See “Note 9.
For the year ended December 31, 2024, management fees from funds that are impacted by changes in market value and have underlying investments held in liquid strategies were approximately 2%. As such, a hypothetical 10% decrease in fair value of our managed funds’ investments as of December 31, 2024 would not have a material impact on our management fees.
For the year ended December 31, 2025, management fees from funds that are impacted by changes in market value and have underlying investments held in liquid strategies were approximately 4%. As such, a hypothetical 10% decrease in market value of our managed funds’ investments as of December 31, 2025 would not have a material impact on our management fees.
Changes in the fair values of our funds’ investments directly impact unrealized principal investment income and unrealized gains on investments. A hypothetical incremental 10% decrease in the fair value of our investments as of December 31, 2024 would result in declines in principal investment income and unrealized gains on investments of $120.7 million and $73.6 million, respectively.
Changes in the fair values of our funds’ investments directly impact unrealized principal investment income and unrealized gains on investments. A hypothetical incremental 10% decrease in the fair value of our investments as of December 31, 2025 would result in declines in principal investment income and unrealized gains on investments of $180.7 million and $107.5 million, respectively.
Interest Rate Risk Our Credit Facility provides a $1.4 billion revolving line of credit , with an accordion feature of $600.0 million (subject to obtaining commitments for any such additional borrowing capacity) , with a maturity date of March 31, 2029. As of December 31, 2024, we had no borrowings outstanding under the Credit Facility.
Interest Rate Risk Our Credit Facility provides a $1.840 billion revolving line of credit , with an accordion feature of $660.0 million (subject to obtaining commitments for any such additional borrowing capacity) , with a maturity date of April 22, 2030. As of December 31, 2025, we had $1,380 million borrowings outstanding under the Credit Facility.
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Management fees will only be directly affected by short-term changes in market conditions to the extent they are impacted by prices available in active markets and are liquid in nature.

Other ARES 10-K year-over-year comparisons