Ares Management Corporation (ARES): History, Ownership, Mission, How It Works & Makes Money

Ever wondered how Ares Management Corporation grew into a global alternative investment powerhouse managing approximately $428 billion in assets as of early 2024?

This firm isn't just another player; its expansive reach across credit, private equity, real estate, and infrastructure provides unique investment solutions in today's complex market.

With Fee Related Earnings hitting $334.6 million in just the first quarter of 2024, understanding their model is crucial. Are you ready to uncover the history, strategies, and financial engine driving one of the most influential names in alternative investments?

Ares Management Corporation (ARES) History

Understanding the trajectory of a major alternative asset manager like Ares Management Corporation requires looking back at its origins and key growth phases. The firm didn't just appear; it evolved strategically over decades.

Ares Management Corporation's Founding Timeline

Year established

1997

Original location

Los Angeles, California

Founding team members

The firm was co-founded by Antony Ressler, Michael Arougheti, David Kaplan, John H. Kissick, and Bennett Rosenthal.

Initial capital/funding

As a private entity initially, specific details on the exact seed capital are not widely public. However, the founders leveraged their collective experience in leveraged finance, private equity, and capital markets to build the firm's foundation, starting primarily focused on credit strategies.

Ares Management Corporation's Evolution Milestones

The journey from a specialized credit firm to a global alternative investment powerhouse involved several crucial steps.

Ares Management Corporation's Transformative Moments

Strategic Diversification Beyond Credit

Moving early into Private Equity (2002) and later into Real Estate and Infrastructure marked a fundamental shift from a credit specialist to a multi-asset class manager, enabling broader market participation and diversified revenue streams.

Leveraging the Public Markets

The IPO of Ares Capital Corporation (ARCC) in 2007 and the parent company Ares Management Corporation in 2014 were pivotal. These events provided access to permanent capital and public validation, fueling large-scale acquisitions and organic growth initiatives.

Acquisitive Growth Strategy

Key acquisitions, like American Capital, SSG Capital, and Black Creek Group, were not just additive but transformative. They rapidly scaled specific platforms, provided entry into new geographies like Asia, and significantly boosted overall AUM, cementing Ares' position among the largest global alternative asset managers by 2024.

Ares Management Corporation (ARES) Ownership Structure

Ares Management Corporation operates as a publicly traded entity, meaning its ownership is dispersed among various shareholders, including large institutions, company insiders, and the general public. This structure influences its governance and strategic direction, reflecting a blend of professional management oversight and market accountability. Understanding this framework is key to grasping the forces shaping the company's future, detailed further in the Mission Statement, Vision, & Core Values of Ares Management Corporation (ARES).

Ares Management Corporation's Current Status

As of the end of 2024, Ares Management Corporation (ARES) is a publicly listed company, traded on the New York Stock Exchange (NYSE). Its status as a public corporation means it adheres to stringent regulatory requirements, including regular financial disclosures, providing transparency to investors and the market. The firm maintained a significant market capitalization reflecting its scale in the alternative asset management industry.

Ares Management Corporation's Ownership Breakdown

The ownership of ARES is distributed among several key groups. Institutional investors hold a substantial portion, indicating confidence from large financial entities. Company insiders, including founders and senior management, also retain a significant stake, aligning their interests with those of shareholders. The remaining shares are held by the public.

Ares Management Corporation's Leadership

The leadership team at Ares Management Corporation plays a crucial role in guiding the firm's strategy and operations. As of late 2024, the key figures steering the organization include:

• Michael Arougheti: Co-Founder, Chief Executive Officer, and President, directs the overall business strategy and day-to-day operations.
• Antony Ressler: Co-Founder and Executive Chairman, provides strategic oversight and guidance.
• David Kaplan: Co-Founder and Co-Chairman, focuses on strategic initiatives and investment activities.
• Bennett Rosenthal: Co-Founder and Co-Chairman, involved in strategic direction and investment oversight.

This experienced team, with deep roots in the firm since its inception, collectively shapes Ares' investment philosophies, operational execution, and long-term growth trajectory across its credit, private equity, real estate, and secondary solutions groups.

Ares Management Corporation (ARES) Mission and Values

Ares Management Corporation operates with a clear focus on generating long-term value for its stakeholders, guided by a set of core principles that define its culture and approach to business.

Ares Management Corporation's Core Purpose

The firm's fundamental purpose revolves around being a leading global alternative investment manager. They aim to deliver attractive investment performance for their clients by providing innovative capital solutions to businesses across various market cycles. Understanding who invests with them provides further context. Exploring Ares Management Corporation (ARES) Investor Profile: Who’s Buying and Why? offers insights into their diverse investor base seeking these alternative strategies.

While not always framed as a formal mission or vision statement, their actions are consistently guided by core principles that emphasize:

• Collaboration: Fostering teamwork across disciplines and geographies to leverage collective intelligence.
• Responsibility: Acting as responsible stewards of capital and considering Environmental, Social, and Governance (ESG) factors.
• Entrepreneurship: Encouraging an innovative and solutions-oriented mindset to meet evolving market needs.
• Integrity & Citizenship: Upholding the highest ethical standards and contributing positively to the communities where they operate.

Ares Management Corporation (ARES) How It Works

Ares Management Corporation operates as a global alternative investment manager, creating value by deploying capital across diverse credit, private equity, real estate, and strategic initiative platforms. The firm earns management and performance fees from the funds it manages for its investors.

Ares Management Corporation's Product/Service Portfolio

Ares Management Corporation's Operational Framework

The company's operations center around a cycle of capital raising, investment deployment, asset management, and value realization. Teams source potential investments across its core strategies, performing rigorous due diligence before committing capital. Post-investment, Ares actively manages assets or portfolio companies to enhance value, leveraging its operational expertise and market insights. It maintains robust reporting and investor relations functions to communicate performance and raise subsequent funds, ensuring a continuous flow of capital and investment opportunities.

Ares Management Corporation's Strategic Advantages

Ares leverages several key strengths to maintain its market position and drive growth.

• Scale and Diversification: Operating across multiple asset classes and geographies provides resilience and diverse investment opportunities. As of September 30, 2024, assets under management reached approximately $450 billion.
• Integrated Platform: Collaboration between different investment groups allows for sharing insights, deal flow, and expertise, creating synergistic advantages.
• Strong Fundraising Capability: A long track record of performance and deep relationships with a global investor base facilitate consistent capital raising. You can learn more by Exploring Ares Management Corporation (ARES) Investor Profile: Who’s Buying and Why?
• Experienced Teams: Deep industry knowledge and long tenure within specialized investment teams enable effective sourcing, execution, and management.
• Significant Dry Powder: Substantial available capital (around $103 billion as of Q3 2024) allows Ares to deploy funds opportunistically during various market conditions.

Ares Management Corporation (ARES) How It Makes Money

Ares Management primarily generates revenue through management fees charged on its assets under management (AUM) and performance-related earnings tied to the success of its investment funds. This dual stream provides both stable recurring income and upside potential based on investment outcomes.

Ares Management Corporation's Revenue Breakdown

Based on financial data leading into the end of 2024, the revenue streams show a typical pattern for alternative asset managers, dominated by recurring fees but supplemented significantly by performance.

Ares Management Corporation's Business Economics

The economic engine of Ares is fundamentally driven by its ability to attract capital and generate returns. Key factors include:

• Assets Under Management (AUM): Growth in AUM, which reached $428 billion as of September 30, 2024, directly increases management fee potential. Success hinges on continuous fundraising across its credit, private equity, real estate, and infrastructure groups.
• Fee Structures: Management fees are typically a percentage of committed or invested capital, providing steady Fee Related Earnings (FRE). Performance fees (carried interest) are earned only after investments exceed specific return hurdles, creating significant, albeit variable, upside.
• Investment Performance: Strong fund performance is crucial not only for earning performance fees but also for attracting new capital and retaining existing investors.
• Operating Leverage: As AUM grows, the incremental cost of managing additional assets tends to be lower, potentially leading to margin expansion. This scalability is a hallmark of successful asset managers.

Ares Management Corporation's Financial Performance

Heading towards year-end 2024, Ares demonstrated continued financial strength. Fee Related Earnings (FRE), a key measure of stable income, grew to $307 million in Q3 2024, a 12% increase year-over-year, reflecting robust fundraising and deployment. Performance Related Earnings also showed strength, contributing significantly to overall profitability, though inherently more volatile than management fees. Distributable Earnings (DE), a measure of cash available to shareholders, benefited from both strong FRE and realized performance fees. Understanding these dynamics is key for evaluating the company's trajectory; you can explore more details here: Breaking Down Ares Management Corporation (ARES) Financial Health: Key Insights for Investors. The consistent growth in fee-paying AUM provides a solid foundation, while the potential for substantial performance fees offers significant upside linked to market conditions and investment execution.

Ares Management Corporation (ARES) Market Position & Future Outlook

As of early 2025, the company stands as a leading global alternative investment manager, particularly strong in credit, with continued strategic focus on expanding its scalable platforms across asset classes. Its future outlook hinges on capitalizing on market dislocations and growing its retail and insurance channels, leveraging its significant dry powder amidst a complex macroeconomic environment.

Competitive Landscape

The alternative asset management space is competitive, featuring several large, diversified players. Scale, fundraising capabilities, and specialized expertise are key differentiators.

Opportunities & Challenges

Industry Position

The company maintains a robust position within the top tier of alternative asset managers, distinguished by its market leadership in credit strategies which constitute a significant portion of its AUM. Its growth trajectory has been impressive, reflected in consistent AUM expansion and strong Fee Related Earnings (FRE), which reached approximately $1.2 billion for the full year 2024. The firm's strategy emphasizes scalable global platforms and synergistic growth across its Credit, Private Equity, Real Assets, and Secondaries groups. Understanding its financial underpinnings is crucial; you can explore more details here: Breaking Down Ares Management Corporation (ARES) Financial Health: Key Insights for Investors. Its focus on generating durable, long-term FRE provides a stable base amidst market fluctuations, positioning it well relative to peers, particularly those more heavily weighted towards volatile performance fees.