Table of Contents I. Overview II. Market Opportunity III. Investment & Growth Strategy IV. Financial Performance & Position V. Conclusion VI. Appendix Segment Review Non-GAAP to GAAP Reconciliation Leadership Team…
Overview 4
Ares Management Overview Ares Management, L.P. (NYSE: ARES) is a leading global alternative asset manager with approximately 77 billion of assets under management(1) Since our inception in 1997, we have adhered to a disciplined…
Differentiated Business Model We believe Ares has a differentiated business model benefitting from high growth and consistent performance TRADITIONAL ASSET ALTERNATIVE ASSET MANAGERS MANAGERS BROAD ARRAY OF LONG-LIVED, LOCKED-…
The Power of our Platform Distinguishing features that together propel our investment performance and growth Collaborative Culture Cross group daily interaction Deep team of talented professionals sharing ideas and best…
Consistent Growth Across Market Cycles(1) Our compelling investment performance has led to double-digit AUM growth in each of the past ten years Assets Under Management 90 800 Tradable Credit 80 Direct Lending 700 Private Equity…
Track Record of Investment Performance(1) The power of our platform has led to consistent and favorable risk-adjusted returns across asset classes Tradable Credit Direct Lending Private Equity Real Estate Gross Annualized Returns Since…
Market Opportunity 10
De-leveraging of the Global Banking System(1) The banks now hold 40-50% more capital than pre- Bank Regulations recession Top 5 Banks: Average Tier 1 11% Common Capital Ratio(2) 10% 1. Increasing 9% Basel III Bank Capital 8%…
Increasing Benefits of Scale in the Asset Management Space We believe fund investors are allocating a greater share of their assets to established and diversified platforms Capabilities of a Scaled Manager Advantages Provided to…
Accelerated Growth of Alternative Asset Allocations from both Retail and Institutional Investors(1) Growth in alternative investments has outpaced 2005 2011 AUM CAGR non-alternatives by 7x 14% Institutional investors have increasingly…
Investment & Growth Strategy 14
Sophisticated Composition Cross-group daily internal systems of investment interactions & & shared committees monthly meetings Investment Approach resources Ares four investment platforms share a common investment approach,…
Multi-Asset Class Capabilities Each of our strategies are enjoying increasing demand from all types of investor groups Ares Risk / Reward Spectrum Ares Risk / Reward Spectrum (1) Targeted Net Returns at June 2014 0% 5% 10% 15% 20%…
Flexible Investment Mandates Our investors typically look to invest with us across the entire market cycle given both the adaptability of our strategies and our history of capitalizing on market volatility Tradable Credit Direct…
Focus on Long-Lived, Locked-Up Capital 60% of Ares capital base has a tenor of 7 years or more Managed Permanent Accounts Capital 15% 15% Fewer Than 3 years 4% Management Fee Visibility 10 or more 13% years Performance Fee…
Maintain a Diversified & Growing Investor Base Our deep and expanding investor relationships are founded on our demonstrated performance Public Entity Institutional & Related Pension Direct 18% 30% SWF Diversified and…
Multiple Avenues for Growth Larger subsequent funds Cross-market our strategies to existing clients Growth of business development group Organic 1 Enter adjacent asset classes Continue to develop differentiated New Products…
Financial Performance & Position 21
High Quality & Diverse Revenues Stable and diversified management fee driven business model Total Fee Revenue Composition(1) 363mm 572mm 619mm 636mm 6% 7% 5% Net Performance Fees: Other 4% 16% 9% 1% 9% Net Performance Fees:…
Favorable Financial Performance with Consistent Growth in millions Three Months Year Ended December 31, Ended March 31, 2011 2012 2013 2013 2014 Direct Lending (1) 155 190 238 51 66 Tradable Credit 99 145 145 31 34 Private Equity…
Well-Capitalized Balance Sheet We have a strong capital base for growth Combined Balance Sheet (1) March 31, 2014 - mm Cash 37 Low Net Debt Cash of 37mm vs. debt of 172mm Performance Fees Receivable 491 Due from Affiliates 137…
Significant Remaining Capacity for Investment 18.2 15.3 1.5 13.0 1.9 4.4 As of March 31, 2014, our 0.3 Available Capital was primarily 4.5 Available Capital(1) 5.5 attributed to ACOF IV, ARCC & bn 7.2 5.9 Related funds, and new…
Conclusion 26
Conclusion 1. 1 Demonstrated investment approach with favorable track records across strategies 2. 2 Stable earnings due to long-lived, locked up capital and a diversified & growing investor base 3. 3 Meaningful benefits from…
Appendix Segment Review 28
Tradable Credit Group is a Leading Manager Across Long-Only and Alternative Credit Strategies Business Overview and Returns Assets Under Management (bn) 31.4 Ares has been managing below investment grade credit 27.9 instruments since…
Direct Lending Group is Among the Largest Self Originating Middle Market Lenders Business Overview and Returns Assets Under Management (bn) Launched in 2004, Ares Direct Lending Group principally 27.5 27.6 originates private debt…
Private Equity Group Demonstrates a Differentiated Investing Approach and Top Tier Performance Business Overview and Returns Fund Sizes & Significant Transactions (bn) Raised first private equity fund in 2003, and currently 4.7…
Real Estate Group has a Demonstrated Track Record of Investing Across the Capital Structure(1) Business Overview and Returns Assets Under Management Ares Real Estate Group manages comprehensive public Debt and private equity and debt…
Appendix Non-GAAP to GAAP Reconciliation 33
Non-GAAP to GAAP Reconciliation Stand Alone Reporting Basis in millions Year ended December 31, Three months ended March 31, 2011 2012 2013 2013 2014 Economic net income and fee related earnings: Income before taxes 953 1,262 873 248…
Non-GAAP to GAAP Reconciliation Stand Alone Reporting Basis in millions Year ended December 31, Three months ended March 31, 2011 2012 2013 2013 2014 Performance related earnings Income before taxes 953 1,262 873 248 275…
Appendix Leadership Team 37
The Breadth, Depth and Tenure of our Leadership The Ares Management Committee 11 members that meet weekly CEO / President Chief Financial Officer Private Equity Co-Heads Tradable Credit Head Tony Ressler* 29yrs Daniel Nguyen 18yrs…
Sophisticated Composition Cross-group daily internal systems of investment interactions & & shared committees monthly meetings Investment Leadership resources Each group is led by its own deep leadership team of highly accomplished…
Not for Publication or Distribution 40
Performance Appendix Tradable Credit Performance returns are as of March 31, 2014 and reflect inception dates of November 1997 for the U.S. Bank Loan Aggregate Composite, May 2007 for the U.S. High Yield Aggregate Composite, December…
Performance Appendix Return information provided is for a grouping comprised of the Ares Special Situations Funds (SSF Funds or Funds) and is calculated using the combined capital draws and distributions from each of the SSF Funds (SSF…
Performance Appendix Direct Lending Performance footnote for ARCC; ARCCs performance statistics are shown as representative of the Ares U.S. Direct Lending Groups long term performance track record as of 3/31/14. Based on original cash…
Performance Appendix Private Equity Performance returns are as of March 31, 2014. Net IRRs for the period are 14% for ACOF I, 15% for ACOF II and 25% for ACOF III. ACOF IV and ACOF Asia I are excluded from the depiction as the funds are…
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