Ares Management Corporation · NYSE:ARES
Ares Management — Investor Day (2021)
28 slides from Ares Management's investor day presentation, 2021
Slide 1: New Platforms Overview & Outlook
New Platforms Overview & Outlook Michael Arougheti Co-Founder, Chief Executive Officer and President Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 2: Important Notice
Important Notice This presentation is prepared for Ares Management Corporation (NYSE: ARES) for the benefit of its public stockholders. This presentation is solely for information purposes in connection with evaluating the business, operations and financial results of Ares Management Corporation (“A
Slide 3: Important Notice
Important Notice Dated information: This video may contain dated information. Viewers are cautioned that this video and the associated presentation is maintained here solely for the purposes of providing historical background about Ares Management Corporation. As the video may contain dated informat
Slide 4: Ares Is Building Long-Term Attractive Businesses Within the Strategic Initiatives Group
Ares Is Building Long-Term Attractive Businesses Within the Strategic Initiatives Group Ares has three key strategic initiatives with significant long-term growth potential $10.4B Our Strategic Initiatives: In Strategic Initiatives AUM Ares SSG is one of the largest Asia-Pacific credit platforms Are
Slide 5: Recognized as a Leading Private Credit Firm in the Asia-Pacific Region
Recognized as a Leading Private Credit Firm in the Asia-Pacific Region $7.5B Our Growth Playbook & Ares SSG In Ares SSG AUM by Strategy Large Addressable End Markets Secured Large and rapidly growing Asia-Pacific region. Direct Lending market beginning to take shape Lending 33% High Quality Platfo
Slide 6: A Growing Pan-Asian Non-Bank Lending Market
A Growing Pan-Asian Non-Bank Lending Market With expanding GDP and credit demand, we believe there is a growing need for non-bank lenders Macro Backdrop Drives Non-Bank Lending Opportunities Long-term GDP Growth (2016-2030) by Region1 Asia Non-Bank Lending Growth2 ($ in Trillions) 25 Asia-Pacific 7%
Slide 7: Direct Lending Market Opportunity Across the Globe
Direct Lending Market Opportunity Across the Globe Asia still shows high reliance on domestic banking system to fuel the growth of economy Regional Breakdowns of Bank vs. Non-Bank Lending US1,2 Europe1,2 Asia1,3 Non-Bank Lending Including: Non-Bank Lending Including: Non-Bank Lending Including: $300
Slide 8: Significant Asia-Pacific Coverage
Significant Asia-Pacific Coverage Highly built-out regional footprint across 9 offices with local presence, infrastructure and licenses enabling onshore and offshore investments i 8 9 Active Funds Offices1 Shanghai New Delhi2 Hong Kong 10 35+ Mumbai1 Bangkok2 Countries Investment Singapore Invested
Slide 9: Strong Performance Driven by Low Loss Rates and Differentiated Market Opportunities
Strong Performance Driven by Low Loss Rates and Differentiated Market Opportunities Ares SSG has invested $7.8 Billion across the firm since inception with an attractive record of performance Ares SSG Capital Deployment & Performance Track Record $7.8B 74% $5.0B of Capital Deployed1 Realized / of Pr
Slide 10: Strong Performance Has Led to Significant AUM Growth
Strong Performance Has Led to Significant AUM Growth Ares SSG has two strategies, Special Situations and Senior Lending, both gaining significant traction over the past 5 years Ares SSG AUM Growth1 ($ in billions) $7.5 $7.0 $6.4 36% CAGR $4.5 over the past $4.0 5 years $2.7 $1.6 2015 2016 2017 2018
Slide 11: Ares SSG's Growth Opportunities
Ares SSG’s Growth Opportunities We are playing for a large expansion of the Ares SSG platform similar to the growth of our EU platform Ares SSG Growth Targets Expand Into AUM New Asset ($ in billions) Types $19.0 Unitranche $17.0 Sponsor Finance Opportunities • Real Estate, Infrastructure, Extensive
Slide 12: Ares Insurance Solutions – Aspida
Ares Insurance Solutions – Aspida AIS provides asset management, capital solutions and corporate development services to Ares’ modern life and annuity platform $2.7B AIS Managed Aspida AUM 1 Aspida’s Annuity Platform Growth Strategy Subadvised By Ares 1 Primary Origination 31% Subadvised by 3rd Part
Slide 13: Aspida's Primary Origination Platform
Aspida’s Primary Origination Platform We are executing on our strategy with the launch of the Aspida U.S. annuity platform in 2022 Expect to begin writing fixed annuity business in early 2022 Executed agreement to acquire U.S. insurance company to provide necessary state licenses Utilize highly scal
Slide 14: Aspida's Reinsurance Platform
Aspida’s Reinsurance Platform Aspida Re provides life and annuity reinsurance solutions to insurance partners in AUM1 2020 Ares launched Aspida Re with the acquisition of F&G Re $2.7B Ares receives servicing fee on total AUM and additional fees on subadvised assets in current reinsurance annual flow
Slide 15: Aspida's Growth Opportunities
Aspida’s Growth Opportunities We believe there are significant growth opportunities for Aspida over the next 5+ years Aspida Growth Targets M&A AUM1 ($ in billions) $25.0 + Life & Annuity Reinsurance • Executed two transactions, with a third deal signed, with Direct closing subject to Life & Annuity
Slide 16: Appendix
Appendix Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 17: GAAP Statement Of Operations
GAAP Statement Of Operations Year Ended December 31, $ in thousands, except share data Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Revenues Management fees $1,307,451 $1,150,608 $979,417 $802,502 $722,419 $642,068 $634,399 $486,477 Carried interest allocation 1,583,262 505,608 621,872 42,410 620,45
Slide 18: RI and Other Measures Financial Summary
RI and Other Measures Financial Summary Year Ended December 31, $ in thousands, except share data (and as otherwise noted) Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Management fees(1) $1,335,413 $1,186,565 $1,012,530 $836,744 $744,825 $659,451 $650,918 $598,046 Other fees 25,993 19,948 18,078 24,
Slide 19: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis
GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis Year Ended December 31, $ in thousands Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Realized Income and Fee Related Earnings: Income before taxes $944,635 $379,478 $425,180 $184,341 $149,859 $297,920 $81,484 $556,915 Adjustments: Amort
Slide 20: GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd)
GAAP to Non-GAAP Reconciliation – Unconsolidated Reporting Basis (cont'd) Year Ended December 31, $ in thousands Q2-21 LTM 2020 2019 2018 2017 2016 2015 2014 Performance income and net investment income reconciliation: Carried interest allocation $1,583,262 $505,608 $621,872 $42,410 $620,454 $494,58
Slide 21: Glossary
Glossary Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 22: Glossary
Glossary ARCC Part II Fees ARCC Part II Fees refers to fees that are paid in arrears as of the end of each calendar year when the cumulative aggregate realized capital gains exceed the cumulative aggregate realized capital losses and aggregate unrealized capital depreciation, less the aggregate amou
Slide 23: Glossary
Glossary Fee Related Earnings Fee Related Earnings or “FRE”, a non-GAAP measure, is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income
Slide 24: Glossary
Glossary Our Funds Our Funds refers to the funds, alternative asset companies, co-investment vehicles and other entities and accounts that are managed or co-managed by the Ares Operating Group, and which are structured to pay fees. It also includes funds managed by Ivy Hill Asset Management, L.P., a
Slide 25: Endnotes – New Platforms Overview & Outlook
Endnotes – New Platforms Overview & Outlook Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Slide 26: New Platforms Overview & Outlook Endnotes
New Platforms Overview & Outlook Endnotes Strong Performance Driven by Low Loss Rates and Differentiated Market Opportunities 1. Capital Deployed represents the total amount funded by capital called from the relevant fund (including recycled capital) and from the fund’s credit facility with respect
Slide 27: New Platforms Overview & Outlook Endnotes
New Platforms Overview & Outlook Endnotes Ares Insurance Solutions - Aspida 1. Aspida Life Re, Ltd. AUM includes $1.9 billion subadvised by 3rd parties and $0.8 billion subadvised by Ares. When reporting consolidated AUM, Aspida assets subadvised by Ares are recorded in their respective strategy AUM
Slide 28: Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution
Ares Management Corporation Investor Day 2021 - Not for Publication or Distribution