Ares Management : Q1-2020 Earnings Presentation

Ares Management Corporation Reports First Quarter 2020 Results

LOS ANGELES--Ares Management Corporation (NYSE:ARES) today reported its financial results for its first quarter ended March 31, 2020.

GAAP net loss attributable to Ares Management Corporation was $31.0 million for the quarter ended March 31, 2020. On a basic and diluted basis, net loss attributable to Ares Management Corporation per share of Class A common stock was $0.33 for the quarter ended March 31, 2020.

After-taxrealized income, net of Series A preferred stock dividends, was $118.8 million for the quarter ended March 31, 2020. After-tax realized income per share of Class A common stock, net of Series A preferred stock dividends, was $0.45 for the quarter ended March 31, 2020. Fee related earnings were $93.1 million for the quarter ended March 31, 2020.

"The unprecedented market volatility and disruption caused by the COVID-19 pandemic has tested us all during these challenging times, but we are very proud to say that our entire workforce at Ares has responded well and is operating highly effectively," said Michael Arougheti, Chief Executive Officer and President of Ares. "Despite the economic disruption, we generated another record level of fee related earnings with growth of 31% versus the prior year period and our fee paying AUM exceeded $100 billion for the first time. We believe our results reflect our resilient, management fee centric business model that is well-suited for navigating volatility."

"We are off to a strong start this year and believe we are well positioned to continue growing our fee related earnings by 15% or more annually as we execute on a strong fundraising cycle and seek to make attractive, value-oriented investments from our long dated assets under management," said Michael McFerran, Chief Operating Officer and Chief Financial Officer of Ares. "As we have demonstrated in the past, we have historically grown during past periods of volatility and believe we are well positioned with our flexible strategies and significant available capital of more than $33 billion."

Common Dividend

Ares declared a quarterly dividend of $0.40 per share of its Class A common stock, payable on June 30, 2020 to its Class A common stockholders of record at the close of business on June 16, 2020.

Preferred Dividend

Ares declared a quarterly dividend of $0.4375 per share of its Series A preferred stock with a payment date of June 30, 2020 to its Series A preferred stockholders of record as of the close of business on June 15, 2020.

Additional Information

Ares issued a full detailed presentation of its first quarter 2020 results, which can be viewed at www.aresmgmt.com on the Investor Resources section of our home page under Events and Presentations. The presentation is titled "First Quarter 2020 Earnings Presentation."

Conference Call and Webcast Information

Ares will host a conference call on May 6, 2020 at 12:00 p.m. ET to discuss first quarter results. All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Home page of the Investor Resources section of our website at http://www.aresmgmt.com. Please visit the website to test your connection before the webcast. Domestic callers can access the conference call by dialing

1. 317-6003.International callers can access the conference call by dialing [phone]. All callers will need to enter the Participant Elite Entry
   Number 7698712 followed by the # sign and reference "Ares Management Corporation" once connected with the operator. All callers are asked to dial in 10- 15 minutes prior to the call so that name and company information can be collected. For interested parties, an archived replay of the call will be available through June 12, 2020 to domestic callers by dialing [phone] and to international callers by dialing [phone]. For all replays, please reference conference number 10140271. An archived replay will also be available through June 12, 2020 on a webcast link located on the Home page of the Investor Resources section of our website.

About Ares Management Corporation

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager operating three integrated businesses across Credit, Private Equity and Real Estate. Ares Management's investment groups collaborate to deliver innovative investment solutions and consistent and attractive investment returns for fund investors throughout market cycles. Ares Management's global platform had $149 billion of assets under management as of March 31, 2020 with more than 1,200 employees in over 20 offices in more than 10 countries. Please visit www.aresmgmt.com for additional information.

Forward-Looking Statements

Statements included herein contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or our future performance or financial condition. Forward-looking statements can be identified by the use of forward looking words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward- looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including but not limited to the impact of the COVID-19 pandemic and the pandemic's impact on the U.S. and global economy, as well as those described from time to time in our filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made. Ares Management Corporation undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call, whether as a result of new information, future developments or otherwise, except as required by law. Nothing in this press release constitutes an offer to sell or solicitation of an offer to buy any securities of Ares or an investment fund managed by Ares or its affiliates.

Investor Relations Contacts
Carl Drake	Veronica Mayer	Cameron Rudd
[e-mail]	[e-mail]	[e-mail]
[phone]	[phone]	[phone]

First Quarter 2020

Earnings Presentation

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 ("Ares") and certain of its affiliates. Any discussion of specific Ares entities is provided solely to demonstrate such entities' role within the Ares organization and their contribution to the business, operations and financial results of Ares. This presentation may not be referenced, quoted or linked by website, in whole or in part, except as agreed to in writing by Ares.

This presentation contains "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. . Forward-looking statements can be identified by the use of forward-looking words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. Actual outcomes and results could differ materially from those suggested by this presentation due to the impact of many factors beyond the control of Ares, including but not limited to the impact of the COVID-19 pandemic and the pandemic's impact on the U.S. and global economy, as well as those described in the "Risk Factors" section of our filings with the Securities and Exchange Commission ("SEC"). These factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in our periodic filings. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and speak only as of the date of this presentation. Ares assumes no obligation to update or revise any such forward-looking statements except as required by law.

Certain information discussed in this presentation was derived from third party sources and has not been independently verified and, accordingly, Ares makes no representation or warranty in respect of this information, and assumes no responsibility for independent verification of such information.

The following slides contain summaries of certain financial and statistical information about Ares. The information contained in this presentation is summary information that is intended to be considered in the context of Ares' SEC filings and other public announcements that Ares may make, by press release or otherwise, from time to time. Ares undertakes no duty or obligation to publicly update or revise the forward-looking statements or other information contained in this presentation. In addition, this presentation contains information about Ares, its affiliated funds and certain of their respective personnel and affiliates, and their respective historical performance. You should not view information related to the past performance of Ares and its affiliated funds as indicative of future results.

Certain information set forth herein includes estimates and targets and involves significant elements of subjective judgment and analysis. No representations are made as to the accuracy of such estimates or targets or that all assumptions relating to such estimates or targets have been considered or stated or that such estimates or targets will be realized. Further, certain performance information, unless otherwise stated, is before giving effect to management fees, carried interest or incentive fees, and other expenses.

This presentation does not constitute, and shall not be construed as, an offer to buy or sell, or the solicitation of an offer to buy or sell, any securities, investment funds, vehicles or accounts, investment advice, or any other service by Ares of any of its affiliates or subsidiaries. Nothing in this presentation constitutes the provision of tax, accounting, financial, investment, regulatory, legal or other advice by Ares or its advisors.

Management uses certain non-GAAP financial measures, including Assets Under Management, Fee Paying Assets Under Management, Fee Related Earnings and Realized Income to evaluate Ares' performance and that of its business segments. Management believes that these measures provide investors with a greater understanding of Ares' business and that investors should review the same supplemental non-GAAP financial measures that management uses to analyze Ares' performance. The measures described herein represent those non-GAAP measures used by management, in each case, before giving effect to the consolidation of certain funds within its results in accordance with GAAP. These measures should be considered in addition to, and not in lieu of, Ares' financial statements prepared in accordance with GAAP. The definitions and reconciliations of these measures to the most directly comparable GAAP measures, as well as an explanation of why we use these measures, are included in the Appendix. Amounts and percentages may reflect rounding adjustments and consequently totals may not appear to sum.

For the definitions of certain terms used in this presentation, please refer to the "Glossary" slide in the appendix.

The statements contained in this presentation are made as of March 31, 2020, unless another time is specified in relation to them, and access to this presentation at any given time shall not give rise to any interpretation that there has been no change in the facts set forth in this presentation since that date.

2

First Quarter 2020 Highlights

Assets Under Management

Financial Results

• Total Assets Under Management ("AUM") of $148.6 billion
• Total Fee Paying AUM ("FPAUM") of $102.0 billion
• Available Capital of $33.2 billion
• AUM Not Yet Paying Fees available for future deployment of $21.0 billion
• Raised $6.6 billion in gross new capital with net inflows(1) of $6.1 billion for the quarter ended March 31, 2020
• Capital deployment of $6.5 billion during the quarter ended March 31, 2020, including $5.5 billion related to our drawdown funds
• Q1-20GAAP net loss attributable to Ares Management Corporation of $31.0 million
• Q1-20GAAP basic and diluted loss per share of Class A common stock of $0.33
• Q1-20GAAP management fees of $263.8 million(2)
• Q1-20unconsolidated management and other fees of $277.7 million(3)
• Q1-20Fee Related Earnings of $93.1 million
• Q1-20Realized Income of $134.1 million
• Q1-20after-tax Realized Income of $0.45 per share of Class A common stock(4)

Corporate Actions

Recent

Developments

• Declared quarterly dividend of $0.40 per share of Class A common stock(5)
• Declared quarterly dividend of $0.4375 per share of Series A preferred stock(6)
• On February 21, 2020, Ares completed an acquisition of seven management contracts from Crestline Denali Capital LLC totaling $2.7 billion of AUM
• On March 31, 2020, Ares sold 12,130,540 shares of newly issued Class A common stock in a private offering with Sumitomo Mitsui Banking Corporation ("SMBC") as part of a strategic agreement to collaborate on future business opportunities. As part of this agreement, Ares received $383.8 million in gross proceeds in exchange for SMBC's 4.9% ownership in the company

1. Net inflows represents gross commitments less redemptions.
2. Includes ARCC Part I Fees of $43.9 million for Q1-20.
3. Unconsolidated management fees includes $10.5 million from Consolidated Funds that are eliminated upon consolidation for GAAP for Q1-20 and excludes management fees attributable to certain joint venture partners. Unconsolidated other fees represents $3.9 million primarily of transaction-based fees earned from Credit Group funds for Q1-20. Unconsolidated other fees excludes administrative fees that are netted against the respective expenses and administrative fees attributable to certain joint venture partners.
4. After-taxRealized Income per share of Class A common stock is net of the preferred share dividend.
5. Payable on June 30, 2020 to shareholders of record as of June 16, 2020.
6. Payable on June 30, 2020 to shareholders of record as of June 15, 2020.

3

Gross New Capital Commitments(1)

$ in billions	Q1 2020	Comments
Credit Group
ARCC and affiliates	$1.5	Additional debt and equity commitments to ARCC and IHAM
Alternative Credit	0.9	New and additional equity commitments
U.S. Direct Lending	0.9	New and additional equity commitments and additional debt commitments to various funds
European Direct Lending	0.7	Additional debt and equity commitments to various funds
Other Credit Funds	0.4	Additional equity and debt commitments to various funds
Total Credit Group	$4.4
Private Equity Group
Special Opportunities	$0.4	New equity commitments
Total Private Equity Group	$0.4
Real Estate Group
U.S. Equity	$0.6	New equity commitments
U.S. Debt	0.6	New and additional equity commitments and additional debt commitments to various funds
European Equity	0.6	New equity commitments
Total Real Estate Group	$1.8
Total	$6.6

1. Represents gross new commitments during the period presented, including equity and debt commitments and gross inflows into our open-ended managed accounts and sub-advised accounts. Commitments denominated in currencies other than U.S. dollar are converted at the prevailing quarter-end exchange rate.

4

The increase of $11.9 billion was driven by capital raising primarily across U.S. direct lending, syndicated loans, which includes the acquisition of Crestline Denali, and alternative credit funds in our Credit Group, special opportunities funds in our Private Equity Group and in funds across all strategies in our Real Estate Group

Assets Under Management

AUM as of March 31, 2020 was $148.6 billion, an increase of 8.8% from prior year(1)

•

FPAUM as of March 31, 2020 was $102.0 billion, an increase of 16.9% from prior year

• The increase of $14.8 billion was primarily attributable to deployment of commitments to the syndicated loans strategy, the acquisition of Crestline

AUM

($ in billions)
		$148.9	$148.6
$136.7
	$13.2		$14.1
	$11.8		$25.2		$22.0
	$23.8

($ in billions)

	$96.9	$102.0
$87.2		$9.2
	$8.0
		$17.0
$7.0		$17.0
$17.3

$101.1	$110.5	$112.5

$62.9

$71.9$75.8

Q1-19	Q4-19	Q1-20
Credit	Private Equity	Real Estate

Q1-19	Q4-19	Q1-20
Credit	Private Equity	Real Estate

1. AUM amounts include funds managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of Ares Capital Corporation ("ARCC") and a registered investment adviser ("IHAM").

5

Management Fees by Duration and Fund Type

For the three months ended March 31, 2020:

• 78% of management fees are earned from funds with three or more years remaining in duration
• 87% of management fees are earned from permanent capital, closed end funds and CLOs

Duration

2%		3%
12%		7% 3%
8%	37%	7%
	43%
		87%
30%		37%
6%	5%

Permanent Capital	10 or more years	7 to 9 years
3 to 6 years	Fewer than 3 years	Differentiated	(1)	Managed Accounts	Open End Funds	Other
		Managed Accounts

Managed Accounts

1. Differentiated managed accounts have been managed by the firm for longer than three years, are investing in illiquid strategies or are co-investments structured to pay management fees.
2. CLOs are a type of closed end fund.

6

AUM and FPAUM by Duration

As of March 31, 2020, approximately 69% of AUM and 71% of FPAUM had a duration longer than 3 years

• At time of fund closing, the initial duration was greater than 7 years for approximately 74% of AUM

3%	13%
17%
	12%
11%
	9%
35%

4%	15%
18%
	11%
7%
	11%
34%

71%

Permanent Capital	10 or more years	7 to 9 years	3 to 6 years	Fewer Than 3 years	Differentiated	(1)	Managed Accounts
					Managed Accounts

1. Differentiated managed accounts have been managed by the firm for longer than three years, are investing in illiquid strategies or are co-investments structured to pay management fees.

7

Available Capital and AUM Not Yet Paying Fees

Available Capital as of March 31, 2020 was $33.2 billion, a decrease of 5.4% from prior year

• The decrease of $1.9 billion was driven primarily by net deployment in U.S. and European direct lending, alternative credit, and corporate private equity funds

AUM Not Yet Paying Fees as of March 31, 2020 was $23.1 billion, a decrease of 14.6% from prior year

• The decrease of $3.9 billion was driven primarily by deployment in the European and U.S. direct lending strategy, offset by new commitments across the special opportunities strategy and Real Estate Group funds

Available Capital

($ in billions)

$35.1$34.6

$4.6$5.3

$5.6$5.3

$24.9$24.0

Q1-19Q4-19

Credit

Private Equity

Real Estate

$33.2

$5.8

$4.8

$22.6

Q1-20

AUM Not Yet Paying Fees

($ in billions)

$27.0$27.1

$1.8$2.6

$1.5

$2.5

$23.7$22.0

Q1-19Q4-19

Credit

Private Equity

Real Estate

$23.1

$2.3

$2.5

$18.3

Q1-20

8

AUM Not Yet Paying Fees

As of March 31, 2020, AUM Not Yet Paying Fees of $23.1 billion could generate approximately $222.3 million in potential incremental annual management fees, of which $199.8 million relates to the $21.0 billion of AUM available for future deployment(1)

• The $21.0 billion of AUM Not Yet Paying Fees available for future deployment includes approximately $14.6 billion relating to U.S. and European direct lending funds, $2.6 billion in alternative credit funds, $1.8 billion in our Private Equity Group and $1.8 billion in our Real Estate Group funds

AUM Not Yet Paying Fees: $23.1 billion

($ in

$0.4

$1.7

$21.0

AUM Not Yet Paying Fees Available for Future

Deployment: $21.0 billion

($ in billions)

$1.8

$1.8

$17.4

of AUM Not Yet Paying Fees for future deployment

Credit	Private Equity	Real Estate
Funds in or Expected to Be in Wind-down

1. No assurance can be made that such results will be achieved or capital will be deployed. Assumes the AUM Not Yet Paying Fees as of March 31, 2020 is invested and such fees are paid on an annual basis. Does not reflect any associated reductions in management fees from certain existing funds, some of which may be material. Reference to $222.3 million includes approximately $10.6 million in potential incremental management fees from deploying cash and a portion of undrawn/available credit facilities at ARCC in excess of its leverage at March 31, 2020. Note that no potential ARCC Part I Fees are reflected in any of the amounts above.
2. Capital available for deployment for follow-on investments represents capital committed to funds that are past their investment periods but have capital available to be called for follow-on investments in existing portfolio companies. As of March 31, 2020, capital available for deployment for follow-on investments could generate approximately $22.5 million in potential management fees. There is no assurance such capital will be invested.

9

Incentive Eligible AUM and Incentive Generating AUM

Incentive Eligible AUM as of March 31, 2020 was $84.5 billion, an increase of 5.8% from prior year

• The increase of $4.6 billion was primarily driven by capital raising across the U.S. direct lending, special opportunities, alternative credit and European real estate equity strategies

Incentive Generating AUM(1) as of March 31, 2020 was $22.4 billion, a decrease of 23.3% from prior year

• The decrease was primarily driven by depreciation within funds across the U.S. direct lending strategy that generated returns below their hurdle rates as of March 31, 2020

Of the $58.6 billion of Incentive Eligible AUM that is currently invested, 38.3% is Incentive Generating

• Excluding the ARCC Part II Fees(2) that are based on capital gains from the largely debt oriented ARCC portfolio, 51.3% of Incentive Eligible AUM that is currently invested is Incentive Generating

Incentive Eligible AUM

Q1-20 Incentive Generating to Incentive Eligible

AUM Reconciliation

$79.9

$87.4$84.5

($ in billions)	Credit	Private	Real	Total
	Equity	Estate

$7.5

$8.4$9.0

Incentive

$19.6

$21.3$18.4

Generating AUM	$15.3	$4.9	$2.2	$22.4
+ Uninvested
IEAUM	16.3	5.1	4.5	25.9
+ IEAUM below

$52.8	$57.7	$57.1

Q1-19	Q4-19	Q1-20
Credit	Private Equity	Real Estate

hurdle	10.6	8.4	2.3	21.3
.+ ARCC Part II Fees
below Hurdle(2)	14.9	-	-	14.9
Incentive Eligible
AUM	$57.1	$18.4	$9.0	$84.5

1. Incentive Generating AUM includes $1.9 billion of AUM from funds generating unrealized incentive income that is not recognized as revenue by Ares until such fees are crystallized or no longer subject to reversal.
2. ARCC Part II Fees 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 amount of Part II Fees paid in all prior years since inception. As of March 31, 2020, this calculation resulted in ARCC being below the required hurdle for payment to Ares of any ARCC Part II Fees by 5.7% of the value of the underlying portfolio.

10

Capital Deployment(1)

• Total Gross Invested Capital during Q1-20 was $6.5 billion compared to $7.4 billion during Q1-19
• • Of the total amount, $5.5 billion was related to deployment in our drawdown funds compared to $6.4 billion for the same period in 2019
  • Of our drawdown funds, the most active investment strategies were European and U.S. direct lending, corporate private equity, and alternative credit

Q1-20 Capital Deployment by Type: $6.5 billion

Q1-20 Capital Deployment Breakdown: $6.5 billion

($ in billions)

$0.6

$1.0

Capital

($ in billions)

$1.0

$5.5

($ in billions)	$6.4
	$0.8
	$1.4

$4.2

Q1-19

	$5.5
$3.9	$0.6
$1.0
$0.7
$0.2
$3.0	$3.9
Q4-19	Q1-20

Drawdown Funds

Non-drawdown Funds(2)

Credit

Private Equity

Real Estate

CLOs but excludes recycled capital.

11

GAAP Statements of Operations

$ in thousands, except share data	Quarter Ended March 31,
	2020	2019
Revenues
Management fees (includes ARCC Part I Fees of $43,923 and $38,393 for the three months ended March 31, 2020 and 2019, respectively)	$263,849	$224,659
Carried interest allocation	(230,876)	197,293
Incentive fees	(3,249)	16,815
Principal investment income (loss)	(26,723)	28,759
Administrative, transaction and other fees	10,408	9,671
Total revenues	13,409	477,197
Expenses
Compensation and benefits	180,084	156,846
Performance related compensation	(167,899)	156,520
General, administrative and other expenses	62,331	51,187
Expenses of Consolidated Funds	7,443	4,554
Total expenses	81,959	369,107
Other income (expense)
Net realized and unrealized gains (losses) on investments	(8,034)	3,476
Interest and dividend income	1,790	1,844
Interest expense	(5,306)	(5,589)
Other income (expense), net	5,464	(4,497)
Net realized and unrealized gains (losses) on investments of Consolidated Funds	(254,761)	4,364
Interest and other income of Consolidated Funds	113,225	93,184
Interest expense of Consolidated Funds	(80,241)	(64,912)
Total other income (expense)	(227,863)	27,870
Income (loss) before taxes	(296,413)	135,960
Income tax expense (benefit)	(20,616)	14,384
Net income (loss)	(275,797)	121,576
Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds	(166,406)	17,624
Less: Net income (loss) attributable to non-controlling interests in Ares Operating Group entities	(78,355)	59,003
Net income (loss) attributable to Ares Management Corporation	(31,036)	44,949
Less: Series A Preferred Stock dividends paid	5,425	5,425
Net income (loss) attributable to Ares Management Corporation Class A common stockholders	$(36,461)	$39,524
Net income (loss) attributable per share of Class A common stock
Basic	$(0.33)	$0.36
Diluted	$(0.33)	$0.36
Weighted-average shares of Class A common stock:
Basic	118,366,539	102,906,494
Diluted	118,366,539	110,699,112

12

RI and Other Measures Financial Summary

$ in thousands, except share data (and as otherwise noted)	Quarter Ended March 31,	LTM Ended March 31,
	2020	2019	% Change	2020	2019	% Change
Management fees(1)	$273,778	$233,012	17%	$1,053,296	$872,930	21%
Other fees	3,872	3,075	26%	18,875	21,290	(11)%
Compensation and benefits expenses(2)	(139,360)	(123,489)	13%	(544,078)	(472,020)	15%
General, administrative and other expenses(3)	(45,186)	(41,326)	9%	(182,602)	(156,073)	17%
Fee Related Earnings	$93,104	$71,272	31%	$345,491	$266,127	30%
Realized net performance income	$33,777	$19,356	75%	$126,557	$116,728	8%
Realized net investment income	7,264	14,004	(48)%	60,951	45,100	35%
Realized Income	$134,145	$104,632	28%	$532,999	$427,955	25%
After-tax Realized Income, net of Series A Preferred Stock dividends(4)	$118,769	$89,019	33%	$466,416	$371,136	26%
After-tax Realized Income per share of Class A common stock, net of Series A
Preferred Stock dividends(5)	$0.45	$0.35	29%	$1.77	$1.50	18%
Other Data
Total Fee Revenue(6)	$311,427	$255,443	22%	$1,198,728	$1,010,948	19%
Effective management fee rate(7)	1.08%	1.09%	(1)%

1. Includes ARCC Part I Fees of $43.9 million and $38.4 million for Q1-20 and Q1-19, respectively, and $169.9 million and $138.8 million for Q1-20 LTM and Q1-19 LTM , respectively.
2. Includes compensation and benefits expenses attributable to the Operations Management Group of $36.4 million and $32.7 million for Q1-20 and Q1-19, respectively, and $142.9 million and $127.3 million for the Q1-20 LTM and Q1-19 LTM respectively, which are not allocated to an operating segment.
3. Includes G&A expenses attributable to Operations Management Group of $21.3 million and $20.6 million for Q1-20 and Q1-19, respectively, and $92.0 million and $77.3 million for Q1-20 LTM and Q1-19 LTM respectively, which are not allocated to an operating segment.
4. For the quarter and LTM periods ended Q1-20 and Q1-19,after-tax Realized Income includes current income tax related to: (i) realized performance income of $5.0 million, $22.2 million, and $3.7 million, $17.1 million, respectively and (ii) FRE of $5.0 million, $22.7 million, and $6.4 million, $18.0 million, respectively. Of the current tax related to FRE, this includes (a) entity level taxes of $1.8 million, $10.4 million, and $1.8 million, $8.2 million, respectively, and (b) corporate level tax expense of $3.2 million, $12.3 million, and $4.6 million, $9.8 million, respectively.
5. Calculation of after-tax Realized Income per share of Class A common stock uses total average shares of Class A common stock outstanding and proportional dilutive effects of the Ares' equity-based awards. See slide 31 for additional details.
6. Total Fee Revenue is calculated as the total of management fees, other fees and realized net performance income.
7. Effective management fee rate represents the quotient of management fees and the aggregate fee bases for the periods presented. The effective rate shown excludes the effect of one-timecatch-up fees.

13

GAAP to Non-GAAP Reconciliation - Unconsolidated Reporting Basis

$ in thousands	Quarter Ended March 31,	LTM Ended March 31,
	2020	2019	2020	2019
Realized Income and Fee Related Earnings:
Income (loss) before taxes	$(296,413)	$135,960	$(7,193)	$258,255
Adjustments:
Depreciation and amortization expense	5,542	5,824	40,320	23,735
Equity compensation expense(1)	32,557	27,552	102,696	96,189
Acquisition and merger-related expense	3,137	1,773	17,630	5,028
Deferred placement fees	5,415	521	29,200	19,200
Other (income) expense, net	-	(1)	(459)	13,481
Net expense of non-controlling interests in consolidated subsidiaries	20,497	876	22,572	3,579
(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of
eliminations	166,378	(17,045)	144,249	(37,321)
Unconsolidated performance (income) loss - unrealized	387,657	(146,575)	231,090	135,755
Unconsolidated performance related compensation - unrealized	(285,892)	107,303	(186,396)	(125,049)
Unconsolidated net investment (income) loss - unrealized	95,267	(11,556)	139,290	35,103
Realized Income	$134,145	$104,632	$532,999	$427,955
Unconsolidated performance income - realized	$(151,770)	$(68,573)	$(485,715)	$(402,673)
Unconsolidated performance related compensation - realized	117,993	49,217	359,158	285,945
Unconsolidated net investment income - realized	(7,264)	(14,004)	(60,951)	(45,100)
Fee Related Earnings	$93,104	$71,272	$345,491	$266,127

Note: This table is a reconciliation of income before provision for income taxes on a GAAP basis to RI and FRE on an unconsolidated basis, which reflects the results of the reportable segments on a combined basis together with the Operations Management Group. Management believes that this presentation is more meaningful than a reconciliation to the reportable segments on a segment basis because such reconciliation would exclude the Operations Management Group. Differences may arise due to rounding.

1. For the quarter and LTM periods ended Q1-20 and Q1-19, equity compensation expense was attributable to the following: (i) IPO awards and other non-recurring awards of $10.8 million, $36.5 million and $13.3 million, $55.9 million, respectively; (ii) annual bonus awards of $11.5 million, $31.2 million and $8.0 million, $20.8 million, respectively; and (iii) discretionary awards of $10.3 million, $34.9 million and $6.3 million, $19.5 million, respectively.

14

GAAP to Non-GAAP Reconciliation - Unconsolidated Reporting Basis (cont'd)

$ in thousands	Quarter Ended March 31,	LTM Ended March 31,
	2020	2019	2020	2019
Performance income and net investment income reconciliation:
Carried interest allocation	$(230,876)	$197,293	$193,703	$185,574
Incentive fees	(3,249)	16,815	49,133	75,124
Carried interest allocation and incentive fees	$(234,125)	$214,108	$242,836	$260,698
Performance income - realized earned from Consolidated Funds	$(45)	$434	$13,372	$4,434
Performance income (loss) reclass(1)	(1,717)	606	(1,583)	1,786
Unconsolidated performance related compensation - unrealized	387,657	(146,575)	231,090	135,755
Performance income - realized	$151,770	$68,573	$485,715	$402,673
Total consolidated other income (loss)	$(227,863)	$27,870	$(133,194)	$121,872
Net investment loss (income) from Consolidated Funds	194,426	(31,579)	95,609	(139,937)
Performance income (loss) reclass(1)	1,717	(606)	1,583	(1,786)
Principal investment income (loss)	(75,988)	29,892	(61,560)	28,231
Other expense (income), net	22	(1)	(437)	1,645
Other (income) loss of non-controlling interests in consolidated subsidiaries	19,683	(16)	19,660	(28)
Investment (income) loss - unrealized	100,083	(16,424)	141,049	29,965
Interest and other investment (income) loss - unrealized	(4,816)	4,868	(1,759)	5,138
Total realized net investment income	$7,264	$14,004	$60,951	$45,100

Note: These tables reconcile consolidated carried interest allocation and incentive fees reported in accordance with GAAP to unconsolidated realized performance income and consolidated GAAP other income to unconsolidated realized net investment income. These reconciliations show the results of the reportable segments on a combined basis together with the Operations Management Group. Management believes that this presentation is more meaningful than a reconciliation to the reportable segments on a segment basis because such reconciliation would exclude the Operations Management Group. Differences may arise due to rounding.

1. Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gain on investments in Ares' Consolidated Statements of Operations.

15

Credit Group(1)

• Management and other fees increased by 21% for Q1-20 compared to Q1-19, primarily driven by deployment in funds in the U.S. and European direct lending strategies and an increase in ARCC Part I Fees
• Fee Related Earnings increased by 24% for Q1-20 compared to Q1-19, primarily driven by higher management fees
• Realized Income increased by 14% for Q1-20 compared to Q1-19, primarily driven by increases in Fee Related Earnings

Financial Summary and Highlights(1)

$ in thousands	Q1-20	Q1-19	% Change	Q1-20 LTM	Q1-19 LTM	% Change
Management and other fees(2)	$200,495	$166,032	21%	$765,440	$616,682	24%
Fee Related Earnings	$114,257	$92,179	24%	$436,290	$340,384	28%
Realized net performance income	$1,117	$9,262	(88)%	$34,656	$53,008	(35)%
Realized net investment income	2,017	1,864	8%	14,783	4,033	267%
Realized Income	$117,391	$103,305	14%	$485,729	$397,425	22%
AUM ($ in billions)	$112.5	$101.1	11%
FPAUM ($ in billions)	$75.8	$62.9	21%

Note: Past performance is not indicative of future results. The Credit Group had ~270 investment professionals, ~1,900 portfolio companies and ~170 active funds as of March 31, 2020.

24%

Q1-20 increase in

Fee Related Earnings

21%

Q1-20 increase in

FPAUM

European Direct Lending:

(0.4)%(3)

High Yield: (12.2)%(4)

Syndicated Loans: (11.8)%(4)

Q1-20 gross returns

1. This table is a financial summary only and segment results are shown before the unallocated support costs of the Operations Management Group. See "Financial Details - Segments" on slide 23 for complete financial results.
2. Includes ARCC Part I Fees of $43.9 million and $38.4 million for Q1-20 and Q1-19, respectively, and $169.9 million and $138.8 million for Q1-20 LTM and Q1-19 LTM, respectively. The $10 million quarterly ARCC-ACAS transaction fee waiver was effective through Q3-19. Fees have increased in subsequent periods due to the expiration of the fee waiver.
3. The net returns for European direct lending was (0.7)% for Q1-20. Gross and net returns for European direct lending are represented by a composite made up of the ACE II, ACE III and ACE IV levered Euro-denominated feeder funds. The gross and net returns for the composite made up of the ACE II and ACE III U.S. dollar denominated feeder funds were (0.1)% and (0.5)% for Q1-20. Returns presented above are shown for the Euro-denominated composite as this is the base denomination of the funds. Composite returns are calculated by asset-weighting the underlying fund-level returns. Returns include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Gross returns do not reflect the deduction of management fees, carried interest, or other expenses, as applicable. Net returns are after giving effect to applicable management fees, carried interest, as applicable, and other expenses. We believe aggregated performance returns reflect overall quarterly performance returns in a strategy, but are not necessarily investable funds or products themselves.
4. Net performance returns for Q1-20 was (12.0)% for U.S. syndicated loan funds and (12.3)% for U.S. high yield funds. Performance for syndicated loans is represented by the U.S. Bank Loan Aggregate Composite which includes all actual, fully discretionary, fee-paying, funds that are benchmarked to the Credit Suisse Leveraged Loan Index and primarily invested in USD denominated banks loans. Such funds may have limited allocations to high yield and structured securities. Performance for high yield is represented by the U.S. high yield Composite which includes all actual, fully discretionary, fee-paying, separately managed funds that primarily invest in U.S. high yield fixed income securities and are benchmarked to the BofA Merrill Lynch US High Yield Master II Constrained Index, or a similar index. We believe aggregated performance returns reflect overall quarterly performance returns in a strategy, but are not necessarily investable funds or products themselves.

16

Private Equity Group(1)

• Management and other fees increased for Q1-20 compared to Q1-19, primarily due to additional management fees generated with the launch of the special opportunities and corporate private equity continuation funds subsequent to the first quarter of 2019
• Fee Related Earnings increased by 3% for Q1-20 compared to Q1-19, primarily driven by higher management fees
• Realized Income increased by 38% for Q1-20 compared to Q1-19, primarily driven by increased monetization activity in ACOF IV from the sale of National Veterinary Associates

Financial Summary and Highlights(1)

$ in thousands	Q1-20	Q1-19	% Change	Q1-20 LTM	Q1-19 LTM	% Change	38%
Management and other fees	$52,267	$51,396	2%	$212,647	$200,359	6%
Q1-20 increase in
Fee Related Earnings	$27,038	$26,143	3%	$115,314	$105,192	10%	Realized Income
Realized net performance income	$23,230	$8,826	163%	$67,293	$36,044	87%	10%
Realized net investment income	10,639	9,055	17%	46,840	25,993	80%	Q1-20 LTM increase in
Realized Income	$60,907	$44,024	38%	$229,447	$167,229	37%	Fee Related Earnings
AUM ($ in billions)	$22.0	$23.8	(8)%				(9.3)%
FPAUM ($ in billions)	$17.0	$17.3	(2)%
			Q1-20 Gross return

in Corporate Private Equity portfolio(2)

Note: Past performance is not indicative of future results. The Private Equity Group had ~100 investment professionals, ~40 portfolio companies, ~50 infrastructure and power assets and ~20 active funds and related co-investment vehicles as of March 31, 2020.

1. This table is a financial summary only and segment results are shown before the unallocated support costs of the Operations Management Group. See "Financial Details - Segments" on slide 23 for complete financial results.
2. Performance for the corporate private equity portfolio is represented by the ACOF I-V Aggregate, which is comprised of investments held by ACOF I, ACOF II, ACOF III, ACOF IV and ACOF V. Performance returns are gross asset-leveltime-weighted rates of return calculated on a quarterly basis. Returns include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Gross returns do not reflect the deduction of management fees, carried interest, or other expenses, if applicable. Net returns are after giving effect to applicable management fees, carried interest, as applicable, and other expenses. Net asset-level returns for corporate private equity portfolio was (8.1)% for Q1-20. We believe aggregated performance returns reflect overall quarterly performance returns in a strategy, but are not necessarily investable funds or products themselves.

17

Real Estate Group(1)

• Management and other fees increased by 33% for Q1-20 compared to Q1-19, primarily driven by new commitments and $0.4 million in one-time catch up fees from a U.S. real estate equity fund and by $2.0 million of one-time deferred fees across multiple European real estate equity funds following the sale of a 40-propertypan-European logistics portfolio
• Fee Related Earnings increased by 53% for Q1-20 compared to Q1-19, primarily driven by higher management fees and a decrease in G&A expenses
• Realized Income increased by 83% for Q1-20 compared to Q1-19, primarily driven by higher monetization activity from the Real Estate Group's sale of its stake in the pan-European logistics portfolio

Financial Summary and Highlights(1)

$ in thousands	Q1-20	Q1-19	% Change	Q1-20 LTM	Q1-19 LTM	% Change	53%
Management and other fees	$24,888	$18,659	33%	$94,084	$77,179	22%	Q1-20 increase in
Fee Related Earnings	$9,540	$6,243	53%	$28,779	$25,088	15%	Fee Related Earnings
Realized net performance income	$9,430	$1,268	NM	$24,608	$27,676	(11)%	19%
Realized net investment income	1,115	3,466	(68)%	7,478	12,149	(38)%	Q1-20 increase in
Realized Income	$20,085	$10,977	83%	$60,865	$64,913	(6)%	AUM
AUM ($ in billions)	$14.1	$11.8	19%				U.S. Equity: (4.2)%
FPAUM ($ in billions)	$9.2	$7.0	31%
			European Equity: (3.5)%

Q1-20 Gross Returns(2)

Note: Past performance is not indicative of future results. The Real Estate Group had ~80 investment professionals, ~250 properties and ~40 active funds and related co-investment vehicles as of March 31, 2020.

1. This table is a financial summary only and segment results are shown before the unallocated support costs of the Operations Management Group. See "Financial Details - Segments" on slide 23 for complete financial results.
2. Performance for the U.S. real estate equity portfolio is represented by the U.S. Real Estate Composite, which is comprised of investments held by DEV II, US VIII, and US IX. Performance for the European real estate equity portfolio is represented by the European Real Estate Composite, which is comprised of investments held by EPEP II, EF IV and EF V. EF IV and EF V are each made up of two feeder funds, one denominated in U.S. dollars and one denominated in Euros. Returns presented above are shown for the Euro-denominated composite as this is the base denomination of the funds. Gross returns do not reflect the deduction of management fees, carried interest, or other expenses, as applicable. Net returns are after giving effect to applicable management fees, carried interest, as applicable, and other expenses. Net returns for the U.S. Real Estate Composite and European Real Estate Composite were (3.5)% and (4.0)% for Q1-20. The gross and net returns for the dollar denominated feeder fund for the European Real Estate Composite were (4.7)% and (4.4)% for Q1-20. We believe aggregated performance returns reflect overall quarterly performance returns in a strategy, but are not necessarily investable funds or products themselves.

18

Realized Income per Share Data

	Quarter Ended March 31,
$ in thousands, except share data	2020	2019
After-tax Realized Income, net of Series A Preferred Stock dividends
Realized Income before taxes	$134,145	$104,632
Entity level foreign, state and local taxes	(1,797)	(1,839)
Series A Preferred Stock dividends(1)	(5,425)	(5,425)
Realized Income, net of Series A Preferred Stock dividends	$126,923	$97,368
Income taxes(2)	$(8,154)	$(8,349)
After-tax Realized Income, net of Series A Preferred Stock dividends	$118,769	$89,019
After-tax Realized Income per share(3)	$0.48	$0.39
After-tax Realized Income per share of Class A common stock
Realized Income, net of Series A Preferred Stock dividends	$126,923	$97,368
x Average ownership % of Ares Operating Group	50.43%	46.80%
Realized Income attributable to Class A common stockholders	$64,013	$45,565
Income taxes(2)	$(8,154)	$(8,349)
After-tax Realized Income attributable to Class A common stockholders	$55,859	$37,216
After-tax Realized Income per share of Class A common stock(4)	$0.45	$0.35

1. Ares had 12,400,000 shares of 7% Series A Preferred Stock outstanding as of March 31, 2020.
2. Amount represents the current corporate taxes paid by Ares for the periods presented and exclude the effects of $(30.6) million and $4.8 million, respectively, of deferred income tax (benefit) expense primarily related to net unrealized performance income and net unrealized investment income. These effects have been excluded as net unrealized performance income and net unrealized investment income have been excluded from RI. For the purposes of evaluating after-tax FRE, we first allocate the taxes to realized performance income. Taxes are allocated to realized performance income based on our 24.0% statutory tax rate. The remaining portion of current corporate taxes is allocated to FRE. All differences between the current portion of taxable income and RI are attributed to FRE. For the three months ended March 31, 2020, and 2019, these differences created tax benefits that totaled $14.0 million and $5.4 million, respectively, and reduced our tax rate on FRE from 24.0% to 8.8% and 16.4%, respectively. The primary differences between the current portion of taxable income and RI are related to the timing of certain items, primarily vesting of equity awards, exercise of stock options, payment of placement fees, depreciation expense and amortization. FRE tax rates may fluctuate based on the total amount of realized performance income and the amount of timing differences between the current portion of taxable income and RI.
3. Weighted average shares used for RI of 248,442,430 includes the sum of shares of Class A common stock, Ares Operating Group Units that are exchangeable for shares of Class A common stock on a one-for- one basis and the dilutive effects of Ares' equity-based awards. Please refer to slide 31 in this presentation for further information.
4. Calculation of after-tax Realized Income per share of Class A common stock uses the total average shares of Class A common stock outstanding and the proportional dilutive effects of Ares' equity-based awards. See slide 31 for additional details.

19

Balance Sheet

• Substantial balance sheet value related to investments primarily in Ares managed vehicles and net accrued performance income
• • As of March 31, 2020, our balance sheet included $1,167.7 million in cash and cash equivalents and $1,046.8 million in debt obligations with $800.0 million drawn against our $1.065 billion revolving credit facility
  • As of March 31, 2020, the fair value of our corporate investment portfolio was $443.2 million in accordance with GAAP. On an unconsolidated basis, our corporate investment portfolio was $575.3 million(1)
  • As of March 31, 2020, gross accrued performance income reported on a GAAP basis was $766.3 million. On an unconsolidated basis, our gross accrued performance income was $768.2 million
  • • As of March 31, 2020, accrued performance income, net of performance related compensation reported on a GAAP basis and unconsolidated basis was $233.6 million and $235.5 million, respectively, representing decreases of ~33% from December 31, 2019

Net Accrued Performance Income by Group

Q4 2019: $347.0 million(2)

(2)

23%		28%
	36%
	41%

	41%	31%
	Private Equity	Real
1.	Funds that are eliminated upon	interests.
	Investments that are attributable to non-controlling interests represent the $22.4 million of CLO investments that are attributable to the Class B Membership Interests. Corporate investment portfolio excludes
	accrued carried interest allocation, a component of gross accrued performance income, of $747.4 million.

2. As of March 31, 2020 and December 31, 2019, unconsolidated net performance income receivable was $235.5 million and $348.2 million, respectively. Unconsolidated net performance income receivable as of March 31, 2020 and December 31, 2019 includes $1.9 million and $1.2 million, respectively, of net performance income receivable of Consolidated Funds attributable to the Credit Group that is eliminated upon consolidation for GAAP.

20

Corporate Data

Board of Directors

Michael Arougheti

Co-Founder, Chief Executive Officer and President of Ares

Antoinette Bush

Executive Vice President and Global Head of Government Affairs of News Corp

Kipp deVeer

Head of Credit Group

Paul G. Joubert

Founding Partner of EdgeAdvisors and

Investing Partner in Converge Venture

Partners

David Kaplan

Co-Founder and Co-Chairman of Private Equity Group

Michael Lynton

Chairman of Snap Inc.

Dr. Judy D. Olian

President of Quinnipiac University

Antony P. Ressler

Co-Founder and Executive Chairman of Ares

Bennett Rosenthal

Co-Founder and Co-Chairman of Private Equity Group

Executive Officers

Michael Arougheti

Co-Founder, Chief Executive Officer and President

Ryan Berry

Chief Marketing and Strategy Officer

Kipp deVeer

Head of Credit Group

David Kaplan

Co-Founder and Co-Chairman of Private Equity Group

Michael McFerran

Chief Operating Officer and Chief Financial Officer

Antony P. Ressler

Co-Founder and Executive Chairman

Bennett Rosenthal

Co-Founder and Co-Chairman of Private Equity Group

Naseem Sagati Aghili

General Counsel and Secretary

Corporate Headquarters

2000 Avenue of the Stars

12th Floor

Los Angeles, CA 90067

Tel: [phone]

Fax: [phone]

Corporate Counsel

Kirkland & Ellis LLP

Los Angeles, CA

Independent Registered Public Accounting

Firm

Ernst & Young LLP

Los Angeles, CA

Research Coverage

Bank of America Merrill Lynch

Michael Carrier [phone]

Bank of Montreal

James Fotheringham [phone]

Barclays

Jeremy Campbell [phone]

Credit Suisse

Craig Siegenthaler [phone]

Goldman Sachs

Alexander Blostein [phone]

Jefferies

Gerald O'Hara [phone]

JP Morgan

Kenneth Worthington [phone]

Keefe, Bruyette & Woods

Robert Lee [phone]

Morgan Stanley

Michael Cyprys [phone]

Oppenheimer

Chris Kotowski [phone]

RBC Capital Markets

Kenneth Lee [phone]

UBS Investment Bank

Adam Beatty

[phone]

Wells Fargo Securities

Christopher Harris [phone]

Investor Relations Contacts

Carl Drake

Partner/Head of Ares Management, LLC Public Investor Relations and Communications

Tel: [phone] [e-mail]

Veronica Mayer

Principal

Tel: [phone] [e-mail]

Cameron Rudd

Vice President

Tel: [phone] [e-mail]

General IR Contact

Tel (U.S.):

1. 340-6597Tel (International):

1. [e-mail]

Please visit our website at:

www.aresmgmt.com

Transfer Agent

American Stock Transfer & Trust Company,

LLC

6201 15th Avenue

Brooklyn, NY 11210

Tel: [phone]

Fax: [phone] [e-mail] www.amstock.com

Securities Listing

NYSE: ARES

NYSE: ARES.PRA

21

Appendix

Financial Details - Segments

		Three Months Ended March 31, 2020
		Private	Real	Operations
	Credit	Equity	Estate	Management	Total(1)
$ in thousands	Group	Group	Group	Group
Management fees (Credit Group includes ARCC Part I Fees of $43,923)	$197,437	$52,157	$24,184	$-	$273,778
Other fees	3,058	110	704	-	3,872
Compensation and benefits	(70,925)	(19,596)	(12,413)	(36,426)	(139,360)
General, administrative and other expenses	(15,313)	(5,633)	(2,935)	(21,305)	(45,186)
Fee related earnings	$114,257	$27,038	$9,540	$(57,731)	$93,104
Performance income-realized	$9,016	$116,154	$26,600	$-	$151,770
Performance related compensation-realized	(7,899)	(92,924)	(17,170)	-	(117,993)
Realized net performance income	$1,117	$23,230	$9,430	$-	$33,777
Investment income (loss)-realized	$(843)	$11,470	$1,290	$(5,698)	$6,219
Interest and other investment income -realized	4,575	812	796	168	6,351
Interest expense	(1,715)	(1,643)	(971)	(977)	(5,306)
Realized net investment income (loss)	$2,017	$10,639	$1,115	$(6,507)	$7,264
Realized income	$117,391	$60,907	$20,085	$(64,238)	$134,145
		Three Months Ended March 31, 2019
		Private	Real	Operations
	Credit	Equity	Estate	Management	Total(1)
$ in thousands	Group	Group	Group	Group
Management fees (Credit Group includes ARCC Part I Fees of $38,393)	$162,966	$51,396	$18,650	$-	$233,012
Other fees	3,066	-	9	-	3,075
Compensation and benefits	(60,348)	(21,196)	(9,284)	(32,661)	(123,489)
General, administrative and other expenses	(13,505)	(4,057)	(3,132)	(20,632)	(41,326)
Fee related earnings	$92,179	$26,143	$6,243	$(53,293)	$71,272
Performance income-realized	$21,925	$44,123	$2,525	$-	$68,573
Performance related compensation-realized	(12,663)	(35,297)	(1,257)	-	(49,217)
Realized net performance income	$9,262	$8,826	$1,268	$-	$19,356
Investment income-realized	$858	$10,936	$3,480	$-	$15,274
Interest and other investment income -realized	2,905	294	1,105	15	4,319
Interest expense	(1,899)	(2,175)	(1,119)	(396)	(5,589)
Realized net investment income (loss)	$1,864	$9,055	$3,466	$(381)	$14,004
Realized income	$103,305	$44,024	$10,977	$(53,674)	$104,632

1. Includes results of the reportable segments on a combined basis together with the Operations Management Group. See "GAAP to Non-GAAP Reconciliation - Unconsolidated Reporting Basis" on slides 14-15.

23

AUM and FPAUM Rollforward

Q1-20 Total AUM Rollforward ($ in millions)

	Credit	Private Equity	Real Estate	Total
Q4-19 Ending Balance	$110,543	$25,166	$13,207	$148,916
Acquisitions	2,693	-	-	2,693
Net new par/equity commitments	2,036	364	1,560	3,960
Net new debt commitments	2,219	-	226	2,445
Capital reductions	(47)	(25)	-	(72)
Distributions	(632)	(1,838)	(643)	(3,113)
Redemptions	(464)	-	-	(464)
Changes in fund value	(3,836)	(1,652)	(238)	(5,726)
Q1-20 Ending Balance	$112,512	$22,015	$14,112	$148,639
QoQ change	$1,969	$(3,151)	$905	$(277)

Q1-20 Total FPAUM Rollforward ($ in millions)

	Credit	Private Equity	Real Estate	Total
Q4-19 Ending Balance	$71,880	$17,040	$7,963	$96,883
Acquisitions	2,596	-	-	2,596
Commitments	1,240	-	1,368	2,608
Subscriptions/deployment/increase in leverage	4,563	352	480	5,395
Capital reductions	(101)	-	(11)	(112)
Distributions	(1,031)	(367)	(226)	(1,624)
Redemptions	(481)	-	-	(481)
Changes in fund value	(2,906)	(5)	(48)	(2,959)
Change in fee basis	-	-	(311)	(311)
Q1-20 Ending Balance	$75,760	$17,020	$9,215	$101,995
QoQ change	$3,880	$(20)	$1,252	$5,112

LTM Total AUM Rollforward ($ in millions)

	Credit	Private Equity	Real Estate	Total
Q1-19 Ending Balance	$101,076	$23,778	$11,810	$136,664
Acquisitions	2,693	-	-	2,693
Net new par/equity commitments	6,062	3,485	3,758	13,305
Net new debt commitments	9,939	25	387	10,351
Capital reductions	(1,707)	(29)	(89)	(1,825)
Distributions	(2,292)	(5,006)	(1,902)	(9,200)
Redemptions	(2,065)	(2)	-	(2,067)
Changes in fund value	(1,194)	(236)	148	(1,282)
Q1-20 Ending Balance	$112,512	$22,015	$14,112	$148,639
YoY change	$11,436	$(1,763)	$2,302	$11,975

LTM Total FPAUM Rollforward ($ in millions)

	Credit	Private Equity	Real Estate	Total
Q1-19 Ending Balance	$62,924	$17,322	$6,975	$87,221
Acquisitions	2,596	-	-	2,596
Commitments	4,397	281	2,362	7,040
Subscriptions/deployment/increase in leverage	14,306	2,059	1,592	17,957
Capital reductions	(1,571)	(198)	(228)	(1,997)
Distributions	(2,793)	(1,590)	(695)	(5,078)
Redemptions	(2,232)	(1)	-	(2,233)
Changes in fund value	(1,628)	(5)	(26)	(1,659)
Change in fee basis	(239)	(848)	(765)	(1,852)
Q1-20 Ending Balance	$75,760	$17,020	$9,215	$101,995
YoY change	$12,836	$(302)	$2,240	$14,774

Credit

Private Equity

Real Estate

• AUM increased by 11.3% from Q1-19, primarily driven by new commitments to the U.S. direct lending, syndicated loans, including the acquisition of Crestline Denali, and alternative credit strategies
• FPAUM increased by 20.4% from Q1-19, primarily driven by deployment in U.S. and European direct lending funds paid on invested capital, new commitments and the acquisition of Crestline Denali to the syndicated loans strategy
• AUM decreased by 7.4% from Q1-19, driven by distributions and realizations across funds in the corporate private equity strategy
• FPAUM decreased by 1.7% from Q1-19, driven by distributions across funds in the corporate private equity strategy
• AUM increased by 19.5% from Q1-19, driven by new commitments across funds in the European equity, U.S. equity and debt strategies
• FPAUM increased by 32.1% from Q1-19, driven by new commitments to the European and U.S. equity strategy and deployment in debt funds

24

AUM and FPAUM by Strategy

		As of March 31, 2020
$ in billions	AUM	% AUM	FPAUM	% FPAUM
Credit
Syndicated Loans	$24.7	22%	$24.1	32%
High Yield	2.8	2	2.9	4
Multi-Asset Credit	2.2	2	1.7	2
Alternative Credit	7.5	7	4.2	6
U.S. Direct Lending(1)	49.2	44	28.8	38
European Direct Lending	26.1	23	14.1	18
Credit	$112.5	100%	$75.8	100%
Private Equity
Corporate Private Equity
ACOF V	$7.8	35%	$7.6	45%
ACOF IV	3.8	17	2.2	13
AEVF	1.2	5	0.9	5
ACOF I/III	1.1	5	-	-
ACOF Asia	0.2	1	0.1	-
Infrastructure and Power
EIF I-IV and Co-investment Vehicles	2.3	10	2.5	15
EIF V	0.9	4	0.8	5
Energy Opportunities
Energy Opportunities	1.0	5	1.0	6
Special Opportunities
Special Opportunities	3.7	18	1.9	11
Private Equity	$22.0	100%	$17.0	100%
Real Estate
U.S. Equity	$4.2	30%	$3.4	37%
European Equity	4.5	32	3.9	42
Debt	5.4	38	1.9	21
Real Estate	$14.1	100%	$9.2	100%
Total	$148.6		$102.0

1. AUM includes ARCC, IHAM, and SDLP AUM of $17.1 billion, $4.8 billion, and $3.2 billion, respectively. ARCC's wholly owned portfolio company, IHAM, an SEC registered investment adviser, manages 22 funds and serves as the sub-manager or sub-adviser for 2 other funds as of March 31, 2020.

25

Balance Sheet Investments by Strategy(1)

$ in millions	March 31, 2020 December 31, 2019
Credit
Syndicated Loans(2)	$64.9	$104.7
Multi-Asset Credit	29.4	29.5
Alternative Credit	16.7	21.0
U.S. Direct Lending	75.6	61.3
European Direct Lending	32.2	32.8
Credit	$218.8	$249.3
Private Equity
ACOF I	$0.1	$0.2
ACOF III	17.0	24.8
ACOF IV	26.5	40.5
ACOF Asia	28.9	56.9
AEVF	27.0	29.2
Energy Opportunities	7.5	9.7
Infrastructure and Power	34.3	43.8
Special Opportunities	55.6	60.5
Private Equity	$196.9	$265.6
Real Estate
U.S. Equity	$80.8	$85.8
European Equity	13.8	15.5
Debt	46.1	42.9
Real Estate	$140.7	$144.2
Operations Management Group
Other	$18.9	$51.5
Other	$18.9	$51.5
Total	$575.3	$710.6

1. As of March 31, 2020, the fair value of our corporate investment portfolio was $443.2 million in accordance with GAAP. Difference between GAAP and unconsolidated investments represents $132.1 million of investments in Consolidated Funds that are eliminated upon consolidation, net of investments that are attributable to non-controlling interests. Investments that are attributable to non-controlling interests represent the $22.4 million of CLO investments that are attributable to the Class B Membership Interests. Corporate investment portfolio excludes accrued carried interest allocation, a component of gross accrued performance income, of $747.4 million.
2. Through investments in Ares CLOs. Represents Ares' maximum exposure of loss from its investments in CLOs.

26

Significant Fund Performance Metrics

The following table presents the performance data for the significant funds in the Credit Group that are not drawdown funds:

As of March 31, 2020

					Returns (%)(1)
			Current Quarter	Year-To-Date	Since Inception(2)
		AUM
	Year of Inception	($ in millions)	Gross	Net	Gross	Net	Gross	Net	Investment Strategy
ARCC(3)	2004	$17,052	N/A	(7.7)	N/A	(7.7)	N/A	11.0	U.S. Direct Lending
ASIF(4)	2018	1,140	(13.3)	(13.4)	(13.3)	(13.4)	(5.7)	(6.3)	Alternative Credit

Note: Past performance is not indicative of future results. AUM and Net Returns are as of March 31, 2020 unless otherwise noted. The above table includes fund performance metrics for significant funds which includes those that contributed at least 1% of total management fees for the three months ended March 31, 2020 or comprised 1% or more of Ares' total FPAUM as of March 31, 2020, and for which we have sole discretion for investment decisions within the fund. Please see significant fund performance endnotes on slides 29 for additional information. Return information presented may not reflect actual returns earned by investors in the applicable fund. ARCC is a publicly traded vehicle.

27

Significant Fund Performance Metrics (cont'd)

The following table presents the performance data for our significant drawdown funds:

As of March 31, 2020

Credit

	Year of		Original Capital	Cumulative	Realized	Unrealized		MOIC			IRR(%)
($ in millions)	Inception	AUM	Commitments	Invested Capital	Proceeds(5)	Proceeds(6)	Total Value	Gross(7)	Net(8)		Gross(9)	Net(10)	Primary Investment Strategy
CSF III	2010	$1,185	$1,135	$1,251	$617	$1,200	$1,817	1.5x	1.5x	8.9	7.6	European & U.S. Direct Lending
ACE III(11)	2015	4,786	2,822	2,446	637	2,433	3,070	1.4x	1.3x	12.4	8.8	European Direct Lending
PCS	2017	3,603	3,365	2,131	199	2,172	2,371	1.1x	1.1x	10.2	7.3	U.S Direct Lending
ACE IV Unlevered(12)	2018	9,971	2,851	1,649	52	1,693	1,745	1.1x	1.1x	9.9	7.0	European Direct Lending
ACE IV Levered(12)	4,819	2,781	125	2,912	3,037	1.1x	1.1x	14.4	10.3
SDL Unlevered	2018	4,926	922	316	24	297	321	1.0x	1.0x	4.9	2.7	U.S Direct Lending
SDL Levered	2,045	700	102	602	704	1.0x	1.0x	5.6	1.0
Private Equity
	Year of		Original Capital	Cumulative	Realized	Unrealized		MOIC			IRR(%)
($ in millions)	Inception	AUM	Commitments	Invested Capital	Proceeds(1)	Value(2)	Total Value	Gross(3)	Net(4)		Gross(5)	Net(6)	Primary Investment Strategy
USPF IV	2010	$1,332	$1,688	$2,121	$1,387	$1,310	$2,697	1.3x	1.1x	6.8	3.1	Infrastructure and Power
ACOF IV	2012	3,829	4,700	4,234	4,716	3,099	7,815	1.8x	1.6x	17.6	11.8	Corporate Private Equity
SSF IV(7)	2015	1,435	1,515	3,227	1,967	1,157	3,124	1.0x	0.9x	(2.7)	(4.5)	Special Opportunities
ACOF V	2017	7,799	7,850	5,807	331	5,899	6,230	1.1x	1.0x	4.7	(0.1)	Corporate Private Equity
AEOF	2018	1,009	1,120	753	11	685	696	0.9x	0.8x		NA	NA	Energy Opportunities
Real Estate
	Year of		Original Capital	Cumulative	Realized	Unrealized		MOIC			IRR(%)
($ in millions)	Inception	AUM	Commitments	Invested Capital	Proceeds(1)	Value(2)	Total Value	Gross(3)	Net(4)		Gross(5)	Net(6)	Primary Investment Strategy
US IX	2017	$1,030	$1,040	$773	$35	$762	$797	1.1x	1.0x	8.6	4.4	U.S. Real Estate Equity
EF V(7)*	2018	1,908	1,968	566	45	553	598	1.0x	0.9x	2.3	(9.0)	European Real Estate Equity

Note: Past performance is not indicative of future results. AUM and Net Returns are as of March 31, 2020 unless otherwise noted. The above table includes fund performance metrics for significant funds which includes those that contributed at least 1% of total management fees for the three months ended March 31, 2020 or comprised 1% or more of Ares' total FPAUM as of March 31, 2020, and for which we have sole discretion for investment decisions within the fund. Please see significant fund performance endnotes on slides 29-30 for additional information. Return information presented may not reflect actual returns earned by investors in the applicable fund.

• We do not present fund performance metrics for significant funds with less than two years of investment performance, which begins on the date of the fund's first investment, except for those significant funds which pay management fees on invested capital, in which case performance is shown at the earlier of (i) the one year anniversary of the fund's first investment or (ii) the date on which the fund has invested at least 50% of its capital.

28

Significant Fund Performance Metrics Endnotes

Credit

1. Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses.
2. Since inception returns are annualized.
3. Net returns are calculated using the fund's NAV and assume dividends are reinvested at the closest quarter-end NAV to the relevant quarterly ex-dividend dates. Additional information related to ARCC can be found in its financial statements filed with the SEC, which are not part of this report.
4. Gross returns do not reflect the deduction of management fees or other expenses. Net returns are calculated by subtracting the applicable management fee and other expenses from the gross returns on a monthly basis. ASIF is a master/feeder structure and the AUM and returns include activity from its' investment in an affiliated Ares fund. Returns presented in the table are expressed in U.S dollars and are for the master fund, excluding the share class hedges. The current quarter to-date and since inception returns (gross / net) for the pound sterling hedged Cayman feeder, the fund's sole feeder, are as follows: (13.9)% / (14.0)%, (7.5)% / (8.1)%, respectively.
5. Realized proceeds represent the sum of all cash distributions to all partners and if applicable, exclude tax and incentive distributions made to the general partner.
6. Unrealized value represents the fund's NAV reduced by the accrued incentive allocation, if applicable. There can be no assurance that unrealized values will be realized at the valuations indicated.
7. The gross multiple of invested capital ("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. The gross MoIC is before giving effect to management fees, carried interest and other expenses, as applicable.
8. 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. The net MoIC is after giving effect to management fees, carried interest, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. The net MoIC would have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
9. 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. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable.
10. 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. The net IRRs are calculated after giving effect to management fees, carried interest, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would likely have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
11. ACE III is made up of two feeder funds, one denominated in U.S. dollars and one denominated in Euros. The gross and net IRR and MoIC presented in the table are for the Euro denominated feeder fund. The gross and net IRR for the U.S. dollar denominated feeder fund are 13.4% and 9.6%, respectively. The gross and net MoIC for the U.S. dollar denominated feeder fund 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. All other values for ACE III are for the combined fund and are converted to U.S. dollars at the prevailing quarter-end exchange rate.
12. ACE IV is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE IV (E) Unlevered, ACE IV (G) Unlevered, ACE IV (E) Levered, and ACE IV (G) Levered. The gross and net IRR and MoIC presented in the table are for ACE IV (E) Unlevered and ACE IV (E) Levered. Metrics for ACE IV (E) Levered are inclusive of a U.S. dollar denominated feeder fund, which has not been presented separately. The gross and net IRR for ACE IV (G) Unlevered are 12.4% and 8.3%, respectively. The gross and net MoIC for ACE IV (G) Unlevered are 1.1x and 1.1.x, respectively. The gross and net IRR for ACE IV (G) Levered are 16.0% and 11.1%, respectively. The gross and net MoIC for ACE IV (G) Levered are 1.1x and 1.1x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund's closing. All other values for ACE IV Unlevered and ACE IV Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

Private Equity

1. Realized proceeds represent the sum of all cash dividends, interest income, other fees and cash proceeds from realizations of interests in portfolio investments. Realized proceeds exclude any proceeds related to bridge financings.
2. Unrealized value represents the fair market value of remaining investments. Unrealized value does not take into account any bridge financings. There can be no assurance that unrealized investments will be realized at the valuations indicated.
3. The gross MoIC is calculated at the investment-level and is based on the interests of all partners. The gross MoIC is before giving effect to management fees, carried interest and other expenses, as applicable. The gross MoIC for the corporate private equity funds is also calculated before giving effect to any bridge financings. Inclusive of bridge financings, gross MoIC would be 1.8x for ACOF IV, 1.1x for ACOF V and 0.9x for AEOF.

29

Significant Fund Performance Metrics Endnotes (cont'd)

Private Equity - Cont.

1. The net MoIC for USPF IV and SSF IV is calculated at the fund-level. The net MoIC for the corporate private equity and energy opportunities funds is calculated at the investment level. For all funds, the net MoIC 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 performance fees. The net MoIC is after giving effect to management fees, carried interest, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. The net MoIC would have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
2. The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from investments and the residual value of the investments at the end of the measurement period. Gross IRRs reflect returns to all partners. For SSF IV, cash flows used in the gross IRR calculation are based on the actual dates of the cash flows. For all other funds, cash flows are assumed to occur at month-end. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable. The gross IRR for the corporate private equity funds is also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the gross IRR would be 17.5% for ACOF IV and 5.0% for ACOF V.
3. 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 calculation are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees, carried interest as applicable, and other expenses and exclude commitments by the general partner and Schedule I investors who do not pay either management fees or carried interest. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would have generally been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
4. In January 2017, a new team assumed portfolio management of SSF IV. In addition to presenting the cumulative performance measure for SSF IV, we have also adopted a new performance measurement called "SSF IV 2.0." SSF IV 2.0 is a subset of SSF IV positions and is intended to provide insight into the new team's cumulative investment performance. SSF IV 2.0 investments represent (i) existing and re-underwritten positions by the new team on January 1, 2017 and (ii) all new investments made by the new team since January 1, 2017. As part of the re-underwriting process, each liquid investment in the SSF IV portfolio was evaluated and a determination was made whether to continue to hold such investment in the SSF IV portfolio or dispose of such investment. At the same time, legacy illiquid investments have been excluded from the SSF IV 2.0 track record as it was not possible to dispose of such investments in the near-term due to their private, illiquid nature. Since January 2017, SSF IV 2.0 has generated gross and net internal rates of return of 5.5% and 3.6% through March 31, 2020, respectively. The IRR is an annualized since inception internal rate of return of cash flows to and from investments and the residual value of the investments at the end of the measurement period. Cash flows used in the IRRs calculations are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable. The net IRRs are calculated after giving effect to estimated management fees, carried interest, as applicable, and other expenses.

Real Estate

1. Realized proceeds include distributions of operating income, sales and financing proceeds received.
2. Unrealized value represents the fair value of remaining investments. There can be no assurance that unrealized investments will be realized at the valuations indicated.
3. The gross MoIC is calculated at the investment level and is based on the interests of all partners. The gross MoIC for all funds is before giving effect to management fees, carried interest and other expenses, as applicable.
4. The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying partners and, if applicable, excludes interests attributable to the non fee-paying partners and/or the general partner which does not pay management fees, carried interest or has such fees rebated outside of the fund. The net MoIC is after giving effect to management fees, carried interest as applicable and other expenses. Net fund-level MoICs would generally likely 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 investments and the residual value of the investments at the end of the measurement period. Gross IRRs reflect returns to all partners. Cash flows used in the gross IRR calculation are assumed to occur at quarter-end. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable.
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 partners and, if applicable, exclude interests attributable to the non fee-paying partners and/or the general partner which does not pay management fees or carried interest or has such fees rebated outside of the fund. The cash flow dates used in the net IRR calculation are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees, carried interest as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally likely have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
7. EF V is made up of two parallel funds, one denominated in U.S. dollars and one denominated in Euros. The gross and net IRR and MoIC presented in the table are for the Euro denominated parallel fund. The gross and net IRRs for the U.S. dollar denominated parallel fund are 2.3% and (9.7%), respectively. The gross and net MoIC for the U.S. dollar denominated parallel fund are 1.0x and 0.9x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of fund's closing. All other values for EF V are for the combined fund and are converted to U.S. dollars at the prevailing quarter-end exchange rate.

30

Weighted Average Shares

	Q1-20	Q1-19
		Common Shares,		Common Shares,
	Total Shares	As Adjusted(3)	Total Shares	As Adjusted(3)
Weighted average shares of Class A common stock	118,366,539	118,366,539	102,906,494	102,906,494
Ares Operating Group Units exchangeable into shares of Class A	116,328,089	-	116,996,031	-
common stock(1)
Dilutive effect of unvested restricted common units(2)	7,863,084	3,965,668	5,485,250	2,566,900
Dilutive effect of unexercised options(2)	5,884,718	2,967,899	2,307,368	1,079,765
Total Weighted Average Shares Used For Realized Income(4)	248,442,430	125,300,106	227,695,143	106,553,159

1. Represents units exchangeable for shares of Class A common stock on a one-for-one basis.
2. We apply the treasury stock method to determine the dilutive weighted-average common shares represented by our restricted units to be settled in shares of Class A common stock and options to acquire shares of Class A common stock. Under the treasury stock method, compensation expense attributed to future services and not yet recognized is presumed to be used to acquire outstanding shares of Class A common stock, thus reducing the weighted-average number of shares and the dilutive effect of these awards.
3. Represents proportional dilutive impact based upon the weighted average percentage of Ares Operating Group owned by Ares Management Corporation (50.43% and 46.80% as of March 31, 2020 and 2019, respectively).
4. Excludes Class B common stock and Class C common stock as they are not entitled to any economic benefits of Ares in an event of dissolution, liquidation, or winding up of Ares.

31

Additional Information

					AUM Mix by	Investor
					Institutional
					Direct - 67%
					(2)
						Public Entity & Related
						•		(1)
						650+ institutional investors
						•			(2)
		15%				200,000+ retail investors across our public funds
				25%		Total Direct Institutional Investors: 850+
	18%
				13%			Pension	Bank/ Private Bank	Insurance
	4%						Sovereign Wealth	Investment Manager	Other
1%	5%					Fund
		11%
	8%
							Public Entities and	Institutional
							Endowment
							Related	Intermediaries

32

RI and Other Measures -Financial Data(1)

$ in thousands	Year ended December 31,
	2019	2018
Credit Group(2)	$713,853	$564,899
Private Equity Group	211,614	198,182
Real Estate Group	87,063	73,663
Management fees	$1,012,530	$836,744
Other fees	$18,078	$24,288
Compensation and benefits expenses	(528,207)	(456,255)
General, administrative and other expense	(178,742)	(149,465)
Fee Related Earnings	$323,659	$255,312
Realized net performance income	$112,136	$105,610
Realized net investment income	67,691	34,474
Realized Income	$503,486	$395,396
Other Data
Total Fee Revenue(3)	$1,142,744	$966,642
Management fees as % of total fees	89%	87%
Fee Related Earnings as % of Realized Income	64%	65%

1. Unconsolidated results represent the operating segments plus the Operation Management Group but exclude the effect of Consolidated Funds.
2. Includes ARCC Part I Fees of $164.4 million and $128.8 million for the years ended December 31, 2019 and 2018 respectively.
3. Total Fee Revenue is calculated as the total of management fees, other fees and realized net performance income.

33

GAAP to Non-GAAP Reconciliation - Unconsolidated Reporting Basis

$ in thousands	Year ended December 31,
	2019	2018
Realized Income and Fee Related Earnings:
Income before taxes	$425,180	$184,341
Adjustments:
Depreciation and amortization expense(1)	40,602	25,087
Equity compensation expense	97,691	89,724
Acquisition and merger-related expense	16,266	2,936
Deferred placement fees	24,306	20,343
Other (income) expense, net(2)	(460)	13,489
Expense of non-controlling interests in consolidated subsidiaries	2,951	3,343
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations	(39,174)	(20,643)
Unconsolidated performance (income) loss - unrealized	(303,142)	247,212
Unconsolidated performance related compensation - unrealized	206,799	(221,343)
Unconsolidated net investment loss - unrealized	32,467	50,907
Realized Income	$503,486	$395,396
Unconsolidated performance fee income - realized	$(402,518)	$(357,207)
Unconsolidated performance related compensation - realized	290,382	251,597
Unconsolidated net investment income - realized	(67,691)	(34,474)
Fee Related Earnings	$323,659	$255,312

Note: This table is a reconciliation of income before provision for income taxes on a consolidated basis to RI and FRE on unconsolidated basis, which reflects the results of the reportable segments on a combined basis together with the Operations Management Group. Management believes that this presentation is more meaningful than a reconciliation to the reportable segments on a segment basis because such reconciliation would exclude the Operations Management Group.

1. The year ended December 31, 2019 includes a $20.0 million non-cash impairment charge on certain intangible assets.
2. The year ended December 31, 2018 includes a $11.8 million payment to ARCC for rent and utilities for the years ended 2017, 2016, 2015 and 2014, and the first quarter of 2018

34

GAAP to Non-GAAP Reconciliation - Unconsolidated Reporting Basis (cont'd)

$ in thousands	Year ended December 31,
	2019	2018
Performance income and net investment income reconciliation:
Carried interest allocation	$621,872	$42,410
Incentive fees	69,197	63,380
Carried interest allocation and incentive fees	$691,069	$105,790
Performance income - realized earned from Consolidated Funds	$13,851	$4,000
Performance income - reclass(1)	740	205
Unconsolidated performance (income) loss - unrealized	(303,142)	247,212
Performance income - realized	$402,518	$357,207
Total consolidated other income	$122,539	$96,242
Net investment income from Consolidated Funds	(130,396)	(115,151)
Performance income - reclass (1)	(740)	(205)
Principal investment income	44,320	1,047
Other (income) expense, net	(460)	1,653
Other income of non-controlling interests in consolidated subsidiaries	(39)	(19)
Investment loss - unrealized	24,542	50,809
Interest and other investment loss - unrealized	7,925	98
Total realized net investment income	$67,691	$34,474

Note: These tables reconcile consolidated carried interest allocation and incentive fees reported in accordance with GAAP to unconsolidated realized performance income and consolidated GAAP other income to unconsolidated realized net investment income. These reconciliations show the results of the reportable segments on a combined basis together with the Operations Management Group. Management believes that this presentation is more meaningful than a reconciliation to the reportable segments on a segment basis because such reconciliation would exclude the Operations Management Group. Differences may arise due to rounding.

1. Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gains (losses) on investments in Ares' Consolidated Statements of Operations.

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Glossary

ARCC Part I Fees	ARCC Part I Fees refers to a quarterly performance income on the net investment income from ARCC. Such fees from ARCC are
	classified as management fees as they are paid quarterly, predictable and recurring in nature, not subject to contingent repayment
	and are typically cash settled each quarter.
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 amount of ARCC Part II Fees paid in all prior years since inception.
Ares Operating Group	Ares Operating Group Entities refers to, collectively, Ares Holdings L.P., Ares Offshore Holdings L.P. and Ares Investments L.P.
Entities
Ares Operating Group	Ares Operating Group Unit refers to, collectively, a partnership unit in each of the Ares Operating Group Entities.
Units

Assets Under

Management

AUM Not Yet Paying Fees

Available Capital

Class B Membership Interests

Consolidated Funds

Fee Paying Assets Under Management

Assets Under Management (or "AUM") refers to the assets we manage. For our funds other than CLOs, our AUM represents the sum of the net asset value ("NAV") of such funds, the drawn and undrawn debt (at the fund-level including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). For our funds that are CLOs, our AUM is equal to initial principal amounts adjusted for paydowns.

AUM Not Yet Paying Fees, also referred to as Shadow AUM, is our AUM that is not currently paying fees and is eligible to earn management fees upon deployment.

Available Capital is comprised of uncalled committed capital and undrawn amounts under credit facilities and may include AUM that may be canceled or not otherwise available to invest (also referred to as "Dry Powder").

Class B Membership Interests refers to the interest that was retained by the former owners of Crestline Denali Capital LLC and represents the financial interests in the subordinated notes of the CLOs.

Consolidated Funds refers collectively to certain Ares-affiliated funds, related co-investment entities and certain CLOs that are required under GAAP to be consolidated in our consolidated financial statements.

Fee Paying AUM (or "FPAUM") refers to the AUM from which we directly earn management fees. Fee Paying AUM is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees.

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Glossary (cont'd)

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 before taxes computed in accordance with GAAP as it excludes performance income, performance related compensation, investment income from our Consolidated Funds and non-consolidated funds and certain other items that we believe are not indicative of our operating performance.

Gross Invested Capital Gross Invested Capital refers to the aggregate amount of capital invested by our funds during a given period, and includes investments made by our draw-down funds and permanent capital vehicles (and affiliated funds) and new capital raised and invested by our open-ended managed accounts, sub-advised accounts and CLOs, but excludes capital that is reinvested (after receiving repayments of capital) by our open-ended managed accounts, sub-advised accounts and CLOs.

Incentive Eligible Assets Under Management

Incentive Eligible AUM (or "IEAUM") refers to the AUM of our funds from which performance income may be generated, regardless of whether or not they are currently generating performance income. It generally represents the NAV plus uncalled equity or total assets plus uncalled debt, as applicable, of our funds for which we are entitled to receive a performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income). With respect to ARCC's AUM, only ARCC Part II Fees may be generated from IEAUM.

Incentive Generating

Assets Under

Management

Net Inflows of Capital

Incentive Generating AUM (or "IGAUM") refers to the AUM of our funds that are currently generating, on a realized or unrealized basis, performance income. It generally represents the NAV or total assets of our funds, as applicable, for which we are entitled to receive performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income). ARCC is only included in IGAUM when Part II Fees are being generated.

Net Inflows of Capital refers to net new commitments during the period, including equity and debt commitments and gross inflows into our open-ended managed accounts and sub-advised accounts, as well as equity offerings by our publicly traded vehicles minus redemptions from our open-ended funds, managed accounts and sub-advised accounts.

Operations Management Group

In addition to our three segments, we have an Operations Management Group (the "OMG") that consists of shared resource groups to support our reportable segments by providing infrastructure and administrative support in the areas of accounting/ finance, operations, information technology, strategy and relationship management, legal, compliance and human resources. The OMG's expenses are not allocated to our three reportable segments but we consider the cost structure of the OMG when evaluating our financial performance. Our management uses this information to assess the performance of our reportable segments and OMG, and we believe that this information enhances the ability of shareholders to analyze our performance.

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 wholly owned portfolio company of ARCC, and a registered investment adviser.

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Glossary (cont'd)

Performance Income	Performance income refers to income we earn based on the performance of a fund that is generally based on certain specific
	hurdle rates as defined in the fund's investment management or partnership agreements and may be structured as either an
	incentive fee or as carried interest.
Permanent Capital	Permanent capital refers to capital of our funds that do not have redemption provisions or a requirement to return capital to
	investors upon exiting the investments made with such capital, except as required by applicable law. Such funds currently consist of
	Ares Capital Corporation ("ARCC"), Ares Commercial Real Estate Corporation ("ACRE"), and Ares Dynamic Credit Allocation Fund,
	Inc. ("ARDC"); such funds may be required, or elect, to return all or a portion of capital gains and investment income.
Realized Income	Realized Income (or "RI"), a non-GAAP measure, is an operating metric used by management to evaluate performance of the
	business based on operating performance and the contribution of each of the business segments to that performance, while
	removing the fluctuations of unrealized income and losses, which may or may not be eventually realized at the levels presented and
	whose realizations depend more on future outcomes than current business operations. RI differs from net income by excluding (a)
	income tax expense, (b) operating results of our Consolidated Funds, (c) depreciation and amortization expense, (d) the effects of
	changes arising from corporate actions, (e) unrealized gains and losses related to performance income and investment
	performance and (f) certain other items that we believe are not indicative of our operating performance. Changes arising from
	corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated
	with mergers, acquisitions and capital transactions, underwriting costs and expenses incurred in connection with corporate
	reorganization.

Senior Direct Lending Program

Total Fee Revenue

Senior Direct Lending Program (or ''SDLP'') is a program co-managed by a subsidiary of Ares through which ARCC co-invests with Varagon Capital Partners.

Total Fee Revenue refers to the total of segment management fees, other fees and realized net performance income. Beginning in the third quarter of 2019, Total Fee Revenue was revised to include other fees. Prior year periods have been modified to conform to the current period presentation.

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