Ares Management Corp.

The stable outlook on Ares reflects S&P Global Ratings' expectation that the company will maintain good investment performance despite increased volatility in markets. We also expect it to maintain solid growth in fee-paying assets under management (FPAUM), and leverage between 1.5x and 2.0x during the next 18 to 24 months. We could downgrade Ares if: Leverage increases above 2.0x on a sustained basis; or, We observe material deterioration in the company's investment performance such that we think its ability to raise funds and maintain its earnings power has diminished. We could upgrade Ares if we expect the company to maintain leverage comfortably below 1.5x. An upgrade based solely on improvement in the company's scale and diversification is unlikely over the

...Locked-up AUM provides significant visibility for future cash flow generation. As of March 31, 2021, 67% of Ares Management Corp's AUM was in funds with three or more years left and 12% was in permanent capital vehicles. Ares continues to exhibit good AUM growth. Ares' AUM reached $207 billion as of March 31, 2021, compared with $149 billion a year before, driven primarily by strong fundraising acquisitions and market appreciation. Increased volatility could result in lower performance fees. A meaningful portion of Ares' earnings (albeit less than that of peers) is derived from performance fees, which could decline due to increased volatility....

Full Report