Ares Management Corp (ARES)

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Ares Management Corporation is a Delaware corporation. Unless the context otherwise requires, references to “Ares,” “we,” “us,” “our,” and the “Company” are intended to mean the business and operations of Ares Management Corporation and its consolidated subsidiaries. The following discussion analyzes the financial condition and results of operations of the Company. “Consolidated Funds” refers collectively to certain Ares funds, co-investment vehicles, CLOs and SPACs that are required under U.S. GAAP to be consolidated in our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Additional terms used by the Company are defined in the Glossary and throughout the Management’s Discussion and Analysis in this Quarterly Report on Form 10-Q.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements of Ares Management Corporation and the related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and the related notes included in the 2025 Annual Report on Form 10-K of Ares Management Corporation.

Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and consequently, totals may not appear to sum. In addition, illustrative charts may not be presented at scale.

The changes from current year compared to prior year may be deemed to be not meaningful and are designated as “NM” within the discussion and analysis of financial condition and results of operations.

Trends Affecting Our Business

We believe that our disciplined investment philosophy across our distinct but complementary investment groups contributes to the stability of our performance throughout market cycles. For the three months ended March 31, 2026, 93% of our management fees were derived from perpetual capital vehicles or long-dated funds. Our funds have a stable base of committed capital enabling us to invest in assets with a long-term focus over different points in a market cycle and to take advantage of market volatility. However, our results from operations, including the fair value of our AUM, are affected by a variety of factors. Conditions in the global financial markets and economic and political environments may impact our business, particularly in the U.S., Europe and Asia-Pacific (“APAC”).

The following table presents returns of selected market indices:

During the first quarter of 2026, global markets experienced heightened volatility amid the geopolitical tension and conflicts in the Middle East, elevated energy prices and changes in monetary policy expectations. As a result, U.S. and European high yield bonds and leveraged loans were pressured, with European markets more sensitive to the conflicts in the Middle East due to greater dependency on oil flows. U.S. and international equity markets also declined amid inflationary pressures and broader macroeconomic uncertainty. Developed and emerging international markets modestly outperformed U.S. equities, reflecting stronger performance in select regions.

Despite elevated uncertainty from the market volatility, global commercial real estate fundamentals strengthened in the first quarter of 2026. Transaction volumes continued to increase, debt availability improved and property values appreciated across markets. Notwithstanding overall strengthening trends, the European and APAC real estate markets demonstrated greater sensitivity to global conditions compared to the U.S. While performance varies by sector and geography, we believe constrained new supply will be a meaningful tailwind for the commercial real estate markets over the next few years. In

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addition, renewable energy continued to scale, supported by record battery storage additions and strong corporate demand for clean energy. The climate infrastructure market remained resilient, bolstered by continued progress in clean energy deployment, the expansion of digital infrastructure and sustained adoption of artificial intelligence.

Private equity activity moderated during the quarter, with dealmaking and exit activity softening amid continued market selectivity and elevated uncertainty in private credit markets. Sponsors remained highly selective, prioritizing businesses with resilient fundamentals and clear paths to value creation, including differentiated technology and artificial intelligence capabilities. We believe a renewed focus on value creation strategies that emphasize operational improvements, selective deployment, talent optimization and digital transformation are essential to support long-term momentum.

We believe our portfolios across all strategies remain well positioned for a fluctuating interest rate environment. On a market value basis, approximately 83% of our debt assets and 51% of our total assets were floating rate instruments as of March 31, 2026.

Managing Business Performance

Operating Metrics

We measure our business performance using certain operating metrics that are common to the alternative investment management industry and are discussed below.

Assets Under Management

AUM refers to the assets we manage and is viewed as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital.

The tables below present rollforwards of our total AUM by segment ($ in millions):

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The components of our AUM are presented below ($ in billions):

(1) Includes $5.4 billion and $5.2 billion of non-fee paying AUM from our general partner and employee commitments as of March 31, 2026 and 2025, respectively.

Please refer to “— Results of Operations by Segment” for a more detailed presentation of AUM by segment for each of the periods presented.

Fee Paying Assets Under Management

FPAUM refers to AUM from which we directly earn management fees and is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees.

The tables below present rollforwards of our total FPAUM by segment ($ in millions):

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[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

AMC is a Delaware corporation. Unless the context otherwise requires, references to “Ares,” “we,” “us,” “our,” and the “Company” are intended to mean the business and operations of AMC and its consolidated subsidiaries. The following discussion analyzes the financial condition and results of operations of the Company. “Consolidated Funds” refers collectively to certain Ares funds, co-investment vehicles, structured financing vehicles, CLOs and SPACs that are required under generally accepted accounting principles in the United States (“GAAP”) to be consolidated within our consolidated financial statements included in this Annual Report on Form 10-K. Additional terms used by the Company are defined in the Glossary and throughout the Management’s Discussion and Analysis in this Annual Report on Form 10-K.

The following discussion and analysis should be read in conjunction with the consolidated financial statements of AMC and the related notes included in this Annual Report on Form 10-K.

This section of the Annual Report on Form 10-K discusses activity as of and for the years ended December 31, 2025 and 2024. For discussion on activity for the year ended December 31, 2023 and period-over-period analysis on results for the year ended December 31, 2024 to 2023, refer to Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. We have reclassified certain prior period amounts to conform to the current year presentation.

Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and consequently, totals may not appear to sum. In addition, illustrative charts may not be presented at scale.

“NM” refers to not meaningful. Period-over-period analysis for current year compared to prior year may be deemed to be not meaningful and are designated as “NM” within the discussion and analysis of financial condition and results of operations.

Trends Affecting Our Business

We believe that our disciplined investment philosophy across our distinct but complementary investment groups contributes to the stability of our performance throughout market cycles. For the year ended December 31, 2025, 93% of our management fees were derived from perpetual capital vehicles or long-dated funds. Our funds have a stable base of committed capital enabling us to invest in assets with a long-term focus over different points in a market cycle and to take advantage of market volatility. However, our results from operations, including the fair value of our AUM, are affected by a variety of factors. Conditions in the global financial markets and economic and political environments may impact our business, particularly in the U.S., Europe and APAC.

The following table presents returns of selected market indices:

Despite periods of volatility in 2025 driven by interest rate cuts and tariff-related uncertainty, markets largely remained resilient across regions and asset classes. U.S. and European high yield bonds and leveraged loans delivered stable returns, supported by strong credit metrics and sustained investor demand. The U.S. and international public equity markets generated positive performance supported by the macroeconomic conditions across regions.

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Global commercial real estate markets experienced mixed performance throughout the year. The U.S. real estate market slightly declined amid broader policy uncertainty and weaker sector performance, while the European real estate market continued to recover with support from declining interest rate expectations. While performance varies by sector and geography, we believe multifamily and industrial properties will continue to benefit from favorable long-term structural trends. In addition, renewable energy has continued to scale, with strong transaction volumes supporting elevated revenue contract prices amid positive demand momentum. The climate infrastructure market remained resilient, bolstered by continued progress in clean energy deployment, the expansion of digital infrastructure and the adoption of artificial intelligence.

Private equity activity improved during the year, supported by interest rate cuts and moderating inflation. Transaction and exit activity accelerated amid a narrowing valuation gap between buyers and sellers. We believe that stabilized market conditions, with a renewed focus on value creation strategies that emphasize operational improvements, selective deployment, talent optimization and digital transformation are essential to support long-term momentum.

We believe our portfolios across all strategies remain well positioned for a fluctuating interest rate environment. On a market value basis, approximately 85% of our debt assets and 52% of our total assets were floating rate instruments as of December 31, 2025.

In 2025, several central tenets contributed to the growth of our platform, including:

• Our ability to fundraise and increase AUM and fee paying AUM. During the year ended December 31, 2025, we raised $113.2 billion of gross new capital across our commingled funds, SMAs, wealth products and other vehicles, and continued to expand our investor base, raising capital from over 190 different investment vehicles and over 540 institutional investors, including over 235 direct institutional investors that were new to Ares. Our fundraising efforts helped drive AUM growth of 29% for 2025. During 2026, we expect that our fundraising will come from a combination of our existing and new strategies in the Americas, Europe and APAC. As of December 31, 2025, AUM not yet paying fees includes $78.8 billion of AUM available for future deployment and $4.3 billion of development assets not yet stabilized that could collectively generate approximately $730.4 million in potential incremental annual management fees. Our potential future deployment, the creation of new development assets and the stabilization of existing development assets, coupled with our future fundraising prospects, creates additional opportunity to increase our management fees in 2026.

• Our ability to attract new capital and investors with our broad multi-asset class product offering. Our ability to attract new capital and investors in our funds is driven, in part, by the extent to which they continue to see the alternative asset management industry generally, and our investment products specifically, as an attractive vehicle for capital appreciation and income generation. We continually seek to create avenues to meet our investors’ evolving needs by offering an expansive range of funds, developing new products and creating managed accounts and other investment vehicles tailored to our investors’ goals. We continue to expand our product offerings and distribution relationships throughout the wealth channel with our global wealth management offerings, as well as the needs of traditional institutional investors, such as pension funds, sovereign wealth funds and endowments. If market volatility persists or increases, investors may seek absolute return strategies that seek to mitigate volatility. We offer a variety of investment strategies depending upon investors’ risk tolerance and expected returns.

• Our disciplined investment approach and successful deployment of capital. Our ability to maintain and grow our revenue base is dependent upon our ability to successfully deploy the capital that our investors have committed to our funds. Under our disciplined investment approach, we deploy capital only when we have sourced a suitable investment opportunity at an attractive price. During the year ended December 31, 2025, we deployed $145.8 billion of gross capital across our investment groups compared to $106.7 billion deployed in 2024. We believe we continue to be well-positioned to invest our assets opportunistically. As of December 31, 2025, we had $156.0 billion of dry powder compared to $133.1 billion as of December 31, 2024.

• Our ability to invest capital and generate returns through market cycles. The strength of our investment performance affects investors’ willingness to commit capital to our funds. The flexibility of the capital we are able to attract is one of the main drivers of the growth of our AUM and the management fees we earn. Current market conditions and a changing regulatory environment have created opportunities for Ares’ businesses, which utilize flexible investment mandates to manage portfolios through market cycles.

See “Item 1. Business—Overview” for a comprehensive overview of our business, and “Item 1A. Risk Factors” for a discussion of the risks our businesses are subject to, both included in this Annual Report on Form 10-K.

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Managing Business Performance

Operating Metrics

We measure our business performance using certain operating metrics that are common to the alternative investment management industry and are discussed below.

Assets Under Management

AUM refers to the assets we manage and is viewed as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital.

The tables below present rollforwards of our total AUM by segment ($ in millions):

The components of our AUM are presented below ($ in billions):

(1) Includes $18.2 billion and $14.4 billion of AUM of funds from which we indirectly earn management fees as of December 31, 2025 and 2024, respectively, and includes $5.1 billion and $4.7 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2025 and 2024, respectively.

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Please refer to “— Results of Operations by Segment” for a more detailed presentation of AUM by segment for each of the periods presented.

Fee Paying Assets Under Management

FPAUM refers to AUM from which we directly earn management fees and is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees.

The tables below present rollforwards of our total FPAUM by segment ($ in millions):

The charts below present FPAUM by its fee bases ($ in billions):

(1)Includes $91.8 billion and $71.9 billion from funds that primarily invest in illiquid strategies as of December 31, 2025 and 2024, respectively. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.

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Please refer to “— Results of Operations by Segment” for detailed information by segment of the activity affecting total FPAUM for each of the periods presented.

Perpetual Capital Assets Under Management

The chart below presents our perpetual capital AUM by segment and type ($ in billions)

Management Fees By Type

We view the duration of funds we manage as a metric to measure the stability of our future management fees. For the years ended December 31, 2025 and 2024, 93% and 95%, respectively, of management fees were earned from perpetual capital or long-dated funds.

The charts below present the composition of our segment management fees by fund type:

(1) Long-dated funds generally have a contractual life of five years or more at inception.

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Available Capital and Assets Under Management Not Yet Paying Fees

The charts below present our available capital and AUM not yet paying fees by segment ($ in billions):

As of December 31, 2025, AUM not yet paying fees includes $78.8 billion of AUM available for future deployment and $4.3 billion of development assets not yet stabilized that could collectively generate approximately $730.4 million in potential incremental annual management fees, which represents a 23% embedded growth rate in our 2025 base management fees.

Incentive Eligible Assets Under Management and Incentive Generating Assets Under Management

The charts below present our IEAUM and IGAUM by segment ($ in billions):

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The charts below present our IGAUM by strategy for funds generating fee related performance revenues and net fee related performance revenues by strategy as of and for the years ended:

(1)Fee related performance revenues by strategy is presented net of the associated fee related performance compensation.

Fund Performance Metrics

Fund performance information for our funds considered to be “significant funds” is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented. Our significant funds are commingled funds that either contributed at least 1% of our total management fees or comprised at least 1% of our total FPAUM for each of the last two consecutive quarters. In addition to management fees, each of our significant funds may generate carried interest or incentive fees upon the achievement of performance hurdles. The fund performance information reflected in this discussion and analysis is not indicative of our overall performance. An investment in Ares is not an investment in any of our funds. Past performance is not indicative of future results. As with any investment, there is always the potential for gains as well as the possibility of losses. There can be no assurance that any of these funds or our other existing and future funds will achieve similar returns.

Fund performance metrics for significant funds may be marked as “NM” as they may not be considered meaningful due to the limited time since the initial investment and/or early stage of capital deployment.

To further facilitate an understanding of the impact a significant fund may have on our results, we present our drawdown funds as either harvesting investments or deploying capital to indicate the fund’s stage in its life cycle. A fund harvesting investments is past its investment period and opportunistically seeking to monetize investments, while a fund deploying capital is generally seeking new investment opportunities.

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Components of Consolidated Results of Operations

GCP Acquisition Overview

On March 1, 2025, we completed the GCP Acquisition. The GCP Acquisition added complementary logistics and digital infrastructure investment capabilities and expanded our geographic presence. The activities of GCP International are included within the Real Assets Group segment.

The GCP Acquisition added geographic exposure in Asia with a significant logistics platform in Japan, logistics platforms in emerging economies such as Brazil and Vietnam and an expanded presence in Europe and the U.S. The GCP Acquisition has broadened our vertically integrated operating and development capabilities across sectors and regions. We anticipate that the size and composition of fees earned, particularly our other fees, will be impacted by these expanded capabilities.

The activities of GCP International are reflected within our results of operations beginning on March 1, 2025. Therefore, our analysis compared to the prior year will lack comparability, particularly in our Real Assets Group segment. Because the activities of GCP International represent 10 months of activity within the year ended December 31, 2025, we will separately discuss the significant impact of the GCP Acquisition within our discussion of our results of operations.

In addition, various components of the agreed-upon purchase price for the GCP Acquisition are required to be accounted for as compensation because the payments were made to certain individuals that became Ares employees on March 1, 2025. Because they are required to be accounted for as compensation, these amounts have been excluded from purchase consideration and will have a varying impact on our results of operations in the current year as well as in future periods. We expect expenses to fluctuate during an integration period as we continue to seek to generate more cost savings and to execute on synergy opportunities.

In connection with the GCP Acquisition, we also entered into contingent compensation arrangements with the sellers and with certain of its professionals that became Ares employees. The portion of the arrangements that are attributable to the sellers represents a component of purchase consideration that will be accounted for as contingent consideration. The portion of the arrangements that are attributable to the professionals that became Ares employees requires continued service through the measurement periods and will be accounted for as compensation. These arrangements will have a varying impact on our results of operations in the current year as well as in future periods that is dependent on these classifications as well as the expected attainment of the measurement criteria.

For further discussion, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations of the Company” as well as “Note 3. Business Combinations” and “Note 9. Commitments and Contingencies” within our consolidated financial statements.

Revenues

Management Fees. The investment adviser of our funds generally receives an annual management fee based on a percentage of capital commitments, invested capital, NAV or the fair value of assets, among others. For certain of our SMAs, we receive an annual management fee based on a percentage of invested capital or NAV throughout the term of the SMA. We also may receive other fees, including agency and arrangement fees. In certain circumstances, we are contractually required to offset certain amounts of these other fees against management fees relating to the applicable fund.

The investment adviser of each of our CLOs typically receives annual management fees based on the gross aggregate collateral balance for CLOs, at par, adjusted for cash and defaulted or discounted collateral. The management fees of CLOs accounted for approximately 2% of our total management fees on a consolidated basis and 3% on an unconsolidated basis for the year ended December 31, 2025.

The management fees we receive from our drawdown style funds are typically payable on a quarterly basis over the life of the fund and do not fluctuate with the changes in value of the underlying investments within the fund. The investment management agreements we enter into with clients in connection with contractual SMAs may generally be terminated by such clients with reasonably short prior written notice. Typically, terminations do not require liquidation of assets so that SMAs will continue to pay fees until the underlying investments are liquidated. The management fees we receive from our SMAs are generally paid on a periodic basis (typically quarterly, subject to the termination rights described above) and are based on either invested capital or on the net asset value of the SMA.

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Details regarding our management fees by strategy, excluding our publicly-traded funds and our perpetual wealth vehicles described separately, are presented below:

(1)    Represents the average remaining contract term pursuant to the funds’ governing documents within each strategy, excluding perpetual capital vehicles, as of December 31, 2025.

(2)    Liquid credit includes the syndicated loan, high yield bond and multi-asset credit strategies. Fee ranges for syndicated loans generally remain unchanged at the close of the re-investment period. In certain cases, CLOs may be called upon demand by subordinated noteholders prior to the management contract term expiration date. The funds in the high yield bond and multi-asset credit strategies are generally open-ended or managed account structures, which typically do not have investment period termination or management contract expiration dates.

(3)    Fee range represents typical range during the investment period. Management fees for opportunistic credit funds generally step down to between 1.00% to 1.25% of the invested capital or the aggregate cost basis of unrealized portfolio investments following the expiration or termination of the investment period.

(4)     Following the expiration or termination of the investment period, the fee basis for certain closed-end funds and managed accounts in this strategy generally change either to the aggregate cost or to market value of the portfolio investments.

(5)    Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested. The funds in this strategy are comprised of closed-end funds, with investment period termination or management contract termination dates. The funds also include co-investment accounts with fees ranging from 0.25% to 1.00%, which generally do not include investment period termination or management contract termination dates.

(6)    Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested. Following the expiration or termination of the investment period the basis on which management fees are earned for certain closed-end funds, managed accounts and co-investment vehicles in this strategy changes from committed capital to invested capital with no change in the management fee rate. Our diversified non-traded REIT and our industrial non-traded REIT pay management fees based on NAV plus net capital raised and outstanding from our 1031 exchange programs. In addition, certain real estate funds pay a management fee of 7.50% of net operating income. For these funds, we present an effective fee rate as a percentage of GAV.

(7)    Fee range represents typical range during the investment period. Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested. The infrastructure opportunities funds generally step down the fee base to the aggregated adjusted cost of unrealized portfolio investments, while retaining the same fee rate, following the expiration or termination of the investment period.

(8)    Funds in each strategy are comprised of closed-end funds with either investment period termination or management contract termination dates and certain open-end accounts that generally do not have termination dates.

(9)    Fee rate represents typical rate during the investment period. Management fees for corporate private equity funds generally step down to 0.75% to 1.00% of the aggregate adjusted cost of unrealized portfolio investments following the earlier to occur of: (i) the expiration or termination of the investment period; and (ii) the activation of a successor fund.

(10)    Fee rate represents typical rate during the investment period. Management fees for APAC private equity funds generally step down the fee base to the aggregate adjusted cost of unrealized portfolio investments following the expiration or termination of the investment period. The funds also include co-investment vehicles with fee rates of 2.00%, which are excluded from the calculation of average remaining contract term because they will generally cease at the same time as the related funds.

(11)    Ares Insurance Solutions earns a tiered management fee that starts at 0.30% and steps down to 0.15% of the monthly weighted average market value. Ares Insurance Solutions generally includes open-ended or managed account structures, which typically do not have investment period termination or management contract expiration dates.

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The investment advisory and management agreements of our publicly-traded funds and our perpetual wealth vehicles must be reviewed or approved annually by their independent boards of directors.

Details regarding our base management fees from our publicly-traded funds and our perpetual wealth vehicles are presented below:

Part I Fees are based on net investment income (before Part I Fees and Part II Fees, where applicable), subject to hurdle rates as presented for each applicable fund below. No fees are recognized until net investment income exceeds the hurdle rate, with a catch-up provision to ensure that we receive the annual fee rate of the net investment income from the first dollar earned.

We are party to contractual expense support agreements with certain perpetual wealth vehicles under which we may advance a portion of certain expenses to support distribution efforts to investors. These expenses are subject to reimbursement from the perpetual wealth vehicles and may result in a reduction to our Part I Fees until expenses have been recovered.

Incentive Fees. The general partners, managers or similar entities of certain of our funds receive incentive fees, a performance-based fee representing a portion of the investment returns of the applicable fund for a specified measurement period, generally one year, subject to certain net loss carry-forward provisions, high-watermarks and/or preferred returns. These performance-based fees may also be based on a fund’s cumulative net investment returns for the measurement period, in some cases subject to a high-watermark or a preferred return. Incentive fees are realized at the end of a measurement period, typically quarterly or annually. Realized incentive fees are generally higher during the second half of the year, aligning with the

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measurement period that typically ends at the end of the calendar year. Once realized, such incentive fees are not subject to repayment. Cash from the realizations is typically received in the period subsequent to the measurement period. Incentive fees are composed of both fee related performance revenues, which are earned from perpetual capital vehicles, and those incentive fees earned from funds with stated investment periods.

Details regarding our fee related performance revenues from our publicly-traded funds and our perpetual wealth vehicles are presented below:

We are party to contractual expense limitation agreements with certain perpetual wealth vehicles under which we may advance a portion of certain expenses to reduce the perpetual wealth vehicles’ expense ratios. Such expenses are subject to reimbursement from the perpetual wealth vehicles and may result in a reduction to our fee related performance revenues until the expenses have been recovered.

Details regarding our fee related performance revenues by strategy, excluding our publicly-traded funds and our perpetual wealth vehicles described above, are presented below:

Details regarding our incentive fees earned from funds with stated investment periods, which are generally based on a fund’s eligible profits, are presented below:

(1) We may receive Part II Fees from certain publicly-traded funds and perpetual wealth vehicles, which are not paid unless these funds achieve cumulative aggregate realized capital gains (net of cumulative aggregate realized capital losses and aggregate unrealized capital depreciation), subject to certain catch-up provisions. Such fees are presented as incentive fees earned from funds with stated investment periods.

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Carried Interest Allocation. Carried interest allocation is recognized based on changes in valuation of our funds’ investments that exceed certain preferred returns as set forth in each respective partnership agreement. Carried interest allocation is based on the amount that would be due to us pursuant to the fund partnership agreement at each period end as if the funds were liquidated at such date. Accordingly, the amount recognized as carried interest allocation reflects our share of the fair value gains and losses of the associated funds’ underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior period. Investment returns of one fund are not offset between or among funds.

Funds generally follow either an American-style waterfall or a European-style waterfall. For American-style waterfalls, we in our role as general partner are entitled to receive carried interest after a fund investment is realized if the investors in the fund have received distributions in excess of the capital contributed for such investment and all prior realized investments (plus allocable expenses), as well as the preferred return. For European-style waterfalls, we in our role as general partner are entitled to receive carried interest if the investors in the fund have received distributions in an amount equal to all prior capital contributions (plus allocable expenses), as well as a preferred return.

For most funds, the carried interest is subject to a preferred return ranging from 5% to 10%, after which there is typically a catch-up allocation to the general partner. Generally, if at the termination of a fund (and in some cases at interim points in the life of a fund), the fund has not achieved investment returns that exceed the preferred return threshold or the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the general partner will be obligated to repay an amount equal to the extent the previously distributed carried interest exceeds the amounts to which the general partner is entitled. These repayment obligations may be related to amounts previously distributed to us and our senior professionals and are generally referred to as contingent repayment obligations.

Certain funds may make distributions to their partners to provide them with cash sufficient to pay applicable federal, state and local tax liabilities attributable to the fund’s income that is allocated to them. These distributions are referred to as tax distributions and are not subject to contingent repayment obligations. Tax distributions from European-style waterfall funds generally precede investors in the fund receiving the preferred return.

Contingent repayment obligations operate with respect to only a given fund’s net investment performance, and carried interest of other funds are not netted for determining this contingent obligation. Although a contingent repayment obligation is several to each person who received a distribution, and not a joint obligation, and our professionals who receive carried interest have guaranteed repayment of such contingent obligation, the governing agreements of our funds generally provide that, if a recipient does not fund his or her respective share, we may have to fund such additional amounts beyond the amount of carried interest we retained, although we generally will retain the right to pursue remedies against those carried interest recipients who fail to fund their obligations.

Details regarding our carried interest, which is generally based on a fund’s eligible profits, are presented below:

For detailed discussion of contingencies on carried interest, see “Note 9. Commitments and Contingencies,” within our consolidated financial statements and “Item 1A. Risk Factors—Risks Related to Our Funds—We may need to pay “clawback” or “contingent repayment” obligations if and when they are triggered under the governing agreements with our funds” included in this Annual Report on Form 10-K.

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Performance Income. Performance income is a term that we use to refer to a sub-set of performance-based fees and includes both carried interest and incentive fees earned from funds with stated investment periods and excludes fee related performance revenues.

Principal Investment Income (Loss). Principal investment income (loss) consists of interest and dividend income and net realized and unrealized gains (losses) on equity method investments where we serve as general partner. Interest and dividend income are recognized on an accrual basis to the extent that such amounts are expected to be collected. A realized gain (loss) may be recognized when all or a portion of our investment is returned to us. Unrealized gains (losses) on investments result from appreciation (depreciation) in the fair value of our investments, as well as reversals of previously recorded unrealized appreciation (depreciation) at the time the gain (loss) on an investment becomes realized.

Administrative, Transaction and Other Fees. Details regarding our administrative, transaction and other fees are presented below, which are typically payable at the time of the related transaction, unless otherwise noted:

Expenses

Compensation and Benefits. Compensation generally includes salaries, bonuses, health and welfare benefits, payroll-related taxes, Part I Fee compensation, fee related performance compensation and equity compensation. We use changes in headcount, which represents the full-time equivalency of active employees during each period, to analyze changes in certain compensation and benefits expenses, primarily salaries, benefits and payroll-related taxes.

Incentive-based compensation is typically correlated to the operating performance of our segments and is accrued over the service period to which it relates. Our discretionary incentive-based compensation includes our annual bonus pool, is based on our operating performance and may fluctuate throughout the year until payments are made. The majority of our annual bonus payments are made in the fourth quarter. Certain of our senior partners are not paid an annual salary or bonus, instead they only receive distributions based on their ownership interest when declared by our board of directors.

Part I Fee compensation and fee related performance compensation represent approximately 60% of Part I Fees and of fee related performance revenues, respectively, before giving effect to payroll-related taxes. We also reduce certain Part I Fee compensation and fee related performance compensation by a portion of the supplemental distribution fees paid to the extent that Part I Fees and fee related performance revenues are earned from certain perpetual wealth vehicles. We pay sales-based bonuses for the sale and distribution of our wealth products, including our exchange programs associated with our non-traded REITs. Incremental changes in fair value of certain contingent liabilities established in connection with our various acquisitions are recognized ratably over the service period and are also presented within compensation and benefits.

Equity compensation represents a form of non-cash compensation that we use to align our employees with the long-term interests of our shareholders. Equity-based awards are typically granted in the form of restricted units or restricted stock

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(collectively “unvested awards”) that vest over service periods up to five years from the grant date. We issue equity awards with a long-term focus of limiting the average dilutive impact on our Class A common stockholders to no more than 1.5% annually. Because we withhold shares equal to the fair value of our employee tax withholding liabilities and pay the taxes on their behalf in cash, fewer net shares are issued upon vesting. This result has reduced the average annual dilutive impact of these awards to less than 1.0% annually. We expect the expenses recognized in connection with these awards to fluctuate with changes in the price of our Class A common stock.

Performance Related Compensation. Performance related compensation includes compensation directly related to carried interest allocation and incentive fees earned from funds with stated investment periods, generally consisting of percentage interests that we grant to our professionals. Depending on the nature of each fund, the performance related compensation generally represents 60% to 80% of the carried interest allocation and incentive fees recognized by us before giving effect to payroll-related taxes.

In certain instances, we may transfer our rights to performance income to structured financing vehicles that we manage. Although these transfers typically result in a reclassification of the associated performance income to investment income, we remain obligated to compensate our professionals who retain the rights to their allocation of performance income, which continue to be reported within performance related compensation. Performance related compensation may also include a portion of the profits from certain of our strategic investments that are payable to professionals although the profits generated from these strategic investments represent investment income and are not reported within performance income.

The performance related compensation payable is calculated based upon the recognition of carried interest allocation and is not paid to recipients until the carried interest allocation is received. Performance related compensation may include allocations to charitable organizations as part of our philanthropic initiatives.

Although the majority of changes in performance related compensation are directly correlated with changes in carried interest allocation and incentive fees reported within our segment results, this correlation does not always exist when our results are reported on a fully consolidated basis in accordance with GAAP. This discrepancy is caused when carried interest allocation and incentive fees earned from our Consolidated Funds is eliminated upon consolidation and performance related compensation is not, and similarly, investment income associated with strategic investments that generate profits interests for our professionals are not presented within performance income.

General, Administrative and Other Expenses. General and administrative expenses include costs primarily related to occupancy, professional services, travel, information services and information technology costs, marketing costs, depreciation, amortization of intangibles and other general operating items. These expenses are largely influenced by changes in headcount growth, fundraising activities or strategic initiatives/acquisitions.

Marketing costs include placement fees and supplemental distribution fees. Placement fees are fundraising costs for campaign funds and include: (i) upfront fees based on commitments to a fund; and (ii) service fees for periodic investor services that are recognized as services are provided. Supplemental distribution fees are fundraising costs associated with wealth products, generally paid to strategic investors and/or financial intermediaries for the distribution of shares and may be upfront on a portion of sales, ongoing as a percentage of net asset value or temporary in the form of a fee concession.

Expenses of Consolidated Funds. Consolidated Funds’ expenses consist primarily of costs incurred by our Consolidated Funds, including professional services fees, research expenses, trustee fees, travel expenses and other costs associated with organizing and offering these funds.

Other Income (Expense)

Net Realized and Unrealized Gains (Losses) on Investments. A realized gain (loss) may be recognized when all or a portion of our investment is returned to us. Unrealized gains (losses) on investments result from the change in appreciation (depreciation) in the fair value of our investments.

Interest and Dividend Income. Interest and dividend income is primarily generated from investments in CLOs and other strategic investments where we do not serve as general partner. Interest and dividend income are both recognized on an accrual basis to the extent that such amounts are expected to be collected.

Interest Expense. Interest expense includes interest related to our Credit Facility, which has a variable interest rate based upon SOFR plus a credit spread that is adjusted with changes to corporate credit ratings, and to our senior and subordinated notes, each of which have fixed coupon rates.

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Other Income (Expense), Net. Other income (expense), net consists of (i) transaction gains (losses) on the revaluation of assets and liabilities denominated in currencies other than an entity’s functional currency; (ii) changes in fair value of contingent earnout arrangements; and (iii) other non-operating and non-investment related activities, such as loss on disposal of assets, among other items.

Net Realized and Unrealized Gains (Losses) on Investments of Consolidated Funds. Realized gains (losses) may arise from dispositions of investments held by our Consolidated Funds. Unrealized gains (losses) are recorded to reflect the change in appreciation (depreciation) of investments held by the Consolidated Funds due to changes in fair value of the investments.

Interest and Other Income of Consolidated Funds. Interest and other income of Consolidated Funds primarily includes interest and dividend income generated from the underlying investments of our Consolidated Funds.

Interest Expense of Consolidated Funds. Interest expense primarily consists of interest related to our Consolidated CLOs’ loans payable and, to a lesser extent, revolving credit lines, term loans and notes of other Consolidated Funds. The interest expense of the Consolidated CLOs is solely the responsibility of such CLOs, and there is no recourse to us if the CLO is unable to make interest payments.

Income Taxes

AMC is a corporation for U.S. federal income tax purposes and is subject to U.S. federal, state and local corporate income taxes at the entity level on its share of net taxable income. In addition, the AOG entities and certain of AMC’s subsidiaries operate in the U.S. as partnerships or disregarded entities for U.S. federal income tax purposes and as corporate entities in certain foreign jurisdictions. These entities, in some cases, are subject to U.S. state or local income taxes or foreign income taxes. Our effective tax rate is the result of AMC’s net taxable income and the applicable U.S. federal, state and local income taxes as well as, in some cases, foreign income taxes. Net taxable income is based on AMC’s ownership of the AOG entities. As such, our effective tax rate will be directly impacted by changes in AMC’s ownership of the AOG entities and changes to statutory rates in the U.S. and other foreign jurisdictions and, to a lesser extent, income taxes that are recorded for certain affiliated funds and co-investment vehicles that are consolidated in our financial results.

The majority of our Consolidated Funds are not subject to income tax as the funds’ investors are responsible for reporting their share of income or loss on a pass-through basis. To the extent required by federal, state and foreign income tax laws and regulations, certain funds may incur income tax liabilities.

Redeemable and Non-Controlling Interests

Net income (loss) attributable to redeemable and non-controlling interests in Consolidated Funds represents the income (loss) attributable to ownership interests that third parties hold in entities that are consolidated within our consolidated financial statements.

Net income (loss) attributable to redeemable and non-controlling interests in AOG entities represents results attributable to the owners of AOG Units and other ownership interests that are not held by AMC.

Net income (loss) attributable to redeemable interest in AOG entities represents income generated by certain non-controlled investments owned by a third-party. Net income (loss) attributable to redeemable interest in AOG entities is allocated based on the ownership percentage attributable to the redeemable interest.

Net income (loss) attributable to non-controlling interests in AOG entities is generally allocated based on the weighted average daily ownership of the other AOG unitholders, except for income (loss) generated from certain joint venture partnerships. Net income (loss) is allocated to other strategic distribution partners with whom we have established joint ventures based on the respective ownership percentages and based on the activity of certain membership interests.

For additional discussion on components of our consolidated results of operations, see “Note 2. Summary of Significant Accounting Policies,” within our consolidated financial statements included in this Annual Report on Form 10-K.

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Consolidation and Deconsolidation of Ares Funds

We consolidate (i) entities that we have both significant economics and the power to direct the activities of the entity that impact economic performance; and (ii) entities in which we hold a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity. Certain funds that have historically been consolidated in the financial statements may no longer be consolidated because: (i) such funds have been liquidated or dissolved; or (ii) we are no longer deemed to have a controlling interest in the entity. Consolidated Funds represented approximately 6% of our AUM as of December 31, 2025 and 3% of total revenues for the year ended December 31, 2025.

The activity of the Consolidated Funds is reflected within the consolidated financial statement line items indicated by reference thereto. The impact of consolidation also typically will decrease revenues reported under GAAP to the extent these amounts are eliminated upon consolidation.

The assets and liabilities of our Consolidated Funds are held within separate legal entities and, as a result, the liabilities of our Consolidated Funds are typically non-recourse to us. Generally, the consolidation of our Consolidated Funds has a significant gross-up effect on our assets, liabilities and cash flows but has no net effect on the net income attributable to us or our stockholders’ equity, except where accounting for a redemption or liquidation preference requires the reallocation of ownership based on specific terms of a profit sharing agreement. The net economic ownership interests of our Consolidated Funds, to which we have no economic rights, are reflected as redeemable and non-controlling interests in the Consolidated Funds within our consolidated financial statements. Redeemable interest in Consolidated Funds represented the shares issued by our SPAC that were redeemable for cash by the public shareholders until the completion of a business combination or tender offer associated with shareholder approval provisions.

We have transferred certain financial interests to structured financing vehicles that we manage, including but not limited to collateralized fund obligations, rated note feeders and private asset-backed notes, among other secondary solutions. These financial interests include our capital interests and rights to performance income in funds that we manage. The purpose of these transferred interests is to provide collateral or other forms of similar credit-enhancement, including subordination and liquidity support, to the structured financing vehicles. These structured financing vehicles are typically designed to meet investors’ risk-return, liquidity, diversification and risk-based capital treatment objectives and to support capital raising efforts across our platform. The transfer of these financial interests does not subject us to the additional risk of loss; instead our maximum risk of loss equals the value of our transferred interest and only in the event that the returns generated by the structured financing vehicles do not meet stated performance thresholds. These structured financing vehicles typically represent variable interest entities that are consolidated with our results. As a result, the financial interests that we transfer will typically be reclassified from investments in the funds that we manage and/or from accrued performance income to investments of the Consolidated Funds upon consolidation. Any future investment income and performance income resulting from these financial interests will be presented within the results of operations of our Consolidated Funds as a result of consolidation.

The performance of our Consolidated Funds is not necessarily consistent with, or representative of, the combined performance trends of all of our funds.

For the actual impact that consolidation had on our results and further discussion on consolidation and deconsolidation of funds, see “Note 16. Consolidation” within our consolidated financial statements included herein.

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Results of Operations

Consolidated Results of Operations

Although the consolidated results presented below include the results of our operations together with those of the Consolidated Funds and other joint ventures, we separate our analysis of those items primarily impacting the Company from those of the Consolidated Funds.

The following table presents our summarized consolidated results of operations ($ in thousands):

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Consolidated Results of Operations of the Company

The following discussion sets forth information regarding our consolidated results of operations:

Revenues

Management Fees. Within the Credit Group, our publicly-traded funds and our perpetual wealth vehicles contributed an increase in management fees of $172.8 million for the year ended December 31, 2025 compared to the prior year, primarily driven by increases in the average size of their portfolios. Capital deployment in private funds within our direct lending and alternative credit strategies led to a rise in FPAUM, contributing to an increase in management fees of $112.5 million for the year ended December 31, 2025 compared to the prior year. Within the Real Assets Group, funds that we manage as a result of the GCP Acquisition generated $202.8 million in additional management fees for the year ended December 31, 2025. In addition, management fees also increased by $20.3 million for the year ended December 31, 2025 compared to the prior year, driven by the WSM Acquisition, which began generating fees in the fourth quarter of 2024.

In addition, Part I Fees increased by $74.5 million for the year ended December 31, 2025 compared to the prior year. The increase in Part I Fees were primarily attributable to ASIF, our open-ended European direct lending fund, our open-ended core infrastructure fund and CADC driven by increase in net investment income from their growing portfolio of investments.

For detail regarding the fluctuations of management fees within each of our segments, see “—Results of Operations by Segment.”

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Carried Interest Allocation. The following table sets forth carried interest allocation by segment ($ in millions):

The activity was principally composed of the following:

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Incentive Fees. The following table sets forth incentive fees by segment ($ in millions):

The increase in incentive fees for the year ended December 31, 2025 compared to the prior year was primarily due to higher fees generated from (i) APMF and our open-ended core alternative credit fund, resulting from increased IGAUM; (ii) our U.S. open-ended industrial real estate fund that crystallizes incentive fees by investor based on performance over three-year measurement periods; and (iii) our diversified non-traded REIT, driven by strong fund performance. For further detail regarding the incentive fees within each of our segments, see discussion of fee related performance revenues and realized net performance income within “—Results of Operations by Segment.”

Principal Investment Income. The activity for the year ended December 31, 2025 was primarily attributable to:

•Unrealized gains from our investments in various European real estate equity and U.S. direct lending, partially offset by an unrealized loss from a U.S. real estate equity fund

•Interest and dividend income primarily generated from our investments in various real estate, direct lending and opportunistic credit funds, and interest income from newly admitted investors in an insurance fund, where capital account balances were reallocated from existing investors in exchange for interest to compensate for carrying costs

The activity for the year ended December 31, 2024 was primarily attributable to:

•Interest income from newly admitted investors in an insurance fund, where capital account balances are reallocated from existing investors in exchange for interest to compensate for carrying costs

•Realized gains generated from our investments in various infrastructure debt, real estate debt and direct lending funds

Administrative, Transaction and Other Fees. The increase for the year ended December 31, 2025 compared to the prior year was driven by incremental fees of $157.2 million following the completion of the GCP Acquisition. The GCP Acquisition enhances our vertically integrated capabilities, which enables us to earn various forms of property-related fees. For the year ended December 31, 2025, these incremental fees largely represented development, property management and leasing fees.

The increase in fees over the comparative period, excluding the aforementioned impact from the GCP Acquisition, was also driven by higher administrative service fees of $20.8 million, primarily from: (i) our perpetual wealth vehicles; and (ii) new and existing private funds within our Credit Group that are based on invested capital. In addition, we earned higher capital markets transaction fees of $4.3 million associated with increased transaction volumes generated by AMCM during the current year as we are investing in the capital markets business to create greater revenue growth opportunities over time.

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Expenses

Compensation and Benefits. In connection with the GCP Acquisition, various components of the agreed-upon purchase price are required to be accounted for as compensation because the payments were made to certain individuals that became Ares employees following the GCP Acquisition. The year ended December 31, 2025 included the following acquisition-related compensation expenses: (i) equity-based compensation expense of $227.6 million, from awards associated with the purchase price of the GCP Acquisition, with $110.0 million of expense from the portion of these awards that immediately vested; (ii) other compensation costs of $48.5 million that were settled in cash; and (iii) compensation expense of $71.3 million for certain contingent earnout arrangements established in connection with the GCP Acquisition. See “Note 9. Commitments and Contingencies” within our consolidated financial statements for a further description of the contingent earnout arrangements established in connection with acquisitions.

In addition, the GCP Acquisition contributed incremental employment related costs of $170.5 million for the year ended December 31, 2025, largely reflecting salary expense and incentive-based compensation.

Compensation and benefits, excluding the aforementioned impact from the GCP Acquisition, increased by $316.0 million, or 18%, for the year ended December 31, 2025 compared to the prior year. The increase in expenses reflect the continued growth in salary and benefits for our increased staffing levels. Equity-based compensation expense also increased by $160.1 million for the year ended December 31, 2025 compared to the prior year as a result of issuing new discretionary and bonus-related awards at an increased stock price as of the grant date.

In addition, Part I Fee compensation increased by $36.8 million over the comparative period, corresponding to the increase in Part I Fees. We reduced Part I Fee compensation by $22.4 million and $11.7 million for the years ended December 31, 2025 and 2024, respectively, to reclaim a portion of the supplemental distribution fees that we paid to distribution partners.

Full-time equivalent headcount increased by 34% to 3,967 professionals for the year-to-date period in 2025 from 2,971 professionals in 2024. The GCP Acquisition added 805 professionals to our headcount as of December 31, 2025, which represents 690 full-time equivalents for the year-to-date period.

For detail regarding the fluctuations of compensation and benefits within each of our segments see “—Results of Operations by Segment.”

Performance Related Compensation. The majority of the changes in performance related compensation are directly associated with the changes in carried interest allocation and incentive fees as described above. These changes also include associated payroll-related taxes as well as the portions that are allocated to charitable organizations as part of our philanthropic initiatives. Performance related compensation generally represents 60% to 80% of carried interest allocation and incentive fees recognized before giving effect to payroll taxes and will vary based on the mix of funds generating carried interest allocation and incentive fees for that period. The performance related compensation ratio is also impacted by additional expense that is payable to professionals as a result of gains recognized from profit interests held in a strategic investment. The corresponding income from this strategic investment is reflected within components of other income rather than carried interest allocation or incentive fees.

General, Administrative and Other Expenses. General, administrative and other expenses incurred in connection with the activities resulting from the GCP Acquisition were $179.4 million for the year ended December 31, 2025. These expenses were driven by: (i) operating costs of $93.2 million, including non-recurring integration costs of $20.1 million and (ii) amortization expense of $86.2 million related to the intangible assets recorded in connection with the GCP Acquisition.

We have also incurred acquisition-related operating expenses in connection with the GCP Acquisition of $35.3 million and $33.4 million during the years ended December 31, 2025 and 2024, respectively. In each case, such costs were largely paid to advisors and professional services providers to assist in completing the transaction.

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General, administrative and other expenses, excluding the aforementioned impact from the GCP Acquisition, increased by $78.2 million, or 11%, for the year ended December 31, 2025 compared to the prior year. The increase in expenses reflect growing staffing levels and fundraising activities. The most significant expense increases were supplemental distribution fees, occupancy costs and information technology costs.

Supplemental distribution fees increased by $58.9 million for the year ended December 31, 2025 compared to the prior year. In the current year, supplemental distribution fees included a one-time expense of $30.7 million pursuant to the termination of a distribution agreement with a strategic partner that will result in annual cost savings of approximately $9.3 million per year. The increase in supplemental distribution fees was also driven by higher sales volumes and NAVs of our perpetual wealth vehicles and by the ongoing development of our distribution relationships and expansion of our wealth product offerings.

In addition, occupancy costs and information technology costs collectively increased by $25.3 million for the year ended December 31, 2025 compared to the prior year. The increase in these expenses was primarily to support our growing headcount and the expansion of our business, including the expansion of our New York headquarters.

Other Income (Expense)

Net Realized and Unrealized Gains on Investments; Interest and Dividend Income. The activity for the year ended December 31, 2025 was primarily attributable to:

•Unrealized gains of $233.3 million from our strategic investments in a U.S. nuclear energy company

•Interest and dividend income primarily included: (i) dividend income from our strategic investment in a Brazilian alternative asset manager; (ii) income from our investments in CLOs and CLO-based investments; and (iii) $11.9 million of interest income earned from treasury-backed securities. These treasury-backed securities were sold and the proceeds from the sale were used to fund the GCP Acquisition

The activity for the year ended December 31, 2024 was primarily attributable to:

•Net unrealized gains primarily from our investment in APMF

•Interest and dividend income primarily included: (i) dividend income from our strategic investment in a Brazilian alternative asset manager; (ii) income from our investments in CLOs and CLO-based investments; and (iii) $11.5 million of interest income earned from aforementioned treasury-backed securities

Interest Expense. Interest expense increased for the year ended December 31, 2025 compared to the prior year due to higher collective interest expense associated with our term debt obligations and a higher average outstanding balance of our Credit Facility over the comparative period.

The activity for the year ended December 31, 2024 included $5.5 million of one-time interest expense related to a temporary bridge facility that was established in connection with the GCP Acquisition. The facility was not utilized and was terminated in the fourth quarter of 2024.

Other Income (Expense), Net. Other income (expense), net for the year ended December 31, 2025 consists of non-cash expense of $301.1 million from the revaluation of contingent consideration primarily from the GCP Acquisition. The purchase agreement for the GCP Acquisition contains contingent earnout arrangements that are dependent on achievement of revenue targets of certain digital infrastructure funds and fundraising targets of certain Japanese real estate funds. See “Note 9. Commitments and Contingencies” within our consolidated financial statements for a further description of the contingent earnout arrangements established in connection with acquisitions.

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Income Tax Expense

The increase in income tax expense was primarily attributable to higher pre-tax income allocable to AMC and higher entity level taxes in foreign and local jurisdictions for the year ended December 31, 2025 compared to the prior year.

The allocation of taxable income is also sensitive to any changes in weighted average daily ownership as the income attributed to redeemable and non-controlling interests is generally passed through to partners and not subject to corporate income taxes. The following table summarizes weighted average daily ownership:

The change in ownership compared to the prior year was primarily driven by the issuances of shares of Class A common stock in connection with the GCP Acquisition, exchanges of AOG Units and vesting of restricted unit awards.

Redeemable and Non-Controlling Interests

The change in net income attributable to non-controlling interests in AOG entities compared to the prior year was a result of the respective changes in income before taxes and weighted average daily ownership, as presented above.

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Consolidated Results of Operations of the Consolidated Funds

The following table presents the results of operations of the Consolidated Funds ($ in thousands):

The results of operations of the Consolidated Funds primarily represent activities from certain funds that we are deemed to control. When a fund is consolidated, we reflect the revenues and expenses of the entity on a gross basis, subject to eliminations from consolidation. Substantially all of our results of operations related to the Consolidated Funds are attributable to ownership interests that third parties hold in those funds. The Consolidated Funds are not necessarily the same funds in each year presented due to changes in ownership, changes in limited partners’ or investor rights, and the creation or termination of funds and entities. Accordingly, such amounts may not be comparable for the periods presented, and in any event have no material impact on net income attributable to Ares Management Corporation.

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Segment Analysis

For segment reporting purposes, revenues and expenses are presented before giving effect to the results of our Consolidated Funds and the results attributable to non-controlling interests of joint ventures that we consolidate. As a result, segment revenues are different than those presented on a consolidated basis in accordance with GAAP. Revenues recognized from Consolidated Funds are eliminated in consolidation and those attributable to the non-controlling interests of joint ventures have been excluded by us. Furthermore, expenses and the effects of other income (expense) are different than related amounts presented on a consolidated basis in accordance with GAAP due to the exclusion of the results of Consolidated Funds and the non-controlling interests of joint ventures.

Non-GAAP Financial Measures

We use Realized Income (“RI”) as a non-GAAP profit measure in making operating decisions, assessing performance and allocating resources. Fee Related Earnings (“FRE”) is a component of RI that excludes realized activities associated with investment income and performance income.

FRE and RI should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “—Consolidated Results of Operations of the Company” and are prepared in accordance with GAAP. We operate through our distinct operating segments. In the first quarter of 2025, we combined the presentation of real estate strategies and infrastructure strategies within Real Assets. Real estate includes Americas real estate equity, European real estate equity, APAC real estate equity and real estate debt. Americas real estate equity, which we had recently renamed from North American real estate equity, now includes the activities of Brazil following the GCP Acquisition. APAC real estate equity is newly established following the GCP Acquisition and primarily represents the activities in Japan and Vietnam. Infrastructure includes digital infrastructure, infrastructure opportunities and infrastructure debt. Digital infrastructure is newly established following the GCP Acquisition. The change in presentation did not result in any change to the historical composition of our segments.

Interest expense was historically allocated among our segments based only on the cost basis of our balance sheet investments. Beginning in the first quarter of 2025, we changed our interest expense allocation methodology to consider the growing sources of financing requirements, including the cost of acquisitions in addition to the cost basis of our balance sheet investments. Prior period amounts have been reclassified to conform to the current period presentation.

The following table sets forth FRE and RI by reportable segment and the OMG ($ in thousands):

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Income before provision for income taxes is the GAAP financial measure most comparable to RI. The following table presents the reconciliation of income before taxes as reported within the Consolidated Statements of Operations to RI and FRE of the reportable segments and the OMG ($ in thousands):

(1)Represents bonus payments, a portion of earnouts and other costs in connection with various acquisitions that are recorded as compensation expense and are presented within compensation and benefits within our Consolidated Statements of Operations.

For the specific components and calculations of these non-GAAP measures, as well as additional reconciliations to the most comparable measures in accordance with GAAP, see “Note 15. Segment Reporting” within our consolidated financial statements included in this Annual Report on Form 10-K. Discussed below are our results of operations for our reportable segments and the OMG.

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Results of Operations by Segment

Credit Group—Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Fee Related Earnings

The following table presents the components of the Credit Group’s FRE ($ in thousands):

Management Fees. The chart below presents Credit Group management fees and effective management fee rates ($ in millions):

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The following table presents the components of and causes for changes in the Credit Group’s management fees for the year ended December 31, 2025 compared to the prior year ($ in millions):

Fee Related Performance Revenues. The chart below presents fee related performance revenues, including the number of funds generating, for the Credit Group by strategy ($ in millions):

Fee related performance revenues increased for the year ended December 31, 2025 compared to the prior year, primarily due to higher incentive fees from: (i) a European direct lending fund that crystallized a deferred payment during the first quarter of 2025 due to the restructuring of its hold back provisions; (ii) the aforementioned European direct lending fund that crystallized higher fees in 2025 due to lower hold back amounts subsequent to the restructuring of its hold back provisions; and (iii) our open-ended core alternative credit fund, driven by increased IGAUM and improved fund performance. In addition, incentive fees from our closed-end sports, media and entertainment fund were recognized as fee related performance revenues in 2025 as this fund converted from having a finite term to a perpetual capital vehicle in 2025. Incentive fees generated from this closed-end sports, media and entertainment fund were presented within realized performance income in previous periods.

Separately, we recognized lower incentive fees of $30.6 million from three direct lending funds for the year ended December 31, 2025 compared to the prior year. These three funds are subject to three-year hold back provisions and had crystallized deferred payments in 2024.

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Other Fees. The increase in other fees for the year ended December 31, 2025 compared to the prior year was primarily driven by higher administrative service fees of $8.2 million, which are earned from certain private funds that pay on invested capital. In addition, we earned higher capital markets transaction fees of $3.0 million associated with increased transaction volumes generated by AMCM during the current year.

Compensation and Benefits. The increase in compensation and benefits for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by higher: (i) incentive-based compensation; (ii) Part I Fee compensation of $36.8 million, corresponding to the increase in Part I Fees; and (iii) fee related performance compensation of $4.3 million, corresponding to the increase in fee related performance revenues. We reduced Part I Fee compensation by $20.1 million and $11.7 million for the years ended December 31, 2025 and 2024, respectively, to reclaim a portion of the supplemental distribution fees that we paid to distribution partners.

Full-time equivalent headcount increased by 5% to 705 investment and investment support professionals for the year-to-date period in 2025 from 672 professionals in 2024 to support our growing direct lending and alternative credit platforms.

General, Administrative and Other Expenses. The increase in general, administrative and other expenses was primarily due to costs incurred to support the distribution of shares in our perpetual wealth vehicles. Supplemental distribution fees increased by $17.9 million for the year ended December 31, 2025 compared to the prior year as we continue to develop our distribution relationships and expand our wealth product offerings.

In addition, occupancy costs and information technology costs collectively increased by $4.4 million for the year ended December 31, 2025 compared to the prior year. The increase in these expenses was primarily to support our growing headcount and the expansion of our business.

Conversely, marketing costs decreased by $5.5 million for the year ended December 31, 2025 compared to the prior year, largely attributable to fund formation costs for ACE VI that did not recur in 2025.

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Realized Income

The following table presents the components of the Credit Group’s RI ($ in thousands):

The Credit Group’s realized activities were principally composed of and caused by the following:

Interest expense allocated to the Credit Group decreased for the year ended December 31, 2025 compared to the prior year as a significant portion of the current year’s interest expense was allocated based on capital used to finance the GCP Acquisition, which occurred within the Real Assets Group.

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Credit Group—Performance Income

The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Credit Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions):

The following table presents the change in accrued performance income for the Credit Group ($ in millions):

The reduction in ASOF I accrued carried interest that is presented within other adjustments results from a partial transfer of our rights to receive the carried interest from this fund in exchange for a capital interest in a structured financing vehicle. As a result, the value associated with the transferred carried interest is now reflected as an investment in the structured financing vehicle.

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Credit Group—Assets Under Management

The tables below present rollforwards of AUM for the Credit Group ($ in millions):