Ares Management Corporation

11/06/2025 | Press release | Distributed by Public on 11/06/2025 07:43

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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 2024 Annual Report on Form 10-K of Ares Management Corporation. 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.
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 September 30, 2025, 94% 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:
Returns (%)
Type of Index Name of Index Region Three months ended September 30, 2025 Nine months ended September 30, 2025
High yield bonds ICE BAML High Yield Master II Index U.S. 2.4 7.1
High yield bonds ICE BAML European Currency High Yield Index Europe 1.9 4.7
Leveraged loans S&P UBS Leveraged Loan Index U.S. 1.7 4.7
Leveraged loans S&P UBS Western European Leveraged Loan Index Europe 0.9 3.3
Equities S&P 500 Index U.S. 8.1 14.8
Equities MSCI All Country World Ex-U.S. Index Non-U.S. 7.0 26.6
Infrastructure equities S&P Global Infrastructure Index Global 3.7 19.8
Real estate equities FTSE NAREIT All Equity REITs Index U.S. 1.7 1.4
Real estate equities FTSE EPRA/NAREIT Developed Europe Index Europe (5.2) 0.8
Real estate equities Tokyo Stock Exchange REIT Index APAC 8.0 16.2
During the third quarter of 2025, macroeconomic and geopolitical developments continued to shape sentiment across global equity and debt markets. Markets largely remained resilient and performed well despite continued volatility. The U.S. public equity markets were supported by interest rate cuts that signaled the possibility of further easing. International markets continued to outperform, supported by gradually improving transaction volumes.
The commercial real estate markets continued to recover during the quarter, driven by increased transaction volumes and steady property valuations and capitalization rates. The U.S. real estate markets improved, with interest rate cuts also driving positive momentum during the quarter. However, the European real estate markets declined primarily due to political uncertainty and lower rent growth expectations in certain regions. 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 continues 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 and the expansion of digital infrastructure and adoption of artificial intelligence.
Private equity activity rebounded in the third quarter, marking a shift in market sentiment following a subdued first half of the year. Transaction and exit activity accelerated, fueled by easing interest rates and 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 September 30, 2025.
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):
Credit
Group 		Real Assets
Group 		Private Equity
Group
Secondaries
Group
Other
Businesses 		Total AUM
Balance at 6/30/2025
$ 377,106 $ 129,774 $ 23,766 $ 33,949 $ 7,790 $ 572,385
Acquisitions - - 856 - - 856
Net new par/equity commitments 11,479 3,347 528 3,349 2,148 20,851
Net new debt commitments 7,800 1,473 - 775 - 10,048
Capital reductions (4,248) (883) (1) (32) - (5,164)
Distributions (3,669) (1,272) (151) (210) (477) (5,779)
Redemptions (1,202) (592) - (60) (502) (2,356)
Net allocations among investment strategies 440 125 - - (565) -
Change in fund value 3,748 382 98 604 (17) 4,815
Balance at 9/30/2025
$ 391,454 $ 132,354 $ 25,096 $ 38,375 $ 8,377 $ 595,656
Credit
Group 		Real Assets
Group 		Private Equity
Group 		Secondaries
Group 		Other
Businesses 		Total AUM
Balance at 6/30/2024
$ 323,123 $ 67,692 $ 24,580 $ 26,303 $ 5,534 $ 447,232
Acquisitions 362 - - - - 362
Net new par/equity commitments 8,801 1,604 105 688 2,043 13,241
Net new debt commitments 5,620 1,250 - 625 - 7,495
Capital reductions (2,518) (254) - - - (2,772)
Distributions (7,277) (933) (195) (162) (238) (8,805)
Redemptions (854) (206) - - - (1,060)
Net allocations among investment strategies 1,027 - - 25 (1,052) -
Change in fund value 7,034 1,200 14 (224) 78 8,102
Balance at 9/30/2024
$ 335,318 $ 70,353 $ 24,504 $ 27,255 $ 6,365 $ 463,795
Credit
Group 		Real Assets
Group 		Private Equity
Group 		Secondaries
Group 		Other
Businesses 		Total AUM
Balance at 12/31/2024
$ 348,858 $ 75,298 $ 24,041 $ 29,153 $ 7,096 $ 484,446
Acquisitions - 45,281 856 - - 46,137
Net new par/equity commitments 26,344 7,904 1,503 8,155 5,165 49,071
Net new debt commitments 21,782 5,706 - 775 - 28,263
Capital reductions (11,524) (2,035) (55) (90) - (13,704)
Distributions (11,938) (4,450) (1,356) (609) (1,025) (19,378)
Redemptions (2,527) (882) - (123) (510) (4,042)
Net allocations among investment strategies 1,935 174 - 73 (2,182) -
Change in fund value 18,524 5,358 107 1,041 (167) 24,863
Balance at 9/30/2025
$ 391,454 $ 132,354 $ 25,096 $ 38,375 $ 8,377 $ 595,656
Credit
Group 		Real Assets
Group 		Private Equity
Group 		Secondaries
Group 		Other
Businesses 		Total AUM
Balance at 12/31/2023
$ 299,350 $ 65,413 $ 24,551 $ 24,760 $ 4,772 $ 418,846
Acquisitions 362 - - - 71 433
Net new par/equity commitments 27,736 4,502 435 2,523 4,655 39,851
Net new debt commitments 20,324 2,954 - 625 - 23,903
Capital reductions (9,114) (589) (4) - - (9,707)
Distributions (13,658) (2,514) (259) (612) (611) (17,654)
Redemptions (4,024) (931) (2) - - (4,957)
Net allocations among investment strategies 2,351 - (47) 25 (2,329) -
Change in fund value 11,991 1,518 (170) (66) (193) 13,080
Balance at 9/30/2024
$ 335,318 $ 70,353 $ 24,504 $ 27,255 $ 6,365 $ 463,795
The components of our AUM are presented below ($ in billions):
AUM: $595.7 AUM: $463.8
FPAUM
Non-fee paying(1)
AUM not yet paying fees
(1) Includes $14.0 billion and $14.4 billion of AUM of funds from which we indirectly earn management fees as of September 30, 2025 and 2024, respectively, and includes $5.7 billion and $4.2 billion of non-fee paying AUM from our general partner and employee commitments as of September 30, 2025 and 2024, respectively.
Please refer to "- Results of Operations by Segment" for a more detailed presentation of AUM by segment for each of the periods presented.
Fee Paying Assets Under Management
FPAUM refers to AUM from which we directly earn management fees and is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees.
The tables below present rollforwards of our total FPAUM by segment ($ in millions):

Credit
Group 		Real Assets
Group 		Private Equity
Group
Secondaries
Group
Other
Businesses 		Total
Balance at 6/30/2025
$ 228,153 $ 79,495 $ 10,993 $ 24,535 $ 6,381 $ 349,557
Acquisitions - - 1,118 - - 1,118
Commitments 8,129 2,811 - 3,153 1,805 15,898
Deployment/increase in leverage 9,888 1,460 1 113 142 11,604
Capital reductions (3,001) (774) - - - (3,775)
Distributions (4,063) (1,704) (8) (101) (414) (6,290)
Redemptions (785) (592) - (60) - (1,437)
Net allocations among investment strategies 669 125 - - (794) -
Change in fund value 757 (496) (16) 444 (96) 593
Change in fee basis 421 178 (240) (5) - 354
Balance at 9/30/2025
$ 240,168 $ 80,503 $ 11,848 $ 28,079 $ 7,024 $ 367,622
Credit
Group 		Real Assets
Group 		Private Equity
Group 		Secondaries
Group 		Other
Businesses 		Total
Balance at 6/30/2024
$ 197,088 $ 41,623 $ 12,265 $ 20,461 $ 4,412 $ 275,849
Acquisitions 244 - - - - 244
Commitments 5,214 1,153 - 507 1,946 8,820
Deployment/increase in leverage 6,811 781 9 89 20 7,710
Capital reductions (3,269) - - - - (3,269)
Distributions (3,717) (581) (54) (66) (238) (4,656)
Redemptions (1,025) (206) - - - (1,231)
Net allocations among investment strategies 1,282 - - - (1,282) -
Change in fund value 2,781 527 (5) (135) 212 3,380
Change in fee basis (172) (184) 68 236 - (52)
Balance at 9/30/2024
$ 205,237 $ 43,113 $ 12,283 $ 21,092 $ 5,070 $ 286,795
Credit
Group 		Real Assets
Group 		Private Equity
Group 		Secondaries
Group 		Other
Businesses 		Total
Balance at 12/31/2024
$ 209,145 $ 44,088 $ 11,427 $ 22,401 $ 5,492 $ 292,553
Acquisitions - 30,467 1,118 - - 31,585
Commitments 20,465 4,760 - 4,893 4,589 34,707
Deployment/increase in leverage 24,594 4,256 33 780 395 30,058
Capital reductions (8,212) (951) (11) - - (9,174)
Distributions (12,668) (4,415) (8) (170) (962) (18,223)
Redemptions (2,177) (882) - (123) - (3,182)
Net allocations among investment strategies 2,293 174 - 73 (2,540) -
Change in fund value 6,670 2,706 (14) 230 50 9,642
Change in fee basis 58 300 (697) (5) - (344)
Balance at 9/30/2025
$ 240,168 $ 80,503 $ 11,848 $ 28,079 $ 7,024 $ 367,622
Credit
Group 		Real Assets
Group 		Private Equity
Group 		Secondaries
Group 		Other
Businesses 		Total
Balance at 12/31/2023
$ 185,280 $ 41,338 $ 13,124 $ 19,040 $ 3,575 $ 262,357
Acquisitions 244 - - - 55 299
Commitments 15,074 2,674 - 2,013 4,348 24,109
Deployment/increase in leverage 21,221 2,508 34 191 174 24,128
Capital reductions (9,145) (12) - - - (9,157)
Distributions (11,414) (1,449) (54) (297) (611) (13,825)
Redemptions (4,347) (931) (2) - - (5,280)
Net allocations among investment strategies 2,781 - - - (2,781) -
Change in fund value 4,109 83 (33) (138) 311 4,332
Change in fee basis 1,434 (1,098) (786) 283 (1) (168)
Balance at 9/30/2024
$ 205,237 $ 43,113 $ 12,283 $ 21,092 $ 5,070 $ 286,795
The charts below present FPAUM by its fee bases ($ in billions):
FPAUM: $367.6 FPAUM: $286.8
Invested capital/other(1)
Market value/reported value(2)
Capital commitments Collateral balances (at par) GAV
(1)Other consists of Ares Commercial Real Estate Corporation's (NYSE: ACRE) ("ACRE") FPAUM, which is based on ACRE's stockholders' equity.
(2)Includes $87.8 billion and $67.8 billion from funds that primarily invest in illiquid strategies as of September 30, 2025 and 2024, respectively. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.
Please refer to "- Results of Operations by Segment" for detailed information by segment of the activity affecting total FPAUM for each of the periods presented.
Perpetual Capital Assets Under Management
The chart below presents our perpetual capital AUM by segment and type ($ 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 three months ended September 30, 2025 and 2024, 94% 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:
Perpetual Capital - Publicly-Traded
Vehicles
Perpetual Capital - Perpetual Wealth Vehicles
Perpetual Capital - Private Commingled Vehicles Perpetual Capital - Managed Accounts
Long-Dated Funds(1)
Other
(1) Long-dated funds generally have a contractual life of five years or more at inception.
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):
Credit Real Assets Private Equity
Secondaries
Other Businesses
As of September 30, 2025, AUM Not Yet Paying Fees includes $81.0 billion of AUM available for future deployment that could generate approximately $756.3 million in potential incremental annual management fees, which represents 26% embedded gross base management fee growth from the last twelve month period upon deployment. Development assets not yet
stabilized represents fund assets that are in the development stage. Upon completion of development, management fees generally increase with a change in fee base, in fee rate or both. As of September 30, 2025, development assets not yet stabilized could generate approximately $22.4 million in potential incremental annual management fees.
Incentive Eligible Assets Under Management and Incentive Generating Assets Under Management
The charts below present our IEAUM and IGAUM by segment ($ in billions):
Credit Real Assets Private Equity
Secondaries
Other Businesses
Fee related performance revenues are not recognized by us until such fees are crystallized and no longer subject to reversal. As of September 30, 2025, perpetual capital IGAUM that could potentially result in crystallized fee related performance revenues totaled $32.1 billion, composed of $20.3 billion within the Credit Group, $7.4 billion within the Real Assets Group and $4.4 billion within the Secondaries Group. As of September 30, 2024, perpetual capital IGAUM that could potentially result in crystallized fee related performance revenues totaled $20.4 billion, composed of $18.5 billion within the Credit Group and $1.9 billion within the Secondaries Group. As of September 30, 2025 and 2024, IGAUM included $58.3 billion and $42.8 billion, respectively, of AUM from funds generating incentive income that is not recognized by us until such fees are crystallized or no longer subject to reversal.
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.
Components of Consolidated Results of Operations
GCP Acquisition Overview
On March 1, 2025, we completed the acquisition of the international business of GLP Capital Partners Limited and certain of its affiliates, excluding its operations in Greater China ("GCP International"), and existing capital commitments to certain managed funds (such acquisition of GCP International and the capital commitments, the "GCP Acquisition"). The GCP Acquisition adds complementary real estate and digital infrastructure investment capabilities and expands the Company's geographic presence. The activities of GCP International are included within the Real Assets Group segment.
The GCP Acquisition adds 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 periods will lack comparability, particularly in our Real Assets Group segment. Because the activities of GCP International represent seven months of activity within the nine months ended September 30, 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 periods as well as in future periods. Following an integration period, we expect to generate cost savings as we begin 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 periods 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 2. 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 8. Commitments and Contingencies" within our unaudited condensed consolidated financial statements.
Revenues
The following is an overview of our fee arrangements by strategy that were impacted as a result of the GCP Acquisition.
Management Fees.Details regarding management fees from GLP J-REIT (TSE: 3281) ("J-REIT") are presented below:
Vehicle Strategy Annual Fee Rate and Fee Base
Real Assets Group
J-REIT Real Estate
•Comprised of multiple components, including:
◦0.18% on GAV ("J-REIT Fee I")
◦3.50% on net operating income ("J-REIT Fee II")
◦Sum of J-REIT Fee I and J-REIT Fee II, multiplied by 0.033%, multiplied by earnings per outstanding investment unit
Details regarding management fees by strategy, excluding J-REIT described above, are presented below:
Strategy Fee Rate Fee Base
Average Remaining Contract Term(1)
Real Assets Group
Real Estate(2)
0.45% - 1.50% Capital commitments, invested capital, GAV, NAV, aggregate cost basis of unrealized portfolio investments or a combination thereof 4.6 years
Infrastructure 1.00% - 1.50% Capital commitments, invested capital, GAV or NAV 5.3 years
(1) Represents the average remaining contract term pursuant to the funds' governing documents within each strategy, excluding perpetual capital vehicles, as of September 30, 2025.
(2) Following the expiration or termination of the investment period the basis on which management fees are earned for certain closed-end funds in this strategy changes from committed capital to invested capital with no change in the management fee rate. 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.
Incentive Fees. Details regarding fee related performance revenues, excluding publicly-traded and perpetual wealth vehicles, are presented below:
Strategy Fee Rate Fee Base Annual Hurdle Rate
Real Assets Group
Real Estate 15.0% - 20.0% Incentive eligible fund's profits 6.0% - 8.0%
Carried Interest Allocation. Details regarding carried interest, which is generally based on a fund's eligible profits, are presented below:
Strategy Fee Rate Annual Hurdle Rate
Real Assets Group
Infrastructure 15.0% - 20.0% 7.0% - 10.0%
Administrative, Transaction and Other Fees.Details regarding other fees are presented below:
Other fees:
Property-related fees represent fees earned within our real estate strategy and include the following:
Acquisition fees Based on a percentage of a property's cost at the time of property acquisition
Development fees Based on a percentage of costs to develop a property over the development period
Leasing fees Based on a percentage of rental income at lease inception or lease renewal
Property management fees Based on tenancy of properties over the time associated property management services are provided
See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Components of Consolidated Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 for a comprehensive overview of the components of our consolidated results of operations, including an overview of fee arrangements for other strategies that were not impacted as a result of the GCP Acquisition.
Consolidation and Deconsolidation of Ares Funds
Consolidated Funds represented approximately 3% of our AUM as of September 30, 2025 and 5% of total revenues for the nine months ended September 30, 2025. As of September 30, 2025, we consolidated 23 CLOs and 16 private funds, and as of September 30, 2024, we consolidated 28 CLOs, 10 private funds and one SPAC.
The activity of the Consolidated Funds is reflected within the unaudited condensed consolidated financial statement line items indicated by reference thereto. The impact of consolidation also typically will decrease management fees, carried interest allocation and incentive fees 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 unaudited condensed consolidated financial statements. Redeemable interest in Consolidated Funds represent the shares issued by our SPACs that are redeemable for cash by the public shareholders in the event that the SPAC does not complete a business combination or tender offer associated with shareholder approval provisions.
We generally deconsolidate funds and CLOs when we are no longer deemed to have a controlling interest in the entity. During the nine months ended September 30, 2025, we deconsolidated four CLOs as a result of liquidation, one CLO as a result of a significant change in ownership and Ares Acquisition Corporation II ("AAC II"), as we no longer hold a controlling financial interest in Kodiak AI, Inc. (Nasdaq: KDK) (f/k/a AAC II) following the business combination described in "Note 13. Equity and Redeemable Interest." During the nine months ended September 30, 2024, we did not deconsolidate any entity.
We have contributed certain financial interests to structured investment vehicles that we manage, including but not limited to collateralized fund obligations and fund-backed loans. These financial interests include our capital interests and rights to performance income in funds that we manage. The purpose of these contributions is to provide collateral or other forms of similar credit-enhancement, including subordination and liquidity support, to the structured investment vehicles. These structured investment 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 contribution of these financial interests subjects us to a maximum risk of loss equal to the value of the contributed financial interests in the event that these structured investment vehicles or the underlying financial interests do not perform at required levels, which results in a variable interest and often the consolidation of these investment vehicles by us. As a result, the financial interests that we contribute will typically be reclassified from investments in the funds that we manage and/or from accrued performance income to investments of the Consolidated Funds. 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 15. Consolidation" within our unaudited condensed consolidated financial statements included herein.
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):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Total revenues $ 1,657,628 $ 1,129,739 $ 527,889 47% $ 4,096,561 $ 2,625,784 $ 1,470,777 56%
Total expenses (1,308,216) (854,887) (453,329) (53) (3,460,122) (1,957,924) (1,502,198) (77)
Total other income, net 302,859 52,254 250,605 NM 443,808 207,619 236,189 114
Less: Income tax expense
111,892 46,453 (65,439) (141) 190,387 114,760 (75,627) (66)
Net income 540,379 280,653 259,726 93 889,860 760,719 129,141 17
Less: Net income attributable to non-controlling interests in Consolidated Funds 67,407 64,241 3,166 5 127,383 236,446 (109,063) (46)
Net income attributable to Ares Operating Group entities 472,972 216,412 256,560 119 762,477 524,273 238,204 45
Less: Net income attributable to redeemable interest in Ares Operating Group entities 1,797 1,319 478 36 1,839 1,005 834 83
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 182,293 96,633 85,660 89 287,524 236,843 50,681 21
Net income attributable to Ares Management Corporation 288,882 118,460 170,422 144 473,114 286,425 186,689 65
Less: Series B mandatory convertible preferred stock dividends declared 25,313 - 25,313 NM 75,938 - 75,938 NM
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 263,569 $ 118,460 145,109 122 $ 397,176 $ 286,425 110,751 39
Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Consolidated Results of Operations of the Company
The following discussion sets forth information regarding our consolidated results of operations:
Revenues
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Revenues
Management fees $ 971,762 $ 753,597 $ 218,165 29% $ 2,689,371 $ 2,162,970 $ 526,401 24%
Carried interest allocation 464,666 277,651 187,015 67 948,575 194,006 754,569 NM
Incentive fees 100,668 48,638 52,030 107 155,795 105,039 50,756 48
Principal investment income 17,976 8,036 9,940 124 50,937 44,547 6,390 14
Administrative, transaction and other fees 102,556 41,817 60,739 145 251,883 119,222 132,661 111
Total revenues $ 1,657,628 $ 1,129,739 527,889 47 $ 4,096,561 $ 2,625,784 1,470,777 56
Management Fees. Within the Credit Group,our publicly-traded and perpetual wealth vehicles contributed to increases in management fees of $44.4 million and $127.8 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 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 increases in management fees of $30.4 million and $83.8 millionfor the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. Within the Real Assets Group, funds that we manage as a result of the GCP Acquisition and the acquisition of Walton Street Capital Mexico S. de R.L. de C.V. and certain of its affiliates ("WSM")
("WSM Acquisition"), collectively generated $63.8 million and $160.1 million in additional management fees for the three and nine months ended September 30, 2025, respectively. Part I Fees increased by $20.0 million and $48.1 millionfor the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.The increases in Part I Fees were primarily attributable to Ares Strategic Income Fund ("ASIF"), our open-ended European direct lending fund, CION Ares Diversified Credit Fund ("CADC") and our open-ended infrastructure fund, driven by increases in net investment income from their growing portfolio of investments. For detail regarding the fluctuations of management fees within each of our segments, see "-Results of Operations by Segment."
Carried Interest Allocation. The following table sets forth carried interest allocation by segment ($ in millions):
Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
Credit funds $ 286.8 $ 209.1 $ 691.2 $ 464.1
Real Assets funds 38.2 37.5 93.1 81.1
Private Equity funds 47.0 54.1 112.7 (311.7)
Secondaries funds
29.5 (20.4) 27.7 (36.8)
Other businesses 71.8 1.0 83.9 18.5
Elimination of carried interest from Consolidated Funds (8.4) (1.0) (20.3) (18.5)
Carried interest of non-controlling interests in consolidated subsidiaries (0.2) (2.6) (39.7) (2.7)
Carried interest allocation $ 464.7 $ 277.7 $ 948.6 $ 194.0
The activity was principally composed of the following:
Three months ended September 30, 2025 Three months ended September 30, 2024
Credit funds
•Primarily from three opportunistic credit funds, two alternative credit funds and three direct lending funds with $41.9 billion of IGAUM generating returns in excess of their hurdle rates:
◦Within our opportunistic credit funds, Ares Special Opportunities Fund II, L.P. ("ASOF II") generated carried interest allocation of $47.9 million driven by improved profitability of portfolio companies that operate in the healthcare and services industries. Ares Special Situations Fund IV, L.P. ("SSF IV") and Ares Special Opportunities Fund, L.P. ("ASOF I") generated carried interest allocation of $42.2 million and $21.5 million, respectively, primarily due to its investment in Savers Value Village, Inc. ("SVV"), driven by its higher stock price
◦Within our alternative credit funds, Ares Pathfinder Fund II, L.P. ("Pathfinder II") and Ares Pathfinder Fund, L.P. ("Pathfinder I") generated carried interest allocation of $37.3 million and $25.5 million, respectively, driven by market appreciation of certain investments and net investment income during the period
◦Within our direct lending funds, Ares Capital Europe VI, L.P. ("ACE VI"), Ares Private Credit Solutions II, L.P. ("PCS II") and Ares Capital Europe V, L.P. ("ACE V") generated carried interest allocation of $33.8 million, $29.9 million and $8.0 million, respectively, driven by net investment income on an increasing invested capital base
•Primarily from one opportunistic credit fund, five direct lending funds and two alternative credit funds with $36.0 billion of IGAUM generating returns in excess of their hurdle rates:
◦Within our opportunistic credit funds, ASOF II generated carried interest allocation of $75.1 million, driven by improved profitability of portfolio companies that operate in the services and retail industries
◦Within our direct lending funds, ACE V and ACE VI generated carried interest allocation of $53.0 million and $16.2 million, respectively, driven by net investment income on an increasing invested capital base. PCS II, Ares Capital Europe IV, L.P. ("ACE IV") and Ares Private Credit Solutions, L.P. ("PCS I") generated carried interest allocation of $27.0 million, $16.9 million and $8.7 million, respectively, primarily driven by net investment income during the period. Our direct lending funds benefited from rising interest rates on predominately floating-rate loans during the period.
◦Within our alternative credit funds, Pathfinder I and Pathfinder II generated carried interest allocation of $17.0 million and $15.6 million, respectively, driven by market appreciation of certain investments and net investment income during the period
•Reversal of unrealized carried interest allocation of $27.6 million from SSF IV, primarily due to SVV's lower stock price
Real Assets funds
•Ares Energy Investors Fund V, L.P. ("EIF V") and Ares Climate Infrastructure Partners II, L.P. ("ACIP II') generated carried interest allocation of $18.4 million and $12.7 million, respectively, driven by appreciation of certain investments
•Ares Infrastructure Debt Fund V, L.P. ("IDF V") generated carried interest allocation of $16.3 million, driven by net investment income during the period
•Ares Climate Infrastructure Partners, L.P. ("ACIP I") and EIF V generated carried interest allocation of $16.3 million and $6.1 million, respectively, due to appreciation of certain investments
•IDF V generated carried interest allocation of $12.6 million, driven by net investment income during the period
•US X and U.S. Real Estate Fund IX, L.P. ("US IX") collectively generated carried interest allocation of $9.5 million, driven by increasing operating income primarily from industrial and multifamily property investments
•Reversal of unrealized carried interest allocation of $6.3 million from Ares European Real Estate Fund IV, L.P. ("EF IV"), driven by the lower valuation of a residential property investment
Three months ended September 30, 2025 Three months ended September 30, 2024
Private Equity funds
•Ares Corporate Opportunities Fund VI, L.P. ("ACOF VI") generated carried interest allocation of $60.2 million, primarily driven by improved profitability from portfolio companies that primarily operate in the industrial, healthcare, retail and service industries
•Reversal of unrealized carried interest allocation of $18.6 million from Ares Corporate Opportunities Fund IV, L.P. ("ACOF IV"), driven by lower profitability of portfolio companies that primarily operate in the energy and healthcare industries
•ACOF VI generated carried interest allocation of $63.3 million, primarily due to the market appreciation of its investment in Frontier Communications Parent, Inc. ("FYBR"), driven by its higher stock price, and to improved profitability from portfolio companies that primarily operate in the healthcare and services industries
•Reversal of unrealized carried interest allocation of $6.8 million from ACOF IV, primarily due to lower valuation of a portfolio company that primarily operates in the healthcare industry
Secondaries funds
•Landmark Real Estate Fund IX, L.P. ("LREF IX") and Landmark Equity Partners XVII, L.P. ("LEP XVII") generated carried interest allocation of $12.9 million and $9.3 million, respectively, primarily driven by appreciation of certain portfolio investments
•Two private equity secondaries funds collectively generated carried interest allocation of $3.1 million, driven by the appreciation of certain portfolio investments
•Reversal of unrealized carried interest of $15.9 million from Landmark Equity Partners XVI, L.P. ("LEP XVI") due to the lower valuation of certain portfolio investments
•Reversal of unrealized carried interest of $2.4 million from Landmark Real Estate Fund VIII, L.P. ("LREF VIII"), primarily driven by the lower valuation of certain investments with underlying interests in multifamily portfolios
Other businesses
•Carried interest allocation of $66.0 million attributable to the change in value from previously held AAC II Class A ordinary shares that converted into equity securities of KDK following the business combination
•No significant activities
Nine months ended September 30, 2025 Nine months ended September 30, 2024
Credit funds
•Primarily from two opportunistic credit fund, four direct lending funds and two alternative credit funds with $44.3 billion of IGAUM generating returns in excess of their hurdle rates:
◦Within our opportunistic credit funds, ASOF II and ASOF I generated carried interest allocation of $122.6 million and $21.2 million, respectively, driven by improved profitability of portfolio companies that operate in the services, healthcare and industrial industries and ASOF I's investment in SVV, driven by its higher stock price
◦Within our direct lending funds, ACE V, ACE VI and PCS II generated carried interest allocation of $101.0 million, $93.0 million and $74.7 million, respectively, driven by net investment income on an increasing invested capital base. ACE IV generated carried interest allocation of $37.0 million driven by net investment income during the period
◦Within our alternative credit funds, Pathfinder II and Pathfinder I generated carried interest allocation of $68.7 million and $57.0 million, respectively, driven by market appreciation of certain investments and net investment income during the period
•Primarily from five direct lending funds, one opportunistic credit fund and two alternative credit funds with $36.0 billion of IGAUM generating returns in excess of their hurdle rates:
◦Within our direct lending funds, ACE V, PCS II and ACE VI generated carried interest allocation of $135.7 million, $115.8 million and $37.6 million, respectively, driven by net investment income on an increasing invested capital base. ACE IV and PCS I generated carried interest allocation of $49.0 million and $22.2 million, respectively, driven by net investment income during the period. Our direct lending funds benefited from rising interest rates on predominately floating-rate loans during the period.
◦Within our opportunistic credit funds, ASOF II generated carried interest allocation of $132.4 million, driven by improved profitability of portfolio companies that operate in the services and retail industries
◦Within our alternative credit funds, Pathfinder I and Pathfinder II generated carried interest allocation of $43.8 million and $36.6 million, respectively, driven by market appreciation of certain investments and net investment income during the period
•Reversal of unrealized carried interest allocation of $80.3 million and $21.3 million, respectively, from SSF IV and ASOF I, primarily due to their investments in SVV, driven by its lower stock price
Real Assets funds
•IDF V generated carried interest allocation of $31.2 million, driven by net investment income during the period
•ACIP II and EIF V generated carried interest allocation of $22.7 million and $19.9 million, respectively, driven by the appreciation of certain portfolio investments
•US IX generated carried interest allocation of $9.8 million, primarily due to market appreciation and increasing operating income primarily from industrial, office and multifamily property investments
•IDF V generated carried interest allocation of $42.2 million, driven by net investment income during the period
•ACIP I and EIF V generated carried interest allocation of $40.5 million and $27.8 million, respectively, due to appreciation of certain investments
•US X generated carried interest allocation of $14.2 million, driven by increasing operating income primarily from industrial and multifamily property investments
•Reversal of unrealized carried interest allocation of $23.4 million from EF IV, primarily driven by the lower valuation of residential property investments
Nine months ended September 30, 2025 Nine months ended September 30, 2024
Private Equity funds
•ACOF VI generated carried interest allocation of $139.0 million, driven by improved profitability of portfolio companies that primarily operate in the healthcare, services, industrial and retail industries
•Reversal of unrealized carried interest allocation of $19.5 million and $13.1 million, respectively, from ACOF IV and from a corporate private equity extended value fund driven by lower operating performance from portfolio companies that primarily operate in the energy, healthcare, industrial and service industries
•Reversal of unrealized carried interest allocation of $474.9 million from ACOF V was primarily due to its investment in SVV, driven by its lower stock price
•ACOF VI generated carried interest allocation of $181.2 million, driven by improved profitability of portfolio companies that primarily operate in the healthcare, services, industrial and retail industries
Secondaries funds
•LEP XVII and LREF IX generated carried interest allocation of $16.5 million and $14.4 million, respectively, primarily driven by appreciation of certain portfolio investments
•Two private equity secondaries funds collectively generated carried interest allocation of $8.0 million, driven by the appreciation of certain portfolio investments
•Reversal of unrealized carried interest of $11.3 million and $2.3 million, respectively, from LEP XVI and LREF VIII, driven by lower valuation of certain investments
•Reversal of unrealized carried interest of $18.2 million from LREF VIII, primarily driven by the lower valuation of certain investments with underlying interests in multifamily portfolios
•Reversal of unrealized carried interest of $28.2 million from LEP XVI, due to the lower valuation of certain portfolio investments
•Ares Secondaries Infrastructure Solutions III, L.P. ("ASIS III") and two private equity secondaries funds collectively generated carried interest allocation of $15.2 million, primarily driven by the appreciation of certain portfolio investments
Other businesses
•Carried interest allocation of $66.0 million attributable to the change in value from previously held AAC II Class A ordinary shares that converted into equity securities of KDK following the business combination
•Carried interest allocation of $18.5 million from an insurance fund that is eliminated upon consolidation
Incentive Fees.The following table sets forth incentive fees by segment ($ in millions):
Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
Credit funds $ 77.5 $ 45.9 $ 106.1 $ 79.1
Real Assets funds 5.9 0.2 6.5 4.9
Secondaries funds
17.3 2.5 43.2 21.0
Incentive fees $ 100.7 $ 48.6 $ 155.8 $ 105.0
The majority of our incentive fees crystallize in the fourth quarter. The increases in incentive fees for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were primarily due to higher incentive fees from an open-ended core alternative credit fund that has an annual measurement period in the third quarter, driven by increased IGAUM and improved 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.For equity method investments where we serve as general partner, we present the activity of net realized and unrealized gains on investments and interest and dividend income together with net cash received or used. The following tables present the change in fair value of our equity method investments where we serve as general partner ($ in millions):
As of June 30, 2025
Activity during the period
As of September 30, 2025
Cost Basis Fair Value Net Cash Used Net Realized and Unrealized Gains Interest and Dividend Income Other Adjustments Cost Basis Fair Value
$ 563.0 $ 645.4 $ 7.2 $ 9.9 $ 8.1 $ (10.0) $ 577.8 $ 660.6
As of December 31, 2024
Activity during the period
As of September 30, 2025
Cost Basis Fair Value Net Cash Used Net Realized and Unrealized Gains Interest and Dividend Income Other Adjustments Cost Basis Fair Value
$ 451.4 $ 536.9 $ 87.3 $ 18.6 $ 32.3 $ (14.5) $ 577.8 $ 660.6
The activity for the three and nine months ended September 30, 2025 was primarily attributable to:
•Net realized and unrealized gains primarily included unrealized gains from our investments in various credit secondaries, private equity secondaries and infrastructure opportunities funds, partially offset by an unrealized loss from a U.S. real estate equity fund. The nine months ended September 30, 2025 also included unrealized gains from our investments in various U.S. direct lending funds.
•Interest and dividend income primarily generated from our investments in various funds within our real estate strategy. The nine months ended September 30, 2025 also included 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.
•Other adjustments reflect the impact of contributions of certain capital interests to structured investment vehicles that are consolidated by us. These adjustments reflect the reclassification of the contributed capital interests to Consolidated Funds, and as a result, these contributed capital interests are eliminated upon consolidation.
•Net cash used was primarily driven by investments in various infrastructure opportunities funds. Net cash used for the nine months ended September 30, 2025 was also driven by investments in various real estate funds.
As of June 30, 2024
Activity during the period
As of September 30, 2024
Cost Basis Fair Value Net Cash Received Net Realized and Unrealized Gains Interest and Dividend Income Cost Basis Fair Value
$ 476.4 $ 559.7 $ (12.3) $ 2.9 $ 5.1 $ 474.2 $ 555.4
As of December 31, 2023
Activity during the period
As of September 30, 2024
Cost Basis Fair Value Net Cash Received Net Realized and Unrealized Gains Interest and Dividend Income Cost Basis Fair Value
$ 453.3 $ 535.3 $ (24.4) $ 3.0 $ 41.5 $ 474.2 $ 555.4
The activity for the three and nine months ended September 30, 2024 was primarily attributable to:
•Interest and dividend income for the nine months ended September 30, 2024 included 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
•Net cash received was primarily driven by transfers of our investments in alternative credit funds to employee co-investment vehicles, partially offset by investments in European real estate debt and U.S. direct lending funds. Net cash received for the nine months ended September 30, 2024 also included transfers of our investments in APAC credit funds to employee co-investment vehicles, partially offset by investments in European direct lending and infrastructure debt funds.
Administrative, Transaction and Other Fees.The increases for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were driven by incremental fees of $50.0 million and $107.9 million, respectively, 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 three and nine months ended September 30, 2025, these incremental fees largely represented leasing, development and property management fees.
The increases in fees over the comparative periods, excluding the aforementioned impact from the GCP Acquisition, were also driven by higher administrative service fees of $4.8 million and $14.2 million, respectively, primarily from: (i) our perpetual wealth vehicles, including two new products launched during the second half of 2024; and (ii) private funds within our Credit Group that are based on invested capital.
Expenses
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Expenses
Compensation and benefits $ 659,835 $ 435,876 $ (223,959) (51)% $ 1,960,669 $ 1,268,685 $ (691,984) (55)%
Performance related compensation 404,095 219,697 (184,398) (84) 761,434 140,180 (621,254) NM
General, administrative and other expenses 246,154 197,019 (49,135) (25) 706,224 537,379 (168,845) (31)
Expenses of Consolidated Funds (1,868) 2,295 4,163 NM 31,795 11,680 (20,115) (172)
Total expenses $ 1,308,216 $ 854,887 453,329 53 $ 3,460,122 $ 1,957,924 (1,502,198) (77)
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 three and nine months ended September 30, 2025 included the following acquisition-related compensation expenses: (i) equity-based compensation expense of $35.1 million and $195.0 million,
respectively, from awards associated with the purchase price of the GCP Acquisition, with $108.8 million of expense from the portion of these awards that immediately vested in the first quarter of 2025; (ii) other compensation costs of $17.6 million and $47.2 million, respectively, that were settled in cash; and (iii) compensation expense of $16.7 million and $37.3 million, respectively, for certain contingent compensation arrangements established in connection with the GCP Acquisition. See "Note 8. Commitments and Contingencies" within our unaudited condensed consolidated financial statements for a further description of the contingent liabilities related to the GCP Acquisition arrangements.
In addition, the GCP Acquisition contributed incremental employment related costs of $58.2 million and $121.3 million for the three and nine months ended September 30, 2025, respectively, largely reflecting salary expense and incentive-based compensation.
Compensation and benefits, excluding the aforementioned impact from the GCP Acquisition, increased by $96.4 million and $291.2 million, or 22% and 23%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases in expensesreflect the continued growth in salary and benefits for our increased staffing levels. The most significant expense increases were equity-based compensation, salary expense and incentive-based compensation. Equity-based compensation expense increased by $39.4 million and $121.8 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 as a result of newly issued awards, magnified by our increased stock price. The higher stock price associated with equity awards that vested during the first quarter of 2025 also drove the increase in payroll-related taxes of $23.2 million from the prior year-to-date period. In addition, we accelerated expense for certain awards requiring no future service as retirement provisions have been achieved. These provisions increased expense by $25.0 million and $17.4 million for the nine months ended September 30, 2025 and 2024, respectively.
Salary expense increased by $15.1 million and $43.5 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 primarily due to headcount growth to support the expansion of our business. In addition, incentive-based compensation which is dependent on our operating performance and is expected to fluctuate during the year, increased over the comparative periods.
Full-time equivalent headcount increased by 33% to 3,891 professionals for the year-to-date period in 2025 from 2,918 professionals in 2024. The acquisition of GCP International added 818 professionals to our period end headcount as of September 30, 2025, which represents 651 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.Changes in performance related compensation are directly associated with the changes in carried interest allocation and incentive fees described above and include associated payroll-related taxes as well as carried interest and incentive fees 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.
General, Administrative and Other Expenses. General, administrative and other expenses incurred in connection with the activities resulting from the GCP Acquisition were $53.3 million and $123.6 million for the three and nine months ended September 30, 2025, respectively. These expenses were driven by: (i) operating costs of $27.4 million and $63.2 million, respectively, including non-recurring integration costs of $7.6 million and $16.0 million, respectively; and (ii) amortization expense of $25.9 million and $60.4 million, respectively, related to the intangible assets recorded in connection with the GCP Acquisition.
We have also incurred acquisition-related operating expenses in connection to the GCP Acquisition of $0.7 million and $35.3 million for the three and nine months ended September 30, 2025, respectively, and $19.2 million and $19.3 million for the three and nine months ended September 30, 2024, respectively. In each case, such costs were largely paid to advisors and professional services providers to assist in completing the transaction.
General, administrative and other expenses, excluding the aforementioned impact from the GCP Acquisition, increased by $14.3 million and $29.2 million, or 8% and 6%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases in expenses reflect the continued growth to support 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 $10.2 million and $23.1 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 primarily due to increases in sales volumes and net asset values of our perpetual wealth vehicles, from the ongoing development ofour distribution relationships and expansion of our wealth product offerings.
In addition, occupancy costs and information technology costs collectively increased by $7.0 million and $22.3 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.The increases in these expenses were primarily to support our growing headcount and the expansion of our business, including the expansion of our New York headquarters.
Other Income (Expense)
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Other income (expense)
Net realized and unrealized gains (losses) on investments $ 188,420 $ (5,074) $ 193,494 NM $ 201,396 $ 13,781 $ 187,615 NM
Interest and dividend income 13,644 7,553 6,091 81 39,072 19,952 19,120 96
Interest expense (46,315) (29,733) (16,582) (56) (126,277) (105,057) (21,220) (20)
Other expense, net (7,263) (18,805) 11,542 61 (64,498) (19,473) (45,025) (231)
Net realized and unrealized gains on investments of Consolidated Funds 180,255 64,831 115,424 178 396,413 192,778 203,635 106
Interest and other income of Consolidated Funds 130,821 234,681 (103,860) (44) 452,783 732,316 (279,533) (38)
Interest expense of Consolidated Funds (156,703) (201,199) 44,496 22 (455,081) (626,678) 171,597 27
Total other income, net $ 302,859 $ 52,254 250,605 NM $ 443,808 $ 207,619 236,189 114
Net Realized and Unrealized Gains (Losses) on Investments; Interest and Dividend Income.For investments where we do not serve as general partner, we present the activity of net realized and unrealized gains on investments and interest and dividend income together with net cash received or used.
The following tables present the change in fair value of these investments ($ in millions):
As of June 30, 2025
Activity during the period
As of September 30, 2025
Cost Basis Fair Value Net Cash Used Net Realized and Unrealized Gains Interest and Dividend Income Other Adjustments Cost Basis Fair Value
$ 659.2 $ 767.6 $ 3.9 $ 188.4 $ 13.6 $ 4.9 $ 669.9 $ 978.4
As of December 31, 2024
Activity during the period
As of September 30, 2025
Cost Basis Fair Value Net Cash Used Net Realized and Unrealized Gains Interest and Dividend Income Other Adjustments Cost Basis Fair Value
$ 514.3 $ 616.3 $ 114.8 $ 201.4 $ 39.1 $ 6.8 $ 669.9 $ 978.4
The activity for the three and nine months ended September 30, 2025 was primarily attributable to:
•Net realized and unrealized gains primarily included unrealized gains of $169.5 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; and (ii) income from our investments in CLOs and CLO-based investments. The nine months ended September 30, 2025 included $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.
•Net cash used for the nine months ended September 30, 2025 was primarily driven by our investments in J-REIT and in an open-ended infrastructure fund, partially offset by the collection of principal from loan investments within our real estate debt strategy
As of June 30, 2024
Activity during the period
As of September 30, 2024
Cost Basis Fair Value Net Cash Used Net Realized and Unrealized Losses Interest and Dividend Income Other Adjustments Cost Basis Fair Value
$ 529.5 $ 633.7 $ 10.4 $ (5.1) $ 7.6 $ 1.2 $ 554.8 $ 647.8
As of December 31, 2023
Activity during the period
As of September 30, 2024
Cost Basis Fair Value Net Cash Received Net Realized and Unrealized Gains Interest and Dividend Income Other Adjustments Cost Basis Fair Value
$ 591.1 $ 675.1 $ (61.7) $ 13.8 $ 20.0 $ 0.6 $ 554.8 $ 647.8
The activity for the three and nine months ended September 30, 2024 was primarily attributable to:
•Net realized and unrealized gains (losses) primarily included unrealized losses from our strategic investments in a U.S. nuclear energy company. The nine months ended September 30, 2024 also included unrealized gains primarily from our investment in Ares Private Markets Fund ("APMF") and an unrealized loss from our strategic, non-core insurance related investment.
•Interest and dividend income primarily included: (i) dividend income from our strategic investment in a Brazilian alternative asset manager; and (ii) income from our investments in CLOs and CLO-based investments
•Net cash used was primarily driven by our strategic loan investments in a U.S. nuclear energy company. Net cash received for the nine months ended September 30, 2024 was primarily driven by the collection of principal from loan investments within our real estate debt strategy.
Interest Expense. Interest expense increased for the three and nine months ended September 30, 2025 compared to the same periods in 2024 due to highercollective interest expense associated with our term debt obligations. Interest expense also increased for the three months ended September 30, 2025 compared to the same period in 2024 due to higher average outstanding balance of our Credit Facility over the comparative periods. However, average interest rates andaverage outstanding balance of our Credit Facility were lower during the current year when compared to the same period a year ago.
Other Expense, Net.The purchase agreement for the GCP Acquisition contains contingent consideration that is dependent on the achievement of revenue targets of certain digital infrastructure funds and fundraising targets of certain Japanese real estate funds. The purchase agreement for the WSM Acquisition contains contingent consideration that is dependent on the achievement of revenue targets from the fundraising of a real estate equity fund and revenue targets associated with growing revenue sources from new business ventures. Other income (expense), net includes non-cash expense from the revaluation of these contingent liabilities of $17.4 million and $45.3 million for the three and nine months ended September 30, 2025, respectively.
Additionally, the activity for the three and nine months ended September 30, 2025 and 2024 included transaction gains (losses) associated with currency fluctuations impacting the revaluation of assets and liabilities denominated in foreign currencies other than an entity's functional currency. While we recognized transaction gains for the three months ended September 30, 2025 due to the U.S. dollar strengthening against the British Pound and Euro, we recognized transaction losses for the nine months ended September 30, 2025 due to the U.S. dollar weakening against the British Pound and Euro and the associated impact of revaluing net liabilities on entities with functional currencies other than the U.S. dollar for the year-to-date period. Transaction losses for the three and nine months ended September 30, 2024 were primarily attributable to the British Pound strengthening against the U.S. dollar and Euro.
Income Tax Expense
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Income before taxes $ 652,271 $ 327,106 $ 325,165 99% $ 1,080,247 $ 875,479 $ 204,768 23%
Less: Income tax expense
111,892 46,453 (65,439) (141) 190,387 114,760 (75,627) (66)
Net income $ 540,379 $ 280,653 259,726 93 $ 889,860 $ 760,719 129,141 17
The increases in income tax expense were primarily attributable to higher pre-tax income allocable to AMC and higher entity level taxes in foreign and local jurisdictions for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.
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:
Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
AMC common stockholders
67.29 % 64.14 % 66.71 % 63.23 %
Non-controlling AOG unitholders 32.71 35.86 33.29 36.77
The changes in ownership compared to the prior year periods were primarily driven by the issuances of shares of Class A common stock in connection with exchanges of AOG Units, the GCP Acquisition and vesting of restricted unit awards.
Redeemable and Non-Controlling Interests
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Net income $ 540,379 $ 280,653 $ 259,726 93% $ 889,860 $ 760,719 $ 129,141 17%
Less: Net income attributable to non-controlling interests in Consolidated Funds 67,407 64,241 3,166 5 127,383 236,446 (109,063) (46)
Net income attributable to Ares Operating Group entities 472,972 216,412 256,560 119 762,477 524,273 238,204 45
Less: Net income attributable to redeemable interest in Ares Operating Group entities 1,797 1,319 478 36 1,839 1,005 834 83
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 182,293 96,633 85,660 89 287,524 236,843 50,681 21
Net income attributable to Ares Management Corporation 288,882 118,460 170,422 144 473,114 286,425 186,689 65
Less: Series B mandatory convertible preferred stock dividends declared 25,313 - (25,313) NM 75,938 - (75,938) NM
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 263,569 $ 118,460 145,109 122 $ 397,176 $ 286,425 110,751 39
The changes in net income attributable to non-controlling interests in AOG entities over the comparative periods were a result of the respective changes in income before taxes and weighted average daily ownership, as presented above.
Consolidated Results of Operations of the Consolidated Funds
The following table presents the results of operations of the Consolidated Funds ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Expenses of the Consolidated Funds $ 1,868 $ (2,295) $ 4,163 NM $ (31,795) $ (11,680) $ (20,115) (172)%
Net realized and unrealized gains on investments of Consolidated Funds 180,255 64,831 115,424 178 396,413 192,778 203,635 106
Interest and other income of Consolidated Funds 130,821 234,681 (103,860) (44) 452,783 732,316 (279,533) (38)
Interest expense of Consolidated Funds (156,703) (201,199) 44,496 22 (455,081) (626,678) 171,597 27
Income before taxes 156,241 96,018 60,223 63 362,320 286,736 75,584 26
Less: Income tax expense of Consolidated Funds 3,183 1,757 (1,426) (81) 5,894 5,619 (275) (5)
Net income 153,058 94,261 58,797 62 356,426 281,117 75,309 27
Less: Revenues attributable to Ares Management Corporation eliminated upon consolidation 75,366 18,884 56,482 NM 198,372 22,499 175,873 NM
Other income, net attributable to Ares Management Corporation eliminated upon consolidation (10,285) (10,703) (418) (4) (30,671) (22,172) 8,499 38
General, administrative and other expense attributable to Ares Management Corporation eliminated upon consolidation - (433) (433) 100 - - - -
Net income attributable to non-controlling interests in Consolidated Funds $ 67,407 $ 64,241 3,166 5 $ 127,383 $ 236,446 (109,063) (46)
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.
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 from management fees, fee related performance revenues, performance income and investment income 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):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Fee Related Earnings:
Credit Group $ 468,605 $ 388,698 $ 79,907 21% $ 1,303,509 $ 1,109,396 $ 194,113 17%
Real Assets Group 126,087 56,518 69,569 123 314,011 154,679 159,332 103
Private Equity Group 13,107 16,540 (3,433) (21) 37,260 46,365 (9,105) (20)
Secondaries Group
74,033 27,754 46,279 167 165,154 87,000 78,154 90
Other
6,294 2,784 3,510 126 15,527 8,144 7,383 91
Operations Management Group (216,916) (152,983) (63,933) (42) (587,864) (440,087) (147,777) (34)
Fee Related Earnings $ 471,210 $ 339,311 131,899 39 $ 1,247,597 $ 965,497 282,100 29
Realized Income:
Credit Group $ 474,572 $ 393,579 $ 80,993 21% $ 1,342,005 $ 1,158,012 $ 183,993 16%
Real Assets Group 112,051 60,340 51,711 86 297,296 145,348 151,948 105
Private Equity Group 10,581 12,711 (2,130) (17) 33,666 35,660 (1,994) (6)
Secondaries Group 72,317 22,284 50,033 225 160,703 66,414 94,289 142
Other
(29) 2,464 (2,493) NM 10,083 24,415 (14,332) (59)
Operations Management Group (213,983) (152,622) (61,361) (40) (584,506) (438,779) (145,727) (33)
Realized Income $ 455,509 $ 338,756 116,753 34 $ 1,259,247 $ 991,070 268,177 27
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 Condensed Consolidated Statements of Operations to RI and FRE of the reportable segments and the OMG ($ in thousands):
Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
Income before taxes $ 652,271 $ 327,106 $ 1,080,247 $ 875,479
Adjustments:
Depreciation and amortization expense 65,956 46,005 177,365 118,900
Equity compensation expense 160,130 85,612 583,083 266,267
Acquisition-related compensation expense(1)
42,448 5,435 108,752 16,374
Acquisition and merger-related expense 5,427 25,166 42,826 39,394
Placement fee adjustment (2,415) (4,485) (3,513) 825
Other (income) expense, net 17,571 3,389 47,260 (7,910)
Income before taxes of non-controlling interests in consolidated subsidiaries (3,861) (10,544) (14,649) (18,148)
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (70,590) (65,998) (133,277) (242,065)
Total performance income-unrealized (463,933) (263,553) (828,968) (95,759)
Total performance related compensation-unrealized 330,960 180,174 579,241 8,478
Total net investment (income) loss-unrealized (278,455) 10,449 (379,120) 29,235
Realized Income 455,509 338,756 1,259,247 991,070
Total performance income-realized (24,559) (22,108) (205,561) (154,931)
Total performance related compensation-realized 15,295 13,234 138,782 95,386
Total net investment loss-realized 24,965 9,429 55,129 33,972
Fee Related Earnings $ 471,210 $ 339,311 $ 1,247,597 $ 965,497
(1)Represents bonus payments, a portion of contingent liabilities ("earnouts") and other costs in connection with various acquisitions that are recorded as compensation expense and are presented within compensation and benefits within our Condensed 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 14. Segment Reporting" within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Discussed below are our results of operations for our reportable segments and the OMG.
Results of Operations by Segment
Credit Group-Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Fee Related Earnings
The following table presents the components of the Credit Group's FRE ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Management fees $ 651,964 $ 557,450 $ 94,514 17% $ 1,854,501 $ 1,603,080 $ 251,421 16%
Fee related performance revenues 62,389 41,761 20,628 49 81,098 48,920 32,178 66
Other fees 13,471 10,520 2,951 28 37,431 30,912 6,519 21
Compensation and benefits (212,709) (179,987) (32,722) (18) (537,661) (457,494) (80,167) (18)
General, administrative and other expenses (46,510) (41,046) (5,464) (13) (131,860) (116,022) (15,838) (14)
Fee Related Earnings $ 468,605 $ 388,698 79,907 21 $ 1,303,509 $ 1,109,396 194,113 17
Management Fees. The chart below presents Credit Group management fees and effective management fee rates ($ in millions):
The following table presents the components of and causes for changes in the Credit Group's management fees for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 ($ in millions):
Three month change Nine month change
Publicly-traded and perpetual wealth vehicles:
Fees from ARCC, ASIF and CADC, excluding Part I Fees, due to increases in the average size of their portfolios $ 32.3 $ 100.3
Part I Fees from ASIF, CADC and our open-ended European direct lending fund driven by increases in net investment income from their growing portfolio of investments
18.0 45.5
Fees from our open-ended European direct lending fund, excluding Part I Fees, due to the expiration of a fee waiver during the first quarter of 2025 and driven by an increase in the average size of its portfolio 10.8 23.3
Capital deployment in private funds:
Fees from SDL III, ACE VI, Pathfinder II, ASOF II and an open-ended core alternative credit fund 38.5 97.1
Distributions that reduced the fee base of ACE IV, ASOF I, Ares Senior Direct Lending Fund, L.P. ("SDL I") and ACE III as the funds are past their investment periods
(10.7) (34.8)
Cumulative effect of other changes 5.6 20.0
Total $ 94.5 $ 251.4
Fee Related Performance Revenues. Fee related performance revenues increased for the three and nine months ended September 30, 2025 compared to the same periods in 2024 primarily due to higher incentive fees from an open-ended core alternative credit fund that has an annual measurement period in the third quarter, driven by increased IGAUM and improved fund performance. Fee related performance revenues for the nine months ended September 30, 2025 were also attributable to incentive fees earned from 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.
Other Fees.The increases in other fees forthethree and nine months ended September 30, 2025 compared to the same periods in 2024 were primarily driven by higher administrative service fees of $2.2 million and $5.2 million, respectively, which are earned from certain private funds that pay on invested capital.
Compensation and Benefits.The increases in compensation and benefits for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 were primarily driven by: (i) higher fee related performance compensation of $15.9 million and $24.8 million, respectively, corresponding to the increases in fee related performance revenues; (ii) higher Part I Fee compensation of $9.2 million and $22.6 million, respectively, corresponding to the increases in Part I Fees; (iii) higher incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year. We reduced Part I Fee compensation by $6.0 million and $3.3 million for the three months ended September 30, 2025 and 2024, respectively, and $15.7 million and $8.0 million for the nine months ended September 30, 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 6% to 701 investment and investment support professionals for the year-to-date period in 2025 from 663 professionals in 2024 to support our growing direct lending and alternative credit platforms.
General, Administrative and Other Expenses.The increases in general, administrative and other expenses were primarily due to costs incurred to support the distribution of shares in our perpetual wealth vehicles. Supplemental distribution fees increased by $5.3 million and $15.7 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 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 $0.9 million and $4.6 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.The increases in these expenses were primarily to support our growing headcount and the expansion of our business.
Realized Income
The following table presents the components of the Credit Group's RI ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Fee Related Earnings $ 468,605 $ 388,698 $ 79,907 21% $ 1,303,509 $ 1,109,396 $ 194,113 17%
Performance income-realized 19,438 6,192 13,246 214 95,465 121,214 (25,749) (21)
Performance related compensation-realized (11,421) (3,451) (7,970) (231) (58,927) (73,127) 14,200 19
Realized net performance income 8,017 2,741 5,276 192 36,538 48,087 (11,549) (24)
Investment income-realized 2,095 6,733 (4,638) (69) 11,570 17,889 (6,319) (35)
Interest income 577 1,266 (689) (54) 6,132 5,719 413 7
Interest expense (4,722) (5,859) 1,137 19 (15,744) (23,079) 7,335 32
Realized net investment income (loss) (2,050) 2,140 (4,190) NM 1,958 529 1,429 270
Realized Income $ 474,572 $ 393,579 80,993 21 $ 1,342,005 $ 1,158,012 183,993 16
The Credit Group's realized activities were principally composed of and caused by the following:
Three months ended September 30, 2025 Three months ended September 30, 2024
Realized net performance income
Incentive fees:
•Incentive fees of $4.6 million from an alternative credit fund that crystallized in connection with a loan repayment
Carried interest:
•Distributions of $1.3 million from an alternative credit fund, which is a European-style waterfall fund that is past its investment period and monetizing investments
Incentive fees:
•Incentive fees of $1.6 million primarily from a U.S. CLO that reset its capital structure and extended its reinvestment period and from a U.S. direct lending fund
Realized investment income and interest income
•Income of $2.5 million generated from our investments in 11 CLOs and CLO-based investments
•Income of $3.3 million generated from our investments in 16 CLOs and CLO-based investments
•Income of $1.3 million from our investment in an APAC credit fund
Nine months ended September 30, 2025 Nine months ended September 30, 2024
Realized net performance income
Carried interest:
•Tax distributions of $14.0 million primarily from ACE IV, ACE V and Pathfinder I
•Distributions of $10.6 million from two alternative credit funds, which are European-style waterfall funds that are past their investment periods and monetizing investments
Incentive fees:
•Incentive fees of $4.6 million from an alternative credit fund that crystallized in connection with a loan repayment
•Incentive fees of $4.4 million from two alternative credit funds that have annual measurement periods in the second quarter and from a U.S. direct lending fund
Carried interest:
•Tax distributions of $30.0 million primarily from ACE IV, ACE V, PCS I and ASOF I
•Distributions of $3.2 million from an alternative credit fund, which is a European-style waterfall fund that passed its investment period and is monetizing investments
Incentive fees:
•Incentive fees of $13.0 million primarily from two alternative credit funds that have annual measurement periods in the second quarter
Realized investment income and interest income
•Income of $9.2 million generated from our investments in 14 CLOs and CLO-based investments
•Income of $2.7 million from our investment in SSF IV
•Income of $10.2 million generated from our investments in 19 CLOs and CLO-based investments
•Income of $6.6 million generated from our investment in a U.S. direct lending fund
•Income of $1.3 million from our investment in an APAC credit fund
Interest expense decreased for the three and nine months ended September 30, 2025 when compared to the same periods in 2024, as our recent change in methodology results in allocating a significant portion of interest expense to our most recent acquisitions.
Credit Group-Performance Income
The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Credit Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions):
As of September 30, 2025
As of December 31, 2024
Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income
Pathfinder I $ 241.8 $ 205.5 $ 36.3 $ 191.4 $ 165.7 $ 25.7
Pathfinder II 115.3 90.2 25.1 46.6 36.3 10.3
ASOF I 322.7 238.9 83.8 318.4 223.2 95.2
ASOF II 380.8 267.1 113.7 258.2 181.4 76.8
PCS I 147.0 86.9 60.1 130.1 76.9 53.2
PCS II 247.3 146.3 101.0 171.4 101.5 69.9
ACE IV 196.3 127.5 68.8 168.8 109.6 59.2
ACE V 366.6 231.1 135.5 286.6 180.9 105.7
ACE VI 164.1 103.1 61.0 71.1 44.8 26.3
Other Credit funds 339.4 206.7 132.7 285.4 170.7 114.7
Total Credit Group $ 2,521.3 $ 1,703.3 $ 818.0 $ 1,928.0 $ 1,291.0 $ 637.0
The following table presents the change in accrued performance income for the Credit Group ($ in millions):
As of December 31, 2024
Activity during the period As of September 30, 2025
Waterfall Type Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income
Accrued Carried Interest
Pathfinder I European $ 191.4 $ 57.0 $ (6.6) $ - $ 241.8
Pathfinder II European 46.6 68.7 - - 115.3
ASOF I European 318.4 21.2 - (16.9) 322.7
ASOF II European 258.2 122.6 - - 380.8
PCS I European 130.1 16.7 - 0.2 147.0
PCS II European 171.4 74.7 - 1.2 247.3
ACE IV European 168.8 37.0 (9.5) - 196.3
ACE V European 286.6 101.0 (20.8) (0.2) 366.6
ACE VI European 71.1 93.0 - - 164.1
Other Credit funds European 184.6 113.5 (30.1) (3.6) 264.4
Other Credit funds American 100.8 (14.2) (3.2) (8.4) 75.0
Total accrued carried interest 1,928.0 691.2 (70.2) (27.7) 2,521.3
Other credit funds
Incentive - 25.3 (25.3) - -
Total Credit Group $ 1,928.0 $ 716.5 $ (95.5) $ (27.7) $ 2,521.3
The reduction in ASOF I accrued carried interest was driven by a partial contribution of our rights to receive the carried interest from this fund to a structured investment vehicle. As a result, the contributed carried interest is now reflected as an investment of the structured investment vehicle.
Credit Group-Assets Under Management
The tables below present rollforwards of AUM for the Credit Group ($ in millions):
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit 		Other Total Credit
Group
Balance at 6/30/2025 $ 48,820 $ 43,716 $ 17,985 $ 174,244 $ 81,291 $ 11,050 $ - $ 377,106
Net new par/equity commitments 2,780 2,466 937 3,910 1,380 6 - 11,479
Net new debt commitments 77 200 - 4,177 3,346 - - 7,800
Capital reductions (2,189) (434) (175) (1,394) (50) (6) - (4,248)
Distributions (40) (358) (279) (1,673) (1,307) (12) - (3,669)
Redemptions (396) (123) - (615) (68) - - (1,202)
Net allocations among investment strategies - 440 - - - - - 440
Change in fund value 293 804 547 1,664 301 139 - 3,748
Balance at 9/30/2025 $ 49,345 $ 46,711 $ 19,015 $ 180,313 $ 84,893 $ 11,177 $ - $ 391,454
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit
Other(1)
Total Credit
Group
Balance at 6/30/2024 $ 46,572 $ 38,412 $ 13,200 $ 141,194 $ 71,478 $ 11,966 $ 301 $ 323,123
Acquisitions - - - 362 - - - 362
Net new par/equity commitments 804 1,144 - 3,841 2,664 277 71 8,801
Net new debt commitments 1,521 250 - 3,515 334 - - 5,620
Capital reductions (2,006) (30) - (472) 6 (16) - (2,518)
Distributions (161) (892) (258) (2,022) (3,238) (706) - (7,277)
Redemptions (587) (150) - (93) (24) - - (854)
Net allocations among investment strategies - 1,052 - - 50 - (75) 1,027
Change in fund value 803 854 461 1,571 3,125 217 3 7,034
Balance at 9/30/2024 $ 46,946 $ 40,640 $ 13,403 $ 147,896 $ 74,395 $ 11,738 $ 300 $ 335,318
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit
Other(1)
Total Credit
Group
Balance at 12/31/2024 $ 46,895 $ 41,565 $ 14,964 $ 159,129 $ 74,560 $ 11,470 $ 275 $ 348,858
Net new par/equity commitments 4,517 3,336 4,448 9,821 4,158 64 - 26,344
Net new debt commitments 2,494 200 350 15,392 3,346 - - 21,782
Capital reductions (4,587) (711) (351) (3,640) (2,121) (114) - (11,524)
Distributions (400) (1,535) (1,382) (4,162) (3,740) (719) - (11,938)
Redemptions (1,330) (123) - (1,006) (68) - - (2,527)
Net allocations among investment strategies - 1,935 - 278 - - (278) 1,935
Change in fund value 1,756 2,044 986 4,501 8,758 476 3 18,524
Balance at 9/30/2025 $ 49,345 $ 46,711 $ 19,015 $ 180,313 $ 84,893 $ 11,177 $ - $ 391,454
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit
Other(1)
Total Credit
Group
Balance at 12/31/2023 $ 47,299 $ 33,886 $ 14,554 $ 123,073 $ 68,264 $ 11,920 $ 354 $ 299,350
Acquisitions - - - 362 - - - 362
Net new par/equity commitments 2,165 3,872 - 14,178 6,844 535 142 27,736
Net new debt commitments 5,171 250 - 14,287 996 (380) - 20,324
Capital reductions (5,674) (30) (1,022) (2,578) 55 135 - (9,114)
Distributions (358) (1,556) (727) (4,899) (5,180) (938) - (13,658)
Redemptions (2,813) (150) - (921) (140) - - (4,024)
Net allocations among investment strategies (18) 2,347 - 25 200 - (203) 2,351
Change in fund value 1,174 2,021 598 4,369 3,356 466 7 11,991
Balance at 9/30/2024 $ 46,946 $ 40,640 $ 13,403 $ 147,896 $ 74,395 $ 11,738 $ 300 $ 335,318
(1) Amounts represent equity commitments to the platform that have not yet been allocated to an investment strategy.
The components of our AUM for the Credit Group are presented below ($ in billions):
AUM: $391.5 AUM: $335.3
FPAUM
Non-fee paying(1)
AUM not yet paying fees
(1) Includes $14.0 billion and $14.4 billion of AUM of funds from which we indirectly earn management fees as of September 30, 2025 and 2024, respectively, and includes $2.1 billion and $1.7 billion of non-fee paying AUM from our general partner and employee commitments as of September 30, 2025 and 2024, respectively.
Credit Group-Fee Paying AUM
The tables below present rollforwards of fee paying AUM for the Credit Group ($ in millions):
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit 		Total Credit
Group
Balance at 6/30/2025 $ 46,629 $ 31,581 $ 8,783 $ 93,940 $ 41,905 $ 5,315 $ 228,153
Commitments 3,782 - - 3,073 1,274 - 8,129
Deployment/increase in leverage 13 2,292 505 4,512 2,278 288 9,888
Capital reductions (2,189) - - (434) (378) - (3,001)
Distributions (40) (594) (133) (2,352) (864) (80) (4,063)
Redemptions (397) (123) - (197) (68) - (785)
Net allocations among investment strategies - 669 - - - - 669
Change in fund value 181 - - 901 (246) (79) 757
Change in fee basis (11) - - - 432 - 421
Balance at 9/30/2025 $ 47,968 $ 33,825 $ 9,155 $ 99,443 $ 44,333 $ 5,444 $ 240,168
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit 		Total Credit
Group
Balance at 6/30/2024 $ 44,780 $ 26,091 $ 8,423 $ 75,967 $ 36,557 $ 5,270 $ 197,088
Acquisitions - - - 244 - - 244
Commitments 3,258 - - 1,826 108 22 5,214
Deployment/increase in leverage 44 1,060 (752) 5,012 1,428 19 6,811
Capital reductions (2,008) - - (459) (769) (33) (3,269)
Distributions (148) (468) (223) (2,349) (312) (217) (3,717)
Redemptions (598) (150) - (93) (184) - (1,025)
Net allocations among investment strategies - 1,282 - - - - 1,282
Change in fund value 869 30 - 758 1,118 6 2,781
Change in fee basis - - - - (172) - (172)
Balance at 9/30/2024 $ 46,197 $ 27,845 $ 7,448 $ 80,906 $ 37,774 $ 5,067 $ 205,237
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit 		Total Credit
Group
Balance at 12/31/2024 $ 44,629 $ 29,384 $ 7,899 $ 86,415 $ 35,786 $ 5,032 $ 209,145
Commitments 8,428 10 - 9,265 2,724 38 20,465
Deployment/increase in leverage 22 4,457 1,957 11,035 5,826 1,297 24,594
Capital reductions (4,595) - - (2,747) (793) (77) (8,212)
Distributions (409) (2,224) (701) (6,091) (2,504) (739) (12,668)
Redemptions (1,318) (123) - (588) (148) - (2,177)
Net allocations among investment strategies - 2,293 - - - - 2,293
Change in fund value 1,222 28 - 2,154 3,342 (76) 6,670
Change in fee basis (11) - - - 100 (31) 58
Balance at 9/30/2025 $ 47,968 $ 33,825 $ 9,155 $ 99,443 $ 44,333 $ 5,444 $ 240,168
Liquid
Credit 		Alternative
Credit 		Opportunistic
Credit 		U.S. Direct
Lending 		European
Direct Lending 		APAC
Credit 		Total Credit
Group
Balance at 12/31/2023 $ 46,140 $ 23,218 $ 8,490 $ 67,596 $ 34,246 $ 5,590 $ 185,280
Acquisitions - - - 244 - - 244
Commitments 7,050 - - 7,873 121 30 15,074
Deployment/increase in leverage 103 2,877 15 12,824 4,791 611 21,221
Capital reductions (5,509) - - (2,281) (1,304) (51) (9,145)
Distributions (352) (988) (1,057) (7,165) (1,008) (844) (11,414)
Redemptions (2,824) (150) - (292) (1,081) - (4,347)
Net allocations among investment strategies (18) 2,799 - - - - 2,781
Change in fund value 1,607 89 - 2,107 575 (269) 4,109
Change in fee basis - - - - 1,434 - 1,434
Balance at 9/30/2024 $ 46,197 $ 27,845 $ 7,448 $ 80,906 $ 37,774 $ 5,067 $ 205,237
The charts below present FPAUM for the Credit Group by its fee bases ($ in billions):
FPAUM: $240.2 FPAUM: $205.2
Invested capital
Market value(1)
Collateral balances (at par) Capital commitments
(1)Includes $58.7 billion and $43.5 billion from funds that primarily invest in illiquid strategies as of September 30, 2025 and 2024, respectively. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.
Credit Group-Fund Performance Metrics as of September 30, 2025
ARCC contributed approximately 31% of the Credit Group's total management fees for the nine months ended September 30, 2025. In addition, the Credit Group's other significant funds, which are presented in the tables below, collectively contributed approximately 40% of the Credit Group's management fees for the nine months ended September 30, 2025.
The following table presents the performance data for our significant funds that are not drawdown funds in the Credit Group as of September 30, 2025 ($ in millions):
Returns(%)
Primary
Investment Strategy 		Year of Inception AUM Current Quarter Year-To-Date
Since Inception(1)
Fund Gross Net Gross Net Gross Net
ARCC(2)
U.S. Direct Lending 2004 $ 35,200 N/A 3.0 N/A 8.1 N/A 12.1
CADC(3)
U.S. Direct Lending 2017 8,278 N/A 2.5 N/A 6.6 N/A 7.1
Open-ended core alternative credit fund(4)
Alternative Credit 2021 7,432 3.2 2.4 9.4 6.9 11.8 8.8
ASIF(3)
U.S. Direct Lending 2023 22,954 N/A 2.6 N/A 7.1 N/A 11.2
Open-ended European direct lending fund(5)
European Direct Lending 2024 5,573 N/A 2.0 N/A 5.7 N/A 10.1
(1)Since inception returns are annualized.
(2)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. 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 filings with the SEC, which are not part of this report.
(3)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. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Net returns are calculated using the fund's NAV and assume distributions are reinvested at the NAV on the date of distribution. Additional information related to CADC and ASIF can be found in its filings with the SEC, which are not part of this report.
(4)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. The fund is made up of a Main Class ("Class M") and a Constrained Class ("Class C"). Class M includes investors electing to participate in all investments and Class C includes investors electing to be excluded from exposure to liquid investments. Returns presented in the table are for onshore Class M. The current quarter gross and net returns for Class M (offshore) are 3.1% and 2.3%, respectively. The year-to-date gross and net returns for Class M (offshore) are 9.3% and 6.8%, respectively. The since inception gross and net returns for Class M (offshore) are 11.7% and 8.3%, respectively. The current quarter gross and net returns for Class C (offshore) are 2.9% and 2.2%, respectively. The year-to-date gross and net returns for Class C (offshore) are 8.4% and 6.2%, respectively. The since inception gross and net returns for Class C (offshore) are 11.3% and 8.1%, respectively.
(5)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. Returns are shown for the Euro hedged distributing institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees, and currency hedging. Actual individual stockholder returns will vary. Net returns are calculated using the fund's NAV and assume distributions are reinvested at the NAV on the date of distribution.
The following table presents the performance data of the Credit Group's significant drawdown funds as of September 30, 2025 ($ in millions):
Primary Investment Strategy Year of Inception AUM Original Capital Commitments Capital Invested to Date
Realized Value(1)
Unrealized Value(2)
Total Value MoIC IRR(%)
Fund
Gross(3)
Net(4)
Gross(5)
Net(6)
Funds Deploying Capital
PCS II U.S. Direct Lending 2020 $ 6,433 $ 5,114 $ 4,053 $ 994 $ 4,403 $ 5,397 1.4x 1.3x 13.3 9.4
ASOF II Opportunistic Credit 2021 9,296 7,128 6,202 27 7,986 8,013 1.4x 1.3x 17.9 13.1
ACE VI Unlevered(7)
European Direct Lending 2022 24,684 7,439 3,011 171 3,129 3,300 1.1x 1.1x 13.3 9.5
ACE VI Levered(7)
9,667 3,615 273 3,866 4,139 1.2x 1.1x 20.5 14.6
SDL III Unlevered(8)
U.S. Direct Lending 2023 27,223 3,311 1,243 66 1,274 1,340 1.1x 1.1x 13.9 10.3
SDL III Levered 11,959 3,331 295 3,542 3,837 1.2x 1.2x 27.6 19.2
Funds Harvesting Investments
ACE IV Unlevered(9)
European Direct Lending 2018 6,086 2,851 2,454 2,056 1,171 3,227 1.4x 1.3x 8.0 5.8
ACE IV Levered(9)
4,819 4,096 3,825 2,022 5,847 1.6x 1.4x 11.0 7.8
ACE V Unlevered(10)
European Direct Lending 2020 17,511 7,026 5,831 1,711 5,626 7,337 1.3x 1.3x 10.3 7.6
ACE V
Levered(10)
6,376 5,305 2,206 5,192 7,398 1.5x 1.3x 14.4 10.6
SDL II Unlevered U.S. Direct Lending 2021 16,468 1,989 1,700 405 1,665 2,070 1.3x 1.2x 11.4 9.0
SDL II Levered 6,047 4,924 1,793 4,695 6,488 1.4x 1.3x 17.7 13.4
(1)For funds other than our opportunistic credit funds, realized value represent the sum of all cash distributions to all partners and if applicable, exclude tax and incentive distributions made to the general partner. For our opportunistic credit funds, realized value represent the sum of all cash distributions to the fee-paying limited partners and if applicable, exclude tax and incentive distributions made to the general partner.
(2)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. For funds other than our opportunistic credit funds, the unrealized value is based on all partners. For our opportunistic credit funds, the unrealized value is based on the fee-paying limited partners.
(3)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, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(4)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 and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally 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 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, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(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 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 and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(7)ACE VI is made up of six parallel funds, four denominated in Euros and two denominated in pound sterling: ACE VI (E) Unlevered, ACE VI (E) II Unlevered, ACE VI (G) Unlevered, ACE VI (E) Levered, ACE VI (E) II Levered, and ACE VI (G) Levered, and three feeder funds: ACE VI (D) Levered, ACE VI (Y) Unlevered and ACE VI (D) Rated Notes. ACE VI (E) II Levered includes ACE VI (D) Levered feeder fund and ACE VI (E) II Unlevered includes ACE VI (Y) Unlevered and ACE VI (D) Rated Notes feeder funds. The gross and net IRR and gross and net MoIC presented in the table are for ACE VI (E) Unlevered and ACE VI (E) Levered. Metrics for ACE VI (E) II Levered exclude the ACE VI (D) Levered feeder fund and metrics for ACE VI (E) II Unlevered exclude ACE VI (Y) Unlevered and ACE VI (D) Rated Notes feeder funds. The gross and net IRR for ACE VI (G) Unlevered are 15.0% and 10.5%, respectively. The gross and net MoIC for ACE VI (G) Unlevered are 1.2x and 1.1x, respectively. The gross and net IRR for ACE VI (G) Levered are 24.3% and 14.4%, respectively. The gross and net MoIC for ACE VI (G) Levered are 1.2x and 1.1x, respectively. The gross and net IRR for ACE VI (E) II Unlevered are 13.1% and 9.2%, respectively. The gross and net MoIC for ACE VI (E) II Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (E) II Levered are 21.1% and 15.2%, respectively. The gross and net MoIC for ACE VI (E) II Levered are 1.2x and 1.2x, respectively. The gross and net IRR for ACE VI (D) Levered are 24.4% and 18.6%, respectively. The gross and net MoIC for ACE VI (D) Levered are 1.2x and 1.2x, respectively. The gross and net IRR for ACE VI (Y) Unlevered are 9.9% and 6.4%, respectively. The gross and net MoIC for ACE VI (Y) Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (D) Rated Notes are 20.5% and 12.5%, respectively. The gross and net MoIC for ACE VI (D) Rated Notes are 1.2x 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 VI Unlevered and ACE VI Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.
(8)SDL III Unlevered includes investor commitments in three currencies: U.S. dollars, pound sterling, and yen. The gross and net IRR and MoIC presented in the table are for investors committed in U.S. dollars. 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 SDL III Unlevered are for the combined fund and are converted to U.S. dollars at the prevailing quarter-end exchange rate.
(9)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 and one feeder fund: ACE IV (D) Levered. ACE IV (E) Levered includes the ACE IV (D) Levered feeder fund. 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 exclude the U.S. dollar denominated feeder fund. The gross and net IRR for ACE IV (G) Unlevered are 9.6% and 7.0%, respectively. The gross and net MoIC for ACE IV (G) Unlevered are 1.5x and 1.4x, respectively. The gross and net IRR for ACE IV (G) Levered are 12.3% and 8.7%, respectively. The gross and net MoIC for ACE IV (G) Levered are 1.7x and 1.5x, respectively. The gross and net IRR for ACE IV (D) Levered are 12.4% and 9.1%, respectively. The gross and net MoIC for ACE IV (D) Levered are 1.7x and 1.5x, 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.
(10)ACE V is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE V (E) Unlevered, ACE V (G) Unlevered, ACE V (E) Levered, and ACE V (G) Levered, and two feeder funds: ACE V (D) Levered and ACE V (Y) Unlevered. ACE V (E) Levered includes the ACE V (D) Levered feeder fund and ACE V (E) Unlevered includes the ACE V (Y) Unlevered feeder fund. The gross and net IRR and gross and net MoIC presented in the table are for ACE V (E) Unlevered and ACE V (E) Levered. Metrics for ACE V (E) Levered exclude the ACE V (D) Levered feeder fund and metrics for ACE V (E) Unlevered exclude the ACE V (Y) Unlevered feeder fund. The gross and net IRR for ACE V(G) Unlevered are 11.9% and 9.0%, respectively. The gross and net MoIC for ACE V (G) Unlevered are 1.4x and 1.3x, respectively. The gross and net IRR for ACE V (G) Levered are 15.6% and 11.3%, respectively. The gross and net MoIC for ACE V (G) Levered are 1.5x and 1.4x, respectively. The gross and net IRR for ACE V (D) Levered are 14.8% and 11.1%, respectively. The gross and net MoIC for ACE V (D) Levered are 1.5x and 1.4x, respectively. The gross and net IRR for ACE V (Y) Unlevered are 10.3% and 7.4%, respectively. The gross and net MoIC for ACE V (Y) Unlevered are 1.3x and 1.2x, 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 V Unlevered and ACE V Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate.
Real Assets Group-Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Fee Related Earnings
The following table presents the components of the Real Assets Group's FRE ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Management fees $ 177,655 $ 105,733 $ 71,922 68% $ 484,032 $ 299,156 $ 184,876 62%
Fee related performance revenues 5,904 - 5,904 NM 6,051 - 6,051 NM
Other fees 55,556 7,263 48,293 NM 125,494 18,783 106,711 NM
Compensation and benefits (85,513) (42,360) (43,153) (102) (222,504) (119,403) (103,101) (86)
General, administrative and other expenses (27,515) (14,118) (13,397) (95) (79,062) (43,857) (35,205) (80)
Fee Related Earnings $ 126,087 $ 56,518 69,569 123 $ 314,011 $ 154,679 159,332 103
Management Fees.The chart below presents Real Assets Group management fees and effective management fee rates ($ in millions):
The following table presents the components of and causes for changes in the Real Assets Group's management fees for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 ($ in millions):
Three month change Nine month change
Fees from acquisitions:
Fees from the GCP Acquisition effective March 1, 2025, excluding catch-up fees $ 58.3 $ 140.5
Fees from the WSM Acquisition effective December 1, 2024 5.5 15.8
Catch-up fees generated from U.S. Logistics Partners V, L.P. - 3.7
Perpetual wealth vehicles:
Fees from our open-ended infrastructure fund, excluding Part I Fees, our diversified non-traded REIT and our U.S. open-ended industrial real estate fund, driven by additional capital raised
8.8 16.5
Part I Fees from our open-ended infrastructure fund driven by an increase in net investment income from its growing portfolio of investments 1.6 1.6
Capital commitments:
Fees from our fourth European value-add real estate equity fund, our 11th U.S. value-add real estate equity fund and ACIP II, excluding catch-up fees
2.6 10.7
Catch-up fees from our fourth European value-add real estate equity fund, our 11th U.S. value-add real estate equity fund and ACIP II 0.8 1.1
Catch-up fees from Ares U.S. Real Estate Opportunity Fund IV, L.P. ("AREOF IV"), which had its final close in the third quarter of 2024 (5.0) (6.5)
Distributions that reduced the fee base of U.S. Power Fund IV, L.P. and Infrastructure Debt Fund IV, L.P. as the funds are past their investment periods (2.2) (4.4)
Cumulative effect of other changes 1.5 5.9
Total $ 71.9 $ 184.9
The decreases in effective management fee rate for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were primarily driven by lower effective management fee rates from funds that we manage as a result of the GCP Acquisition and the impact of the fees received from these funds. Certain of these funds pay management fees based on net operating income and we present the associated effective management fee rates as a percentage of fund assets, which may result in greater variability in the Real Assets Group's effective management fee rate. In addition, due to the vertically integrated focus of the acquired platform following the GCP Acquisition, we expect the size and composition of other fees earned from these funds will increase relative to management fees.
Fee Related Performance Revenues. Fee related performance revenues for the three and nine months ended September 30, 2025 were primarily attributable to incentive fees earned from our U.S. open-ended industrial real estate fund that vary based upon a three-year measurement period calculated for each fund investor.
Other Fees.The increases in other fees forthethree and nine months ended September 30, 2025 compared to the same periods in 2024 were driven by incremental fees of $45.5 million and $100.5 million, respectively, 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 three and nine months ended September 30, 2025, these incremental fees largely represented development and leasing fees.
Excluding the aforementioned impact of the GCP Acquisition, other fees increased by $2.8 million and $6.2 million, or 39% and 33%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024primarily due to higher property management fees from increased activity within certain U.S. real estate equity funds.
Compensation and Benefits.The GCP Acquisition added 530 professionals to our period end headcount as of September 30, 2025, which represents 444 full-time equivalents for the year-to-date period. Headcount growth attributable to the GCP Acquisition contributed $35.8 million and $83.2 million in employment related costs for the three and nine months ended September 30, 2025, respectively, largely reflecting salary expense and incentive-based compensation.
Compensation and benefits, excluding the aforementioned impact from the GCP Acquisition, increased by $7.6 million and $20.1 million, or 18% and 17%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases in compensation and benefits over the comparative periods were driven by: (i) higher incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year; and (ii) higher fee related performance compensation of $3.5 million for each of the comparative periods, corresponding to the aforementioned increases in fee related performance revenues.
Full-time equivalent headcount increased by 123% to 860 investment and investment support professionals for the year-to-date period in 2025 from 386 professionals for the same period in 2024, including the impact of GCP International previously discussed.
General, Administrative and Other Expenses. The GCP Acquisition contributed $10.1 million and $27.6 million in general, administrative and other expenses for the three and nine months ended September 30, 2025, respectively, and included certain non-recurring integration costs of $0.7 million and $1.8 million, respectively. We expect the remainder of the operating expenses to fluctuate during an integration period as we seek to generate cost savings and begin to execute on synergy opportunities.
General, administrative and other expenses, excluding the aforementioned impact from the GCP Acquisition, increased by $3.3 million and $7.6 million, or 24% and 17%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases were driven by supplemental distribution fees, which increased by $3.5 million and $5.0 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024, as we expanded our wealth product offerings with our open-ended infrastructure fund.
In addition, occupancy costs and information technology costs collectively increased by $3.0 million for the nine months ended September 30, 2025 compared to the same period in 2024 to support our growing headcount and the expansion of our business.
Realized Income
The following table presents the components of the Real Assets Group's RI ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Fee Related Earnings $ 126,087 $ 56,518 $ 69,569 123% $ 314,011 $ 154,679 $ 159,332 103%
Performance income-realized 1,200 15,441 (14,241) (92) 70,186 24,324 45,862 189
Performance related compensation-realized (769) (9,403) 8,634 92 (49,893) (15,134) (34,759) (230)
Realized net performance income 431 6,038 (5,607) (93) 20,293 9,190 11,103 121
Investment income (loss)-realized 10,415 3,729 6,686 179 24,878 (592) 25,470 NM
Interest income 1,639 245 1,394 NM 4,922 3,543 1,379 39
Interest expense (26,521) (6,190) (20,331) NM (66,808) (21,472) (45,336) (211)
Realized net investment loss (14,467) (2,216) (12,251) NM (37,008) (18,521) (18,487) (100)
Realized Income $ 112,051 $ 60,340 51,711 86 $ 297,296 $ 145,348 151,948 105
The Real Assets Group's realized activities were principally composed of and caused by the following:
Three months ended September 30, 2025 Three months ended September 30, 2024
Realized net performance income
Carried interest:
•Distributions of $0.4 million from U.S. Real Estate Fund VIII, L.P. ("US VIII"), which is a European-style waterfall fund that is past its investment period and monetizing investments
Carried interest:
•Distributions of $3.1 million from the partial sale of an ACIP I co-investment vehicle's investment in a renewable energy company
•Distributions of $2.4 million from US VIII, which is past its investment period and monetizing investments
Realized investment income and interest income
•Income of $7.9 million from our APAC real estate equity and real estate debt funds
•Income of $2.2 million from US VIII
•Income of $1.2 million from the sale of an infrastructure opportunities fund's investment in a wind energy company and $1.2 million from an infrastructure debt fund
Nine months ended September 30, 2025 Nine months ended September 30, 2024
Realized net performance income
Carried interest:
•Tax distributions of $12.6 million from EIF V
•Distributions of $4.6 million from US VIII and a U.S. real estate equity fund, which are both European-style waterfall funds that are past their investment periods and monetizing investments
•Distributions of $2.1 million from the sale of an ACIP I co-investment vehicle's investment in a renewable energy company
Carried interest:
•Distributions of $3.5 million from US VIII, which is past its investment period and monetizing investments
•Distributions of $3.1 million from the partial sale of an ACIP I co-investment vehicle's investment in a renewable energy company
Incentive fees:
•Incentive fees of $1.9 million generated from a U.S. open-ended industrial real estate fund that varies based upon a three-year measurement period calculated for each fund investor
Realized investment income and interest income
•Income of $15.8 million from our APAC real estate equity and real estate debt funds
•Income of $3.5 million from US VIII
•Realized investment losses of $12.4 million associated with a guarantee of a credit facility provided in connection with a historical acquisition
•Income of $6.4 million from funds within our real estate debt strategy and $2.6 million from an infrastructure debt fund
•Income of $1.2 million from the sale of an infrastructure opportunities fund's investment in a wind energy company
Interest expense increased over the comparative periods primarily due to financing costs incurred in connection with the GCP Acquisition. Interest expense is allocated among our segments primarily based on the cost basis of our balance sheet investments and the cost of acquisitions. The financing costs to complete the GCP Acquisition resulted in a greater allocation of interest expense to the Real Assets Group in the current year periods. We expect that interest expense allocated to the Real Assets Group will remain elevated in the current year as the interest expense associated with the GCP Acquisition will remain fully allocated to the Real Assets Group.
Real Assets Group-Performance Income
The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Real Assets Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions):
As of September 30, 2025 As of December 31, 2024
Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income
US IX $ 109.6 $ 68.0 $ 41.6 $ 99.8 $ 61.9 $ 37.9
EIF V 91.4 68.3 23.1 121.3 90.7 30.6
IDF V 161.7 99.4 62.3 113.7 69.3 44.4
ACIP I 96.0 66.0 30.0 97.7 66.8 30.9
Other Real Assets funds 150.5 97.2 53.3 135.8 85.7 50.1
Total Real Assets Group $ 609.2 $ 398.9 $ 210.3 $ 568.3 $ 374.4 $ 193.9
The following table presents the change in accrued performance income for the Real Assets Group ($ in millions):
As of December 31, 2024 Activity during the period As of September 30, 2025
Waterfall
Type 		Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income
Accrued Carried Interest
US IX European $ 99.8 $ 9.8 $ - $ - $ 109.6
EIF V European 121.3 19.9 (49.8) - 91.4
IDF V European 113.7 31.2 - 16.8 161.7
ACIP I European 97.7 3.6 (5.3) - 96.0
Other Real Assets funds European 97.2 22.0 (14.6) 0.7 105.3
Other Real Assets funds American 38.6 6.6 - - 45.2
Total accrued carried interest 568.3 93.1 (69.7) 17.5 609.2
Other Real Assets funds Incentive - 0.5 (0.5) - -
Total Real Assets Group $ 568.3 $ 93.6 $ (70.2) $ 17.5 $ 609.2
Real Assets Group-Assets Under Management
The tables below present rollforwards of AUM for the Real Assets Group ($ in millions):
Real Estate Infrastructure Total Real
Assets Group
Balance at 6/30/2025 $ 108,650 $ 21,124 $ 129,774
Net new par/equity commitments 1,698 1,649 3,347
Net new debt commitments 1,096 377 1,473
Capital reductions (883) - (883)
Distributions (741) (531) (1,272)
Redemptions (226) (366) (592)
Net allocations among investment strategies (133) 258 125
Change in fund value 39 343 382
Balance at 9/30/2025 $ 109,500 $ 22,854 $ 132,354
Real Estate Infrastructure Total Real
Assets Group
Balance at 6/30/2024 $ 51,527 $ 16,165 $ 67,692
Net new par/equity commitments 1,182 422 1,604
Net new debt commitments 1,250 - 1,250
Capital reductions (254) - (254)
Distributions (414) (519) (933)
Redemptions (206) - (206)
Change in fund value 565 635 1,200
Balance at 9/30/2024 $ 53,650 $ 16,703 $ 70,353
Real Estate Infrastructure Total Real
Assets Group
Balance at 12/31/2024 $ 58,246 $ 17,052 $ 75,298
Acquisitions 43,273 2,008 45,281
Net new par/equity commitments 3,869 4,035 7,904
Net new debt commitments 5,162 544 5,706
Capital reductions (2,035) - (2,035)
Distributions (2,591) (1,859) (4,450)
Redemptions (516) (366) (882)
Net allocations among investment strategies (239) 413 174
Change in fund value 4,331 1,027 5,358
Balance at 9/30/2025 $ 109,500 $ 22,854 $ 132,354
Real Estate Infrastructure Total Real
Assets Group
Balance at 12/31/2023 $ 49,715 $ 15,698 $ 65,413
Net new par/equity commitments 3,311 1,191 4,502
Net new debt commitments 2,954 - 2,954
Capital reductions (589) - (589)
Distributions (1,055) (1,459) (2,514)
Redemptions (931) - (931)
Change in fund value 245 1,273 1,518
Balance at 9/30/2024 $ 53,650 $ 16,703 $ 70,353
The components of our AUM for the Real Assets Group are presented below ($ in billions):
AUM: $132.4 AUM: $70.3
FPAUM
Non-fee paying(1)
AUM not yet paying fees
(1) Includes $1.4 billion and $0.7 billion of non-fee paying AUM from our general partner and employee commitments as of September 30, 2025 and 2024, respectively.
Real Assets Group-Fee Paying AUM
The tables below present rollforwards of fee paying AUM for the Real Assets Group ($ in millions):
Real Estate Infrastructure Total Real
Assets Group
Balance at 6/30/2025 $ 67,192 $ 12,303 $ 79,495
Commitments 1,695 1,116 2,811
Deployment/increase in leverage 850 610 1,460
Capital reductions (774) - (774)
Distributions (541) (1,163) (1,704)
Redemptions (226) (366) (592)
Net allocations among investment strategies (133) 258 125
Change in fund value 7 (503) (496)
Change in fee basis 178 - 178
Balance at 9/30/2025 $ 68,248 $ 12,255 $ 80,503
Real Estate Infrastructure Total Real
Assets Group
Balance at 6/30/2024 $ 30,298 $ 11,325 $ 41,623
Commitments 1,104 49 1,153
Deployment/increase in leverage 526 255 781
Distributions (286) (295) (581)
Redemptions (206) - (206)
Change in fund value 419 108 527
Change in fee basis (124) (60) (184)
Balance at 9/30/2024 $ 31,731 $ 11,382 $ 43,113
Real Estate Infrastructure Total Real
Assets Group
Balance at 12/31/2024 $ 32,896 $ 11,192 $ 44,088
Acquisitions 30,178 289 30,467
Commitments 3,068 1,692 4,760
Deployment/increase in leverage 2,250 2,006 4,256
Capital reductions (951) - (951)
Distributions (1,812) (2,603) (4,415)
Redemptions (516) (366) (882)
Net allocations among investment strategies (239) 413 174
Change in fund value 3,433 (727) 2,706
Change in fee basis (59) 359 300
Balance at 9/30/2025 $ 68,248 $ 12,255 $ 80,503
Real Estate Infrastructure Total Real
Assets Group
Balance at 12/31/2023 $ 30,310 $ 11,028 $ 41,338
Commitments 2,482 192 2,674
Deployment/increase in leverage 1,715 793 2,508
Capital reductions (12) - (12)
Distributions (801) (648) (1,449)
Redemptions (931) - (931)
Change in fund value 6 77 83
Change in fee basis (1,038) (60) (1,098)
Balance at 9/30/2024 $ 31,731 $ 11,382 $ 43,113
The charts below present FPAUM for the Real Assets Group by its fee bases ($ in billions):
FPAUM: $80.5 FPAUM: $43.1
Invested capital/other(1)
GAV
Market value(2)
Capital commitments
(1)Other consists of ACRE's FPAUM, which is based on ACRE's stockholders' equity.
(2)Amounts represent FPAUM from funds that primarily invest in illiquid strategies. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.
Real Assets Group-Fund Performance Metrics as of September 30, 2025
The significant funds presented in the tables below collectively contributed approximately 34% of the Real Assets Group's management fees for the nine months ended September 30, 2025.
The following table presents the performance data for our significant funds that are not drawdown funds in the Real Assets Group as of September 30, 2025 ($ in millions):
Returns(%)
Primary
Investment Strategy 		Year of Inception AUM Current Quarter Year-To-Date
Since Inception(1)
Fund Gross Net Gross Net Gross Net
Diversified non-traded REIT(2)
Real Estate 2012 $ 7,010 N/A 3.2 N/A 7.9 N/A 6.4
J-REIT(3)
Real Estate 2012 8,076 N/A N/A N/A N/A N/A 13.3
Industrial non-traded REIT(4)
Real Estate 2017 7,565 N/A 1.8 N/A 6.3 N/A 8.5
U.S. open-ended industrial real estate fund(5)
Real Estate 2017 5,779 1.3 1.0 4.6 3.8 16.4 13.4
Japanese open-ended industrial real estate fund Real Estate 2020 3,856 3.6 3.3 7.6 6.8 13.6 11.8
(1)Since inception returns are annualized.
(2)Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Actual individual stockholder returns will vary. Net returns are calculated using the fund's NAV and assume distributions are reinvested at the NAV on the date of distribution. The inception date used in the calculation of the since inception return is the date in which the first shares of common stock were sold after converting to a NAV-based REIT.
(3)Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Actual individual stockholder returns will vary. Net returns are calculated using the fund's NAV and assume distributions are reinvested at NAV on the semi-annual period-end date. NAVs are calculated semi-annually in February and August, and therefore, only the since inception return is presented. The inception date used in the calculation of the since inception return is the date in which the fund's investment units began to be listed on the Tokyo Stock Exchange. The since inception return is calculated based on the most recent NAV date. Additional information related to J-REIT can be found in its materials posted to its website, which are not part of this report.
(4)Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Actual individual stockholder returns will vary. Net returns are calculated using the fund's NAV and assume distributions are reinvested at the NAV on the date of distribution.
(5)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. Gross returns do not reflect the deduction of management fees, incentive fees, as applicable, or other expenses. Net returns are calculated by subtracting the applicable management fees, incentive fees, as applicable and other expenses from the gross returns on a quarterly basis.
The following table presents the performance data of the Real Assets Group's significant drawdown funds as of September 30, 2025 ($ in millions):
Primary Investment Strategy Year of Inception AUM Original Capital Commitments Capital Invested to Date
Realized Value(1)
Unrealized Value(2)
Total Value MoIC IRR(%)
Fund
Gross(3)
Net(4)
Gross(5)
Net(6)
Fund Harvesting Investments
Europe Logistics Income Partners II SCSp ("EIP II")(7)
Real Estate 2020 $ 4,033 $ 1,839 $ 1,786 $ 222 $ 1,782 $ 2,004 1.2x 1.1x 3.2 2.8
(1)Realized proceeds include distributions of operating income, sales and financing proceeds received to the limited partners.
(2)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.
(3)The gross 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, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(4)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 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, credit facility interest expense, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally 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 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, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(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 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 and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(7)EIP II is a Euro-denominated fund. 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 EIP II are converted to U.S. Dollars at the prevailing quarter-end exchange rate.
Private Equity Group-Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Fee Related Earnings
The following table presents the components of the Private Equity Group's FRE ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Management fees $ 33,284 $ 34,621 $ (1,337) (4)% $ 97,049 $ 103,126 $ (6,077) (6)%
Other fees 467 372 95 26 1,298 1,258 40 3
Compensation and benefits (15,752) (13,877) (1,875) (14) (46,379) (42,737) (3,642) (9)
General, administrative and other expenses (4,892) (4,576) (316) (7) (14,708) (15,282) 574 4
Fee Related Earnings $ 13,107 $ 16,540 (3,433) (21) $ 37,260 $ 46,365 (9,105) (20)
Management Fees. The chart below presents Private Equity Group management fees and effective management fee rates ($ in millions):
The following table presents the components of and causes for changes in the Private Equity Group's management fees for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 ($ in millions):
Three month change Nine month change
Fees from acquired APAC private equity funds effective August 1, 2025
$ 2.0 $ 2.0
Corporate private equity extended value fund that stopped paying fees at the end of the fourth quarter of 2024
(1.7) (5.1)
Cumulative effect of other changes (1.6) (3.0)
Total $ (1.3) $ (6.1)
The increases in effective management fee rate for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 were primarily driven by a corporate private equity extended fund that stopped paying fees at the end of the fourth quarter of 2024 and had a lower effective management fee rate than the average effective management fee rate of funds within the Private Equity Group.
Compensation and Benefits.The changes in compensation and benefits largely reflect higher incentive-based compensation recognized in anticipation of management fees from Ares Corporate Opportunities Fund VII, L.P. ("ACOF VII") turning on in the fourth quarter of 2025. Full-time equivalent headcount increased by 4% to 107 investment and investment support professionals for the year-to-date period in 2025 from 103 professionals in 2024.
Realized Income
The following table presents the components of the Private Equity Group's RI ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Fee Related Earnings $ 13,107 $ 16,540 $ (3,433) (21)% $ 37,260 $ 46,365 $ (9,105) (20)%
Performance income-realized 3,744 475 3,269 NM 39,733 9,032 30,701 NM
Performance related compensation-realized (2,999) (380) (2,619) NM (29,856) (7,235) (22,621) NM
Realized net performance income 745 95 650 NM 9,877 1,797 8,080 NM
Investment income (loss)-realized 513 526 (13) (2) (3,720) 1,287 (5,007) NM
Interest income 1 4 (3) (75) 2,024 12 2,012 NM
Interest expense (3,785) (4,454) 669 15 (11,775) (13,801) 2,026 15
Realized net investment loss (3,271) (3,924) 653 17 (13,471) (12,502) (969) (8)
Realized Income $ 10,581 $ 12,711 (2,130) (17) $ 33,666 $ 35,660 (1,994) (6)
The Private Equity Group's realized activities were principally composed of and caused by the following:
Three months ended September 30, 2025 Three months ended September 30, 2024
Realized net performance income
Carried interest:
•Distributions from partial sales of ACOF IV's investments in various energy companies
•No significant activities
Nine months ended September 30, 2025 Nine months ended September 30, 2024
Realized net performance income
Carried interest:
•Distributions from partial sales of ACOF VI's investment in FYBR and ACOF IV's investments in various energy companies
Carried interest:
•Distributions from ACOF IV's investment in various energy companies
Realized investment income (loss) and interest income
•Realized investment loss of $5.7 million from Ares Corporate Opportunities Fund III, L.P. as the fund continues to liquidate its remaining assets
•No significant activities
Interest expense decreased for the three and nine months ended September 30, 2025 when compared to the same periods in 2024, as our recent change in methodology results in allocating a significant portion of interest expense to our most recent acquisitions.
Private Equity Group-Performance Income
The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Private Equity Group ($ in millions):
As of September 30, 2025 As of December 31, 2024
Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income
ACOF IV $ 130.8 $ 104.7 $ 26.1 $ 166.8 $ 133.6 $ 33.2
ACOF VI 613.3 543.2 70.1 523.1 442.8 80.3
Other Private Equity funds 14.0 11.3 2.7 20.9 14.8 6.1
Total Private Equity Group $ 758.1 $ 659.2 $ 98.9 $ 710.8 $ 591.2 $ 119.6
The following table presents the change in accrued carried interest for the Private Equity Group ($ in millions):
As of December 31, 2024 Activity during the period As of September 30, 2025
Waterfall Type Accrued Carried Interest Change in Unrealized Realized Other Adjustments Accrued Carried Interest
ACOF IV American $ 166.8 $ (19.5) $ (16.5) $ - $ 130.8
ACOF VI American 523.1 139.0 (23.2) (25.6) 613.3
Other Private Equity funds European 13.1 (12.6) - - 0.5
Other Private Equity funds American 7.8 5.7 - - 13.5
Total Private Equity Group $ 710.8 $ 112.6 $ (39.7) $ (25.6) $ 758.1
The reduction in ACOF VI accrued carried interest was driven by a partial contribution of our rights to receive the carried interest from this fund to a structured investment vehicle. As a result, the contributed carried interest is now reflected as an investment of the structured investment vehicle.
Private Equity Group-Assets Under Management
The tables below present rollforwards of AUM for the Private Equity Group ($ in millions):
Corporate Private
Equity 		APAC Private
Equity 		Other Total Private
Equity Group
Balance at 6/30/2025 $ 21,201 $ 2,565 $ - $ 23,766
Acquisitions - 856 - 856
Net new par/equity commitments 516 12 - 528
Capital reductions (1) - - (1)
Distributions (70) (81) - (151)
Change in fund value 78 20 - 98
Balance at 9/30/2025 $ 21,724 $ 3,372 $ - $ 25,096
Corporate Private
Equity 		APAC Private
Equity 		Other Total Private
Equity Group
Balance at 6/30/2024 $ 21,270 $ 3,310 $ - $ 24,580
Net new par/equity commitments 105 - - 105
Distributions (187) (8) - (195)
Change in fund value 208 (194) - 14
Balance at 9/30/2024 $ 21,396 $ 3,108 $ - $ 24,504
Corporate Private
Equity 		APAC Private
Equity 		Other Total Private
Equity Group
Balance at 12/31/2024 $ 21,064 $ 2,977 $ - $ 24,041
Acquisitions - 856 - 856
Net new par/equity commitments 1,475 28 - 1,503
Capital reductions (55) - - (55)
Distributions (1,275) (81) - (1,356)
Change in fund value 515 (408) - 107
Balance at 9/30/2025 $ 21,724 $ 3,372 $ - $ 25,096
Corporate Private
Equity 		APAC Private
Equity
Other(1)
Total Private
Equity Group
Balance at 12/31/2023 $ 20,998 $ 3,414 $ 139 $ 24,551
Net new par/equity commitments 374 3 58 435
Capital reductions (4) - - (4)
Distributions (240) (19) - (259)
Redemptions - (2) - (2)
Net allocations among investment strategies 150 - (197) (47)
Change in fund value 118 (288) - (170)
Balance at 9/30/2024 $ 21,396 $ 3,108 $ - $ 24,504
(1) Amounts represent equity commitments to the platform that have not yet been allocated to an investment strategy.
The components of our AUM for the Private Equity Group are presented below ($ in billions):
AUM: $25.1 AUM: $24.5
FPAUM
Non-fee paying(1)
AUM not yet paying fees
(1) Includes $1.1 billion and $1.3 billion of non-fee paying AUM from our general partner and employee commitments as of September 30, 2025 and 2024, respectively.
Private Equity Group-Fee Paying AUM
The tables below present rollforwards of fee paying AUM for the Private Equity Group ($ in millions):
Corporate Private
Equity 		APAC Private
Equity 		Total Private
Equity Group
Balance at 6/30/2025 $ 9,491 $ 1,502 $ 10,993
Acquisitions - 1,118 1,118
Deployment/increase in leverage 1 - 1
Distributions (8) - (8)
Change in fund value (16) - (16)
Change in fee basis - (240) (240)
Balance at 9/30/2025 $ 9,468 $ 2,380 $ 11,848
Corporate Private
Equity 		APAC Private
Equity 		Total Private
Equity Group
Balance at 6/30/2024 $ 10,592 $ 1,673 $ 12,265
Deployment/increase in leverage 9 - 9
Distributions (54) - (54)
Change in fund value (5) - (5)
Change in fee basis 68 - 68
Balance at 9/30/2024 $ 10,610 $ 1,673 $ 12,283
Corporate Private
Equity 		APAC Private
Equity 		Total Private
Equity Group
Balance at 12/31/2024 $ 9,860 $ 1,567 $ 11,427
Acquisitions - 1,118 1,118
Deployment/increase in leverage 26 7 33
Capital reductions (11) - (11)
Distributions (8) - (8)
Change in fund value (14) - (14)
Change in fee basis (385) (312) (697)
Balance at 9/30/2025 $ 9,468 $ 2,380 $ 11,848
Corporate Private
Equity 		APAC Private
Equity 		Total Private
Equity Group
Balance at 12/31/2023 $ 11,459 $ 1,665 $ 13,124
Deployment/increase in leverage 18 16 34
Distributions (54) - (54)
Redemptions - (2) (2)
Change in fund value (33) - (33)
Change in fee basis (780) (6) (786)
Balance at 9/30/2024 $ 10,610 $ 1,673 $ 12,283
The charts below present FPAUM for the Private Equity Group by its fee bases ($ in billions):
FPAUM: $11.8 FPAUM: $12.3
Capital commitments Invested capital
Private Equity Group-Fund Performance Metrics as of September 30, 2025
The significant funds presented in the table below collectively contributed approximately 75% of the Private Equity Group's management fees for the nine months ended September 30, 2025.
The following table presents the performance data of the Private Equity Group's significant drawdown funds as of September 30, 2025 ($ in millions):
Primary Investment Strategy Year of Inception AUM Original Capital Commitments Capital Invested to Date
Realized Value(1)
Unrealized Value(2)
Total Value MoIC IRR(%)
Fund
Gross(3)
Net(4)
Gross(5)
Net(6)
Fund Deploying Capital
ACOF VI Corporate Private Equity 2020 $ 8,546 $ 5,743 $ 5,869 $ 2,107 $ 8,080 $ 10,187 1.7x 1.5x 21.5 16.1
Funds Harvesting Investments
ACOF V Corporate Private Equity 2017 7,092 7,850 7,611 4,115 6,622 10,737 1.4x 1.3x 7.1 5.2
(1)Realized value represents the sum of all cash dividends, interest income, other fees and cash proceeds from realizations of interests in portfolio investments. Realized value excludes 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 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, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The gross MoICs are also calculated before giving effect to any bridge financings. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(4)The net MoIC is calculated at the fund-level. 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 net MoICs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net MoIC would be 1.3x for ACOF V and 1.4x for ACOF VI. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally 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 the fund and the fund's residual value at the end of the measurement period. Gross IRRs reflect 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, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The gross IRRs are also calculated before giving effect to any bridge financings. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(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 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 generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. The net IRRs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net IRRs would be 5.3% for ACOF V and 15.5% for ACOF VI.
Secondaries Group-Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Fee Related Earnings
The following table presents the components of the Secondaries Group's FRE ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Management fees $ 91,303 $ 48,084 $ 43,219 90% $ 210,596 $ 140,650 $ 69,946 50%
Fee related performance revenues 17,110 2,508 14,602 NM 43,002 20,633 22,369 108
Other fees 196 58 138 238 6,119 116 6,003 NM
Compensation and benefits (24,952) (14,432) (10,520) (73) (66,390) (47,971) (18,419) (38)
General, administrative and other expenses (9,624) (8,464) (1,160) (14) (28,173) (26,428) (1,745) (7)
Fee Related Earnings $ 74,033 $ 27,754 46,279 167 $ 165,154 $ 87,000 78,154 90
Management Fees. The chart below presents Secondaries Group management fees and effective management fee rates ($ in millions):
The following table presents the components of and causes for changes in the Secondaries Group's management fees for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 ($ in millions):
Three month change Nine month change
Capital commitments:
Catch-up fees generated from ASIS III and related vehicles $ 27.2 $ 25.3
Fees from ASIS III, excluding catch-up fees, and a credit secondaries fund
7.4 21.5
Perpetual wealth vehicles:
Fees from APMF, driven by additional capital raised
7.6 20.3
Cumulative effect of other changes 1.0 2.8
Total $ 43.2 $ 69.9
The increases in effective management fee rate for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 were primarily due to additional capital raised by APMF that has a fee rate of 1.40%.
Fee Related Performance Revenues. The increases in fee related performance revenues for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 were attributable to higher incentive fees earned from APMF driven by increased IGAUM and higher investment returns over the comparative periods.
Other Fees.The increase in other fees forthenine months ended September 30, 2025 compared to the same period in 2024 were attributable to capital markets transaction fees associated with services provided by Ares Management Capital Markets LLC ("AMCM") during the second quarter of 2025.
Compensation and Benefits.The increases in compensation and benefits for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 were driven by: (i) higher incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year; and (ii) higher fee related performance compensation of $7.4 million and $11.6 million, respectively, corresponding to the increases in fee related performance revenues. We reduced fee related performance compensation by $3.1 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively, and $8.7 million and $6.0 million for the nine months ended September 30, 2025 and 2024, respectively, to reclaim a portion of the supplemental distribution fees paid to distribution partners.
Full-time equivalent headcount increased slightly to 115 investment and investment support professionals for the year-to-date period in 2025 from 112 professionals in 2024.
General, Administrative and Other Expenses. The increases in general, administrative and other expenses were primarily due to costs incurred to support distribution of shares in APMF. Supplemental distribution fees increased by $1.9 million and $3.4 million for the three and nine months ended September 30, 2025 compared to the same periods in 2024.
Conversely, placement fee expense decreased by $1.1 million for the nine months ended September 30, 2025compared to the same period in 2024. The activity for the nine months ended September 30, 2024included $1.3 million of investor servicefees that were fully recognized through the service period that ended in the third quarter of 2024.
Realized Income
The following table presents the components of the Secondaries Group's RI ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Fee Related Earnings $ 74,033 $ 27,754 $ 46,279 167% $ 165,154 $ 87,000 $ 78,154 90%
Performance income-realized 177 - 177 NM 177 361 (184) (51)
Performance related compensation-realized (106) - (106) NM (106) 110 (216) NM
Realized net performance income 71 - 71 NM 71 471 (400) (85)
Investment income-realized 221 76 145 191 376 390 (14) (4)
Interest income 68 20 48 240 1,048 64 984 NM
Interest expense (2,076) (5,566) 3,490 63 (5,946) (21,511) 15,565 72
Realized net investment loss (1,787) (5,470) 3,683 (67) (4,522) (21,057) 16,535 79
Realized Income $ 72,317 $ 22,284 50,033 225 $ 160,703 $ 66,414 94,289 142
Realized net investment loss for the three and nine months ended September 30, 2025 and 2024 largely represents allocated interest expense exceeding investment income during these periods.
Interest expense decreased for the three and nine months ended September 30, 2025 when compared to the same periods in 2024, as our recent change in methodology results in allocating a significant portion of interest expense to our most recent acquisitions.
Secondaries Group-Performance Income
The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Secondaries Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions):
As of September 30, 2025 As of December 31, 2024
Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income
LEP XVI $ 1.6 $ 1.6 $ - $ 144.1 $ 123.3 $ 20.8
LREF VIII 79.0 66.9 12.1 81.3 68.9 12.4
Other Secondaries funds 79.9 60.6 19.3 38.4 28.8 9.6
Total Secondaries Group
$ 160.5 $ 129.1 $ 31.4 $ 263.8 $ 221.0 $ 42.8
The following table presents the change in accrued performance income for the Secondaries Group ($ in millions):
As of December 31, 2024 Activity during the period As of September 30, 2025
Waterfall Type Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income
Accrued Carried Interest
LEP XVI European $ 144.1 $ (11.3) $ - $ (131.2) $ 1.6
LREF VIII European 81.3 (2.3) - - 79.0
Other Secondaries funds
European 38.4 41.5 - - 79.9
Total accrued carried interest 263.8 27.9 - (131.2) 160.5
Other Secondaries funds
Incentive - 0.2 (0.2) - -
Total Secondaries Group
$ 263.8 $ 28.1 $ (0.2) $ (131.2) $ 160.5
The reduction in LEP XVI accrued carried interest was driven by the contribution of our rights to receive the carried interest from this fund to a structured investment vehicle. As a result, the contributed carried interest is now reflected as an investment of the structured investment vehicle.
Secondaries Group-Assets Under Management
The table below presents the rollforwards of AUM for the Secondaries Group ($ in millions):
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit
Secondaries 		Other
Total Secondaries
Group
Balance at 6/30/2025 $ 18,183 $ 7,998 $ 4,199 $ 3,569 $ - $ 33,949
Net new par/equity commitments 910 174 1,941 324 - 3,349
Net new debt commitments 775 - - - - 775
Capital reductions (32) - - - - (32)
Distributions (108) (36) (57) (9) - (210)
Redemptions (60) - - - - (60)
Change in fund value 380 125 82 17 - 604
Balance at 9/30/2025 $ 20,048 $ 8,261 $ 6,165 $ 3,901 $ - $ 38,375
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit
Secondaries
Other(1)
Total Secondaries
Group
Balance at 6/30/2024 $ 13,838 $ 7,903 $ 2,899 $ 1,663 $ - $ 26,303
Net new par/equity commitments 621 10 - 57 - 688
Net new debt commitments 625 - - - - 625
Distributions (98) (22) (39) (3) - (162)
Net allocations among investment strategies 15 - - - 10 25
Change in fund value (239) (24) 43 (4) - (224)
Balance at 9/30/2024 $ 14,762 $ 7,867 $ 2,903 $ 1,713 $ 10 $ 27,255
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit
Secondaries 		Other Total Secondaries
Group
Balance at 12/31/2024 $ 15,805 $ 7,779 $ 3,691 $ 1,878 $ - $ 29,153
Net new par/equity commitments 3,258 402 2,522 1,973 - 8,155
Net new debt commitments 775 - - - - 775
Capital reductions (32) (58) - - - (90)
Distributions (336) (80) (167) (26) - (609)
Redemptions (123) - - - - (123)
Net allocations among investment strategies 10 25 - 38 - 73
Change in fund value 691 193 119 38 - 1,041
Balance at 9/30/2025 $ 20,048 $ 8,261 $ 6,165 $ 3,901 $ - $ 38,375
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit
Secondaries
Other(1)
Total Secondaries
Group
Balance at 12/31/2023 $ 13,174 $ 7,826 $ 2,380 $ 1,380 $ - $ 24,760
Net new par/equity commitments 1,572 198 424 329 - 2,523
Net new debt commitments 625 - - - - 625
Distributions (461) (48) (94) (9) - (612)
Net allocations among investment strategies 15 - - - 10 25
Change in fund value (163) (109) 193 13 - (66)
Balance at 9/30/2024 $ 14,762 $ 7,867 $ 2,903 $ 1,713 $ 10 $ 27,255
(1) Amounts represent equity commitments to the platform that have not yet been allocated to an investment strategy.
The components of our AUM for the Secondaries Group are presented below ($ in billions):
AUM: $38.4 AUM: $27.3
FPAUM AUM not yet paying fees
Non-fee paying(1)
(1) Includes $1.1 billion and $0.5 billion of non-fee paying AUM from our general partner and employee commitments as of September 30, 2025 and 2024, respectively.
Secondaries Group-Fee Paying AUM
The table below presents the rollforwards of fee paying AUM for the Secondaries Group ($ in millions):
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit
Secondaries 		Total Secondaries
Group
Balance at 6/30/2025 $ 13,918 $ 6,557 $ 3,144 $ 916 $ 24,535
Commitments 1,251 24 1,878 - 3,153
Deployment/increase in leverage 65 (28) 5 71 113
Distributions (11) (43) (47) - (101)
Redemptions (60) - - - (60)
Change in fund value 133 120 22 169 444
Change in fee basis (5) - - - (5)
Balance at 9/30/2025 $ 15,291 $ 6,630 $ 5,002 $ 1,156 $ 28,079
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit Secondaries Total Secondaries
Group
Balance at 6/30/2024 $ 12,018 $ 6,243 $ 2,137 $ 63 $ 20,461
Commitments 497 10 - - 507
Deployment/increase in leverage (2) 87 4 - 89
Distributions (12) (17) (34) (3) (66)
Change in fund value (158) (68) 39 52 (135)
Change in fee basis (2) 40 - 198 236
Balance at 9/30/2024 $ 12,341 $ 6,295 $ 2,146 $ 310 $ 21,092
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit Secondaries Total Secondaries
Group
Balance at 12/31/2024 $ 12,788 $ 6,441 $ 2,582 $ 590 $ 22,401
Commitments 2,271 194 2,428 - 4,893
Deployment/increase in leverage 202 19 18 541 780
Distributions (25) (81) (64) - (170)
Redemptions (123) - - - (123)
Net allocations among investment strategies 10 25 - 38 73
Change in fund value 173 32 38 (13) 230
Change in fee basis (5) - - - (5)
Balance at 9/30/2025 $ 15,291 $ 6,630 $ 5,002 $ 1,156 $ 28,079
Private Equity
Secondaries 		Real Estate
Secondaries 		Infrastructure
Secondaries 		Credit Secondaries Total Secondaries
Group
Balance at 12/31/2023 $ 11,204 $ 5,978 $ 1,763 $ 95 $ 19,040
Commitments 1,432 160 421 - 2,013
Deployment/increase in leverage 7 179 6 (1) 191
Distributions (135) (35) (88) (39) (297)
Change in fund value (116) (124) 44 58 (138)
Change in fee basis (51) 137 - 197 283
Balance at 9/30/2024 $ 12,341 $ 6,295 $ 2,146 $ 310 $ 21,092
The chart below presents FPAUM for the Secondaries Group by its fee bases ($ in billions):
FPAUM: $28.1 FPAUM: $21.1
Reported value(1)
Capital commitments Invested capital/other
(1)Amounts represent FPAUM from funds that primarily invest in illiquid strategies. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies.
Secondaries Group-Fund Performance Metrics as of September 30, 2025
The significant funds presented in the tables below collectively contributed approximately 33% of the Secondaries Group's management fees for the nine months ended September 30, 2025.
The following table presents the performance data for our significant fund that is not a drawdown fund in the Secondaries Group as of September 30, 2025 ($ in millions):
Returns(%)
Primary
Investment Strategy 		Year of Inception AUM Current Quarter Year-To-Date
Since Inception(1)
Fund Gross Net Gross Net Gross Net
APMF(2)
Private Equity Secondaries 2022 $ 4,380 N/A 3.6 N/A 11.3 N/A 14.7
(1)Since inception returns are annualized.
(2)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. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Net returns are calculated using the fund's NAV and assume distributions are reinvested at the NAV on the date of distribution. Additional information related to APMF can be found in its filings with the SEC, which are not part of this report.
The following table presents the performance data of the Secondaries Group's significant drawdown fund as of September 30, 2025 ($ in millions):
Primary Investment Strategy Year of Inception AUM Original Capital Commitments Capital Invested to Date
Realized Value(1)
Unrealized Value(2)
Total Value MoIC IRR(%)
Fund
Gross(3)
Net(4)
Gross(5)
Net(6)
Fund Harvesting Investments
LEP XVI(7)
Private Equity Secondaries 2016 $ 4,165 $ 4,896 $ 4,318 $ 2,079 $ 3,304 $ 5,383 1.4x 1.3x 15.3 9.4
Returns for LEP XVI are calculated from results of the underlying portfolio that are generally reported on a three month lag and may not include the impact of economic and market activities occurring in the current reporting period.
(1)Realized value represents the sum of all cash distributions to all limited partners and if applicable, exclude tax and incentive distributions made to the general partner.
(2)Unrealized value represents the limited partners' share of 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.
(3)The gross MoIC is calculated at the fund-level and is based on the interests of all partners. If applicable, limiting the gross MoIC to exclude interests attributable to the non-fee paying limited partners and/or the general partner who does not pay management fees or carried interest would have no material impact on the result. The gross MoIC is before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund's governing documentation. The gross fund-level MoIC would have generally been lower had such fund called capital from its partners instead of utilizing the credit facility.
(4)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 and other expenses, carried interest and credit facility interest expense, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund's governing documentation. The net fund-level MoICs would generally 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 the fund and the fund's residual value at the end of the measurement period. Gross IRR reflects returns to all partners. If applicable, limiting the gross IRR to exclude interests attributable to the non-fee paying limited partners and/or the general
partner who does not pay management fees or carried interest would have no material impact on the result. 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, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund's governing documents. The gross fund-level IRR would generally have been lower had such fund called capital from its partners instead of utilizing the credit facility.
(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 limited partners and, if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner who 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 and other expenses, carried interest and credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund's governing documents. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility.
(7)The results of the fund are presented on a combined basis with the affiliated parallel funds or accounts, given that the investments are substantially the same.
Operations Management Group-Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Fee Related Earnings
The following table presents the components of the Operations Management Group's FRE ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Other fees $ 9,235 $ 5,253 $ 3,982 76% $ 22,603 $ 15,066 $ 7,537 50%
Compensation and benefits (144,405) (102,112) (42,293) (41) (395,518) (294,639) (100,879) (34)
General, administrative and other expenses (81,746) (56,124) (25,622) (46) (214,949) (160,514) (54,435) (34)
Fee Related Earnings $ (216,916) $ (152,983) (63,933) (42) $ (587,864) $ (440,087) (147,777) (34)
Other Fees.The increases in other fees for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 were primarily attributable to higher facilitation fees from the 1031 exchange program associated with our non-traded REITs, as well as higher capital markets transaction services that were provided by AMCM.
Compensation and Benefits. The GCP Acquisition added 285 business operations professionals to our period end headcount as of September 30, 2025, which represents 208 full-time equivalents for the year-to-date period. Headcount growth attributable to the GCP Acquisition contributed $18.0 million and $30.8 million, respectively, in employment related costs for the three and nine months ended September 30, 2025, largely reflecting salary expense and incentive-based compensation.
Compensation and benefits, excluding the aforementioned impact from the GCP Acquisition, increased by $24.3 million and $70.1 million, or 24% for both the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases in compensation and benefits over the comparative periods were driven by: (i) the increase in headcount to support the growth of our business and other strategic initiatives; (ii) higher incentive-based compensation, which is dependent on our operating performance and is expected to fluctuate during the year; and (iii) higher sales-based bonuses, which increased by $1.5 million and $6.9 million, respectively, primarily driven by the increase in sales of our wealth products.
Full-time equivalent headcount increased by 28% to 2,072 professionals for the year-to-date period in 2025 from 1,622 professionals in 2024, including the impact of GCP International previously discussed.
General, Administrative and Other Expenses. The GCP Acquisition contributed $16.2 million and $31.8 million, respectively, in general, administrative and other expenses for the three and nine months ended September 30, 2025 and primarily included certain non-recurring integration costs of $6.8 million and $14.2 million, respectively. We expect the remainder of the operating expenses to fluctuate during an integration period as we seek to generate cost savings and begin to execute on synergy opportunities.
General, administrative and other expenses, excluding the aforementioned impact from the GCP Acquisition, increased by $9.5 million and $22.6 million, or 17% and 14%, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The increases in general, administrative and other expenses were driven by occupancy costs and information technology costs, which collectively increased by $5.0 million and $14.2 million, respectively, over the comparative periods. The increases in these expenses were primarily to support our growing headcount and the expansion of our business, with occupancy costs also being impacted by the expansion of our New York headquarters. In addition, marketing and travel expenses collectively increased by $2.8 million and $5.3 million, respectively, over the comparative periods, driven by investor events.
Realized Income
The following table presents the components of the OMG's RI ($ in thousands):
Three months ended September 30, Favorable (Unfavorable) Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change 2025 2024 $ Change % Change
Fee Related Earnings $ (216,916) $ (152,983) $ (63,933) (42)% $ (587,864) $ (440,087) $ (147,777) (34)%
Investment income-realized 2,090 58 2,032 NM 1,528 297 1,231 NM
Interest income 853 438 415 95 2,102 1,291 811 63
Interest expense (10) (135) 125 93 (272) (280) 8 3
Realized net investment income 2,933 361 2,572 NM 3,358 1,308 2,050 157
Realized Income $ (213,983) $ (152,622) (61,361) (40) $ (584,506) $ (438,779) (145,727) (33)
Liquidity and Capital Resources
Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. Management believes that we are well-positioned and our liquidity will continue to be sufficient for our foreseeable working capital needs, contractual obligations, dividend payments, pending acquisitions and strategic initiatives.
Sources and Uses of Liquidity
Our sources of liquidity are: (i) cash on hand; (ii) net working capital; (iii) cash from operations, including management fees and certain other fees, which are collected monthly, quarterly or semi-annually, and fee related performance revenues, which are typically measured and collected annually, as well as net realized performance income, which may be unpredictable as to amount and timing; (iv) fund distributions related to our investments that are unpredictable as to amount and timing; and (v) net borrowings from the Credit Facility. As of September 30, 2025, our cash and cash equivalents were $496.7 million and we have $725.0 million available under our Credit Facility. Our ability to draw from the Credit Facility is subject to leverage and other covenants. We remain in compliance with all covenants as of September 30, 2025. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for the foreseeable future. Cash flows from management fees may be impacted by a slowdown in deployment, declines in valuations or negatively impacted fundraising. In addition, management fees may be subject to deferral and fee related performance revenues may be subject to hold backs. Contributions of our financial interests, such as capital interests and rights to performance income earned by us from funds that we manage, to structured investment vehicles that we manage, may reduce or delay our cash flows and liquidity associated with the contributed financial interests. Declines or delays in transaction activity may also impact our fund distributions and net realized performance income, which could adversely impact our cash flows and liquidity. Market conditions may make it difficult to extend the maturity or refinance our existing indebtedness or obtain new indebtedness with similar terms.
We expect that our primary liquidity needs will continue to be to: (i) provide capital to facilitate the growth of our existing investment management businesses; (ii) fund our investment commitments; (iii) provide capital to facilitate our expansion into businesses that are complementary to our existing investment management businesses as well as other strategic growth initiatives; (iv) pay operating expenses, including cash compensation to our employees and tax payments for net settlement of equity awards; (v) fund capital expenditures; (vi) service our debt; (vii) pay income taxes and make payments under the tax receivable agreement ("TRA"); (viii) make dividend payments to our Class A and non-voting common stockholders and our Series B mandatory convertible preferred stockholders in accordance with our dividend policies; and (ix) pay distributions to AOG unitholders.
In the normal course of business, we expect to pay dividends to our Class A and non-voting common stockholders that are aligned with our expected FRE after an allocation of current taxes paid. For the purposes of determining this amount, we allocate the current taxes paid to FRE and to realized performance and investment income in a manner that may be disproportionate to earnings generated by these metrics, and the actual taxes paid on these metrics should they be considered separately. Additionally, our methodology uses the tax benefits from certain expenses that are not included in these non-GAAP metrics, such as equity-based compensation from the vesting of equity awards and from the amortization of intangible assets, among others. We allocate the taxes by multiplying the statutory tax rate currently in effect by our net realized performance and net investment income and removing this amount from total current taxes. The remaining current tax paid is the amount that we allocate to FRE. We use this method to allocate the current provision for income taxes to approximate the amount of cash that is available to pay dividends to our stockholders. If cash flows from operations were insufficient to fund dividends over a
sustained period of time, we expect that we would suspend or reduce paying such dividends. In addition, there is no assurance that dividends would continue at the current levels or at all. Unless quarterly dividends have been declared and paid (or declared and set apart for payment) on the Series B mandatory convertible preferred stock, we may not declare or pay or set apart payment for dividends on any shares of our Class A common stock during the period. Declared dividends on the Series B mandatory convertible preferred stock will be payable, at our election, in cash, shares of our Class A common stock or a combination of cash and shares of our Class A common stock. Dividends on Series B mandatory convertible preferred stock are cumulative and the Series B mandatory convertible preferred stock, unless previously converted or redeemed, will automatically convert into our Class A common stock on October 1, 2027. Although any income allocated to Series B mandatory convertible preferred stock dividends may be subject to taxes, dividends to our Series B mandatory convertible preferred stockholders will not be reduced on account of any income taxes owed by us. As a result, taxes associated with any income allocated to Series B mandatory convertible preferred stock dividends will be borne by Class A and non-voting common stockholders.
Our ability to obtain debt financing and complete stock offerings provides us with additional sources of liquidity. For further discussion of financing transactions occurring in the current period, see "Cash Flows" within this section and "Note 7. Debt" and "Note 13. Equity and Redeemable Interest" within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Our unaudited condensed consolidated financial statements reflect the cash flows of our operating businesses as well as those of our Consolidated Funds. The assets of our Consolidated Funds, on a gross basis, are significantly larger than the assets of our operating businesses and therefore have a substantial effect on the amounts reported within our condensed consolidated statements of cash flows. The primary cash flow activities of our Consolidated Funds include: (i) raising capital from third-party investors, which is reflected as non-controlling interests of our Consolidated Funds; (ii) financing certain investments by issuing debt; (iii) purchasing and selling investment securities; (iv) generating cash through the realization of certain investments; (v) collecting interest and dividend income; and (vi) distributing cash to investors. Our Consolidated Funds are generally accounted for as investment companies under GAAP; therefore, the character and classification of all Consolidated Fund transactions are presented as cash flows from operations. Liquidity available at our Consolidated Funds is not available for corporate liquidity needs, and debt of the Consolidated Funds is non-recourse to us except to the extent of our investment in the fund.
Cash Flows
The following tables summarize our condensed consolidated statements of cash flows by activities attributable to the Company and Consolidated Funds. For more details on the activity of the Company and Consolidated Funds, refer to "Note 15. Consolidation" within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Nine months ended September 30,
2025 2024
Net cash provided by operating activities $ 1,745,161 $ 1,289,501
Net cash provided by the Consolidated Funds' operating activities, net of eliminations 2,005,486 694,035
Net cash provided by operating activities 3,750,647 1,983,536
Net cash used in the Company's investing activities (1,782,560) (95,886)
Net cash used in the Company's financing activities (604,930) (1,196,743)
Net cash used in the Consolidated Funds' financing activities, net of eliminations (2,365,095) (713,012)
Net cash used in financing activities (2,970,025) (1,909,755)
Effect of exchange rate changes (9,369) 23,969
Net change in cash and cash equivalents $ (1,011,307) $ 1,864
The Consolidated Funds had no effect on cash flows attributable to the Company for the periods presented and are excluded from the discussion below. The following discussion focuses on cash flow by activities attributable to the Company.
Operating Activities
In the table below, cash flows from operations are summarized to present: (i) cash generated from our core operating activities, primarily consisting of profits generated principally from fee revenues after covering for operating expenses and fee related performance compensation; (ii) net realized performance income; and (iii) net cash from investment related activities including purchases, sales, realized net investment income and interest expense. We generated meaningful cash flow from operations in each period presented.
Nine months ended September 30, Favorable (Unfavorable)
2025 2024 $ Change % Change
Core operating activities $ 1,596,238 $ 1,096,816 $ 499,422 46%
Net realized performance income 98,959 98,000 959 1
Net cash provided by investment related activities 49,964 94,685 (44,721) (47)
Net cash provided by operating activities $ 1,745,161 $ 1,289,501 455,660 35
Cash from our core operating activities increased as a result of growing fee revenues and sustained profitability and timing of cash collection of our receivables.
Net realized performance income includes (i) carried interest distributions that may represent tax distributions or other distributions of income and (ii) incentive fees that are realized annually at the end of the measurement period, which is typically at the end of the calendar year. Cash received from carried interest distributions and the subsequent payments to employees may not necessarily occur in the same quarter. Cash from incentive fees is generally received in the period subsequent to the measurement period. The increase in net realized performance income over the comparative period was primarily due to the increase in carried interest distributions received during the first nine months of 2025 when compared to the same period in 2024.
Net cash provided by investment related activities for the nine months ended September 30, 2025 and 2024 primarily represents: (i) distributions received from our capital investments and the collection of principal and interest from loans that we have made; (ii) sales of certain capital investments to employees; and (iii) the rebalancing of and associated return of our capital commitments upon admitting new limited partners; offset by (iv) purchases associated with funding capital commitments and strategic investments in our investment portfolio; and (v) interest payments on our debt obligations. Net cash provided by investment related activities for the nine months ended September 30, 2025 also included interest income from treasury-backed securities that were redeemed in March 2025, providing proceeds to support the GCP Acquisition. As we are committed to invest alongside the investors in our funds, our capital commitments will increase with our growing assets under management and our investment related activities may fluctuate depending on timing of capital investments and distributions of each fund from year to year. For further discussion of our capital commitments, see "Note 8. Commitments and Contingencies" within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Our working capital needs are generally rising to support the growth of our business, while the capital requirements needed to support fund-related activities vary based upon the specific investment activities being conducted during such period.
Investing Activities
Nine months ended September 30,
2025 2024
Purchase of furniture, equipment and leasehold improvements $ (56,385) $ (82,203)
Acquisitions, net of cash acquired (1,726,175) (13,683)
Net cash used in investing activities $ (1,782,560) $ (95,886)
Net cash used in investing activitiesfor the nine months ended September 30, 2025was predominately cash used to complete the GCP Acquisition in the first quarter of 2025. In addition, net cash used in investing activitiesfor both periods included cash to purchase furniture, equipment and leasehold improvements, primarily for the expansion of our New York headquarters for the nine months ended September 30, 2025 to support the growth in our staffing levels, while the nine months ended September 30, 2024 was primarily for the build out of our new Los Angeles headquarters, which we occupied beginning in the third quarter of 2024.
Financing Activities
Nine months ended September 30,
2025 2024
Net proceeds from issuance of Class A common stock $ - $ 407,236
Net borrowings (repayments) of Credit Facility 1,115,000 (425,000)
Dividends/distributions to unitholders and stockholders (1,296,937) (969,360)
Stock option exercises - 1,511
Taxes paid related to net share settlement of equity awards (425,623) (211,615)
Other financing activities 2,630 485
Net cash used in the Company's financing activities $ (604,930) $ (1,196,743)
As a result of generating higher fee related earnings, we increased the level of dividends paid to a growing shareholder base of Class A and non-voting common stockholders and distributions paid to AOG unitholders, representing net cash used for the nine months ended September 30, 2025 and 2024. In addition, we issued 30,000,000 shares of Series B mandatory convertible preferred stock in October 2024. Net cash used in the Company's financing activities included dividend payments made during the nine months ended September 30, 2025 to preferred stockholders.
Net cash used in the Company's financing activities for the nine months ended September 30, 2025 included net borrowings under the Credit Facility. These proceeds were used primarily to fund the GCP Acquisition in the first quarter of 2025 and to support general operating cash needs. Net cash used in the Company's financing activities for the nine months ended September 30, 2024 included the repayment of our Credit Facility, partially using cash provided by the net proceeds from the public offering of Class A common stock that closed during the second quarter of 2024.
In connection with the vesting of equity awards that are granted to our employees under the Equity Incentive Plan, we withhold shares equal to the fair value of our employees' tax withholding liabilities and pay the taxes on their behalf in cash and thus issue fewer net shares. Cash used in connection with these awards increased during the current period primarily as a result of a higher stock price on the vesting date, which resulted in employees recognizing additional compensation. For the nine months ended September 30, 2025, we net settled and did not issue 2.2 million shares, which includes 0.2 million shares that were withheld from restricted units that vested on the GCP Acquisition close date. For the nine months ended September 30, 2024, we net settled and did not issue 1.7 million shares.
Capital Resources
We intend to use a portion of our available liquidity to pay cash dividends and distributions to our Series B mandatory convertible preferred stockholders, Class A and non-voting common stockholders, and AOG unitholders on a quarterly basis in accordance with our dividend and distribution policies. Our ability to make cash dividends and distributions is dependent on a myriad of factors, including: (i) general economic and business conditions; (ii) our strategic plans and prospects; (iii) our business and investment opportunities; (iv) timing of capital calls by our funds in support of our commitments; (v) our financial condition and operating results; (vi) working capital requirements and other anticipated cash needs; (vii) contractual restrictions and obligations; (viii) legal, tax and regulatory restrictions; (ix) restrictions on the payment of distributions by our subsidiaries to us; and (x) other relevant factors.
We are required to maintain minimum net capital balances for regulatory purposes for our broker-dealer entities. These net capital requirements are met in part by retaining cash, cash equivalents and investment securities. Additionally, certain of our subsidiaries operating outside the U.S. are also subject to capital adequacy requirements in each of the applicable jurisdictions. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of September 30, 2025, we were required to maintain approximately $101.9 million in net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We remain in compliance with these regulatory requirements.
Holders of AOG Units, subject to the terms of the exchange agreement, may exchange their AOG Units for shares of our Class A common stock on a one-for-one basis. These exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of AMC that otherwise would not have been available. These increases in tax basis may increase depreciation and amortization for U.S. income tax purposes and thereby reduce the amount of tax that we would otherwise be required to pay in the future. We entered into the TRA that provides payment to the TRA recipients of 85% of the amount of actual cash savings ("Cash Tax Savings"), if any, in U.S. federal, state, local and foreign income tax or franchise tax that we actually realize as a result of these increases in tax basis and of certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA and interest accrued thereon. Future payments under the TRA in
respect of subsequent exchanges are expected to be substantial. The TRA liability balance was $540.6 million and $402.4 million as of September 30, 2025 and December 31, 2024, respectively. For the nine months ended September 30, 2025 and 2024, payments under the TRA were $8.1 million and $6.1 million, respectively.
For a discussion of our debt obligations, including the debt obligations of our consolidated funds, see "Note 7. Debt" within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
For a discussion of our equity, see "Note 13. Equity and Redeemable Interest" within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
We prepare our unaudited condensed consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our unaudited condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. For a summary of our significant accounting policies, see "Note 2. Summary of Significant Accounting Policies," to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024. For a summary of our critical accounting estimates, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates" in our Annual Report on Form 10-K.
Recent Accounting Pronouncements
Information regarding recent accounting pronouncements and their impact on Ares can be found in "Note 2. Summary of Significant Accounting Policies," within our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Commitments and Contingencies
In the normal course of business, we enter into contractual obligations that may require future cash payments. We may also engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, capital commitments to funds, indemnifications and potential contingent payment obligations. For further discussion of these arrangements, see "Note 8. Commitments and Contingencies" to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
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