Assets rise at Ares Management, net income falls

The decline in profit was attributed to lower performance earnings at Ares Management's tradable credit group.

Ares Management, the alternative investment firm headquartered in Los Angeles, reported an uptick in assets in its third quarter earnings release yesterday (12 November), while its economic net income decreased compared with the prior quarter and last year. Ares, which runs direct lending, tradable credit, private equity and real estate businesses, reported assets under management of $79.6 billion as of September 30 2014, compared to $79.2 billion the prior quarter and $69.8 billion for the third quarter of 2013.

Ares’ economic net income for the three months ended Sept. 30 was $72.1 million, compared to $116.7 million for the third quarter of last year. The decline was mostly attributed to lower performance earnings in the tradable credit group, which at $32.6 billion is Ares’s largest business line at present. Tradable credit is not related to Ares’s direct lending division, although some of the executives from direct lending sit on investment committees in tradable credit.

The firm’s direct lending business now has about $28 billion in assets under management. Part of that is the $9.2 billion publicly traded business development company, Ares Capital Corporation, which released its earnings last week. The BDC went public in 2004, while Ares Management as a whole went public this spring. The firm’s stock has declined in value since. It opened at $18.60 per share on May 2 and finished trading at $16.08 per share at close of trading yesterday (12 November). It experienced a slight uptick on the earning’s announcement: rising from $15.60 on November 11.