AddedRisk Factors
•our financial support of particular investment products, or the inability to provide support, may cause AUM, revenue and earnings to decline;
The 10-K against last year's
501 changes: 106 added, 90 removed, 302 reworded, 3 quiet changes
10-K 0001628280-26-011413 (2026-02-25) vs 10-K 0001628280-25-008665 (2025-02-27)
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The paragraph that changed most in each section
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MD&A 766 words changed in this paragraph; it is 50% similar to last year's version.
Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 Credit funds •Primarily from one opportunistic credit fund, four direct lending funds and two alternative credit funds with $42.6 billion of IGAUM generating returns in excess of their hurdle rates: •Primarily from five direct lending funds, one opportunistic credit fund and two alternative credit funds with $36.2 billion of IGAUM generating returns in excess of their hurdle rates: •Primarily from six direct lending funds, three opportunistic credit funds and one alternative credit fund with $37.4 billion of IGAUM generating returns in excess of their hurdle rates: ◦Within our direct lending funds, Ares Capital Europe V, L.P. (“ACE V”), Ares Private Credit Solutions II, L.P. (“PCS II”) and Ares Capital Europe VI, L.P. (“ACE VI”) generated carried interest allocation of $153.2 million, $131.1 million and $54.5 million, respectively, driven by net investment income on an increasing invested capital base. Ares Capital Europe IV, L.P. (“ACE IV”) and Ares Private Credit Solutions, L.P. (“PCS I”) generated carried interest allocation of $57.0 million and $22.9 million, respectively, driven by net investment income during the period ◦Within our direct lending funds, ACE V, PCS II, Ares Sports Media and Entertainment Finance, L.P. and ACE VI generated carried interest allocation of $181.1 million, $37.6 million, $22.0 million and $16.6 million, respectively, driven by net investment income on an increasing invested capital base. ACE IV and PCS I generated carried interest allocation of $58.4 million and $45.3 million, respectively, primarily driven by net investment income during the period. Our direct lending funds have benefited from rising interest rates on predominately floating-rate loans ◦Within our opportunistic credit funds, Ares Special Opportunities Fund II, L.P. (“ASOF II”) generated carried interest allocation of $174.7 million, driven by improved profitability of portfolio companies that operate in the services, healthcare and industrial industries ◦Within our opportunistic credit funds, ASOF II generated carried interest allocation of $177.3 million, driven by improved operating performance metrics from portfolio companies that operate in the services and retail industries ◦Within our opportunistic credit direct lending funds, ASOF I Ares Capital Europe V, L.P. (“ACE V”), Ares Capital Europe VI, L.P. (“ACE VI”), Ares Private Credit Solutions II, L.P. (“PCS II”) and SSF IV Ares Capital Europe IV, L.P. (“ACE IV”) generated carried interest allocation of $82.7 $130.7 million, $119.2 million, $89.7 million and $79.8 $36.5 million, respectively, predominately driven by market appreciation net investment income during the period ◦Within our direct lending funds, ACE V, PCS II, ACE IV, ACE VI and improved operating performance of portfolio companies that operate in the services industry. ASOF II Ares Private Credit Solutions, L.P. (“PCS I”) generated carried interest allocation of $80.9 $153.2 million, $131.1 million, $57.0 million, $54.5 million and $22.9 million, respectively, driven by improved operating performance net investment income during the period ◦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 portfolio companies that operate in $88.1 million and $63.0 million, respectively, driven by market appreciation of certain investments and net investment income during the healthcare industry period ◦Within our alternative credit funds, Pathfinder I and Pathfinder II generated carried interest allocation of $62.6 million and $39.1 million, respectively, driven by market appreciation of certain investments and net investment income during the period ◦Within our alternative credit funds, Pathfinder I generated carried interest allocation of $66.3 million, driven by market appreciation of certain investments and net investment income during the period •Reversal of unrealized carried interest allocation of $99.8 million and $23.7 million from Ares Special Situations Fund IV, L.P. (“SSF IV”) and Ares Special Opportunities Fund, Fund I, L.P. (“ASOF I”), I”) respectively, primarily due to the market depreciation of their investments in Savers Value Village, Inc. (“SVV”), driven by its lower stock price and lower operating performance of portfolio companies that primarily operate in the retail, services and healthcare industries •Reversal of unrealized carried interest allocation of $68.9 million from Ares Capital Europe III, L.P. (“ACE III”) due to lower valuations of certain investments Real Assets funds •Ares Infrastructure Debt Fund V, L.P. (“IDF V”) generated carried interest allocation of $63.8 $42.0 million, driven by net investment income during the period •IDF V generated carried interest allocation of $37.9 $63.8 million, driven by net investment income during the period •Ares Climate Infrastructure Partners, Partners II, L.P. (“ACIP I”) II”) and Ares Energy Investors Fund V, L.P. (“EIF V”) generated carried interest allocation of $26.6 million and $22.1 million, respectively, driven by the appreciation of certain portfolio investments •Ares Climate Infrastructure Partners, L.P. (“ACIP I”) and EIF V generated carried interest allocation of $44.0 million and $27.7 million, respectively, due to appreciation of certain investments •ACIP I generated carried interest allocation of $19.0 million due to market appreciation of certain investments •Reversal of unrealized carried interest allocation of $26.3 million from Ares European Real Estate Fund IV SCSp. SCSp (“EF IV”), primarily driven by the lower valuation of a residential property investment •U.S. Secondaries funds •Landmark Real Estate Fund IX, L.P. (“US (“LREF IX”) and Landmark Equity Partners XVII, L.P. (“LEP XVII”) generated carried interest allocation of $3.1 $27.1 million and $20.4 million, respectively, primarily driven by increasing operating income appreciation of certain portfolio investments •Ares Secondaries Infrastructure Solutions III, L.P. (“ASIS III”) and four private equity secondaries funds collectively generated carried interest allocation of $27.0 million, primarily from industrial and multifamily driven by the appreciation of certain portfolio investments •Reversal of unrealized carried interest allocation of $12.6 $28.9 million from EF IV, $5.7 million from Ares Real Estate Opportunity Fund III, Landmark Equity Partners XVI, L.P. (“AREOF III”), $5.5 million from Ares European Real Estate Fund V SCSp. (“EF V”) and $19.1 million from two European real estate equity funds, primarily driven by (“LEP XVI”), due to the lower valuations valuation of certain properties, which were impacted by the market environment Private Equity funds portfolio investments •Reversal of unrealized carried interest allocation of $474.9 $19.8 million from Ares Corporate Opportunities Landmark Real Estate Fund V, VIII, L.P. (“ACOF V”) due to the market depreciation of its investment in SVV, driven by its lower stock price •ACOF VI generated carried interest allocation of $190.0 million, driven by improved operating performance of portfolio companies that primarily operate in the retail and healthcare industries and market appreciation of an investment in a services company •Ares Corporate Opportunities Fund VI, L.P. (“ACOF VI”) generated carried interest allocation of $220.3 million, driven by improved operating performance metrics from portfolio companies that primarily operate in the healthcare, services, industrial and retail industries •Reversal of unrealized carried interest allocation of $268.1 million from ACOF V, (“LREF VIII”), primarily driven by a the lower stock price for SVV, and $35.8 million from Ares Corporate Opportunities Fund IV, L.P. (“ACOF IV”), primarily driven by lower operating performance metrics valuation of a portfolio company that operates certain investments with underlying interests in the healthcare industry multifamily portfolios
Source: Item 7, 10-K 0001628280-26-011413 vs Item 7, 10-K 0001628280-25-008665
Risk Factors 295 words changed in this paragraph; it is 36% similar to last year's version.
The EU, the U.K. and many other countries have implemented the OECD’s Common Reporting Standard for the automatic exchange of financial account information in tax matters (the “CRS”). EU Council Directive 2011/16/EU requires a mandatory automatic exchange of information regime on administrative co-operation in the field of taxation (as amended) (the “Directive on Administrative Co-Operation” or the “DAC”). The DAC, which effectively incorporates (among other items) the CRS into European law, like the CRS, requires governments to obtain detailed account information from financial institutions and exchange that information automatically with other jurisdictions annually. Neither the CRS nor the DAC imposes withholding taxes. EU Council Directive 2018/822 (“DAC 6”) amended the DAC to require ‘intermediaries’ (as defined in DAC 6) and, in some cases, taxpayers to disclose information to tax authorities about cross-border arrangements bearing specific hallmarks involving one or more EU member states. Certain cross-border arrangements are reportable to relevant taxing authorities. Similar reporting rules may apply or be introduced in other jurisdictions which implement the OECD mandatory disclosure rules (“OECD MDR”). With effect from December 31, 2020, the U.K. narrowed the scope of DAC 6 and the corresponding arrangements that need to be reported in the U.K. pursuant to DAC 6 (as implemented under U.K. law by the International Tax Enforcement (Disclosable Arrangements) Regulations 2020 (the “U.K. Regulations”)). In line with OECD standards (as a minimum) on exchange of information on cross-border planning arrangements such that only arrangements, very broadly, relating to the avoidance of obligations to report information in financial accounts or that obscure beneficial ownership (Category D Hallmarks), are required to be reporting in the U.K. under DAC 6. On March 28, 2023, new U.K. regulations (the International Tax Enforcement (Disclosable Arrangements) Regulations 2023 (the “U.K. MDR Regulations 2023”)) came into force in the U.K. which repealed and replaced the U.K. Regulations. The U.K. MDR Regulations 2023 implement OECD MDR into U.K. law and require U.K. 'intermediaries' (as defined under OECD MDR), and in some cases taxpayers, to report information to HMRC about certain types of arrangements known as CRS avoidance arrangements and opaque offshore structures. The EU has also signed separate automatic exchange of information agreements with certain non-EU countries, under which the EU and the relevant jurisdiction will automatically exchange information on the financial
Source: Item 1A, 10-K 0001628280-26-011413 vs Item 1A, 10-K 0001628280-25-008665
Legal Proceedings 215 words changed in this paragraph; it is 54% similar to last year's version.
The portion of the WSM DC Earnout and WSM MIP Japan Earnout attributable to the professionals is, 40.9 % and 70.0 %, respectively, and that became employees of the Company requires continued service through the measurement periods. The Company expects to settle the contingent liabilities at the Company's Company’s discretion with a component of no less than 15.0 % cash and the remaining balance in equity awards as follows: (i) no less than 60.0 % cash for the WSM Earnout; and (ii) no less than 50.0 % cash for the WSM MIP. awards. The WSM DC Earnout and WSM MIP Japan Earnout are remeasured each period with incremental changes in fair value for the cash and equity components of these liabilities recognized within compensation and benefits expense within the Consolidated Statements of Operations. As of December 31, 2024, the fair value of the contingent liabilities were $ 15.6 million. Compensation expense of $ 0.8 million for the year ended December 31, 2024 is presented within compensation and benefits within the Consolidated Statements of Operations with an equal offset presented within accrued compensation within the Consolidated Statements of Financial Condition. Following the measurement period end dates, the cash components will be paid and the equity awards will be granted at fair value for the balance of the liability. As of December 31, 2025, the fair value of the contingent liabilities was $ 327.0 million. Compensation expense of $ 70.1 million for the year ended December 31, 2025 was recorded within compensation and benefits within the Consolidated Statements of Operations with an equal offset presented within accrued compensation within the Consolidated Statements of Financial Condition. The unpaid liabilities at the respective measurement period end dates will be reclassified from liability to additional paid-in-capital. Any compensation expense associated with the WSM DC Earnout and WSM MIP Japan Earnout that was not previously recorded through the final measurement period end date will be recognized as equity-based compensation expense over the remaining service periods ranging from three to six years, measured from the GCP Acquisition close date.
Source: Item 3, via Note 9 – COMMITMENTS AND CONTINGENCIES, 10-K 0001628280-26-011413 vs Item 3, via Note 8 – COMMITMENTS AND CONTINGENCIES, 10-K 0001628280-25-008665
Accounting Policies 180 words changed in this paragraph; it is 36% similar to last year's version.
In November 2023, September 2025, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Targeted Improvements to Reportable Segment Disclosures. the Accounting for Internal-Use Software. ASU 2023-07 requires disclosure of significant segment expenses 2025-06 clarifies the threshold for capitalizing internal-use software costs to be based on when (i) management has authorized and committed to funding the software project and (ii) it is probable that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, project will be completed and the title and position of software will be used to perform the Company’s CODM. The amendments in this update also expand the interim segment disclosure requirements. function intended. ASU 2023-07 2025-06 is effective for the Company’s fiscal year ending December 15, 2024 and for the Company’s interim periods beginning with the first quarter ended 2025. 31, 2028. Early adoption is permitted and the amendments in this update are required to may be applied on a prospective, retrospective or modified basis. The Company has concluded this guidance does not have a material impact on its consolidated financial statements. Information presented within “Note 14. Segment Reporting” reflects is currently evaluating the impact from adoption of ASU 2023-07. this guidance.
Source: 10-K text, Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0001628280-26-011413 vs 10-K text, Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0001628280-25-008665
Every change, by type
Sentences and paragraphs added, removed or reworded
Sentences and paragraphs of ARES's Risk Factors and MD&A, 10-K 2026-02-25 against 10-K 2025-02-27. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier (may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, wouldAddedRisk Factors
•technological developments in artificial intelligence could disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs;
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Changes in trade policies, including the imposition of new tariffs or increases in existing tariffs between the U.S., Mexico, Canada, China or other countries, or reactionary measures in response thereto, including retaliatory tariffs, legal challenges, or currency manipulation, could adversely affect the market conditions in which we operate. These factors may affect the level and volatility of credit and securities prices and the liquidity and value of fund investments, and we, our funds and our funds’ portfolio companies may not be able to successfully manage our exposure to these conditions.
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•we may transfer (or decide not to transfer) assets owned by us on our balance sheet or otherwise provide financial support to our funds and structured financing vehicles, which could give rise to claims of conflicts of interest, including with respect to the nature of those assets and the method by which they were valued, and subject us to a risk
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of loss equal to the value of any financial support in the event that these structured financing vehicles or the underlying financial interests do not meet stated performance thresholds;
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•in order to broaden distribution of certain of their private wealth products, some of our competitors may be willing to pay higher placement, servicing or other forms of distributor fees; our unwillingness to pay such fees may adversely impact the amount of capital we or our funds are able to raise in the private wealth channel;
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We may lose investment opportunities in the future if we do not match pricing, structures and terms offered by our competitors. Alternatively, we may experience decreased profitability, rates of return and increased risks of loss if we match pricing, structures and terms offered by our competitors. Further, as part of a shift in the distribution arrangements in the financial industry, certain third-party intermediaries have sought to revise existing or implement new fee arrangements that align their fees with the initial amount or ongoing NAV of capital invested through the intermediary in the applicable vehicle. While the extent of this shift going forward is uncertain, the costs associated with the distribution of certain of our perpetual wealth vehicles have increased and there may be further increases in distribution costs for these and future products. The incurrence of higher costs in connection with product distribution, without corresponding decreases in our cost structure, would adversely affect the profitability of impacted products. Certain of the third-party intermediaries on whom we rely to distribute our investment products also sell their own competing proprietary investment products, which could limit the distribution of our products.
AddedRisk Factors
increase in interest rates available to investors could make an investment in our common stock less attractive if we are not able to increase our dividend rate, which could reduce the value of our common stock.
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AddedRisk Factors
Our capital markets activities expose us to risks that could limit our revenue growth and expose us to losses from counterparties.
AddedRisk Factors
The capital markets services that our Capital Solutions Group and AMCM provide serve as one of our sources of revenue. The capital markets fees AMCM receives are generally dependent on the frequency and volume of transactions by our funds and portfolio companies, which can fluctuate over time. A slowdown in market activity generally or in our investment or exit activity could adversely affect the amount of fees AMCM’s business generates.
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In addition, as a result of services provided by our Capital Solutions Group and by AMCM, we could incur losses that could have a material adverse effect on our results of operations, financial condition and cash flow, as well as our reputation. For example, we may incur significant losses to the extent that our counterparties fail to acquire or pay for the debt or equity securities or loans that we expected to sell, place or syndicate to them or are otherwise unable to dispose of any financial exposure that we incur at the prices that we anticipated or at all.
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•regulatory or compliance exposure related to acquired assets until appropriate processes and controls are implemented;
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These initiatives developments, together with heightened scrutiny of private equity and alternative asset managers (including with respect to serial acquisitions, “roll-up” strategies and potential interlocking directorates), are expected to increase scrutiny of mergers and acquisitions and to could result in the adoption of more stringent guidelines standards for pre-approval of mergers, approving transactions and potentially for potential review of previously consummated transactions as well. transactions.
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In addition, the agreement may be terminated by ARCC’s board of directors, the affirmative vote of the holders of a majority of ARCC’s outstanding voting securities (each as required by the Investment Company Act, both ARCC and Act) or its investment adviser have the right to terminate the agreement without penalty upon 60 days’ written notice to the other party.
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Furthermore, if, as a result of poor performance or otherwise, a fund does not achieve total investment returns that exceed a specified investment return threshold over the life of the fund or other measurement period, we may be obligated to repay the amount by which carried interest that was previously distributed or paid to us exceeds amounts to which we were entitled.
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CLOs have failed in the past and may in the future fail one or more of their “overcollateralization” tests. tests.The failure of one or more of these tests will result in reduced cash flows giving rise to these types of consequences will not once again occur, subsist or become more acute in the future.
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These investments are subject to the potential for deterioration of real estate market fundamentals and the risk of adverse changes in local market and economic conditions, which may include changes in supply of and demand for competing properties in an area, fluctuating occupancy rates liquid credit, alternative credit and changes in demand for commercial office properties (including as a result of an increased prevalence of remote work). direct lending.
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Department of Justice Antitrust Division and the FTC, Federal Trade Commission, the two agencies responsible for enforcing federal antitrust and competition laws, have in recent years issued new guidance (including the 2023 Merger Guidelines in December 2023, designed Guidelines) and adopted changes to invigorate enforcement of premerger notification requirements under the antitrust and competition laws. Hart-Scott-Rodino Act.
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An earthquake earthquake, wildfire or other disaster or a disruption in the infrastructure that supports our businesses, including a disruption involving electronic communications, our internal human resources systems or other services used by us or third parties with whom we conduct business, or directly affecting our headquarters, headquarters or other office locations, could have a material adverse effect on materially disrupt our ability to continue to operate operations and adversely affect our businesses without interruption. business and financial results.
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We have presented returns relating to the historical performance of the funds we manage and certain targets of our future performance, including by reference to the internal rate of return (“IRR”) of certain funds’ performance using a gross IRR and a net IRR calculation and the MoIC (as defined below) of certain funds’ performance using a gross MoIC, generally calculated at the fund-level and based on the interests of all partners, and a net MoIC calculation.
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AddedMD&A
Despite periods of volatility in 2025 driven by interest rate cuts and tariff-related uncertainty, markets largely remained resilient across regions and asset classes. U.S. and European high yield bonds and leveraged loans delivered stable returns, supported by strong credit metrics and sustained investor demand. The U.S. and international public equity markets generated positive performance supported by the macroeconomic conditions across regions.
AddedMD&A
Private equity activity improved during the year, supported by interest rate cuts and moderating inflation. Transaction and exit activity accelerated amid a narrowing valuation gap between buyers and sellers. We believe that stabilized market conditions, with a renewed focus on value creation strategies that emphasize operational improvements, selective deployment, talent optimization and digital transformation are essential to support long-term momentum.
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In 2025, several central tenets contributed to the growth of our platform, including:
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On March 1, 2025, we completed the GCP Acquisition. The GCP Acquisition added complementary logistics and digital infrastructure investment capabilities and expanded our geographic presence. The activities of GCP International are included within the Real Assets Group segment.
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The GCP Acquisition added geographic exposure in Asia with a significant logistics platform in Japan, logistics platforms in emerging economies such as Brazil and Vietnam and an expanded presence in Europe and the U.S. The GCP Acquisition has broadened our vertically integrated operating and development capabilities across sectors and regions. We anticipate that the size and composition of fees earned, particularly our other fees, will be impacted by these expanded capabilities.
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The activities of GCP International are reflected within our results of operations beginning on March 1, 2025. Therefore, our analysis compared to the prior year will lack comparability, particularly in our Real Assets Group segment. Because the activities of GCP International represent 10 months of activity within the year ended December 31, 2025, we will separately discuss the significant impact of the GCP Acquisition within our discussion of our results of operations.
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In addition, various components of the agreed-upon purchase price for the GCP Acquisition are required to be accounted for as compensation because the payments were made to certain individuals that became Ares employees on March 1, 2025. Because they are required to be accounted for as compensation, these amounts have been excluded from purchase consideration and will have a varying impact on our results of operations in the current year as well as in future periods. We expect expenses to fluctuate during an integration period as we continue to seek to generate more cost savings and to execute on synergy opportunities.
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In connection with the GCP Acquisition, we also entered into contingent compensation arrangements with the sellers and with certain of its professionals that became Ares employees. The portion of the arrangements that are attributable to the sellers represents a component of purchase consideration that will be accounted for as contingent consideration. The portion of the arrangements that are attributable to the professionals that became Ares employees requires continued service through the measurement periods and will be accounted for as compensation. These arrangements will have a varying impact on our results of operations in the current year as well as in future periods that is dependent on these classifications as well as the expected attainment of the measurement criteria.
AddedMD&A
Part I Fees are based on net investment income (before Part I Fees and Part II Fees, where applicable), subject to hurdle rates as presented for each applicable fund below. No fees are recognized until net investment income exceeds the hurdle rate, with a catch-up provision to ensure that we receive the annual fee rate of the net investment income from the first dollar earned.
AddedMD&A
Vehicle Strategy Annual Fee Rate Hurdle Rate Catch-Up Provision Credit Group ARCC Part I Fees U.S. Direct Lending 20% 1.75% per quarter or 7% per annum 20% ASIF Part I Fees U.S. Direct Lending 12.5% 1.25% per quarter or 5% per annum 12.5% CADC Part I Fees U.S. Direct Lending 15% 1.50% per quarter or 6% per annum 15% Open-Ended European Direct Lending Fund Part I Fees European Direct Lending 12.5% 1.25% per quarter or 5% per annum 12.5% Open-Ended European Direct Lending ELTIF Part I Fees European Direct Lending 12.5% 1.25% per quarter or 5% per annum 12.5% Real Assets Group Open-Ended Core Infrastructure Fund Part I Fees Infrastructure 12.5% 1.25% per quarter or 5% per annum 12.5%
AddedMD&A
Compensation and Benefits. Compensation generally includes salaries, bonuses, health and welfare benefits, payroll-related taxes, Part I Fee compensation, fee related performance compensation and equity compensation. We use changes in headcount, which represents the full-time equivalency of active employees during each period, to analyze changes in certain compensation and benefits expenses, primarily salaries, benefits and payroll-related taxes.
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In certain instances, we may transfer our rights to performance income to structured financing vehicles that we manage. Although these transfers typically result in a reclassification of the associated performance income to investment income, we remain obligated to compensate our professionals who retain the rights to their allocation of performance income, which continue to be reported within performance related compensation. Performance related compensation may also include a portion of the profits from certain of our strategic investments that are payable to professionals although the profits generated from these strategic investments represent investment income and are not reported within performance income.
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Corporate Private APAC Private Other Total Private Equity Equity Equity Group Balance at 12/31/2024 $ 21,064 $ 2,977 $ — $ 24,041 Acquisitions — 856 — 856 New par/equity commitments 2,191 91 — 2,282 Capital reductions (55) — — (55) Distributions (1,878) (153) — (2,031) Change in fund value 553 (358) — 195 Balance at 12/31/2025 $ 21,875 $ 3,413 $ — $ 25,288 Corporate Private APAC Private Other(1) Total Private Equity Equity Equity Group Balance at 12/31/2023 $ 20,998 $ 3,414 $ 139 $ 24,551 Net new New par/equity commitments 458 3 58 519 Capital reductions (4) — — (4) Distributions (685) (19) — (704) Redemptions — (2) — (2) Net allocations among investment strategies 150 — (197) (47) Change in fund value 147 (419) — (272) Balance at 12/31/2024 $ 21,064 $ 2,977 $ — $ 24,041 Corporate Private APAC Private Other(1) Total Private Equity Equity Equity Group Balance at 12/31/2022 $ 20,939 $ 90 $ — $ 21,029 Acquisitions — 3,697 — 3,697 Net new par/equity commitments 1,482 — 139 1,621 Capital reductions (9) — — (9) Distributions (1,794) (16) — (1,810) Change in fund value 380 (357) — 23 Balance at 12/31/2023 $ 20,998 $ 3,414 $ 139 $ 24,551 (1) Activity within Other represents Amounts represent equity commitments to the platform that either have not yet been allocated to an investment strategy or have been allocated in a subsequent period as commitments to an investment strategy.
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Strategy Fee Rate Fee Base Average Remaining Contract Term(1) Credit Group Liquid Credit(2) 0.25% - 1.00% Par plus cash or NAV 9.2 9.3 years(2) Alternative Credit 0.50% - 1.50% NAV, gross asset value, capital commitments or invested capital 4.1 3.2 years Opportunistic Credit(3) 1.50% Invested capital or aggregate cost basis of unrealized portfolio investments 6.8 7.3 years U.S. and European Direct Lending(4) 0.75% - 1.50% Invested capital, NAV or total assets (in certain cases, excluding cash and cash equivalents) 4.2 5.5 years APAC Credit(5) 1.00% - 2.00% Capital commitments, aggregate cost basis of unrealized portfolio investments or a combination thereof 3.8 4.3 years Real Assets Group Real Estate Equity(6) 0.50% Estate(6) 0.45% - 1.50% Invested Capital commitments, invested capital, GAV, NAV, capital commitments aggregate cost basis of unrealized portfolio investments or a combination thereof 5.1 4.6 years Real Estate Debt 0.50% Infrastructure(7) 0.75% - 1.00% Invested capital 1.50% Capital commitments, invested capital, GAV or NAV N/A(7) Infrastructure Opportunities(8) 1.00% - 1.50% Invested capital, capital commitments 5.0 years Infrastructure Debt 1.00% Invested capital 5.2 years Private Equity Group Corporate Private Equity(9) 1.50% Capital commitments 4.9 years APAC Private Equity(10) 1.00% - 2.00% Invested capital, capital commitments or a combination thereof 3.1 6.3 years Secondaries Group Private Equity, Real Estate, Infrastructure and Credit Secondaries(11) Secondaries(8) 0.50% - 1.25% Capital commitments, invested capital, reported value (largely representing NAV of each fund’s underlying limited partnership interests), called capital plus unfunded commitments or reported value plus unfunded commitments 7.1 8.1 years Private Equity Group Corporate Private Equity(9) 1.50% Capital commitments 5.9 years APAC Private Equity(10) 1.00% - 2.00% Invested capital, capital commitments or a combination thereof 4.7 years Other Businesses Ares Insurance Solutions(12) 0.30% Solutions(11) 0.28% Monthly weighted average market value of the assets N/A(12) N/A(11)
RewordedMD&A
As of December 31, 2023 2024 Activity during the period As of December 31, 2024 2025 Waterfall Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income Type Accrued Carried Interest US VIII IX European $ 32.2 99.8 $ (0.1) 11.5 $ (12.0) (26.3) $ — $ 20.1 US IX European 90.0 9.8 — — 99.8 AREOF III European 35.7 (11.2) — — 24.5 EF IV American 49.2 (26.3) — — 22.9 85.0 EIF V European 121.3 22.1 (49.8) — 93.6 27.7 — — 121.3 IDF V European 56.1 63.8 113.7 42.0 — (6.2) 113.7 16.8 172.5 ACIP I European 61.4 44.0 (7.7) 97.7 (7.6) (5.3) — 97.7 84.8 Other real assets Real Assets funds European 51.0 8.8 (12.2) 5.0 52.6 97.2 34.9 (17.9) 0.9 115.1 Other real assets Real Assets funds American 27.7 (10.8) (1.2) 38.6 (2.6) — 15.7 — 36.0 Total accrued carried interest 496.9 105.7 (33.1) (1.2) 568.3 100.3 (99.3) 17.7 587.0 Other real assets Real Assets funds Incentive — 27.2 (27.2) 0.5 (0.5) — — Total Real Assets Group $ 496.9 568.3 $ 132.9 100.8 $ (60.3) (99.8) $ (1.2) 17.7 $ 568.3 587.0
RewordedMD&A
Strategy Fee Rate Annual Hurdle Rate Credit Group Liquid Credit and Alternative Credit 10.0% - 20.0% 6.0% - 8.0% 20% 6% Opportunistic Credit 20.0% 8.0% 20% 8% U.S. and European Direct Lending 10.0% 10% - 20.0% 5.0% 20% 5% - 8.0% 8% APAC Credit 15.0% 15% - 20.0% 6.0% 20% 6% - 8.0% 8% Real Assets Group Real Estate 10.0% 10% - 20.0% 7.0% 20% 6% - 10.0% 10% Infrastructure 15.0% 15% - 20.0% 7.0% 20% 7% - 8.0% 8% Secondaries Group Private Equity, Real Estate, Infrastructure and Credit Secondaries 10% - 15% 7% - 8% Private Equity Group Corporate Private Equity and APAC Private Equity 15.0% 15% - 20.0% 8.0% Secondaries Group Private Equity, Real Estate, Infrastructure and Credit Secondaries 10.0% - 15% 7.0% - 8.0% 20% 8% Other Businesses Ares Insurance Solutions 20.0% 8.0% 20% 8%
RewordedMD&A
Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 Credit funds •Primarily from one opportunistic credit fund, four direct lending funds and two alternative credit funds with $42.6 billion of IGAUM generating returns in excess of their hurdle rates: •Primarily from five direct lending funds, one opportunistic credit fund and two alternative credit funds with $36.2 billion of IGAUM generating returns in excess of their hurdle rates: •Primarily from six direct lending funds, three ◦Within our opportunistic credit funds and one alternative credit fund with $37.4 billion of IGAUM generating returns in excess of their hurdle rates: ◦Within our direct lending funds, Ares Capital Europe V, Special Opportunities Fund II, L.P.
RewordedMD&A
Returns(%) Primary Year of Inception AUM Year-To-Date Since Inception(1) Primary Investment Strategy Fund Gross Net Gross Net Diversified non-traded REIT(2) Real Estate 2012 $ 5,663 7,417 N/A (0.4) 11.6 N/A 6.1 North American 6.5 J-REIT(3) Real Estate Equity 2012 7,547 N/A N/A N/A 13.3 Industrial non-traded REIT(3) REIT(4) Real Estate 2017 7,354 7,648 N/A 0.8 8.3 N/A 8.5 North American Real Estate Equity Open-ended U.S. open-ended industrial real estate fund(4) 2017 5,083 4.3 3.3 17.5 14.3 North American fund(5) Real Estate Equity 2017 5,983 7.7 6.5 16.3 13.3 Japanese open-ended industrial real estate fund Real Estate 2020 3,915 10.1 9.4 13.1 11.8
RewordedMD&A
As of December 31, 2025 2024 2023 Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income LEP XVI ACOF IV $ 107.9 142.8 $ 92.3 114.4 $ 15.6 28.4 $ 136.8 166.8 $ 117.0 133.6 $ 19.8 LREF VIII 81.3 68.9 12.4 101.1 87.5 13.6 33.2 ACOF VI 594.3 584.1 10.2 523.1 442.8 80.3 Other secondaries Private Equity funds 74.6 59.8 11.1 8.9 2.2 20.9 14.8 45.5 38.7 6.8 6.1 Total Secondaries Private Equity Group $ 263.8 748.2 $ 221.0 707.4 $ 42.8 40.8 $ 283.4 710.8 $ 243.2 591.2 $ 40.2 119.6
RewordedMD&A
The decrease increase in effective management fee rate for the year ended December 31, 2024 2025 compared to the year ended December 31, 2023 2024 was primarily driven by the reduction in fee rate for the energy opportunities fund as discussed above, partially offset by certain funds within our APAC a corporate private equity strategy extended value fund, that have stopped paying fees at the end of the fourth quarter of 2024 and had a higher lower effective management fee rate than the average effective management fee rate of the funds within our corporate private equity strategy. the Private Equity Group.
RewordedMD&A
RewordedMD&A
As of December 31, 2023 2024 Activity during the period As of December 31, 2024 2025 Waterfall Type Accrued Carried Interest Performance Income Change in Unrealized Realized Other Adjustments Accrued Carried Interest Performance Income Accrued Carried Interest LEP XVI European $ 136.8 144.1 $ (28.9) (11.4) $ — $ (131.2) $ 107.9 1.5 LREF VIII European 101.1 (19.8) 81.3 (7.3) — — 81.3 74.0 Other secondaries Secondaries funds European 45.5 29.1 38.4 67.7 — — 74.6 0.1 106.2 Total accrued carried interest 283.4 (19.6) 263.8 49.0 — — 263.8 (131.1) 181.7 Other secondaries Secondaries funds Incentive — 0.4 (0.4) 0.2 (0.2) — — Total Secondaries Group $ 283.4 263.8 $ (19.2) 49.2 $ (0.4) (0.2) $ (131.1) $ 263.8 181.7
RewordedMD&A
Carried interest from: •Aggregate tax interest: •Tax distributions of $84.7 million primarily from ASOF II, ACE V, ACE IV and Pathfinder I •Tax distributions of $74.7 million primarily from ACE IV, ACE V, PCS I, ASOF I and an alternative credit fund •Aggregate tax distributions •Distributions of $70.2 $12.8 million primarily from ASOF I, ACE IV, ACE V two alternative credit funds, which are European-style waterfall funds that are past their investment periods and PCS I monetizing investments Incentive fees from: fees:
RewordedMD&A
As of December 31, 2023 2024 Activity during the period As of December 31, 2024 2025 Waterfall Type Accrued Carried Interest Change in Unrealized Realized Other Adjustments Accrued Carried Interest ACOF IV American $ 181.3 166.8 $ (5.5) (4.8) $ (9.0) (19.2) $ 166.8 ACOF V American 474.9 (474.9) — — $ 142.8 ACOF VI American 337.1 220.3 (34.3) 523.1 191.5 (23.2) (97.1) 594.3 Other Private Equity funds European 46.1 (33.0) 13.1 (12.2) — 13.1 — 0.9 Other Private Equity funds American 9.1 (1.3) 7.8 2.4 — 7.8 — 10.2 Total Private Equity Group $ 1,048.5 710.8 $ (294.4) 176.9 $ (43.3) (42.4) $ 710.8 (97.1) $ 748.2
Quiet changesMD&A
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.