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Item 1A. Risk Factors

2025-02-27 compared with 2024-02-27 · 472 added, 597 removed, 1310 unchanged (45% of the section changed)

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Our businesses are subject to a number of inherent risks.

We believe that the primary risks affecting our businesses and an investment in shares of our Class A common stock are:

• difficult market and political conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital;

We believe that the primary risks affecting our businesses and an investment in shares of our Class A common stock or Series B mandatory convertible preferred stock are:

• difficult, volatile market and political conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital;

• we operate in a complex regulatory and tax environment involving rules and regulations (both domestic and foreign), some of which are outdated relative to today’s global financial activities and some of which are subject to political influence, which could restrict or require us to adjust our operations or the operations of our funds or portfolio companies and subject us to increased compliance costs and administrative burdens, as well as restrictions on our business activities;

• inflation has adversely affected and may continue to adversely affect our business, results of operations and financial condition of our funds and their portfolio companies;

• if we are unable to raise capital from investors or deploy capital into investments, or if any of our management fees are waived or reduced, or if we fail to realize investments and generate carried interest or incentive fees, our revenues and cash flows would be materially reduced;

• we are subject to risks related to our dependence on members of the Executive Management Committee, senior professionals and other key personnel as well as attracting, retaining and developing human capital in a highly competitive talent market;

• if we are unable to raise capital from investors or deploy capital into investments, or experience reduced capital raising or deployment activity, or if any of our management fees are waived or reduced, or if we fail to realize investments and generate carried interest or incentive fees, our revenues and cash flows would be materially reduced;

• we are subject to risks related to our dependence on our executive officers, senior professionals and other key personnel as well as attracting, retaining and developing human capital in a highly competitive talent market;

• we may experience reputational harm if we fail to appropriately address conflicts of interest or if we, our employees, our funds or their portfolio companies fail (or are alleged to have failed) to comply with applicable regulations in an increasingly complex political and regulatory environment;

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• the increasing demands of fund investors, including the potential for fee compression and changes to other terms, could materially adversely affect our future revenues;

• we and our third-party service providers may be subject to cybersecurity risks and our business could be adversely affected by changes to data protection laws and regulations;

• security incidents or cyber-attacks could adversely affect our business, financial condition and operating results;

• we are subject to numerous privacy laws, and violation of such laws may subject us to significant fines or penalties, litigation, or reputational damage, and new privacy laws could impact our business and financial performance;

• we may be subject to litigation and reputational risks and related liabilities or risks related to employee misconduct, fraud and other deceptive practices;

• increases in interest rates could negatively impact the values of certain assets or investments and the ability of our funds and their portfolio companies to access the debt markets on attractive terms, which could adversely impact investment and realization opportunities;

• the use of leverage by us and our funds exposes us to substantial risks, including related to the selection of a replacement for London Interbank Offered Rate (“LIBOR”);

• asset valuation methodologies can be highly subjective and the value of assets may not be realized;

• the use of leverage by us and our funds exposes us to substantial risks, including related to the use of Secured Overnight Financing Rate (“SOFR”) and Sterling Overnight Interbank Average Rate (“SONIA”);

• asset valuation methodologies can be highly subjective and our value of an asset may differ materially from the value ultimately realized;

• our funds may perform poorly due to market conditions, political actions or environments, monetary and fiscal policy or other conditions beyond our control;

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• we are subject to risks relating to our contractual rights and obligations under our funds’ governing documents and investment management agreements;

• a downturn in the global credit markets could adversely affect our CLO investments;

• a downturn in the global credit markets could adversely affect certain of our investments, including CLO investments and other liquid credit portfolios;

• due to our and our funds’ investments in certain market sectors, such as power, infrastructure and energy, real estate and insurance, we are subject to risks and regulations inherent to those industries;

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• we are subject to risks related to our categorization as a “controlled company” within the meaning of the NYSE listing standards;

• potential conflicts of interest may arise among the holders of Class B and Class C common stock and the holders of our Class A common stock;

• potential conflicts of interest may arise among the holders of Class B and Class C common stock and the holders of our Class A common stock and/or Series B mandatory convertible preferred stock;

• our holding company structure, Delaware law and contractual restrictions may limit our ability to pay dividends to the holders of our Class A and non-voting common stock;

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Difficult market and political conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.

Our businesses are materially affected by conditions in the global financial markets and economic and political conditions throughout the world, such as interest rates, the availability and cost of credit, persistent inflation, changes in laws (including laws relating to our taxation, taxation of our investors and the possibility of changes to regulations applicable to alternative asset managers), trade policies, commodity prices, tariffs, currency exchange rates and controls and national and international political circumstances (including wars and other forms of conflict, civil unrest, terrorist acts, and security operations), general economic uncertainty and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, other adverse weather and climate conditions and pandemics.

These factors are outside of our control and may affect the level and volatility of securities prices and the liquidity and value of investments, and we may not be able to or may choose not to manage our exposure to these conditions.

Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events in or affecting the world’s major economies, such as the conflict between Russia and Ukraine and more recently between Israel and Hamas and the ongoing instability in the Middle East region.

Our businesses are materially affected by conditions in the global financial markets and economic and political conditions throughout the world that are outside our control.

These conditions may affect the level and volatility of securities prices and the liquidity and value of investments, and we may not be able to or may choose not to manage our exposure to these conditions.

This could in turn materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.

Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events in or affecting the world’s major economies, such as the ongoing war between Russia and Ukraine and conflicts in the Middle East.

Sanctions imposed by the U.S.

and other countries in connection with hostilities between Russia and Ukraine and the tensions between China and Taiwan have caused additional financial market volatility and affected the global economy.

Concerns over increasing inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility.

Market uncertainty and volatility have also been magnified as a result of the upcoming 2024 U.S.

Concerns over future increases in inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility.

Market uncertainty and volatility have also been magnified as a result of the 2024 U.S.

presidential and congressional elections and resulting uncertainties regarding actual and potential shifts in U.S.

and foreign, trade, economic and other policies.

trade, economic and other policies, including with respect to treaties and tariffs.

The United States has recently enacted and proposed to enact significant new tariffs, including on Mexican, Canadian and Chinese goods.

Additionally, the new Presidential Administration has directed various federal agencies to further evaluate key aspects of U.S.

trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S.

trade policies, treaties and tariffs.

In addition, numerous structural dynamics and persistent market trends have exacerbated volatility and market uncertainty.

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The weakness and the uncertainty regarding the stability of the oil and gas markets resulted in a tightening of credit across multiple sectors.

In addition, in an effort to combat inflation the Federal Reserve has increased the federal funds rate in 2023.

Although the Federal Reserve left its benchmark rates steady in the fourth quarter of 2023, it has indicated that additional rate increases in the future may be necessary to mitigate inflationary pressures.

In addition, the Federal Reserve has decreased the federal funds rate multiple times in 2024.

Changes in and uncertainty surrounding interest rates may have a material effect on our business, particularly with respect to the cost and availability of financing for significant acquisition and disposition transactions.

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Certain of our funds and their portfolio companies are in industries that have been impacted by inflation.

Although the U.S.

inflation rate has decreased in the fourth quarter, it remains well above the historic levels over the past several decades.

Although U.S.

inflation rates have fluctuated in recent periods, they remain well above the historic levels over the past several decades.

Such inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our funds’ portfolio companies’ operations.

If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results.

In addition, any

projected future decreases in the operating results of our funds’ portfolio companies due to inflation could adversely impact the fair value of those investments.

If these portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results.

In addition, any projected future decreases in the operating results of our funds’ portfolio companies due to inflation could adversely impact the fair value of those investments.

Any decreases in the fair value of our fund investments could result in future realized or unrealized losses.

Political and regulatory conditions, including the effects of negative publicity surrounding the financial industry in general and proposed legislation, could adversely affect our businesses.

As a result of market disruptions and highly publicized financial scandals in recent years, regulators and investors have exhibited concerns over the integrity of the U.S.

financial markets.

The businesses that we operate both in and outside the U.S.

will be subject to new or additional regulations.

We may be adversely affected as a result of new or revised legislation or regulations imposed by the SEC, the CFTC, FINRA or other U.S.

or foreign governmental regulatory authorities or self-regulatory organizations that supervise the financial markets.

We may also be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations.

In recent periods there has been an increasing level of public discourse, debate and media coverage regarding the appropriate extent of regulation and oversight of the financial industry, including investment firms, as well as the tax treatment of certain investments and income generated from such investments.

For further discussion regarding legislation affecting the taxation of carried interest, see “—We depend on the members of the Executive Management Committee, senior professionals and other key personnel, and our ability to retain them and attract additional qualified personnel is critical to our success and our growth prospects.” There is ongoing uncertainty regarding prospective changes in law and regulation affecting the U.S.

private equity industry, including the possibility of significant revision to the Code and U.S.

securities and financial laws, rules and regulations.

See “—Risks Related to Taxation—Applicable U.S.

and foreign tax law, regulations, or treaties, and changes in such tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely affect our effective tax rate, tax liability, financial condition and results, ability to raise funds from certain foreign investors, increase our compliance or withholding tax costs and conflict with our contractual obligations” and “—Risks Related to Regulation—Extensive regulation affects our activities, increases the cost of doing business and creates the potential for significant liabilities and penalties that could adversely affect our businesses and results of operations.” The likelihood of occurrence and the effect of any such change is highly uncertain and could have an adverse impact on us, our funds and their portfolio companies.

Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities may adversely affect our effective tax rate, tax liability and financial condition and results.

Any substantial changes in domestic or international corporate tax policies, regulations or guidance, enforcement activities or legislative initiatives may adversely affect our business, the amount of taxes we are required to pay and our financial condition and results of operations generally.

Our effective tax rate and tax liability is based on the application of current income tax laws, regulations and treaties.

These laws, regulations and treaties are complex, and the manner in which they apply to us and our funds is sometimes open to interpretation.

Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.

Although management believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities, the tax authorities could challenge our interpretation resulting in additional tax liability or adjustment to our income tax provision that could increase our effective tax rate.

For an overview of certain relevant U.S.

tax laws and relevant foreign tax laws, see “—Risks Related to Taxation—Applicable U.S.

Our business depends in large part on our ability to raise capital from investors.

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Our investors and potential investors continually assess our funds’ performance independently and relative to market benchmarks and our competitors, which affects our ability to raise capital for existing and future funds.

If economic and market conditions deteriorate or continue to be volatile, investors may delay making new commitments to funds and/or we may be unable to raise sufficient amounts of capital to support the

investment activities of future funds.

We may not be able to find suitable investments for the funds to effectively deploy capital, which could reduce our revenues and cash flow and adversely affect our financial condition as well as our ability to raise new funds and our prospects for future growth.

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Furthermore, while our senior professionals have committed substantial capital to our funds, commitments from new investors may depend on the commitments made by our senior professionals to new funds and there can be no assurance that there will be further commitments to our funds by these individuals, and any future investments by them in our funds or other alternative investment categories will likely depend on the performance of our funds, the performance of their overall investment portfolios and other investment opportunities available to them.

The financial projections of our portfolio companies could prove inaccurate.

Our funds generally establish the capital structure of portfolio companies on the basis of financial projections prepared by the management of such portfolio companies.

These projected operating results will normally be based primarily on judgments of the management of the portfolio companies.

In all cases, projections are only estimates of future results that are based upon assumptions made at the time that the projections are developed.

General economic conditions, which are not predictable, along with other factors may cause actual performance to fall short of the financial projections that were used to establish a given portfolio company’s capital structure.

Because of the leverage that we typically employ in our investments, this could cause a substantial decrease in the value of our equity holdings in the portfolio company.

The inaccuracy of financial projections could result in actual performance differing from expectations.

We depend on the members of the Executive Management Committee, senior professionals and other key personnel, and our ability to retain them and attract additional qualified personnel is critical to our success and our growth prospects.

We depend on the diligence, skill, judgment, business contacts and personal reputations of the members of the Executive Management Committee, senior professionals and other key personnel.

We depend on our executive officers, senior professionals and other key personnel, and our ability to retain them and attract additional qualified personnel is critical to our success and our growth prospects.

We depend on the diligence, skill, judgment, business contacts and personal reputations of our executive officers, senior professionals and other key personnel depart.

Our future success will depend upon our ability to retain our senior professionals and other key personnel and our ability to recruit additional qualified personnel.

These individuals possess substantial experience and expertise in investing, are responsible for locating and executing our funds’ investments, have significant relationships with the institutions that are the source of many of our funds’ investment opportunities and, in certain cases, have strong relationships with our investors.

Therefore, if any of our senior professionals or other key personnel join competitors or form competing companies, it could result in the loss of significant investment opportunities, limit our ability to raise capital from certain existing investors or result in the loss of certain existing investors.

Therefore, if any of our senior professionals or other key personnel depart and join competitors or form competing companies, it could result in the loss of significant investment opportunities, limit our ability to raise capital from certain existing investors or result in the loss of certain existing investors.

There is no guarantee that the non-competition and non-solicitation agreements to which certain of our senior professionals and other key personnel are subject, together with our other arrangements with them, will prevent them from leaving, joining our competitors or otherwise competing with us.

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states and/or federal agencies enact legislation or adopt rules aimed at effectively prohibiting non-competition agreements.

In this respect, in January 2023, the U.S.

Federal Trade Commission (“FTC”) published a proposed rule that, if finally issued, would generally prohibit post-employment non-compete clauses (or other clauses with comparable effect) in agreements between employers and their employees.

If issued, the proposed rule could adversely affect our ability to recruit and retain our professionals.

The departure or bad acts of any of our senior professionals, or a significant number of our other investment professionals, could have a material adverse effect on our ability to achieve our investment objectives, cause certain of our investors to withdraw capital they invest with us or elect not to commit additional capital to our funds or otherwise have a material adverse effect on our business and our prospects.

Turnover and associated costs of rehiring, the loss of human capital through attrition and the reduced ability to attract talent could impair our ability to implement our growth strategy and maintain our standards of excellence.

Further the departure of some or all of those individuals could also trigger certain “key person” provisions in the documentation governing certain of our funds, which would permit the investors in those funds to suspend or terminate such funds’ investment periods or, in the case of certain funds, permit investors to withdraw their capital prior to expiration of the applicable lock-up date.

Competition for qualified, motivated, and highly-skilled executives, professionals and other key personnel in investment management firms is significant, both in the U.S.

and internationally, and we may not succeed in recruiting additional personnel or we may fail to effectively replace current personnel who depart with qualified or effective successors.

funds’ investment periods or, in the case of certain funds, permit investors to withdraw their capital prior to expiration of the applicable lock-up date.

We do not carry any “key person” insurance that would provide us with proceeds in the event of the death or disability of any of our senior professionals, and we do not have a policy that prohibits our senior professionals from traveling together.

See “—Risks Related to Regulation—Employee misconduct could harm us by impairing our ability to attract and retain investors and subjecting us to significant legal liability, regulatory scrutiny and reputational harm.”

We anticipate that it will be necessary for us to add investment professionals both to grow our businesses and to replace those who depart.

Competition for qualified, motivated, and highly-skilled executives, professionals and other key personnel in investment management firms is significant, both in the U.S.

and internationally, and we may not succeed in

recruiting additional personnel or we may fail to effectively replace current personnel who depart with qualified or effective successors.

We seek to offer our personnel meaningful professional development opportunities and programs such as employee engagement, training and development opportunities and periodic review processes.

We also seek to provide our personnel with competitive benefits and compensation packages.

However, these efforts may not be sufficient to enable us to attract, retain and motivate qualified individuals to support our business and growth.

The tax treatment of carried interest has continued to be an area of focus for policymakers and government officials, which could result in a further regulatory action by federal or state governments.

Congress and the current Presidential administration may consider legislation to further extend the holding period for carried interest to qualify for long-term capital gains treatment, have carried interest taxed as ordinary income rather than as capital gain, impose surcharges on carried interest or increase the capital gains tax rate.

Tax authorities and legislators in other jurisdictions in which Ares has investments or employees could clarify, modify or challenge their treatment of carried interest.

For example, the U.K.

government has suggested, following a report by the Office of Tax Simplification on the U.K.

Capital Gains Tax Regime, that it is keeping the regime under review.

Such review could result in a change to the taxation of carried interest with respect to our U.K.

investment professionals.

If any of these potential changes were effectuated, the amount of taxes that our employees and other key personnel would be required to pay could increase materially and could impact our ability to recruit, retain and motivate employees and key personnel in the relevant jurisdictions or could require us in certain circumstances to consider alternative or modified incentive arrangements for such employees or key personnel.

Our efforts to retain and attract investment professionals may also result in significant additional expenses, which could adversely affect our profitability or result in an increase in the portion of our carried interest and incentive fees that we grant to our investment professionals.

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As we expand the number and scope of our businesses, we increasingly confront potential conflicts of interest relating to our and our funds’ investment activities.

These conflicts are most likely to arise between or among our funds or between one or more funds across our Credit, Private Equity, Real Assets and Secondaries Groups, and other businesses including any SPACs and similar investment vehicles that we sponsor.

These conflicts are most likely to arise between or among our funds or between one or more funds across our Credit, Real Assets, Private Equity and Secondaries Groups, and other businesses including any SPACs and similar investment vehicles that we sponsor.

These conflicts of interest include:

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• our affiliates or portfolio companies may be service providers or counterparties to our funds or portfolio companies and receive fees or other compensation for services that are not shared with our fund investors.

In such instances, we

may be incentivized to cause our funds or portfolio companies to purchase such services from our affiliates or portfolio companies rather than an unaffiliated service provider despite the fact that a third-party service provider could potentially provide higher quality services or offer them at a lower cost;

In such instances, we may be incentivized to cause our funds or portfolio companies to purchase such services from our affiliates or portfolio companies rather than an unaffiliated service provider despite the fact that a third-party service provider could potentially provide higher quality services or offer them at a lower cost;

• funds in one group could be restricted from selling their positions in such companies for extended periods because investment professionals in another group sit on the boards of such companies or because another part of the firm has received private information;

• certain funds in different groups may invest alongside each other in the same security.

ARCC, ASIF and other registered closed-end management investment companies managed by us are permitted to co-invest in portfolio companies with each other and with affiliated funds pursuant to an SEC order (the “Co-Investment Exemptive Order”).

The different investment objectives or terms of such funds may result in a potential conflict of interest, including in connection with the allocation of investments between the funds made pursuant to the Co-Investment Exemptive Order;

For example, ARCC, ASIF and certain other registered closed-end management investment companies managed by us are permitted to co-invest in portfolio companies with each other and with affiliated funds pursuant to an SEC order (the “Co-Investment Exemptive Order”).

The different investment objectives or terms of such funds may result in a potential conflict of

interest, including in connection with the allocation of investments between the funds made pursuant to the Co-Investment Exemptive Order;

• conflicts of interest may exist in the valuation of our investments (which can affect fees and carried interest) and regarding decisions about the allocation of specific investment opportunities among us and our funds and the allocation of fees and costs among us, our funds and their portfolio companies;

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While we have developed general guidelines regarding when two or more funds can invest in different parts of the same company’s capital structure and created a process that we employ to handle such conflicts if they arise, our decision to permit the investments to occur in the first instance or our judgment on how to minimize the conflict could be challenged.

Further, our employees may make investments which may conflict with investments made by our funds or prevent our funds from investing in an opportunity.

If we fail to appropriately address any such conflicts, it could negatively impact our reputation and ability to raise additional funds and the willingness of counterparties to do business with us or result in potential litigation or regulatory action against us, which may adversely impact our business.

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Certain funds in different groups may invest alongside each other in the same security.

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Potential conflicts will arise with respect to our decisions regarding how to allocate co-investment opportunities among our funds and investors and the terms of any such co-investments.

Our fund documents typically do not mandate specific

allocations with respect to co-investments.

Our fund documents typically do not mandate specific allocations with respect to co-investments.

The investment advisers of our funds may have an incentive to provide co-investment opportunities to certain investors in lieu of others.

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Such incentives will from time to time give rise to conflicts of interest.

There can be no assurance that any conflicts of interest will be resolved in favor of any particular funds or investors (including any applicable co-investors) and such investment fund or investor (or the SEC) may challenge our treatment of such conflict, which could impose costs on our business and expose us to potential liability.

There can be no assurance that any conflicts of interest will be resolved in favor of any particular funds or investors (including any

applicable co-investors) and such investment fund or investor (or the SEC) may challenge our treatment of such conflict, which could impose costs on our business and expose us to potential liability.

We may also decide to provide a co-investment opportunity to certain investors in lieu of allocating more of that investment to our funds, which may adversely impact our fundraising activity.

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• other industry participants may, from time to time, seek to recruit our investment professionals and other employees away from us.

Developments in financial technology, such as a distributed ledger technology (or blockchain), have the potential to disrupt the financial industry and change the way financial institutions, including investment managers, do business, and could exacerbate these competitive pressures.

Developments in financial technology, such as artificial intelligence or distributed ledger technology (or blockchain), have the potential to disrupt the financial industry and change the way financial institutions, including investment managers, do business, and could exacerbate these competitive pressures.

We may lose investment opportunities in the future if we do not match pricing, structures and terms offered by our competitors.

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Increased competition may adversely impact our ability to deploy capital, which could reduce our revenues and cash flow and adversely affect our financial condition.

Poor performance of our funds would cause a decline in our revenue and results of operations, may obligate us to repay carried interest previously paid to us and could adversely affect our ability to raise capital for future funds.

Poor performance of our funds, or a failure of slowdown in deployment, would cause a decline in our revenue and results of operations and could adversely affect our ability to raise capital for future funds.

We derive revenues primarily from:

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For further information on the impact of poor fund performance, see “—We may not be able to maintain our current fee structure as a result of industry pressure from fund investors to reduce fees, which could have an adverse effect on our profit margins and results of operations.”

The pace and consistency of our funds’ capital deployment has been, and may in the future continue to be, affected by a range of factors which are beyond our control.

Our inability to deploy capital on the timeframe we expect, or at all, and on terms that we believe are attractive, would reduce or delay the management fees, carried interest and incentive fees that we would otherwise expect to earn on this capital.

Moreover, we could be delayed in raising successor funds.

The impact of any such reduction or delay would be particularly adverse with respect to funds where management fees are paid on invested capital.

In addition, if any of our subsidiaries become the sponsor of any SPACs that are unable to successfully complete a business combination within the time limitation provided for such SPAC, we may lose the entirety of our investment.

See “—Risks Related to Regulation—Our investments in subsidiaries that have sponsored SPACs and invested in their business combination targets may expose us to increased liabilities, and we may suffer the loss of all or a portion of our investments if the SPAC does not complete a business combination by the applicable deadline or the target is unsuccessful.”

ARCC’s management fee comprises a significant portion of our management fees and a reduction in fees from ARCC could have an adverse effect on our revenues and results of operations.

ARCC’s management fee comprises a significant portion of our management fees.

The management fees we receive from ARCC (including fees attributable to ARCC Part I Fees) comprise a significant percentage of our management fees.

The investment advisory and management agreement we have with ARCC categorizes the

fees we receive as:

The investment advisory and management agreement we have with ARCC categorizes the fees we receive as:

(i) base management fees, which are paid quarterly and generally increase or decrease based on ARCC’s total assets (excluding cash and cash equivalents);

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and (iii) fees based on ARCC’s net capital gains, which are paid annually (“ARCC Part II Fees”).

We classify the ARCC Part I Fees as management fees because they are predictable and recurring in nature, not subject to contingent repayment and generally cash-settled each quarter.

We classify the ARCC Part I Fees as management fees because they are

predictable and recurring in nature, not subject to contingent repayment and generally cash-settled each quarter.

If ARCC’s total assets or its net investment income (before ARCC Part I Fees and ARCC Part II Fees) were to decline significantly for any reason, including, without limitation, due to fair value accounting requirements, the poor performance of its investments or the failure to successfully access or invest capital, the amount of the fees we receive from ARCC, including the base management fee and the ARCC Part I Fees, would also decline significantly, which could have an adverse effect on our revenues and results of operations.

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In the face of poor fund performance, investors could demand lower fees or fee concessions for existing or future funds which would likewise decrease our revenue.

A major public health crisis, like the COVID-19 pandemic, could disrupt the U.S.

and global economy and industries in which we, our funds and our funds’ portfolio companies operate and negatively impact us, our funds or our funds’ portfolio companies.

A major public health crisis could impact the U.S.

and global economy.

Disruptions to commercial activity (such as the imposition of quarantines or travel restrictions) or, more generally, a failure to contain or effectively manage a public health crisis, has, and may in the future, adversely impact our and our funds’ business and operations, as well as the business and

operations of our funds’ portfolio companies.

For example, such disruptions have adversely affected, and in the future could again, impair our ability to raise funds or deter fund investors from investing in new or successor funds that we are marketing particularly in certain industries in which certain of our funds’ portfolio companies operate, including energy, hospitality, travel, retail and restaurant industries.

Additionally, while restrictions have generally been lifted globally, and the World Health Organization has declared the end of the COVID-19 global health emergency, the COVID-19 pandemic contributed, and any future public health crisis could contribute, to adverse impacts on global commercial activity and supply chain operations and significant volatility in the equity and debt markets.

Such volatility could increase credit and liquidity risk and hamper our and our funds’ ability to deploy capital, all of which could negatively impact our and our funds’ performance, as well as the business and operations of our funds’ portfolio companies.

Rapid growth of our businesses, particularly outside the U.S., may be difficult to sustain and may place significant demands on our administrative, operational and financial resources.

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See “—Risks Related to Regulation—Regulatory changes in jurisdictions outside the U.S.

could adversely affect our businesses.”

could adversely affect our businesses” and “—Risks Related to Our Funds—Our funds make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States.”

We may enter into new lines of business and expand into new investment strategies, geographic markets, strategic partnerships and businesses, each of which may result in additional risks, expenses and uncertainties in our businesses.

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We may pursue growth through acquisitions of other investment management companies, acquisitions of critical business partners, acquisition of companies, or other strategic initiatives (including through our other businesses), which may include entering into new lines of business.

In addition, consistent with our past experience, we expect opportunities will arise to acquire other alternative or traditional asset managers.

In addition, consistent with our past experience, we expect opportunities will arise to acquire other alternative or traditional asset managers, including asset managers located outside of the U.S.

We have in the past opened many offices to conduct our asset management and capital markets businesses around the world, including in Europe and APAC, which we intend to grow and expand.

We have also launched a number of new investment initiatives in various asset classes and geographies, which subject us to additional risk.

For example, in connection with the WSM Acquisition, we expanded our real estate capabilities into Mexico.

Additionally, in connection with 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 (the “GCP Acquisition”), which is expected to close in the first quarter of 2025, we expect to launch investment initiatives in Japan, Vietnam and Brazil.

Each of these geographies may subject us to heightened risks due to jurisdictional limitations or political or economic uncertainty in these regions.

See “—Investments in emerging markets are subject to greater risks than those in more developed markets.” Introducing new types of investment structures and products could increase the complexities involved in managing such investments, including ensuring compliance with applicable regulatory requirements and terms of the investment vehicles.

Attempts to expand our businesses involve a number of special risks, including some or all of the following:

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This strategy also contemplates the use of shares of our publicly-traded Class A common stock as acquisition consideration.

Volatility or declines in the trading price of shares of our Class A common stock may make shares of our Class

A common stock less attractive to acquisition targets.

Volatility or declines in the trading price of shares of our Class A common stock may make shares of our Class A common stock less attractive to acquisition targets.

Moreover, even if we are able to identify and successfully complete an acquisition, we may encounter unexpected difficulties or incur unexpected costs associated with integrating and overseeing the operations of the new businesses.

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Overview of our regulatory environment and exemptions from certain laws.

Our businesses are subject to extensive regulation, including periodic examinations, by governmental agencies and self-regulatory organizations in the jurisdictions in which we operate.

Our businesses are subject to extensive regulation, including periodic examinations and potential investigations, by governmental agencies and self-regulatory organizations in the jurisdictions in which we operate.

The SEC oversees the activities of our subsidiaries that are registered investment advisers under the Investment Advisers Act.

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We cannot predict what, if any, actions may be taken, but such regulation could have a material adverse effect on our business and results of operations.

We regularly rely on exemptions from various requirements of the Securities Act, the Exchange Act, the Investment Company Act, the Commodity Exchange Act and ERISA.

These exemptions are sometimes highly complex and may in certain circumstances depend on compliance by third parties who we do not control.

If for any reason these exemptions were to be revoked or challenged or otherwise become unavailable to us, such action could increase our cost of doing business or subject us to regulatory action or third-party claims, which could have a material adverse effect on our businesses.

For example, the “bad actor” disqualification provisions of Rule 506 of Regulation D under the Securities Act ban an issuer from offering or selling securities pursuant to the safe harbor in Rule 506 if the issuer, or any other “covered person,” is the subject of a criminal, regulatory or court order or other “disqualifying event” under the rule which has not been waived by the SEC.

The definition of a “covered person” under the rule includes an issuer’s directors, general partners, managing members and executive officers and promoters and persons compensated for soliciting investors in the offering.

Accordingly, our ability to rely on Rule 506 to offer or sell securities would be impaired if we or any “covered person” is the subject of a disqualifying event under the rule and we are unable to obtain a waiver or, in certain circumstances, terminate our involvement with such “covered person”.

SEC enforcement activity has increased under the current Presidential administration.

While we have a robust compliance program in place, it is possible this enforcement activity will target practices which we believe are compliant, and which were not targeted by the prior Presidential administration.

For example, the Biden administration and the current leadership of the SEC have signaled that they intend to seek to enact changes to numerous areas of law and regulations currently in effect.

In particular, the SEC has signaled an increased emphasis on investment adviser and private fund regulation and has enacted rules that will meaningfully affect investment advisers and their management of private funds.

These include rules with respect to fund audits, adviser-led secondary transactions, fee and expense allocation and reporting, beneficial ownership reporting under Exchange Act Sections 13(d) and 13(g), reporting on Form PF, borrowings, preferential investment terms, cybersecurity risk management, ESG disclosure, annual compliance reviews and outsourcing by investment advisers.

The SEC is expected to propose additional changes in the future.

Such current and future rulemaking is expected to materially impact private funds and private fund advisers and their operations, including increasing compliance burdens and regulatory costs, and heightened risk of regulatory enforcement action such as public sanctions, restrictions on activities, fines and reputational damage.

For example, significant time and resources are expected to be required to comply with the private fund adviser rules that the SEC adopted on August 23, 2023, including costs related to reporting and disclosures to investors.

Further, implementation of the private fund advisor rules may result in us evaluating certain of our fundraising practices, which could adversely impact fundraising.

Any of the foregoing could lead to further regulatory uncertainty, particularly regarding those rules that are currently (or in the future may become) subject to legal challenge from private fund industry groups and others, result in changes to our operations and could materially impact our funds and/or their investments and/or the Company, including by causing us to incur additional expenses.

SEC enforcement activity has increased in recent years.

While we have a robust compliance program in place, it is possible this enforcement activity will target practices which we believe are compliant, and which were not historically targeted by the SEC.

The SEC has also increased emphasis on investment adviser and private fund regulation and sought to enact rules that could meaningfully affect investment advisers and their management of private funds, which could materially impact private funds and private fund advisers and their operations, including increasing compliance burdens and regulatory costs, and heightened risk of regulatory enforcement action such as public sanctions, restrictions on activities, fines and reputational damage.

Federal regulation.

Under the Dodd-Frank Act, a 10 voting-member Financial Stability Oversight Council (“FSOC”) has the authority to review the activities of certain nonbank financial firms engaged in financial activities and designate them as systemically important financial institutions (“SIFI”), evaluating, among other things, the impact of the distress of the financial firm on the stability of the U.S.

Currently, there are no non-bank financial companies with a non-bank SIFI

Under the Dodd-Frank Act, the Financial Stability Oversight Council (“FSOC”) has the authority to review the activities of certain nonbank financial firms engaged in financial activities and designate them as systemically important financial institutions (“SIFI”).

Currently, there are no non-bank financial companies with a non-bank SIFI designation.

The FSOC has, however, designated certain non-bank financial companies as SIFIs in the past, and additional non-bank financial companies, which may include large asset management companies such as us, may be designated as SIFIs in the future.

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Many of these swaps are also subject to mandatory trading on designated contract markets or swap execution facilities.

The CFTC may propose rules designating other classes of swaps for mandatory clearing.

Mandatory clearing and trade execution requirements may change the cost and availability of the swaps that we use, and expose our funds to the credit risk of the clearing house through which any cleared swap is cleared.

In addition, federal bank regulatory authorities and the CFTC have adopted initial and variation margin requirements for swap dealers, security-based swap dealers and swap entities, including permissible forms of margin, custodial arrangements and documentation requirements for uncleared swaps and security-based swaps.

The rules regarding variation margin requirements are now in effect, and as a result some of our funds are required to post collateral to satisfy the variation margin requirements which has made transacting in uncleared swaps more expensive.

As a result of these variation margin requirements,

some of our funds are required to post collateral to satisfy the variation margin requirements which has made transacting in uncleared swaps more expensive.

Position limits imposed by various regulators, self-regulatory organizations or trading facilities on derivatives may also limit our ability to effect desired trades.

Position limits represent the maximum amounts of net long or net short positions that any one person or entity may own or control in a particular financial instrument.

The CFTC adopted a final rule that applies specific limits on speculative positions in 25 physical commodity futures contracts, futures and options directly or indirectly linked to such contracts as well as economically equivalent swaps.

The final rule had a general compliance date of January 1, 2022 and became effective for economically equivalent swaps on January 1, 2023.

The Dodd-Frank Act also authorizes the SEC to establish position limits on security-based swaps, which rules could have a similar impact on our business.

The CFTC could propose to expand such requirements to other types of contracts in the future.

These rules and any additional proposals could affect our ability and the ability for our funds to enter into derivatives transactions.

The Dodd-Frank Act authorizes federal regulatory agencies to review and, in certain cases, prohibit compensation arrangements at financial institutions that give employees incentives to engage in conduct deemed to encourage inappropriate risk-taking by covered financial institutions.

In 2016, federal bank regulatory authorities and the SEC revised and re-proposed a rule that generally:

(i) prohibits incentive-based payment arrangements that are determined to encourage inappropriate risks by certain financial institutions by providing excessive compensation or that could lead to material financial loss;

and (ii) requires those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.

For more information on certain incentive compensation paid to our senior executive officers, see “—Risks Related to Shares of Our Common Stock—The market price of shares of our Class A common stock may decline due to the large number of shares of Class A common stock eligible for exchange and future sale.” The Dodd-Frank Act also directs the SEC to adopt a rule that requires public companies to adopt and disclose policies requiring, in the event the company is required to issue an accounting restatement, the contingent repayment obligations of related incentive compensation from current and former executive officers.

The SEC has proposed but not yet adopted such rule.

To the extent the aforementioned rules are adopted, our ability to recruit and retain investment professionals and senior management executives could be limited.

It is difficult to determine the full extent of the impact on us of new laws, regulations or initiatives that may be proposed or whether any of the proposals will become law.

In addition, as a result of proposed legislation, shifting areas of

focus of regulatory enforcement bodies or otherwise, regulatory compliance practices may shift such that formerly accepted industry practices become disfavored or less common.

In addition, as a result of proposed legislation, shifting areas of focus of regulatory enforcement bodies or otherwise, regulatory compliance practices may shift such that formerly accepted industry practices become disfavored or less common.

Any changes or other developments in the regulatory framework applicable to our businesses, including the changes described above and changes to formerly accepted industry practices, may impose additional costs on us, require the attention of our senior management or result in limitations on the manner in which we conduct our businesses.

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Compliance with any new laws or regulations could make compliance more difficult and expensive, affect the manner in which we conduct our businesses and adversely affect our profitability.

Additionally, in June 2024, the U.S.

Supreme Court reversed its longstanding approach under the Chevron doctrine, which provided for judicial deference to regulatory agencies.

As a result of this decision, we cannot be sure whether there will be increased challenges to existing agency regulations or how lower courts will apply the decision in the context of other regulatory schemes without more specific guidance from the U.S.

Supreme Court.

For example, the decision could significantly impact consumer protection, advertising, privacy, artificial intelligence, anti-corruption and anti-money laundering practices and other regulatory regimes with which we are required to comply.

Any such regulatory developments could result in uncertainty about and changes in the ways such regulations apply to us and our portfolio companies, and may require additional resources to ensure our continued compliance.

We cannot predict which, if any, of these actions will be taken or, if taken, their effect on the financial stability of the U.S.

Such actions could have a significant adverse effect on our business, financial condition and results of operations.

State regulation.

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They are not designed to protect our stockholders.

Even if a sanction is imposed against us, one of our subsidiaries or our personnel by a regulator for a small monetary amount, the costs incurred in responding to such matters could be material, the adverse publicity related to the sanction could harm our reputation, which in turn could have a material adverse effect on our businesses in a number of ways, making it harder for us to raise new funds and discouraging others from doing business with us.

if a sanction is imposed against us, one of our subsidiaries or our personnel by a regulator for a small monetary amount, the costs incurred in responding to such matters could be material, the adverse publicity related to the sanction could harm our reputation, which in turn could have a material adverse effect on our businesses in a number of ways, making it harder for us to raise new funds and discouraging others from doing business with us.

In the past several years, the financial services industry, and private equity and alternative asset managers in particular, has been the subject of heightened scrutiny by regulators around the globe.

In particular, the SEC and its staff have focused more narrowly on issues relevant to alternative asset management firms, including by adopting a number of new rules that will likely impose significant changes on investment advisers and their management of private funds and by forming specialized units devoted to examining such firms and, in certain cases, bringing enforcement actions against the firms, their principals and employees.

In particular, the SEC and its staff have focused more narrowly on issues relevant to alternative asset management firms, including by forming specialized units devoted to examining such firms and, in certain cases, bringing enforcement actions against the firms, their principals and employees.

In recent periods there have been a number of enforcement actions within the industry, and it is expected that the SEC will continue to pursue enforcement actions against private fund managers.

This increased enforcement activity may cause us to reevaluate certain practices and adjust our compliance control function as necessary and appropriate.

This enforcement activity may cause us to reevaluate certain practices and adjust our compliance control function as necessary and appropriate.

A number of our investing activities, such as our direct lending business, are also subject to regulation by various U.S.

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Any changes in the regulatory framework applicable to our businesses, including the changes described above, may impose additional costs on us, require the attention of our senior management or result in limitations on the manner in which we conduct our business.

Complying with any new laws or regulations could be more

difficult and expensive, affect the manner in which we conduct our businesses and adversely affect our profitability.

Complying with any new laws or regulations could be more difficult and expensive, affect the manner in which we conduct our businesses and adversely affect our profitability.

As of December 31, 2024, our direct lending AUM represented 48% of our total AUM.

The SEC’s recent lists of examination priorities includes numerous items related to the oversight of asset managers to private funds, such as:

(i) conflicts of interest;

(ii) calculation and allocation of fees and expenses;

(iii) compliance with certain rules under the Investment Advisers Act relating to marketing and custody;

and (iv) policies and procedures regarding the use of alternative data.

In addition, many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding private funds, including the acceleration of monitoring fees, the allocation of broken-deal expenses, the disclosure of operating partner or operating executive compensation, outside business activities of firm principals and employees, group purchasing arrangements and general conflicts of interest disclosures.

Further, the SEC has recently adopted new rules and amendments to existing rules under the Investment Advisers Act that include:

(i) a requirement for detailed quarterly disclosure to private fund investors regarding performance, fees and expenses (including disclosure of the compensation paid to the investment adviser and its affiliates by the private fund) and additional portfolio investment-level disclosure regarding compensation paid to the investment adviser and its affiliates by the portfolio investment;

(ii) restrictions on a private fund adviser’s ability to engage in certain activities and practices, such as charging certain fees or expenses, unless the adviser provides certain disclosures to investors, and in some cases, receive investor consent;

(iii) limitations on an adviser’s ability to grant certain types of preferential terms regarding redemption or information about portfolio holdings or exposures to only certain private fund investors (e.g., through side letters);

(iv) a requirement to provide written notice to investors of preferential terms granted to certain investors in the same private fund;

(v) a requirement to obtain an annual audit for each private fund advised by the adviser;

(vi) a requirement to obtain a fairness opinion or valuation opinion in connection with an adviser-led secondary transaction;

and (vii) a requirement for the adviser to document an annual compliance review in writing.

The SEC’s recent lists of examination priorities for investment advisers includes numerous items related to the oversight of asset managers to private funds, and many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding private funds, including the calculation of fees and expenses, the allocation of broken-deal expenses, the disclosure of operating partner or operating executive compensation, outside business activities of firm principals and employees, group purchasing arrangements and general conflicts of interest disclosures.

Further, the SEC has highlighted valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation.

If the SEC were to investigate and find errors in our methodologies or procedures, we and/or members of our management could be subject to penalties and fines, which could harm our reputation and our business, financial condition and results of operations could be materially and adversely affected.

Changes in relevant data protection laws could necessitate changes to the steps taken by our funds for the purposes of complying with such laws and the way in which personal data is transferred between our funds.

Following Brexit, the provisions of the GDPR were incorporated directly into U.K.

law as the U.K.

GDPR, and the two regimes have remained materially similar since this date.

However, the U.K.

government has recently introduced the draft Data (Use and Access) Bill (“DUA Bill”) which, if it becomes law, will introduce a number of changes to the U.K.’s data protection regime.

Some of these changes would reduce the current burden of data protection compliance on businesses (for example, removing the need to obtain consent to use analytics cookies), whereas others would introduce additional obligations (for example, the scope of what constitutes special category data for the purposes of the U.K.

GDPR may be expanded).

It is unlikely that our U.K.

funds will have to make any material changes to their data protection practices to ensure compliance with any resulting reforms to U.K.

data protection laws, but we will continue to monitor the progress of the DUA Bill.

Any changes to the U.K.’s data protection regime may impact the finding by the EU Commission on June 28, 2021 that the U.K.

provides adequate protection for personal data transferred from the EU to the U.K.

The U.K.’s adequacy status expires on June 27, 2025 and is therefore due for imminent review by EU Commission.

Whilst any divergence from the GDPR may increase the possibility of a successful challenge to the U.K.’s adequacy status, on the basis that the scope of the reforms proposed pursuant to the DUA Bill are reasonably limited, we believe it is unlikely that these reforms alone will threaten the U.K.’s adequacy status.

To the extent that any data is transferred from the EU funds to the U.K.

funds on the basis of the adequacy decision, we will continue to monitor developments in this area of the law and ensure that any transfer mechanisms which are necessary to facilitate any EU-U.K.

data flows are in place.

Regulations impacting the insurance industry could adversely affect our business and our operations, and our provision of products and services to insurance companies, including through Aspida, subjects us to a variety of risks and uncertainties.

The insurance industry is subject to significant regulatory oversight, both in the U.S.

Regulatory authorities in many relevant jurisdictions have broad administrative, and in some cases discretionary, authority with respect to insurance companies and/or their investment advisors, which may include, among other things, the investments insurance companies may acquire and hold, marketing practices, affiliate transactions, reserve requirements, capital adequacy including insurance company licensing and examination, agent licensing, establishment of reserve requirements and solvency standards, premium rate regulation, admissibility of assets, policy form approval, unfair trade and claims practices, advertising, maintaining policyholder privacy, payment of dividends and distributions to shareholders, investments, review and/or approval of transactions with affiliates, reinsurance, acquisitions, mergers and other matters.

Regulatory authorities in many relevant jurisdictions have broad administrative, and in some cases discretionary, authority with respect to

insurance companies and/or their investment advisors, which may include, among other things, the investments insurance companies may acquire and hold, marketing practices, affiliate transactions, reserve requirements, capital adequacy including insurance company licensing and examination, agent licensing, establishment of reserve requirements and solvency standards, premium rate regulation, admissibility of assets, policy form approval, unfair trade and claims practices, advertising, maintaining policyholder privacy, payment of dividends and distributions to shareholders, investments, review and/or approval of transactions with affiliates, reinsurance, acquisitions, mergers and other matters.

Insurance regulatory authorities regularly review and update these and other requirements.

Currently, there are proposals to increase the scope of regulation of insurance holding companies in the U.S., Bermuda and other jurisdictions.

Current proposals in Bermuda (intended to become effective by the BMA in March 2024, subject to certain transitional and grandfathering arrangements) relate to changes to the calculation of the technical provisions framework of insurers and insurance groups, amendments to the computation and flexibility of the Bermuda Solvency Capital Requirement, updates to the prudential rules and reporting forms to modify capital requirements and revisions to the fees charged to life insurers regulated by the BMA.

Effective March 31, 2024, new legislation became operative in Bermuda (subject to certain transitional and grandfathering arrangements) which relates to changes to the calculation of the technical provisions framework of insurers and insurance groups, amendments to the computation and flexibility of the Bermuda Solvency Capital Requirement, updates to the prudential rules and reporting forms to modify capital requirements and revisions to the fees charged to life insurers regulated by the BMA.

In 2024, the National Association of Insurance Commissioners in the U.S.

adopted changes to its Financial Analysis Handbook to provide additional guidance to regulators reviewing affiliated investment management agreements and added new regulatory considerations and guidance to assist regulators in assessing complex ownership structures.

Changes in rules and regulations impacting the insurance industry could adversely impact our expansion into the insurance industry, the prospects of our Bermuda insurance company subsidiary Aspida Re and other investments we make in the insurance industry, both in the U.S.

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We may be the target or subject of, or may have indemnification obligations related to, litigation, enforcement investigations or regulatory scrutiny.

licenses, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action.

Regulators and other authorities generally have the power to bring administrative or judicial proceedings against insurance companies, which could result in, among other things, suspension or revocation of licenses, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action.

To the extent AIS or another Ares business that offers products to insurance companies, Aspida Life or Aspida Re is directly or indirectly involved in such regulatory actions, our reputation could be harmed, we may become liable for indemnification obligations and we could potentially be subject to enforcement actions, fines and penalties from both U.S.

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Employee misconduct could harm us by impairing our ability to attract and retain investors and subjecting us to significant legal liability, regulatory scrutiny and reputational harm.

Our ability to attract and retain investors and to pursue investment opportunities for our funds depends heavily upon the reputation of our professionals, especially our senior professionals.

We are subject to a number of laws, obligations and standards arising from our investment management business and our authority over the assets managed by our investment management business.

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Our businesses often require that we deal with confidential matters of great significance to companies in which our funds may invest.

If our employees or former employees were to use or disclose confidential information improperly, we could suffer serious harm to our reputation, financial position and current and future business relationships.

Employee misconduct could also include, among other things, binding us to transactions that exceed authorized limits or present unacceptable risks and other unauthorized activities or concealing unsuccessful investments (which, in either case, may result in unknown and unmanaged risks or losses), concealing or failing to disclose conflicts of interest with our funds or portfolio companies or otherwise charging (or seeking to charge) inappropriate expenses or inappropriate or unlawful behavior or actions directed towards other employees, or misappropriation of confidential or proprietary information relating to us or our funds’ portfolio companies.

If our current or former employees were to use or disclose confidential information improperly, we could suffer serious harm to our reputation, financial position and current and future business relationships.

Additionally, we allow certain of our employees to work on a hybrid schedule or remotely, which has required us to develop and implement additional precautions in order to detect and prevent employee misconduct.

Employee misconduct could also include, binding us to transactions that exceed authorized limits or present unacceptable risks and other unauthorized activities or concealing unsuccessful investments (which, in either case, may result in unknown and unmanaged risks or losses), concealing or failing to disclose conflicts of interest with our funds or portfolio companies or otherwise charging (or seeking to charge) inappropriate expenses or inappropriate or unlawful behavior or actions directed towards other employees, or misappropriation of confidential or proprietary information relating to us or our funds’ portfolio companies.

Such misconduct could subject us to whistleblower claims, regulatory action and monetary or other penalties.

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It is not always possible to detect or deter employee misconduct, and the extensive precautions we take to detect and prevent this activity may not be effective in all cases.

If one or more of our employees or former employees were to engage in misconduct or were to be accused of such misconduct, our businesses and our reputation could be adversely affected and a loss of investor confidence could result, which would adversely impact our ability to raise future funds.

If one or more of our current or former employees were to engage in misconduct or were to be accused of such misconduct, our businesses and our reputation could be adversely affected and a loss of investor confidence could result, which would adversely impact our ability to raise future funds.

Our current and former employees and those of our funds’ portfolio companies may also become subject to allegations of sexual harassment, racial and gender discrimination or other similar misconduct, which, regardless of the ultimate outcome, may result in adverse publicity that could harm our and such portfolio company’s brand and reputation.

The pervasiveness of social media, coupled with increased public focus on the externalities of activities unrelated to the business, could further magnify the reputational risks associated with negative publicity.

Changes to the method of determining the LIBOR or the selection of SOFR or SONIA as replacements for LIBOR may affect the value of investments held by us or our funds and could affect our results of operations and financial results.

In July 2017, the FCA, as supervisor of ICE Benchmark Administrator (“IBA”), the administrator of LIBOR, announced that it would phase out LIBOR by the end of 2021 (later extended to the end of June 2023 for USD LIBOR only).

IBA ceased publishing GBP, EUR, CHF and JPY LIBOR rates on January 1, 2022 and ceased publishing overnight and 12-month USD LIBOR on June, 30 2023.

In order to avoid disruption for users of LIBOR who were unable to transition to risk-free rates (“RFRs”) prior to relevant deadlines, the FCA required the continued publication of certain LIBOR settings on a changed or “synthetic” methodology (“Synthetic LIBOR”).

Synthetic LIBOR settings have been largely transitioned out, and at the date of writing only 3-month GBP Synthetic LIBOR and 1-month, 3-month, and 6-month USD Synthetic LIBOR are being published.

Supervised users of all financial contracts other than cleared derivatives are permitted to use these settings in respect of legacy contracts only.

The FCA has announced that it intends to compel the publication of these Synthetic LIBOR settings permanently from the following dates:

in respect of the GBP Synthetic LIBOR settings, on March 31, 2024, and in respect of the USD Synthetic LIBOR settings, on September 30, 2024.

The nominated replacement for USD LIBOR is the Secured Overnight Financing Rate (“SOFR”) and the nominated replacement for GBP-LIBOR is the Sterling Overnight Interbank Average Rate (“SONIA”).

In March 2020, the Federal Reserve began publishing 30-day, 90-day and 180-day tenor SOFR Averages and a SOFR Index and in July 2020, Bloomberg began publishing fall-backs that the International Swaps and Derivatives Association (“ISDA”) implemented in lieu of LIBOR with respect to swaps and derivatives.

In July 2021, the CME Group’s forward-looking SOFR term rates were formally recommended by the Alternative Reference Rates Committee.

SOFR and SONIA have a limited history.

The future performance of SOFR and SONIA, and SOFR- and SONIA-based reference rates, is uncertain.

Future levels of SOFR and SONIA may bear little or no relation to historical levels of SOFR, LIBOR or other rates.

SOFR and SONIA are transaction-based rates, and each has been more volatile than other benchmark or market rates during certain periods.

Accordingly, use of SOFR or SONIA may result in market inefficiencies.

For these reasons, among others, there is no assurance that SOFR or SONIA, or rates derived from SOFR or SONIA, will perform in the same or similar way as USD LIBOR would have performed at any time, and there is no assurance that SOFR- or SONIA-based rates will be a suitable substitute for USD LIBOR.

Regulatory changes in jurisdictions outside the U.S.

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Despite the U.K.’s departure from the EU on January 31, 2020 (see “—The U.K.’s exit from the EU (“Brexit”) could adversely affect our business and our operations” for further detail), new and existing EU legislation is expected to continue to impact our business in the U.K.

The following EU measures are of particular relevance to our business.

The following EU and U.K.

measures are of particular relevance to our business.

Securitisation Regulation.

The EU Securitisation Regulation (the “Securitisation Regulation”) includes requirements in relation to transparency and risk retention and restricts AIFMs from investing in securitizations which do not comply with its provisions (“non-compliant securitizations”).

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This lack of clarity may hamper our ability to raise capital for some of our non-EEA funds from investors in the EEA or subject such fund raising to additional risks, including, if application of the Securitisation Regulation to non-EEA AIFMs is confirmed, that their funds that market in the EEA could be required to divest of interests in non-compliant securitizations at sub-optimal prices.

Following the U.K.’s exit from the EU, the U.K.

intends to repeal the U.K.’s current implementation of the Securitisation Regulation and has published draft legislation (the “Securitisation Regulations 2023”) as part of a policy statement, identifying several areas for revision in the U.K.

and divergence from the EU’s Securitisation Regulation.

The policy statement and the draft Securitisation Regulations 2023 are still under review and the final rules are still unclear.

has since assimilated the EU Securitisation Regulation and has published the Securitisation Regulations 2024 (the “U.K.

Securitisation Regulation”).

Securitisation Regulation deviates from the EU’s Securitisation Regulation in a number of ways.

We are assessing the impact of these changes to existing securitization activities and our funds.

The EU Regulation on over-the-counter (“OTC”) derivative transactions, central counterparties and trade repositories (the “European Market Infrastructure Regulation” or “EMIR”) requires the mandatory clearing of certain OTC derivatives through central counterparties.

This creates additional risk mitigation requirements (including, in particular, margining requirements) in respect of certain OTC derivative transactions that are not cleared by a central counterparty and imposes reporting and record keeping requirements in respect of most derivative transactions.

EMIR creates additional risk mitigation requirements (including, in particular, margining requirements) in respect of certain OTC derivative transactions that are not cleared by a central counterparty and imposes reporting and record keeping requirements in respect of most derivative transactions.

The requirements are similar to, but not the same as, those in Title VII of the Dodd-Frank Act.

The latest amendments to EMIR (“EMIR 3.0”) came into effect on December 24, 2024.

EMIR 3.0 introduces a new active account requirement and amends existing requirements under EMIR (including with respect to the reporting obligation and clearing threshold calculations).

has on-shored EMIR, with the effect that a similar but not identical set of rules apply in the U.K.

Certain cross-border arrangements (e.g., where an Ares European fund

enters into derivatives transactions with a U.K.

Certain cross-border arrangements (e.g., where an Ares European fund enters into derivatives transactions with a U.K.

counterparty, transacts on a U.K.

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EMIR are substantively similar, there are some areas of regulatory divergence (including differences in the way in which derivatives are reported and a lack of equivalence declarations between the U.K.

and the EU with respect to trade repositories) and there can be no guarantee that the U.K.

and the EU with respect to trade repositories) which have been exacerbated by EMIR 3.0, and there can be no guarantee that the U.K.

will move in lockstep with the future changes proposed by the EU.

The EU regulation on transparency of securities financing transactions (“SFTR”) requires the mandatory reporting of certain securities financing transactions (“SFTs”), disclosure obligations to counterparties regarding the re-use of collateral, and certain transparency and disclosure obligations for managers of UCITS and AIFs in respect of SFTs and total return swaps.

The new SFTR validation rules, which were updated in March 2023, are effective as of September 2023.

has on-shored SFTR, with the effect that a similar but not identical set of rules apply in the U.K.

Certain cross-border arrangements (such as those where an Ares European fund enters into SFT with a U.K.

Certain cross-border arrangements (such as those where an Ares European fund enters into an SFT with a U.K.

counterparty) may be impacted.

Although SFTR and U.K.

SFTR are substantively similar, there are some areas of regulatory divergence (including with respect to the new validation rules) and there can be no guarantee that the U.K.

SFTR are substantively similar, there are some areas of regulatory divergence (including with respect to the differing new validation rules) and there can be no guarantee that the U.K.

will move in lockstep with the future changes proposed by the EU.

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In the EU, examples of further legislation may include proposals for further changes to or reviews of the extent and interpretation of pay regulation, including under the EU Regulation on the prudential requirements of investment firms (Regulation (EU) 2019/2033) and its accompanying Directive (Directive (EU) 2019/2034) or the U.K.

version, the Investment Firms Prudential Regime (which may have an impact on the retention and recruitment of key personnel), proposals for enhanced regulation of loan origination (see “—Alternative Investment Fund Managers Directive”), credit servicing (see “—Credit Servicers and Purchasers Directive”) and new reporting requirements in relation to securities financing transactions.

version, the Investment Firms Prudential Regime (which may have an impact on the retention and recruitment of key personnel), proposals for enhanced regulation of loan origination (see “—Alternative Investment Fund Managers Directive”) and new reporting requirements in relation to securities financing transactions.

In the U.K., additional rule changes have affected the approval of certain Ares professionals in the U.K.

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notwithstanding Brexit.

On November 10, 2023, the European Commission published a near-final amending directive, commonly referred to as “AIFMD II”.

Assuming AIFMD II is adopted promptly and published in the Official Journal without delay, most of the changes will come into effect in 2026, subject to the grandfathering period for certain of the loan origination provisions and certain Annex IV disclosure requirements which will come into effect a year later.

In the EU, an amending directive to AIFMD, commonly referred to as “AIFMD II” was published on March 26, 2024 and will become effective from April 16, 2026, subject to the grandfathering period for certain of the loan origination provisions and certain Annex IV disclosure requirements which will become effective a year later.

It is not yet clear to what extent (if any) the U.K.

will seek to reflect AIFMD II in its domestic rules implementing AIFMD.

The draft contains a number of amendments to AIFMD, including more onerous delegation requirements which may require a review of AM Lux’s existing arrangements, enhanced substance requirements, additional liquidity management provisions for AIFMs to the extent that they manage open-ended AIFs, and revised regulatory reporting and investor disclosures requirements.

The draft also proposed significant new requirements relating to the activities of funds managed by AM Lux which originate loans including new restrictions on the structure which such funds may take.

AIFMD II may result in new restrictions on the ability of certain of our affiliates other than AM Lux to register funds for marketing to investors in certain EEA states.

The amending directive contains a number of amendments to AIFMD, including more onerous delegation requirements which may require a review of AM Lux’s existing arrangements, enhanced substance requirements, additional liquidity management provisions for AIFMs to the extent that they manage open-ended AIFs, and revised regulatory reporting and investor disclosures requirements.

The directive also proposed significant new requirements relating to the activities of funds managed by AM Lux which originate loans including new restrictions on the structure which such funds may take.

AIFMD II may, depending on the jurisdiction of the AIF and the AIFM, result in new restrictions on the ability of certain of our affiliates other than AM Lux to register funds for marketing to investors in certain EEA states.

AIFMD II imposes a range of requirements on AIFMs which may increase the cost of doing business for AM Lux and Ares’ non-EEA AIFMs (including AMUKL) to the extent they market funds in the EEA and potentially disadvantages our funds as investors in private companies located in EEA member states compared to non-AIF/AIFM competitors that may not be subject to such requirements.

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will seek to reflect AIFMD II in its domestic rules implementing AIFMD.

While there is no current indication that the non-EEA AIFM passport provisions of AIFMD will become effective or available, certain of the jurisdiction specific private placement regimes may cease to exist in the case that it does.

This development could have a negative impact on our ability to raise capital from EEA investors if, for example, a jurisdiction specific private placement regime ceases to operate and the non-EEA AIFM passport is not made available to U.S.

We will continue to assess the impact of AIFMD II to AM Lux, our non-EEA AIFMs and AIFs that are managed and/or marketed in the EEA.

The European solvency framework and prudential regime for insurers and reinsurers, under the Solvency II Directive 2009/138/EC (“Solvency II”) imposes economic risk-based solvency requirements across all EU member states.

Solvency II is supplemented by European Commission Delegated Regulation (EU) 2015/35 (the “Delegated Regulation”), other European Commission “delegated acts” and binding technical standards and guidelines issued by the European Insurance and Occupational Pensions Authority.

The Delegated Regulation sets out detailed requirements for individual insurance and reinsurance undertakings, as well as for groups, based on the overarching provisions of Solvency II, which together make up the core of the single prudential rulebook for insurance and reinsurance undertakings in the EU.

We are not subject to Solvency II;

however, many of our European insurer or reinsurer fund investors are subject to this directive, as applied under applicable domestic law.

Solvency II may impact insurers’ and reinsurers’ investment decisions and their asset allocations.

In addition, insurers and reinsurers are subject to more onerous data collation and reporting requirements.

As a result, there is the potential for Solvency II to have an adverse indirect effect on our businesses by, among other things, restricting the ability of European insurers and reinsurers to invest in our funds and imposing on us extensive disclosure and reporting obligations for those insurers and reinsurers that do invest in our funds.

On September 22, 2021, the European Commission published proposed legislation to amend the Solvency II Directive.

The European Parliament and the Council of the EU are still considering the legislation.

Post Brexit, Solvency II was on-shored in the U.K.

In November 2022, His Majesty’s Treasury (“HM Treasury”) issued its response to its consultation on a Review of Solvency II, outlining the areas of reform that would be delivered through changes to the U.K.’s Prudential Regulation Authority’s (“PRA”) rules and legislation.

Two consultation papers have since followed, the first published on June 29, 2023 and the second on September 28, 2023.

The first consultation paper focused on simplifying the existing framework with the intent of reducing the administrative and reporting requirements (and in turn, costs) for U.K.

insurance firms.

The second consultation paper included proposals to reform insurers’ matching adjustment mechanism, with the intention of widening the categories of assets which insurers can hold in their portfolios.

The intended implementation date for the majority of the changes proposed in the consultation papers is December 31, 2024, with the reforms to the matching adjustment reforms taking effect from June 30, 2024.

It is unclear at this stage the extent to which the proposed amendments to Solvency II will have an indirect effect on our businesses.

Although the U.K.

has now withdrawn from the EU, its rules implementing MiFID II continue to have effect and MiFIR has been on-shored into U.K.

law (subject to certain amendments to ensure it operates properly in a U.K.-specific context).

MiFID II amended the existing MiFID regime and, among other requirements, introduced new organizational and conduct of business requirements for investment firms in the EEA.

MiFID II requirements apply to AML and AELM as MiFID investment firms.

Certain requirements of MiFID II also apply to AIFMs with a MiFID “top-up” permission, such as AMUKL and AM Lux.

MiFID II extended MiFID requirements in a number of areas such as the receipt and payment of inducements (including investment research), suitability and appropriateness assessments, conflicts of interest, record-keeping, costs and charges disclosures, best execution, product design and governance, and transaction and trade reporting.

Under MiFID II, national competent authorities are also required to establish position limits in relation to the maximum size of positions which a relevant person can hold in certain commodity derivatives.

The limits apply to contracts traded on trading venues and their economically equivalent OTC contracts.

The position limits established, as amended from time to time, and our ability to rely on any exemption thereunder may affect the size and types of investments we may make.

Failure to comply with MiFID II and

its associated legislative acts could result in sanctions from national regulators, the loss of market access and a number of other adverse consequences which would have a detrimental impact on our business.

Certain aspects of MIFID II and MiFIR are subject to review and change in both the EU and the U.K.

In August 2022, the EU introduced amendments to MiFID II.

The key requirement is that EU MiFID firms, who are providing financial advice and portfolio management, need to carry out a mandatory assessment of the sustainability preferences of their clients.

Broadly, sustainability preferences address taxonomy alignment, Sustainable Finance Disclosure Regulation (“SFDR”) sustainable investment alignment and consideration of principal adverse impacts.

EU MiFID firms then need to take these into account in the selection process of financial products.

Credit Servicers and Purchasers Directive

In December 2021, a new European Commission directive governing credit servicers, credit purchasers and the recovery of collateral in connection with loans (the “Credit Servicers and Purchasers Directive” or “CSPD”) became effective.

The policy aim behind CSPD is the development of a well-functioning secondary market for non-performing loans.

Member States were required to adopt and apply measures implementing CSPD by December 30, 2023 and entities carrying on credit servicing activities from December 30, 2023 were required to obtain authorization under the CSPD by June 29, 2024.

The CSPD applies to, among others, “credit servicers” and “credit purchasers” and would impose a number of new requirements relating to licensing, conduct of business and provision of information.

The definition of “credit servicer” in the European Commission proposal is sufficiently broad that it could be construed to include asset managers.

Ares funds which are established in the EU will be in scope of CSPD where they purchase non-performing loans (or purchases loans issued by an EU credit institution that subsequently become non-performing loans) and will be required to appoint a credit servicer for non-performing loans concluded with consumers.

Ares funds which are established outside of the EU will be required to designate an EU established representative when purchasing in-scope non-performing loans who will be responsible for compliance with the obligations imposed on the credit purchased under CSPD.

The impact of the CSPD, together with other regulatory initiatives in the leveraged and non-performing loans markets, continues to be under review.

Such requirements are likely to result in additional compliance and operational costs for Ares managed funds.

however, many of our European insurer or reinsurer fund investors are subject to this directive, as applied under applicable domestic law and any amendments may impact insurers’ and reinsurers’ investment decisions and their asset allocations.

On September 22, 2021, the European Commission published proposed legislation to amend the Solvency II Directive, which has since been approved by the European Parliament on October 8, 2024 and the Council of the EU on November 5, 2024.

The amending directive is expected to take effect from December 2026.

Post Brexit, Solvency II assimilated into U.K.

law as “Solvency U.K.” and is undergoing reform to simplify the administrative and reporting requirements, reduce costs and widen the categories of assets which insurers can hold in their portfolios.

The amendments have been staggered, with certain provisions entering into force on December 31, 2023, June 30, 2024 and the remaining reforms on December 31, 2024.

It is unclear at this stage the extent to which the amendments to Solvency II or Solvency U.K.

will have an indirect effect on our businesses.

Economic Crime and Corporate Transparency Act 2023

introduced the Economic Crime and Transparency Act 2023 (“ECCTA”) on October 26, 2023.

As part of ECCTA, a new ‘failure to prevent fraud’ offence was introduced in the U.K.

(the “FTPF Offence”).

The FTPF Offence is modeled on similar existing offences for ‘failure to prevent bribery’ and ‘failure to prevent the facilitation of tax evasion.’

The FTPF Offence imposes criminal liability on bodies corporate and partnerships, wherever incorporated, meeting specified size thresholds (so-called ‘large organizations’) where an ‘associate’ (being an employee, agent, subsidiary undertaking or person who provides services for or on behalf of the large organization) commits a U.K.

fraud offence, unless the large organization has in place reasonable fraud prevention policies and procedures (or it was not reasonable to have policies and procedures in place).

Owing to the complexity of this definition, certain fund structures (and potentially portfolio companies) could be caught in scope too.

The FTPF Offence comes into effect on September 1, 2025.

We are assessing the impact to our business and are reviewing our existing fraud prevention policies and procedures.

Hong Kong Security Law

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In addition, any downturn in Hong Kong’s economy could adversely affect the financial performance of the Company and our investments, or could have a significant impact on the industries in which the Company participates, and may adversely affect the operations of the Company, its funds and portfolio companies, including the retention of investment and other key professionals located in Hong Kong.

Regulations governing ARCC’s and ASIF’s operation as business development companies affect their ability to raise, and the way in which they raise, additional capital.

As business development companies, ARCC and ASIF operate as highly regulated businesses within the provisions of the Investment Company Act.

Many of the regulations governing business development companies restrict, among other things, leverage incurrence, co-investments and other transactions with other entities within the Ares Operating Group.

Certain of our funds may be restricted from engaging in transactions with ARCC or ASIF and their respective subsidiaries.

As business development companies registered under the Investment Company Act, ARCC and ASIF may issue debt securities or preferred stock and borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the Investment Company Act.

Under the provisions of the Investment Company Act, ARCC and ASIF are currently permitted, as business development companies, to incur indebtedness or issue senior securities only in amounts such that their respective asset coverage ratio, as calculated pursuant to the Investment Company Act, equals at least 150% after each such issuance.

ARCC and ASIF are also generally prohibited from issuing and selling their respective common

stock at a price below net asset value per share without first obtaining approval from their respective stockholders and independent directors.

Business development companies may issue and sell common stock at a price below net asset value per share only in limited circumstances, one of which is after obtaining stockholder approval for such issuance in accordance with the Investment Company Act.

Regulations governing the operation of our business development companies affect their ability to raise, and the way in which they raise, additional capital.

Our funds organized as BDCs operate as highly regulated businesses within the provisions of the Investment Company Act.

Many of the regulations governing BDCs restrict, among other things, leverage incurrence, co-investments and other transactions with other entities within the Ares Operating Group.

Certain of our funds may be restricted from engaging in transactions with our BDCs and their respective subsidiaries.

As funds registered under the Investment Company Act, our BDCs may issue debt securities or preferred stock and borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the Investment Company Act.

Under the provisions of the Investment Company Act, our BDCs are currently permitted to incur indebtedness or issue senior securities only in amounts such that their respective asset coverage ratio, as calculated pursuant to the Investment Company Act, equals at least 150% after each such issuance.

Our BDCs are also generally prohibited from issuing and selling their respective common stock at a price below net asset value per share without first obtaining approval from their respective stockholders and independent directors.

BDCs may issue and sell common stock at a price below net asset value per share only in limited circumstances, one of which is after obtaining stockholder approval for such issuance in accordance with the Investment Company Act.

ARCC’s stockholders have, in the past, approved such issuances so that during the subsequent 12-month period, ARCC may, in one or more public or private offerings of its common stock, sell or otherwise issue shares of its common stock at a price below the then-current net asset value per share, subject to certain conditions including parameters on the amount of shares sold, approval of the sale by the directors and a requirement that the sale price be not less than approximately the market price of the shares of its common stock at specified times, less the expenses of the sale.

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The extent to which ARCC is negatively affected by these regulations may affect our overall profitability.

The publicly-traded investment vehicles that we manage are subject to regulatory complexities that limit the way in which they do business and may subject them to a higher level of regulatory scrutiny.

The publicly-traded investment vehicles that we manage operate under a complex regulatory environment.

The publicly-traded and perpetual wealth investment vehicles that we manage are subject to regulatory complexities that limit the way in which they do business and may subject them to a higher level of regulatory scrutiny.

The publicly-traded and perpetual wealth investment vehicles that we manage operate under a complex regulatory environment.

Such companies require the application of complex tax and securities regulations and may entail a higher level of regulatory scrutiny.

In addition, regulations affecting our publicly-traded investment vehicles generally affect their ability to take certain actions.

In addition, regulations affecting our publicly-traded and perpetual wealth investment vehicles generally affect their ability to take certain actions.

Certain of our vehicles have elected to be treated as a RIC or a REIT for U.S.

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ARCC and ASIF are required to generally distribute to their respective stockholders at least 90% of their respective investment company taxable income to maintain their RIC status.

ARCC, ASIF and our publicly-traded closed-end fund are subject to complex rules under the Investment Company Act, including rules that restrict certain of our funds from engaging in transactions with ARCC, ASIF or the closed-end fund.

In addition, subject to certain exceptions, ARCC and ASIF are generally prohibited from issuing and selling their common stock at a price below net asset value per share and from incurring indebtedness (including for this purpose, preferred stock), if ARCC’s or ASIF’s respective asset coverage ratio, as calculated pursuant to the Investment Company Act, equals less than 150% after giving effect to such incurrence.

The extent to which the publicly-traded investment vehicles that we manage are negatively affected by these regulations may affect our overall profitability.

To maintain its qualification as a REIT, ACRE, in addition to our diversified non-traded REIT and industrial non-traded REIT must distribute at least 90% of its taxable income to its stockholders and meet, on a continuing basis, certain other complex requirements under the Code.

Certain of our perpetual wealth vehicles are subject to complex rules under the Investment Company Act, including rules that restrict certain of our funds from engaging in transactions with these perpetual wealth vehicles.

In addition, subject to certain exceptions, our BDCs are generally prohibited from issuing and selling their common stock at a price below net asset value per share and from incurring indebtedness (including for this purpose, preferred stock), if the BDCs’ respective asset coverage ratio, as calculated pursuant to the Investment Company Act, equals less than 150% after giving effect to such incurrence.

The extent to which the publicly-traded and perpetual wealth investment vehicles that we manage are negatively affected by these regulations may affect our overall profitability.

Failure to comply with “pay to play” regulations implemented by the SEC and certain states, and changes to the “pay to play” regulatory regimes, could adversely affect our businesses.

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A variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicized.

Investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG ratings and measures to their investment decisions.

Investment in funds that specialize in companies that perform well in such assessments remain popular, and major institutional investors have publicly discussed their consideration of such ESG ratings and measures in making their investment decisions.

If our ESG ratings or practices do not meet the standards set by such investors or our stockholders, or if we fail, or are perceived to fail, to demonstrate progress toward our ESG goals and initiatives, they may choose not to invest in our funds or exclude our common stock from their investments.

Relatedly, we, our funds and their portfolio companies risk damage to our brands and reputations, if we or they do not or are perceived to not act responsibly in a number of areas, such as DEI, human rights, climate change and environmental stewardship, support for local communities, corporate governance and transparency, or consideration of ESG factors in our investment processes.

Relatedly, we, our funds and their portfolio companies risk damage to our brands and reputations, if we or they do not or are perceived to not act responsibly in a number of areas, including, but not limited to human rights, climate change and environmental stewardship, support for local communities, corporate governance and transparency, or consideration of ESG factors in our investment processes.

Adverse incidents with respect to ESG activities could impact the value of our brand, the brand of our funds or their portfolio companies, or the cost of our or their operations and relationships with investors, all of which could adversely affect our business and results of operations.

Conversely, anti-ESG sentiment has gained momentum across the U.S., with several states having enacted or proposed “anti-ESG” policies, legislation or issued related legal opinions.

Conversely, anti-ESG sentiment has gained momentum across the U.S., with a growing number of states, federal agencies, the executive branch and Congress having enacted or proposed or indicated an intent to pursue “anti-ESG” policies, legislation, issued related legal opinions and engaged in related investigation and litigation.

(i) boycott bills target financial institutions that “boycott” or “discriminate against” companies in certain industries (e.g., energy and mining) and prohibit state entities from doing business with such institutions and/or investing the state’s assets (including pension plan assets) through such institutions;

and (ii) ESG investment prohibitions require that state entities or managers/administrators of state investments make investments based solely on pecuniary factors without consideration of ESG factors.

If investors subject to such legislation viewed our funds or ESG practices, including our climate-related goals and commitments, as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, such investors may not invest in our funds, our ability to maintain the size of our funds could be impaired, and it could negatively affect the price of our common stock.

Further, asset managers have been subject to recent scrutiny related to ESG-focused industry working groups, initiatives and associations, including organizations advancing action to address climate change or climate-related risk.

Such scrutiny could expose us to the risk of antitrust investigations or challenges by federal authorities, result in reputational harm and discourage certain investors from investing in our funds.

In addition, some state attorneys general have asserted that the Supreme Court’s decision striking down race-based affirmative action in higher education in June 2023 should be analogized to private employment matters and private contract matters.

Several new cases alleging discrimination based on similar arguments have been filed since the decision, with scrutiny of certain corporate DEI practices increasing.

If investors subject to such legislation viewed our funds or responsible investing or ESG practices, including our climate-related goals and commitments, as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, such investors may not invest in our funds, our ability to maintain the size of our funds could be impaired, and it could negatively affect results of our operations, cash flow or the price of our common stock.

In addition, some advocacy groups and federal and state officials have asserted that the Supreme Court’s decision striking down race-based affirmative action in higher education in June 2023 should be analogized to private employment matters and private contract matters.

Several media campaigns and cases alleging discrimination based on such arguments have been initiated since the decision, with scrutiny of certain corporate DEI practices increasing.

In January 2025, the new Presidential Administration signed a number of Executive Orders focused on DEI, which

include a broad mandate to eliminate federal DEI programs and indicate continued scrutiny of DEI initiatives, potential investigations of certain private entities, including publicly traded companies, and changes to federal contracting regulations.

If we do not successfully manage expectations across these varied stakeholder interests, it could erode stakeholder trust, impact our reputation and constrain our investment opportunities.

Such scrutiny of both ESG and DEI related practices could expose us to the risk of litigation, investigations or challenges by federal or state authorities, result in reputational harm and/or discourage certain investors from investing in our products.

In addition, clients and investors may decide not to commit capital to future fundraises as a result of their assessment of our approach to and consideration of ESG.

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Additionally, certain regulations related to ESG that are applicable to us, our funds and their portfolio companies could adversely affect our business.

The European Commission’s “action plan on financing sustainable growth” is designed to, among other things, define and reorient investment toward sustainability.

The action plan contemplates:

The European Commission’s “action plan on financing sustainable growth” (“Action Plan”) is designed to, among other things, define and reorient investment toward more sustainable economic activities.

The Action Plan contemplates, among other things:

establishing EU labels for green financial products;

clarifying asset managers’ and institutional investors’ duties regarding sustainability in their investment decision-making processes;

increasing disclosure requirements in the financial services sector around ESG and strengthening the transparency of companies on their ESG policies;

increasing disclosure requirements in the financial services sector around sustainability and increasing the transparency of companies on their ESG policies and related processes and management systems;

and introducing a ‘green supporting factor’ in the EU prudential rules for banks and insurance companies to incorporate climate risks into banks’ and insurance companies’ risk management policies.

As part of these regulations, SFDR introduced mandatory sustainability-related transparency requirements for MiFID investment firms providing portfolio management or investment advisory services, and AIFMs.

For Ares, this primarily impacts

our AIFMs by requiring certain firm-level website disclosures regarding how sustainability risks are integrated into our investment process and remuneration practices.

Fund-level disclosures are also required in relation to the integration of sustainability risks into investment decisions and potential impacts on fund returns.

From January 1, 2022, further disclosures in periodic reports have been required and, since January 1, 2023 certain template pre-contractual and periodic disclosures must be provided in a uniform template.

Further, firms that offer financial products (such as AIFs) that promote environmental or social characteristics, or which have a sustainable investment objective, will also need to comply with additional disclosure and periodic reporting requirements that are broadly designed to prevent firms from “greenwashing” (i.e., the holding out of a product as having green or sustainable characteristics where this is not, in fact, the case).

This reporting is mainly focused on the clear and concise articulation of their ESG features and the creation of bespoke key performance indicators to support annual reporting.

A significant reorientation in the market following the implementation of these and further measures could be adverse to our funds’ portfolio companies if they are perceived to be less valuable as a consequence of, among other things, their carbon footprint or “greenwashing.” There is also a risk that market expectations in relation to SFDR categorization of financial products could adversely affect our ability to raise capital from EEA investors.

In September 2023, the European Commission announced a consultation on refinement versus a wholesale re-write of product categorization criteria under SFDR, but the consultation did not contain much in the way of policy suggestions.

The Taxonomy Regulation is a classification system that establishes a list of environmentally sustainable economic activities and sets out four overarching conditions that an economic activity has to meet in order to qualify as environmentally sustainable.

The Taxonomy Regulation, amongst other things, introduces mandatory disclosure and reporting requirements and supplements the framework set out in the SFDR, which requires certain disclosures at both firm and fund level.

For Ares, this primarily impacts our AIFMs and the funds they manage by requiring certain firm-level website disclosures regarding how sustainability risks are integrated into our investment process, consideration of adverse impacts of investment decisions on sustainability factors and transparency of remuneration practices and inclusion of certain fund-level information in pre-contractual and periodic disclosures.

There is a risk that a significant reorientation in the market following the implementation of these regulations and further measures could be adverse to our funds’ portfolio companies if they are perceived to be less valuable as a consequence of, among other things, their carbon footprint or allegations or evidence of “greenwashing” (i.e., the holding out of a product as having green or sustainable characteristics where this is not, in fact, the case).

There is also a risk that market expectations in relation to SFDR categorization of financial products could adversely affect our ability to raise capital from EEA investors.

In September 2023, the European Commission announced a consultation on refinement versus a wholesale re-write of product categorization criteria under SFDR and in May 2024, the European Commission published a summary of the consultation but there are currently no formal proposals for legislative change.

Ares cannot guarantee that its current approach will meet future regulatory requirements, reporting frameworks or best practices, increasing the risk of related enforcement.

Compliance with new requirements may lead to increased management burdens and costs.

In addition, on June 22, 2020, Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment was published in the Official Journal of the EU (the “Taxonomy Regulation”).

The Taxonomy Regulation sets out a framework for classifying economic activities as “environmentally sustainable” and also introduces certain mandatory disclosure and reporting requirements, which supplement those set out in SFDR.

The Taxonomy Regulation took effect in part (for climate change mitigation and adaptation) from January 1, 2022 and in part (for remaining environmental objectives) from January 1, 2023.

Sustainable finance initiatives continue to evolve rapidly so it is not possible at this stage to fully assess how our business will be affected.

We are monitoring developments in relation to EU corporate sustainability reporting and proposals for laws requiring due diligence of supply chains.

Guidance from EU policymakers and supervisors moves the goalposts frequently, for example a recent consultation paper on the use of ESG-related words in fund names, which, if implemented, may require changes to either the names of certain Ares funds or changes to their portfolio composition.

Guidance from EU policymakers and supervisors moves the goalposts frequently, for example, the finalized ESMA Guidelines on Fund Names (the “Guidelines”), which took effect on November 21, 2024 for new funds and May 21, 2025 for funds launched before November 21, 2024.

It is not possible at this stage to fully assess how our business will be affected by EU sustainable finance and corporate sustainability reporting initiatives.

Such guidelines may require changes to either the names of certain Ares funds or changes to their portfolio composition.

We, our funds and their portfolio companies are subject to the risk that similar measures might be introduced in other jurisdictions in which we or they currently have investments or plan to invest in the future.

Additionally, compliance with any new laws or regulations (including recent heightened SEC scrutiny regarding advisor compliance with advisors’ own internal policies) increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we, our funds or their portfolio companies conduct our businesses and adversely affect our profitability.

compliance more difficult and expensive, affect the manner in which we, our funds or their portfolio companies conduct our businesses and adversely affect our profitability.

Moreover, on January 5, 2023, the Corporate Sustainability Reporting Directive (“CSRD”) came into effect.

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CSRD requires a much broader range of companies to produce detailed and prescriptive reports on sustainability-related matters within their financial statements – including large EU companies (including EU subsidiaries of non-EU parent companies), EU and non-EU-companies (including small and medium sized enterprises) with listed securities on EU-regulated markets (except micro-undertakings) and non-EU companies with significant turnover and a legal presence on EU markets.

The reporting requirements will be phased in from 2024, with the first reports including audited information on sustainability-related matters being published in 2025 to cover the 2024 financial year.

The reporting standards under CSRD within delegated legislation have been adopted by the European Commission and are still due to be published in the Official Journal of the EU.

There can be no assurance that adverse developments with respect to such risks will not adversely affect assets held by Ares managed funds that are held in certain countries or the returns from these assets.

The reporting requirements started being phased in from 2024, with the first reports including audited information on sustainability-related matters expected to be published in 2025 to cover the 2024 financial year.

For EU companies, disclosures must be made in accordance with European Sustainability Reporting Standards, the first set of which were published in the Official Journal on December 22, 2023 under the form of a delegated regulation.

Sector-specific, non-EU company and small and medium enterprise reporting standards are still being developed.

CSRD remains subject to change and there can be no assurance that adverse developments with respect to CSRD will not adversely affect Ares or assets held by Ares managed funds that are held in certain countries or the returns from these assets.

One or more of our businesses may fall within scope of CSRD and this may lead to increased management burdens and costs.

Finally, starting in 2025 AML and AMUKL will have to disclose certain climate-related financial information in line with the four overarching pillars of the TCFD recommendations (Governance, Strategy, Risk Management, Metrics & Targets) on a mandatory basis under new FCA rules.

In the U.K., the FCA has introduced a regulatory framework focused on implementing the recommendations of the Financial Stability Board’s TCFD and, in particular, by introducing mandatory TCFD-aligned disclosure requirements for certain FCA authorized firms.

Pursuant to these rules AML and AMUKL will have to disclose certain climate-related financial information in line with the four overarching pillars of the TCFD recommendations (Governance, Strategy, Risk Management, Metrics & Targets) annually on a mandatory basis.

Collating the relevant data and preparing the relevant report under these new rules could impose additional compliance and administrative burden which could in turn increase costs.

In addition to the above EU regulations, Sustainability Labelling and Disclosure of Sustainability-Related Financial Information Instrument 2023 (“SDR”) introduces sustainability disclosure requirements, investment product labels and an ‘anti-greenwashing’ rule.

The anti-greenwashing rule applies to all U.K.-authorized firms in their communications with clients in the

U.K., but the balance of the new regime is directed at U.K.

investment funds and U.K.

regulated asset managers, that manage or distribute such funds.

The FCA has indicated it will consult in early 2024 on alternative approaches to applying the labelling regime to portfolio managers and continues to work with His Majesty’s Treasury to consider its approach in respect of overseas funds.

As a result, it is not yet clear to what extent this new legislation will affect Ares.

Sustainability Labelling and Disclosure of Sustainability-Related Financial Information Instrument 2023 (“SDR”) introduces sustainability disclosure requirements, investment product labels and an ‘anti-greenwashing’ rule.

The anti-greenwashing rule applies to all U.K.-authorized firms in their communications with clients in the U.K.

in relation to a product or service or when communicating or approving a financial promotion to a person in the U.K.

The FCA has consulted in early 2024 on alternative approaches to applying the labelling regime to portfolio managers and continues to work with His Majesty’s Treasury to consider its approach in respect of overseas funds.

If these rules become applicable to our funds or products, then additional regulatory costs may be incurred and they may also have an impact on our ability to deliver on our fund’s investment strategies and financial returns could be adversely impacted as a result.

In Asia, regulators in Singapore and Hong Kong have introduced requirements for asset managers to integrate climate risk considerations in investment and risk management processes, together with enhanced disclosure and reporting and have also issued enhanced rules for certain ESG funds on general ESG risk management and disclosure.

Meanwhile, Australia’s securities regulator issued information on “greenwashing”, and the Australian government is seeking input on the design and implementation of a climate-related financial disclosure regime.

There is also a growing regulatory interest across jurisdictions in improving transparency regarding the definition, measurement and disclosure of ESG factors in order to allow investors to validate and better understand sustainability claims.

For example, on May 25, 2022, the SEC proposed amendments to rules and reporting forms concerning ESG factors.

On August 23, 2023, the SEC adopted its final rule enhancing the regulation of private fund advisers, which includes requirements with respect to the disclosure of certain information to investors that could affect the way certain ESG-related information is shared.

In addition, in 2021 the SEC established an enforcement task force to look into ESG practices and disclosures by public companies and investment managers and has started to bring enforcement actions based on ESG disclosures not matching actual investment processes.

In Asia, regulators in Singapore and Hong Kong have released guidelines for asset managers to integrate climate risk considerations in investment and risk management processes, together with enhanced disclosure and reporting and have also issued enhanced rules for certain ESG funds on general ESG risk management and disclosure.

Australia’s securities regulator issued information on “greenwashing”, and the Australian government is seeking input on the design and implementation of a climate-related financial disclosure regime.

There is also regulatory interest across jurisdictions in improving transparency regarding the definition, measurement and disclosure of ESG factors in order to allow investors to validate and better understand sustainability claims.

For example, the SEC sometimes reviews compliance with ESG commitments in examinations, and it has taken enforcement actions against registered investment advisers for not establishing adequate or consistently implementing ESG policies and procedures to meet ESG commitments to investors.

Growing interest on the part of investors and regulators in ESG factors and increased demand for, and scrutiny of, ESG-related disclosure by asset managers, have also increased the risk that asset managers could be perceived as, or accused of, making inaccurate or misleading statements regarding the ESG-related investment strategies or their and their funds’ ESG efforts or initiatives, or “greenwashing.” Such perception or accusation could damage our reputation, result in litigation or regulatory actions and adversely impact our ability to raise capital.

On March 21, 2022, the SEC issued a proposed rule regarding the enhancement and standardization of mandatory climate-related disclosures for investors.

The proposed rule would mandate extensive disclosure of climate-related data, risks, and opportunities, including financial impacts, physical and transition risks, related governance and strategy and greenhouse gas emissions, for certain public companies.

Although the ultimate date of effectiveness and the final form and substance of the requirements for the proposed rule are not yet known and the ultimate scope and impact on our business is uncertain, compliance with the proposed rule, if finalized, may result in increased legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place strain on our personnel, systems and resources.

In October 2023, California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2, and 3 greenhouse gas emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures.

The SEC has also announced that it is working on proposals for mandatory disclosure of certain ESG-related matters, including with respect to board diversity and human capital management.

At this time, there is uncertainty regarding the scope of such proposals or when they would become effective.

Compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we or our funds’ portfolio companies conduct our businesses and adversely affect our profitability.

In March 2024, the SEC adopted final rules intended to enhance and standardize climate-related disclosures;

however these rules are stayed pending the outcome of consolidated legal challenges in the Eighth Circuit Court of Appeals.

At the state level, in October 2023, California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2, and 3 greenhouse gas emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures.

Compliance with any new laws or regulations increases our regulatory burden and could result in increased legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, place strain on our

personnel, systems and resources, affect the manner in which we or our funds’ portfolio companies conduct our businesses and adversely affect our profitability.

Economic sanction laws in the U.S.

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sanctions against Iran.

transactions involving Iran or other individuals and entities targeted by certain OFAC sanctions engaged in by the reporting company or any of its affiliates during the period covered by the relevant periodic report.

Additionally, Section 219 of the ITRA amended the Exchange Act to require companies subject to SEC reporting obligations under Section 13 of the Exchange Act to disclose in their periodic reports specified dealings or transactions involving Iran or other individuals and entities targeted by certain OFAC sanctions engaged in by the reporting company or any of its affiliates during the period covered by the relevant periodic report.

In some cases, the ITRA requires companies to disclose these types of transactions even if they were permissible under U.S.

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We do not independently verify or participate in the preparation of these disclosures.

We are required to separately file and have separately filed with the SEC a notice when such activities have been disclosed in this report or in our quarterly reports, and the SEC is required to post such notice of disclosure on its website and send the report to the President and certain U.S.

Congressional committees.

The President thereafter is required to initiate an investigation and, within 180 days of initiating such an investigation, determine whether sanctions should be imposed.

As of December 31, 2023, no sanctions have been imposed on us as a result of our disclosures of these activities.

Disclosure of such activity, even if such activity is not subject to sanctions under applicable law, and any sanctions actually imposed on us or our affiliates as a result of these activities, could harm our reputation and have a negative impact on our business, financial condition and results of operations, and any failure to disclose any such activities as required could additionally result in fines or penalties.

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The U.K.’s exit from the EU (“Brexit”) could adversely affect our business and our operations

Following the U.K.’s exit from the EU on January 31, 2020 and a transitional period, EEA “passporting rights” facilitating market access into the EEA by U.K.

firms, and into the U.K.

by EEA firms, are no longer available.

Various EU laws have been “on-shored” into domestic U.K.

legislation and certain transitional regimes and deficiency-correction powers exist to ease the transition.

Following the U.K.'s exit from the EU on January 31, 2020 and a transitional period, EEA “passporting rights” which previously facilitated certain EEA investor-facing activities by AML and AMUKL, are no longer available.

AM Lux and its EU branches were established to enable Ares to continue certain regulated activities in the EU post Brexit, such as the management and marketing of funds (including funds managed by affiliates of AM Lux) to European investors.

The Trade and Cooperation Agreement (the “TCA”) governs certain matters between the U.K.

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firms under equivalence arrangements or otherwise.

A similar temporary regime, the TMPR, allows AIFMs to continue to market those funds in the U.K.

that were in existence on December 31, 2020, on broadly the same terms as previously applied.

Unless extended, the TMPR lasts until December 31, 2025.

While the TCA and the TMPR provide clarity in some areas, there remains considerable uncertainty as to the future position of the U.K.

and the arrangements which will apply to its relationships with the EU and other countries.

The implications and the operation of the TCA and the TMPR may also be subject to change and/or develop at short notice.

Applicable regulatory requirements may increase effective tax rates within Ares’ structure or on its investments, including by way of higher levels of tax being imposed on AM Lux and EU branches of AM Lux.

Further, the development of the U.K.’s future legislative approach and the extent to which the U.K.

diverges from EU legislation remains uncertain.

introduced the Financial Services and Markets Act 2023 (“FSMA 2023”) on June 29, 2023 as a significant piece of legislation that the U.K.

government intends to use to bring about changes to the U.K.’s financial services and markets regime.

FSMA 2023 contains a number of substantial measures that will overhaul the existing financial services regime, including the implementation of the U.K.’s post-Brexit framework through the repeal of retained EU legislation relating to financial services and markets, as well as the migration of much of that law into regulator’s rulebooks.

It is likely that, with the exception of regulations which are no longer needed and which can be repealed without replacement, individual pieces of retained EU will only be revoked once the relevant regulator’s final rules has been established.

It is expected that the legislative reform process will be slow, with the U.K.

Treasury confirming that it expects it will take a number of years to complete the process of revoking retained EU law.

To the extent that U.K.

materially diverges from the EU regime, compliance with two diverging regulatory regimes in the EU and U.K.

requirements may to continue to increase the operational burden and cost to our operations in these jurisdictions.

is currently reviewing its financial services and markets regime.

To the extent that the revised U.K.

regime materially diverges from the EU regime, compliance with two diverging regulatory regimes may increase the operational burden and cost to our operations in these jurisdictions.

These complex issues and other by-products of Brexit may increase the costs of having operations, conducting business and making investments in the U.K.

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and to a lesser extent across Europe, such as certain funds in our Credit and Real Assets Groups may be disproportionately affected compared to those funds that invest more broadly across global geographies or are focused on different regions.

The uncertainty surrounding the precise nature of the U.K.’s future legal relationship with the EU may continue to be a source of significant exchange rate fluctuations and/or other adverse effects on international markets.

Unhedged currency

fluctuations have the ability to adversely affect our funds and their underlying business investments, as well as the relative value of management fees earned and impact of operational expenses on profitability.

In addition, Brexit could potentially disrupt the tax jurisdictions in which we operate and affect the tax benefits or liabilities in these or other jurisdictions in a manner that is adverse to us and/or our funds.

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Many of our funds depend on the services of prime brokers, custodians, counterparties, administrators and other agents to carry out certain securities and derivatives transactions and other administrative services.

We are subject to risks of errors and mistakes made by these third parties, which may be attributed to us and subject us or our fund investors to reputational damage, penalties or losses.

We are subject to risks of errors and mistakes made by these third parties, which may be attributed to us and subject us or our fund investors to reputational

damage, penalties or losses.

We may be unsuccessful in seeking reimbursement or indemnification from these third-party service providers.

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In addition, the investment returns of most of our funds are volatile.

We may also experience fluctuations in our results from quarter to quarter and year to year due to a number of other factors, including changes in the values of our funds’ investments, changes in the amount of distributions, dividends or interest paid in respect of investments, changes in our operating expenses, the degree to

which we encounter competition and general economic and market conditions.

Such variability may lead to volatility in the trading price of shares of our Class A common stock and cause our results for a particular period not to be indicative of our performance in a future period.

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We cannot predict when, or if, any realization of investments will occur.

If we were to have a realization event in a particular quarter or year, it may have a significant impact on our results for that particular quarter or year that may not be replicated in subsequent periods.

If we were to have a

realization event in a particular quarter or year, it may have a significant impact on our results for that particular quarter or year that may not be replicated in subsequent periods.

We recognize revenue on investments in our funds based on our allocable share of realized and unrealized gains (or losses) reported by such funds, and a decline in realized or unrealized gains, or an increase in realized or unrealized losses, would adversely affect our revenue, which could increase the volatility of our results.

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Such misconduct could negatively affect the valuation of a fund’s investments and consequently affect our funds’ performance and negatively impact our businesses.

In addition, we may face an increased risk of such misconduct to the extent

our investment in foreign markets, particularly emerging markets, increase.

In addition, we may face an increased risk of such misconduct to the extent our investment in foreign markets, particularly emerging markets, increase.

Such markets may not have established laws and regulations that are as stringent as in more developed nations, or existing laws and regulations may not be consistently enforced.

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Our use of leverage to finance our businesses exposes us to substantial risks.

As of December 31, 2023, we had $895.0 million in borrowings outstanding under our credit facility (the “Credit Facility”), and aggregate principal amount of senior notes and subordinated notes of $1,650.0 million and $450.0 million, respectively, are outstanding.

As of December 31, 2024, we had no borrowings outstanding under our credit facility (the “Credit Facility”), and aggregate principal amount of senior notes and subordinated notes of $2,150.0 million and $450.0 million, respectively, are outstanding.

We may choose to finance our businesses operations through further borrowings under the Credit Facility or by issuing additional debt.

Our existing and future indebtedness exposes us to the typical risks associated with the use of leverage, including the same risks that are applicable to our funds that use leverage as discussed below under “—Risks Related to Our Funds—Dependence on significant leverage by our funds subjects us to volatility and contractions in the debt financing markets could adversely affect our ability to achieve attractive rates of return on those investments.” The occurrence or continuation of any of these events or trends could cause us to suffer a decline in the credit ratings assigned to our debt by rating agencies, which would cause the interest rate applicable to borrowings under the Credit Facility to increase and could result in other material adverse effects on our businesses.

Our existing and future indebtedness exposes us to the typical risks associated with the use of leverage,

including the same risks that are applicable to our funds that use leverage as discussed below under “—Risks Related to Our Funds—Dependence on significant leverage by our funds subjects us to volatility and contractions in the debt financing markets could adversely affect our ability to achieve attractive rates of return on those investments.” The occurrence or continuation of any of these events or trends could cause us to suffer a decline in the credit ratings assigned to our debt by rating agencies, which would cause the interest rate applicable to borrowings under the Credit Facility to increase and could result in other material adverse effects on our businesses.

We depend on financial institutions extending credit to us on terms that are reasonable to us.

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In addition, if we incur additional debt, our credit rating could be adversely impacted.

Borrowings under the Credit Facility will mature in March 2027, our tranches of senior notes mature in October 2024, November 2028, June 2030 and February 2052, respectively, and our subordinated notes mature in June 2051.

Borrowings under the Credit Facility will mature in March 2029, our tranches of senior notes mature in November 2028, June 2030, February 2052 and October 2054, respectively, and our subordinated notes mature in June 2051.

As these borrowings and other indebtedness mature (or are otherwise repaid prior to their scheduled maturities), we may be required to either refinance them by entering into new facilities or issuing additional debt, which could result in higher borrowing costs, or issuing equity, which would dilute existing stockholders.

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Trading prices tend to fluctuate more for fixed rate securities that have longer maturities.

Although we have no policy governing the maturities of our investments, under current market conditions we expect that we will invest in a portfolio of debt generally having maturities of up to 10 years.

Trading prices for debt that pays a fixed rate of return tend to fall as interest rates

Trading prices for debt that pays a fixed rate of return tend to fall as interest rates rise.

This means that we are subject to greater risk (other things being equal) than a fund invested solely in shorter-term securities.

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Consequently, we rely heavily on our financial, accounting and other data processing systems.

New investment products we may introduce could create a significant risk that our existing systems may not be adequate to identify or control the relevant risks in the investment strategies employed by such new investment products.

New investment products we

may introduce could create a significant risk that our existing systems may not be adequate to identify or control the relevant risks in the investment strategies employed by such new investment products.

In addition, we operate in a business that is highly dependent on information systems and technology.

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Any interruption or deterioration in the performance of these third parties or the service providers of our counterparties or failures or vulnerabilities of their respective information systems or technology could impair the quality of our funds’ operations and could impact our reputation, adversely affect our businesses and limit our ability to grow.

Finally, there has been significant evolution and developments in the use of artificial intelligence technologies, including large language models, such as ChatGPT.

Finally, there continues to be significant evolution and developments in the use of artificial intelligence and machine learning technologies, including generative artificial intelligence and large language models.

We cannot fully determine the impact of such evolving technology to our business at this time.

Our investments in subsidiaries that have sponsored SPACs and invested in their business combination targets may expose us to increased liabilities, and we may suffer the loss of all or a portion of our investments if the SPAC does not complete a business combination by the applicable deadline or the target is unsuccessful.

In February 2021, we invested $23.0 million into a subsidiary that is the sponsor of AAC I, a blank check company.

In February 2021, we invested $23.0 million into a subsidiary that is the sponsor of Ares Acquisition Corporation (formerly NYSE:

AAC) (“AAC I”), a blank check company.

On December 5, 2022, AAC I entered into a business combination agreement among AAC I, X-Energy Reactor Company, LLC (“X-energy”), a Delaware limited liability company and additional parties thereto.

On October 31, 2023, AAC I announced that it mutually agreed to terminate its previously announced business combination with X-energy, given challenging market conditions, peer-company trading performance and a balancing of the benefits and drawbacks of becoming a publicly-traded company under current circumstances.

Because AAC I did not complete a business combination within the time period required by its amended and restated memorandum and articles of association, AAC I has redeemed all outstanding Class A ordinary shares and ceased all operations other than legal dissolution.

Because AAC I did not complete a business combination within the time period required by its amended and restated memorandum and articles of association, AAC I redeemed all outstanding Class A ordinary shares and ceased all operations other than legal dissolution and liquidation.

In December 2023, we invested $50.0 million into X-energy to support X-energy’s continued growth as a private company.

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AAC II has until April 25, 2025 to complete a business combination.

Prior to a business combination, the sponsor of AAC II (and its

permitted transferees) holds 100% of the Class B ordinary shares outstanding of AAC II.

Prior to a business combination, the sponsor of AAC II (and its permitted transferees) holds 100% of the Class B ordinary shares outstanding of AAC II.

The Class B ordinary shares equal 20% of the outstanding ordinary shares of AAC II.

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There is no assurance that AAC II will be successful in completing a business combination or that any business combination will be successful.

Adverse legal and regulatory developments relating to SPACs and their sponsors could adversely affect our business and reputation and result in significant losses and expenses.

We have sponsored AAC I, AAC II and may in the future continue to sponsor or otherwise utilize SPACs or other blank check companies in connection with the operation of our business.

Regulatory and legal scrutiny of SPACs and other blank check companies increased significantly in recent years.

For example, in 2021, the SEC’s staff issued statements relating to certain accounting classifications applicable to the financial statements prepared by SPACs, leading to many SPACs, including AAC I, having to restate their financial statements and, in January 2024, the SEC adopted final rules that, among other items, impose additional disclosure requirements in business combination transactions involving SPACs and private operating companies;

Adverse regulatory and legal developments relating to SPACs and their sponsors could adversely affect our business and reputation and result in significant losses and expenses.

We have sponsored SPACs including AAC I, AAC II and may in the future continue to sponsor or otherwise utilize SPACs or other blank check companies in connection with the operation of our business.

Regulatory and legal scrutiny of

SPACs and other blank check companies increased significantly in recent years.

On July 1, 2024, new rules became effective that, among other items, impose additional disclosure requirements in business combination transactions involving SPACs and private operating companies;

amend the financial statement requirements applicable to business combination transactions involving such companies;

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Moreover, we may lose all or a portion of our investment in any SPAC that we sponsor or become affiliated with if a business combination is not completed as contemplated or if the business combination is unsuccessful, which may also result in significant regulatory scrutiny, litigation costs and other expenses.

AAC I did not complete a business combination within the time period required by its amended and restated memorandum and articles of association, and is going through the dissolution and liquidation process.

Risks Related to Our Funds

The historical returns attributable to our funds should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in shares of our Class A common stock.

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.

The historical performance of our funds is relevant to us primarily insofar as it is indicative of carried interest and incentive fees we have earned in the past and may earn in the future and our reputation and ability to raise new funds and therefore earn management fees on such new funds.

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Also, there is no assurance that projections in respect of our funds or unrealized valuations will be realized.

Moreover, the historical returns of our funds should not be considered indicative of the future returns of these or from any future funds we may raise, in part because:

• market conditions during previous periods may have been significantly more favorable for generating positive performance than the market conditions we may experience in the future;

• our funds’ rates of returns, which are calculated on the basis of net asset value of the funds’ investments, reflect unrealized gains, which may never be realized;

• our funds’ returns have previously benefited from investment opportunities and general market conditions that may not recur, including the availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same returns or profitable investment opportunities or deploy capital as quickly;

• the historical returns that we present in this Annual Report on Form 10-K derive largely from the performance of our earlier funds, whereas future fund returns will depend increasingly on the performance of our newer funds or funds not yet formed, which may have little or no realized investment track record;

• our funds’ historical investments were made over a long period of time and over the course of various market and macroeconomic cycles, and the circumstances under which our current or future funds may make future investments may differ significantly from those conditions prevailing in the past;

• the attractive returns of certain of our funds have been driven by the rapid return of invested capital, which has not occurred with respect to all of our funds and we believe is less likely to occur in the future;

• in recent years, there has been increased competition for investment opportunities resulting from the increased amount of capital invested in alternative funds and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future;

• our newly established funds may generate lower returns during the period that they take to deploy their capital.

The future internal rate of return for any current or future fund may vary considerably from the historical internal rate of return generated by any particular fund, or for our funds as a whole.

Moreover, the historical returns of our funds should not be considered indicative of the future returns of these or from any future funds we may raise.

Performance metrics, such as IRR, going forward for any current or future fund may vary considerably from the historical performance generated by any particular fund, or for our funds as a whole.

Future returns will also be affected by the risks described elsewhere in this Annual Report on Form 10-K, including risks of the industries and businesses in which a particular fund invests.

Valuation methodologies for certain assets can be subject to significant subjectivity, and the values of assets may never be realized.

Valuation methodologies for certain assets can be subject to significant subjectivity, and our value of an asset may differ materially from the value ultimately realized.

Many of the investments of our funds are illiquid and thus have no readily ascertainable market prices.

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Because these valuations are inherently uncertain, they may fluctuate greatly from period to period.

Also, they may vary greatly from the prices that would be obtained if the assets were to be liquidated on the date of the valuation and often do vary greatly from the prices we eventually realize;

Also, they may vary greatly from the prices that would be obtained if the assets were to be liquidated on the date of the valuation and

often do vary greatly from the prices we eventually realize;

as a result, there can be no assurance that such unrealized valuations will be fully or timely realized.

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The valuation process for the portfolio holdings of our registered funds and business development companies that we manage may create a conflict of interest.

Effective September 2022, Rule 2a-5 under the Investment Company Act establishes requirements for good faith determinations of fair value, and addresses both the board’s and the “valuation designee’s” roles and responsibilities relating to determinations of the fair value of securities without readily available market quotations.

Rule 2a-5 under the Investment Company Act establishes requirements for good faith determinations of fair value, and addresses both the board’s and the “valuation designee’s” roles and responsibilities relating to determinations of the fair value of securities without readily available market quotations.

Each of the boards of the investment companies registered under the Investment Company Act (collectively, the “registered funds”) and the business development companies that we manage have designated their respective investment advisers to serve as valuation designee.

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The value of publicly-traded securities in which our funds invest may be particularly volatile as a result of these factors.

In addition, debt instruments that are held by our funds to maturity or for long terms must be “marked-to-market” periodically, and their values are therefore vulnerable to interest rate fluctuations and the changes in the general state of the credit environment, notwithstanding their underlying performance.

the credit environment, notwithstanding their underlying performance.

Changes in the values of these investments may adversely affect our investment performance and our results of operations.

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The pace and consistency of our funds’ capital deployment has been, and may in the future continue to be, affected by a range of factors, including market conditions, regulatory developments and increased competition, which are beyond our control.

In particular, the private equity and real estate markets have recently experienced a slowdown in deal activity.

In addition, the private markets have continued to experience challenges with downward pressure on valuations and muted opportunities for realizations.

In particular, the private equity and certain real estate markets have experienced a slowdown in deal activity.

In addition, the private markets have from time to time experienced challenges with downward pressure on valuations and muted opportunities for investment and realizations.

To the extent these market dynamics continue, it may continue to impact the pace and consistency of our funds’ capital deployment.

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Certain investments may also be financed through borrowings on fund-level debt facilities, which may or may not be available for a refinancing at the end of their respective terms.

In the event that our funds are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at an increased interest rate or on unfavorable terms, our funds may have difficulty completing otherwise profitable acquisitions or may generate profits that are lower than would otherwise be the case, either of which could reduce the performance and investment income earned by us.

performance and investment income earned by us.

Similarly, our funds’ portfolio companies regularly utilize the corporate debt markets to obtain financing for their operations.

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A fund may borrow money from time to time to purchase or carry securities or may enter into derivative transactions with counterparties that have embedded leverage.

The interest expense and other costs incurred in connection with such borrowing may not be recovered by

appreciation in the securities purchased or carried and will be lost, and the timing and magnitude of such losses may be accelerated or exacerbated, in the event of a decline in the market value of such securities.

The interest expense and other costs incurred in connection with such borrowing may not be recovered by appreciation in the securities purchased or carried and will be lost, and the timing and magnitude of such losses may be accelerated or exacerbated, in the event of a decline in the market value of such securities.

Gains realized with borrowed funds may cause the fund’s net asset value to increase at a faster rate than would be the case without borrowings.

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In addition, market conditions can also delay our funds’ ability to exit and realize value from their investments.

For example, rising interest rates and challenging credit markets may make it difficult for potential buyers to raise sufficient capital to purchase our funds’ investments.

For example, fluctuations in interest rates and challenging credit markets may make it difficult for potential buyers to raise sufficient capital to purchase our funds’ investments.

Although the equity markets are not the only means by which we exit investments from our funds, the strength and liquidity of the U.S.

and relevant global equity markets generally, and the initial public offering market specifically, affect the valuation of, and our ability to successfully exit, our

equity positions in the portfolio companies of our funds in a timely manner.

and relevant global equity markets generally, and the initial public offering market specifically, affect the valuation of, and our ability to successfully exit, our equity positions in the portfolio companies of our funds in a timely manner.

We may also realize investments through strategic sales.

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persons in U.S.

companies or real assets deemed critical or sensitive to the United States.

companies or real assets deemed critical or sensitive to the U.S.

Many non-U.S.

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equivalents thereof may seek to impose limitations, conditions or restrictions on or prohibit one or more of our investments, which may adversely affect the ability of our funds to execute on their investment strategy with respect to such transaction as well as limit our flexibility in structuring or financing certain transactions.

In addition, CFIUS is actively pursuing transactions that were not notified to it and may ask questions regarding, or impose restrictions, conditions or limitations on, transactions post-closing.

In addition, CFIUS is actively pursuing transactions that were not

notified to it and may ask questions regarding, or impose restrictions, conditions or limitations on, transactions post-closing.

Our funds may also invest in companies that are, or may become, subject to CFIUS requirements based on pre-existing foreign ownership and control;

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antitrust agencies and other non-U.S.

antitrust authorities for mergers and acquisitions undertaken by the investment funds we

manage is expected to become more challenging, more time consuming and more expensive.

antitrust authorities for mergers and acquisitions undertaken by the investment funds we manage is expected to become more challenging, more time consuming and more expensive.

We may even be required to undergo investigations concerning previously closed transactions.

If certain proposed acquisitions or dispositions of portfolio companies by our managed investment funds are delayed or rejected by antitrust enforcers, or if previously closed transactions are investigated, it could have an adverse impact on our ability to generate future performance revenues and to fully invest the available capital in our funds, as well as reduce opportunities to exit and realize value from our fund investments.

In August 2023, the President issued an executive order establishing an outbound investment screening regime that is intended to regulate or prohibit certain investments by U.S.

persons in advanced technology sectors in China and other jurisdictions that may be designated as a “country of concern.” While the U.S.

Department of the Treasury proposed rules in August 2023 contemplating the imposition of notification requirements for, and the potential prohibition of, outbound investment involving semiconductors and microelectronics, quantum information technologies and artificial intelligence by U.S.

persons into certain entities with a nexus to China, the exact scope and application of the outbound investment program has yet to be determined.

In August 2023, President Biden issued an Executive Order establishing an outbound investment screening regime that is intended to regulate or prohibit certain investments by U.S.

persons in advanced technology sectors in China and other jurisdictions that may be designated as a “country of concern.” The U.S.

Department of the Treasury issued final regulations implementing this Executive Order in October 2024, which took effect on January 2, 2025.

The final rule prohibits or imposes notification requirements on certain outbound investments involving semiconductors and microelectronics, quantum information technologies and artificial intelligence by U.S.

persons into certain entities with a nexus to China.

Moreover, there is a high likelihood that the number of targeted sectors will expand over the life of our funds.

When restrictions on U.S.

outbound investment become effective, these could limit the universe of prospective investments available to us, making it more difficult to deploy capital or identify buyers for investments, and/or adversely affect the governance and operations of our investments and thus our overall performance.

These restrictions on U.S.

outbound investments could limit the universe of prospective investments available to us, making it more difficult to deploy capital or identify buyers for investments, and/or adversely affect the governance and operations of our investments and thus our overall performance.

State regulatory agencies may also impose restrictions on private funds’ investments in certain types of assets, which could affect our funds’ ability to find attractive and diversified investments and to complete such investments in a timely manner.

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Changes to regulations, or changes to interpretations thereof, by FERC or public utility commissions may similarly make regulated investments, acquisitions or dispositions more challenging or time-consuming, and may subject previously-exempt classes of transactions to new authorization requirements.

While our investments are exposed to FERC and public utility commission regulation in a manner that is consistent with other participants in the power, infrastructure and energy sector, such regulations could nonetheless result in delays in making investments, delays in exiting investments or limitations or conditions that may adversely affect the ability of our funds to execute on their investment strategy with respect to such transactions as well as limit our flexibility in structuring or financing certain transactions.

of our funds to execute on their investment strategy with respect to such transactions as well as limit our flexibility in structuring or financing certain transactions.

Certain of our funds make preferred and common equity investments that rank junior to preferred equity and debt in a company’s capital structure.

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investments may be substantially less than that of the senior creditors.

Certain of our funds utilize special situation and distressed debt investment strategies that involve significant risks.

Certain of the funds in our Credit and Private Equity Groups invest in obligors and issuers with weak financial conditions, poor operating results, substantial financing needs, negative net worth and/or special competitive problems.

Certain of our funds utilize special situations and distressed debt investment strategies that involve significant risks.

Certain of the funds in our Credit Group invest in obligors and issuers with weak financial conditions, poor operating results, substantial financing needs, negative net worth and/or special competitive problems.

These funds also invest in obligors and issuers that are involved in bankruptcy or reorganization proceedings.

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With respect to these funds or accounts, this results in the application of the fiduciary responsibility standards of ERISA to investments made by such funds or accounts, including the requirement of investment prudence and diversification, and the possibility that certain transactions that we enter into, or may have entered into, on behalf of these funds or accounts, in the normal course of business, might constitute or result in, or have constituted or resulted in, non-exempt prohibited transactions under Section 406 of ERISA or Section 4975 of the Code.

A non-exempt prohibited transaction, in addition to imposing potential liability upon fiduciaries of an ERISA plan, may also result in the imposition of an excise tax under the Code upon a “party in interest” (as defined in ERISA) or “disqualified person” (as defined in the Code) with whom we engaged in the transaction.

A non-exempt prohibited

transaction, in addition to imposing potential liability upon fiduciaries of an ERISA plan, may also result in the imposition of an excise tax under the Code upon a “party in interest” (as defined in ERISA) or “disqualified person” (as defined in the Code) with whom we engaged in the transaction.

Some of our other funds or accounts are intended to qualify as “venture capital operating companies” or rely on another exception under the “plan assets” regulation under ERISA and therefore not be subject to the fiduciary or prohibited transaction provisions of ERISA or Section 4975 of the Code with respect to their assets.

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A fund may also be required to indemnify the purchasers of such investment to the extent that any such representations are inaccurate.

These arrangements may result in the incurrence of contingent liabilities by a fund, even after the

disposition of an investment.

These arrangements may result in the incurrence of contingent liabilities by a fund, even after the disposition of an investment.

Accordingly, the inaccuracy of representations and warranties made by a fund could harm such fund’s performance.

Our funds may be held liable for the underfunded pension liabilities of their portfolio companies.

A court decision found that, in certain circumstances, an investment fund could be treated as a “trade or business” for purposes of determining pension liability under ERISA.

In at least one circuit, a court found that, in certain circumstances, an investment fund could be treated as a “trade or business” for purposes of determining pension liability under ERISA.

Therefore, where an investment fund owns 80% or more (or possibly, under certain circumstances, less than 80%) of a portfolio company, such investment fund (and any other 80%-owned portfolio companies of such fund) might be found liable for certain pension liabilities of such a portfolio company to the extent the portfolio company is unable to satisfy such liabilities.

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If a fund (or other 80%-owned portfolio companies of such fund) were deemed to be liable for such pension liabilities, this could have a material adverse effect on the operations of such fund and the companies in which such fund invests.

This discussion is based on current court decisions, statute and regulations regarding control group liability under ERISA, as in effect as of the date hereof, which may change in the future as the case law and guidance develops.

Our funds’ performance, and our performance, may be adversely affected by the financial performance of our funds’ portfolio companies and the industries in which our funds invest.

Our performance and the performance of our funds are significantly impacted by the value of the companies in which our funds have invested.

Our funds invest in companies in many different industries, each of which is subject to volatility based upon economic and market factors.

The recent global economic downturn induced by the COVID-19 pandemic had a significant impact in overall performance activity and the demands for many of the goods and services provided by portfolio companies of the funds we advise.

Although we believe the U.S.

economy has largely recovered from the economic crisis induced by the COVID-19 pandemic, there remain many obstacles to continued growth in the economy such as global geopolitical events, persistent inflation or deflation, rising interest rates and high debt levels, both public and private.

These factors and other general economic trends are likely to affect the performance of portfolio companies in a range of industries.

The performance of our funds, and our performance, may be adversely affected if our fund portfolio companies in these industries experience adverse performance or additional pressure due to downward trends.

The performance of our investments with underlying exposure to the commodities markets is also subject to a high degree of business and market risk, as it is dependent upon prevailing prices of commodities such as oil, natural gas and coal, which are subject to wide fluctuation for a variety of factors that are beyond our control, such as geopolitical developments like hostilities in the Middle East region and between Russia and Ukraine.

It is common in making investments with underlying exposure to the commodities markets to deploy hedging strategies to protect against pricing fluctuations but such strategies may or may not protect our investments.

Declining global commodity prices have impacted the value of securities held by our funds.

Continued volatility could result in lower returns than we anticipated at the time certain of our investments were made.

As of December 31, 2023, 1% of our total AUM was invested in debt and equity investments in the energy sector (of which less than 1% of our total AUM was invested in midstream investments and also includes oil and gas exploration) and less than 1% of our total AUM was invested in renewable energy investments that were challenged from the market disruption and volatility experienced in the recent past.

In respect of real estate, various factors could have an adverse effect on investment performance, including, but not limited to, rising mortgage interest rates, a low level of confidence in the economic recovery or the residential real estate market.

This discussion is based on current court decisions, statutes and regulations regarding control group liability under ERISA, as in effect as of the date hereof, which may change in the future as the case law and guidance develops.

Our failure to comply with investment guidelines set by our clients and/or investors could result in damage awards against us or a reduction in AUM, either of which would cause our earnings to decline and adversely affect our business.

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Clients or investors could also sue us for breach of contract and seek to recover damages from us.

In addition, such guidelines may restrict our ability to pursue certain investments and strategies on behalf of our clients or limit an investor’s exposure to such investments and strategies that we believe are economically desirable, which could similarly result in losses to a client account or investor capital account or termination or potential withdrawal of the account or investor and a

corresponding reduction in AUM.

Even if we comply with all applicable investment guidelines, restrictions and limitations, a client or investor may be dissatisfied with its investment performance or our services or fees, and may terminate their customized separate accounts or advisory accounts, seek to withdraw from our funds or be unwilling to commit new capital to our specialized funds, customized separate accounts or advisory accounts.

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Any material reduction in the amount of carried interest generated by a fund will adversely affect our revenues.

Our funds make investments in companies that are based outside of the U.S., which may expose us to additional risks not typically associated with investing in companies that are based in the U.S.

Our funds make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States.

Some of our funds invest a portion of their assets in the equity, debt, loans or other securities of issuers located outside the U.S., including Europe and APAC, while certain of our funds invest substantially all of their assets in these types of securities, and we expect that international investments will increase as a proportion of certain of our funds’ portfolios in the future.

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• controls on, and changes in controls on, foreign investment and limitations on repatriation of invested capital;

• less developed or less efficient financial markets than exist in the U.S., which may lead to price volatility and relative illiquidity;

• less developed or less efficient financial markets than exist in the United States, which may lead to price volatility and relative illiquidity;

• the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation;

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• the imposition of foreign taxes or withholding taxes on income and gains recognized with respect to such securities.

See “—Investments in emerging markets are subject to greater risks than those in more developed markets” for additional risks related to such investments made outside of the United States.

While our funds will take these factors into consideration in making investment decisions, including when hedging positions, there can be no assurance that adverse developments with respect to these risks will not adversely affect our funds that invest in securities of foreign issuers.

In addition, certain of these funds are managed outside the U.S., which may increase the foregoing risks.

In addition, certain of these funds are managed outside the United States, which may increase the foregoing risks.

Investments in emerging markets are subject to greater risks than those in more developed markets.

We have invested and expect to continue to invest in businesses in emerging markets.

Investing in emerging markets exposes us to heightened risks compared to developed economies, including political, social, and economic instability.

Local economic and social conditions, such as cultural and communication challenges, as well as local laws and regulations, add complexity to operations.

Companies in these markets might lack depth of management and may be vulnerable to political or economic developments such as the nationalization of key industries.

Many emerging markets are developing both economically and politically and are at greater risk of having unstable governments and economies.

Certain of the emerging markets in which we operate have histories of political and military unrest and financial instability, and their markets may experience significant volatility, even when compared to those of other emerging market countries, which could have a destabilizing effect on our investments and operations in such regions.

See also “—Risks Related to Our Businesses—Difficult market and political conditions may adversely affect our businesses in many ways, including by reducing the value or hampering the performance of the investments made by our funds or reducing the ability of our funds to raise or deploy capital, each of which could materially reduce our revenue, earnings and cash flow and adversely affect our financial prospects and condition.”

Further, due to jurisdictional limitations, matters of comity, and other factors, the SEC, the U.S.

Department of Justice, and other U.S.

authorities will be limited in their ability to pursue enforcement or other actions against companies in such emerging market jurisdictions that engage in fraud or other wrongdoing.

Similar limitations also apply to the pursuit of actions against individuals in certain other emerging markets, including officers, directors, and gatekeepers, individuals such as compliance officers, lawyers, accountants and auditors, who have engaged in fraud or other wrongdoing.

In addition, local authorities in certain emerging markets are often constrained in their ability to assist foreign authorities and foreign investors more generally.

In addition, the political, administrative, and judiciary institutions in emerging markets are not as mature as their peers in developed markets.

As a result, these institutions might not sustain their independence against political pressure or corruption by individuals in positions of power.

The heightened potential for fraud and political corruption in certain emerging markets increases operational uncertainties.

There can be no assurance that adverse developments with respect to such risks will not adversely affect any portfolio companies based in such countries.

Our funds are also permitted to acquire portfolio companies in countries where generally accepted accounting standards and practices differ significantly from those in the United States.

As a result, financial information from these entities may not align with U.S.

standards, potentially affecting the reliability of evaluations and due diligence processes.

These factors could materially and adversely impact the performance of our portfolio companies and our operations.

Many of our funds make investments in companies that we do not control.

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In addition, our funds may seek to acquire minority equity interests more frequently and may also dispose of a portion of their majority equity investments in portfolio companies over time in a manner that results in the funds retaining a minority investment.

Furthermore, while certain of our funds may make “toe-hold” distressed debt investments in a company with the intention of obtaining control, there is no assurance that a control position may be obtained and such fund may retain a minority investment.

may retain a minority investment.

Those investments will be subject to the risk that the company in which the investment is made may make business, financial or management decisions with which we do not agree or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve our interests.

If any of the foregoing were to occur, the values of the investments held by our funds could decrease and our financial condition, results of operations and cash flow could suffer as a result.

Increased regulatory scrutiny and uncertainty with regard to expense allocation may increase risk of harm.

Increased regulatory scrutiny and uncertainty with regards to expense allocation may increase risk of harm.

While we historically have and will continue to allocate the expenses of our funds in good faith and in accordance with the terms of the relevant fund agreements and our expense allocation policy in effect from time to time, due to increased regulatory scrutiny of expense allocation policies in the private funds realm, there is no guarantee that our policies and practices will not be challenged by our supervising regulatory bodies.

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As of December 31, 2024, had we assumed all existing investments were worthless, the amount of carried interest, net of tax distributions, subject to contingent repayment would have been approximately $59.6 million of which approximately $39.5 million is reimbursable to the Company by certain professionals.

In addition, the SEC has recently adopted rules that will require a written notice to private fund investors in order to reduce the amount of any adviser clawback by actual,

potential, or hypothetical taxes within 45 days after the end of any fiscal quarter in which a clawback occurs.

See “—Risks Related to Regulation—Extensive regulation affects our activities, increases the cost of doing business and creates the potential for significant liabilities and penalties that could adversely affect our businesses and results of operations.” To the extent that we fail to provide such written notice, we would be limited in our ability to reduce the clawback amount in connection with those taxes, potentially leading to a larger contingent repayment obligation.

Although a contingent repayment obligation is several to each person who received a distribution, and not a joint obligation, if a recipient does not fund his or her respective share of a contingent repayment obligation, we may have to fund such additional amounts beyond the amount of carried interest we retained, although we generally will retain the right to pursue remedies against those carried interest recipients who fail to fund their obligations.

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These events would lead to a decrease in our revenues, which could be substantial.

Investors in certain of our funds, including our open-ended funds and non-traded REITs may generally redeem their investments on a periodic basis subject to the expiration of a specified period of time during which capital may not be withdrawn.

Investors in certain of our funds, including our open-ended funds and perpetual wealth vehicles may generally redeem their investments on a periodic basis subject to the expiration of a specified period of time during which capital may not be withdrawn.

Such redemptions would result in a reduction of our AUM and decrease in our management fees.

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In addition, the boards of directors of the investment management companies we manage could terminate our advisory engagement of those companies on as little as 30 days’ prior written notice.

ARCC and ASIF’s respective investment management agreements can be terminated by the majority of their respective stockholders upon 60 days’ prior written notice.

Each respective investment advisory and management agreement with our BDCs can be terminated by the majority of their respective voting securities holders upon 60 days’ prior written notice.

We serve as the sub-adviser for the existing manager of certain funds.

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Isolated departures have occurred in the past but have not had a material impact on our business.

Moreover, a number of our contracts with state government-sponsored clients are secured through such government’s mandated procurement process, and are subject to periodic renewal.

Moreover, a number of our contracts with state government-sponsored clients

are secured through such government’s mandated procurement process, and are subject to periodic renewal.

If multiple clients were to exercise their termination rights or fail to renew their existing contracts and we were unable to secure new clients or maintain our levels of AUM, our customized separate account and advisory account fees would decline materially.

A significant reduction in the number of fee-paying clients and/or AUM levels in any given period could reduce our revenue and materially and adversely affect our business, financial condition and results of operations.

We are vulnerable to an increased number of investors seeking to participate in share redemption programs or tender offers of our non-traded vehicles.

We manage non-traded REITs, BDCs and other non-traded vehicles.

Non-traded vehicles often conduct share redemption programs or tender offers to provide liquidity to investors in such vehicles, subject to certain limitations.

We are vulnerable to an increased number of investors seeking to participate in share redemption programs or tender offers of our perpetual wealth vehicles.

We manage non-traded REITs, BDCs and other perpetual wealth vehicles.

These perpetual wealth vehicles often conduct share redemption programs or tender offers to provide liquidity to investors in such vehicles, subject to certain limitations.

For example, with respect to our non-traded REITs, the total amount of aggregate redemptions is limited by a certain percentage of each of the non-traded REIT’s NAV for each calendar month and quarter, which percentage is generally based on the excess of share redemptions (capital outflows) over the proceeds from the sale of shares (capital inflows), not including proceeds related to sales of beneficial interests in specific Delaware statutory trusts holding real properties, or the exchange program for the applicable period.

While such share redemption programs and tender offers may contain restrictions that limit the amount of shares or other equity, as applicable, that may be redeemed or purchased in particular periods, an increased number of investors requesting redemptions in excess of capital inflows or participating in tender offers of our non-traded vehicles could lead to a decline in the management fees and incentive fees we receive.

Economic events affecting the economy or market in general, such as volatility in the financial markets related to changes in markets, inflation, changes in interest rates or global or national events that are beyond our control, could cause investors to request redemption of an increased number of shares pursuant to the share redemption programs of our non-traded vehicles, potentially in excess of established limits.

While such share redemption programs and tender offers may contain restrictions that limit the amount of shares or other equity, as applicable, that may be redeemed or purchased in particular periods, an increased number of investors requesting redemptions in excess of capital inflows or participating in tender offers of our perpetual wealth vehicles could lead to a decline in the management fees and incentive fees we receive.

Economic events affecting the economy or market in general, such as volatility in the financial markets related to changes in markets, inflation, changes in interest rates or global or national events that are beyond our control, could cause investors to request redemption of an increased number of shares pursuant to the share redemption programs of our perpetual wealth vehicles, potentially in excess of established limits.

Such prolonged economic disruptions have caused a number of similar vehicles to deny redemption requests or to suspend or partially suspend their share redemption programs and tender offers.

Our non-traded vehicles may redeem or purchase fewer shares than investors request due to a lack of readily available funds because of such adverse market conditions beyond our control or the need to maintain liquidity for operations.

Certain of our non-traded vehicles may amend or suspend share repurchase programs during periods of

market dislocation where selling assets to fund a repurchase could have a materially negative impact on remaining investors.

With respect to our non-traded vehicles, the vast majority of their assets will consist of investments that cannot generally be readily liquidated on short notice without impacting the vehicle’s ability to realize full value upon their disposition.

Our perpetual wealth vehicles may redeem or purchase fewer shares than investors request due to a lack of readily available funds because of such adverse market conditions beyond our control or the need to maintain liquidity for operations.

Certain of our perpetual wealth vehicles may amend or suspend share repurchase programs during periods of market dislocation where selling assets to fund a repurchase could have a materially negative impact on remaining investors.

With respect to our perpetual wealth vehicles, the vast majority of their assets will consist of investments that cannot generally be readily liquidated on short notice without impacting the vehicle’s ability to realize full value upon their disposition.

This may further limit the amount of cash available to immediately satisfy redemption requests.

Any redemptions or purchases of less than amounts requested could undermine investor confidence in our non-traded vehicles and adversely impact our reputation.

Any redemptions or purchases of less than amounts requested could undermine investor confidence in our perpetual wealth vehicles and adversely impact our reputation.

A downturn in the global credit markets could adversely affect our CLO investments.

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If a fund holds investments concentrated in a particular issuer, security, asset class or geographic region, such fund may be more susceptible than a more widely diversified investment partnership to the negative consequences of a single corporate, economic, political or regulatory event.

Accordingly, a lack of diversification on the part of a fund could adversely affect a fund’s performance and, as a result, our financial condition and results of operations.

Accordingly, a lack of diversification

on the part of a fund could adversely affect a fund’s performance and, as a result, our financial condition and results of operations.

Our funds may be forced to dispose of investments at a disadvantageous time.

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Our real estate funds are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.

Investments in our real estate funds will be subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets.

These risks include the following:

Investments in our real estate funds are subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets.

These investments are subject to the potential for deterioration of real estate 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 and changes in demand for commercial office properties (including as a result of an increased prevalence of remote work).

Additionally, our funds’ properties may be managed by third parties, which makes us dependent upon such third parties and subjects us to risks associated with the actions and financial resources of such third parties.

More generally, investments in real estate-related businesses and assets are subject to risks including the following:

• those associated with the burdens of ownership of real property;

• general and local economic conditions;

• changes in supply of and demand for competing properties in an area (as a result, for example, of overbuilding);

• fluctuations in the average occupancy and room rates for hotel properties;

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• natural disasters, extreme weather events and other physical risks related to climate change;

• changes in government regulations (such as rent control and tax laws);

• changes in government regulations (such as rent control, digital infrastructure regulation and tax laws);

• changes in real property tax and transfer tax rates;

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If our real estate funds acquire direct or indirect interests in undeveloped land or underdeveloped real property, which may often be non-income producing, they will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction (including risks beyond the control of our fund, such as weather or labor conditions or material shortages) and the availability of both construction and permanent financing on favorable terms.

Additionally, our funds’ properties may be managed by a third party, which makes us dependent upon such third parties and subjects us to risks associated with the actions of such third parties.

Any of these factors may cause the value of the investments in our real estate funds to decline, which may have a material impact on our results of operations.

Certain of our funds invest in the power, infrastructure and energy sector which is subject to significant market volatility.

Certain of our funds invest in the power, infrastructure and energy sector which is subject to significant market volatility and may expose us to increased environmental risks and liabilities inherent in the ownership of real assets.

As such, the performance of investments in the energy sector is subject to a high degree of business and market risk.

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Commodity prices fluctuate for several reasons, including changes in market and economic conditions, the impact of weather on demand, climate initiatives of government entities, levels of domestic production and international production, policies implemented by the Organization of Petroleum Exporting Countries, power and energy conservation, domestic and foreign governmental regulation and taxation and the availability of local, intrastate and interstate transportation systems.

Climate change, climate change-related regulation and other efforts to reduce climate change and address sustainability concerns could adversely affect our business.

Climate change is widely considered to be a significant threat to the global economy.

Our business operations, our funds’ portfolio companies, and the companies in which our funds invest may face risks associated with climate change, including “transition risks” such as risks related to the impact of climate-related legislation and regulation (both domestically and internationally), risks related to climate-related business trends (such as the process of transitioning to a lower-carbon economy)and risks stemming from the physical impacts of climate change, such as the increasing frequency or severity of extreme weather events and rising sea levels and temperatures.

Significant chronic or acute physical effects of climate change including extreme weather events such as hurricanes or floods, may have an adverse impact on certain of our funds’ portfolio companies and investments, especially our real asset investments and portfolio companies that rely on physical factories, plants or stores located in the affected areas, or that focus

on tourism or recreational travel.

For some of our products and our products’ portfolio companies, physical risks of climate change may also pose systemic risks for their businesses.

For example, to the extent weather conditions are affected by climate change, energy use by us, our products or our products’ portfolio companies could increase or decrease depending on the duration and magnitude of any changes.

As the effects of climate change increase, we expect the frequency and impact of weather and climate related events and conditions to increase as well.

See “—Risks Related to Our Funds—Our real estate funds are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.”

In addition, the current Presidential administration has focused on climate change policies and has re-joined the Paris Agreement, which includes commitments from countries to reduce their greenhouse gas emissions, among other commitments.

The Paris Agreement and other regulatory and voluntary initiatives launched by international, federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose our business operations, portfolio companies, funds and the companies in which they invest to transition risks related to climate change in addition to physical risks, such as:

(i) political and policy risks, (including changing regulatory incentives, and legal requirements, including with respect to greenhouse gas emissions, that could result in increased costs or changes in business operations);

(ii) regulatory and litigation risks, (including changing legal requirements that could result in increased permitting, tax and compliance costs, enhanced disclosure obligations, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to impacts related to climate change);

(iii) technology and market risks, (including declining market for investments in industries seen as greenhouse gas intensive, like fossil fuels, or less effective than alternatives in reducing greenhouse gas emissions, and increased cost of insurance for assets in high risk sectors);

(iv) business trend risks, (including capital expenditures, product or service redesigns, and changes to operations and supply chains to meet changing customer expectations and the increased attention to ESG considerations by our investors, including in connection with their determination of whether to invest in our funds or portfolio companies);

and (v) potential harm to our reputation if certain stakeholders, such as our limited partners or shareholders, believe that we are not adequately or appropriately responding to climate change, including through the way in which we operate our business, the composition of our funds’ existing portfolios, the new investments made by our funds, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.

See “—Risks Related to Regulation—Increasing scrutiny from stakeholders and regulators with respect to ESG matters could impact our or our funds’ portfolio companies’ reputation, the cost of our or their operations, or result in investors ceasing to allocate their capital to us, all of which could adversely affect our business and results of operations.”

Investments in energy, manufacturing, infrastructure and certain other assets may expose us to increased environmental risks and liabilities that are inherent in the ownership of real assets.

The performance of our investments with underlying exposure to the commodities markets is subject to a high degree of business and market risk, as it is dependent upon prevailing prices of commodities such as oil, natural gas and coal, which are subject to wide fluctuation for a variety of factors that are beyond our control, such as geopolitical developments like hostilities in the Middle East region and between Russia and Ukraine.

Declining global commodity prices have impacted the value of securities held by our funds.

Continued volatility could result in lower returns than we anticipated at the time certain of our investments were made.

As of December 31, 2024, less than 1% of our total AUM was invested in debt and equity investments in the energy sector, including midstream investments, oil and gas exploration, and renewable energy investments.

Ownership of real assets in our funds or vehicles may increase our risk of liability under environmental laws that impose, regardless of fault, joint and several liability for the cost of remediating contamination and compensation for damages.

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Even in cases where we are indemnified by a seller against liabilities arising out of violations of environmental laws and regulations, there can be no assurance as to the financial viability of the seller to satisfy such indemnities or our ability to achieve enforcement of such indemnities.

Climate change, climate change-related regulation and other efforts to reduce climate change and address sustainability concerns could adversely affect our business.

Climate change is widely considered to be a significant threat to the global economy.

Our business operations, our funds’ portfolio companies, and the companies in which our funds invest may face risks associated with climate change, including “transition risks” such as risks related to the impact of climate-related legislation and regulation (both domestically and internationally), risks related to climate-related business trends (such as the process of transitioning to a lower-carbon economy) and risks stemming from the physical impacts of climate change, such as the increasing frequency or severity of extreme weather events (including wildfires, droughts, hurricanes and floods) and rising sea levels and temperatures.

These events and the disruptions they cause, alone or in combination, could also lead to increased costs of insurance (particularly for real estate in certain regions).

See “—Our real estate funds are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.”

Our investments in infrastructure assets may expose us to increased risks and liabilities.

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If the lender under one or more of those credit lines were to freeze the account in response to sanctions or become insolvent, we may have difficulty replacing the credit line and the affected fund(s) or we may face liquidity challenges, which may adversely affect our business operations or the fund’s ability to close on an investment.

If that counterparty is unable to perform its obligations or performs below our standards, we, our

specialized funds, customized separate accounts and other investments may be adversely affected.

If that counterparty is unable to perform its obligations or performs below our standards, we, our specialized funds, customized separate accounts and other investments may be adversely affected.

In addition, some of our methods for managing the risks related to our clients’ investments are based upon our analysis of historical private markets behavior.

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Moreover, because we believe that the capital interests of the general partners of our funds in their respective funds are neither securities nor investment securities, we believe that less than 40% of Ares Management Corporation’s total assets (exclusive of U.S.

government securities and cash items) on an unconsolidated basis are composed of assets that could be considered investment securities.

government securities and cash items) on an unconsolidated basis are composed of

assets that could be considered investment securities.

Accordingly, we do not believe that AMC is an inadvertent investment company by virtue of the 40% test in Section 3(a)(1)(C) of the Investment Company Act as described in the second bullet point above.

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We intend to conduct our operations so that we will not be deemed to be an investment company under the Investment Company Act.

between and among the Ares Operating Group, us, our funds and our senior management, or any combination thereof, and have a material adverse effect on our businesses, financial condition and results of operations.

If anything were to happen that would cause us to be deemed to be an investment company under the Investment Company Act, requirements imposed by the Investment Company Act, including limitations on capital structure, the ability to transact business with affiliates and the ability to compensate senior employees, could make it impractical for us to continue our businesses as currently conducted, impair the agreements and arrangements between and among the Ares Operating Group, us, our funds and our senior management, or any combination thereof, and have a material adverse effect on our businesses, financial condition and results of operations.

In addition, we may be required to limit the amount of investments that we make as a principal or otherwise conduct our businesses in a manner that does not subject us to the registration and other requirements of the Investment Company Act.

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On any date on which the Ares Ownership Condition is satisfied, the shares of our Class B common stock held by the Class B Stockholder entitles it to a number of votes, in the aggregate, equal to (x) four times the aggregate number of votes attributable to the shares of our Class A common stock minus (y) the aggregate number of votes attributable to the shares of our Class C common stock.

On any date on which the Ares Ownership Condition is not satisfied, the shares of our Class B common stock held by the Class B Stockholder will not be entitled to vote on any matter submitted to a vote of our stockholders.

On any date on which the Ares Ownership Condition is not satisfied,

the shares of our Class B common stock held by the Class B Stockholder will not be entitled to vote on any matter submitted to a vote of our stockholders.

The Class C Stockholder, as the holder of our Class C common stock, is entitled to a number of votes equal to the number of AOG Units held of record by each limited partner of the AOG entities (other than us and our subsidiaries).

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As a result of these matters and the provisions referred to under “—Due to the disparity in voting power among the classes of our common stock, holders of our Class A common stock will generally have no influence over matters on which holders of our common stock vote and limited ability to influence decisions regarding our business,” holders of our Class A common stock may be deprived of an opportunity to receive a premium for their shares of our Class A common stock in the future through a sale of AMC, and the trading prices of shares of our Class A common stock may be adversely affected by the absence or reduction of a takeover premium in the trading price.

Potential conflicts of interest may arise among the Class B Stockholder and the Class C Stockholder, on the one hand, and the holders of our Class A common stock, on the other hand.

Potential conflicts of interest may arise among the Class B Stockholder and the Class C Stockholder, on the one hand, and the holders of our Class A common stock and/or Series B mandatory convertible preferred stock, on the other hand.

The Class B Stockholder and the Class C Stockholder are controlled by the Holdco Members, certain of whom also serve on our board of directors and all of whom serve as executive officers.

As a result, conflicts of interest may arise among the Class B Stockholder and the Class C Stockholder, and their respective controlling persons, on the one hand, and us and the holders of our Class A common stock, on the other hand.

The Class B Stockholder and the Class C Stockholder, and thereby the Holdco Members, have the ability to influence our business and affairs through their ownership of the shares of our Class B common stock and the shares of our Class C common stock, respectively, and provisions under our certificate of incorporation requiring the approval of the holders of our Class B common stock for certain corporate actions.

Due to the disparity in voting power among the classes of our common stock, the Class B Stockholder and the Class C Stockholder will effectively control the election of directors while the Ares Ownership Condition is satisfied, and holders of our Class A common stock will generally have limited ability to elect directors and no ability to remove any of our directors, with or without cause.

As such, the Class B Stockholder and Class C Stockholder, and thereby the Holdco Members, have the ability to indirectly, and in some cases directly, influence the determination of the amount and timing of the Ares Operating Group’s investments and dispositions, cash expenditures, including those relating to compensation, indebtedness, issuances of additional partner interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of AOG Units.

partner interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of AOG Units.

In addition, conflicts may arise relating to the selection and structuring of investments or transactions, declaring dividends and other distributions.

For example, certain of our principals and senior professional owners indirectly hold their AOG Units through Ares Owners, which, unlike us, is not subject to corporate income taxation.

See “—Tax consequences to the direct and indirect holders of AOG Units or to general partners in our funds may give rise to conflicts of interests.”

See “—Risks Related to Taxation—Tax consequences to the direct and indirect holders of AOG Units or to general partners in our funds may give rise to conflicts of interests.”

Certain actions by our board of directors require the approval of the Class B Stockholder, which is controlled by the Holdco Members.

actions will also require the approval of the Class B Stockholder, which is controlled by the Holdco Members.

Although the affirmative vote of a majority of our directors (which, so long as the Ares Ownership Condition is satisfied, must include the Class I director) is required for any action to be taken by our board of directors, certain specified actions will also require the approval of the Class B Stockholder, which is controlled by the Holdco Members.

These actions consist of the following:

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Under the NYSE rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect, and we have elected, and expect to continue to elect, not to comply with certain corporate governance requirements of the NYSE, including the requirement that the listed company have a nominating and corporate governance committee that is composed entirely of independent directors.

Accordingly, holders of our Class A common stock do not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Accordingly, holders of our Class A common stock and/or Series B mandatory convertible preferred stock do not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Our certificate of incorporation states that the Class B Stockholder is under no obligation to consider the separate interests of our other stockholders and contains provisions limiting the liability of the Class B Stockholder.

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Our certificate of incorporation contains provisions stating that the Class B Stockholder is under no obligation to consider the separate interests of our other stockholders (including the tax consequences to such stockholders) in deciding whether or not to cause us to take (or decline to take) any action as well as provisions stating that the Class B Stockholder shall not be liable to our other stockholders for monetary damages or equitable relief for losses sustained, liabilities incurred or benefits not derived by such stockholders in connection with such decisions.

See “—Potential conflicts of interest may arise among the Class B Stockholder and the Class C Stockholder, on the one hand, and the holders of our Class A common stock, on the other hand.”

See “—Potential conflicts of interest may arise among the Class B Stockholder and the Class C Stockholder, on the one hand, and the holders of our Class A common stock and/or Series B mandatory convertible preferred stock, on the other hand.”

The Class B Stockholder will not be liable to us or holders of our Class A common stock for any acts or omissions unless there has been a final and non-appealable judgment determining that the Class B Stockholder acted in bad faith or with criminal intent, and we have also agreed to indemnify other designated persons to a similar extent.

Even if there is deemed to be a breach of the obligations set forth in our certificate of incorporation, our certificate of incorporation provides that the Class B Stockholder will not be liable to us or the holders of our Class A common stock for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Class B Stockholder acted in bad faith or with criminal intent.

These provisions are detrimental to the holders of our Class A common stock because they restrict the remedies available to our stockholders for actions of the Class B Stockholder.

provisions are detrimental to the holders of our Class A common stock because they restrict the remedies available to our stockholders for actions of the Class B Stockholder.

In addition, we have agreed to indemnify and hold harmless (i) each member of our board of directors and each of our officers, (ii) each holder of record of our Class B common stock, (iii) Ares Management GP LLC, in its capacity as the former general partner of our company when we were a Delaware limited partnership, and any successor or permitted assign, (iv) any person who is or was a “tax matters partner” (as defined in the Section 6231 of the Code prior to amendment by P.L.

114-74) or “partnership representative” (as defined in Section 6223 of the Code after amendment by P.L.

basis from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interests, settlements or other amounts arising from any and all threatened, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, and including appeals, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee, whether arising from acts or omissions to act occurring on, before or after the date of our certificate of incorporation.

114-74), member, manager, officer or director of any holder of record of our Class B common stock or Ares Management GP LLC, and (v) any member, manager, officer or director of any holder of record of our Class B common stock or Ares Management GP LLC who is or was serving at the request of any holder of record of our Class B common stock or Ares Management GP LLC as a director, officer, manager, employee, trustee, fiduciary, partner, tax matters partner, partnership representative, member, representative, agent or advisor of another person (collectively, the “Indemnitees”), in each case, to the fullest extent permitted by law, on an after tax basis from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interests, settlements or other amounts arising from any and all threatened, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, and including appeals, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee, whether arising from acts or omissions to act occurring on, before or after the date of our certificate of incorporation.

We have agreed to provide this indemnification unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or with criminal intent.

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corporation we will be subject to entity-level corporate income taxes and may be obligated to make payments under the TRA, the amount of dividends ultimately paid by us to holders of our Class A and non-voting common stock are generally expected to be less, on a per share basis, than the amounts distributed by the Ares Operating Group to the holders of AOG Units (including us) in respect of their or our AOG Units.

For a further discussion of related tax consequences and risks, see “—Risks Related to Taxation—We are a corporation, and applicable taxes will reduce the amount available for dividends to holders of our Class A and non-voting common stock in respect of such investments and could adversely affect the value of our Class A and non-voting common stockholders’ investment.”

Our dividend policy contemplates a steady quarterly dividend for each calendar year that will be based on fee related earnings after an allocation of current taxes paid.

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Furthermore, by making cash dividends to our stockholders rather than investing that cash in our businesses, we risk slowing the pace of our growth, or not having a sufficient amount of cash to fund our operations, new investments or unanticipated capital expenditures, should the need arise.

In addition, on October 10, 2024, we issued 30,000,000 shares of Series B mandatory convertible preferred stock with a dividend rate of 6.75% per annum on the liquidation preference thereof.

The Series B mandatory convertible preferred stock ranks senior to our Class A common stock and non-voting common stock, with respect to the payment of dividends.

As long as any share of Series B mandatory convertible preferred stock is outstanding, unless all accumulated and unpaid dividends on the Series B mandatory convertible preferred stock for all preceding dividend periods have been declared and paid in full or declared and set apart for payment, we may not declare, pay or set apart for payment any dividends on our Class A common stock or any other class or series of stock that ranks junior to the Series B mandatory convertible preferred stock.

Dividends on the Series B mandatory convertible preferred stock are discretionary and cumulative.

Holders of Series B mandatory convertible preferred stock will only receive dividends on their shares when, as and if declared by our board of directors.

If dividends on the Series B mandatory convertible preferred stock have not been declared and paid for the equivalent of six or more quarterly dividend periods, whether or not consecutive, holders of Series B mandatory convertible preferred stock, together as a class with holders of any other series of parity stock with like voting rights, will be entitled to vote in an election for two additional directors to our board of directors.

This right to elect additional directors to our board of directors will dilute the representation of our stockholders on our board of directors and may adversely affect the market price of our Class A common stock.

When all accumulated and unpaid dividends have been paid in full, the right of the holders of Series B mandatory convertible preferred stock to elect these two additional directors will terminate, the terms of office of these two directors will forthwith terminate and the number of directors constituting our board of directors will be reduced accordingly.

Additional risks related to the Series B mandatory convertible preferred stock are contained in the prospectus supplement filed with the SEC on October 9, 2024.

The Class B Stockholder or the Class C Stockholder may transfer their interests in the shares of our Class B common stock or the shares of our Class C common stock, respectively, which could materially alter our operations.

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These provisions may also discourage acquisition proposals or delay or prevent a change in control.

We will be required to pay the TRA Recipients for most of the benefits relating to our use of attributes we receive from prior and future exchanges of AOG Units and related transactions.

In certain circumstances, payments to the TRA Recipients may be accelerated and/or could significantly exceed the actual tax benefits we realize.

The holders of AOG Units, subject to any applicable transfer restrictions and other provisions, may, on a quarterly basis, exchange their AOG Units for shares of our Class A common stock on a one-for-one basis or, at our option, for cash.

A holder of AOG Units must exchange one AOG Unit in the Ares Operating Group entity to effect an exchange for a share of

Class A common stock of AMC.

These exchanges are expected to result in increases (for U.S.

federal income tax purposes) in the tax basis of the tangible and intangible assets of the relevant Ares Operating Group entity.

These increases in tax basis generally will increase (for U.S.

federal income tax purposes) depreciation and amortization deductions and potentially reduce gain on sales of assets and, therefore, reduce the amount of tax that we would otherwise be required to pay in the future, although the IRS may challenge all or part of these deductions and tax basis increases, and a court could sustain such a challenge.

We have entered into a TRA with certain direct and indirect holders of AOG Units (the “TRA Recipients”) that provides for the payment (“Tax Receivable Payment”) by us to the TRA Recipients of 85% of the amount of cash tax savings, if any, in U.S.

federal, state, local and foreign income tax or franchise tax that we actually realize (or are deemed to realize in the case of an early termination payment by us or a change of control, as discussed below) as a result of increases in tax basis and certain other tax benefits related to our entering into the TRA, including tax benefits attributable to payments under the TRA.

Pursuant to an amendment to the TRA, dated May 1, 2023, to the extent Ares Owners Holdings L.P.

would have been a TRA Recipient of a Tax Receivable Payment under the TRA prior to the amendment, Ares Owners Holdings L.P.

will no longer be entitled to any Tax Receivable Payment for taxable exchanges on or after May 1, 2023.

The payments we may make to the TRA Recipients could be material in amount and we may need to incur debt to finance payments under the TRA if our cash resources are insufficient to meet our obligations under the TRA as a result of timing discrepancies or otherwise.

The actual increase in tax basis (and our ability to achieve the corresponding tax benefits), as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including the timing of exchanges, the price of a share of our Class A common stock at the time of the exchange, the extent to which such changes are taxable and the amount and timing of our income.

In certain circumstances, payments to the TRA Recipients under the TRA could be in excess of our cash tax savings.

If the IRS were to challenge a tax basis increase (or the ability to amortize such increase), the TRA Recipients will not reimburse us for any payments previously made to them under the TRA.

In addition, the TRA provides that, upon a change of control, or if, at any time, we elect an early termination of the TRA, our obligations under the TRA with respect to exchanged or acquired shares of our Class A common stock (whether exchanged or acquired before or after such change of control) would be based on certain assumptions, including that we would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the TRA and, in the case of an early termination election, that any AOG Units that have not been exchanged are deemed exchanged for the market value of shares of our Class A common stock at the time of termination.

Assuming that the market value of a share of our Class A common stock were to be equal to $118.92, which is the closing price per share of our Class A common stock as of December 31, 2023, and that SOFR were to be 5.38% and a blended federal and state corporate tax rate of 24.0%, we estimate that the aggregate amount of these termination payments would be approximately $1.7 billion on the 117 million AOG Units that have not been exchanged for Class A common stock.

The foregoing amount is merely an estimate and the actual payments could differ materially.

Tax consequences to the direct and indirect holders of AOG Units or to general partners in our funds may give rise to conflicts of interests.

As a result of the tax gain inherent in our assets held by the Ares Operating Group, upon a realization event, certain direct and indirect holders of AOG Units may incur different and potentially significantly greater tax liabilities as a result of the disproportionately greater allocations of items of taxable income and gain to such holders.

As these direct and indirect holders will not receive a correspondingly greater distribution of cash proceeds, they may, subject to applicable fiduciary or contractual duties, have different objectives regarding the appropriate pricing, timing and other material terms of any sale, refinancing, or disposition, or whether to sell such assets at all.

Decisions made with respect to an acceleration or deferral of income or the sale or disposition of assets with unrealized built-in tax gains may also influence the timing and amount of payments that are received by the TRA Recipients (including, among others, the Holdco Members and other executive officers) under the TRA.

In general, we anticipate that disposition of assets with unrealized built-in tax gains following an exchange will tend to accelerate such payments and increase the present value of payments under the TRA, and disposition of assets with unrealized built-in tax gains in a tax year before an exchange generally will increase an exchanging holder’s tax liability without giving rise to any rights to any payments under the TRA.

Decisions made regarding a change of control also could have a material influence on the timing and amount of payments received by the TRA Recipients pursuant to the TRA.

Moreover, we may receive carried interest or incentive fees from our funds if specified returns are achieved by those funds.

In certain circumstances, we may prefer to structure the fees as a special allocation of income, which we refer to as a carried interest, rather than as an incentive fee.

The general partner of our funds may be entitled to receive carried interest from our funds and a significant portion of that carried interest may consist of long-term capital gains.

corporation, we will not receive preferential treatment for long-term capital gains and we may be limited in deducting capital losses.

As a result, the general partners of our funds may

have interests that are not entirely aligned with our stockholders and thus, subject to their fiduciary duties to fund investors, may be incentivized to seek investment opportunities that maximize favorable tax treatment to the general partners.

Risks Related to Shares of Our Common Stock

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The market price of shares of our Class A common stock may fluctuate or decline significantly in the future.

Some of the factors that could negatively affect the price of shares of our Class A common stock or result in fluctuations in the price or trading volume of shares of our Class A common stock include:

• variations in our quarterly operating results or dividends, which variations we expect will be substantial;

• our policy of taking a long-term perspective on making investment, operational and strategic decisions, which is expected to result in significant and unpredictable variations in our quarterly returns;

• our creditworthiness, results of operations and financial condition;

• the prevailing interest rates or rates of return being paid by other companies similar to us and the market for similar securities;

• failure to meet analysts’ earnings estimates;

• publication of research reports about us or the investment management industry or the failure of securities analysts to cover shares of our Class A common stock;

• additions or departures of our senior professionals and other key management personnel;

• adverse market reaction to any indebtedness we may incur or securities we may issue in the future;

• changes in market valuations of similar companies;

• speculation in the press or investment community;

• changes or proposed changes in laws or regulations or differing interpretations thereof affecting our businesses or enforcement of these laws and regulations, or announcements relating to these matters;

• a lack of liquidity in the trading of shares of our Class A common stock;

• announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments;

• adverse publicity about the asset management industry generally or, more specifically, private equity fund practices or individual scandals;

• general market and economic, financial, geopolitical, regulatory or judicial events or conditions that affect us or the financial markets.

In the past few years, stock markets have experienced extreme price and volume fluctuations.

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The market price of shares of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock in the market and non-voting common stock, to the extent that sales happen in the future or the perception that such sales could occur, including pursuant to Rule 10b5-1 trading plans.

These sales, or the possibility that these

sales may occur, also might make it more difficult for us to sell shares of our Class A common stock in the future at a time and at a price that we deem appropriate.

These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell shares of our Class A common stock in the future at a time and at a price that we deem appropriate.

We may freely issue and sell in the future additional shares of our Class A common stock.

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Ares Owners Holdings L.P.

has the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of Class A common stock delivered in exchange for AOG Units or shares of Class A common stock of AMC otherwise held by them.

common stock of AMC otherwise held by them.

In addition, we may be required to make available shelf registration statements permitting sales of shares of our Class A common stock into the market from time to time over an extended period.

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will have the ability to exercise certain piggyback registration rights in respect of shares of our Class A common stock held by them in connection with registered offerings requested by other registration rights holders or initiated by us.

As of December 31, 2023, there were options outstanding to purchase 79,524 shares of our Class A common stock and 17,359,829 restricted units outstanding to be settled in shares of our Class A common stock, both of which are subject to specified vesting requirements, and were granted to certain of our senior professionals under the 2023 Ares Management Corporation Equity Incentive Plan (the “Equity Incentive Plan”).

As of December 31, 2024, there were 17,968,940 restricted units outstanding to be settled in shares of our Class A common stock, which are subject to specified vesting requirements, and were granted to certain of our senior professionals under the 2023 Ares Management Corporation Equity Incentive Plan (the “Equity Incentive Plan”).

As of December 31, 2024, 62,634,307 shares of our Class A common stock were available to be issued under the Equity Incentive Plan.

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Risks Related to Taxation

We are a corporation, and applicable taxes will reduce the amount available for dividends to holders of our Class A and non-voting common stock in respect of such investments and could adversely affect the value of our Class A and non-voting common stockholders’ investment.

Because we are taxed as a corporation for U.S.

federal income tax purposes, we could be liable for entity-level U.S.

federal income taxes and applicable state and local income taxes that would not otherwise be incurred if we were treated as a partnership for U.S.

federal income tax purposes, which could reduce the amount of cash available for dividends to holders of our Class A and non-voting common stock and adversely affect the value of their investment.

Our effective tax rate and tax liability is based on the application of current income tax laws, regulations and treaties.

These laws, regulations and treaties are complex, and the manner in which they apply to us and our funds is sometimes open to interpretation.

For an overview of certain relevant U.S.

tax laws and relevant foreign tax laws, see “—Applicable U.S.

and foreign tax law, regulations, or treaties, and changes in such tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely affect our effective tax rate, tax liability, financial condition and results, ability to raise funds from certain foreign investors, increase our compliance or withholding tax costs and conflict with our contractual obligations.” The introduction of additional tax regimes both globally and domestically, the implementation of which are uncertain, require significant judgment and will depend on the facts and circumstances of each year.

These regimes may not be compatible with one another and may cause adverse tax consequences.

Applicable U.S.

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117-169) (the “IRA”) was signed into law.

The IRA introduces a 15% minimum tax for corporations whose average annual adjusted financial statement income for any consecutive

three-tax-year period preceding the tax year exceeds $1 billion and a 1% excise tax on the fair market value of stock repurchased by certain corporations after December 31, 2022.

We do not currently expect that the IRA will have a material impact on our income tax liability for 2024.

The impact on taxable years thereafter will depend on the facts and circumstances of such years.

The IRA introduced a 15% minimum tax (“CAMT”) for corporations whose average annual adjusted financial statement income for any consecutive three-tax-year period preceding the tax year exceeds $1 billion and a 1% excise tax on the fair market value of stock repurchased by certain corporations after December 31, 2022.

The IRA has not had a material impact on our income tax liability for 2024, but if we were to reach the applicable financial statement income thresholds, the CAMT rules could increase

tax compliance complexity and result in additional administrative costs and income tax liabilities.

The potential impact of CAMT on future taxable years, including as early as the 2026 taxable year, will depend on the facts and circumstances of such years.

Under Sections 1471 to 1474 of the Code (such Sections, along with the Treasury Regulations promulgated thereunder, “FATCA”), a broadly defined class of foreign financial institutions are required to comply with a U.S.

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Regulations”)).

intends to transition from and replace the U.K.

Regulations (as amended) with the OECD MDR during the first half of 2023.

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 accounts of each other’s residents.

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.

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.

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.

accounts of each other’s residents.

Investors in our funds will be required:

(i) to consent to the taking of any action in connection with FATCA, the CRS, the DAC (including DAC 6), the OECD MDR and/or any local law relating to, implementing or having similar effect to any of these regimes, including the disclosure of information to tax authorities which may in turn be exchanged between other tax authorities;

and (ii) to agree to provide the AIFM and/or the general partner with the information they require to comply with FATCA, the CRS, the DAC (including DAC 6), the OECD MDR and/or any local law relating to, implementing or having similar effect to any of

these regimes in any relevant jurisdiction.

The breadth of the disclosure requirements under such tax reporting regimes will likely create costs and administrative burdens and penalties and withholding taxes could be imposed for non-compliance.

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or (iv) an increased risk of activity undertaken in a jurisdiction constituting a permanent establishment of our funds and/or any of their subsidiaries.

Many of the jurisdictions in which our funds will make investments have now ratified, accepted and approved the OECD’s draft Multilateral Instrument (“MLI”) which brings into force a number relevant changes to double tax treaties within scope.

Many of the jurisdictions in which our funds will make investments have now ratified, accepted and approved the OECD’s draft Multilateral Instrument (“MLI”) which brings into force a number of relevant changes to double tax treaties within scope.

The MLI is intended to facilitate the speedy introduction by participating states of double tax treaty-related BEPS recommendations.

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However, if, the jurisdiction of the payee does not deny the deduction, the secondary rule would oblige the jurisdiction of the payor to deny the deduction at the level of the payor.

If ATAD II anti-hybrid rules apply, they can act to deny (to a greater or lesser extent) deductibility in Luxembourg corporate entities of interest/expenses.

If ATAD II anti-hybrid rules apply, they can act to deny (to a greater or lesser extent) deductibility in Luxembourg to corporate entities of interest/expenses or bring otherwise transparent vehicles within the charge to Luxembourg corporate tax.

However, these anti-hybrid rules only apply to arrangements:

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As a consequence of this rebuttable presumption, any investor holding less than 10% in an investment fund should not be regarded as an “associated enterprise” of the fund and of any underlying Luxembourg entities.

Any investor holding more than 10% will only be regarded as an “associated enterprise” if it meets the requisite threshold in its own right, or it can be demonstrated that it is acting together with other investors, which would cause it to be deemed to reach the requisite threshold.

Our funds have sought their own tax advice in relation to these proposed new rules and their potential impact on future investments.

to be deemed to reach the requisite threshold.

Our funds have sought their own tax advice in relation to these rules and their potential impact on our funds and their future investments.

The impacts of ATAD II on interest and other finance costs in the context of European investments are jurisdiction specific and will be examined on an investment-by-investment basis.

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The GloBE Rules must be implemented through domestic legislation, and on December 20, 2021 the OECD released Pillar Two model rules providing a template for this purpose.

Many jurisdictions have begun that process, including EU member states pursuant to the EU minimum tax directive and the U.K., with a view to the IIR and the UTPR taking effect for fiscal years beginning on or after December 31, 2023 and December 31, 2024, respectively.

Many jurisdictions enacted legislation, including most EU member states pursuant to the EU minimum tax directive and the U.K., with a view to the IIR and the UTPR taking effect for fiscal years beginning on or after December 31, 2023 and December 31, 2024, respectively.

Amount A of Pillar One will be implemented through a multilateral convention and the STTR will be implemented, where applicable, either through modifications to bilateral tax treaties or alternatively through a multilateral instrument.

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The extent to which this regime may be applicable or beneficial to and/or utilized by our funds (or their subsidiaries) remains under consideration.

stockholders are subject to additional tax on “ net investment income.

stockholders that are individuals, estates or trusts are subject to a surtax of 3.8% on “net investment income” (or undistributed “net investment income,” in the case of estates and trusts) for each taxable year, with such tax applying to the lesser of such income or the excess of such person’s adjusted gross income (with certain adjustments) over a specified amount.

Net investment income includes earnings from dividends and net gain attributable to the disposition of investment property.

anticipated that dividends and net gain attributable to an investment in shares of our Class A common stock will be included in a U.S.

holder’s “net investment income” subject to this surtax.

We will be required to pay the TRA Recipients for most of the benefits relating to our use of attributes we receive from prior and future exchanges of AOG Units and related transactions.

In certain circumstances, payments to the TRA Recipients may be accelerated and/or could significantly exceed the actual tax benefits we realize.

A holder of AOG Units must exchange one AOG Unit in the Ares Operating Group entity to effect an exchange for a share of Class A common stock of AMC.