Ares Management Corp 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations AMC is a Delaware corporation. Unless the context otherwise requires, references to “Ares,” “we,” “us,” “our,” and the “Company” are intended to mean the business and operations of AMC and its consolidated subsidiaries. The following discussion analyzes the financial condition and results of operations of the Company. “Consolidated Funds” refers collectively to certain Ares funds, co-investment vehicles, CLOs and SPACs that are required under generally accepted accounting principles in the United States (“GAAP”) to be consolidated within our consolidated financial statements included in this Annual Report on Form 10-K. Additional terms used by the Company are defined in the Glossary and throughout the Management’s Discussion and Analysis in this Annual Report on Form 10-K. The following discussion and analysis should be read in conjunction with the consolidated financial statements of AMC and the related notes included in this Annual Report on Form 10-K. This section of the Annual Report on Form 10-K discusses activity as of and for the years ended December 31, 2024 and 2023. For discussion on activity for the year ended December 31, 2022 and period-over-period analysis on results for the year ended December 31, 2023 to 2022, refer to Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023. We have reclassified certain prior period amounts to conform to the current year presentation. Amounts and percentages presented throughout our discussion and analysis of financial condition and results of operations may reflect rounded results in thousands (unless otherwise indicated) and consequently, totals may not appear to sum. In addition, illustrative charts may not be presented at scale. “NM” refers to not meaningful. Period-over-period analysis for current year compared to prior year may be deemed to be not meaningful and are designated as “NM” within the discussion and analysis of financial condition and results of operations. Trends Affecting Our Business We believe that our disciplined investment philosophy across our distinct but complementary investment groups contributes to the stability of our performance throughout market cycles. For the year ended December 31, 2024, 95% of our management fees were derived from perpetual capital vehicles or long-dated funds. Our funds have a stable base of committed capital enabling us to invest in assets with a long-term focus over different points in a market cycle and to take advantage of market volatility. However, our results from operations, including the fair value of our AUM, are affected by a variety of factors. Conditions in the global financial markets and economic and political environments may impact our business, particularly in the U.S., Europe and APAC. The following table presents returns of selected market indices: Returns (%) Type of Index Name of Index Region Year ended December 31, 2024 Year ended December 31, 2023 High yield bonds ICE BAML High Yield Master II Index U.S. 8.2 13.5 High yield bonds ICE BAML European Currency High Yield Index Europe 8.7 12.2 Leveraged loans Credit Suisse Leveraged Loan Index (“CSLLI”) U.S. 9.1 13.0 Leveraged loans Credit Suisse Western European Leveraged Loan Index Europe 8.5 12.5 Equities S&P 500 Index U.S. 25.0 26.3 Equities MSCI All Country World Ex-U.S. Index Non-U.S. 5.5 15.6 Infrastructure equities S&P Global Infrastructure Index Global 6.8 15.1 Real estate equities FTSE NAREIT All Equity REITs Index U.S. 0.9 11.4 Real estate equities FTSE EPRA/NAREIT Developed Europe Index Europe (6.5) 17.4 During 2024, global markets were fueled by the easing of monetary policy by the Federal Reserve and several other major central banks with predominately positive returns despite seeing mixed performances towards the end of the year. U.S. and European high yield bonds and leveraged loans showed positive performance driven by stable demand and improved access to capital markets. The APAC markets experienced favorable performance, with growth driven by moderate inflation, lower unemployment and lower interest rate expectations, which supported consumption in Southeast Asia, India, and Australia. China announced policy stimulus measures affecting monetary policy, the property sector and equity markets, contributing to positive investor sentiment. Globally, reduced bank lending and limited capital accessibility continued to support private credit growth. 101 Table of Contents The private equity industry benefited from lower interest rates, cooling inflation and tighter credit spreads, leading to a meaningful increase in the private equity deal value in the U.S. Despite challenges such as inflation and potential tariffs, market sentiment remains optimistic due to lower taxes, favorable regulations and technology advancements. We believe that demand for strong performance, combined with a favorable deal-making environment, will support deployment opportunities in 2025. The U.S. and European commercial real estate markets experienced increased deal activity on a year over year basis that was largely supported by the improving macroeconomic environment. Property valuations are showing signs of recovery, and capitalization rates are stabilizing or compressing. The European real estate markets are showing slower signs of recovery, with the volatility in interest rates having a greater impact on performance during the year. Despite variations in market performance by sector and geography, we believe multifamily and industrial properties will benefit from favorable long-term structural trends. Infrastructure investment opportunities continue to be supported by the convergence of two megatrends – digital infrastructure and artificial intelligence adoption – paired with surging power demand expectations. Renewable energy transaction volume remained strong, which has supported elevated renewable energy revenue contract prices. We believe our portfolios across all strategies are well positioned for a fluctuating interest rate environment. On a market value basis, approximately 85% of our debt assets and 57% of our total assets were floating rate instruments as of December 31, 2024. In 2024, some of the considerations pertaining to our strategic decisions included: • Our ability to fundraise and increase AUM and fee paying AUM. During the year ended December 31, 2024, we raised $92.7 billion of gross new capital across our commingled funds, SMAs, wealth products and other vehicles, and continued to expand our investor base, raising capital from over 185 different investment vehicles and over 660 institutional investors, including over 310 direct institutional investors that were new to Ares. Our fundraising efforts helped drive AUM growth of 16% for 2024. During 2025, we expect that our fundraising will come from a combination of our existing and new strategies in North America, Europe and APAC. As of December 31, 2024, AUM not yet paying fees includes $81.0 billion of AUM available for future deployment which could generate approximately $728.8 million in potential incremental annual management fees. Our potential future deployment, coupled with our future fundraising prospects, gives us the opportunity to increase our management fees in 2025. • Our ability to attract new capital and investors with our broad multi-asset class product offering. Our ability to attract new capital and investors in our funds is driven, in part, by the extent to which they continue to see the alternative asset management industry generally, and our investment products specifically, as an attractive vehicle for capital appreciation and income generation. We continually seek to create avenues to meet our investors’ evolving needs by offering an expansive range of funds, developing new products and creating managed accounts and other investment vehicles tailored to our investors’ goals. We continue to expand our distribution channels throughout the wealth channel with our global wealth management offerings, as well as the needs of traditional institutional investors, such as pension funds, sovereign wealth funds and endowments. If market volatility persists or increases, investors may seek absolute return strategies that seek to mitigate volatility. We offer a variety of investment strategies depending upon investors’ risk tolerance and expected returns. • Our disciplined investment approach and successful deployment of capital. Our ability to maintain and grow our revenue base is dependent upon our ability to successfully deploy the capital that our investors have committed to our funds. Greater competition, high valuations, cost of credit and other general market conditions have affected and may continue to affect our ability to identify and execute attractive investments. Under our disciplined investment approach, we deploy capital only when we have sourced a suitable investment opportunity at an attractive price. During the year ended December 31, 2024, we deployed $106.7 billion of gross capital across our investment groups compared to $68.1 billion deployed in 2023. We believe we continue to be well-positioned to invest our assets opportunistically. As of December 31, 2024, we had $133.1 billion of capital available for investment compared to $111.4 billion as of December 31, 2023. • Our ability to invest capital and generate returns through market cycles. The strength of our investment performance affects investors’ willingness to commit capital to our funds. The flexibility of the capital we are able to attract is one of the main drivers of the growth of our AUM and the management fees we earn. Current market conditions and a changing regulatory environment have created opportunities for Ares’ businesses, which utilize flexible investment mandates to manage portfolios through market cycles. See “Item 1. Business—Overview” for a comprehensive overview of our business, and “Item 1A. Risk Factors” for a discussion of the risks our businesses are subject to, both included in this Annual Report on Form 10-K. 102 Table of Contents Managing Business Performance Operating Metrics We measure our business performance using certain operating metrics that are common to the alternative investment management industry and are discussed below. Assets Under Management AUM refers to the assets we manage and is viewed as a metric to measure our investment and fundraising performance as it reflects assets generally at fair value plus available uncalled capital. The tables below present rollforwards of our total AUM by segment ($ in millions): Credit Group Real Assets Group Private Equity Group Secondaries Group Other Businesses Total AUM Balance at 12/31/2023 $ 299,350 $ 65,413 $ 24,551 $ 24,760 $ 4,772 $ 418,846 Acquisitions 362 2,488 — — 71 2,921 Net new par/equity commitments 39,343 7,367 519 4,453 6,442 58,124 Net new debt commitments 29,268 4,049 — 625 — 33,942 Capital reductions (10,546) (1,086) (4) — — (11,636) Distributions (16,864) (3,475) (704) (880) (817) (22,740) Redemptions (5,252) (1,093) (2) — — (6,347) Net allocations among investment strategies 2,828 20 (47) 25 (2,826) — Change in fund value 10,369 1,615 (272) 170 (546) 11,336 Balance at 12/31/2024 $ 348,858 $ 75,298 $ 24,041 $ 29,153 $ 7,096 $ 484,446 Credit Group Real Assets Group Private Equity Group Secondaries Group Other Businesses Total AUM Balance at 12/31/2022 $ 239,299 $ 66,061 $ 21,029 $ 21,961 $ 3,647 $ 351,997 Acquisitions — — 3,697 — — 3,697 Net new par/equity commitments 40,393 6,076 1,621 3,648 7,008 58,746 Net new debt commitments 14,897 726 — — — 15,623 Capital reductions (3,858) (480) (9) — — (4,347) Distributions (7,684) (4,796) (1,810) (1,116) (423) (15,829) Redemptions (3,345) (1,759) — (1) (1,046) (6,151) Net allocations among investment strategies 4,258 — — 5 (4,263) — Change in fund value 15,390 (415) 23 263 (151) 15,110 Balance at 12/31/2023 $ 299,350 $ 65,413 $ 24,551 $ 24,760 $ 4,772 $ 418,846 The components of our AUM are presented below ($ in billions): AUM: $484.4 AUM: $418.8 FPAUM Non-fee paying (1) AUM not yet paying fees (1) Includes $14.4 billion and $15.1 billion of AUM of funds from which we indirectly earn management fees as of December 31, 2024 and 2023, respectively, and includes $4.7 billion and $4.3 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2024 and 2023, respectively. Please refer to “— Results of Operations by Segment” for a more detailed presentation of AUM by segment for each of the periods presented. 103 Table of Contents Fee Paying Assets Under Management FPAUM refers to AUM from which we directly earn management fees and is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees. The tables below present rollforwards of our total FPAUM by segment ($ in millions): Credit Group Real Assets Group Private Equity Group Secondaries Group Other Businesses Total Balance at 12/31/2023 $ 185,280 $ 41,338 $ 13,124 $ 19,040 $ 3,575 $ 262,357 Acquisitions 244 1,554 — — 55 1,853 Commitments 19,326 3,440 — 2,793 5,745 31,304 Deployment/subscriptions/increase in leverage 29,479 3,180 47 395 174 33,275 Capital reductions (11,972) (12) — — — (11,984) Distributions (14,843) (2,157) (54) (505) (817) (18,376) Redemptions (5,252) (1,093) (2) — — (6,347) Net allocations among investment strategies 3,453 20 — — (3,473) — Change in fund value 2,144 (156) (21) 41 234 2,242 Change in fee basis 1,286 (2,026) (1,667) 637 (1) (1,771) Balance at 12/31/2024 $ 209,145 $ 44,088 $ 11,427 $ 22,401 $ 5,492 $ 292,553 Credit Group Real Assets Group Private Equity Group Secondaries Group Other Businesses Total Balance at 12/31/2022 $ 158,441 $ 41,607 $ 11,281 $ 17,668 $ 2,064 $ 231,061 Acquisitions — — 1,692 — — 1,692 Commitments 8,333 3,674 — 1,645 6,181 19,833 Deployment/subscriptions/increase in leverage 26,219 2,968 234 473 150 30,044 Capital reductions (3,657) (455) — — — (4,112) Distributions (9,121) (3,862) (38) (613) (415) (14,049) Redemptions (4,474) (1,775) — (1) — (6,250) Net allocations among investment strategies 4,363 — — 30 (4,393) — Change in fund value 5,176 (917) — (164) 317 4,412 Change in fee basis — 98 (45) 2 (329) (274) Balance at 12/31/2023 $ 185,280 $ 41,338 $ 13,124 $ 19,040 $ 3,575 $ 262,357 The charts below present FPAUM by its fee bases ($ in billions): FPAUM: $292.6 FPAUM: $262.4 Invested capital/other (1) Market value /reported value (2) Collateral balances (at par) Capital commitments (1) Other consists of ACRE’s FPAUM, which is based on ACRE’s stockholders’ equity. (2) Includes $71.9 billion and $58.8 billion from funds that primarily invest in illiquid strategies as of December 31, 2024 and 2023, respectively. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. Please refer to “— Results of Operations by Segment” for detailed information by segment of the activity affecting total FPAUM for each of the periods presented. 104 Table of Contents Perpetual Capital Assets Under Management The chart below presents our perpetual capital AUM by segment and type ($ in billions): Management Fees By Type We view the duration of funds we manage as a metric to measure the stability of our future management fees. For both the years ended December 31, 2024 and 2023, 95% of management fees were earned from perpetual capital or long-dated funds. The charts below present the composition of our segment management fees by the initial fund duration: Perpetual Capital - Publicly-Traded Vehicles Perpetual Capital - Perpetual Wealth Vehicles Perpetual Capital - Managed Accounts Perpetual Capital - Private Commingled Vehicles Long-Dated Funds (1) Other (1) Long-dated funds generally have a contractual life of five years or more at inception. 105 Table of Contents Available Capital and Assets Under Management Not Yet Paying Fees The charts below present our available capital and AUM not yet paying fees by segment ($ in billions): Credit Real Assets Private Equity Secondaries Other Businesses As of December 31, 2024, AUM Not Yet Paying Fees includes $81.0 billion of AUM available for future deployment that could generate approximately $728.8 million in potential incremental annual management fees, which represents 29% embedded gross base management fee growth upon deployment. As of December 31, 2023, AUM Not Yet Paying Fees included $62.9 billion of AUM available for future deployment that could generate approximately $621.6 million in potential incremental annual management fees. Incentive Eligible Assets Under Management and Incentive Generating Assets Under Management The charts below present our IEAUM and IGAUM by segment ($ in billions): Credit Real Assets Private Equity Secondaries Other Businesses 106 Table of Contents The charts below present our IGAUM by strategy for funds generating fee related performance revenues and net fee related performance revenues by strategy as of and for the years ended: U.S. Direct Lending European Direct Lending Alternative Credit Private Equity Secondaries North American Real Estate Equity Real Estate Debt (1) Fee related performance revenues by strategy is presented net of the associated fee related performance compensation. Fund Performance Metrics Fund performance information for our funds considered to be “significant funds” is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented. Our significant funds are commingled funds that either contributed at least 1% of our total management fees or comprised at least 1% of our total FPAUM for each of the last two consecutive quarters. In addition to management fees, each of our significant funds may generate carried interest or incentive fees upon the achievement of performance hurdles. The fund performance information reflected in this discussion and analysis is not indicative of our overall performance. An investment in Ares is not an investment in any of our funds. Past performance is not indicative of future results. As with any investment, there is always the potential for gains as well as the possibility of losses. There can be no assurance that any of these funds or our other existing and future funds will achieve similar returns. Fund performance metrics for significant funds may be marked as “NM” as they may not be considered meaningful due to the limited time since the initial investment and/or early stage of capital deployment. To further facilitate an understanding of the impact a significant fund may have on our results, we present our drawdown funds as either harvesting investments or deploying capital to indicate the fund’s stage in its life cycle. A fund harvesting investments is past its investment period and opportunistically seeking to monetize investments, while a fund deploying capital is generally seeking new investment opportunities. 107 Table of Contents Components of Consolidated Results of Operations Revenues Management Fees. The investment adviser of our funds generally receives an annual management fee based on a percentage of the fund’s capital commitments, contributed capital, net asset value or invested capital during the investment period, which may then change at the end of the investment period. For certain of our SMAs, we receive an annual management fee based on a percentage of invested capital, contributed capital or net asset value throughout the term of the SMA. We also may receive special fees, including agency and arrangement fees. In certain circumstances, we are contractually required to offset certain amounts of such special fees against management fees relating to the applicable fund. The investment adviser of each of our CLOs typically receives annual management fees based on the gross aggregate collateral balance for CLOs, at par, adjusted for cash and defaulted or discounted collateral. The management fees of CLOs accounted for approximately 2% of our total management fees on a consolidated basis and 4% on an unconsolidated basis for the year ended December 31, 2024. The management fees we receive from our drawdown style funds are typically payable on a quarterly basis over the life of the fund and do not fluctuate with the changes in investment performance of the fund. The investment management agreements we enter into with clients in connection with contractual SMAs may generally be terminated by such clients with reasonably short prior written notice. Typically, terminations do not require liquidation of the SMAs and such SMAs will continue to exist until the underlying investments are liquidated. The management fees we receive from our SMAs are generally paid on a periodic basis (typically quarterly, subject to the termination rights described above) and are based on either invested capital or on the net asset value of the SMA. The investment advisory and management agreements of our publicly-traded and perpetual wealth vehicles must be reviewed or approved annually by their independent boards of directors. 108 Table of Contents Details regarding our management fees from our publicly-traded and perpetual wealth vehicles are presented below: Vehicle Strategy Annual Fee Rate Fee Base Credit Group ARCC (1) U.S. Direct Lending 1.50% Total assets (other than cash and cash equivalents) ARCC Part I Fees U.S. Direct Lending 20.00% Net investment income (before ARCC Part I Fees and ARCC Part II Fees), subject to a fixed hurdle rate of 1.75% per quarter, or 7.00% per annum. No fees are recognized until net investment income exceeds a 1.75% hurdle rate, with a catch-up provision to ensure that we receive 20.00% of the net investment income from the first dollar earned ARDC Liquid Credit 1.00% Total assets minus liabilities (other than liabilities relating to indebtedness) ASIF U.S. Direct Lending 1.25% NAV ASIF Part I Fees U.S. Direct Lending 12.50% Net investment income (before ASIF Part I Fees and ASIF Part II Fees), subject to a fixed hurdle rate of 1.25% per quarter, or 5.00% per annum. No fees are recognized until net investment income exceeds a 1.25% hurdle rate, with a catch-up provision to ensure that we receive 12.50% of the net investment income from the first dollar earned CADC U.S. Direct Lending 1.25% Total assets minus liabilities (other than liabilities relating to indebtedness) CADC Part I Fees U.S. Direct Lending 15.00% Net investment income (before CADC Part I Fees), subject to a fixed hurdle rate of 1.50% per quarter, or 6.00% per annum. No fees are recognized until net investment income exceeds the hurdle rate, with a catch-up provision to ensure that we receive 15.00% of the net investment income from the first dollar earned Open-ended European Direct Lending Fund European Direct Lending 1.25% NAV Open-ended European Direct Lending Fund Part I Fees European Direct Lending 12.50% Net investment income (before open-ended European direct lending fund Part I Fees and open-ended European direct lending fund Part II Fees), subject to a fixed hurdle rate of 1.25% per quarter, or 5.00% per annum. No fees are recognized until net investment income exceeds a 1.25% hurdle rate, with a catch-up provision to ensure that we receive 12.50% of the net investment income from the first dollar earned Real Assets Group ACRE Real Estate Debt 1.50% Stockholders’ equity Diversified Non-traded REIT North American Real Estate Equity 1.10% NAV Industrial Non-traded REIT North American Real Estate Equity 1.25% NAV Infrastructure Private BDC Infrastructure Opportunities 1.25% NAV Infrastructure Private BDC Part I Fees Infrastructure Opportunities 12.50% Net investment income (before infrastructure private BDC Part I Fees and infrastructure private BDC Part II Fees), subject to a fixed hurdle rate of 1.25% per quarter, or 5.00% per annum. No fees are recognized until net investment income exceeds a 1.25% hurdle rate, with a catch-up provision to ensure that we receive 12.50% of the net investment income from the first dollar earned Secondaries Group APMF Private Equity Secondaries 1.40% Total assets (including any assets relating to indebtedness or preferred shares that may be issued) minus liabilities (other than liabilities relating to indebtedness) (1) ARCC’s management fee rate is reduced from 1.50% to 1.00% on all assets financed using leverage over 1.0x debt to equity. We are party to contractual expense support agreements with certain perpetual wealth vehicles under which we may advance a portion of certain expenses to support distribution efforts to investors. These expenses are subject to reimbursement from the perpetual wealth vehicles and may result in a corresponding reduction to our Part I Fees until expenses have been recovered. 109 Table of Contents Details regarding our management fees by strategy, excluding publicly-traded and perpetual wealth vehicles described above, are presented below: Strategy Fee Rate Fee Base Average Remaining Contract Term (1) Credit Group Liquid Credit (2) 0.25% - 1.00% Par plus cash or NAV 9.2 years (2) Alternative Credit 0.50% - 1.50% NAV, gross asset value, capital commitments or invested capital 4.1 years Opportunistic Credit (3) 1.50% Invested capital or aggregate cost basis of unrealized portfolio investments 6.8 years U.S. and European Direct Lending (4) 0.75% - 1.50% Invested capital, NAV or total assets (in certain cases, excluding cash and cash equivalents) 4.2 years APAC Credit (5) 1.00% - 2.00% Capital commitments, aggregate cost basis of unrealized portfolio investments or a combination thereof 3.8 years Real Assets Group Real Estate Equity (6) 0.50% - 1.50% Invested capital, NAV, capital commitments or a combination thereof 5.1 years Real Estate Debt 0.50% - 1.00% Invested capital or NAV N/A (7) Infrastructure Opportunities (8) 1.00% - 1.50% Invested capital, capital commitments 5.0 years Infrastructure Debt 1.00% Invested capital 5.2 years Private Equity Group Corporate Private Equity (9) 1.50% Capital commitments 4.9 years APAC Private Equity (10) 1.00% - 2.00% Invested capital, capital commitments or a combination thereof 3.1 years Secondaries Group Private Equity, Real Estate, Infrastructure and Credit Secondaries (11) 0.50% - 1.25% Capital commitments, invested capital, reported value (largely representing NAV of each fund’s underlying limited partnership interests), called capital plus unfunded commitments or reported value plus unfunded commitments 7.1 years Other Businesses Ares Insurance Solutions (12) 0.30% Monthly weighted average market value of the assets N/A (12) (1) Represents the average remaining contract term pursuant to the funds’ governing documents within each strategy, excluding perpetual capital vehicles, as of December 31, 2024. (2) Liquid credit includes the syndicated loan, high yield bond and multi-asset credit strategies. Fee ranges for syndicated loans generally remain unchanged at the close of the re-investment period. In certain cases, CLOs may be called upon demand by subordinated noteholders prior to the management contract term expiration date. The funds in the high yield bond and multi-asset credit strategies are generally open-ended or managed account structures, which typically do not have investment period termination or management contract expiration dates. (3) Fee range represents typical range during the investment period. Management fees for opportunistic credit funds generally step down to between 1.00% to 1.25% of the invested capital or the aggregate cost basis of unrealized portfolio investments following the expiration or termination of the investment period. (4) Following the expiration or termination of the investment period, the fee basis for certain closed-end funds and managed accounts in this strategy generally change either to the aggregate cost or to market value of the portfolio investments. (5) Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested. The funds in this strategy are comprised of closed-end funds, with investment period termination or management contract termination dates. The funds also include co-investment accounts with fees ranging from 0.25% to 1.00%, which generally do not include investment period termination or management contract termination dates. (6) Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested. Following the expiration or termination of the investment period the basis on which management fees are earned for certain closed-end funds, managed accounts and co-investment vehicles in this strategy changes from committed capital to invested capital with no change in the management fee rate. Our diversified non-traded REIT and our industrial non-traded REIT pay management fees based on NAV plus net capital raised and outstanding from our 1031 exchange programs. (7) The funds in this strategy are generally open-ended or managed account structures, which typically do not have investment period termination or management contract expiration dates. (8) Fee range represents typical range during the investment period. Certain funds pay a lower management fee rate on committed capital which increases when such capital is invested. The infrastructure opportunities funds generally step down the fee base to the aggregated adjusted cost of unrealized portfolio investments, while retaining the same fee rate, following the expiration or termination of the investment period. (9) Fee rate represents typical rate during the investment period. Management fees for corporate private equity funds generally step down to 0.75% of the aggregate adjusted cost of unrealized portfolio investments following the earlier to occur of: (i) the expiration or termination of the investment period; and (ii) the activation of a successor fund. (10) Fee rate represents typical rate during the investment period. Management fees for APAC private equity funds generally step down the fee base to the aggregate adjusted cost of unrealized portfolio investments following the expiration or termination of the investment period. The funds also include co-investment vehicles with fee rates of 2.00%, which generally do not include investment period termination or management contract termination dates. (11) Funds in each strategy are comprised of closed-end funds with either investment period termination or management contract termination dates and certain open-end accounts that generally do not have termination dates. (12) Ares Insurance Solutions earns a tiered management fee that starts at 0.30% and steps down to 0.15% of the monthly weighted average market value. Ares Insurance Solutions generally includes open-ended or managed account structures, which typically do not have investment period termination or management contract expiration dates. 110 Table of Contents Incentive Fees. The general partners, managers or similar entities of certain of our funds receive incentive fees, a performance-based fee representing a portion of the investment returns of the applicable fund for a specified measurement period, generally one year, subject to certain net loss carry-forward provisions, high-watermarks and/or preferred returns. These performance-based fees may also be based on a fund’s cumulative net investment returns for the measurement period, in some cases subject to a high-watermark or a preferred return. Incentive fees are realized at the end of a measurement period, typically quarterly or annually. Realized incentive fees are generally higher during the second half of the year, aligning with the measurement period that typically ends at the end of the calendar year. Once realized, such incentive fees are not subject to repayment. Cash from the realizations is typically received in the period subsequent to the measurement period. Incentive fees are composed of both fee related performance revenues, which are earned from perpetual capital vehicles, and those incentive fees earned from funds with stated investment periods. Details regarding our fee related performance revenues from our publicly-traded and perpetual wealth vehicles are presented below: Vehicle Strategy Annual Fee Rate Fee Base Annual Hurdle Rate Real Assets Group ACRE Real Estate Debt 20.0% The difference between ACRE’s core earnings (as defined in ACRE’s management agreement) and its shareholders' return on equity 8.0% Diversified Non-traded REIT and Industrial Non-traded REIT North American Real Estate Equity 12.5% Annual investment returns, subject to certain net loss carry-forward provisions 5.0% Secondaries Group APMF Private Equity Secondaries 12.5% Quarterly investment returns, subject to certain net loss carry-forward provisions N/A We are party to contractual expense limitation agreements with certain perpetual wealth vehicles under which we may advance a portion of certain expenses to reduce the perpetual wealth vehicles’ expense ratios. Such expenses are subject to reimbursement from the perpetual wealth vehicles and may result in a corresponding reduction to our fee related performance revenues until the expenses have been recovered. Details regarding our fee related performance revenues by strategy, excluding publicly-traded and perpetual wealth vehicles described above, are presented below: Strategy Fee Rate Fee Base Annual Hurdle Rate Credit Group Alternative Credit 15.0% Incentive eligible fund’s profits 6.0% U.S. and European Direct Lending 8.0% - 16.0% Incentive eligible fund’s profits 5.0% - 8.0% Details regarding our incentive fees earned from funds with stated investment periods, which are generally based on a fund’s eligible profits, are presented below: Strategy Fee Rate Annual Hurdle Rate Credit Group Liquid Credit 10.0% - 20.0% 3.0% - 12.0% Alternative Credit 12.5% - 20.0% 6.0% - 7.0% U.S. and European Direct Lending (1) 10.0% - 15.0% 5.0% - 8.0% Real Assets Group Real Estate Equity 15.0% - 20.0% 6.0% - 8.0% Infrastructure Opportunities (1) (1) Secondaries Group Private Equity Secondaries 10.0% 8.0% (1) We may receive Part II Fees, which are not paid unless ARCC, ASIF, our open-ended European direct lending fund and our infrastructure private BDC achieve cumulative aggregate realized capital gains (net of cumulative aggregate realized capital losses and aggregate unrealized capital depreciation), subject to certain catch-up provisions. Incentive fees from ARCC represent 20.0% of the cumulative aggregate realized capital gains (net of cumulative aggregate realized losses and aggregate unrealized capital depreciation). For ASIF, our open-ended European direct lending fund, and for our infrastructure private BDC, incentive fees represent 12.5% of the cumulative aggregate realized capital gains (net of cumulative aggregate realized losses and aggregate unrealized capital depreciation). Such fees are presented as incentive fees earned from funds with stated investment periods. 111 Table of Contents Carried Interest Allocation. Carried interest allocation is recognized based on changes in valuation of our funds’ investments that exceed certain preferred returns as set forth in each respective partnership agreement. Carried interest allocation is based on the amount that would be due to us pursuant to the fund partnership agreement at each period end as if the funds were liquidated at such date. Accordingly, the amount recognized as carried interest allocation reflects our share of the fair value gains and losses of the associated funds’ underlying investments measured at their then-current fair values relative to the fair values as of the end of the prior period. Investment returns of one fund are not offset between or among funds. Funds generally follow either an American-style waterfall or a European-style waterfall. For American-style waterfalls, we in our role as general partner are entitled to receive carried interest after a fund investment is realized if the investors in the fund have received distributions in excess of the capital contributed for such investment and all prior realized investments (plus allocable expenses), as well as the preferred return. For European-style waterfalls, we in our role as general partner are entitled to receive carried interest if the investors in the fund have received distributions in an amount equal to all prior capital contributions plus a preferred return. For most funds, the carried interest is subject to a preferred return ranging from 5.0% to 10.0%, after which there is typically a catch-up allocation to the general partner. Generally, if at the termination of a fund (and in some cases at interim points in the life of a fund), the fund has not achieved investment returns that exceed the preferred return threshold or the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the general partner will be obligated to repay an amount equal to the extent the previously distributed carried interest exceeds the amounts to which the general partner is entitled. These repayment obligations may be related to amounts previously distributed to us and our senior professionals and are generally referred to as contingent repayment obligations. Contingent repayment obligations operate with respect to only a given fund’s net investment performance, and carried interest of other funds are not netted for determining this contingent obligation. Although a contingent repayment obligation is several to each person who received a distribution, and not a joint obligation, and our professionals who receive carried interest have guaranteed repayment of such contingent obligation, the governing agreements of our funds generally provide that, if a recipient does not fund his or her respective share, we may have to fund such additional amounts beyond the amount of carried interest we retained, although we generally will retain the right to pursue remedies against those carried interest recipients who fail to fund their obligations. Certain funds may make distributions to their partners to provide them with cash sufficient to pay applicable federal, state and local tax liabilities attributable to the fund’s income that is allocated to them. These distributions are referred to as tax distributions and are not subject to contingent repayment obligations. Tax distributions from European-style waterfall funds generally precede investors in the fund receiving the preferred return. Details regarding our carried interest, which is generally based on a fund’s eligible profits, are presented below: Strategy Fee Rate Annual Hurdle Rate Credit Group Liquid Credit and Alternative Credit 10.0% - 20.0% 6.0% - 8.0% Opportunistic Credit 20.0% 8.0% U.S. and European Direct Lending 10.0% - 20.0% 5.0% - 8.0% APAC Credit 15.0% - 20.0% 6.0% - 8.0% Real Assets Group Real Estate 10.0% - 20.0% 7.0% - 10.0% Infrastructure 15.0% - 20.0% 7.0% - 8.0% Private Equity Group Corporate Private Equity and APAC Private Equity 15.0% - 20.0% 8.0% Secondaries Group Private Equity, Real Estate, Infrastructure and Credit Secondaries 10.0% - 15% 7.0% - 8.0% Other Businesses Ares Insurance Solutions 20.0% 8.0% For detailed discussion of contingencies on carried interest, see “Note 8. Commitments and Contingencies,” within our consolidated financial statements and “Item 1A. Risk Factors—Risks Related to Our Funds—We may need to pay “clawback” or “contingent repayment” obligations if and when they are triggered under the governing agreements with our funds” included in this Annual Report on Form 10-K. 112 Table of Contents Performance Income. Performance income is a term that we use to refer to a sub-set of performance-based fees and only includes incentive fees earned from funds with stated investment periods or carried interest. Principal Investment Income (Loss). Principal investment income (loss) consists of interest and dividend income and net realized and unrealized gains (losses) on equity method investments where we serve as general partner. Interest and dividend income are recognized on an accrual basis to the extent that such amounts are expected to be collected. A realized gain (loss) may be recognized when all or a portion of our investment is returned to us. Unrealized gains (losses) on investments result from appreciation (depreciation) in the fair value of our investments, as well as reversals of previously recorded unrealized appreciation (depreciation) at the time the gain (loss) on an investment becomes realized. Administrative, Transaction and Other Fees. Details regarding our administrative, transaction and other fees are presented below: Administrative fees Represent fees that we earn for providing administrative services to certain funds and may reflect either expense reimbursements for the cost of certain professionals that perform services for a fund or may be based on fixed percentage of a fund’s invested capital Transaction fees Typically represent fees earned from the arrangement and origination of loans and are generated primarily from funds within our direct lending and infrastructure debt strategies. Fees are based on a fixed percentage of original issue discount for our direct lending funds and based on a fixed percentage of loan originations for our infrastructure debt funds Other fees: Capital markets transaction fees represent fees that we earn for participating as an underwriter and/or acting as advisor on capital markets transactions Property-related fees represent fees earned within our real estate equity strategies and include the following: Acquisition fees Based on a percentage of a property’s cost at the time of property acquisition Development fees Based on a percentage of costs to develop a property Property management fees Based on tenancy of properties over the time associated property management services are provided Sale and distribution fees represent fees earned through AWMS for the sale and distribution of fund shares in our perpetual wealth vehicles and include the following: Sales-based fees Based on a percentage of sales or subscriptions to investors in our perpetual wealth vehicles. Sales-based fees are reported net of amounts re-allowed to participating broker-dealers for their ongoing shareholder services Asset-based fees Based on the NAV of applicable funds and asset classes. Asset-based fees are reported net of amounts re-allowed to participating broker-dealers for their ongoing shareholder services Exchange program fees Based on a percentage of the value associated with the properties transacted through our 1031 exchange programs. Exchange program fees are recognized when investors contribute real property through like-kind 1031 exchanges for fund shares and through other private placements. These fees are composed of a program administration fee and a facilitation fee for advisory services and sales-based efforts, respectively Expenses Compensation and Benefits. Compensation generally includes salaries, bonuses, health and welfare benefits, payroll-related taxes, equity compensation, Part I Fee compensation and fee related performance compensation expenses. Compensation and benefits expenses are typically correlated to the operating performance of our segments, which is used to determine incentive-based compensation for each segment. Incentive-based compensation is accrued over the service period to which it relates. Our discretionary incentive-based compensation includes our annual bonus pool, is based on our operating performance and may fluctuate throughout the year until payments are made. The majority of our annual bonus payments are made in the fourth quarter. Certain of our senior partners are not paid an annual salary or bonus, instead they only receive distributions based on their ownership interest when declared by our board of directors. Part I Fee compensation and fee related performance compensation represent approximately 60% of Part I Fees and of fee related performance revenues, respectively, before giving effect to payroll-related taxes. We also reduce certain Part I Fee compensation and fee related performance compensation by a portion of the supplemental distribution fees paid to the extent that Part I Fees and fee related performance revenues are earned from certain perpetual wealth vehicles. We pay sales-based bonuses for the sale and distribution of our wealth products through AWMS, including our exchange programs associated with our non-traded REITs. Incremental changes in fair value of certain contingent liabilities established in connection with our various acquisitions are recognized ratably over the service period and are also presented within compensation and benefits. We use changes in headcount, which represents the full-time equivalency of active employees during each period, to analyze changes in compensation and benefits. Equity compensation represents a form of non-cash compensation that we use to align our employees with the long-term interests of our shareholders. Equity-based awards are typically granted in the form of restricted units or restricted stock (collectively “unvested awards”) that generally vest over a service period between three and five years. We issue equity awards with a long-term focus of limiting the average dilutive impact on our Class A common stockholders to no more than 1.5% annually. Because we withhold shares equal to the fair value of our employee tax withholding liabilities and pay the taxes on their behalf in cash, fewer net shares are issued upon vesting. This result has reduced the average annual dilutive impact of 113 Table of Contents these awards to less than 1.0% annually. We expect the expenses recognized in connection with these awards to fluctuate with changes in the price of our Class A common stock. Performance Related Compensation. Performance related compensation includes compensation directly related to carried interest allocation and incentive fees earned from funds with stated investment periods, generally consisting of percentage interests that we grant to our professionals. Depending on the nature of each fund, the performance related compensation generally represents 60% to 80% of the carried interest allocation and aforementioned incentive fees recognized by us before giving effect to payroll-related taxes. The performance related compensation payable is calculated based upon the recognition of carried interest allocation and is not paid to recipients until the carried interest allocation is received. Performance related compensation may include allocations to charitable organizations as part of our philanthropic initiatives. Although changes in performance related compensation are directly correlated with changes in carried interest allocation and incentive fees reported within our segment results, this correlation does not always exist when our results are reported on a fully consolidated basis in accordance with GAAP. This discrepancy is caused when carried interest allocation and incentive fees earned from our Consolidated Funds is eliminated upon consolidation and performance related compensation is not. General, Administrative and Other Expenses. General and administrative expenses include costs primarily related to occupancy, professional services, travel, information services and information technology costs, marketing costs, depreciation, amortization of intangibles and other general operating items. These expenses are largely influenced by changes in headcount growth, fundraising activities or strategic initiatives/acquisitions. Marketing costs include placement fees and supplemental distribution fees. Placement fees are fundraising costs for campaign funds and include: (i) upfront fees based on commitments to a fund; and (ii) service fees for periodic investor services that are recognized as services are provided. Supplemental distribution fees are fundraising costs associated with wealth products, generally paid to strategic investors and/or financial intermediaries for the distribution of shares and may be upfront on a portion of sales, ongoing as a percentage of net asset value or temporary in the form of a fee concession. We may reduce Part I Fee compensation and fee related performance compensation associated with certain perpetual wealth vehicles by a portion of the supplemental distribution fees paid to the extent that Part I Fees and fee related performance revenues are earned from these vehicles. In such instances, the related compensation will be less than 60%. Expenses of Consolidated Funds. Consolidated Funds’ expenses consist primarily of costs incurred by our Consolidated Funds, including professional services fees, research expenses, trustee fees, travel expenses and other costs associated with organizing and offering these funds. Other Income (Expense) Net Realized and Unrealized Gains (Losses) on Investments. A realized gain (loss) may be recognized when all or a portion of our investment is returned to us. Unrealized gains (losses) on investments result from the change in appreciation (depreciation) in the fair value of our investments. Interest and Dividend Income. Interest and dividend income is primarily generated from investments in CLOs and other strategic investments where we do not serve as general partner. Interest and dividend income are both recognized on an accrual basis to the extent that such amounts are expected to be collected. Interest Expense. Interest expense includes interest related to our Credit Facility, which has a variable interest rate based upon SOFR plus a credit spread that is adjusted with changes to corporate credit ratings and with the achievement of certain ESG-related targets, and to our senior and subordinated notes, each of which have fixed coupon rates. Other Income (Expense), Net. Other income (expense), net consists of (i) non-economic transaction gains (losses) on the revaluation of assets and liabilities denominated in currencies other than an entity’s functional currency; and (ii) other non-operating and non-investment related activities, such as changes in fair value of contingent liabilities, loss on disposal of assets, among other items. Net Realized and Unrealized Gains (Losses) on Investments of Consolidated Funds. Realized gains (losses) may arise from dispositions of investments held by our Consolidated Funds. Unrealized gains (losses) are recorded to reflect the change in appreciation (depreciation) of investments held by the Consolidated Funds due to changes in fair value of the investments. Interest and Other Income of Consolidated Funds. Interest and other income of Consolidated Funds primarily includes interest and dividend income generated from the underlying investments of our Consolidated Funds. 114 Table of Contents Interest Expense of Consolidated Funds. Interest expense primarily consists of interest related to our Consolidated CLOs’ loans payable and, to a lesser extent, revolving credit lines, term loans and notes of other Consolidated Funds. The interest expense of the Consolidated CLOs is solely the responsibility of such CLOs, and there is no recourse to us if the CLO is unable to make interest payments. Income Taxes AMC is a corporation for U.S. federal income tax purposes and is subject to U.S. federal, state and local corporate income taxes at the entity level on its share of net taxable income. In addition, the AOG entities and certain of AMC’s subsidiaries operate in the U.S. as partnerships or disregarded entities for U.S. federal income tax purposes and as corporate entities in certain foreign jurisdictions. These entities, in some cases, are subject to U.S. state or local income taxes or foreign income taxes. Our effective tax rate is the result of AMC’s net taxable income and the applicable U.S. federal, state and local income taxes as well as, in some cases, foreign income taxes. Net taxable income is based on AMC’s ownership of the AOG entities. As such, our effective tax rate will be directly impacted by changes in AMC’s ownership of the AOG entities and changes to statutory rates in the U.S. and other foreign jurisdictions and, to a lesser extent, income taxes that are recorded for certain affiliated funds and co-investment vehicles that are consolidated in our financial results. The majority of our Consolidated Funds are not subject to income tax as the funds’ investors are responsible for reporting their share of income or loss on a pass-through basis. To the extent required by federal, state and foreign income tax laws and regulations, certain funds may incur income tax liabilities. Redeemable and Non-Controlling Interests Net income (loss) attributable to redeemable and non-controlling interests in Consolidated Funds represents the income (loss) attributable to ownership interests that third parties hold in entities that are consolidated within our consolidated financial statements. Net income (loss) attributable to redeemable and non-controlling interests in AOG entities represents results attributable to the owners of AOG Units and other ownership interests that are not held by AMC. In connection with our acquisition of a majority interest in SSG Capital Holdings Limited and its operating subsidiaries (“SSG” and subsequently rebranded as “Ares SSG”) in July 2020, the former owners of SSG retained a 20% ownership interest in a subsidiary of an AOG entity that is reflected as redeemable interest in AOG entities. Net income (loss) attributable to redeemable interest in AOG entities is allocated based on the ownership percentage attributable to the redeemable interest. On March 31, 2023, we acquired a portion of the remaining ownership interest in SSG that was retained by the former owners of SSG (the “SSG Buyout”), and we now own 100% of Ares SSG’s fee-generating business. Following the SSG Buyout, legacy owners of SSG retained an ownership interest in certain non-controlled investments that will continue to be reflected as redeemable interests, and the income generated by these investments will continue to be allocated ratably based on ownership. Net income (loss) attributable to non-controlling interests in AOG entities is generally allocated based on the weighted average daily ownership of the other AOG unitholders, except for income (loss) generated from certain joint venture partnerships. Net income (loss) is allocated to other strategic distribution partners with whom we have established joint ventures based on the respective ownership percentages and based on the activity of certain membership interests. For additional discussion on components of our consolidated results of operations, see “Note 2. Summary of Significant Accounting Policies,” within our consolidated financial statements included in this Annual Report on Form 10-K. 115 Table of Contents Consolidation and Deconsolidation of Ares Funds Consolidated Funds represented approximately 3% of our AUM as of December 31, 2024 and 2% of total revenues for the year ended December 31, 2024. As of December 31, 2024, we consolidated 27 CLOs, ten private funds and one SPAC, and as of December 31, 2023, we consolidated 28 CLOs, ten private funds and one SPAC. The activity of the Consolidated Funds is reflected within the consolidated financial statement line items indicated by reference thereto. The impact of consolidation also typically will decrease management fees, carried interest allocation and incentive fees reported under GAAP to the extent these amounts are eliminated upon consolidation. The assets and liabilities of our Consolidated Funds are held within separate legal entities and, as a result, the liabilities of our Consolidated Funds are typically non-recourse to us. Generally, the consolidation of our Consolidated Funds has a significant gross-up effect on our assets, liabilities and cash flows but has no net effect on the net income attributable to us or our stockholders’ equity, except where accounting for a redemption or liquidation preference requires the reallocation of ownership based on specific terms of a profit sharing agreement. The net economic ownership interests of our Consolidated Funds, to which we have no economic rights, are reflected as redeemable and non-controlling interests in the Consolidated Funds within our consolidated financial statements. Redeemable interest in Consolidated Funds represent the shares issued by our SPACs that are redeemable for cash by the public shareholders in the event that the SPAC does not complete a business combination or tender offer associated with shareholder approval provisions. We generally deconsolidate funds and CLOs when we are no longer deemed to have a controlling interest in the entity. During the year ended December 31, 2024, we deconsolidated one CLO as a result of significant change in ownership. During the year ended December 31, 2023, we deconsolidated one SPAC as a result of liquidation and one private fund as a result of a significant change in ownership. The performance of our Consolidated Funds is not necessarily consistent with, or representative of, the combined performance trends of all of our funds. For the actual impact that consolidation had on our results and further discussion on consolidation and deconsolidation of funds, see “Note 15. Consolidation” within our consolidated financial statements included herein. 116 Table of Contents Results of Operations Consolidated Results of Operations Although the consolidated results presented below include the results of our operations together with those of the Consolidated Funds and other joint ventures, we separate our analysis of those items primarily impacting the Company from those of the Consolidated Funds. The following table presents our summarized consolidated results of operations ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Total revenues $ 3,884,781 $ 3,631,884 $ 252,897 7% Total expenses (2,938,691) (2,797,858) (140,833) (5) Total other income, net 329,262 499,037 (169,775) (34) Less: Income tax expense 164,617 172,971 8,354 5 Net income 1,110,735 1,160,092 (49,357) (4) Less: Net income attributable to non-controlling interests in Consolidated Funds 295,772 274,296 21,476 8 Net income attributable to Ares Operating Group entities 814,963 885,796 (70,833) (8) Less: Net income attributable to redeemable interest in Ares Operating Group entities 103 226 (123) (54) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 351,118 411,244 (60,126) (15) Net income attributable to Ares Management Corporation 463,742 474,326 (10,584) (2) Less: Series B mandatory convertible preferred stock dividends declared 22,781 — 22,781 NM Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 440,961 $ 474,326 (33,365) (7) Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Consolidated Results of Operations of the Company The following discussion sets forth information regarding our consolidated results of operations: Revenues Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Revenues Management fees $ 2,942,126 $ 2,551,150 $ 390,976 15% Carried interest allocation 390,180 618,579 (228,399) (37) Incentive fees 344,157 276,627 67,530 24 Principal investment income 45,424 36,516 8,908 24 Administrative, transaction and other fees 162,894 149,012 13,882 9 Total revenues $ 3,884,781 $ 3,631,884 252,897 7 Management Fees. C apital deployment in direct lending and alternative credit funds within the Credit Group led to a rise in FPAUM, contributing an increase in management fees of $230.6 million for the year ended December 31, 2024 compared to the prior year. Part I Fees increased by $96.3 million for the year ended December 31, 2024 compared to the prior year. The increase in Part I Fees was primarily due to: (i) the increase in pre-incentive fee net investment income generated by ASIF, ARCC and CADC, driven by an increase in the average size of their portfolios; and (ii) the increase in pre-incentive fee net investment income from our open-ended European direct lending fund that began generating Part I Fees after the third quarter of 2023. For detail regarding the fluctuations of management fees within each of our segments, see “—Results of Operations by Segment.” 117 Table of Contents Carried Interest Allocation. The following table sets forth carried interest allocation by segment ($ in millions): Year ended December 31, 2024 2023 Credit funds $ 607.2 $ 742.1 Real Assets funds 105.7 8.5 Private Equity funds (294.4) (118.8) Secondaries funds (28.3) (13.2) Carried interest allocation $ 390.2 $ 618.6 The activity was principally composed of the following: Year ended December 31, 2024 Year ended December 31, 2023 Credit funds • Primarily from five direct lending funds, one opportunistic credit fund and two alternative credit funds with $36.2 billion of IGAUM generating returns in excess of their hurdle rates: ◦ Within our direct lending funds, Ares Capital Europe V, L.P. (“ACE V”), Ares Private Credit Solutions II, L.P. (“PCS II”) and Ares Capital Europe VI, L.P. (“ACE VI”) generated carried interest allocation of $153.2 million, $131.1 million and $54.5 million, respectively, driven by net investment income on an increasing invested capital base. Ares Capital Europe IV, L.P. (“ACE IV”) and Ares Private Credit Solutions, L.P. (“PCS I”) generated carried interest allocation of $57.0 million and $22.9 million, respectively, driven by net investment income during the period ◦ Within our opportunistic credit funds, Ares Special Opportunities Fund II, L.P. (“ASOF II”) generated carried interest allocation of $177.3 million, driven by improved operating performance metrics from portfolio companies that operate in the services and retail industries ◦ Within our alternative credit funds, Pathfinder I and Pathfinder II generated carried interest allocation of $62.6 million and $39.1 million, respectively, driven by market appreciation of certain investments and net investment income during the period • Reversal of unrealized carried interest allocation of $99.8 million and $23.7 million from Ares Special Situations Fund IV, L.P. (“SSF IV”) and Ares Special Opportunities Fund, L.P. (“ASOF I”), respectively, primarily due to the market depreciation of their investments in Savers Value Village, Inc. (“SVV”), driven by its lower stock price and lower operating performance of portfolio companies that primarily operate in the retail, services and healthcare industries • Reversal of unrealized carried interest allocation of $68.9 million from Ares Capital Europe III, L.P. (“ACE III”) due to lower valuations of certain investments • Primarily from six direct lending funds, three opportunistic credit funds and one alternative credit fund with $37.4 billion of IGAUM generating returns in excess of their hurdle rates: ◦ Within our direct lending funds, ACE V, PCS II, Ares Sports Media and Entertainment Finance, L.P. and ACE VI generated carried interest allocation of $181.1 million, $37.6 million, $22.0 million and $16.6 million, respectively, driven by net investment income on an increasing invested capital base. ACE IV and PCS I generated carried interest allocation of $58.4 million and $45.3 million, respectively, primarily driven by net investment income during the period. Our direct lending funds have benefited from rising interest rates on predominately floating-rate loans ◦ Within our opportunistic credit funds, ASOF I and SSF IV generated carried interest allocation of $82.7 million and $79.8 million, respectively, predominately driven by market appreciation and improved operating performance of portfolio companies that operate in the services industry. ASOF II generated carried interest allocation of $80.9 million, driven by improved operating performance of portfolio companies that operate in the healthcare industry ◦ Within our alternative credit funds, Pathfinder I generated carried interest allocation of $66.3 million, driven by market appreciation of certain investments and net investment income during the period Real Assets funds • Ares Infrastructure Debt Fund V, L.P. (“IDF V”) generated carried interest allocation of $63.8 million, driven by net investment income during the period • Ares Climate Infrastructure Partners, L.P. (“ACIP I”) and Ares Energy Investors Fund V, L.P. (“EIF V”) generated carried interest allocation of $44.0 million and $27.7 million, respectively, due to appreciation of certain investments • Reversal of unrealized carried interest allocation of $26.3 million from Ares European Real Estate Fund IV SCSp. (“EF IV”), primarily driven by the lower valuation of a residential property investment • IDF V generated carried interest allocation of $37.9 million, driven by net investment income during the period • ACIP I generated carried interest allocation of $19.0 million due to market appreciation of certain investments • U.S. Real Estate Fund IX, L.P. (“US IX”) generated carried interest allocation of $3.1 million, driven by increasing operating income primarily from industrial and multifamily investments • Reversal of unrealized carried interest allocation of $12.6 million from EF IV, $5.7 million from Ares Real Estate Opportunity Fund III, L.P. (“AREOF III”), $5.5 million from Ares European Real Estate Fund V SCSp. (“EF V”) and $19.1 million from two European real estate equity funds, primarily driven by lower valuations of certain properties, which were impacted by the market environment Private Equity funds • Reversal of unrealized carried interest allocation of $474.9 million from Ares Corporate Opportunities Fund V, L.P. (“ACOF V”) due to the market depreciation of its investment in SVV, driven by its lower stock price • Ares Corporate Opportunities Fund VI, L.P. (“ACOF VI”) generated carried interest allocation of $220.3 million, driven by improved operating performance metrics from portfolio companies that primarily operate in the healthcare, services, industrial and retail industries • ACOF VI generated carried interest allocation of $190.0 million, driven by improved operating performance of portfolio companies that primarily operate in the retail and healthcare industries and market appreciation of an investment in a services company • Reversal of unrealized carried interest allocation of $268.1 million from ACOF V, primarily driven by a lower stock price for SVV, and $35.8 million from Ares Corporate Opportunities Fund IV, L.P. (“ACOF IV”), primarily driven by lower operating performance metrics of a portfolio company that operates in the healthcare industry 118 Table of Contents Year ended December 31, 2024 Year ended December 31, 2023 Secondaries funds • Reversal of unrealized carried interest of $19.8 million from Landmark Real Estate Fund VIII, L.P. (“LREF VIII”), primarily driven by the lower valuation of certain investments with underlying interests in multifamily portfolios • Reversal of unrealized carried interest of $28.9 million from Landmark Equity Partners XVI, L.P. (“LEP XVI”), due to the lower valuation of certain portfolio investments • Our third infrastructure secondaries fund and four private equity secondaries funds collectively generated carried interest allocation of $27.0 million, primarily driven by the appreciation of certain portfolio investments • Depreciation across several investments in LEP XVI led to a reversal of unrealized carried interest Incentive Fees. The following table sets forth incentive fees by segment ($ in millions): Year ended December 31, 2024 2023 Credit funds $ 287.8 $ 248.4 Real Assets funds 27.2 15.4 Secondaries funds 29.2 12.8 Incentive fees $ 344.2 $ 276.6 We earned higher incentive fees for the year ended December 31, 2024 compared to the year ended December 31, 2023 as a result of growth in our IGAUM, primarily driven by deployment of capital within credit funds that are generating returns in excess of their hurdle rates mostly in our U.S. and European direct lending strategies and our alternative credit strategy. For further detail regarding the incentive fees within each of our segments, see discussion of fee related performance revenues and realized net performance income within “—Results of Operations by Segment.” Principal Investment Income. For equity method investments where we serve as general partner, we present the activity of net realized and unrealized gains on investments and realized investment income together with net capital activity. The following tables present the change in fair value of our equity method investments where we serve as general partner ($ in millions): As of December 31, 2023 Activity during the period As of December 31, 2024 Cost Basis Fair Value Net Capital Activity Change in Unrealized Realized Cost Basis Fair Value $ 453.3 $ 535.3 $ (43.8) $ 2.4 $ 43.0 $ 451.4 $ 536.9 The activity for the year ended December 31, 2024 was primarily attributable to: • Principal investment income, primarily due to: (i) realized gains generated from funds within our infrastructure debt, real estate debt and our U.S. and European direct lending strategies; and (ii) interest income from newly admitted investors in an insurance fund • Net capital activity from our investments in credit funds, primarily driven by transfers of capital investments within European direct lending and APAC credit funds to employee co-investment vehicles As of December 31, 2022 Activity during the period As of December 31, 2023 Cost Basis Fair Value Net Capital Activity Change in Unrealized Realized Cost Basis Fair Value $ 480.9 $ 543.6 $ (44.8) $ 2.3 $ 34.2 $ 453.3 $ 535.3 The activity for the year ended December 31, 2023 was primarily attributable to: • Principal investment income from realized gains generated from funds within our infrastructure debt and our U.S. and European direct lending strategies • Net capital activities from our investments in credit and private equity funds, primarily driven by: (i) transfers of capital investments within opportunistic credit, alternative credit and corporate private equity funds to employee co-investment vehicles; partially offset by (ii) investments made within our real estate debt strategy Administrative, Transaction and Other Fees. The increase for the year ended December 31, 2024 compared to the prior year was driven by: (i) higher administrative service fees of $17.8 million primarily from private funds within our Credit Group that are based on invested capital and from our perpetual wealth vehicles; and (ii) higher administrative fees of $5.2 119 Table of Contents million from a commercial finance fund that were previously eliminated when this fund was consolidated into our results until the second quarter of 2023; and (iii) higher property management and development fees of $3.5 million resulting from an increase in property-related activities within certain North American real estate equity funds; partially offset by (iv) lower credit transaction fees of $11.0 million, primarily from the infrastructure debt strategy, which are infrequent in nature and lower loan origination income earned from certain managed accounts within the U.S. direct lending strategy, driven by a lower capacity of investable capital; and (v) lower asset-based, net distribution fees associated with our non-traded REITs of $5.3 million. Expenses Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Expenses Compensation and benefits $ 1,731,747 $ 1,486,698 $ (245,049) (16)% Performance related compensation 449,564 607,522 157,958 26 General, administrative and other expenses 736,501 660,146 (76,355) (12) Expenses of Consolidated Funds 20,879 43,492 22,613 52 Total expenses $ 2,938,691 $ 2,797,858 (140,833) (5) Compensation and Benefits. The increase in compensation and benefits for the year ended December 31, 2024 compared to the prior year reflects the continued growth in salary and benefits for increased staff levels. The most significant expense increases were equity-based compensation, salary expense and Part I Fee compensation. Equity-based compensation expense increased by $96.9 million from the prior year as result of newly issued unvested awards, magnified by our increased stock price. In addition, we accelerated expense for certain awards requiring no future service as retirement provisions have been achieved. These provisions increased expense by $17.4 million and $10.0 million for the years ended December 31, 2024 and 2023, respectively. The increase in compensation and benefits for the year ended December 31, 2024 compared to the prior year was also driven by: (i) an increase in salary expense of $54.2 million primarily attributable to headcount growth to support the expansion of our business; and (ii) higher Part I Fee compensation of $43.1 million. Compensation and benefits for the year ended December 31, 2024 also included: (i) $20.0 million from the performance-based, acquisition-related compensation arrangement established in connection with the acquisition of Crescent Point Capital (“Crescent Point”) (the “Crescent Point Acquisition”) that closed in the fourth quarter of 2023; and (ii) $17.7 million of bonus payments made at the close of the WSM Acquisition. The performance-based, acquisition-related compensation arrangement for the Crescent Point Acquisition contributed $5.0 million of expense for the year ended December 31, 2023. See “Note 8. Commitments and Contingencies” for a further description of the contingent liabilities related to the Crescent Point Acquisition arrangement. Average headcount increased by 11% to 2,971 professionals for the year-to-date period in 2024 from 2,674 professionals in 2023. For detail regarding the fluctuations of compensation and benefits within each of our segments see “—Results of Operations by Segment.” Performance Related Compensation. Changes in performance related compensation are directly associated with the changes in carried interest allocation and incentive fees described above and include associated payroll-related taxes as well as carried interest and incentive fees allocated to charitable organizations as part of our philanthropic initiatives. Performance related compensation generally represents 60% to 80% of carried interest allocation and incentive fees recognized before giving effect to payroll taxes and will vary based on the mix of funds generating carried interest allocation and incentive fees for that period. General, Administrative and Other Expenses. The increase in general, administrative and other expenses for the year ended December 31, 2024 compared to the prior year reflects the continued growth to support staff levels and fundraising activities. The most significant expense increases were marketing costs, acquisition-related costs, occupancy costs, information services costs and information technology costs. Marketing costs, which include placement fees and supplemental distribution fees, increased by $62.8 million for the year ended December 31, 2024 compared to the prior year, to support fundraising for our funds and distribution of shares in our perpetual wealth vehicles. Supplemental distribution fees increased by $37.3 million over the comparative periods as a result of increases in sales volumes and net asset value of our wealth products. We expect that these fees will fluctuate with sales 120 Table of Contents volumes and net asset value as we have expanded the diversity of our wealth products. Placement fees increased by $14.2 million for the year ended December 31, 2024 compared to the prior year primarily due to new commitments to Ares Senior Direct Lending Fund III, L.P. (“SDL III”). Marketing costs associated with fund formation, program sponsorships and investor events increased by $11.3 million for the year ended December 31, 2024 compared to the prior year, including our first firmwide annual general meeting with investors (“AGM”). Acquisition-related costs increased by $45.4 million for the year ended December 31, 2024 compared to the prior year. Acquisition-related costs generally precede a business combination, varying with the size, scale and complexity of the transaction. The majority of the costs incurred in the current year are related to the GCP Acquisition. The GCP Acquisition is expected to close in the first half of 2025. We also incurred costs in the current year for various strategic acquisitions, including the WSM Acquisition which was completed in the fourth quarter of 2024. We expect to continue to incur acquisition-related costs until acquisitions are completed. In addition, occupancy costs, information services and information technology costs collectively increased by $39.7 million for the year ended December 31, 2024 compared to the prior year to support our growing headcount and the expansion of our business, including costs for our new corporate headquarters that we occupied beginning in third quarter of 2024. During the year ended December 31, 2024, we recognized a non-cash impairment charge of $8.9 million to the fair value of management contracts of certain funds primarily within the Credit Group. During the year ended December 31, 2023, we recognized a non-cash impairment charge of $78.7 million, primarily related to the value of client relationships from the acquisition of Landmark Partners, LLC (the “Landmark Acquisition”). Other Income (Expense) Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Other income (expense) Net realized and unrealized gains on investments $ 16,570 $ 77,573 $ (61,003) (79)% Interest and dividend income 43,054 19,276 23,778 123 Interest expense (142,966) (106,276) (36,690) (35) Other income, net 627 4,819 (4,192) (87) Net realized and unrealized gains on investments of Consolidated Funds 313,963 262,700 51,263 20 Interest and other income of Consolidated Funds 933,349 995,545 (62,196) (6) Interest expense of Consolidated Funds (835,335) (754,600) (80,735) (11) Total other income, net $ 329,262 $ 499,037 (169,775) (34) Net Realized and Unrealized Gains on Investments; Interest and Dividend Income. For investments where we do not serve as general partner, we present the activity of net realized and unrealized gains on investments and interest and dividend income together with net capital activity. The following tables present the change in fair value of these investments ($ in millions): As of December 31, 2023 Activity during the period As of December 31, 2024 Cost Basis Fair Value Net Capital Activity Net Realized and Unrealized Gains (Losses) Interest and Dividend Income Other Adjustments Cost Basis Fair Value $ 591.1 $ 675.1 $ (117.8) $ 16.6 $ 43.1 $ (0.7) $ 514.3 $ 616.3 The activity for the year ended December 31, 2024 was primarily attributable to: • Net unrealized gains from the appreciation of our investment in APMF • Interest and dividend income, primarily due to: (i) interest income generated from our investments in CLOs; and (ii) $11.5 million of interest income generated from capital raised in anticipation of the GCP Acquisition, which was temporarily invested in treasury-backed securities. Following the completion of the GCP Acquisition, this portion of interest income will subside • Net capital activity driven by the collection of principal associated with loans that we made within our real estate debt strategy 121 Table of Contents As of December 31, 2022 Activity during the period As of December 31, 2023 Cost Basis Fair Value Net Capital Activity Net Realized and Unrealized Gains (Losses) Interest and Dividend Income Other Adjustments Cost Basis Fair Value $ 291.6 $ 325.3 $ 252.6 $ 77.6 $ 19.3 $ 0.3 $ 591.1 $ 675.1 The activity for the year ended December 31, 2023 was primarily attributable to: • Net gains from our strategic investments in a U.S. energy company, primarily as a result of the increase in value of our various common and preferred equity investments, and unrealized gains on our investments from: (i) APMF; and (ii) certain strategic investments in companies that manage portfolios of non-performing loans and real estate owned properties • Interest and dividend income, primarily due to: (i) interest income generated from our investments in CLOs; and (ii) dividends from our investment in APMF • Net capital activity driven by an investment made in a strategic investment in a Brazilian alternative asset manager and the deployment of capital into an investment within our real estate debt strategy Interest Expense . Interest expense increased for the year ended December 31, 2024 compared to the prior year primarily due to the i ssuance of the 2028 Senior Notes in November 2023 and 2054 Senior Notes in October 2024 that collectively increased interest expense by $37.8 million. The increase in interest expense was partially offset by reductions of: (i) $4.5 million from our Credit Facility due to lower average outstanding balance during the second half of 2024; and (ii) $2.5 million from the repayment of our 2024 Senior Notes in October 2024. We expect interest expense to trend higher in future periods as the issuance of our 2054 Senior Notes is expected to result in greater interest expense than the collective savings resulting from the lower anticipated balances from our Credit Facility and repayment of our 2024 Senior Notes. The activity for the year ended December 31, 2024 also included $5.5 million of one-time interest expense related to a temporary bridge facility that was established in connection with the GCP Acquisition. The facility was not utilized and was terminated in the fourth quarter of 2024. Other Income, Net. The activity for the years ended December 31, 2024 and 2023 included transaction gains (losses) associated with currency fluctuations impacting the revaluation of assets and liabilities denominated in foreign currencies other than an entity’s functional currency. The year ended December 31, 2024 included an insignificant amount of transaction gains associated with currency fluctuations. Transaction losses for the year ended December 31, 2023 were primarily due to the Euro weakening against the British pound. Income Tax Expense Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Income before taxes $ 1,275,352 $ 1,333,063 $ (57,711) (4)% Less: Income tax expense 164,617 172,971 8,354 5 Net income $ 1,110,735 $ 1,160,092 (49,357) (4) The decrease in income tax expense was attributable to lower pre-tax income allocable to AMC for the year ended December 31, 2024 compared to the prior year as the income attributed to redeemable and non-controlling interests is generally passed through to partners and not subject to corporate income taxes. The calculation of income taxes is also sensitive to any changes in weighted average daily ownership. The following table summarizes weighted average daily ownership: Year ended December 31, 2024 2023 AMC common stockholders 63.61 % 60.83 % Non-controlling AOG unitholders 36.39 39.17 The change in ownership compared to the prior year was primarily driven by the issuances of shares of Class A common stock in connection with exchanges of AOG Units, the public offering that closed during the year ended December 31, 2024 (the “Offering”), stock option exercises and vesting of restricted unit awards. 122 Table of Contents Redeemable and Non-Controlling Interests Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Net income $ 1,110,735 $ 1,160,092 $ (49,357) (4)% Less: Net income attributable to non-controlling interests in Consolidated Funds 295,772 274,296 21,476 8 Net income attributable to Ares Operating Group entities 814,963 885,796 (70,833) (8) Less: Net income attributable to redeemable interest in Ares Operating Group entities 103 226 (123) (54) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 351,118 411,244 (60,126) (15) Net income attributable to Ares Management Corporation 463,742 474,326 (10,584) (2) Less: Series B mandatory convertible preferred stock dividends declared 22,781 — (22,781) NM Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 440,961 $ 474,326 (33,365) (7) The change in net income attributable to non-controlling interests in AOG entities compared to the prior year was a result of the respective changes in income before taxes and weighted average daily ownership, as presented above. Consolidated Results of Operations of the Consolidated Funds The following table presents the results of operations of the Consolidated Funds ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Expenses of the Consolidated Funds $ (20,879) $ (43,492) $ 22,613 52% Net realized and unrealized gains on investments of Consolidated Funds 313,963 262,700 51,263 20 Interest and other income of Consolidated Funds 933,349 995,545 (62,196) (6) Interest expense of Consolidated Funds (835,335) (754,600) (80,735) (11) Income before taxes 391,098 460,153 (69,055) (15) Less: Income tax expense of Consolidated Funds 7,074 3,823 (3,251) (85) Net income 384,024 456,330 (72,306) (16) Less: Revenues attributable to Ares Management Corporation eliminated upon consolidation 68,200 188,155 (119,955) (64) Other expense (income), net attributable to Ares Management Corporation eliminated upon consolidation (20,052) 5,688 25,740 NM General, administrative and other expense attributable to Ares Management Corporation eliminated upon consolidation — 433 433 100 Net income attributable to non-controlling interests in Consolidated Funds $ 295,772 $ 274,296 21,476 8 The results of operations of the Consolidated Funds primarily represent activities from certain funds that we are deemed to control. When a fund is consolidated, we reflect the revenues and expenses of the entity on a gross basis, subject to eliminations from consolidation. Substantially all of our results of operations related to the Consolidated Funds are attributable to ownership interests that third parties hold in those funds. The Consolidated Funds are not necessarily the same funds in each year presented due to changes in ownership, changes in limited partners’ or investor rights, and the creation or termination of funds and entities. Accordingly, such amounts may not be comparable for the periods presented, and in any event have no material impact on net income attributable to Ares Management Corporation. 123 Table of Contents Segment Analysis For segment reporting purposes, revenues and expenses are presented before giving effect to the results of our Consolidated Funds and the results attributable to non-controlling interests of joint ventures that we consolidate. As a result, segment revenues from management fees, fee related performance revenues, performance income and investment income are different than those presented on a consolidated basis in accordance with GAAP. Revenues recognized from Consolidated Funds are eliminated in consolidation and those attributable to the non-controlling interests of joint ventures have been excluded by us. Furthermore, expenses and the effects of other income (expense) are different than related amounts presented on a consolidated basis in accordance with GAAP due to the exclusion of the results of Consolidated Funds and the non-controlling interests of joint ventures. Non-GAAP Financial Measures We use Realized Income (“RI”) as a non-GAAP profit measure in making operating decisions, assessing performance and allocating resources. Fee Related Earnings (“FRE”) is a component of RI that excludes realized activities associated with investment income and performance income. FRE and RI should be considered in addition to and not in lieu of, the results of operations, which are discussed further under “—Components of Consolidated Results of Operations” and are prepared in accordance with GAAP. We operate through our distinct operating segments. On January 1, 2024, we changed our segment composition. The special opportunities strategy, historically part of the Private Equity Group, was renamed to opportunistic credit and integrated into the Credit Group. Historical results have been modified to conform with the current presentation. On December 1, 2024, we completed the WSM Acquisition. The acquired business is presented within the Real Assets Group within our North American real estate equity strategy, which we renamed from U.S. real estate equity following the WSM Acquisition. The strategy name change did not result in any change to the historical composition of our segments. The following table sets forth FRE and RI by reportable segment and the OMG ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Fee Related Earnings: Credit Group $ 1,568,157 $ 1,317,012 $ 251,145 19% Real Assets Group 212,106 218,807 (6,701) (3) Private Equity Group 60,546 53,057 7,489 14 Secondaries Group 126,172 104,387 21,785 21 Other 15,686 8,530 7,156 84 Operations Management Group (620,930) (538,052) (82,878) (15) Fee Related Earnings $ 1,361,737 $ 1,163,741 197,996 17 Realized Income: Credit Group $ 1,684,817 $ 1,445,315 $ 239,502 17% Real Assets Group 223,842 217,195 6,647 3 Private Equity Group 48,775 46,125 2,650 6 Secondaries Group 119,940 101,056 18,884 19 Other 10,304 (6,703) 17,007 NM Operations Management Group (620,558) (537,460) (83,098) (15) Realized Income $ 1,467,120 $ 1,265,528 201,592 16 124 Table of Contents Income before provision for income taxes is the GAAP financial measure most comparable to RI. The following table presents the reconciliation of income before taxes as reported within the Consolidated Statements of Operations to RI and FRE of the reportable segments and the OMG ($ in thousands): Year ended December 31, 2024 2023 Income before taxes $ 1,275,352 $ 1,333,063 Adjustments: Depreciation and amortization expense 157,341 233,185 Equity compensation expense 352,851 255,419 Acquisition-related compensation expense (1) 38,150 7,334 Acquisition and merger-related expense 57,360 12,000 Placement fee adjustment 5,715 (5,819) Other (income) expense, net (12,172) 976 Income before taxes of non-controlling interests in consolidated subsidiaries (22,267) (17,249) Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations (302,846) (278,119) Total performance income—unrealized (109,533) (305,370) Total performance related compensation—unrealized 36,823 206,923 Total net investment income—unrealized (9,654) (176,815) Realized Income 1,467,120 1,265,528 Total performance income—realized (430,179) (415,899) Total performance related compensation—realized 281,301 282,406 Total net investment loss—realized 43,495 31,706 Fee Related Earnings $ 1,361,737 $ 1,163,741 (1) Represents bonus payments and contingent liabilities (“earnouts”) in connection with various acquisitions that are recorded as compensation expense and are presented within compensation and benefits within our Consolidated Statements of Operations. For the specific components and calculations of these non-GAAP measures, as well as additional reconciliations to the most comparable measures in accordance with GAAP, see “Note 14. Segment Reporting” within our consolidated financial statements included in this Annual Report on Form 10-K. Discussed below are our results of operations for our reportable segments and the OMG. 125 Table of Contents Results of Operations by Segment Credit Group—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Fee Related Earnings The following table presents the components of the Credit Group’s FRE ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Management fees $ 2,177,816 $ 1,853,326 $ 324,490 18% Fee related performance revenues 202,703 167,333 35,370 21 Other fees 41,819 36,640 5,179 14 Compensation and benefits (692,309) (624,741) (67,568) (11) General, administrative and other expenses (161,872) (115,546) (46,326) (40) Fee Related Earnings $ 1,568,157 $ 1,317,012 251,145 19 Management Fees. The chart below presents Credit Group management fees and effective management fee rates ($ in millions): 126 Table of Contents The following table presents the components of and causes for changes in the Credit Group’s management fees for the year ended December 31, 2024 compared to the prior year ($ in millions): Year-over-year Change Perpetual wealth vehicles: Fees from ARCC, ASIF and CADC, excluding Part I Fees, due to increases in the average portfolio size of their portfolios $ 105.3 Part I Fees from ASIF, ARCC and CADC, driven by an increase in the average size of their portfolios 83.5 Part I Fees from our open-ended European direct lending fund that began generating fees during the first quarter of 2024 9.8 Capital deployment in private funds: Fees from SDL III, ACE VI and Pathfinder II, which all launched during the second quarter of 2023 80.7 Fees from Ares Senior Direct Lending Fund II, L.P. (“SDL II”), ASOF II, an open-ended core alternative credit fund and ACE V 61.1 Distributions that reduced the fee base of ASOF I and Ares Senior Direct Lending Fund, L.P. (“ SDL I”) as the funds are past their investment periods (22.0) Reduction in fee rate of ACE III (21.0) Cumulative effect of other changes 27.1 Total $ 324.5 The increase in effective management fee rate for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by the increase in Part I Fees’ contribution to the effective management fee rate. Fee Related Performance Revenues. The chart below presents fee related performance revenues, including the number of funds generating, for the Credit Group by strategy ($ in millions): The increase in fee related performance revenues for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily attributable to higher incentive fees earned from an open-ended core alternative credit fund, which increased its IGAUM over the current year measurement period. Other Fees. The increase in other fees for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by higher administrative service fees of $7.7 million, which are earned from certain private funds that pay on invested capital. Compensation and Benefits. The increase in compensation and benefits for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by higher Part I Fee compensation of $43.1 million, corresponding to the increase in Part I Fees. For the years ended December 31, 2024 and 2023, we reduced Part I Fee compensation by $11.7 million and $2.6 million, respectively, to reclaim a portion of the supplemental distribution fees that we paid to distribution partners. The increase in compensation and benefits compared to the prior year was also driven by: (i) 127 Table of Contents higher fee related performance compensation of $27.7 million, corresponding to the increase in fee related performance revenues; and (ii) an increase in salary expense of $11.0 million, primarily attributable to headcount growth to support the expansion of our business; partially offset by (iii) lower incentive-based compensation. Average headcount increased by 12% to 672 investment and investment support professionals for the year-to-date period in 2024 from 602 professionals in 2023 as we continued to add professionals, primarily to support our growing direct lending and alternative credit platforms. General, Administrative and Other Expenses. The increase in general, administrative and other expenses was primarily due to costs incurred to support distribution of shares in our perpetual wealth vehicles and fundraising for our funds. Supplemental distribution fees were $30.4 million for the year ended December 31, 2024 and increased by $18.6 million for the year ended December 31, 2024 compared to the prior year a s we continue to develop our distribution relationships and expand our wealth product offerings. The increase in general, administrative and other expenses for the year ended December 31, 2024 compared to the prior year was also driven by fundraising related expenses including: (i) marketing costs of $5.7 million, largely attributable to fund formation costs for ACE VI and investor events, including our firmwide AGM event; and (ii) placement fees of $2.9 million, primarily due to new commitments to SDL III. Additionally, certain expenses increased during the current year, including occupancy costs, information services and information technology costs. These expenses collectively increased by $8.4 million for the year ended December 31, 2024 compared to the prior year to support our growing headcount and the expansion of our business, including costs for our new corporate headquarters that we occupied beginning in third quarter of 2024. Separately, professional service fees rose by $8.0 million for the year ended December 31, 2024 compared to the prior year, primarily related to certain non-recurring legal fees . Realized Income The following table presents the components of the Credit Group’s RI ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Fee Related Earnings $ 1,568,157 $ 1,317,012 $ 251,145 19% Performance income—realized 326,202 323,733 2,469 1 Performance related compensation—realized (207,794) (211,976) 4,182 2 Realized net performance income 118,408 111,757 6,651 6 Investment income—realized 21,159 36,490 (15,331) (42) Interest income 11,671 9,788 1,883 19 Interest expense (34,578) (29,732) (4,846) (16) Realized net investment income (loss) (1,748) 16,546 (18,294) NM Realized Income $ 1,684,817 $ 1,445,315 239,502 17 128 Table of Contents The Credit Group’s realized activities were principally composed of and caused by the following: Year ended December 31, 2024 Year ended December 31, 2023 Realized net performance income Carried interest from: • Aggregate tax distributions of $74.7 million primarily from ACE IV, ACE V, PCS I, ASOF I and an alternative credit fund Incentive fees from: • Incentive fees of $31.3 million, primarily generated from (i) seven direct lending funds and five alternative credit funds with $5.1 billion of IGAUM generating returns in excess of their hurdle rates; and (ii) a U.S. CLO that was driven by the reset of its capital structure and extension of its reinvestment period Carried interest from: • Aggregate tax distributions of $70.2 million primarily from ASOF I, ACE IV, ACE V and PCS I Incentive fees from: • Incentive fees of $27.7 million, primarily generated from ten direct lending funds and six alternative credit funds with $5.5 billion of IGAUM generating returns in excess of their hurdle rates Realized investment income and interest income • Distributions of investment income of $8.9 million generated from four liquid credit vehicles that are invested in the subordinated notes of CLOs • Distributions of investment income of $6.6 million from our investment in a U.S. direct lending fund • Interest income generated from 15 CLO investments of $4.6 million • Interest income earned on treasury-backed securities of $3.0 million, which is allocated among our segments based on the cost basis of our balance sheet investments • Distributions of investment income of $16.9 million from our investment in a commercial finance fund that was sold during the second quarter of 2023 • Distributions of investment income of $6.4 million generated from four liquid credit vehicles that are invested in the subordinated notes of CLOs • Interest income generated from 16 CLO investments of $5.3 million Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023 and 2054 Senior Notes in October 2024. 129 Table of Contents Credit Group—Performance Income The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Credit Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions): As of December 31, 2024 2023 Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Pathfinder I $ 191.4 $ 165.7 $ 25.7 $ 155.1 $ 131.9 $ 23.2 ASOF I 318.4 223.2 95.2 357.0 250.2 106.8 ASOF II 258.2 181.4 76.8 80.9 56.6 24.3 PCS I 130.1 76.9 53.2 124.0 73.3 50.7 PCS II 171.4 101.5 69.9 38.1 22.6 15.5 ACE IV 168.8 109.6 59.2 149.6 97.1 52.5 ACE V 286.6 180.9 105.7 232.2 146.2 86.0 ACE VI 71.1 44.8 26.3 16.6 9.9 6.7 Other credit funds 332.0 207.0 125.0 397.7 253.6 144.1 Total Credit Group $ 1,928.0 $ 1,291.0 $ 637.0 $ 1,551.2 $ 1,041.4 $ 509.8 The following table presents the change in accrued performance income for the Credit Group ($ in millions): As of December 31, 2023 Activity during the period As of December 31, 2024 Waterfall Type Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income Accrued Carried Interest Pathfinder I European $ 155.1 $ 62.6 $ (26.3) $ — $ 191.4 ASOF I European 357.0 (23.7) (14.9) — 318.4 ASOF II European 80.9 177.3 — — 258.2 PCS I European 124.0 22.9 (16.9) 0.1 130.1 PCS II European 38.1 131.1 — 2.2 171.4 ACE IV European 149.6 57.0 (38.7) 0.9 168.8 ACE V European 232.2 153.2 (101.1) 2.3 286.6 ACE VI European 16.6 54.5 — — 71.1 Other credit funds European 373.3 (40.2) (33.9) (6.6) 292.6 Other credit funds American 24.4 12.5 (8.1) 10.6 39.4 Total accrued carried interest 1,551.2 607.2 (239.9) 9.5 1,928.0 Other credit funds Incentive — 86.3 (86.3) — — Total Credit Group $ 1,551.2 $ 693.5 $ (326.2) $ 9.5 $ 1,928.0 130 Table of Contents Credit Group—Assets Under Management The tables below present rollforwards of AUM for the Credit Group ($ in millions): Liquid Credit Alternative Credit Opportunistic Credit U.S. Direct Lending European Direct Lending APAC Credit Other (1) Total Credit Group Balance at 12/31/2023 $ 47,299 $ 33,886 $ 14,554 $ 123,073 $ 68,264 $ 11,920 $ 354 $ 299,350 Acquisitions — — — 362 — — — 362 Net new par/equity commitments 2,995 4,222 1,653 19,408 10,234 689 142 39,343 Net new debt commitments 6,615 250 — 21,010 1,773 (380) — 29,268 Capital reductions (7,011) (30) (1,022) (2,608) 55 70 — (10,546) Distributions (403) (1,854) (1,088) (6,183) (6,134) (1,202) — (16,864) Redemptions (3,390) (150) — (1,572) (140) — — (5,252) Net allocations among investment strategies (18) 2,824 25 25 200 — (228) 2,828 Change in fund value 808 2,417 842 5,614 308 373 7 10,369 Balance at 12/31/2024 $ 46,895 $ 41,565 $ 14,964 $ 159,129 $ 74,560 $ 11,470 $ 275 $ 348,858 Liquid Credit Alternative Credit Opportunistic Credit U.S. Direct Lending European Direct Lending APAC Credit Other (1) Total Credit Group Balance at 12/31/2022 $ 43,864 $ 21,363 $ 13,720 $ 98,327 $ 50,642 $ 11,383 $ — $ 239,299 Net new par/equity commitments 2,808 8,351 — 15,960 12,508 387 379 40,393 Net new debt commitments 1,978 400 — 8,492 3,826 201 — 14,897 Capital reductions (858) — — (1,935) (1,065) — — (3,858) Distributions (319) (1,484) (499) (2,976) (1,977) (429) — (7,684) Redemptions (2,069) (984) — (290) (2) — — (3,345) Net allocations among investment strategies (33) 4,291 — — — 25 (25) 4,258 Change in fund value 1,928 1,949 1,333 5,495 4,332 353 — 15,390 Balance at 12/31/2023 $ 47,299 $ 33,886 $ 14,554 $ 123,073 $ 68,264 $ 11,920 $ 354 $ 299,350 (1) Activity within Other represents equity commitments to the platform that either have not yet been allocated to an investment strategy or have been allocated in a subsequent period as commitments to an investment strategy. The components of our AUM for the Credit Group are presented below ($ in billions): AUM: $348.8 AUM: $299.4 FPAUM AUM not yet paying fees Non-fee paying (1) (1) Includes $14.4 billion and $15.1 billion of AUM of funds from which we indirectly earn management fees as of December 31, 2024 and 2023, respectively, and includes $2.0 billion and $1.8 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2024 and 2023, respectively. 131 Table of Contents Credit Group—Fee Paying AUM The tables below present rollforwards of fee paying AUM for the Credit Group ($ in millions): Liquid Credit Alternative Credit Opportunistic Credit U.S. Direct Lending European Direct Lending APAC Credit Total Credit Group Balance at 12/31/2023 $ 46,140 $ 23,218 $ 8,490 $ 67,596 $ 34,246 $ 5,590 $ 185,280 Acquisitions — — — 244 — — 244 Commitments 7,897 — — 11,088 300 41 19,326 Deployment/subscriptions/increase in leverage 114 4,024 573 17,482 6,326 960 29,479 Capital reductions (6,859) — — (2,929) (2,133) (51) (11,972) Distributions (396) (1,280) (1,164) (9,316) (1,462) (1,225) (14,843) Redemptions (3,410) (150) — (452) (1,240) — (5,252) Net allocations among investment strategies (18) 3,471 — — — — 3,453 Change in fund value 1,161 101 — 2,702 (1,537) (283) 2,144 Change in fee basis — — — — 1,286 — 1,286 Balance at 12/31/2024 $ 44,629 $ 29,384 $ 7,899 $ 86,415 $ 35,786 $ 5,032 $ 209,145 Liquid Credit Alternative Credit Opportunistic Credit U.S. Direct Lending European Direct Lending APAC Credit Total Credit Group Balance at 12/31/2022 $ 42,191 $ 15,904 $ 7,166 $ 57,568 $ 29,561 $ 6,051 $ 158,441 Commitments 4,958 65 — 3,068 — 242 8,333 Deployment/subscriptions/increase in leverage 282 5,463 2,518 11,246 5,554 1,156 26,219 Capital reductions (892) — — (2,304) (268) (193) (3,657) Distributions (335) (1,913) (1,194) (3,707) (450) (1,522) (9,121) Redemptions (2,067) (901) — (305) (1,201) — (4,474) Net allocations among investment strategies (33) 4,396 — — — — 4,363 Change in fund value 2,036 204 — 2,030 1,050 (144) 5,176 Balance at 12/31/2023 $ 46,140 $ 23,218 $ 8,490 $ 67,596 $ 34,246 $ 5,590 $ 185,280 The charts below present FPAUM for the Credit Group by its fee bases ($ in billions): FPAUM: $209.2 FPAUM: $185.3 Invested capital Market value (1) Collateral balances (at par) Capital commitments (1) Includes $46.4 billion and $35.4 billion from funds that primarily invest in illiquid strategies as of December 31, 2024 and 2023, respectively. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. 132 Table of Contents Credit Group—Fund Performance Metrics as of December 31, 2024 ARCC contributed approximately 34% of the Credit Group’s total management fees for the year ended December 31, 2024. In addition, the Credit Group’s other significant funds, which are presented in the tables below, collectively contributed approximately 34% of the Credit Group’s management fees for the year ended December 31, 2024. The following table presents the performance data for our significant funds that are not drawdown funds in the Credit Group as of December 31, 2024 ($ in millions): Returns(%) Year of Inception AUM Year-To-Date Since Inception (1) Primary Investment Strategy Fund Gross Net Gross Net ARCC (2) 2004 $ 32,302 N/A 13.8 N/A 12.1 U.S. Direct Lending CADC (3) 2017 7,208 N/A 10.2 N/A 6.9 U.S. Direct Lending Open-ended core alternative credit fund (4) 2021 5,841 14.6 10.9 11.6 8.6 Alternative Credit ASIF (3) 2023 13,711 N/A 11.4 N/A 11.8 U.S. Direct Lending (1) Since inception returns are annualized. (2) Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Net returns are calculated using the fund’s NAV and assume dividends are reinvested at the closest quarter-end NAV to the relevant quarterly ex-dividend dates. Additional information related to ARCC can be found in its filings with the SEC, which are not part of this report. (3) Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Net returns are calculated using the fund’s NAV and assume distributions are reinvested at the NAV on the date of distribution. Additional information related to CADC and ASIF can be found in its filings with the SEC, which are not part of this report. (4) Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. The fund is made up of a Main Class (“Class M”) and a Constrained Class (“Class C”). Class M includes investors electing to participate in all investments and Class C includes investors electing to be excluded from exposure to liquid investments. Returns presented in the table are for onshore Class M. The current quarter gross and net returns for Class M (offshore) are 2.9% and 2.0%, respectively. The year-to-date gross and net returns for Class M (offshore) are 14.9% and 10.4%, respectively. The since inception gross and net returns for Class M (offshore) are 11.6% and 8.2%, respectively. The current quarter gross and net returns for Class C (offshore) are 2.9% and 1.6%, respectively. The year-to-date gross and net returns for Class C (offshore) are 13.6% and 9.2%, respectively. The since inception gross and net returns for Class C (offshore) are 11.3% and 8.0%, respectively. The following table presents the performance data of the Credit Group’s significant drawdown funds as of December 31, 2024 ($ in millions): Year of Inception AUM Original Capital Commitments Capital Invested to Date Realized Value (1) Unrealized Value (2) Total Value MoIC IRR(%) Primary Investment Strategy Fund Gross (3) Net (4) Gross (5) Net (6) Funds Harvesting Investments ACE IV Unlevered (7) 2018 $ 8,252 $ 2,851 $ 2,190 $ 1,402 $ 1,441 $ 2,843 1.4x 1.3x 8.2 5.9 European Direct Lending ACE IV Levered (7) 4,819 3,728 2,377 2,881 5,258 1.5x 1.4x 11.4 8.2 Pathfinder I 2020 4,227 3,683 3,177 566 3,503 4,069 1.4x 1.3x 15.3 11.0 Alternative Credit SDL II Unlevered 2021 16,396 1,989 1,529 274 1,537 1,811 1.2x 1.2x 12.1 9.6 U.S. Direct Lending SDL II Levered 6,047 4,269 1,222 4,283 5,505 1.4x 1.3x 19.2 14.6 Funds Deploying Capital PCS II 2020 6,023 5,114 3,552 907 3,572 4,479 1.3x 1.2x 12.5 8.6 U.S. Direct Lending ACE V Unlevered (8) 2020 16,256 7,026 5,194 1,058 5,198 6,256 1.3x 1.2x 11.3 8.4 European Direct Lending ACE V Levered (8) 6,376 4,693 1,504 4,835 6,339 1.4x 1.3x 15.9 11.9 ASOF II 2021 8,596 7,128 4,725 13 5,939 5,952 1.4x 1.3x 18.8 13.6 Opportunistic Credit ACE VI Unlevered (9) 2022 20,086 7,439 1,197 29 1,282 1,311 1.1x 1.1x 21.7 15.9 European Direct Lending ACE VI Levered (9) 9,667 2,943 119 3,179 3,298 1.2x 1.1x 23.0 16.1 SDL III Unlevered 2023 23,121 3,311 747 6 771 777 1.1x 1.0x NM NM U.S. Direct Lending SDL III Levered 11,959 2,038 47 2,175 2,222 1.1x 1.1x NM NM (1) For funds other than our opportunistic credit funds, realized value represent the sum of all cash distributions to all partners and if applicable, exclude tax and incentive distributions made to the general partner. For our opportunistic credit funds, realized value represent the sum of all cash distributions to the fee-paying limited partners and if applicable, exclude tax and incentive distributions made to the general partner. (2) Unrealized value represents the fund's NAV reduced by the accrued incentive allocation, if applicable. There can be no assurance that unrealized values will be realized at the valuations indicated. For funds other than our opportunistic credit funds, the unrealized value is based on all partners. For our opportunistic credit funds, the unrealized value is based on the fee-paying limited partners. 133 Table of Contents (3) The gross multiple of invested capital (“MoIC”) is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The gross MoIC is before giving effect to management fees, carried interest and other expenses, as applicable, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (4) The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes those interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The net MoIC is after giving effect to management fees and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (5) The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRR reflects returns to the fee-paying limited partners and, if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, as applicable, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (6) The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and, if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the net IRR calculations are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (7) ACE IV is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE IV (E) Unlevered, ACE IV (G) Unlevered, ACE IV (E) Levered and ACE IV (G) Levered and one feeder fund: ACE IV (D) Levered. ACE IV (E) Levered includes the ACE IV (D) Levered feeder fund. The gross and net IRR and MoIC presented in the table are for ACE IV (E) Unlevered and ACE IV (E) Levered. Metrics for ACE IV (E) Levered exclude the U.S. dollar denominated feeder fund. The gross and net IRR for ACE IV (G) Unlevered are 9.7% and 7.1%, respectively. The gross and net MoIC for ACE IV (G) Unlevered are 1.5x and 1.4x, respectively. The gross and net IRR for ACE IV (G) Levered are 12.7% and 9.1%, respectively. The gross and net MoIC for ACE IV (G) Levered are 1.6x and 1.4x, respectively. The gross and net IRR for ACE IV (D) Levered are 12.9% and 9.5%, respectively. The gross and net MoIC for ACE IV (D) Levered are 1.6x and 1.5x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund’s closing. All other values for ACE IV Unlevered and ACE IV Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate. (8) ACE V is made up of four parallel funds, two denominated in Euros and two denominated in pound sterling: ACE V (E) Unlevered, ACE V (G) Unlevered, ACE V (E) Levered, and ACE V (G) Levered, and two feeder funds: ACE V (D) Levered and ACE V (Y) Unlevered. ACE V (E) Levered includes the ACE V (D) Levered feeder fund and ACE V (E) Unlevered includes the ACE V (Y) Unlevered feeder fund. The gross and net IRR and gross and net MoIC presented in the table are for ACE V (E) Unlevered and ACE V (E) Levered. Metrics for ACE V (E) Levered exclude the ACE V (D) Levered feeder fund and metrics for ACE V (E) Unlevered exclude the ACE V (Y) Unlevered feeder fund. The gross and net IRR for ACE V (G) Unlevered are 12.7% and 9.5%, respectively. The gross and net MoIC for ACE V (G) Unlevered are 1.3x and 1.3x, respectively. The gross and net IRR for ACE V (G) Levered are 16.9% and 12.3%, respectively. The gross and net MoIC for ACE V (G) Levered are 1.4x and 1.3x, respectively. The gross and net IRR for ACE V (D) Levered are 15.7% and 11.7%, respectively. The gross and net MoIC for ACE V (D) Levered are 1.4x and 1.3x, respectively. The gross and net IRR for ACE V (Y) Unlevered are 12.0% and 8.8%, respectively. The gross and net MoIC for ACE V (Y) Unlevered are 1.3x and 1.2x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund's closing. All other values for ACE V Unlevered and ACE V Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate. (9) ACE VI is made up of six parallel funds, four denominated in Euros and two denominated in pound sterling: ACE VI (E) Unlevered, ACE VI (E) II Unlevered, ACE VI (G) Unlevered, ACE VI (E) Levered, ACE VI (E) II Levered, and ACE VI (G) Levered, and three feeder funds: ACE VI (D) Levered, ACE VI (Y) Unlevered and ACE VI (D) Rated Notes. ACE VI (E) II Levered includes ACE VI (D) Levered feeder fund and ACE VI (E) II Unlevered includes ACE VI (Y) Unlevered and ACE VI (D) Rated Notes feeder funds. The gross and net IRR and gross and net MoIC presented in the table are for ACE VI (E) Unlevered and ACE VI (E) Levered. Metrics for ACE VI (E) II Levered exclude the ACE VI (D) Levered feeder fund and metrics for ACE VI (E) II Unlevered exclude ACE VI (Y) Unlevered and ACE VI (D) Rated Notes feeder funds. The gross and net IRR for ACE VI (G) Unlevered are 22.2% and 15.9%, respectively. The gross and net MoIC for ACE VI (G) Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (G) Levered are 18.9% and 7.7%, respectively. The gross and net MoIC for ACE VI (G) Levered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (E) II Unlevered are 22.4% and 17.5%, respectively. The gross and net MoIC for ACE VI (E) II Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (E) II Levered are 20.9% and 14.9%, respectively. The gross and net MoIC for ACE VI (E) II Levered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (D) Levered are 23.5% and 17.0%, respectively. The gross and net MoIC for ACE VI (D) Levered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (Y) Unlevered are 15.8% and 11.1%, respectively. The gross and net MoIC for ACE VI (Y) Unlevered are 1.1x and 1.1x, respectively. The gross and net IRR for ACE VI (D) Rated Notes are 26.0% and 14.0%, respectively. The gross and net MoIC for ACE VI (D) Rated Notes are 1.2x and 1.1x, respectively. Original capital commitments are converted to U.S. dollars at the prevailing exchange rate at the time of the fund's closing. All other values for ACE VI Unlevered and ACE VI Levered are for the combined levered and unlevered parallel funds and are converted to U.S. dollars at the prevailing quarter-end exchange rate. 134 Table of Contents Real Assets Group—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Fee Related Earnings The following table presents the components of the Real Assets Group’s FRE ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Management fees $ 401,968 $ 389,437 $ 12,531 3% Fee related performance revenues — 334 (334) (100) Other fees 27,263 29,695 (2,432) (8) Compensation and benefits (160,357) (153,870) (6,487) (4) General, administrative and other expenses (56,768) (46,789) (9,979) (21) Fee Related Earnings $ 212,106 $ 218,807 (6,701) (3) Management Fees. The chart below presents Real Assets Group management fees and effective management fee rates ($ in millions): 135 Table of Contents The following table presents the components of and causes for changes in the Real Assets Group’s management fees for the year ended December 31, 2024 compared to the prior year ($ in millions): Year-over-year Change Capital commitments: Fees from Ares U.S. Real Estate Opportunity Fund IV, L.P. (“AREOF IV”) and our second climate infrastructure fund, excluding catch-up fees $ 14.7 Fees from our fourth European value-add real estate equity fund (excluding catch-up fees), which launched during the second quarter of 2024 4.1 Catch-up fees 5.7 Capital deployment in IDF V 8.6 Fees from the WSM Acquisition effective December 1, 2024 2.1 Distributions that reduced the fee bases of Infrastructure Debt Fund IV, L.P. (“IDF IV”) and Infrastructure Debt Fund III, L.P. (“IDF III”) as the funds are past their investment periods (9.2) Decrease in NAV of our industrial non-traded REIT due to lower valuations of certain properties (8.1) Contractual reduction in the fee base of AREOF III that was triggered at the expiration of the fund’s investment period at the end of the fourth quarter of 2023 (4.6) Cumulative effect of other changes (0.8) Total $ 12.5 The increase in effective management fee rate for the year ended December 31, 2024 compared to the prior year was primarily driven by the deployment of capital within our real estate equity funds. Certain of our private real estate equity funds pay a fee on committed capital that increases once that capital is invested. As a result, our effective management fee rate increases as capital is deployed. Other Fees. The decrease in other fees for the year ended December 31, 2024 compared to the prior year was driven by: (i) lower credit transaction fees of $8.1 million from the infrastructure debt strategy, which are infrequent in nature; partially offset by (ii) higher administrative service fees of $1.7 million, mostly from certain infrastructure debt funds that started paying such fees to us subsequent to the third quarter of 2023; and (iii) higher property management and development fees of $3.5 million resulting from an increase in property-related activities within certain North American real estate equity funds. Compensation and Benefits. The increase in compensation and benefits for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by (i) an increase in salary expenses of $7.4 million, primarily attributable to headcount growth to support the expansion of our business; and (ii) an increase in payroll-related taxes of $2.8 million, primarily due to the higher stock price associated with equity awards that vested during the first quarter of 2024; partially offset by (iii) lower incentive-based compensation; and (iv) higher administrative fees reimbursement of expenses for increased services provided throughout the current year. Average headcount increased by 10% to 391 investment and investment support professionals for the year-to-date period in 2024 from 356 professionals for the same period in 2023. General, Administrative and Other Expenses. The increase in general, administrative and other expenses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to marketing and fundraising activities, including supplemental distribution fees charged in connection with an amended servicing arrangement with a distribution partner. Supplemental distribution fees increased by $3.3 million for the year ended December 31, 2024 compared to the prior year . Other marketing costs also increased by $2.0 million over the comparative periods, driven by: (i) investor events, including our firmwide AGM event; and (ii) fund formation costs for AREOF IV. In addition, certain expenses increased for the year ended December 31, 2024 compared to the prior year , including: (i) higher information technology costs related to software license fees of $3.1 million; and (ii) higher professional service fees of $2.0 million, which included non-recurring legal expenses of $1.5 million incurred during the first quarter of 2024. 136 Table of Contents Realized Income The following table presents the components of the Real Assets Group’s RI ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Fee Related Earnings $ 212,106 $ 218,807 $ (6,701) (3)% Performance income—realized 60,317 20,990 39,327 187 Performance related compensation—realized (37,283) (12,768) (24,515) (192) Realized net performance income 23,034 8,222 14,812 180 Investment income—realized 5,184 3,392 1,792 53 Interest income 7,649 3,165 4,484 142 Interest expense (24,131) (16,391) (7,740) (47) Realized net investment loss (11,298) (9,834) (1,464) (15) Realized Income $ 223,842 $ 217,195 6,647 3 The Real Assets Group’s realized activities were principally composed of and caused by the following: Year ended December 31, 2024 Year ended December 31, 2023 Realized net performance income Carried interest from: • Distributions of $8.8 million from U.S. Real Estate Fund VIII, L.P. (“US VIII”) and a North American real estate equity fund, which are both European-style waterfall funds that are past their investment periods and monetizing investments • Realized gains of $3.1 million from the partial sale of ACIP’s investment in a renewable energy company Incentive fees from: • An industrial North American real estate equity fund of $8.7 million, that is based upon a three-year measurement period • An open-ended industrial real estate fund of $2.1 million, that varies based upon a three-year measurement period calculated for each fund investor Carried interest from: • Distributions of $1.8 million from US VIII and a North American real estate equity fund, which are both European-style waterfall funds that are past their investment periods and monetizing investments Incentive fees from: • Incentive fees of $5.7 million generated from an open-ended industrial real estate fund that varies based upon a three-year measurement period calculated for each fund investor Realized investment income and interest income • Distributions of investment income of $15.6 million, primarily from funds within our real estate debt and infrastructure debt strategies • Interest income earned on treasury-backed securities of $2.1 million, which is allocated among our segments based on the cost basis of our balance sheet investments • Interest earned from loans that we made within our real estate debt strategy • Realized gains of $1.2 million from the sale of an infrastructure opportunities fund’s investment in a wind energy company • Realized loss of $12.4 million associated with a guarantee of a credit facility provided in connection with a historical acquisition • Distributions of investment income of $7.8 million, primarily from funds within our real estate debt, infrastructure debt and infrastructure opportunities strategies • Realized losses of $6.2 million from a real estate debt vehicle, where interest expense was incurred with no associated investment income during the periods. These realized losses are not expected to recur as we restructured the arrangement in the fourth quarter of 2023 Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023 and 2054 Senior Notes in October 2024. 137 Table of Contents Real Assets Group—Performance Income The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Real Assets Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions): As of December 31, 2024 2023 Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income US VIII $ 20.1 $ 12.9 $ 7.2 $ 32.2 $ 20.7 $ 11.5 US IX 99.8 61.9 37.9 90.0 55.8 34.2 AREOF III 24.5 14.8 9.7 35.7 21.4 14.3 EF IV 22.9 13.7 9.2 49.2 29.5 19.7 EIF V 121.3 90.7 30.6 93.6 70.0 23.6 IDF V 113.7 69.3 44.4 56.1 33.7 22.4 ACIP 97.7 66.8 30.9 61.4 42.2 19.2 Other real assets funds 68.3 44.3 24.0 78.7 50.2 28.5 Total Real Assets Group $ 568.3 $ 374.4 $ 193.9 $ 496.9 $ 323.5 $ 173.4 The following table presents the change in accrued performance income for the Real Assets Group ($ in millions): As of December 31, 2023 Activity during the period As of December 31, 2024 Waterfall Type Accrued Performance Income Change in Unrealized Realized Other Adjustments Accrued Performance Income Accrued Carried Interest US VIII European $ 32.2 $ (0.1) $ (12.0) $ — $ 20.1 US IX European 90.0 9.8 — — 99.8 AREOF III European 35.7 (11.2) — — 24.5 EF IV American 49.2 (26.3) — — 22.9 EIF V European 93.6 27.7 — — 121.3 IDF V European 56.1 63.8 — (6.2) 113.7 ACIP European 61.4 44.0 (7.7) — 97.7 Other real assets funds European 51.0 8.8 (12.2) 5.0 52.6 Other real assets funds American 27.7 (10.8) (1.2) — 15.7 Total accrued carried interest 496.9 105.7 (33.1) (1.2) 568.3 Other real assets funds Incentive — 27.2 (27.2) — — Total Real Assets Group $ 496.9 $ 132.9 $ (60.3) $ (1.2) $ 568.3 138 Table of Contents Real Assets Group—Assets Under Management The tables below present rollforwards of AUM for the Real Assets Group ($ in millions): North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2023 $ 29,177 $ 6,941 $ 13,597 $ 6,248 $ 9,450 $ 65,413 Acquisitions 2,488 — — — — 2,488 Net new par/equity commitments 2,684 1,465 1,580 664 974 7,367 Net new debt commitments 200 — 3,849 — — 4,049 Capital reductions — — (1,086) — — (1,086) Distributions (1,148) (240) (418) (395) (1,274) (3,475) Redemptions (883) — (210) — — (1,093) Net allocations among investment strategies — — — — 20 20 Change in fund value 441 (358) 167 927 438 1,615 Balance at 12/31/2024 $ 32,959 $ 7,808 $ 17,479 $ 7,444 $ 9,608 $ 75,298 North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2022 $ 31,460 $ 7,196 $ 12,526 $ 5,194 $ 9,685 $ 66,061 Net new par/equity commitments 3,116 36 1,278 1,218 428 6,076 Net new debt commitments — — 726 — — 726 Capital reductions (245) — (235) — — (480) Distributions (2,813) (250) (273) (322) (1,138) (4,796) Redemptions (1,207) — (552) — — (1,759) Change in fund value (1,134) (41) 127 158 475 (415) Balance at 12/31/2023 $ 29,177 $ 6,941 $ 13,597 $ 6,248 $ 9,450 $ 65,413 The components of our AUM for the Real Assets Group are presented below ($ in billions): AUM: $75.3 AUM: $65.4 FPAUM Non-fee paying (1) AUM not yet paying fees (1) Includes $1.0 billion and $0.6 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2024 and 2023, respectively. 139 Table of Contents Real Assets Group—Fee Paying AUM The tables below present rollforwards of fee paying AUM for the Real Assets Group ($ in millions): North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2023 $ 20,844 $ 5,913 $ 3,553 $ 5,148 $ 5,880 $ 41,338 Acquisitions 1,554 — — — — 1,554 Commitments 2,278 936 — 226 — 3,440 Deployment/subscriptions/increase in leverage 609 668 828 98 977 3,180 Capital reductions — — (12) — — (12) Distributions (855) (178) (330) (340) (454) (2,157) Redemptions (883) — (210) — — (1,093) Net allocations among investment strategies — — — — 20 20 Change in fund value 197 (390) 94 57 (114) (156) Change in fee basis (1,066) (654) — (60) (246) (2,026) Balance at 12/31/2024 $ 22,678 $ 6,295 $ 3,923 $ 5,129 $ 6,063 $ 44,088 North American Real Estate Equity European Real Estate Equity Real Estate Debt Infrastructure Opportunities Infrastructure Debt Total Real Assets Group Balance at 12/31/2022 $ 21,788 $ 5,566 $ 3,759 $ 4,524 $ 5,970 $ 41,607 Commitments 2,525 26 (5) 1,128 — 3,674 Deployment/subscriptions/increase in leverage 199 221 602 350 1,596 2,968 Capital reductions (245) — (210) — — (455) Distributions (1,125) 9 (280) (854) (1,612) (3,862) Redemptions (1,207) — (568) — — (1,775) Change in fund value (1,091) 91 157 — (74) (917) Change in fee basis — — 98 — — 98 Balance at 12/31/2023 $ 20,844 $ 5,913 $ 3,553 $ 5,148 $ 5,880 $ 41,338 The charts below present FPAUM for the Real Assets Group by its fee bases ($ in billions): FPAUM: $44.1 FPAUM: $41.3 Invested capital/other (1) Market value (2) Capital commitments (1) Other consists of ACRE’s FPAUM, which is based on ACRE’s stockholders’ equity. (2) Amounts represent FPAUM from funds that primarily invest in illiquid strategies. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. 140 Table of Contents Real Assets Group—Fund Performance Metrics as of December 31, 2024 The significant funds presented in the tables below collectively contributed approximately 37% of the Real Assets Group’s management fees for the year ended December 31, 2024. The following table presents the performance data for our significant funds that are not drawdown funds in the Real Assets Group as of December 31, 2024 ($ in millions): Returns(%) Year of Inception AUM Year-To-Date Since Inception (1) Primary Investment Strategy Fund Gross Net Gross Net Diversified non-traded REIT (2) 2012 $ 5,663 N/A (0.4) N/A 6.1 North American Real Estate Equity Industrial non-traded REIT (3) 2017 7,354 N/A 0.8 N/A 8.5 North American Real Estate Equity Open-ended industrial real estate fund (4) 2017 5,083 4.3 3.3 17.5 14.3 North American Real Estate Equity (1) Since inception returns are annualized. (2) Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Actual individual stockholder returns will vary. Net returns are calculated using the fund’s NAV and assume distributions are reinvested at the NAV on the date of distribution. The inception date used in the calculation of the since inception return is the date in which the first shares of common stock were sold after converting to a NAV-based REIT. (3) Performance is measured by total return, which includes income and appreciation and reinvestment of all distributions for the respective time period. Returns are shown for institutional share class. Shares of other classes may have lower returns due to higher selling commissions and fees. Actual individual stockholder returns will vary. Net returns are calculated using the fund’s NAV and assume distributions are reinvested at the NAV on the date of distribution. (4) Returns are time-weighted rates of return and include the reinvestment of income and other earnings from securities or other investments and reflect the deduction of all trading expenses. Gross returns do not reflect the deduction of management fees, incentive fees, as applicable, or other expenses. Net returns are calculated by subtracting the applicable management fees, incentive fees, as applicable and other expenses from the gross returns on a quarterly basis. The following table presents the performance data of the Real Assets Group’s significant drawdown fund as of December 31, 2024 ($ in millions): Year of Inception AUM Original Capital Commitments Capital Invested to Date Realized Value (1) Unrealized Value (2) Total Value MoIC IRR(%) Primary Investment Strategy Fund Gross (3) Net (4) Gross (5) Net (6) Fund Deploying Capital IDF V (7) 2020 $ 4,849 $ 4,585 $ 3,813 $ 912 $ 3,550 $ 4,462 1.2x 1.2x 12.9 10.1 Infrastructure Debt (1) Realized proceeds include distributions of operating income, sales and financing proceeds received to the limited partners. (2) Unrealized value represents the fund's NAV reduced by the accrued incentive allocation, if applicable. There can be no assurance that unrealized values will be realized at the valuations indicated. (3) The gross MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The gross MoIC is before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (4) The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and, if applicable, excludes interests attributable to the non fee-paying limited partners and/or the general partner which does not pay management fees or carried interest. The net MoIC is after giving effect to management fees, carried interest, as applicable, credit facility interest expense, as applicable, and other expenses. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (5) The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRR reflects returns to the fee-paying limited partners and, if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (6) The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and, if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the net IRR calculations are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees and carried interest, other expenses and credit facility interest expenses, as applicable. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (7) IDF V is made up of U.S. Dollar hedged, Euro unhedged, GBP hedged, Yen hedged, and single investor parallel funds. The gross and net IRR and MoIC presented in the table are for the U.S. Dollar hedged parallel fund. The gross and net IRR for the single investor U.S. Dollar parallel fund are 10.2% and 7.8%, respectively. The gross and net MoIC for the single investor U.S. Dollar parallel fund are 1.2x and 1.2x, respectively. The gross and net IRR for the Euro unhedged parallel fund are 13.7% and 10.8%, respectively. The gross and net MoIC for the Euro unhedged parallel fund are 1.3x and 1.2x, respectively. The gross and net IRR for the GBP hedged parallel fund are 12.3% and 9.3%, respectively. The gross and net MoIC for the GBP hedged parallel fund are 1.2x and 1.1x, respectively. The gross and net IRR for the Yen hedged parallel fund are 8.8% and 6.2%, respectively. The gross and net MoIC for the Yen hedged parallel fund are 1.1x and 1.1x, respectively. Original capital commitments are converted to U.S. Dollars at the prevailing exchange rate at the time of fund's closing. All other values for IDF V are for the combined fund and are converted to U.S. Dollars at the prevailing quarter-end exchange rate. 141 Table of Contents Private Equity Group—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Fee Related Earnings The following table presents the components of the Private Equity Group’s FRE ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Management fees $ 137,130 $ 126,721 $ 10,409 8% Other fees 1,695 1,693 2 — Compensation and benefits (56,830) (58,408) 1,578 3 General, administrative and other expenses (21,449) (16,949) (4,500) (27) Fee Related Earnings $ 60,546 $ 53,057 7,489 14 Management Fees. The chart below presents Private Equity Group management fees and effective management fee rates ($ in millions): The following table presents the components of and causes for changes in the Private Equity Group’s management fees for the year ended December 31, 2024 compared to the prior year ($ in millions): Year-over-year Change Fees from the Crescent Point Acquisition effective October 2, 2023 $ 21.7 Change in fee base from capital commitments to invested capital and reduction in fee rate from 1.50% to 0.75% for an energy opportunities fund, which were both contractually triggered at the expiration of the fund’s investment period (11.3) Total $ 10.4 The decrease in effective management fee rate for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by the reduction in fee rate for the energy opportunities fund as discussed above, partially offset by certain funds within our APAC private equity strategy that have a higher effective management fee rate than the average effective management fee rate of the funds within our corporate private equity strategy. 142 Table of Contents Compensation and Benefits. Although salary expenses increased for the year ended December 31, 2024 compared to the prior year reflecting the full year impact from the increase in headcount from the Crescent Point Acquisition, compensation and benefits decreased slightly over the comparative periods. The decrease for the year ended December 31, 2024 compared to the prior year was primarily driven by lower incentive-based compensation paid to our corporate private equity team. Average headcount increased by 10% to 103 investment and investment support professionals for the year-to-date period in 2024 from 94 professionals in 2023, driven by the increase in headcount from the Crescent Point Acquisition and partially offset by a decrease in headcount for our corporate private equity team. General, Administrative and Other Expenses. The increase in general, administrative and other expenses for the year ended December 31, 2024 compared to the prior year largely reflect Crescent Point’s operating expenses following the Crescent Point Acquisition. Realized Income The following table presents the components of the Private Equity Group’s RI ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Fee Related Earnings $ 60,546 $ 53,057 $ 7,489 14% Performance income—realized 43,299 65,716 (22,417) (34) Performance related compensation—realized (36,334) (52,984) 16,650 31 Realized net performance income 6,965 12,732 (5,767) (45) Investment income (loss)—realized 1,926 (712) 2,638 NM Interest income 1,970 38 1,932 NM Interest expense (22,632) (18,990) (3,642) (19) Realized net investment loss (18,736) (19,664) 928 5 Realized Income $ 48,775 $ 46,125 2,650 6 The Private Equity Group’s realized activities were principally composed of and caused by the following: Year ended December 31, 2024 Year ended December 31, 2023 Realized net performance income Carried interest from: • Realized gains from ACOF IV’s investments in various energy companies and ACOF VI’s investment in Frontier Communications Parent, Inc. (“FYBR”) Carried interest from: • Realized gains from the partial sale of ACOF IV’s investment in The AZEK Company (“AZEK”) Realized investment income (loss) and interest income • Distributions of investment income from our corporate private equity funds • Interest income earned on treasury-backed securities, which is allocated among our segments based on the cost basis of our balance sheet investments • Realized losses of $4.6 million in connection with the liquidation and disposition of remaining assets of certain legacy funds • Realized gains of $4.0 million from the partial sale of ACOF IV’s investment in AZEK Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023 and 2054 Senior Notes in October 2024. 143 Table of Contents Private Equity Group—Performance Income The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Private Equity Group ($ in millions): As of December 31, 2024 2023 Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income ACOF IV $ 166.8 $ 133.6 $ 33.2 $ 181.3 $ 145.2 $ 36.1 ACOF V — — — 474.9 380.8 94.1 ACOF VI 523.1 442.8 80.3 337.1 289.1 48.0 Other funds 20.9 14.8 6.1 55.2 42.3 12.9 Total Private Equity Group $ 710.8 $ 591.2 $ 119.6 $ 1,048.5 $ 857.4 $ 191.1 The following table presents the change in accrued carried interest for the Private Equity Group ($ in millions): As of December 31, 2023 Activity during the period As of December 31, 2024 Waterfall Type Accrued Carried Interest Change in Unrealized Realized Accrued Carried Interest ACOF IV American $ 181.3 $ (5.5) $ (9.0) $ 166.8 ACOF V American 474.9 (474.9) — — ACOF VI American 337.1 220.3 (34.3) 523.1 Other funds European 46.1 (33.0) — 13.1 Other funds American 9.1 (1.3) — 7.8 Total Private Equity Group $ 1,048.5 $ (294.4) $ (43.3) $ 710.8 Private Equity Group—Assets Under Management The tables below present rollforwards of AUM for the Private Equity Group ($ in millions): Corporate Private Equity APAC Private Equity Other (1) Total Private Equity Group Balance at 12/31/2023 $ 20,998 $ 3,414 $ 139 $ 24,551 Net new par/equity commitments 458 3 58 519 Capital reductions (4) — — (4) Distributions (685) (19) — (704) Redemptions — (2) — (2) Net allocations among investment strategies 150 — (197) (47) Change in fund value 147 (419) — (272) Balance at 12/31/2024 $ 21,064 $ 2,977 $ — $ 24,041 Corporate Private Equity APAC Private Equity Other (1) Total Private Equity Group Balance at 12/31/2022 $ 20,939 $ 90 $ — $ 21,029 Acquisitions — 3,697 — 3,697 Net new par/equity commitments 1,482 — 139 1,621 Capital reductions (9) — — (9) Distributions (1,794) (16) — (1,810) Change in fund value 380 (357) — 23 Balance at 12/31/2023 $ 20,998 $ 3,414 $ 139 $ 24,551 (1) Activity within Other represents equity commitments to the platform that either have not yet been allocated to an investment strategy or have been allocated in a subsequent period as commitments to an investment strategy. 144 Table of Contents The components of our AUM for the Private Equity Group are presented below ($ in billions): AUM: $24.0 AUM: $24.5 FPAUM Non-fee paying (1) AUM not yet paying fees (1) Includes $1.2 billion and $1.4 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2024 and 2023, respectively. Private Equity Group—Fee Paying AUM The tables below present rollforwards of fee paying AUM for the Private Equity Group ($ in millions): Corporate Private Equity APAC Private Equity Total Private Equity Group Balance at 12/31/2023 $ 11,459 $ 1,665 $ 13,124 Deployment/subscriptions/increase in leverage 28 19 47 Distributions (54) — (54) Redemptions — (2) (2) Change in fund value (21) — (21) Change in fee basis (1,552) (115) (1,667) Balance at 12/31/2024 $ 9,860 $ 1,567 $ 11,427 Corporate Private Equity APAC Private Equity Total Private Equity Group Balance at 12/31/2022 $ 11,277 $ 4 $ 11,281 Acquisitions — 1,692 1,692 Deployment/subscriptions/increase in leverage 220 14 234 Distributions (38) — (38) Change in fee basis — (45) (45) Balance at 12/31/2023 $ 11,459 $ 1,665 $ 13,124 145 Table of Contents The charts below present FPAUM for the Private Equity Group by its fee bases ($ in billions): FPAUM: $11.4 FPAUM: $13.1 Capital commitments Invested capital Private Equity Group—Fund Performance Metrics as of December 31, 2024 The significant funds presented in the table below collectively contributed approximately 72% of the Private Equity Group’s management fees for the year ended December 31, 2024. The following table presents the performance data of the Private Equity Group’s significant drawdown funds as of December 31, 2024 ($ in millions): Year of Inception AUM Original Capital Commitments Capital Invested to Date Realized Value (1) Unrealized Value (2) Total Value MoIC IRR(%) Primary Investment Strategy Fund Gross (3) Net (4) Gross (5) Net (6) Fund Harvesting Investments ACOF V 2017 $ 7,827 $ 7,850 $ 7,611 $ 3,510 $ 7,350 $ 10,860 1.4x 1.3x 8.1 6.1 Corporate Private Equity Fund Deploying Capital ACOF VI 2020 8,142 5,743 5,256 1,471 7,248 8,719 1.6x 1.4x 23.0 17.0 Corporate Private Equity (1) Realized value represents the sum of all cash dividends, interest income, other fees and cash proceeds from realizations of interests in portfolio investments. Realized value excludes any proceeds related to bridge financings. (2) Unrealized value represents the fair market value of remaining investments. Unrealized value does not take into account any bridge financings. There can be no assurance that unrealized investments will be realized at the valuations indicated. (3) The gross MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The gross MoIC is before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The gross MoICs are also calculated before giving effect to any bridge financings. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the gross fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (4) The net MoIC is calculated at the fund-level. The net MoIC is based on the interests of the fee-paying limited partners and if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or performance fees. The net MoIC is after giving effect to management fees, carried interest, as applicable, and other expenses. The net MoICs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net MoIC would be 1.3x for ACOF V and 1.4x for ACOF VI. The funds may utilize a credit facility during the investment period and for general cash management purposes. Early in the life of a fund, the net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (5) The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRRs reflect returns to the fee-paying limited partners and, if applicable, excludes interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The gross IRRs are also calculated before giving effect to any bridge financings. The funds may utilize a credit facility during the investment period and for general cash management purposes. Gross fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (6) The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The cash flow dates used in the net IRR calculation are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees, carried interest as applicable, and other expenses and exclude commitments by the general partner and Schedule I investors who do not pay either management fees or carried interest. The funds may utilize a credit facility during the investment period and for general cash management purposes. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. The net IRRs are also calculated before giving effect to any bridge financings. Inclusive of bridge financings, the net IRRs would be 6.2% for ACOF V and 16.2% for ACOF VI. 146 Table of Contents Secondaries Group—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Fee Related Earnings The following table presents the components of the Secondaries Group’s FRE ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Management fees $ 197,287 $ 174,942 $ 22,345 13% Fee related performance revenues 28,834 12,782 16,052 126 Other fees 222 22 200 NM Compensation and benefits (66,290) (62,160) (4,130) (7) General, administrative and other expenses (33,881) (21,199) (12,682) (60) Fee Related Earnings $ 126,172 $ 104,387 21,785 21 Management Fees. The chart below presents Secondaries Group management fees and effective management fee rates ($ in millions): The following table presents the components of and causes for changes in the Secondaries Group’s management fees for the year ended December 31, 2024 compared to the prior year ($ in millions): Year-over-year Change Fees from APMF, primarily driven by additional capital raised $ 17.5 Fees from our third infrastructure secondaries fund, which launched during the fourth quarter of 2023 (exclusive of catch-up fees) 8.8 Catch-up fees in 2024 generated from our third infrastructure secondaries fund 1.9 Catch-up fees in 2023 generated from Landmark Real Estate Fund IX, L.P. (“LREF IX”) (7.9) Cumulative effect of other changes 2.0 Total $ 22.3 147 Table of Contents The increase in effective management fee rate for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to additional capital raised by APMF that has a fee rate of 1.40%. Fee Related Performance Revenues . The years ended December 31, 2024 and 2023 reflect incentive fees recognized from APMF. The activity for the year ended December 31, 2024 includes gains recognized in connection with acquiring a sizable portfolio of limited partnership interests during the second quarter of 2024. Compensation and Benefits. The increase in compensation and benefits for the year ended December 31, 2024 compared to the year ended December 31, 2023 was driven by higher fee related performance compensation of $2.3 million, corresponding to the increase in fee related performance revenues. For the years ended December 31, 2024 and 2023, we reduced fee related performance compensation by $9.5 million and $2.1 million, respectively, to reclaim a portion of the supplemental distribution fees paid to distribution partners. The increase in compensation and benefits was also driven by an increase in payroll-related taxes of $1.5 million, primarily due to the higher stock price associated with equity awards that vested during the first quarter of 2024. Average headcount increased by 7% to 112 investment and investment support professionals for the year-to-date period in 2024 from 105 professionals in 2023. General, Administrative and Other Expenses. In an effort to accelerate the growth of APMF’s assets, we entered into agreements beginning in the second quarter of 2023 to pay distribution partners fees to raise additional capital. We refer to these fees as supplemental distribution fees, and these fees are based on assets and/or sales. These fees contributed to an increase in expense of $11.4 million for the year ended December 31, 2024 compared to the prior year . Supplemental distribution fees are expected to fluctuate with sales and the growth in assets, and may reduce fee related performance compensation to the extent that fee related performance revenues are earned from APMF. Realized Income The following table presents the components of the Secondaries Group’s RI ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Fee Related Earnings $ 126,172 $ 104,387 $ 21,785 21% Performance income—realized 361 5,460 (5,099) (93) Performance related compensation—realized 110 (4,678) 4,788 NM Realized net performance income 471 782 (311) (40) Investment income—realized 2,565 4,523 (1,958) (43) Interest income 972 344 628 183 Interest expense (10,240) (8,980) (1,260) (14) Realized net investment loss (6,703) (4,113) (2,590) (63) Realized Income $ 119,940 $ 101,056 18,884 19 Realized net performance income for the year ended December 31, 2023 was primarily attributable to tax distributions from LREF VIII. Realized net investment loss for the years ended December 31, 2024 and 2023 largely represents interest expense exceeding investment income during these periods. Interest expense, which is allocated among our segments based on the cost basis of our balance sheet investments, increased over the comparative periods primarily due to the issuance of the 2028 Senior Notes in November 2023 and 2054 Senior Notes in October 2024. The realized investment activity for the years ended December 31, 2024 and 2023 was primarily attributable to dividend income received from APMF. 148 Table of Contents Secondaries Group—Performance Income The following table presents the accrued carried interest, also referred to as accrued performance income, and related performance compensation for the Secondaries Group. Accrued net performance income excludes net performance income that has been realized but not yet received as of the reporting date ($ in millions): As of December 31, 2024 2023 Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income Accrued Performance Income Accrued Performance Compensation Accrued Net Performance Income LEP XVI $ 107.9 $ 92.3 $ 15.6 $ 136.8 $ 117.0 $ 19.8 LREF VIII 81.3 68.9 12.4 101.1 87.5 13.6 Other secondaries funds 74.6 59.8 14.8 45.5 38.7 6.8 Total Secondaries Group $ 263.8 $ 221.0 $ 42.8 $ 283.4 $ 243.2 $ 40.2 The following table presents the change in accrued performance income for the Secondaries Group ($ in millions): As of December 31, 2023 Activity during the period As of December 31, 2024 Waterfall Type Accrued Carried Interest Change in Unrealized Realized Other Adjustments Accrued Carried Interest Accrued Carried Interest LEP XVI European $ 136.8 $ (28.9) $ — $ — $ 107.9 LREF VIII European 101.1 (19.8) — — 81.3 Other secondaries funds European 45.5 29.1 — — 74.6 Total accrued carried interest 283.4 (19.6) — — 263.8 Other secondaries funds Incentive — 0.4 (0.4) — — Total Secondaries Group $ 283.4 $ (19.2) $ (0.4) $ — $ 263.8 Secondaries Group—Assets Under Management The table below presents the rollforwards of AUM for the Secondaries Group ($ in millions): Private Equity Secondaries Real Estate Secondaries Infrastructure Secondaries Credit Secondaries Other (1) Total Secondaries Group Balance at 12/31/2023 $ 13,174 $ 7,826 $ 2,380 $ 1,380 $ — $ 24,760 Net new par/equity commitments 2,489 279 1,192 493 — 4,453 Net new debt commitments 625 — — — — 625 Distributions (504) (215) (146) (15) — (880) Net allocations among investment strategies 15 — — 10 — 25 Change in fund value 6 (111) 265 10 — 170 Balance at 12/31/2024 $ 15,805 $ 7,779 $ 3,691 $ 1,878 $ — $ 29,153 Private Equity Secondaries Real Estate Secondaries Infrastructure Secondaries Credit Secondaries Other (1) Total Secondaries Group Balance at 12/31/2022 $ 12,769 $ 7,552 $ 1,640 $ — $ — $ 21,961 Net new par/equity commitments 567 952 721 1,358 50 3,648 Distributions (477) (537) (102) — — (1,116) Redemptions (1) — — — — (1) Net allocations among investment strategies 30 — — 25 (50) 5 Change in fund value 286 (141) 121 (3) — 263 Balance at 12/31/2023 $ 13,174 $ 7,826 $ 2,380 $ 1,380 $ — $ 24,760 (1) Activity within Other represents equity commitments to the platform that either have not yet been allocated to an investment strategy or have been allocated in a subsequent period as commitments to an investment strategy. 149 Table of Contents The components of our AUM for the Secondaries Group are presented below ($ in billions): AUM: $29.2 AUM: $24.7 FPAUM AUM not yet paying fees Non-fee paying (1) (1) Includes $0.5 billion of non-fee paying AUM from our general partner and employee commitments as of December 31, 2024 and 2023. Secondaries Group—Fee Paying AUM The table below presents the rollforwards of fee paying AUM for the Secondaries Group ($ in millions): Private Equity Secondaries Real Estate Secondaries Infrastructure Secondaries Credit Secondaries Total Secondaries Group Balance at 12/31/2023 $ 11,204 $ 5,978 $ 1,763 $ 95 $ 19,040 Commitments 1,783 160 850 — 2,793 Deployment/subscriptions/increase in leverage 125 231 6 33 395 Distributions (146) (188) (132) (39) (505) Change in fund value (131) 19 95 58 41 Change in fee basis (47) 241 — 443 637 Balance at 12/31/2024 $ 12,788 $ 6,441 $ 2,582 $ 590 $ 22,401 Private Equity Secondaries Real Estate Secondaries Infrastructure Secondaries Credit Secondaries Total Secondaries Group Balance at 12/31/2022 $ 11,062 $ 5,313 $ 1,293 $ — $ 17,668 Commitments 367 772 506 — 1,645 Deployment/subscriptions/increase in leverage 51 317 20 85 473 Distributions (95) (421) (88) (9) (613) Redemptions (1) — — — (1) Net allocations among investment strategies 30 — — — 30 Change in fund value (162) (53) 32 19 (164) Change in fee basis (48) 50 — — 2 Balance at 12/31/2023 $ 11,204 $ 5,978 $ 1,763 $ 95 $ 19,040 150 Table of Contents The chart below presents FPAUM for the Secondaries Group by its fee bases ($ in billions): FPAUM: $22.4 FPAUM: $19.1 Reported value (1) Capital commitments Invested capital/other (1) Amounts represent FPAUM from funds that primarily invest in illiquid strategies. The underlying investments held in these funds are generally subject to less market volatility than investments held in liquid strategies. Secondaries Group—Fund Performance Metrics as of December 31, 2024 LEP XVI contributed approximately 23% of the Secondaries Group’s management fees for the year ended December 31, 2024. The following table presents the performance data of the Secondaries Group’s significant drawdown fund as of December 31, 2024 ($ in millions): Year of Inception AUM Original Capital Commitments Capital Invested to Date Realized Value (1) Unrealized Value (2) Total Value MoIC IRR(%) Primary Investment Strategy Fund Gross (3) Net (4) Gross (5) Net (6) Fund Harvesting Investments LEP XVI (7) 2016 $ 4,347 $ 4,896 $ 3,945 $ 2,079 $ 2,973 $ 5,052 1.4x 1.3x 18.4 11.6 Private Equity Secondaries For the funds in the Secondaries Group, returns are calculated from results of the underlying portfolio that are generally reported on a three month lag and may not include the impact of economic and market activities occurring in the current reporting period. (1) Realized value represents the sum of all cash distributions to all limited partners and if applicable, exclude tax and incentive distributions made to the general partner. (2) Unrealized value represents the limited partners’ share of fund’s NAV reduced by the accrued incentive allocation, if applicable. There can be no assurance that unrealized values will be realized at the valuations indicated. (3) The gross MoIC is calculated at the fund-level and is based on the interests of all partners. If applicable, limiting the gross MoIC to exclude interests attributable to the non-fee paying limited partners and/or the general partner who does not pay management fees or carried interest would have no material impact on the result. The gross MoIC is before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documentation. The gross fund-level MoIC would have generally been lower had such fund called capital from its partners instead of utilizing the credit facility. (4) The net MoIC is calculated at the fund-level and is based on the interests of the fee-paying limited partners and if applicable, excludes those interests attributable to the non-fee paying limited partners and/or the general partner which does not pay management fees or carried interest. The net MoIC is after giving effect to management fees and other expenses, carried interest and credit facility interest expense, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documentation. The net fund-level MoICs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (5) The gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Gross IRR reflects returns to all partners. If applicable, limiting the gross IRR to exclude interests attributable to the non-fee paying limited partners and/or the general partner who does not pay management fees or carried interest would have no material impact on the result. The cash flow dates used in the gross IRR calculation are based on the actual dates of the cash flows. The gross IRRs are calculated before giving effect to management fees, carried interest, as applicable, and other expenses, but after giving effect to credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documents. The gross fund-level IRR would generally have been lower had such fund called capital from its partners instead of utilizing the credit facility. (6) The net IRR is an annualized since inception net internal rate of return of cash flows to and from the fund and the fund’s residual value at the end of the measurement period. Net IRRs reflect returns to the fee-paying limited partners and, if applicable, exclude interests attributable to the non-fee paying limited partners and/or the general partner who does not pay management fees or carried interest. The cash flow dates used in the net IRR calculations are based on the actual dates of the cash flows. The net IRRs are calculated after giving effect to management fees and other expenses, carried interest and credit facility interest expenses, as applicable. The funds may utilize a short-term credit facility for general cash management purposes, as well as a long-term credit facility as permitted by the respective fund’s governing documents. Net fund-level IRRs would generally have been lower had such fund called capital from its limited partners instead of utilizing the credit facility. (7) The results of the fund are presented on a combined basis with the affiliated parallel funds or accounts, given that the investments are substantially the same. 151 Table of Contents Operations Management Group—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Fee Related Earnings The following table presents the components of the Operations Management Group’s FRE ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Other fees $ 20,357 $ 23,685 $ (3,328) (14)% Compensation and benefits (421,268) (361,124) (60,144) (17) General, administrative and other expenses (220,019) (200,613) (19,406) (10) Fee Related Earnings $ (620,930) $ (538,052) (82,878) (15) Other Fees. The decrease in other fees for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by lower asset-based, net distribution fees of $5.2 million associated with our non-traded REITs. The decrease was partially offset by an increase in facilitation fees from the 1031 exchange program associated with our non-traded REITs of $1.3 million over the comparative periods. Compensation and Benefits. The increase in compensation and benefits for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by: (i) the expansion of our business operations teams to support the growth of our business and other strategic initiatives; (ii) the expansion of our strategy and relationship management teams to support global fundraising; (iii) increased compensation and benefits associated with our wealth distribution channel, AWMS, resulting from higher variable compensation for sales employees associated with APMF and ASIF; and (iv) higher incentive-based compensation. Average headcount increased by 11% to 1,660 professionals for the year-to-date period in 2024 from 1,492 professionals in 2023. General, Administrative and Other Expenses. Certain expenses increased during the year ended December 31, 2024, including occupancy costs and information technology costs. These expenses collectively increased by $21.4 million for the year ended December 31, 2024 compared to the prior year to support our growing headcount and the expansion of our business, including costs for our new corporate headquarters that we occupied beginning in third quarter of 2024. In addition, travel and marketing costs increased by $4.8 million over the comparative periods, driven by investor events, including our firmwide AGM event. The aforementioned increase compared to the prior year was partially offset by lower professional service fees of $8.6 million , as we have recognized efficiencies from the transition of our income tax compliance function. Realized Income The following table presents the components of the OMG’s RI ($ in thousands): Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Fee Related Earnings $ (620,930) $ (538,052) $ (82,878) (15)% Investment loss—realized (650) (470) (180) (38) Interest income 1,723 1,218 505 41 Interest expense (701) (156) (545) NM Realized net investment income 372 592 (220) (37) Realized Income $ (620,558) $ (537,460) (83,098) (15) 152 Table of Contents Liquidity and Capital Resources Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. Management believes that we are well-positioned and our liquidity will continue to be sufficient for our foreseeable working capital needs, contractual obligations, dividend payments, pending acquisitions and strategic initiatives. Sources and Uses of Liquidity Our sources of liquidity are: (i) cash on hand; (ii) net working capital; (iii) cash from operations, including management fees and fee related performance revenues, which are collected monthly, quarterly or semi-annually, and net realized performance income, which may be unpredictable as to amount and timing; (iv) fund distributions related to our investments that are unpredictable as to amount and timing; and (v) net borrowings from the Credit Facility. As of December 31, 2024, our cash and cash equivalents were $1,508.0 million and we have $1,400.0 million available under our Credit Facility. Our ability to draw from the Credit Facility is subject to leverage and other covenants. We remain in compliance with all covenants as of December 31, 2024. We believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the ordinary course of business and under the current market conditions for the foreseeable future. Cash flows from management fees may be impacted by a slowdown in deployment, declines in valuations or negatively impacted fundraising. In addition, management fees may be subject to deferral and fee related performance revenues may be subject to hold backs. Declines or delays in transaction activity may impact our fund distributions and net realized performance income, which could adversely impact our cash flows and liquidity. Market conditions may make it difficult to extend the maturity or refinance our existing indebtedness or obtain new indebtedness with similar terms. We expect that our primary liquidity needs will continue to be to: (i) provide capital to facilitate the growth of our existing investment management businesses; (ii) fund our investment commitments; (iii) provide capital to facilitate our expansion into businesses that are complementary to our existing investment management businesses as well as other strategic growth initiatives; (iv) pay operating expenses, including cash compensation to our employees and tax payments for net settlement of equity awards; (v) fund capital expenditures; (vi) service our debt; (vii) pay income taxes and make payments under the TRA; (viii) make dividend payments to our Class A and non-voting common stockholders and our Series B mandatory convertible preferred stockholders in accordance with our dividend policies; and (ix) pay distributions to AOG unitholders. In the normal course of business, we expect to pay dividends to our Class A and non-voting common stockholders that are aligned with our expected FRE after an allocation of current taxes paid. For the purposes of determining this amount, we allocate the current taxes paid to FRE and to realized performance and investment income in a manner that may be disproportionate to earnings generated by these metrics, and the actual taxes paid on these metrics should they be considered separately. Additionally, our methodology uses the tax benefits from certain expenses that are not included in these non-GAAP metrics, such as equity-based compensation from the vesting of equity awards and from the amortization of intangible assets, among others. We allocate the taxes by multiplying the statutory tax rate currently in effect by our net realized performance and net investment income and removing this amount from total current taxes. The remaining current tax paid is the amount that we allocate to FRE. We use this method to allocate the current provision for income taxes to approximate the amount of cash that is available to pay dividends to our stockholders. If cash flows from operations were insufficient to fund dividends over a sustained period of time, we expect that we would suspend or reduce paying such dividends. In addition, there is no assurance that dividends would continue at the current levels or at all. Unless quarterly dividends have been declared and paid (or declared and set apart for payment) on the Series B mandatory convertible preferred stock, we may not declare or pay or set apart payment for dividends on any shares of our Class A common stock during the period. Declared dividends on the Series B mandatory convertible preferred stock will be payable, at our election, in cash, shares of our Class A common stock or a combination of cash and shares of our Class A common stock. Dividends on Series B mandatory convertible preferred stock are cumulative and the Series B mandatory convertible preferred stock, unless previously converted or redeemed, will automatically convert into our Class A common stock on October 1, 2027. Although income allocated to Series B mandatory convertible preferred stock dividends may be subject to tax, dividends to our Series B preferred stockholders will not be reduced on account of any income taxes owed by us. As a result, taxes associated with income allocated to Series B mandatory convertible preferred stock dividends will be borne by Class A and non-voting common stockholders. Our ability to obtain debt financing and complete stock offerings provides us with additional sources of liquidity. For further discussion of financing transactions occurring in the current period, see “Cash Flows” within this section and “Note 6. Debt” and “Note 13. Equity and Redeemable Interest” within our consolidated financial statements included in this Annual Report on Form 10-K. 153 Table of Contents Our consolidated financial statements reflect the cash flows of our operating businesses as well as those of our Consolidated Funds. The assets of our Consolidated Funds, on a gross basis, are significantly larger than the assets of our operating businesses and therefore have a substantial effect on the amounts reported within our consolidated statements of cash flows. The primary cash flow activities of our Consolidated Funds include: (i) raising capital from third-party investors, which is reflected as non-controlling interests of our Consolidated Funds; (ii) financing certain investments by issuing debt; (iii) purchasing and selling investment securities; (iv) generating cash through the realization of certain investments; (v) collecting interest and dividend income; and (vi) distributing cash to investors. Our Consolidated Funds are generally accounted for as investment companies under GAAP; therefore, the character and classification of all Consolidated Fund transactions are presented as cash flows from operations. Liquidity available at our Consolidated Funds is not available for corporate liquidity needs, and debt of the Consolidated Funds is non–recourse to us except to the extent of our investment in the fund. Cash Flows The following tables summarize our consolidated statements of cash flows by activities attributable to the Company and Consolidated Funds. For more details on the activity of the Company and Consolidated Funds, refer to “Note 15. Consolidation” within our consolidated financial statements included in this Annual Report on Form 10-K. Year ended December 31, 2024 2023 Net cash provided by operating activities $ 1,404,724 $ 473,107 Net cash provided by (used in) the Consolidated Funds’ operating activities, net of eliminations 1,386,430 (706,368) Net cash provided by (used in) operating activities 2,791,154 (233,261) Net cash used in the Company’s investing activities (159,404) (111,079) Net cash used in the Company’s financing activities (77,727) (404,761) Net cash provided by (used in) the Consolidated Funds’ financing activities, net of eliminations (1,353,867) 696,887 Net cash provided by (used in) financing activities (1,431,594) 292,126 Effect of exchange rate changes (40,454) 10,501 Net change in cash and cash equivalents $ 1,159,702 $ (41,713) The Consolidated Funds had no effect on cash flows attributable to the Company for the periods presented and are excluded from the discussion below. The following discussion focuses on cash flow by activities attributable to the Company. Operating Activities In the table below, cash flows from operations are summarized to present: (i) cash generated from our core operating activities, primarily consisting of profits generated principally from management fees and fee related performance revenues after covering for operating expenses and fee related performance compensation; (ii) net realized performance income; and (iii) net cash from investment related activities including purchases, sales, realized net investment income and interest expense. We generated meaningful cash flow from operations in each period presented. Year ended December 31, Favorable (Unfavorable) 2024 2023 $ Change % Change Core operating activities $ 1,095,204 $ 1,066,837 $ 28,367 3% Net realized performance income 137,950 (34,737) 172,687 NM Net cash provided by (used in) investment related activities 171,570 (558,993) 730,563 (131) Net cash provided by operating activities $ 1,404,724 $ 473,107 931,617 197 Cash from our core operating activities increased as a result of growing fee revenues and sustained profitability and timing of cash collection of our receivables, partially offset by a decrease in cash attributable to fee related performance revenues earned from our non-traded REITs in 2022 and collected during the year ended December 31, 2023. There were no fee related performance revenues earned from our non-traded REITs in 2024 and 2023. Net realized performance income includes: (i) carried interest distributions that may represent tax distributions or other distributions of income; and (ii) incentive fees that are realized annually at the end of the measurement period, which is typically at the end of the calendar year. Cash received from carried interest distributions and the subsequent payments to employees may not necessarily occur in the same quarter. Cash from incentive fees is generally received in the period subsequent to the measurement period. The increase in net realized performance income over the comparative periods was primarily due to timing of payments to employees for tax distributions that were both received and paid in the fourth quarter of 154 Table of Contents 2024 and 2023, while tax distributions received in the fourth quarter of 2022 were paid and resulted in a use of cash in the first quarter of 2023. Net cash provided by (used in) investment related activities for the years ended December 31, 2024 and 2023 primarily represents: (i) distributions received from our capital investments and the collection of principal and interest from loans that we have made; (ii) sales of certain capital investments to employees; (iii) the rebalancing of and associated return of our capital commitments upon admitting new limited partners; (iv) interest income from treasury-backed securities; offset by (v) purchases associated with funding capital commitments and strategic investments in our investment portfolio; and (vi) interest payments on our debt obligations. Although our capital commitments continue to increase with our growing assets under management, cash generated from our investment related activities has exceeded cash used in investment related activities for the year ended December 31, 2024. Our investment related activities may fluctuate depending on timing of capital investments and distributions of each fund from year to year. For further discussion of our capital commitments, see “Note 8. Commitments and Contingencies,” within our consolidated financial statements included in this Annual Report on Form 10-K. Our working capital needs are generally rising to support the growth of our business, while the capital requirements needed to support fund-related activities vary based upon the specific investment activities being conducted during such period. Investing Activities Year ended December 31, 2024 2023 Purchase of furniture, equipment and leasehold improvements, net of disposals $ (91,509) $ (67,183) Acquisitions, net of cash acquired (67,895) (43,896) Net cash used in investing activities $ (159,404) $ (111,079) Net cash used in the Company’s investing activities for both periods included cash to purchase furniture, fixtures, equipment and leasehold improvements to support the growth in our staffing levels. Net cash used in the Company’s investing activities for the year ended December 31, 2024 was predominantly for the build out of our new corporate headquarters that we occupied beginning in the third quarter of 2024. In addition, net cash used in the Company’s investing activities included cash used to complete the WSM Acquisition in the current year and to complete the Crescent Point Acquisition in the prior year. Financing Activities Year ended December 31, 2024 2023 Net proceeds from issuance of Series B mandatory convertible preferred stock $ 1,458,771 $ — Net proceeds from issuance of Class A common stock 407,124 — Net borrowings (repayments) of Credit Facility (895,000) 195,000 Proceeds from issuance of senior notes 736,010 499,010 Repayment of senior notes (250,000) — Class A and non-voting common stock dividends (783,172) (599,934) AOG unitholder distributions (527,724) (430,732) Stock option exercises 1,511 85,959 Taxes paid related to net share settlement of equity awards (227,532) (157,007) Other financing activities 2,285 2,943 Net cash used in the Company’s financing activities $ (77,727) $ (404,761) As a result of generating higher fee related earnings, we increased the level of dividends paid to a growing shareholder base of Class A and non-voting common stockholders and distributions paid to AOG unitholders, resulting in net cash used in the Company’s financing activities for the years ended December 31, 2024 and 2023. Net cash used in the Company’s financing activities for the year ended December 31, 2024 also included the repayments of our Credit Facility and 2024 Senior Notes, partially using cash provided by the net proceeds from the Offering, the issuance of the 2054 Senior Notes and the Series B mandatory convertible preferred stock. In connection with the vesting of equity awards that are granted to our employees under the Equity Incentive Plan, we withhold shares equal to the fair value of our employees’ tax withholding liabilities and pay the taxes on their behalf in cash and thus issue fewer net shares. Cash used in connection with these awards increased during the current year primarily as a result of our higher stock price, which resulted in employees recognizing additional compensation. For the years ended December 31, 155 Table of Contents 2024 and 2023, we net settled and did not issue 1.8 million shares and 1.7 million shares, respectively. The Company’s financing activities also included cash received from stock options exercises with 0.1 million and 5.1 million options exercised for the years ended December 31, 2024 and 2023, respectively. All the remaining options were exercised during the first quarter of 2024, and we will no longer receive cash or realize any tax benefit from the exercise of stock options after the 2024 tax year. Capital Resources We intend to use a portion of our available liquidity to pay cash dividends to our Series B mandatory convertible preferred stockholders and Class A and non-voting common stockholders on a quarterly basis in accordance with our dividend policies. Our ability to make cash dividends is dependent on a myriad of factors, including: (i) general economic and business conditions; (ii) our strategic plans and prospects; (iii) our business and investment opportunities; (iv) timing of capital calls by our funds in support of our commitments; (v) our financial condition and operating results; (vi) working capital requirements and other anticipated cash needs; (vii) contractual restrictions and obligations; (viii) legal, tax and regulatory restrictions; (ix) restrictions on the payment of distributions by our subsidiaries to us; and (x) other relevant factors. We are required to maintain minimum net capital balances for regulatory purposes for our broker-dealer entities. These net capital requirements are met in part by retaining cash, cash equivalents and investment securities. Additionally, certain of our subsidiaries operating outside the U.S. are also subject to capital adequacy requirements in each of the applicable jurisdictions. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of December 31, 2024, we were required to maintain approximately $71.6 million in net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We remain in compliance with these regulatory requirements. Holders of AOG Units, subject to the terms of the exchange agreement, may exchange their AOG Units for shares of our Class A common stock on a one-for-one basis. These exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of AMC that otherwise would not have been available. These increases in tax basis may increase depreciation and amortization for U.S. income tax purposes and thereby reduce the amount of tax that we would otherwise be required to pay in the future. We entered into the TRA that provides payment to the TRA recipients of 85% of the amount of actual cash savings (“Cash Tax Savings”), if any, in U.S. federal, state, local and foreign income tax or franchise tax that we actually realize as a result of these increases in tax basis and of certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA and interest accrued thereon (“Tax Benefit Payment”). Effective as of May 1, 2023, pursuant to an amendment to the TRA, to the extent Ares Owners Holdings L.P. would have been a recipient of certain Tax Benefit Payments under the TRA for taxable exchanges on or after May 1, 2023, Ares Owners Holdings L.P. will no longer be entitled to any Tax Benefit Payment for such exchanges and 100% of any Cash Tax Savings will inure to us. Future payments under the TRA in respect of subsequent exchanges are expected to be substantial. The TRA liability balance was $402.4 million and $191.3 million as of December 31, 2024 and December 31, 2023, respectively. For a discussion of our debt obligations, including the debt obligations of our consolidated funds, see “Note 6. Debt,” within our consolidated financial statements included in this Annual Report on Form 10-K. For a discussion of our equity, see “Note 13. Equity and Redeemable Interest,” within our consolidated financial statements included in this Annual Report on Form 10-K. 156 Table of Contents Critical Accounting Estimates We prepare our consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe the following critical accounting policies could potentially produce materially different results if we were to change the underlying assumptions, estimates or judgments. See “—Components of Consolidated Results of Operations” and “Note 2. Summary of Significant Accounting Policies,” within our consolidated financial statements included in this Annual Report on Form 10-K for a summary of our significant accounting policies. Principles of Consolidation We consolidate entities based on either a variable interest model or voting interest model. As such, for entities that are determined to be variable interest entities (“VIEs”), we consolidate those entities where we have both significant economics and the power to direct the activities of the entity that impact economic performance. For limited partnerships and similar entities evaluated under the voting interest model, we do not consolidate those entities for which we act as the general partner unless we hold a majority voting interest. The consolidation guidance requires qualitative and quantitative analysis to determine whether our involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g., management fees and performance related income), would give us a controlling financial interest. This analysis requires judgment. These judgments include: (i) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support; (ii) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity; (iii) determining whether two or more parties’ equity interests should be aggregated; (iv) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity; and (v) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary. The creditors of the consolidated VIEs do not have recourse to us other than to the assets of the respective consolidated VIEs. The assets and liabilities of the consolidated VIEs are comprised primarily of investments and loans payable, respectively. Fair Value Measurement GAAP establishes a hierarchical disclosure framework prioritizing the inputs used in measuring financial instruments at fair value into three levels based on their market observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or where fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rate, yield curve, volatility, prepayment risk, loss severity, credit risk and default rate. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the our assessment of the assumptions that market participants would use to value the instrument based on the best information available. 157 Table of Contents In some instances, an instrument may fall into multiple levels of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. Our assessment of the significance of an input requires judgment and considers factors specific to the instrument. See “Note 5. Fair Value,” within our consolidated financial statements included in this Annual Report on Form 10-K for a summary of our valuation of investments and other financial instruments by fair value hierarchy levels. Acquisitions Management’s determination of fair value of assets acquired and liabilities assumed at the acquisition date is based on the best information available in the circumstances and may incorporate management’s own assumptions and involve a significant degree of judgment. We use our best estimates and assumptions to accurately assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets. For business combinations accounted for under the acquisition method, the purchase consideration, including the fair value of certain elements of contingent consideration as of the acquisition date, in excess of the fair value of net assets acquired is recorded as goodwill. Conversely, any excess of the fair value of the net assets acquired over the purchase consideration is recognized as a bargain purchase gain. Critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful lives, discount rates and income tax rates. Our estimates for future cash flows are based on historical data, internal estimates and external sources, and are based on assumptions that are consistent with the plans and estimates we are using to manage the underlying assets acquired. We estimate the useful lives of the intangible assets based on the expected period over which we anticipate generating economic benefit from the asset. We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. Impairment of Intangible Assets We evaluate intangible assets for impairment annually, or if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. We evaluate impairment by comparing the estimated undiscounted cash flows attributable to the intangible asset being evaluated with its carrying amount. If an impairment is determined to exist, we accelerate amortization expense so that the carrying amount represents fair value. We estimate fair value using a discounted future cash flow methodology. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including our strategic plans. We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Additionally, future estimates may differ materially from current estimates and assumptions. Income Taxes We are taxed as corporation for U.S. federal and state income tax purposes. We use the liability method of accounting for deferred income taxes pursuant to GAAP. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the statutory tax rates expected to be applied in the periods in which those temporary differences are settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized during the year the change is enacted. A valuation allowance is recorded on our net deferred tax assets when it is more likely than not that such assets will not be realized or when timing is unknown. When evaluating the realizability of our deferred tax assets, all evidence, both positive and negative, is evaluated. Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies and expectations of future earnings. Under GAAP, the amount of tax benefit to be recognized is the amount of benefit that is more likely than not to be sustained upon examination. We analyze our tax filing positions in all of the U.S. federal, state, local and foreign tax jurisdictions where we are required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, we determine that uncertainties in tax positions exist, a liability is established. We recognize accrued interest and penalties related to unrecognized tax positions within interest expense and general, administrative and other expenses, respectively, within the Consolidated Statements of Operations. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. We review our tax positions quarterly and adjust our tax balances as new legislation is passed or new information becomes available. 158 Table of Contents Recent Accounting Pronouncements Information regarding recent accounting pronouncements and their impact on Ares can be found in “Note 2. Summary of Significant Accounting Policies,” within our consolidated financial statements included in this Annual Report on Form 10-K. Contractual Obligations, Commitments and Contingencies and Other Arrangements In the normal course of business, we enter into contractual obligations that may require future cash payments. We may also engage in off-balance sheet arrangements, including guarantees, capital commitments to funds, indemnifications and potential contingent repayment obligations. The following table sets forth our contractual obligations and capital commitments of the Company and of the Consolidated Funds as of December 31, 2024 ($ in thousands): Less than 1 year 1 - 3 years 4 - 5 years Thereafter Total The Company: Operating lease obligations (1) $ 57,402 $ 124,642 $ 142,187 $ 711,391 $ 1,035,622 Debt obligations payable (2) — — 495,677 2,063,237 2,558,914 Interest obligations on debt (3) 157,839 315,678 253,647 1,856,922 2,584,086 Other long-term obligations (4) 5,934 5,209 453 — 11,596 Capital commitments (5) 1,451,392 — — — 1,451,392 Subtotal 1,672,567 445,529 891,964 4,631,550 7,641,610 Consolidated Funds: Debt obligations payable 121,000 1,286,354 685 8,861,486 10,269,525 Interest obligations on debt (3) 572,867 1,099,802 1,059,824 1,937,703 4,670,196 Capital commitments of Consolidated Funds (5) 1,038,225 — — — 1,038,225 $ 3,404,659 $ 2,831,685 $ 1,952,473 $ 15,430,739 $ 23,619,556 (1) The table includes future minimum commitments for our operating leases, including leases that have been executed but have not yet commenced. The majority of our operating lease obligations represents office space agreements with expirations through June 2043. Rent expense includes only base contractual rent. (2) Debt obligations include $2,150.0 million of senior notes and $450.0 million of subordinated notes, net of unamortized discount as of December 31, 2024. (3) Interest obligations reflect future interest payments on outstanding debt obligations with stated interest rates for fixed rate debt and at the prevailing rate in effect as of the reporting date for floating rate debt. (4) Represents payment obligations with respect to long-term service contracts entered into by the Company and future minimum commitments for our finance leases. (5) Represents commitments to fund certain investments. These amounts are generally due on demand and are therefore presented as obligations payable in less than one-year. We entered into a TRA with the TRA Recipients that requires us to pay them 85% of any cash tax savings, if any, realized by AMC from any step-up in tax basis resulting from an exchange of AOG Units for shares of our Class A common stock or, at our option, for cash. Because the timing of amounts to be paid under the TRA cannot be determined, this contractual commitment has not been presented in the table above. The cash tax savings, if any, achieved may not ensure that we have sufficient cash available to pay this liability, and we may be required to incur additional debt to satisfy this liability. For further discussion of our capital commitments, indemnification arrangements and contingent liabilities, see “Note 8. Commitments and Contingencies,” within our consolidated financial statements included in this Annual Report on Form 10-K. 159 Table of Contents