Ares Management reported $106.4 billion in assets under management as of Dec. 31, a 1% increase from the end of the prior quarter and up 11.8% from Dec. 31, 2016, the alternative investment firm's fourth-quarter earnings released Thursday states.
Ares also announced that effective March 1 it is switching to a C-corporation from a publicly traded partnership. Ares is the first alternative investment manager to make the switch following passage of the U.S. tax reform legislation.
"This morning, we announced that we have changed our corporate tax status, which we believe will simplify our structure, broaden our potential investor base, improve our liquidity and trading volume, and provide a more attractive currency for strategic acquisitions," said Michael McFerran, chief operating officer and chief financial officer, in a news release.
Ares executives declined further comment.
"Ares' decision to convert to a C-corp from a partnership following tax reform may be the first domino to fall across the alternative (investment management) industry as other firms are expected to more strongly consider converting," said Jared Kirsch, associate director, non-bank financial institutions at Fitch Ratings, in a statement. "This type of conversion could mean higher taxes but it also expands the potential pool of equity investors, which could improve stock valuations."