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Money Management

Ares posts 4.5% increase in AUM for quarter, 22.7% jump for year

Ares Management reported $130.7 billion in assets under management as of Dec. 31, up 4.5% from three months earlier and up 22.7% from a year earlier, said the alternative investment firm's earnings report released Thursday.

Ares attributed the quarter's growth to new capital raised, amounting to $10.2 billion in commitments, which was partially offset by $2.4 billion in redemptions and distributions.

"Despite market volatility in the fourth quarter, we reported strong fourth-quarter earnings, which concluded a great year for Ares with year-over-year growth in our fee-related earnings and realized income of 18% and 21%, respectively," said Michael Arougheti, president and CEO, in a news release. "We also raised gross capital of more than $10 billion in the fourth quarter, bringing full-year gross fundraising to a record $36 billion, driving AUM growth of 23%."

Ares' credit business saw its AUM reach $95.84 billion as of Dec. 31, up 4.7% from Sept. 30 and up 33.6% from Dec. 31, 2017. Private equity AUM reached $23.49 billion, up 2.2% from three months earlier but down 4.3% from a year earlier. Real estate assets hit $11.34 billion, up 7.1% from the end of the previous quarter and up 10.9% on a year-over-year basis.

GAAP management fees were $214.4 million in the fourth quarter, up 4.9% from the third quarter and up 15% from fourth quarter of 2017. Administrative, transaction and other fees were $14.3 million for the quarter, up 31.2% from the previous quarter and up 6.7% from the year-earlier quarter.

Incentive fees were $49.7 million in the fourth quarter, up from $872,000 in the third quarter and up from $4.4 billion in the fourth quarter of 2017. Principal investment loss was $771,000, compared to a loss of $7.5 million in the quarter ended Sept. 30 and an $18.8 million gain in the year-prior quarter.

Ares had a GAAP net income of $11.9 million in the quarter, compared to $15.9 million in the previous quarter and $39.6 million in the year-earlier quarter.