Ares Management (ARES) Risk Factor Changes

Legal liability could have a material adverse effect on our businesses, financial condition or results of operations or cause reputational harm to us, which could harm our businesses.

Many jurisdictions in which we operate have laws and regulations relating to data protection, privacy, cybersecurity and information security to which we may be subject, including the CCPA, the New York SHIELD Act, th…

increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personal information of our employees, our investors and others, and other sensitive information th…

Security incidents or cyber-attacks, affecting us or our third-party service providers, could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential, pe…

As a result of the tax gain inherent in our assets held by the Ares Operating Group, upon a realization event, certain direct and indirect holders of AOG Units may incur different and potentially significantly greater…

In addition, the TRA provides that, upon a change of control, or if, at any time, we elect an early termination of the TRA, our obligations under the TRA with respect to exchanged or acquired shares of our Class A com…

We have entered into a TRA with certain direct and indirect holders of AOG Units (the “TRA Recipients”) that provides for the payment (“Tax Receivable Payment”) by us to the TRA Recipients of 85% of the amount of cash…

and exchange that information automatically with other jurisdictions annually.

Overview of certain relevant U.S.

Applicable U.S.

As of December 31, 2025, there were 19,760,606 unvested awards outstanding, which are subject to specified vesting requirements, and were granted to certain of our senior professionals under the 2023 Ares Management C…

Ares Owners Holdings L.P.

As of December 31, 2025, our professionals owned, indirectly, an aggregate of 105,079,121 AOG Units.

The market price of shares of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock in the market and non-voting common stock, to the extent that sales hap…

Subject to certain restrictions outlined in our certificate of incorporation, our stock is freely transferable and the Class B Stockholder or the Class C Stockholder may transfer their shares of our Class B common sto…

Even if there is deemed to be a breach of the obligations set forth in our certificate of incorporation, our certificate of incorporation provides that the Class B Stockholder will not be liable to us or the holders o…

Due to the disparity in the voting power of the classes of our common stock, holders of our Class A common stock will generally have no influence over matters on which holders of our common stock vote.

As such, the Class B Stockholder and Class C Stockholder, and thereby the Holdco Members, have the ability to indirectly, and in some cases directly, influence the determination of the amount and timing of the Ares Op…

The Class B Stockholder and Class C Stockholder, entities wholly owned by Ares Partners Holdco LLC, which is in turn owned and controlled by the Holdco Members, hold the shares of our Class B common stock and the shar…

We believe that we are engaged primarily in the business of providing investment management services and not primarily in the business of investing, reinvesting or trading in securities.

•absent an applicable exemption, it is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities, and owns or proposes to acquire investment securities having a…

Our business operations, our funds’ portfolio companies, and the companies in which our funds invest may face risks associated with climate change, including “transition risks” such as risks related to the impact of c…

Certain of our funds invest in secondaries investment products that we do not control.

Infrastructure investments often involve an ongoing commitment to a municipal, state, federal or foreign government or regulatory agencies.

Our Real Assets Group funds are subject to the risks inherent in the ownership and operation of real assets and the construction and development of real assets.

More generally, investments in non-investment grade credit are subject to risks including the following:

We manage non-traded REITs, BDCs and other perpetual wealth vehicles, and we continue to seek to expand the distribution of certain of these products through retail and private wealth channels.

were to exercise their termination rights or fail to renew their existing contracts and we were unable to secure new clients or maintain our levels of AUM, our customized separate account and advisory account fees wou…

Our revenue in any given period is dependent on the number of fee-paying clients and corresponding level of AUM in such period.

Investors in certain of our funds, including our open-ended funds and perpetual wealth vehicles may generally redeem their investments on a periodic basis subject to the expiration of a specified period of time during…

Investors in certain of our funds, including our open-ended funds, may redeem their investments in these funds.

With respect to certain of our funds, including funds that are not exempt from registration under the Investment Company Act, each fund’s investment management agreement must be approved annually by (i) such fund’s bo…

We currently manage a portion of investor assets through separately managed accounts, whereby we earn management fees and carried interest or incentive fees, and we intend to continue to seek additional separately man…

We derive a substantial portion of our revenues from funds managed pursuant to management agreements that may be terminated.

Investments by many of our funds will include debt instruments and equity securities of companies that we do not control.

Many of our funds make investments in companies that we do not control and may rank junior to preferred equity and debt in a company’s capital structure.

When clients retain us to manage assets on their behalf, they specify certain guidelines regarding investment allocation and strategy that we are required to observe in the management of their portfolios.

Certain of the funds and accounts we advise or manage are subject to the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code.

Many of the power, infrastructure and energy companies in which certain of our funds invest are subject to regulation by the Federal Energy Regulatory Commission (“FERC”), which oversees acquisition and disposition of…

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

In addition to undertaking active ongoing investigative agendas, the U.S.

Certain of our investments may be subject to review and approval by CFIUS or any non-U.S.

The U.S.

whether incurred at or above the investment-level entity.

For example, CLOs are subject to credit, liquidity, interest rate and other risks and we have significant exposure to these markets through our investments in our CLO funds.

In the event that our funds are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at an increased interest rate or on unfavorable terms, our funds may have difficulty complet…

A substantial majority of our registered funds’ and BDCs’ portfolio holdings are comprised of investments that are not publicly-traded and do not otherwise have readily available market quotations.

Rule 2a-5 under the Investment Company Act establishes requirements for good faith determinations of fair value, and addresses both the board’s and the “valuation designee’s” roles and responsibilities relating to det…

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

We include the fair value of illiquid assets in the calculations of net asset values, returns of our funds and our assets under management.

We have presented returns relating to the historical performance of the funds we manage and certain targets of our future performance, including by reference to the internal rate of return (“IRR”) of certain funds’ pe…

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

may be held liable for failing to prevent their employees and associated persons from violating the Act.

Failure to comply with regulations related to financial crimes, fraud and other deceptive practices or other misconduct at our funds’ portfolio companies, properties or projects could subject us to liability and reput…

The U.K.

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

In Asia, regulators in Singapore, Japan and Hong Kong have released guidelines for asset managers to integrate climate risk considerations in investment and risk management processes, together with enhanced disclosure…

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

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

Guidance from EU policymakers and supervisors moves the goalposts frequently.

For Ares, this primarily impacts our AIFMs and the funds they manage by requiring certain firm-level website disclosures regarding how sustainability risks are integrated into our investment process, consideration of…

We, our funds and their portfolio companies face increasing public scrutiny related to ESG activities.

While we historically have and will continue to allocate the expenses of our funds in good faith and in accordance with the terms of the relevant fund agreements and our expense allocation policy in effect from time t…

Increased regulatory scrutiny and uncertainty with respect to expense allocation may expose us to additional risk.

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

On June 30, 2020, the National People’s Congress of China passed a national security law applicable to Hong Kong (the “National Security Law”), which criminalize certain offenses including secession, subversion of the…

undertaking or person who provides services for or on behalf of the large organization) commits a U.K.

The U.K.

AIFMD II imposes a range of requirements on AIFMs which may increase the cost of doing business for AM Lux and Ares’ non-EEA AIFMs (including AMUKL) to the extent they market funds in the EEA and potentially disadvant…

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

Despite Brexit, new and existing EU legislation is expected to continue to impact our business in the U.K.

Employee misconduct and failure to comply with applicable laws, obligations and standards could harm us by impairing our ability to attract and retain investors and subjecting us to significant legal liability, regula…

Changes in rules and regulations impacting the insurance industry could adversely impact our expansion into the insurance industry, the prospects of Aspida Re, a Bermuda insurance company, and other investments we mak…

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

Compliance with existing and new or changing laws and regulations subjects us to significant costs.

State regulation.

Certain classes of interest rate swaps and certain classes of credit default swaps are subject to mandatory clearing, unless an exemption applies.

assessing and addressing potential risks to financial stability.

SEC enforcement activity has increased in recent years.

Overview of our regulatory environment and exemptions from certain laws.

were to freeze the account or become insolvent, we may have difficulty replacing the credit line and the affected fund(s) or we may face liquidity challenges, which may adversely affect our business operations or the…

Hedging strategies may adversely affect the returns on our cash flow and financial condition and funds’ investments.

If we are unable to consummate or successfully integrate new businesses and strategies, acquisitions or joint ventures, we may not be able to implement our growth strategy successfully.

•our inability to realize the anticipated operation and financial benefits from an acquisition for a number of reasons, including if we are unable to effectively integrate acquired businesses and the potential departu…

alternative or traditional asset managers, including asset managers located outside of the U.S.

The counterparty risks that we face have increased in complexity and magnitude as a result of disruption in the financial markets in recent years.

The counterparty to one or more of these contracts may default, either voluntarily or involuntarily, on its performance under the contract.

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

We also rely on a concentrated set of vendors and third-party service providers for certain aspects of our businesses, including for certain information systems, technology and administration of our funds and complian…

Furthermore, while we have offices and personnel located worldwide, our headquarters and a substantial portion of our personnel are located in Los Angeles.

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

We face operational risk from errors made in the execution, confirmation or settlement of transactions.

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

Inflation has impacted and may in the future adversely affect our business, results of operations and financial condition of our funds and their portfolio companies.

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

As of December 31, 2025, we had $1,380 million borrowings outstanding under the Credit Facility and aggregate principal amount of senior notes and subordinated notes of $2,150.0 million and $450.0 million, respectivel…

Because a portion of our revenue, earnings and cash flow can be variable from quarter to quarter and year to year, we do not plan to provide any guidance regarding our expected quarterly and annual operating results.

The timing and amount of carried interest and incentive fees generated by our funds is uncertain and contributes to the volatility of our results.

We may not be able to maintain our current fee structure as a result of industry pressure from fund investors to reduce fees.

Our investment advisory and management agreement with ARCC renews for successive annual periods subject to the approval of ARCC’s board of directors or by the affirmative vote of the holders of a majority of ARCC’s ou…