GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

3. GOODWILL AND INTANGIBLE ASSETS

Intangible Assets, Net

The following table summarizes the carrying value, net of accumulated amortization, of the Company’s intangible assets:



	Weighted Average Amortization Period (in years) as of September 30, 2023	As of September 30,		As of December 31,
		2023		2022
Management contracts	4.4	$	571,542	$	586,077
Client relationships	8.8	178,620		262,301
Trade name	0.0	—		11,079
Other	1.1	500		500
Finite-lived intangible assets		750,662		859,957
Foreign currency translation		(841)		935
Total finite-lived intangible assets		749,821		860,892
Less: accumulated amortization		(284,031)		(220,472)
Finite-lived intangible assets, net		465,790		640,420
Management contracts		567,800		567,800

Indefinite-lived intangible assets		567,800		567,800
Intangible assets, net		$	1,033,590	$	1,208,220

During the third quarter of 2023, the Company recorded a non-cash impairment charge of $65.7 million to the carrying value of client relationships from the acquisition of Landmark Partners, LLC (the “Landmark Acquisition”) that are included within the Secondaries Group. The primary indicator of impairment was the lower expected fee paying assets under management in a private equity secondaries fund from existing investors as of the date of the Landmark Acquisition. During the second quarter of 2023, the Company recorded non-cash impairment charges of $4.4 million and $0.7 million to the fair value of management contracts of certain funds within the Real Assets Group and Credit Group, respectively. The primary indicator of impairment was the lower than expected future fee revenue generated from these funds. During the first quarter of 2023, the Company rebranded Ares SSG as Asia credit and discontinued the use of the SSG trade name. As a result, the Company recorded a non-cash impairment charge equal to the SSG trade name’s carrying value of $7.8 million to accelerate the amortization expense in the first quarter of 2023.

During the third quarter of 2022, the Company recorded non-cash impairment charges of $181.6 million, related to rebranding of our secondaries group as Ares Secondaries and discontinued the ongoing use of the Landmark trade name, and fair value of certain management contracts in connection with lower than expected fee paying assets under management.

Amortization expense associated with intangible assets, excluding the accelerated amortization described above, was $31.0 million and $32.7 million for the three months ended September 30, 2023 and 2022, respectively, and $95.0 million and $101.5 million for the nine months ended September 30, 2023 and 2022, respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2023, the Company removed $109.3 million of impaired and fully-amortized intangible assets.

Goodwill

The following table summarizes the carrying value of the Company’s goodwill:


	Credit Group		Private Equity Group		Real Assets Group		Secondaries Group		Other		Total




Balance as of December 31, 2022	$	32,196	$	48,070	$	277,183	$	417,620	$	224,587	$	999,656
Acquisitions	—		—		22		—		—		22
Reallocation	224,587		—		—		—		(224,587)		—
Foreign currency translation	(1,879)		—		—		2		—		(1,877)
Balance as of September 30, 2023	$	254,904	$	48,070	$	277,205	$	417,622	$	—	$	997,801

In connection with the SSG Buyout described in “Note 2. Summary of Significant Accounting Policies,” the former Ares SSG reporting unit has been transferred in its entirety to the Credit Group and the total goodwill of $224.6 million has been reallocated accordingly.

There was no impairment of goodwill recorded during the nine months ended September 30, 2023 and 2022. The impact of foreign currency translation is reflected within other comprehensive income (loss) within the Condensed Consolidated Statements of Comprehensive Income.