Tax return

15 February 2018 By Tom Buerkle

The manager of $106 bln in alternative assets is going to pay U.S. corporate tax rather than elect for partnership treatment. That should boost its investment appeal – and, for Ares, the numbers add up. The likes of Blackstone, with lumpier earnings, probably have less to gain.

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Ares Management on Feb. 15 said it would elect to be treated as a corporation rather than a partnership for U.S. tax purposes from March 1. The manager of $106 billion in alternative investments said it believed the change would broaden its potential investor base, improve the liquidity and valuation of its traded units, and give it a more attractive currency for making acquisitions.

The company also said after-tax economic net income rose 23 percent in the fourth quarter of 2017 from the same period a year earlier, to $117 million. That exceeded the consensus analyst estimate of $98 million.

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