Risk Factors Update Summary

• Difficulty in market and political conditions may reduce investment value or hinder fund performance. This could impact capital raising and deployment.
• Cybersecurity risks increased with potential for security breaches from various sources, requiring more resources.
• AIFMD II changes effective in 2026, with some provisions delayed to 2027. Impact on UK rules uncertain.
• Restrictions on U.S. outbound investments may limit investment opportunities and impact fund performance.
• SEC adopted rules in July 2023 mandating disclosure of cybersecurity incidents and risk management.
• Increases in interest rates may negatively affect asset values and debt market access, impacting investment opportunities.
• Potential legislation may increase tax burden by 5% and lead to larger repayment obligations.
• Solvency II reforms proposed by the UK, with changes effective from June 30, 2024.
• Increased costs expected to comply with new SEC rules, including cybersecurity training and management.
• Failure to comply with investment guidelines could result in damage awards and reduced earnings.
• Changes in interest rates could lead to adverse consequences for the company and its funds.
• CSPD requirements likely to increase compliance costs for Ares managed funds.
• The company's AUM in direct lending increased from 42% to 46% of total AUM.
• Increased regulatory focus on ESG activities could impact reputation and increase costs.
• The company's European operations may face increased regulatory burdens and costs due to changing regulations.
• New regulations like CSRD and Taxonomy Regulation may lead to increased compliance costs.
• The company may face increased liabilities and potential losses if SPAC investments do not result in successful business combinations.
• Enhanced regulations on SPACs could impact Ares' sponsored SPACs and related investments.
• The company's funds may be impacted by changes in the method of determining LIBOR and its replacement with SOFR or SONIA.
• Antitrust enforcement intensifying, potentially impacting mergers and acquisitions for Ares managed funds.