Ares and GE team up again for new €3bn fund

The new vehicle, which made its first loan to support the acquisition of theTrainline.com, is the partners’ third joint-venture and brings the total capital committed by both sides to €13 billion.

Ares Management and GE Capital have teamed up again to establish a new €3 billion joint-venture, the European Loan Programme (ELP). The new programme has made its first investment, joining the club of lenders that provided the £265 million debt package backing KKR’s acquisition of theTrainline, a UK-based online train ticket retailer.

The financing package was split between a £205 million senior term loan and a £60 million revolving credit facility which was provided by existing relationship banks. Ares and GE, via the ELP, joined a club of senior lenders to provide the term loan, Chris Fowler, executive director at GE Capital told PDI.

The new joint-venture follows on from the two firms’ unitranche deal fund, European Senior Secured Loan Programme (ESSLP), a €1.75 billion programme that provides blended senior debt to mid-market borrowers.

Unlike ESSLP, the new fund has the ability to finance undrawn revolving commitments and targets the upper-mid-market senior debt space where deals are usually syndicated or clubbed. ESSLP focused on blended senior debt and was restricted to providing whole loans, explained Fowler.

Some of GE and Ares’ existing senior loan assets will be moved into the new programme, PDI understands.

ELP will seek to take major positions in the financing for buyouts, refinancing, acquisitions and recapitalisations across currencies. It can hold up to €150 million in any single deal with the potential to increase that upper limit, the firms said in a statement.

ELP is the third such joint-venture formed by Ares and GE. The partners established their US-focused Senior Secured Loan Programme in 2011 which was followed by the European version of the unitranche financing fund (ESSLP) in 2012. The new vehicle brings the committed capital for the partnership up to €13 billion.

A spokesperson for GE Capital declined to comment on whether a similar senior-only co-investment vehicle would be launched in the US. 

Both firms also participated in the financing for Exponent Private Equity’s buyout of international city tour operator, Big Bus Tours. That facility was executed outside both the ELP and ESSLP, PDI understands, with GE providing senior debt and Ares taking the junior piece. HSBC, Northwestern Mutual and Citibank also joined the deal.

The firms announced earlier this month that the €1.75 billion ESSLP is now three quarters invested following a €75 million unitranche loan to support CVC Growth Partner’s buyout of Wireless Logic, a UK-based company.