Ares Capital Europe III cruises past €2bn target – exclusive

The firm’s third European direct lending fund has beaten its target and is set to reach a final close in the first quarter of 2016.

Ares Management has raised more than the €2 billion target for its third European direct lending fund, PDI has learnt. The end total is unclear because final investors are working to join Ares Capital Europe III, but the fund has a hard-cap of €2.5 billion. 

The new lending vehicle is likely to close in the first quarter of 2016, sources confirmed. 

A spokesman for Ares declined to comment on fundraising. 

Ares Capital Europe III reached a first close in July followed by a second in October, said one of the sources. 

Limited partners that have already committed to the fund include Rochester Institute of Technology, Mercer Private Markets, Golding Capital Partners, Swiss National Accident Insurance Institution, Guy’s & Thomas’ Charity and Evergreen Partners, according to PDI Research & Analytics. 

Associated British Food Pension Scheme, International Bank for Reconstruction and Development Retirement Plan and its Employee Benefits Plan, Pictet Private Equity Investors, PT Alternatives, Remarkable Views Consultants, Wave Private Equity, SUVA and Vorsorge-Einrichtung Der Suva all committed to the fund in the second close, according to publicly filed documents. 

Ares’ European unit has been busy in the final quarter. On Monday the firm said that it had bought a £500 million ($744 million; €679 million) portfolio of mid-market leveraged loans from UK lender Barclays. The purchase was announced in tandem with a new non-exclusive partnership between the lenders, where Barclays will provide revolving and other credit instruments for financing packages for borrowers sourced by Ares.

The US-headquartered asset manager has also closed a number of large deals ahead of the New Year break including one of the largest unitranche deals executed so far in Europe: a €250 million loan for Irish-based travel VAT refund company Fintrax. It also agreed to provide the full £120 million second lien portion of UK gym group David Lloyd’s £380 million refinancing package this month. 

Ares is a listed alternative investment firm with about $92 billion in assets under management across its private equity, real estate, direct lending and tradable credit businesses.