Ares Management has held an interim close on over $1 billion for its latest distressed product.
The Los Angeles-based credit manager closed on $1.02 billion for its Ares Special Opportunities Fund on 19 June, which is targeting $2 billion, according to documents filed with the Securities and Exchange Commission.
The firm’s special opportunities strategy seeks to invest in companies that are stressed or going through transitional change and need additional capital, according to the firm’s website. More specifically, the strategy focuses on companies that are changing management teams or business plans; are in an industry that is falling out of favour with capital markets; are going through a secular change; or have over-cumbersome balance sheets.
The vehicle received a $70 million commitment from the Pennsylvania State Employees’ Retirement System.
The special opportunities strategy made up 8 percent of the firm’s private equity portfolio and was valued around $1.8 billion, according to the firm’s first-quarter results. The strategy is targeting 15-20 percent returns.
This is the first distressed-focused fund launched since the firm pivoted its distressed and special situation strategy in 2017. At that time, the firm hired Scott Graves from Oaktree Capital Management to lead the firm’s special situations platform as a portfolio manager and head of distressed debt.
The firm declined to comment.
Ares was founded in 1997 and operates strategies across private credit, private equity, and real estate. It has more than $137 billion in assets under management.