Ares closes special opps fund at its $7.1bn hard cap

Second vintage focused on distressed assets doubles that of precursor and exceeds target of $4bn

Los Angeles-headquartered Ares Management announced the final close of its Ares Special Opportunity Fund II. The close came after fundraising had reached its hard cap of $7.1 billion, above the target of $4 billion.

ASOF II has doubled the fundraising of its precursor, ASOF, which closed in June 2020 with $3.5 billion.

Like its precursor, ASOF II employs a distressed assets strategy. Scott Graves, partner and co-head of the Ares Private Equity Group, said in a statement October 21 that the Ares special opportunities team “has focused on extending Ares’ position as a leading middle market investor by consistently supporting companies, management teams and sponsors through cycles and transformational change.”

The statement says that Ares Private Equity Group developed its special opportunities strategy in January 2017. This strategy grew out of existing not-for-control flexible capital investment activities. It complements for-control private equity strategy. A spokesperson for Ares confirmed that the private equity group has a flexible mandate, taking in hybrid debt/equity strategies.

Special opportunities are pursued now by a team of 24, led by six partners consisting of Graves as well as Aaron Rosen, Craig Snyder, Felix Bernshteyn, James Kim and Matt Underwood.

The team expressed its confidence that “the breadth of our Special Opportunities capabilities and the scale of the Ares platform will continue to drive sourcing and due diligence advantages.”

According to Private Debt Investor data, both ASOF II and its precursor have public pensions prominent among their LPs. ASOF received commitments from the Pennsylvania State Employees’ Retirement System, and both funds received commitments from the Teachers’ Retirement System of Louisiana and the Virginia Retirement System, among others. ASOF II has commitments from the Texas County and District Retirement System as well.

Thus far, ASOF II has already invested or committed close to $3 billon, or approximately 45 percent of its investable capital base.

As of June 30, Ares Management’s global platform had approximately $334 billion of assets under management.