Ares holds final close on debut US direct lending private fund

The firm begins the new year with more than $3bn in committed capital raised.

Ares Management finished 2018 with a bang, holding a final close on its oversubscribed debut commingled US direct lending fund.

Ares Senior Direct Lending Fund closed on approximately $3 billion in committed capital in December, the Los Angeles-based firm announced on 2 January. Ares expects the amount of investible capital to be closer to $5 billion with anticipated leverage.

The vehicle began fundraising at the beginning of 2018. The firm then upped its initial fundraising target from $3.5 billion to $4.7 billion, including leverage, at the beginning of November, as previously reported by Private Debt Investor.

“We are happy with the timing of our fundraise as pricing and terms are improving due to recent loan market volatility,” Mitch Goldstein, a partner and co-head of credit at Ares, told Private Debt Investor. “The success of our fundraise illustrates the global demand for this defensive, senior-secured asset class.”

The fund will continue the same direct lending strategy Ares has followed with past funds. It will focus on lending senior-secured loans to both sponsored and non-sponsored North America-based mid-market companies of all sizes.

The firm’s direct lending strategy invests across commercial finance, project finance and corporate financing. Within corporate, Ares direct lending focuses on companies in fields such as business services, consumer products and distribution, according to the firm’s website.

“We differentiate ourselves using our scale and significant market coverage,” Goldstein said of Ares’ direct lending strategy. “The fund is expected to be highly diversified in terms of industry and geography.”

The fund has deployed approximately 10 percent of the capital raised across 20 investments since its first close in July. This latest vehicle attracted 21 new investors and multiple re-ups from the firm’s investor base.

Ares Management is a global investment firm with $125 billion in assets under management. Ares Credit Group has more than $60.4 billion in direct lending assets under management.