Ares Management has led a £1.875 billion ($2.34 billion; €2.07 billion) lending package for UK-based insurance broker Ardonaugh Group, claiming it is the largest ever unitranche financing.
Ares was the lead arranger of the package which was also supported by lending from Caisse de dépôt et placement du Québec, HPS Investment Partners and KKR. HPS Investment Partners and Madison Dearborn Partners are the majority owners of the group.
The finance package consists of a £1.575 billion unitranche loan and a £300 million capital expenditures facility. The loans are part of Ardonaugh’s global refinancing to support its business expansion plans.
In a statement, Blair Jacobson, partner and co-head of European Credit and Mark Affolter, partner and co-head of US direct lending at Ares, said: “We believe this is the largest ever unitranche financing transaction globally, which is a testament to the quality of The Ardonagh Group, our long-standing relationships with HPS Investment Partners and Madison Dearborn Partners and the advantages created by our global and scaled platform.”
That private credit funds are able to arrange such large loans despite the economic turmoil as a result of the coronavirus may come as a surprise. However, insurance businesses are thought to be fairly well insulated from the direct effects of the virus and are expected to perform well through the economic cycle.
Ardonaugh was created in 2017 and grew through a series of acquisitions of major insurance brokerage brands in the UK. It now has more than 100 office locations and over 6,000 staff active in distribution, wholesale, underwriting and services.
Last year, Ares funds extended £1 billion of loans to UK-based IT company Daisy Group in what was thought to be the largest ever private debt deal in Europe at the time. Ares acted as the sole lender, though capital was drawn from several of its funds.