Ares snags Oaktree executive

Scott Graves will expand the global asset manager’s distressed debt investments.

Ares Management has hired a former Oaktree Capital Management senior executive Scott Graves to lead the firm’s special situations funds platform, the company said on Monday.

As portfolio manager and head of distressed, Graves will manage the special situations efforts from Los Angeles, aiming to increase the asset manager’s distressed debt capacity across the company, according to the announcement. He will now be a partner at Ares’s private equity group and will serve on two of the firm’s investment committees.

“The opportunity to oversee special situations fund management and further develop global distressed investing capabilities against the market backdrop of increased uncertainty is an exciting combination,” Graves said in the statement.

A spokesperson for the firm declined to comment further.

Graves brings 23 years of credit investing experience to Ares. Before his departure from Oaktree was announced at the end of September 2016, he managed the investment portfolios at the credit strategies and corporate management at that firm, where he worked for 15 years.

From 2010 to 2015, Graves lead Oaktree’s emerging market credit, equities, infrastructure, structured credit and senior secured lending. He also worked in Oaktree’s distressed debt platform as a co-portfolio manager from 2001 through 2013. 

The California-based asset manager also closed its distressed Ares Special Situations Fund in April 2015 with $1.52 billion in commitments, according to a Securities and Exchange Commission filing.

Public pension funds that committed to the fund include the New Mexico State Investment Council ($75 million); the Kansas Public Employees Retirement System ($50 million); and the San Bernardino County Employees Retirement Association ($75 millions), according to PDI data.

The fund had called $525 million, or about 35 percent of total commitments, by March 2016, according to a meeting agenda of San Bernardino County Employees Retirement Association. Energy and commodity related sectors comprised 64 percent of those capital deployments.

As of 30 June, the fund listed an internal rate of return of negative 42.2 percent, according to documents from the Kentucky Retirement Systems. The fund was a creditor in the Quicksilver Resources and Walter Energy Chapter 11 bankruptcies. Graves’ hire comes as Ares business development company finalised its official $3.62 billion merger with American Capital 3 January, as Private Debt Investor reported. The acquisition boosted Ares Capital Corporation’s assets by more than $3 billion to $12.3 billion, maintaining its status as the largest BDC on the market, as PDI also reported.

Including the expected additional assets from its BDC acquisition of American Capital, Ares Management had approximately $100 billion of assets under management as of 30 September, 2016, according to the announcement.