Ares Management Closes Third European Direct Lending Fund at €2.5B Hard Cap

The new fund, Ares Capital Europe III (ACE III) was oversubscribed and closed at its hard cap of €2.5 billion, above its initial target of €2.0 billion, according to Ares. The fund attracted strong backing from a diverse group of existing and new investors globally, including pension funds, insurance companies, sovereign wealth funds, endowments, a private banking platform and family offices.

Ares established its European direct lending platform in 2007, making it one of the first to operate in the market. Since then, the Ares team has completed over 110 direct lending investments alongside more than 70 private equity sponsors. 

The Ares European direct lending platform is part of the $60 billion Credit Group at Ares and has grown to become one of the region’s largest, managing in excess of €8 billion of capital. Ares raised €911 million for the fund’s predecessor, Ares Capital Europe II, in August 2013.

The new fund will continue Ares’ strategy of providing flexible and scaled capital solutions to mid-market companies across Europe. It has had strong deployment to date, making more than 15 investments since its launch, the company said.

“Our growth, ability to provide flexible capital, and the strong performance of our direct lending strategies in Europe have been significant in supporting our position as one of the region’s leading alternative credit providers,” said Kipp deVeer and Greg Margolies, co-heads of the Ares Credit Group, in a statement. “Many of our credit strategies have benefitted from Ares being an early participant and an innovator in our markets.”

“The successful closing of ACE III is a testament to the confidence investors have in our strong track record in the European middle market. In addition, it is clear there is growing acceptance of direct lending as an asset class in Europe,” added Michael Arougheti, president and co-founder of Ares Management.

Founded in 1997 and publically traded, Ares Management is a leading global alternative asset manager with approximately $94 billion of assets under management as of March 31, 2016. The firm operates in three distinct investment groups: Credit, Private Equity and Real Estate.