Ares Management held the final close for its junior capital direct lending fund with $3.4 billion of total commitments, which exceeded the initial fundraising target of $2.5 billion.

The fund targets the growing junior capital needs of upper middle market companies in North America and will focus primarily on investing in companies backed by private equity sponsors. This market segment is increasingly seeking differentiated financial solutions as more traditional financing sources, such as high yield investors, continue to focus on larger companies. Ares’ direct lending team has a significant track record of making debt investments and equity co-investments to middle market and upper middle market borrowers, having previously deployed approximately $9.5 billion in second lien and mezzanine securities since 2004.

“We are very thankful for the continued support from our existing investors and we welcome the new investors to the Ares platform,” said Michael Arougheti, president and CEO of Ares Management. “We believe that the success of the fundraise, which closed well in excess of our initial target, clearly illustrates the tremendous market opportunity and our leading market position in the U.S.”

The Ares U.S. direct lending platform is part of the Ares Credit Group, which manages approximately $70.5 billion in global assets under management, including more than $40 billion in direct lending assets in the U.S. and Europe as of September 30, 2017.