Ares Management announced the final closing of its third European direct lending fund, Ares Capital Europe III (ACE III). Approximately one year after its launch, ACE III was oversubscribed and closed at its hard cap of €2.5 billion ($2.78 billion), above its initial target of €2.0 billion ($2.2 billion). 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 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 Credit Group at Ares, which manages approximately $60.0 billion in global assets under management as of March 31, 2016.

The platform has grown to become one of the region’s largest, managing in excess of €8.0 billion ($8.8 billion) of capital. ACE III’s predecessor fund, Ares Capital Europe II, held its final close in August 2013 at €911 million ($1.0 billion).

ACE III will continue Ares’ strategy of providing flexible and scaled capital solutions to mid-market companies across Europe. The fund benefits from the team’s strong origination capabilities, with 33 dedicated investment professionals across four originating offices in London, Paris, Frankfurt and Stockholm. ACE III has had strong deployment to date, making more than 15 investments since its launch.

“Today’s announcement demonstrates that investors share our longstanding view that European middle market companies and their owners will continue to seek our flexible one-stop financing solutions in senior debt, unitranche and mezzanine debt,” said Michael Dennis and Blair Jacobson, co-heads of the Ares European direct lending platform and partners in Ares’ Credit Group. “With the growth of our platform, we have the ability to lead increasingly large transactions to support the growth, acquisitions and changing needs of European middle market companies.”