Ares Management, a global alternative investment manager, closed its fifth commingled European direct lending fund, Ares Capital Europe V (ACE V), at €11 billion ($13.34 billion). According to Ares, this represents the largest European direct lending fund raised to date.
ACE V surpassed its €9 billion ($10.91) billion target eight months after its launch and closed oversubscribed at its €11 billion ($13.34 billion) hard cap. The final fund size represents an increase of approximately 70% versus the predecessor fund, Ares Capital Europe IV, which closed in July 2018 at its €6.5 billion ($7.88 billion) hard cap and also was oversubscribed at the time. Including anticipated leverage, the total available capital for ACE V will be approximately €15 billion ($18.19) billion. ACE V also represents the largest institutional fund raised by Ares Management to date.
The fund attracted backing from a group of nearly 180 investors, including 65 limited partners new to Ares Management. ACE V’s global investor base includes pension funds, insurance companies, sovereign wealth funds, endowments, asset managers and family offices. With more than 80% of commitments coming from existing Ares investors, ACE V received support from the firm’s investor base.
“We believe the successful fundraise for ACE V is a result of our market position and our cycle-tested track record,” Blair Jacobson, partner and co-head of European credit at Ares, said. “We appreciate the strong continued support and confidence our investors have in our team, strategy and the strength of our leadership position in Europe. ACE V will also seek to have a positive social impact as part of our broader firm-wide focus on ESG. We look forward to working to build value for our limited partners for many years to come.”
The Ares European direct lending team has already started investing ACE V using its strategy of providing capital to predominantly mid-market companies. ACE V benefits from the team’s pan-European sourcing platform, with 11 investments committed to the fund to date totaling $2.06 billion.
“The deployment backdrop remains constructive as middle market companies increasingly seek our flexible capital solutions in an improving economy. As a result, our team’s investment activity has been robust, and we have achieved this whilst increasing our selectively rates,” Michael Dennis, a partner and co-head of European credit at Ares, said. “We believe the scale of our capital remains a key differentiator due to our ability to provide flexible, one-stop financing solutions, making Ares an attractive direct lender to companies seeking a long-term partner to sustain their growth.”
“We sincerely appreciate the continued support from our investors, who once again entrusted us with their capital and have helped us achieve this record fundraise for Ares,” Kipp deVeer, a partner and head of the credit group at Ares, said. “We believe the market opportunity for direct lending in Europe continues to grow and are proud that the Ares team will continue to lead the way.”