Ares Management Secures $34bn for US Senior Direct Lending Strategy

Ares Management Corporation, a global alternative investment manager, has reached its final close of Ares Senior Direct Lending Fund III (“SDL III” or the “Fund”).

SDL III had more equity commitments than it had anticipated, totalling around $15.3bn, compared to its original $10.0bn goal. With potential leverage and equity commitments in linked vehicles, the overall capital base for SDL III is estimated to be around $33.6bn.

With $14.9bn in total debt and equity commitments, SDL II, the Fund's predecessor from 2021, is almost twice as large as the current one. In just the second quarter of 2024, almost $6.4bn in finance and equity commitments had been secured for SDL III.

Moreover, Ares offers middle-market businesses in North America direct originated senior secured loans through its US Direct Lending strategy.

Ares has followed the same strategy in SDL III as in its preceding funds, SDL I and SDL II, investing in firms with EBITDA ranging from $10m to more than $150m, with Ares funds serving as the primary source of capital.

It focuses on investing in businesses with seasoned management teams, robust free cash flow, and a strong distinctive advantage in their specific markets.

Furthermore, SDL III has already deployed substantial resources, with the Fund allocating $9bn to over 165 enterprises to date.

Mitch Goldstein, partner, and co-head of the Ares Credit Group stated: “Over the last twenty years, Ares has developed significant scale, relationships, and deep investment experience within direct lending, all of which have continued to support our leadership position in the market. We appreciate the strong vote of confidence from our growing investor base, and we look forward to executing on our longstanding strategy of providing flexible capital solutions to our borrowers while seeking to generate attractive risk adjusted returns for our investors.”

Mark Affolter, partner, and co-head of US Direct Lending added: “The middle market continues to experience significant demand for reliable capital solutions as it remains underserved by banks and other traditional lending sources. Our extensive origination capability enables us to see a broad set of potential opportunities to lend to high quality small, medium, and large-sized companies. We are pleased to have already deployed nearly one third of the fund’s capital to date in what we believe are compelling investment opportunities.”

"Ares Management secures $34bn for US senior direct lending strategy" was originally created and published by Private Banker International, a GlobalData owned brand.