General Dealmaking Shifts as Markets Evolve
The InvestmentAccording to Private Debt Investor, the asset management firm Ares has lined up $7.1 billion for a new credit secondaries investment strategy. This represents the largest inaugural institutional fundraise…
Executive Summary
Deal Analysis & Market IntelligenceThe InvestmentAccording to Private Debt Investor, the asset management firm Ares has lined up $7.1 billion for a new credit secondaries investment strategy.
The Investment
According to Private Debt Investor, the asset management firm Ares has lined up $7.1 billion for a new credit secondaries investment strategy. This represents the largest inaugural institutional fundraise for the firm to date, doubling its initial $2 billion equity target.
The Investor
With this $7.1 billion fundraise, Ares has demonstrated strong investor appetite for its credit secondaries strategy. Credit secondaries involve purchasing existing credit positions, loans or other debt instruments in the secondary market, often at a discount to par value. This allows Ares to deploy capital into credit opportunities that may be attractive relative to primary market valuations. The large fund size signals that institutional investors see value in Ares' expertise in navigating the credit secondaries landscape.
Market Context
The credit secondaries market has grown significantly in recent years, driven by factors like increased market volatility, the rise of direct lending, and a general proliferation of private credit strategies. Industry estimates put the size of the global credit secondaries market at over $150 billion as of 2021, up from just $50 billion a decade ago. As the market has matured, larger, more sophisticated players like Ares are able to raise substantial capital to target dislocations and capitalize on relative value opportunities across the credit spectrum.
What This Signals
Ares' successful $7.1 billion fundraise underscores several important trends in the alternative asset management industry. First, it highlights the continued investor demand for diversified credit exposure, as institutions seek ways to generate yield in a challenging macroeconomic environment. Second, it demonstrates Ares' ability to leverage its scale and credit expertise to capture a leadership position in the fast-growing credit secondaries space. Finally, this initiative positions Ares to be a consolidator in the fragmented credit markets, allowing it to selectively acquire positions at attractive prices and generate returns for its investors.