Ares Secures $34B for US Senior Lending

Ares Management Corporation, a leading global investment manager, successfully closed the Ares Senior Direct Lending Fund III, raising $15.3 billion, surpassing its $10 billion target.

This positions the Fund's total capital at roughly $33.6 billion, marking a significant growth from its predecessor. Mitch Goldstein, Co-Head of the Ares Credit Group, highlighted Ares's two-decades-long growth and direct lending expertise, emphasizing the firm’s leading market position due to strong investor trust and a history of delivering flexible capital solutions and attractive risk-adjusted returns.

The demand for reliable capital in the middle market, often overlooked by traditional lending institutions, continues to grow, stated Mark Affolter, Co-Head of U.S. Direct Lending at Ares. Ares capitalizes on this through its extensive origination capability, investing in diverse quality companies across sizes, focusing on those with strong market positions, experienced management, and solid free cash flow.

The Fund has already committed $9.0 billion to over 165 companies, demonstrating significant progress towards its investment goals.

Our Opinion:

Ares’ ability to secure $15.3 billion, effectively doubling their previous fund, highlights their strong market presence. They're positively impacting the middle market by offering crucial loans to companies typically bypassed by traditional banks, thus supporting SME growth. However, with $33.6 billion at stake, the inherent risks of alternative lending, especially amid economic volatility, warrant a cautious approach. It is interesting to see the fairness and sustainability of the loan terms to ensure they don't burden the borrowing SMEs.

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