Ares closes oversubscribed USD3.5bn Special Opportunities Fund
Alternative investment manager Ares Management Corporation (Ares) has held the final closing of its Ares Special Opportunities Fund, which was significantly oversubscribed with over USD3.5 billion of commitments relative to its USD2.0 billion target.
When Scott Graves joined the firm in January of 2017, the Ares Private Equity Group embarked on developing its Special Opportunities strategy as an expansion of its flexible capital investment activities. These efforts included building out an experienced team of 17 professionals, including Partners Craig Snyder and Aaron Rosen, with a goal of leveraging the competitive advantages of the Ares Platform. The team pursues a differentiated strategy that pivots opportunistically between private and public market sourced opportunities and seeks to partner with management teams by embracing an “activist for good” approach.
ASOF attracted strong interest from a diverse set of more than 70 limited partners from North America, Europe, Asia and the Middle East, and investors included pension funds, sovereign wealth funds, insurance companies, endowments, family offices and private banks. Approximately half of the ASOF investors had previously invested in another Ares fund and this group of limited partners accounted for over 80% of the Fund’s committed capital.
“We appreciate the enthusiasm of our investors who have supported us in the launch of our Special Opportunities strategy,” says Michael Arougheti, CEO and President of Ares. “The success of the ASOF launch exemplifies our ability to create new, differentiated strategies by assembling top talent and providing them access to the knowledge, networks and resources of our extensive platform. This has proven to be a significant fundraising quarter for the Ares Private Equity Group. Due to a demonstrated ability to capitalise on market volatility, the Group has attracted meaningful capital from existing relationships and new investors for its investment activities.”
“The strong support from my private equity colleagues and the entire Ares organisation has enabled us to pursue our vision for a flexible stressed/distressed strategy that we believe positions us well across different market environments,” says Scott Graves, Partner, Co-Head of Ares Private Equity Group and Head of Special Opportunities. “We believe the significant distressed investing expertise, industry coverage and company sponsorship capabilities within our Private Equity Group combined with the global market leadership in Direct Lending and Liquid Credit from our Credit Group puts us at a significant advantage in investing across private and public situations.”
The ASOF “all-weather” sourcing model positions the team to be highly effective in making compelling relative value investments regardless of market conditions. The team had been primarily focused on privately negotiated transactions heading into March 2020 with approximately $400 million deployed, but quickly pivoted with a focus more toward publicly traded investments with approximately USD1.3 billion invested and committed by the Fund during the market dislocation. The Fund’s USD1.7 billion of invested and committed capital to date is split almost evenly between private and public situations.