Ares Management has raised over $9.8bn for its opportunistic credit platform, completing the third fund in the series along with associated investment vehicles, even as private credit faces growing scrutiny, according to a report by the Wall Street Journal.
The firm has secured $8.3bn in equity commitments for Ares Special Opportunities Fund III, with the remaining capital coming from co-investment vehicles. The total excludes leverage, which the firm may deploy opportunistically. Ares has already allocated more than $1.8bn from the new fund, backing deals including railroad operator FTAI Infrastructure and home improvement platform Leaf Home.
Launched in May 2024, the fund held its first close in December 2024, surpassing its initial $7.1bn target. The bulk of commitments came from traditional institutional investors, including the California Public Employees’ Retirement System ($1.5bn), Virginia Retirement System ($275m), and Teachers’ Retirement System of Louisiana ($150m).
Ares’ opportunistic credit strategy invests across both public and private markets, targeting high-yield debt, preferred equity, and hybrid structures. It focuses on companies facing temporary pressures—such as elevated borrowing costs or refinancing needs—while also selectively supporting distressed firms through restructuring or operational enhancements. Typical targets are midsize companies with EBITDA between $50m and $250m.
Notable transactions from the fund include a $1bn preferred equity investment in FTAI Infrastructure to support its acquisition of the Wheeling & Lake Erie Railway and a preferred equity stake in Leaf Home, which combined two direct-to-consumer home improvement businesses alongside Apollo-led debt financing. Ares aims to back firms in sectors undergoing transformation or with complex balance sheets, deploying capital in checks ranging from $150m to $500m, scalable with other Ares pools.
The firm positions the fund to provide flexible financing solutions bridging private-equity control investments and traditional corporate lending, as well as opportunistic purchases of stressed corporate debt. Since its inception in 2017, the strategy has deployed more than $17bn and forms part of Ares’ $405bn credit platform, supported by a team of over 560 investment professionals.
