Ares closes European direct lending fund at $17.5 billion

Ares Management Corp. closed its sixth commingled European direct lending fund at €17.1 billion ($17.5 billion), exceeding its target and making it the largest institutional fund in the global direct lending market based on LP equity commitments, the firm said.

The target was €15 billion.

The total available capital for the Ares European direct lending strategy is expected to be about €30 billion, including related vehicles and anticipated leverage.

The predecessor fund, Ares Capital Europe V, closed in 2021 at its €11.1 billion.

“The final closing of ACE VI underscores the strength of Ares’ European direct lending platform as well as the strong demand from borrowers for flexible capital solutions,” Blair Jacobson, partner and co-head of European credit, said in a release.

The aim of the fund is to self-originate flexible financing solutions for European companies in defensive industries with EBITDA of more than €10 million. It has already committed about €6.4 billion across 50 investments.

Investors include the $14 billion Sacramento County (Calif.) Employees’ Retirement System and the $534.1 billion California Public Employees' Retirement System, Sacramento.

The firm’s European direct lending strategy counts about 90 investment professionals across Amsterdam, Frankfurt, London, Madrid, Paris and Stockholm and managed more than $74 billion in assets as of Sept. 30.

Ares had a total $464 billion in assets under management as of Sept. 30.