Ares Raises $34B for Senior Direct Lending Strategy

Ares Management Corporation held the final close of Ares Senior Direct Lending Fund III with total equity commitments of approximately $15.3 billion. The fund was oversubscribed compared with its initial target of $10 billion. The total capital base is expected to be about $33.6 billion, which includes equity commitments in related vehicles and anticipated leverage.

The fund is nearly double the size of SDL II, its 2021 predecessor fund, which had $14.9 billion in total debt and equity commitments. Approximately $6.4 billion in debt and equity commitments for SDL III were raised during the second quarter of 2024.

As banks tighten lending standards, more lending has transferred outside of the banking system, particularly to middle-market and smaller borrowers.

“The middle market continues to experience significant demand for reliable capital solutions as it remains underserved by banks and other traditional lending sources,” said Mark Affolter, partner and co-Head of U.S. direct lending.

Through its strategy, Ares provides directly originated senior secured loans to middle market companies in North America. The alternative asset manager has deployed the same strategy in the latest fund as its predecessor funds, with investments in companies with $10 million to over $150 million of EBITDA. Fund III has already committed $9 billion to over 165 companies to date.