Ares Management Nears $5B for Second Private Credit Fund

Ares Management, a global alternative investment manager, has raised roughly $4.5 billion for its second Pathfinder alternative credit fund, bringing it closer to its $5 billion target.

The new fund has outperformed Ares’ first Pathfinder fund, which raised $3.7 billion in 2021. The fund aims to profit from a post-pandemic credit market with “distinct similarities” to the post-2008 financial crash corporate lending climate.

According to Ares, which recently filed an update to the fundraise with the US Securities and Exchange Commission, more than 130 investors have committed funds. Backers of the new vehicle include the Virginia Retirement System, which committed $250 million in April.

Ares CEO Michael Arougheti said during the firm’s Q1 earnings call that private credit was being well received amid the high interest-rate, lower deal-count environment.

The firm’s Pathfinder funds are targeting financing gaps found between the credit, private equity and real estate sectors, the firm noted.

It aims to provide tailored financial solutions for owners of large, diversified portfolios of assets that generate predictable and contractual cash flows throughout market cycles.

Founded in 1997, Ares currently manages $378 billion in assets, with $250.1 billion allocated to credit, according to its website.