Ares Management has closed its third opportunistic credit fund at more than $9.8 billion, exceeding its target and drawing significant backing from some of the largest U.S. public pension systems. 

The raise includes $8.3 billion in equity commitments to Ares Special Opportunities Fund III (SOF III), with additional capital allocated through related vehicles. Among the largest investors, the California Public Employees’ Retirement System committed $1.6 billion, alongside contributions from the Texas County & District Retirement System and the Teachers’ Retirement System of Louisiana at $150 million each, and the State of Wisconsin Investment Board with $100 million. 

The fund targets opportunities between traditional private equity and corporate lending, deploying debt, equity and hybrid capital into middle-market companies, while also investing in stressed public credits. “A pipeline of attractive relative value opportunities for managers with the discipline to invest across private and public companies,” said Craig Snyder, pointing to ongoing market volatility as a key driver. 

SOF III is managed by a 33-person team, reflecting Ares’ continued buildout of its opportunistic credit platform. 

The close caps an active period for Ares’ credit business. Earlier this year, the firm raised more than $7 billion for its inaugural credit secondaries fund and has already begun deploying capital. That strategy recently included leading a $1.7 billion continuation vehicle for Antares Capital. “Delivering innovative liquidity solutions to private credit institutional investors,” said Vivek Mathew. 

Advisors on the transaction included Evercore, GreensLedge and Moelis & Company.