Ares Management Closes $6.6B Alternative Credit Fund

Ares Management Corporation, an alternative investment manager, closed its oversubscribed credit funds Ares Pathfinder Fund II, L.P. and Ares Pathfinder Fund II (Offshore), L.P, at $6.6 billion after exceeding its $5 billion target.

The fund was approximately 80% larger than its predecessor fund, which had total commitments of $3.7 billion. The fund held its final close seven months after its first closing in March.

Backers of the new vehicle include the Virginia Retirement System, which committed $250 million in April this year.

“As many banking participants grapple with new capital and liability paradigms, we see significant potential for the fund given its scale and flexibility,” said Keith Ashton, Ares partner and co-head of alternative credit.

Pathfinder donates at least 5-10% of carried interest profits from its funds to global health and educational charities.

As of June 30, the Ares alternative credit strategy was one of the largest investors in asset-based credit, managing about $27.8 billion. Ares, which invests across credit, private equity, real estate and infrastructure, had about $378 billion in total assets under management.