Ares raises $4.2bn for first structured solutions secondaries fund

Ares Management has successfully raised $4.2 billion for its inaugural structured solutions secondaries fund, surpassing the original target by more than fourfold, according to Bloomberg. The Ares Global Structured Solutions Fund primarily offers preferred equity to private market managers seeking capital for various purposes, such as boosting commitments to new funds, launching investment strategies, and supporting succession planning.

Nate Walton, Ares' head of secondaries, stated that the fundraising amount exceeded expectations, leading the fund to set a larger final size. With the ability to commit over $1 billion to a single transaction, Ares can provide significant customized financing solutions to private investment firms. The fund is part of Ares' efforts to directly provide capital to private equity managers, complementing the firm's GP stakes platform launched last year in collaboration with the Abu Dhabi Investment Council and Mubadala Investment.

Walton explained that private equity managers can opt for structured capital or sell minority equity interests based on their objectives, with some seeking a long-term minority partner for strategic support, while others prioritize accessing capital without introducing an equity investor. The structured solutions strategy has attracted repeat business, with around 30% to 40% of previous transactions involving follow-on investments.

This strategy is part of Ares Secondaries Group, which managed approximately $44 billion as of mid-year. Ares has deployed nearly $9 billion across structured solutions transactions since 2013.