Ares raises $4.2 billion for structured solutions fund and affiliated vehicles

Ares Management closed its inaugural Ares Global Structured Solutions Fund on the first day of the fourth quarter, gathering about $4.2 billion in capital for the fund and affiliated vehicles against a $1 billion target. The qualifier is doing real work there: the total covers the flagship and the vehicles that sit beside it, and nothing in the disclosure separates how much the fund itself holds. However the $4.2 billion divides, a first-time vehicle closing at more than four times its target is the number limited partners will carry out of the week.

The money goes to work at the GP-facing end of the secondaries market. Ares' private equity secondaries team will partner with managers seeking flexible capital for three stated purposes: increasing GP fund commitments, seeding new strategies with structured LP commitments, and facilitating succession plans. None of those activities is new to the firm, which has deployed nearly $9 billion across structured solutions transactions since 2013; what the close adds is a dedicated pool to run them from. The State of Wisconsin Investment Board is among the investors, having committed $50 million in the second quarter.

Co-President Blair Jacobson described the fund as an expansion of Ares' existing GP capabilities, built to provide solutions for managers' growth initiatives, and read the raise as evidence of LP confidence in the strategy. Nate Walton, who heads private equity secondaries at Ares, credited a team with more than 30 years of secondaries market experience and pointed to a suite that now spans structured solutions, continuation vehicles and GP stakes. The secondaries strategy sits inside the Ares Secondaries Group, which managed $44 billion as of June 30 across private equity, real estate, infrastructure and credit and supplies liquidity to GPs as well as LPs.

A $1 billion target on an inaugural vehicle inside a $44 billion platform is a deliberately modest ask, and the overshoot says something about what the buyers thought they were underwriting. On this evidence the commitment was to the platform and the team rather than to a new set of terms, which is the usual way a first-time vehicle gets sold and the reason the affiliated-vehicle language in the disclosure matters more than it appears to. The secondaries franchise has been deploying capital since 2013; the fund is a wrapper around work that predates it.

That last distinction shapes how the money behaves. The group serves both sides of the market, buying positions from LPs and financing sponsors, and the new vehicle's mandate leans toward the sponsors: seeding their strategies, funding their commitments, underwriting their succession. Capital raised on that premise gets deployed at origination rather than only at the moment an LP wants out, which makes the four-times overshoot read as LP appetite for the part of secondaries that behaves like a private equity allocation. Whether that appetite holds through the next vintage is a fair question, and not one this close answers.

In Europe on the same day, Ares Alternative Credit funds contributed more than €1 billion to Plenitude, the renewable energy business of Italy's Eni, as part of a reorganization of Plenitude's shareholding and governance. Ares and Eni together upsized their capital contribution by about €1.5 billion. The coverage available stops short of the pre-money equity valuation, so what Ares paid for its position and how large that position becomes are not established by the disclosure. The same coverage reports that one of the day's deployments placed Ares in the same lender group as Apollo Global Management.

Apollo's own announcement came across a credit business it sizes at $850 billion; the material does not say what was announced. The outlet grouped the morning under three headings, fundraise, deployments and daily pricing, and the pricing thread is the one the available extract leaves undeveloped. Nothing in it describes the daily pricing itself.

What the day does establish is a firm raising long-dated, capital-call money at more than four times target and spending it the same morning on an equity stake in European renewables, plus a competitor working a credit book it sizes at $850 billion. Both are institutional businesses talking to institutional clients, and both sets of numbers will be quoted in fundraising decks for a while yet. Apollo's half of the day, so far, is a size and nothing else.