Ares raises about $2.8 bln for third European direct lending fund

Ares Management LPC has closed its third oversubscribed European direct lending fund at a hard cap of 2.5 billion euros (about $2.8 billion), beating its initial target of 2 billion euros ($2.2 billion).

Ares Capital Europe III will focus on providing financing to European mid-market companies. Since launching about a year ago, ACE III made more than 15 investments.

The limited partners for Ares Capital Europe III include pension funds, insurance companies, sovereign wealth funds, endowments, a private banking platform and family offices.

Ares’ previous European lending fund raised 911 million euros (over $1 billion) in August 2013. According to the California State Teachers’ Retirement System, ACE Capital Europe II generated an IRR of 8.62 percent, as of September 30, 2015.

In 2007, Ares founded its European direct lending platform and according to the alternative asset manager, has closed over 110 direct lending deals in partnership with more than 70 private equity firms. Currently, it manages over 8 billion euros (over $9 billion).

Photo: U.S. dollars are counted out by a banker counting currency at a bank in Westminster. Photo: Reuters