Key Takeaways
- • Ares Management Corporation (NYSE: ARES) closed Ares Pathfinder Fund II, L.P. and its parallel vehicles at $6.6 billion in total commitments, reaching the fund's hard cap.
- • The final close exceeded the fund's $5 billion target and is approximately 80 percent larger than its predecessor, Pathfinder I, which raised $3.7 billion.
- • The fund reached final close only seven months after its first closing in March 2023, according to Ares.
- • The Ares Alternative Credit strategy manages approximately $27.8 billion in assets under management as of June 30, 2023, including the Pathfinder family of funds.
- • The Pathfinder family has raised roughly $15 billion in LP commitments since its March 2021 inception and has accrued over $13 million in charitable donations under the firm's carried-interest pledge.
Summary
Ares Management Corporation announced the final closing of Ares Pathfinder Fund II, L.P. and Ares Pathfinder Fund II (Offshore), L.P., together with parallel vehicles (collectively "Pathfinder II"), at $6.6 billion in commitments. The fund was oversubscribed and closed at its hard cap, exceeding its $5 billion target. According to the firm, Pathfinder II is approximately 80 percent larger than its predecessor, which held total commitments of $3.7 billion. The fund held its final close seven months after its first close in March 2023.
The Alternative Credit team pursues a strategy of providing scaled solutions to owners of large, diversified asset portfolios seeking resilient, contractual cash flows across market cycles. As of June 30, 2023, Ares described its Alternative Credit strategy as one of the largest investors in asset-based credit, managing approximately $27.8 billion in assets under management, including the Pathfinder funds. Ares Management Corporation reported approximately $378 billion in total global assets under management as of the same date, with over 2,600 employees across North America, Europe, Asia Pacific and the Middle East.
Keith Ashton, Partner and Co-Head of Alternative Credit, said the firm believes its strategy benefits from diversified asset portfolios with meaningful downside protections. He noted that many banking participants are adjusting to new capital and liability paradigms, and said the firm sees significant potential for the fund given its scale and flexibility.
The Pathfinder family also includes a charitable component. Ares and the Pathfinder portfolio managers have pledged to donate at least 5-10% of carried-interest profits from the funds to global health and educational charities. Since inception in March 2021, the Pathfinder family has raised approximately $15 billion in LP commitments with a charitable tie-in, and the pledge had accrued over $13 million in donations based on performance as of June 30, 2023. Ares stated this could generate between $10 million and $20 million for every $1 billion of capital earning a 1.5x to 2.0x multiple in the closed-end Pathfinder funds. Joel Holsinger, Partner and Co-Head of Alternative Credit, said the Pathfinder funds seek attractive risk-adjusted returns in a differentiated private credit strategy.
The Alternative Credit team pursues a strategy of providing scaled solutions to owners of large, diversified asset portfolios seeking resilient, contractual cash flows across market cycles. As of June 30, 2023, Ares described its Alternative Credit strategy as one of the largest investors in asset-based credit, managing approximately $27.8 billion in assets under management, including the Pathfinder funds. Ares Management Corporation reported approximately $378 billion in total global assets under management as of the same date, with over 2,600 employees across North America, Europe, Asia Pacific and the Middle East.
Keith Ashton, Partner and Co-Head of Alternative Credit, said the firm believes its strategy benefits from diversified asset portfolios with meaningful downside protections. He noted that many banking participants are adjusting to new capital and liability paradigms, and said the firm sees significant potential for the fund given its scale and flexibility.
The Pathfinder family also includes a charitable component. Ares and the Pathfinder portfolio managers have pledged to donate at least 5-10% of carried-interest profits from the funds to global health and educational charities. Since inception in March 2021, the Pathfinder family has raised approximately $15 billion in LP commitments with a charitable tie-in, and the pledge had accrued over $13 million in donations based on performance as of June 30, 2023. Ares stated this could generate between $10 million and $20 million for every $1 billion of capital earning a 1.5x to 2.0x multiple in the closed-end Pathfinder funds. Joel Holsinger, Partner and Co-Head of Alternative Credit, said the Pathfinder funds seek attractive risk-adjusted returns in a differentiated private credit strategy.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.