Ares private equity fund smashes target

The Ares Corporate Opportunities Fund V closed on $7.85bn, considerably bigger than its previous vehicle.

Los Angeles-based alternatives investor Ares Management has closed its fifth global flexible capital private equity fund on $7.85 billion, a significant jump up in size from its previous, $4.7 billion, 2012-vintage vehicle. The firm also overshot its $6.5 billion target.

Ares started fundraising for Ares Corporate Opportunities Fund V in the third quarter of last year.

About 80 percent of the fund’s limited partners were returning investors and the fundraising included a $250 million GP commitment, the firm said.

The Florida State Board of Administration, Kansas Public Employees Retirement System, New Mexico State Investment Council, New Mexico Educational Retirement Board, Nebraska Investment Council and Fubon Life Insurance are among LPs in the fund, according to PEI Research & Analytics.

According to a 25 April filing with the US Securities and Exchange Commission, there were 114 investors in total in the fund.

Fund V will follow the strategy of its predecessors by seeking opportunistic investments in North America and Europe via transactions such as control buyouts, growth equity, distressed for control and rescue investments. 

The Ares Corporate Opportunities fund series has invested in companies such as veterinary hospital ownership group National Veterinary Associates, employment agency Insight Global and oil and gas exploration and development company BlackBrush.

Ares said the previous Ares Corporate Opportunities funds have realised a net 16 percent internal rate of return. According to documents from the New Mexico Educational Retirement Board, Ares Corporate Opportunities Fund IV generated 11.3 percent net IRR since inception, as of 31 March 2015. It closed on $4.7 billion, ahead of its $4 billion target, in 2012.

The Ares Private Equity Group manages over $21 billion in assets as of 31 December, and is split into three teams focusing on five North American and European flexible capital funds, five commingled funds and five related co-investment funds with a focus on US power and energy infrastructure, and one China corporate growth fund.

Ares Management has about $94 billion in assets under management, as of 31 December.

Proskauer Rose was the legal counsel to the fund.

According to the SEC filing, Ares Investor Services, Korea Investment & Securities and Eugene Investment & Securities served as placement agents.

A spokesman was not available to comment.