Ares Management Corp. is kicking off an ambitious fundraising drive at a time when many alternative-asset managers have seen demand for private equity evaporate.
The firm is raising capital for seven of its 10 largest institutional funds, including its European direct lending, U.S. direct lending and alternative credit funds, chief executive officer Michael Arougheti said in a conference call with analysts after the company posted fourth-quarter results.
Ares has also started raising cash for its seventh corporate private equity fund, which can do distressed-for-control investing in addition to buyouts.
Arougheti forecast that the 2023 fundraising haul will be “well in excess” of last year’s $57 billion and approach the 2021 record of $77 billion. In all, Ares expects to have about 30 commingled and perpetual funds in the market this year, he said.
“Initial investor engagement has been very active across all three of these large private-credit funds and we expect strong demand for all of these products,” Arougheti said.
Alternative-asset managers including Blackstone Inc. and Apollo Global Management Inc. are struggling to attract investor capital for their flagship private equity funds as institutional investors pull back from the asset class. Demand for private credit is soaring as higher interest rates make it more lucrative to lend, and access to public debt markets remains limited amid economic uncertainty.
Ares reported fourth-quarter after-tax realized income of $388.7 million, a 34 percent increase from a year earlier, the firm said in a statement. Fee-related earnings grew 33 percent to $335.7 million and assets under management rose 15 percent to $352 billion as of year-end. Available capital for investment fell 6 percent to about $85 billion.
