Fundraising pace and structure
A person familiar with the matter said Ares is raising capital at a quicker clip for its newest flagship U.S. direct lending effort than it did for the prior vintage. The firm opened two vehicles in April: Ares Senior Direct Lending Fund IV, a closed-end fund, and Ares Senior Direct Lending Core, an open-ended senior direct lending fund for institutional investors - the first of its kind at the firm.
That person, who discussed non-public figures, said Fund IV has secured almost $6 billion of equity, and the evergreen Core vehicle has collected more than $2 billion. Taken together, their first close is 60% larger than the prior vintage at the same stage.
Scale, targets, and timing
With expected fund-level leverage, the pair is set to have roughly $15 billion available to deploy. Earlier this year, Chief Executive Officer Mike Arougheti said the funds are targeting $10 billion and are expected to wrap up in 2027, matching the goal of the 2024 predecessor. That earlier flagship ultimately surpassed $15 billion in equity commitments, establishing a new record for the size of an institutional direct lending fund.
Q3 results and market backdrop
In results released Thursday, Ares said third quarter assets under management reached $691 billion, a 16% increase from a year earlier, and management fees rose 10% to $1.1 billion - both in line with Wall Street expectations. Fee-earning assets totaled $416 billion, below the $426 billion consensus in a Bloomberg survey, reflecting slower deployment.
The firm also said earlier this week it agreed to acquire MidCap Financial Investment Corp., a private credit fund, from Apollo Global Management Inc. in a $2.6 billion transaction. Across the $1.8 trillion private credit market, managers have been selling weaker funds as they shift focus to lower-risk lending, and this year's wave of investor redemptions has drawn interest from rivals hunting for discounted deals.
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Why it matters for investors
A faster first close, a larger investable base with leverage, and steady fee growth point to more origination capacity across Ares's platform. The bottom line: if private credit remains active and consolidation continues, Ares's fundraising momentum and the MidCap deal could influence how investors think about exposure to direct lending in their portfolios.
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