Ares Management Raises $8B in Fifth Fund

LOS ANGELES—Ares Management has closed Ares Corporate Opportunities Fund V, the firm's fifth private equity fund, with $7.85 billion in total commitments. The firm began fundraising efforts for the fifth fund in the third quarter of 2005 with an initial capital expectation of $6.5 billion. The investor pool consists of third-party investors and principal commitments from employees.

The fund's investment strategy will align with its past funds. It will invest in opportunistic investments and businesses in North America and Europe. The fund has an innately broad reach, which includes control buyouts, growth equity, distressed for control and rescue investments. According to the company, which declined to comment directly on the capital raise, this approach allows for increased flexibility and “compelling risk-reward” opportunities.

The strategy is working. Aside from exceeding its capital raise expectations by more than $1 billion, 80% of the fund's limited partner commitments came from existing investors from the firm's four prior funds. The funds have had an average gross internal rate of return at 23% and a net internal rate of return at 16%, which only further encourages investors. The firm's strategy was designed to deploy capital throughout the market cycle.

While Ares could not comment, capital markets expert John M. Carrick, Senior Managing Director at NGKF Capital Markets, tells GlobeSt.com, “I am not surprised by Ares' success. The firm enjoys extraordinary intellectual capital, and this most recent round of financing evidences continued institutional confidence in both Ares and investment opportunities still available in the real estate sector.”

Ares Management has $21 billion in assets and has been investing for 12 years. Last year, there were rumors that Ares and Kayne Anderson were planning a $113 billion merger, but the companies canceled the merger in October of last year due to the volatility in the energy markets.

LOS ANGELES—Ares Management has closed Ares Corporate Opportunities Fund V, the firm's fifth private equity fund, with $7.85 billion in total commitments. The firm began fundraising efforts for the fifth fund in the third quarter of 2005 with an initial capital expectation of $6.5 billion. The investor pool consists of third-party investors and principal commitments from employees.

The fund's investment strategy will align with its past funds. It will invest in opportunistic investments and businesses in North America and Europe. The fund has an innately broad reach, which includes control buyouts, growth equity, distressed for control and rescue investments. According to the company, which declined to comment directly on the capital raise, this approach allows for increased flexibility and “compelling risk-reward” opportunities.

The strategy is working. Aside from exceeding its capital raise expectations by more than $1 billion, 80% of the fund's limited partner commitments came from existing investors from the firm's four prior funds. The funds have had an average gross internal rate of return at 23% and a net internal rate of return at 16%, which only further encourages investors. The firm's strategy was designed to deploy capital throughout the market cycle.

While Ares could not comment, capital markets expert John M. Carrick, Senior Managing Director at NGKF Capital Markets, tells GlobeSt.com, “I am not surprised by Ares' success. The firm enjoys extraordinary intellectual capital, and this most recent round of financing evidences continued institutional confidence in both Ares and investment opportunities still available in the real estate sector.”

Ares Management has $21 billion in assets and has been investing for 12 years. Last year, there were rumors that Ares and Kayne Anderson were planning a $113 billion merger, but the companies canceled the merger in October of last year due to the volatility in the energy markets.