Oversubscribed SDL III Significantly Exceeds Target, Creating the Largest Direct Lending Fund in the Firm’s History and the Largest Institutional Fund in the Market

Ares Management Corporation, a leading global alternative investment manager, announced the final closing of Ares Senior Direct Lending Fund III (“SDL III”). With total equity commitments of approximately $15.3 billion, SDL III was oversubscribed relative to its initial target of $10.0 billion. The total capital base for SDL III is expected to be approximately $33.6 billion, which includes equity commitments in related vehicles and anticipated leverage. The Fund is nearly double the size of SDL II, its 2021 predecessor fund, which had $14.9 billion in total debt and equity commitments. Approximately $6.4 billion in debt and equity commitments for SDL III were raised during the second quarter of 2024 alone.

“Over the last twenty years, Ares has developed significant scale, relationships, and deep investment experience within direct lending, all of which have continued to support our leadership position in the market,” said Mitch Goldstein, Partner and Co-Head of the Ares Credit Group. “We appreciate the strong vote of confidence from our growing investor base, and we look forward to executing on our longstanding strategy of providing flexible capital solutions to our borrowers while seeking to generate attractive risk adjusted returns for our investors.”

“The middle market continues to experience significant demand for reliable capital solutions as it remains underserved by banks and other traditional lending sources,” said Mark Affolter, Partner and Co-Head of U.S. Direct Lending. “Our extensive origination capability enables us to see a broad set of potential opportunities to lend to high quality small, medium and large-sized companies. We are pleased to have already deployed nearly one third of the fund’s capital to date in what we believe are compelling investment opportunities.”

Through its U.S. Direct Lending strategy, Ares provides directly originated senior secured loans to middle market companies in North America. Ares has deployed the same strategy in SDL III as its predecessor funds, SDL I and SDL II, with investments in companies with $10 million to over $150 million of EBITDA where Ares funds act primarily as the lead provider of capital. Ares seeks to invest in companies that maintain a strong competitive position in their respective markets with experienced management teams and strong free cash flow characteristics. Importantly, SDL III has already deployed significant capital with the Fund committing $9.0 billion of capital to over 165 companies to date.

Source: Ares Capital