Ares Management has closed Ares Corporate Opportunities Fund V, LP (ACO) with $7.8 billion of total commitments. Fundraising began in the third quarter of 2015 with an initial target of $6.5 billion. Ares Corporate Opportunities Fund IV closed with $4.7 billion of committed capital in August 2012.
The new fund’s total commitments include $250 million of capital from the general partner which is composed mainly of Ares’ employees. Approximately 80% of limited partner commitments came from existing investors in one or more of the Ares’ four prior funds.
“We greatly appreciate the tremendous support of our limited partners and thank them for the trust placed in us as responsible stewards of their capital,” said David Kaplan, co-founder of Ares Management and co-head of the private equity group. “We believe that the strong and favorable response of our limited partners to this fundraising process reflects their confidence in the strength of the Ares investment platform, the private equity team and our expertise in creating value and driving growth at our portfolio companies.”
As with earlier funds, ACO will invest in North American and European businesses across a range of industries. Historically, the corporate opportunities funds have invested approximately 40% of capital in distressed situations and 60% in traditional private equity situations.
“We believe our demonstrated investment discipline, ability to invest across market cycles and consistent track record of performance were integral to a successful fundraise in a short period of time,” said Bennett Rosenthal, co-founder of Ares Management and co-head of the private equity group. “We are excited to have this new pool of capital to deploy in compelling risk-reward opportunities for our limited partners.”
The private equity group of Ares has a long track record, investing for over 12 years across 48 platform investments in the prior ACO funds. Over this period, these funds have generated an aggregate gross IRR of 23% and a net IRR of 16%.
The current Ares portfolio includes Smart & Final, a warehouse-style discount retailer acquired in 2012; Farrow & Ball, a manufacturer and retailer of paints and wallpaper acquired in 2014; National Veterinary Associates, an owner and operator of freestanding veterinary hospitals acquired in 2014; Blackbrush, an independent oil and gas exploration and development company acquired in 2014; American Tire Distributors, one of the larger replacement tire distributors in North America acquired in 2015; CPG International, a manufacturer of low maintenance building products acquired in 2013; and Insight Global, a provider of IT staffing acquired in 2012.
Ares has approximately 700 employees and is headquartered in Los Angeles with offices in New York, London, Chicago, and Atlanta (www.aresmgmt.com).
Proskauer Rose (www.proskauer.com) provided legal services to Ares for this fundraise.
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-26-16
