Ares Management has raised $8.5bn (£6.4bn) for an asset-backed finance (ABF) fund at final close, surpassing its $6.5bn target.
The capital was raised for the Ares Pathfinder Fund III and marks the “largest global ABF fund in the market”, Ares claimed, exceeding the second 2023 vintage in the series, which raised $6.6bn.
Overall, Ares said its Pathfinder III fund and related investment structures have raised about $12.7bn of investor capital to be deployed into ABF. This brings Ares Alternative Credit’s total assets under management to approximately $57.3bn, including around $33.1bn allocated to non-investment grade strategies.
“The speed and size of this fundraise underscore our investors’ confidence in our team’s differentiated track record of sourcing and underwriting relative value investment opportunities in ABF,” said Joel Holsinger, co-head of alternative credit at Ares.
In a recent interview with Alternative Credit Investor, Holsinger said the more compelling opportunities within ABF lie on the non-IG side.
“On the non-IG side, I think the market is just getting started and nowhere near the size of what it was pre-GFC,” he told ACI.
Ares Alternative Credit funds currently hold minority equity stakes in several players operating in the relative value, non-IG segment, rather than in captive origination models feeding insurance balance sheets.
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According to the $644bn manager, the $8.5bn of limited partner commitments for Pathfinder III included approximately $4bn from investors reinvesting capital from the previous vintage for an additional two years.
“We believe we have raised four of the five largest ABF funds in the market to date, strengthening our ability to capitalise on the demand driven by current market conditions and deliver customisable liquidity solutions at scale,” added Kevin Alexander, co-head of alternative credit at Ares.
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