Ares backs $3.1bn StepStone structured secondaries vehicle

StepStone Group has raised $3.1bn (£2.3bn) of commitments for a structured solutions vehicle focused on private market secondaries, with backing from Ares.

The investment firm said Ares Management Alternative Credit funds will serve as the primary capital provider to the vehicle, with Barings Portfolio Finance providing a substantial portion of its rated financing.

According to StepStone, the transaction is the largest of its kind in the market to date.

“This transaction provides investors with a differentiated entry point into our secondaries strategies, delivered at meaningful scale,” said Adam Johnston and Philippe Ferneini, partners at StepStone. “This transaction provides investors with a differentiated entry point into our secondaries strategies, delivered at meaningful scale. It builds on our experience executing similar solutions tailored to the needs of insurance company and financial services investors, and reflects our ability to leverage the depth and breadth of the StepStone platform.”

StepStone stated that the vehicle gives institutional investors access to the firm’s secondaries platform through a flexible and capital-efficient solution.

“We are pleased to support StepStone on this transaction, sustaining our momentum as a leading provider of tailored and flexible fund finance to quality managers,” said Richard Sehayek, partner & co-head of European Alternative Credit at Ares. “As the market continues to evolve and mature, we believe we are well-positioned to continue providing innovative liquidity solutions attributable to our scaled capital, deep experience, and global sponsor network.”

Citi acted as structuring and placement agent for the transaction.

Dechert served as legal counsel for Ares. Debevoise & Plimpton served as legal counsel for StepStone. Citi was represented by Orrick, Herrington & Sutcliffe, while Cadwalader, Wickersham & Taft acted as counsel for Barings.