Ares Management Announces Second Quarter 2024 U.S. Direct Lending Origination Activity

Rhea-AI Summary

Ares Management (NYSE:ARES) reported record-breaking U.S. direct lending activity for Q2 2024 and the 12 months ended June 30, 2024. The company closed $12.8 billion in commitments across 93 transactions in Q2, contributing to a 12-month total of $38.3 billion across 295 transactions. This represents a new record for Ares' U.S. Direct Lending business.

The press release highlights 11 significant transactions where Ares served in various roles, including administrative agent, lead arranger, and book runner. These deals span diverse industries such as fraud prevention, food & beverage, veterinary services, scientific research software, personal care, dental equipment, fire safety, car wash services, packaged ice, healthcare operations software, and aerospace MRO services.

Positive

• Record-breaking $38.3 billion in U.S. direct lending commitments over 12 months
• $12.8 billion in new commitments closed in Q2 2024 alone
• Diverse portfolio of transactions across multiple industries
• Strong market position as lead arranger and administrative agent in numerous deals

Negative

• None.

Insights

Financial Analyst

Ares Management's Q2 2024 U.S. Direct Lending activity showcases remarkable growth, with $12.8 billion in new commitments closed during the quarter and a record-breaking $38.3 billion over the 12 months ended June 30, 2024. This significant increase in lending activity indicates strong demand for private credit and Ares' growing market share in the alternative lending space.

The diversity of sectors represented in the highlighted transactions - from veterinary services to aerospace - demonstrates Ares' broad reach and adaptability in the market. This diversification helps mitigate risk and positions Ares well for continued growth across various economic cycles.

Notably, many of these deals support private equity acquisitions or growth plans, suggesting a robust M&A environment that could drive further demand for Ares' services. The company's ability to serve as the sole or joint lead arranger in multiple large transactions underscores its strong market position and reputation in the direct lending space.

For investors, this report signals potential for continued revenue growth and market share expansion for Ares. However, it's important to monitor how this rapid growth in commitments translates to actual returns and whether the company can maintain its underwriting quality amidst this expansion.

Market Research Analyst

The substantial increase in Ares Management's direct lending commitments reflects a broader trend in the alternative lending market. As traditional banks face regulatory constraints and economic uncertainties, private credit providers like Ares are stepping in to fill the financing gap, particularly in the middle market.

The diversity of transactions across sectors such as technology (Dotmatics), healthcare (CVP) and consumer goods (Elida Beauty) indicates a healthy appetite for private credit across various industries. This trend suggests that companies are increasingly turning to alternative lenders for flexible financing solutions, potentially reshaping the lending landscape.

The prevalence of private equity-backed deals in Ares' portfolio highlights the symbiotic relationship between private equity and private credit. As PE firms continue to seek leverage for their acquisitions and growth strategies, firms like Ares are well-positioned to capitalize on this demand.

However, investors should be aware of potential risks. The rapid growth in lending commitments could lead to increased competition in the space, potentially pressuring yields. Additionally, a economic downturn could test the quality of Ares' loan book, making it important to monitor default rates and recovery performance in the coming quarters.

$12.8 Billion in New Commitments Closed in the Second Quarter, Reaching a Record of $38.3 Billion Closed in the 12 Months Ended June 30, 2024

NEW YORK, NY / ACCESSWIRE / August 2, 2024 / Ares Management Corporation (NYSE:ARES) announced today that funds managed by its Credit Group (collectively "Ares") closed approximately $12.8 billion in U.S. direct lending commitments across 93 transactions during the second quarter of 2024 and approximately $38.3 billion in direct lending commitments across 295 transactions in the 12 months ended June 30, 2024. The $38.3 billion of commitments over the 12-month period represents a new record for the U.S. Direct Lending business. Below is a description of selected transactions that Ares closed during the second quarter of 2024.

Accertify / Accel-KKR

Ares served as the administrative agent, sole lead arranger and book runner for a senior secured credit facility to support Accel-KKR's acquisition of Accertify. Accertify is a leading provider of fraud prevention, chargeback management, account protection, and payment gateway solutions.

Bluegrass Ingredients / TA Associates

Ares served as the administrative agent, sole lead arranger and sole book runner for a senior secured credit facility to support TA Associates' acquisition of Bluegrass Ingredients. Bluegrass Ingredients develops and manufactures customized natural and clean label flavorings, primarily specialty dairy powders, for the food & beverage end market.

Community Veterinary Partners ("CVP") / OMERS Private Equity

Ares served as the administrative agent, joint lead arranger and joint book runner for a senior secured credit facility to support the sponsor's continued growth plans for CVP. CVP is a leading veterinary network and operator of vet hospitals with 140+ practices across 18 states with regional density in the Northeast and Mid-Atlantic regions.

Dotmatics / Insight Partners

Ares served as the administrative agent, joint lead arranger and joint book runner for a senior secured credit facility to support the sponsor's continued growth plans for Dotmatics. Dotmatics is a premier provider of data analytics, statistics and graphing software solutions for scientific research applications.

Elida Beauty / Yellow Wood Partners

Ares served as the administrative agent, joint lead arranger and joint book runner for a senior secured credit facility to support Yellow Wood Partners' acquisition of Elida Beauty. Elida Beauty is a personal care platform that markets and distributes consumer brands in North America, Europe and throughout the globe.

HuFriedy Group / Peak Rock Capital

Ares served as administrative agent and joint lead arranger for a senior secured credit facility to support Peak Rock Capital's acquisition of HuFriedy Group. HuFriedy is a market-leading manufacturer and marketer of dental instruments, infection prevention & control products, and conscious sedation equipment.

Pye Barker Fire & Safety / Leonard Green & Partners and Altas Partners

Ares served as the joint lead arranger for a senior secured credit facility to support the sponsors' continued growth plans for Pye Barker. Pye Barker is a market leading provider of highly recurring, non-discretionary, and non-deferrable fire protection services to commercial customers in a variety of end markets across the United States.

Quick Quack Car Wash / Seidler Equity Partners, KKR and Management

Ares served as the joint lead arranger and joint book runner for a senior secured credit facility to support the continued growth plans for Quick Quack. Quick Quack is a leading express car wash platform with locations across California, Texas, Utah, Arizona, and Colorado.

Reddy Ice / Stone Canyon Industries

Ares served as the administrative agent, lead arranger and joint book runner for a senior secured credit facility to support the sponsor in executing on the Company's acquisition strategy and continued growth plans. Reddy Ice is a leading packaged ice producer and distributor in North America, providing bagged ice to customer locations across the Central, Mid-Atlantic, Southeast and West regions of the U.S.

RLDatix / TA Associates and Five Arrows Capital

Ares served as a lender for a senior secured credit facility to support the sponsors' continued growth plans for RLDatix. RLDatix is a global provider of Connect Healthcare Operations including patient safety, compliance and workforce management software for the healthcare industry.

Sunvair Aerospace Group / Greenbriar Equity Partners

Ares served as the administrative agent, sole lead arranger and book runner for a senior secured credit facility to support Greenbriar Equity Partners' acquisition of Sunvair. Sunvair is a global provider of aircraft component maintenance, repair, and overhaul (MRO) services, specializing in engineering-centric aircraft accessory repair and landing gear overhauls.

About Ares Management Corporation

Ares Management Corporation (NYSE:ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, real estate, private equity and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of June 30, 2024, Ares Management Corporation's global platform had over $447 billion of assets under management, with more than 2,950 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com.

Investor Relations:
irares@aresmgmt.com

Media:
media@aresmgmt.com

SOURCE: Ares Management Corporation

View the original press release on accesswire.com

FAQ

What was Ares Management's U.S. direct lending origination activity in Q2 2024?

Ares Management (NYSE:ARES) closed approximately $12.8 billion in U.S. direct lending commitments across 93 transactions during the second quarter of 2024.

How much did Ares Management (ARES) lend in the 12 months ended June 30, 2024?

Ares Management closed approximately $38.3 billion in direct lending commitments across 295 transactions in the 12 months ended June 30, 2024, setting a new record for their U.S. Direct Lending business.

What types of companies did Ares Management (ARES) provide financing to in Q2 2024?

Ares provided financing to companies in various industries, including fraud prevention, food & beverage, veterinary services, scientific research software, personal care, dental equipment, fire safety, car wash services, packaged ice, healthcare operations software, and aerospace MRO services.

What roles did Ares Management (ARES) play in the Q2 2024 lending transactions?

Ares served in various roles across the transactions, including administrative agent, sole lead arranger, joint lead arranger, book runner, and lender for senior secured credit facilities.