Ares Management (NYSE:ARES) is moving to sell $3.4 billion of bundled interests in a flagship European direct-lending fund, potentially making it one of the largest private credit sales on record.
Ares is holding discussions with credit-secondaries investors to arrange a sale of limited partner stakes in the fourth vintage of Ares Capital Europe, Bloomberg reported, citing sources.
Talks are still underway, and there is no guarantee a deal will come to fruition, sources added.
According to Ares, private-credit secondaries market has been expanding quickly, as a growing subset of investors are utilizing the secondary market to address a broad range of liquidity and portfolio management needs.
In 2024, the credit secondaries transaction volume totaled $15 billion. That’s a five times increase from 2019. Ares credits greater awareness and education about the asset class, paired with increased dedicated capital formation, for driving more sellers to transact.
“Recently, we are seeing sellers utilizing the credit secondaries market to access liquidity in order to prudently manage downside risk against an uncertain market backdrop,” said Dave Schwartz, Partner and Head of Credit Secondaries at Ares.
Schwartz said the firm anticipates the market to continue to grow meaningfully, with advisors projecting transacted volumes of $28 billion by 2026 and exceeding $50 billion by 2030.
Last month, GIC Pte tapped investment banking firm Evercore Inc. to advise on a potential divestment of private credit fund assets. Singapore’s sovereign wealth fund has been allocating to private credit for years and is now considering selling a portion of those positions as they mature.
Other recent GP-led secondaries deals include Pantheon Ventures, which led a $3.2 billion private credit continuation vehicle for Crescent Capital.
Last year, Benefit Street Partners closed its $2.3 billion private credit continuation vehicle, led by Coller Capital.
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