Ares Credit Secondaries funds acquires Arcmont’s Direct Lending Fund III
for $2.5bn

Ares Credit Secondaries funds have acquired Arcmont’s Direct Lending Fund III in a $2.5 billion transaction, providing liquidity to existing Limited Partners while maintaining exposure to a diversified and well-performing senior credit portfolio. This acquisition positions Ares to capitalize on the growing trend of European credit managers seeking secondary solutions for enhanced liquidity and portfolio management flexibility. The deal underscores Ares' strategic focus on expanding its presence in the European credit secondaries market, where it can leverage its extensive relationships and deep regional expertise. The transaction mechanics were executed through a continuation vehicle structure that included debt financing, although specific terms like valuation multiples or interest rates remain undisclosed. PJT Partners acted as financial advisor to Arcmont, while Kirkland & Ellis provided legal counsel. The acquisition will likely enhance Ares' competitive position in the European credit secondaries space by solidifying its reputation for handling large and complex transactions efficiently. Post-close, Ares faces integration challenges such as harmonizing portfolio management practices with those of Arcmont’s Direct Lending Fund III. Additionally, there is potential risk associated with maintaining strong performance across a diversified loan portfolio amidst fluctuating market conditions. However, the deal also presents growth opportunities for both parties, allowing Arcmont to focus on new investment strategies while Ares gains access to seasoned assets and established sponsor relationships in Europe.