Sumitomo Mitsui buys into Ares private credit growth

Ares Management Corporation has agreed to work with Tokyo-based Sumitomo Mitsui Financial Group on future business opportunities with an equity investment of $384 million in publicly traded shares of Class A common stock. The joint initiatives are aimed at three growth areas: strategic distribution, accretive investment opportunities and capital markets acceleration. The plan is to enter into a strategic distribution agreement to market Ares’ investment products to Sumitomo Mitsui’s Japanese clients. “We have enjoyed a long and mutually beneficial relationship with SMBC Group and we are excited to enhance our already strong strategic collaboration,” said Michael Arougheti, chief executive officer and president of $149 billion private markets giant Ares. “We believe this partnership will empower both of our firms to further leverage our individual franchise strengths and will enable us to accelerate the growth of many new strategic business initiatives on a global scale.” With respect to investment opportunities, Sumitomo Mitsui will use its capital to make attractive investments that will support the launch of certain new business and accelerate the growth of Ares platforms, with a particular focus on the private credit markets. Thirdly, the agreement has both firms coordinating on financing activities in the U.S. and Asian leveraged finance markets. “Beyond the growth opportunity that this partnership presents for both of our firms, the strategic investment by SMBC coupled with Ares’ existing strong balance sheet and liquidity position and our proven ability to grow through periods of extreme market dislocation provides an opportunity for our firms to jointly capitalize on compelling risk-adjusted investments in this period of market volatility,” stated Michael McFerran, chief operating officer and chief financial officer of Ares. Ares intends to use the proceeds from the Japanese group’s $384 million direct investment for strategic growth initiatives, including funding additional growth capital for its insurance initiative, Aspida Financial, rolling out the aforementioned new investment products in the Japanese market in partnership with SMBC Group and taking advantage of opportunities presented by the current market dislocation.

Sumitomo Mitsui buys into Ares private credit growth

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