Ares Management acquired a $3.5 billion specialty finance loan portfolio in an expansion of its growing $24 billion alternative credit business.
The portfolio was purchased from PacWest Bancorp, a Nasdaq-listed bank holding company that wholly owns Pacific Western Bank.
Originated by Los Angeles-based PacWest’s Lender Finance unit, the portfolio consists of high quality, senior secured, asset-backed loans. The assets backing the loans are across a variety of industries and asset classes including consumer loans, small business loans, timeshare receivables, auto loans, asset manager and fund finance loans, residential real estate loans and commercial real estate loans.
“We are excited to broaden and enhance our existing Alternative Credit portfolio through this strategic acquisition of a high-quality portfolio of asset-backed loans,” said Jeffrey Kramer, partner and portfolio manager in alternative credit at Ares. “Our longstanding relationship with PacWest and our team’s ability to underwrite across numerous asset classes and efficiently complete the transaction posited Ares to be the partner of choice.”
Ares remains active in the asset-backed space. In May, Ares Management’s U.S. Direct Lending and Alternative Credit strategies acted as the lead arranger and junior agent for $3 billion in asset-backed and operating company financing for the acquisition of Merchants Fleet, a provider of fleet management services.
The alternative credit unit has deployed over $10 billion in the last 12 months. The capital supports over 1,000 investments and Ares to participate in scale and commit up to approximately $1 billion in a single transaction. The Ares team totals more than 60 investment professionals globally.
“Our team is an established leader in providing creative and flexible solutions to asset-focused investment opportunities,” said Joel Holsinger, partner and co-head of Alternative Credit at Ares. “Our scale, coupled with one of the more flexible mandates in the private credit market today, makes Ares Alternative Credit an ideal partner to the banking community as they optimize their balance sheets and strengthen their financial position.”
Barclays provided exclusive financing to Ares on the transaction. Stephens served as exclusive financial advisor to PacWest Bancorp on the transaction.
“We are pleased to have worked together with Ares to complete this strategic transaction,” said Paul Taylor, president and CEO of PacWest Bancorp. “This transaction will improve our liquidity and capital as we continue to implement our announced strategy to return our focus to relationship-based community banking.”