Ares Management held the oversubscribed final close of its Ares Pathfinder Fund II and Ares Pathfinder Fund II (Offshore) with $6.6 billion in commitments, exceeding its $5 billion target and beating by a wide margin its predecessor fund that drew a total of $3.7 billion in 2021.
Ares did not identify the investors, but Alternatives Watch tracked the following commitments to the fund:
- New Mexico State Investment Council: $300 million
- Virginia Retirement System: $250 million
- Indiana Public Retirement System: $150 million
- Texas County & District Retirement System: $100 million
- Alaska Retirement Management Board: $100 million
- New Hampshire Retirement System: $50 million
The Ares Alternative Credit team had $27.8 billion in assets under management as of June 30 across offerings including syndicated loans, high-yield bonds, alternative credit investments and direct lending. Pathfinder II pursues a differentiated strategy, providing scaled solutions to owners of large, diversified portfolios seeking to build resilience across market cycles.
The strategy is well-suited to the current environment where opportunity vies with increasing uncertainty, according to Keith Ashton, partner and co-head of Alternative Credit at Ares. “As many banking participants grapple with new capital and liability paradigms, we see significant potential for the Fund given its scale and flexibility,” he said.
The Pathfinder fund family aims to do well by doing good through a predefined structure of social impact purpose, pledging to donate at least 5-10% of the carried interest profits to global health and educational charities. Since inception in March 2021, Ares Pathfinder funds have raised about $15 billion in LP commitments with a charitable tie-in, generating over $13 million of donations for charity, based on performance as of June 30.
“When investors commit to our funds, they gain access to one of the largest and most seasoned teams in alternative credit, while having the opportunity to make a difference to impoverished communities around the world,” said Joel Holsinger, Partner and co-head of Alternative Credit at Ares.
