Ares, newly public, out marketing special situations fund

Firm: Ares Management

Fund: Ares Special Situations IV LP

Target: Unknown

The New Mexico State Investment Council, which backed the 2011 vintage predecessor, plans to consider a commitment at its May 27 meeting, according to a spokesperson. An executive at Ares Management declined comment, citing the difficulty of doing so for funds in the market.

Los Angeles-based Ares Management invests in special situations through its tradable credit group, which managed $28 billion in assets as of Dec. 31, according to an S-1 filing. The firm’s special situations funds, according to the filing, are designed to invest in “stressed and distressed credit opportunities,” including debtor-in-possession loans, exit financings, rescue financings and equities of companies on the mend in the aftermath of restructurings. The firm also may purchase non-performing or non-core holdings being divested by banks.  

The predecessor fund, Ares Special Situations III LP, took in at least $345 million of its $650 million target, according to a Form D filing with the U.S. Securities and Exchange Commission. Placement agents for the fund included BNP Paribas and Prudential Investment & Securities. According to the S-1, the firm’s dedicated special situations funds have generated a 15.8 percent annual return net of fees since inception.

Executive officers for Fund III listed on the Form D include Gregory MargoliesJeff Moore, Daniel Nguyen, Darryl Schall and Michael Weiner. All five are currently listed on the Ares Management website—Margolies as senior partner and head of the tradable credit group; Moore and Schall as portfolio managers in the tradable credit group; Nguyen as executive vice president, CFO and treasurer; and Weiner as executive vice president, chief legal officer and secretary.

New Mexico Educational Retirement Board also backed the firm’s third special situations fund. Other investors in Ares Management limited partnerships over the years have included California Public Employees’ Retirement System, Canada Pension Plan Investment Board, Florida State Board of Administration, Kansas Public Employees Retirement System and New York State Teachers’ Retirement System.

Ares Management raised about $217 million through its public offering and achieved a market capitalization of about $4 billion in early trading May 2. On May 7 at mid-day, shares were changing hands at $17.91, down from the IPO price of $19.

(Correction: Five executive officers for Fund III are listed on the Ares Management website. The original version of this article gave the number as four.)