Ares BlackRock Fund Investment Amid Asia Headwinds

Snack-Sized Version:

Ares Management is a new investor in a BlackRock Asia private credit fund, and it acquired its stake via the secondary market. This move comes as BlackRock’s fund navigates a challenging market. In fact, the fund just received a one-year extension to deploy its capital. The Asian private credit market has seen sharp declines in capital raising. Therefore, Ares’s investment signals an opportunistic move into a potentially undervalued sector. This positions the company to capitalize on any future rebound in the region’s credit markets.

Read the Full Meal:

Ares Management Corporation has become a new investor in BlackRock’s second Asia private credit fund. The company acquired its stake from insurer Arch Capital Group on the secondary market. Furthermore, this investment occurs as the fund navigates significant regional challenges. The fund, APCO Fund II, recently obtained investor consent for a one-year investment period extension. It originally targeted a $1 billion raise but closed with about $435 million. The broader Asian private credit market has also faced sharp declines in capital raising. Consequently, Ares’s move represents a strategic entry into a market where other global firms have found it tricky to operate.

Ares Buys Into BlackRock Fund Amid Asian Market Headwinds

• Secondary Purchase: Ares acquired its stake from insurer Arch Capital Group in a secondary market transaction.
• Fund Extension: The BlackRock fund will remain active for another year to deploy up to $135 million.
• Market Conditions: Capital raised in Asia’s private credit market declined sharply in the last year.
• Risks: The previous investor reportedly explored selling due to weak performance in some vehicles.

Why this can matter for NYSE:ARES holders

• Opportunistic Strategy: This investment shows Ares is actively seeking value in challenged or distressed markets.
• Asia Expansion: Ares is growing its footprint in the Asian private credit space via a secondary purchase.
• Competitive Positioning: The move places Ares alongside other major firms navigating the tricky Asian credit market.

For more details, see ARES SEC filings.

What to watch next

1. Quarterly Filings: Look for details on Ares’s private credit exposure in its next quarterly report.
2. Market Data: Monitor capital flow data for the Asian private credit market for signs of a rebound.
3. Peer Activity: Watch for similar secondary market transactions by other asset managers in the region.

Mini FAQ

What did Ares Management do?
Ares Management became a new investor in BlackRock’s Asia private credit fund. In addition, it acquired the stake on the secondary market from another investor.

Why is this investment notable?
The investment is notable because the Asian private credit market is facing challenges. For example, capital raising in the region has declined significantly.

What is the status of the fund Ares invested in?
The fund recently received a one-year extension for its investment period. As a result, it can deploy up to $135 million in new investments.

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