Dubai, UAE — Ares Management Corporation, a global alternative investment manager, and Abu Dhabi’s sovereign investor have announced the formation of a joint venture to invest in global credit secondaries opportunities.
The JV will initially deploy $1 billion as it seeks to “capitalize on the anticipated growth and substantial demand from general and limited partners for customized liquidity solutions for the credit secondaries asset class”, Mubadala said in a statement.
The venture is an extension of Ares’ credit and secondaries platforms, which respectively had approximately $214 billion and $22 billion of assets under management as of 31 Dec 2022.
“By leveraging Ares’ track record and Mubadala’s global footprint, the joint venture will benefit from access to a broader network, differentiated market intelligence, and new transaction opportunities,” the statement reads.
“The joint venture represents a key milestone for both organizations and will enhance Mubadala’s positioning within the secondaries credit market, while enabling Ares to significantly scale its offering,” it added.
Dave Schwartz will serve as partner and head of the credit secondaries strategy and a member of the Ares secondaries executive committee.
He most recently served as co-head of Ares’ US direct lending strategy.
The senior leadership team also includes Sebastien Burdel and Luca Salvato, both partners in the Ares secondaries group and veterans of the secondaries industry.
Fabrizio Bocciardi, Head of Credit Investments at Mubadala, “We are very pleased to partner with Ares as we expand our investment strategy into the credit secondaries market.”
Michael Arougheti, CEO and President of Ares Management, “We are pleased to announce this joint venture with Mubadala, which underscores our view that private credit secondaries offer a compelling opportunity for investors seeking diversified exposure to the attractive return profile of private credit assets.”
Dave Schwartz said there has been a substantial increase in credit secondaries transaction volume resulting from the growth of the primary private credit market.
“Against this market backdrop, we see a meaningful supply-demand imbalance requiring dedicated capital to meet the liquidity needs of General and Limited Partners. We believe that our partnership with Mubadala combined with the scale, underwriting capabilities and experience of our private credit and secondaries businesses will allow us to take advantage of these attractive market dynamics as we seek to drive attractive risk-adjusted returns for our investors,” he said.
Ares and Mubadala have established a long-standing strategic relationship investing across the full spectrum of the credit sector since 2017, the statement said.