The acquisition represents Ares’ biggest private equity secondaries deal ever
April 23, 2024 (Preqin News) – Ares Management has acquired a $1.1bn interest in a portfolio of diversified private equity stakes, its largest private equity secondaries transaction to date.
The interest in the portfolio, which Ares says is diversified across geographies and sectors, was acquired from ‘a leading institutional investor’, and is managed by ‘market-leading General Partners’. The firm did not provide any further details of the firms’ identities when contacted by Preqin News.
‘The transaction represents an exciting opportunity to partner with a leading institutional investor and gain exposure to a diversified portfolio of investments at attractive pricing,’ Barry Miller, Partner in the Ares Secondaries Group and CEO of Ares Private Markets Fund, said in a statement announcing the acquisition.
Ares Secondaries Group, which invests primarily in North America, had assets under management (AUM) of $24.7bn across private equity, real estate, infrastructure, and credit as of the end of 2023. Its private equity secondaries portfolio stood at $13.1bn AUM at the end of last year, meaning this latest deal marks a significant increase in size.
In June 2021, Ares acquired Landmark Partners, one of the largest secondaries investors with $19.6bn in AUM at the time, in a transaction valued at $1.1bn.
According to its latest annual report, Ares Secondaries Group raised $3.6bn in 2023, including $600mn in private equity. In the same year, $2.3bn was invested across its secondaries portfolios, of which $1.1bn was in private equity.
‘Given the ongoing challenges in today’s M&A market, Ares is focused on leveraging the strength of our platform to provide bespoke liquidity solutions for both General Partners and Limited Partners that support their strategic objectives,’ Nate Walton, Partner and Head of Ares’ Private Equity Secondaries strategy, said in a statement announcing the acquisition.
As reported previously by Preqin News, global secondaries fundraising rose to $70.7bn in 2023, more than double the $33.1bn raised in 2021. Mega funds helped drive the increase, as the average fund size increased to $1.4bn, up from $542mn in 2022.
According to Preqin data, there are currently 156 private equity secondaries funds in market; 116 are North American funds, reflecting the region’s dominance in the strategy.
Demand for secondaries is expected to remain strong amid subdued exit activity. As reported in Blackstone’s H1 2024 outlook on private market secondaries: ‘With muted M&A and IPO activity, and the growth of active management, the market is presenting an unprecedented opportunity for secondary buyers.’
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