Private debt funds closed in 2024 have raised an average 123% of their targets

  • Ares Management has raised $15.3bn of equity for Ares Senior Direct Lending Fund III, which will have a total capital base of $33.6bn including related equity vehicles and debt.

  • The equity fundraise was heavily oversubscribed against an initial target of $10.0bn. The fund is more than twice the size of SDL II, which attracted $14.9bn in total debt and equity commitments.

  • SDL III has already committed $9.0bn of capital to more than 165 companies.

  • Ares’ new vehicle is the third largest private capital fund ever raised, exceeded only by Softbank’s two Vision Funds ($98.6bn and $56.0bn). It’s also substantially larger than the next biggest private debt vehicle, Oaktree Opportunities Fund XI, which raised $15.9bn and closed in July 2021.

August 1, 2024 (Preqin News) – Ares’ mammoth fundraising highlights the continued demand for private debt strategies. The fund held a first close of $50mn in July 2023 and a second close of $8.3bn in December 2023, according to Preqin data, with Ares receiving $6.4bn of commitments in Q2 2024 alone.

Private debt fundraising has been relatively lackluster in 2024, with 1,327 funds closed and a total of $590.3bn raised in the first half. That’s down from $618.3bn raised across 1,958 funds in H1 2023, which was a slower year than either 2022 or record year 2021, when $1.76tn was raised across 7,424 funds.

However, market momentum appears to be increasing again, with funds closed in 2024 YTD raising an average 123% of their targets, compared with 95% last year. Preqin is tracking 1,175 private debt funds in the market, with a combined target size of $494.8bn.

Preqin’s Fundraising Calendar, which anticipates future fund launches, expects billion-dollar-plus funds will be launched by several GPs by the end of this year, including HPS Investment Partners, Davidson Kempner Capital Management, Audax Private Debt, GoldenTree Asset Management, Willow Tree Credit Partners, Chorus Capital, Bain Capital, AB CarVal Investors, Accel-KKR, and TPG Angelo Gordon.