Ares Management Corp plans to invest in distressed & poorly managed residential properties for its new fund – which has raised €1.78 billion making it the largest property vehicle it has ever launched.
Ares EF V will be managed by the firm’s property unit, Ares Real Estate Group, headed by Bill Benjamin and close to 40% has already been committed to nine investments including a residential portfolio in Madrid and a mixed office-retail building in London.
According to John Ruane, partner and co-head of European Real Estate Equity the firm favours «residential and offices in major European cities, as well as logistics, an asset class that has benefited from problems in the retail sector from the growth of e-commerce”.
Ares’s property arm manages about $11.9 billion in private equity and debt and their EF IV vehicle, predecessor of their new fund, achieved a net 13.4% internal rate of return as of June 30, according to company filings.
Ares was founded in 1997 by a veteran team of investment professionals to pursue investment activities in leveraged loans, high yield bonds, private debt, private equity and other types of investments. After becoming an independent firm in 2002, the firm raised its first dedicated private equity and private debt funds in 2003 and 2004, respectively. The development of our Private Equity and Credit Groups significantly benefited from our senior professionals’ deep middle market experience and the reputation of our Credit Group in the investment community.
In 2012, the company would launch its first REIT, Ares Commercial Real Estate Corporation (NYSE:ACRE) designed to meet the distinct and underserved financing needs of middle-market commercial real estate. Ares further enhanced its Real Estate Group in 2013 with the strategic acquisition of AREA Property Partners, L.P. («AREA»), a top-tier real estate investment management firm with a 20-year track record and 50 investment professionals in the U.S. and Europe.