Ares plans real estate debt funds

The Los Angeles-based investment firm is contemplating the launch of real estate debt funds for the US and Europe, according to recent presentation materials.

Ares Management is contemplating new real estate debt funds targeting investments in the US and Europe, according to presentation documents made available to sister publication Private Debt Investor.

Ares typically manages its debt origination activities in the US through its publicly-traded real estate investment trust, according the materials. The funds Ares may raise would be privately funded, with a focus on direct lending to commercial real estate properties.

The expansion of its product line also would extend to Europe, where the firm already is well entrenched across two of its business segments. “With an established presence in Europe within the capital markets and private debt groups, we have contemplated expanding our direct lending presence into Europe through our commercial real estate group,” the meeting materials stated. “Such an expansion could be a potential fit … given its focus on global opportunistic credit.”

The materials were included in a presentation for the San Bernardino County Employees’ Retirement Association (SBCERA), which is considering the establishment of a separate account that will “leverage Ares’ broader investment platform to access investment opportunities in global opportunistic corporate credit,” according to the presentation.

In July, Ares Management closed its acquisition of AREA Property Partners, which expanded its global reach, according to the presentation materials. The addition of AREA also expanded Ares’ real estate capabilities to include opportunistic equity investing and mezzanine lending in the US, Europe and India, according to an NEPC report supporting the potential SBCERA account.

Ares already maintains a broad private debt platform in the US and Europe, managing approximately $23 billion through the group. The firm could not be reached for comment at press time.