Ares Management has raised A$2.6bn (£1.3bn) for a credit fund for Australia and New Zealand, its first leveraged buyout vehicle for the region.
The Ares Asia Direct Lending fund has deployed over A$1.04bn of first lien, senior secured loans, according to a Bloomberg report.
Borrowers include Australian funeral home operator InvoCare as it was delisted by private equity firm TPG and BGH Capital’s payments platform Pushpay.
Read more: Ares set to close largest ever direct lending fund
Financing of leveraged buyouts in Australia and New Zealand has typically been done through banks, but banks are now retrenching from leveraged loans, providing an opportunity for credit funds.
“Australia and New Zealand don’t have a high yield bond market and have a nascent institutional syndicated term loan B market, so the private debt, direct lending product is arguably even more valuable to borrowers, financial sponsors and corporates,” said Peter Graf, Ares’ head of sponsor direct lending Asia, in an interview with Bloomberg.
Read more: BlackRock appoints new head of Australasia private credit
The new fund comprises around A$850m from investors and the remainder in loans from Sumitomo Mitsui Banking Corporation and Citigroup.
Investors include two Asia Pacific sovereign wealth funds, pension funds, insurance companies, family offices and high net worth individuals, according to Ares.
Read more: Australian pensions giant hikes private credit exposure
