Mubadala-Ares JV to invest in credit secondaries prospects

NEW YORK / WAM

Ares Management Corporation, a leading global alternative investment manager, and Mubadala Investment Company, a global sovereign investor, on Wednesday announced the formation of a joint venture (JV) to invest in global credit secondaries opportunities.
The joint venture, anchored by Mubadala, will initially aim to deploy approximately $1 billion as it seeks to capitalise on the anticipated growth and substantial demand from general and limited partners for customised liquidity solutions for the credit secondaries asset class. The joint venture is anticipated to scale alongside the growing market opportunity.
The joint venture represents a key milestone for both organisations and will enhance Mubadala’s positioning within the secondaries credit market, while enabling Ares to significantly scale its offering. The newly established strategy is a natural extension of Ares’ leading credit and secondaries platforms, which respectively had approximately $214 billion and $22 billion of assets under management as of December 31, 2022.
By leveraging Ares’ track record and Mubadala’s global footprint, the joint venture will benefit from access to a broader network, differentiated market intelligence, and new transaction opportunities.
Dave Schwartz will serve as Partner and Head of Credit Secondaries strategy and a member of the Ares Secondaries Executive Committee. The senior leadership team also includes Sebastien Burdel and Luca Salvato, both Partners in the Ares secondaries group and veterans of the secondaries industry, as well as Nate Walton, Partner and Head of the Private Equity Secondaries strategy and a member of the Ares Secondaries Executive Committee.
Michael Arougheti, CEO and President of Ares Management, said, “We are pleased to announce this joint venture with Mubadala, which underscores our view that private credit secondaries offer a compelling opportunity for investors seeking diversified exposure to the attractive return profile of private credit assets. Building on our position as a leading global direct lender and a secondaries market pioneer, we believe the expansion of the Credit Secondaries strategy alongside Mubadala helps to further differentiate Ares in the market as a comprehensive solutions provider.”
Fabrizio Bocciardi, Head of Credit Investments at Mubadala, commented, “We are very pleased to partner with Ares as we expand our investment strategy into the credit secondaries market. Private credit has become a relevant and important part of institutional portfolios which has led to the growth and development of the private credit secondaries industry. We believe that Ares is particularly well-positioned as a global leader to capitalise on the growing demand for diversified credit secondaries opportunities. We look forward to working with the Ares team to realize the significant benefits of this joint venture.”
“We believe that our partnership with Mubadala combined with the scale, underwriting capabilities and experience of our private credit and secondaries businesses will allow us to take advantage of these attractive market dynamics as we seek to drive attractive risk-adjusted returns for our investors,” he added.
Beginning in 2017, Ares and Mubadala have established a long-standing strategic relationship investing across the full spectrum of the credit sector.