American investment group Ares is on track to raise more than $80 billion

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Ares Management is on track to raise more than $80 billion from investors this year, a record for the credit-focused investment group, its chief executive predicted on Friday.

Michael Arougheti, the head of the $464 billion asset manager, said the investment group is benefiting from “increased demand” for its funds from both institutional and retail investors, who have been attracted by the high yields on private credit.

That has manifested in the fastest fundraising pace Ares has ever recorded, including $20.9 billion. of investor commitments won in the three months to the end of September.

Arougheti has tried to push the Los Angeles-based wealth manager beyond credit, which includes its core franchise that lends directly to businesses, a division that has boomed as banks have pulled out of the business.

He recently struck a deal to buy the international division of real estate investment manager GLP Capital Partners for up to $5.2 billion. The takeover will add DKK 44 billion. USD to Ares’ assets once it is completed and take it towards Arougheti’s target of reaching 750bn. USD in 2028, which would make it one of the largest listed investment managers in private markets.

The race in the private investment world has manifested itself in a wave of deal-making by companies looking to pick up private credit, insurance and infrastructure, and in turn credit-focused boutiques looking to expand their businesses.

Investment manager Blue Owl bought the insurance company Kuvare and the asset-backed lender Atalaya in the third quarter. BlackRock closed its DKK 12.5 billion takeover. USD by infrastructure investment firm Global Infrastructure Partners last month and is now in talks to buy private credit manager HPS Investment Partners for more than 10 billion. USD.

Credit has been seen as an area where these asset managers can grow without the same constraints they find in the traditional leveraged buyout business.

The managers have been able to lend and deploy hundreds of billions of dollars regardless of the broader market backdrop. Ares said it had deployed just under $30 billion in the third quarter, the vast majority through its credit arm. It was the second-best showing in the group’s history and put year-to-date investment activity at nearly 75bn.

Kipp deVeer, who runs Ares’ credit business, said on Wednesday that the firm had seen “an acceleration” in buyout activity and as a result was benefiting from a wave of new financing that it was able to underwrite.

Ares generated $339 million in fee-based earnings in the quarter, up 24 percent from a year earlier, in line with analyst expectations. The company also revealed that the management fees it earns – a closely watched metric – rose 18 per cent from a year earlier to $757m.