Ares Secures €300M+ for Second European Direct Lending CLO
Event summary
- Ares Management priced its second European Direct Lending Collateralized Loan Obligation (EDL CLO II) at over €300 million.
- EDL CLO II comprises loans to over 70 middle-market companies in Western Europe, primarily in resilient industries.
- The CLO is structured as a multi-currency instrument, reportedly a first for Europe.
- Ares manages approximately $84 billion in assets across its European Direct Lending strategy and has completed over 420 investments since 2007.
- Ares has issued 108 CLOs since 1999, with 72 currently active, representing over $39 billion of its assets.
The big picture
Ares' EDL CLO II demonstrates the continued appetite for private credit solutions in Europe, particularly among middle-market companies. The CLO's multi-currency structure suggests a strategic effort to broaden investor appeal and potentially access new pools of capital. With over $39 billion in CLOs, Ares is a dominant player in the space, and this issuance reinforces their position as a key provider of capital to European businesses.
What we're watching
- Market Appetite
- Continued success in pricing similar CLOs will depend on sustained investor demand for European middle-market debt, which is sensitive to broader macroeconomic conditions and interest rate expectations.
- Competition
- The emergence of Ares as a pioneer in multi-currency European middle-market CLOs may attract increased competition, potentially impacting pricing and deal terms in the future.
- Origination Pace
- The ability of Ares to consistently originate sufficient high-quality loans to feed EDL CLO III and subsequent vehicles will be a key determinant of the strategy's long-term success.
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