Ares’ Landmark closes latest secondaries fund below target

Ares Management’s secondaries business, Landmark Partners, has wrapped up fundraising for its latest private equity secondaries fund on a significantly lower amount than the vehicle was targeting, Secondaries Investor has learned.

Landmark Equity Partners XVII held its final close on 31 October, according to three sources familiar with the matter. The fund raised around $2.4 billion, one of the sources said.

Fund XVII launched in July 2020 and was initially targeting $6 billion, according to Secondaries Investor data.

According to two of the sources, the main fund raised between $1.7 billion and $1.9 billion, and the remainder of the capital was raised via a co-investment sleeve.

A spokesperson for Ares declined to comment on fundraising.

Investors that backed XVII include Cathay Life Insurance, Connecticut Retirement Plans and Trust Funds  and Kentucky Teachers’ Retirement System, according to Secondaries Investor data.

This is Ares’ first final close of a secondaries vehicle since it agreed to acquire Landmark Partners in June last year.

At least two partners have left the firm’s private equity secondaries business since the Ares acquisition: John Stott departed the firm last year, while Charlie Tingue left this year, as Secondaries Investor has reported.

Secondaries is a major focus area for Ares, with chief executive Michael Arougheti noting on an earnings call last year that the secondaries industry was at an “inflection point”. He added that the Landmark acquisition would provide “meaningful growth opportunities” for the firm.

Ares has since launched a secondaries fund aimed at high-net-worth individuals and acquired GP-led-focused Spring Bridge Partners. On the real estate side, it is seeking $3.5 billion for its latest secondaries vehicle focusing on that asset class, according to documents prepared by the Minnesota State Board of Investment last year.

Fund XVII’s close comes amid a challenging environment for private equity secondaries fundraising. Funds held final closes on a total of $24.2 billion in the first three months of this year – a 49 percent drop on the same period last year, when such funds raised a record $47 billion, Secondaries Investor reported on Thursday.