Ares launches secondaries fund aimed at HNW individuals

The fund has $250m of initial capital to invest primarily in secondaries and will target high-net-worth individual investors in the US.

Ares Management has launched a product aimed at the fast-growing individual investor market, eight months after Secondaries Investor reported the private markets firm’s intention to do so.

The non-traded, closed-end Ares Private Markets Fund will invest in a portfolio of private assets acquired primarily on a secondary basis, the Los Angeles-headquartered firm said in a statement. It can also make primary investments and co-investments.

The fund has launched with $250 million of initial capital, $75 million of which comes from Ares. Two unnamed “significant institutional investors” are among the initial investors.

The fund will be distributed to registered investment advisers and financial advisers in the US through the Ares Wealth Management Solutions platform. It will be managed by the Landmark Partners team, which Ares acquired in April last year for $1.08 billion.

“This latest product combines Ares’ leading secondary investment capabilities and global distribution platform to create an attractive portfolio diversification option for high-net-worth retail investors,” said global head of Ares Wealth Management Solutions Raj Dhanda.

The product complements Ares’ existing perpetual capital products in credit and real estate, he added.

Secondaries Investor reported in August that Ares had registered a vehicle under the Investment Company Act of 1940, otherwise known as a 40 Act fund. The fund can invest in LP-led and GP-led deals, including single-asset deals, and preferred equity transactions across private equity, private credit, venture capital, infrastructure and real estate, we reported.

In July, Ares chief executive Michael Arougheti described the secondaries market as “the best way” to introduce alternatives into 401(k) defined contribution and defined benefit plans, adding that the firm was actively considering how to deliver its secondaries product into retail channels.

There are other 40 Act funds that invest primarily in secondaries, including Pomona Investment Fund and Conversus StepStone Private Markets.

High-net-worth investors could represent an additional $1.5 trillion-worth of private assets under management by 2025, according to a June report by Morgan Stanley.