Ares Management has been exploring the restructuring of its crisis-era private equity fund that holds struggling luxury department store chain Neiman Marcus, Secondaries Investor has learned.
The listed alternative asset manager, which has $125 billion in assets under management, wants to give more runway to the remaining assets in Ares Corporate Opportunities Fund III, according to three sources familiar with the matter.
It is not clear if the firm is working with an advisor or at what stage the GP-led process is at.
ACOF III is a 2008-vintage $3.5 billion vehicle, according to PEI data. The fund has nine remaining assets, Secondaries Investor understands.
AP Fonden 2, Florida State Board of Administration and Colorado Public Employees’ Retirement Association are among its limited partners.
The fund had returned a net multiple of 2.2x and a net internal rate of return of 20.5 percent, according to its most recent 10k form filed for the year ending 31 December.
Among the remaining assets in the fund is Neiman Marcus, which ACOF III and Canada Pension Plan Investment Board acquired for around $6 billion in 2013.
On Monday, the department chain announced it had reached an agreement with a majority of its creditors to extend maturities on its debt to at least 2023. The company had total long-term liabilities of $6.04 billion, according to its quarterly for the period ending 26 January.
Asset sales accounted for 56 percent of the $25 billion in GP-led transactions recorded in 2018, according to UBS’s Secondary Market Survey and Outlook for 2019. Tender offers accounted for the remaining 44 percent.
Ares declined to comment.
– Adam Le contributed to this story.