Ares Capital establishes new middle-market credit fund

By Devika Patel

Knoxville, Tenn., Nov. 20 - Ares Capital Corp. announced it has established a new middle-market credit fund.

The new fund, Ivy Hill Middle Market Credit Fund, Ltd., will be managed by Ivy Hill Asset Management, LP, a subsidiary of Ares Capital.

Upon formation, the fund closed with $400 million of capital, including a $56 million investment by Ares Capital for $40 million of rated notes and $16 million of junior capital.

Ares Capital expects the fund will be an active purchaser of first-lien and second-lien bank debt of middle market companies.

Ares Capital may sell up to $150 million of senior secured loans to the fund and also may sell additional loans to the fund. In addition, Ivy Hill will seek to partner with banks and other agents, while providing support to critical sponsor relationships, to provide $5 million to $15 million investments as part of larger financing solutions.

"We are extremely pleased that we have been given the opportunity to manage the Fund and to work with its impressive roster of investors," Ares Capital president Michael Arougheti said in a press release. "We believe that the fund is well positioned to take advantage of attractive opportunities in the current market for senior debt in middle market companies.

"We hope this fund is the first of many opportunities to actively manage third party assets and to build on our core competencies in the middle market."

Based in New York, Ares Capital is a specialty finance company that is a closed-end, non-diversified management investment company.

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