Seeing opportunity in Spain, France, Germany and the UK, Ares Management Corp is investing now in distressed residential properties for its new fund. This new fund has raised €1.78 billion making it the largest property vehicle Ares has ever launched.
Ares’s property arm successfully manages about $11.9 billion in private equity and debt. This billion Dollar firm has got all of the manpower and research behind them to ensure they are successful and as such, Ares achieved a net 13.4% internal rate of return as of June 30, according to company filings.
Ares was founded in 1997 by an experienced team of senior investment professionals. Their goal was to pursue investment activities in leveraged loans, high yield bonds, private debt, private equity and other types of investments. In 2002, the firm raised its first private equity fund. “The development of our Private Equity and Credit Groups significantly benefited from our senior professionals’ deep middle market experience and the reputation of our Credit Group in the investment community.” confirms a representative of the reputable firm.
In 2012 Ares launched its first REIT, Ares Commercial Real Estate Corporation (ACRE) on NYSE. This was followed by the acquisition of AREA Property Partners L.P., in 2013, a property investment management firm with a 20-year track record and 50 investment professionals across the U.S. and Europe.
According to John Ruane, partner and co-head of European Real Estate Equity: “The firm favours residential and offices and we have chosen Spain, France, Germany and the UK to invest the 1.78 Billion Euros raised.” Research chose that these countries’ residential and office real estate markets are filled with opportunities at the moment and their market is buoyant enough to generate some healthy, stable and steady returns.
For individual property investors and second home buyers, it is well worth following the lead of the big fish who have the resources to identify which countries to target when it comes to residential home investments. Fund managers like Ares follow a very strict protocol when making decisions on where to invest. They have a duty which is to provide their investors with returns. These fund managers have little room for error and a low risk tolerance as funds are meant to produce income and cannot afford to loose. When they choose a country like Spain, France, Germany and the UK to invest 1.78 billion Euros of their investors’ money, in residential properties, it is a clear indication of where you should be buying your second home.