Ares targets $3bn for new EIF fund

The EIF senior team will be in charge of raising Ares EIF Management V, the first vehicle to go to market after Ares acquired the energy-focused private equity firm in January.

Nearly a year after acquiring Energy Investors Funds (EIF), Los Angeles-based Ares Management is initiating efforts to raise a $3 billion energy infrastructure vehicle.

Four senior partners from EIF – Terence Darby, Herbert Magid, Andrew Schroeder and Mark Segel – will be leading fundraising for Ares EIF Management V, a source told Infrastructure Investor.

The market had been expecting a new EIF fund but it became unclear how Ares Management would proceed after it announced plans to merge with Kayne Anderson Capital Advisors in July. 

The merger would have added another $22 billion to Ares’s portfolio and contributed to the firm’s efforts to expand its energy and energy infrastructure platform. In October, both sides decided to call off the $2.55 billion deal, citing “different views as to how best to proceed with the business combination in response to the current market conditions in the energy sector.”

However, Ares did expand its energy platform in January when it completed the acquisition of EIF, a New York-based private equity firm focusing on energy and energy infrastructure in the US with about $4 billion in assets under management.

While the two firms have merged, EIF continues to operate out of its New York offices. According to a statement issued by Ares at the time of the acquisition, the EIF investment team would join Ares Private Equity Group and maintain full day-to-day responsibility over EIF’s current and future private equity funds.

In addition to its private equity group, New York-listed Ares Management also comprises a Tradable Credit Group, Direct Lending Group and Real Estate Group. The firm had about $92 billion of assets under management as of 30 September this year. Of that total, more than $7 billion is in energy-related investments across three of its four groups.